Marketing of L'oreal

1.0 Executive Summary

L’Oréal Group, based in Paris, France, is one of the global market leaders in cosmetic industry. As its commitment to all men and women over the world, they continue to produce high quality of cosmetic products for fulfilling individual needs and desires of beauty through their innovative research. Their marketing strategy is to target at mass market by having cosmetics product range satisfying all levels of demographic groups. Marketing team in L’Oréal Malaysia undertakes the functions of marketing, sales and distribution activities aligning with the Group’s mission and marketing strategy. L’Oréal Malaysia set up four (4) product divisions, which specialize in different target markets. They are consumer products, luxury products, professional products and active cosmetics.

Fragrance is one of L’Oréal Group business products. According to L’Oréal Group 2008 Annual Results, sale from fragrance business is about 1,848million euros, which is about 11.3% of L’Oréal Group overall cosmetic sales. The sales growth rate based on published figure is about 7.8% which is the highest compared to other products despite recent economic crisis. In view of lucrative profit and its existing perfume products have almost reached its maturity stage, there is a need to penetrate new market to increase market share and thus profits.

Currently, all fragrance products are marketed as premium brands and belonged to luxury products division, which targets at high-income consumers. Cacharel, Giorgio Armani, Lancome and Ralph Lauren are the brands, which have fragrance products sold in Malaysia market. L’Oréal Malaysia marketing team is proud of becoming the first country chosen to pilot and promote the first ever fragrance designed specially for female from medium to low-income groups by Consumer Product Division. We will fully support the Group’s initiative by putting all our effort to promote the new perfume into local market with effective marketing plan.

2.0 Situational Analysis

2.1 Overall Local Consumer and Fragrance Market Summary

Malaysia economy has been affected badly by world economy downturn. This can be shown from Malaysia GDP rate dropped from 6.3% in the end of 2007 to 0.1 % in the end of 2008. Sales value of the manufacturing sector in January 2009 decreased by 22.7% (RM10.8million) as compared to January 2008. L’Oréal Group 2008 Annual Result shows that most of the products around the world have shown a slowdown of sales growth