L’oreal: Global Brand, Local Knowledge Case Study

L’Oreal: Global Brand, Local Knowledge Case Study

The case study sums up the strategies adopted by L'Oreal to adapt to different environment and the flexibility they adopted to have an impact in the market through effective Marketing strategies. The case study also highlights how innovation has been the nucleus of their development and how this focus on innovation helped them gain and maintain their position in the market. The study also highlights how efficiently they managed their brand value and how proper branding is key to business development in a particular organization.

Having said all these, there were some areas where L'Oreal could have altered their already effective strategies to gain more out of their business. We shall discuss in detail.

Focus of Innovation –

L’Oreal spent 3.5% of revenues on Research and development. To understand consumers at local level, it created ‘geocosmetics’, to study the beauty trends around the world. It opened various research institutes to gain insight into its structure and characteristics of local skin and hair.

Marketing Strategy –

L’Oreal has not just focused on its own products, it started acquiring various middle level cosmetic product companies and increased their customer base. L’Oreal exhibited a better long-term vision which was evident in the adaptation of different marketing strategies as and when technology progressed. There was a gradual increase in allocation of funds in social media to promote their products and move away from traditional billboards, print media and TV. They appealed to the younger generation through various competitions such as L’Oreal brand storm and associating the products with high profile celebrities. Instead of focusing only on their cosmetics, they started expanding in other domains like Body shop, Dermatology.

Opportunities –

L’Oreal largely missed Brazilian women who are the top beauty spenders through door to door representatives segment dominated by Agon. They were rigid in their thought as the market develops, direct sales will be less relevant. They did not focus on the present, rather they predicted the future, and hence lost potential customers to Agon. Hence, L’Oreal could have allocated more funds and could have targeted Brazilian women.

Active cosmetics division sales in North America, lagged as they were only 9% of the total sales in the active cosmetics division. Following measures can be implemented to increase the sales in North America –