L'Oréal Global Branding Strategy explains What? their Case Study. Image credit from L'Oréal.
L’Oréal Global Branding Strategy; The L’Oréal group has been the market leader of cosmetics and the beauty industry. The products it mainly sells are in the fields of cosmetics including, hair color, makeup products, skincare products, perfumes, etc. Poster presentation on L’oreal Luxury Cosmetic; The company has also launched several products in the field of dermatology and pharmacy. The sales and profits maintain through its wide range of professional consumer luxury; and, active products showing a strong through it. So, what discusses is: L’Oréal Global Branding Strategy explains What? their Case Study.
It was founded in 1909 by Eugene Schueller and soon it grew into the world’s largest company in the industry. The turnover of the company has grown over 19 billion euros with over 11 percent of growth; which considerably indicates the success of marketing strategies of the L’Oréal group. The company market over 70 international brands along with several local brands made specifically for the country it is marketing with the same international standards; and, flexibility according to the local needs and requirements that are to sell to both men and women in over 150 countries.
The company has shown enough growth in the continents of North America and Western Europe with its outstanding performance of twice the market trend growth of the markets of Asia Pacific, Eastern Europe, Latin America, Africa, and the Middle East. The global marketing efforts of the company with its smart selling efforts brought a tremendous amount of success for it. The differences between the different cultures and the needs of the native people of those different cultures have been quite successfully understood by the company’s marketing personals.
To understand and to answer the cosmetic requirement of the different types of people in the world the company has set up its five worldwide research; and, development center which establishes in different continents like 2 in France, 1 in the US, and 1 in Japan and 1 in China, to make the manufacturing of the product; managed according to the needs of a different culture. L’Oréal group has successfully projected itself as a nice example of a good multinational corporation that manages its profit with considerable success through the competitions in the market’s surrounded by the various geographical, social, economic, and cultural risks.
The company reached out to a variety of customers with different economic status and cultural background in overall different perception through its fine global branding strategies. Through its selling of different products, the company sold different genres of products like Italian elegance, New York street smarts, French beauty, etc through different global branding methods.
L’Oréal’s global branding strategy that’s doing wonders has been actively spearheaded by Owen Jones himself. Lindsey Owen Jones has been the CEO of L’Oréal for nearly two decades and an “Honorary President” now, and under his leadership; L’Oréal has really fine-tuned its global branding strategy. Interestingly some press reports tell us that he has been seen roaming around streets in foreign markets to understand the new and existing trends.
And without any doubt, his interesting work style seems to work wonders. The branding strategy of L’Oréal has such an impact that L’Oréal seems to be the only global leader in every segment of the cosmetics industry; the right positioning of its products seems to be the key. Whatever it is trying to sell the French elegance or street smartness of America; is getting good response throughout the world and L’Oréal has been able to reach its consumers across the national and cultural boundaries. Owen Jones says: “We have this great strategy back in the head office of how we are going to do it worldwide.
But when you go out and look at what is happening, is there a big gap between your projections and the reality of what you see and hear? It is so important to have a world vision because otherwise decentralized consumer goods companies with many brands can fracture into as many little parts if somebody isn’t pulling it back the other way the whole time with a central vision.” This really explains why he prefers roaming in the streets for his strategy-making rather than sitting in the boardroom. Having said all that it’s quite evident that the global branding strategy of L’Oréal has paid huge dividends to the company overall.
To understand this splendid growth story, we need to see how exactly L’Oréal applied their strategy to the countries that were entirely distinct as far as the lifestyle, spending pattern, and culture concern. L’Oréal was started in France, has a good brand value in the united states of America, is reaping good dividends from India, and has a remarkable presence in Japan. These are different complex societies with different needs; so how exactly L’Oréal managed to be equally successful in all these places? This question needs some fact-finding to be done based on country-specific products; and, strategies adopted by the cosmetics conglomerate.
That’s what exactly we will try doing in the next section of this case study. In India, 4 billion 7.5 ml sachets sell every year and that’s a staggering 66% of total shampoo consumption in India. Most of the urban Indian women (96%) use shampoo, however only 46% use foundation. For hair care, a huge 74% population of Indian women still rely on home remedies, 42% use henna, and 94% use hair oil, as far as L’Oréal’s sale per person in India concern is just 10 cents compared to 28 Euros per person in France. In India skin lightening creams (fairness creams) constitute more than 50% of the skincare market people seem to be crazy about getting fairer.
These facts are self-explanatory about the nature of the Indian market; and, it’s clearly stating that the strategy used in the USA or any other European countries is not going to work in India. the USA is a mature market as far as cosmetics consumption concerns India is an emerging economy with most of the population below 35 years of age and a huge aspiring middle class. The cosmetics market is growing approximately at an annual rate of 16% in India, still a long way to go. The youth in urban centers very concern about the image but the larger section is still off the fashion map.
Interestingly even after the success story of corporate India, apparently it’s still a country that is very much community-oriented. The great Indian middle class is aspiring but still has the community-driven cultural values intact. L’Oréal has taken this fact very much into consideration while preparing the marketing strategy for India. A very good example would be the launch of Garnier Fructis shampoo in India. The concept was to rely on the idea rather than relying on advertising a brand. The idea of getting five times stronger hair was the central point that created the hype, through “word of mouth” or network marketing.
Initially, it was positioned as a product for young and teenagers; once the product was established in the market it tried to change or rather increase the target base by shifting gears. In a recent advertisement for Garnier hair color, a daughter is shown advising her mother to try the Garnier product and explaining the benefits. Again it relies on the concept of the idea getting spread by “word of mouth” to another customer segment. This is the best example of marketing in a closed &community driven society.
There is one more remarkable thing about this entire campaign the catchline “take care”. It shifts the focus from the product to the core value of Indian society “caring about others”; and, the entire advertisement becomes more of good advice rather than publicity. China is the world’s most populated country in the world and that makes it very clear that it has the potential of being the biggest consumer market. These days Chinese women are spending an average of 10 to 15% of their income on cosmetics products, and urban Chinese ladies would use 2.2 cosmetics products on average every morning.
Evidently, most of them want to be fashionable and the L’Oréal punch line – ‘if you want to be fashionable, just choose Maybelline’, really seems to work. Masses are made to believe that this is something that represents America and it ought to be trendy. Maybelline is the product line for the masses and L’Oréal really uses the tendency of masses to look towards the USA that’s why the Maybelline products display against the backdrop of the shiny skyline of New York City Chinese women prefer skincare and beauty products.
According to research by L’Oréal in China, women concern about the radiance of their skin; and, prefer skin nourishing lotions that protect their skin from skin-drying winters. Unlike us customers most Chinese women like skin whiteners rather than tanning products. It’s a sign of beauty for Chinese women. Also, the texture of Chinese hair is thicker and more course than typical US Caucasian hair. This requires different products, and really different skill set to effectively sell and get these products moving in China.
L’Oréal has dedicated research facilities for these and other issues and followed up with more innovations to suit the needs and preferences of Chinese consumers. There is one more very interesting fact about the Chinese cosmetics industry; Chinese women are very concerned about the ingesting of lipsticks. This is the most interesting food attitude about Chinese women.
Now following its global strategy L’Oréal even considered this and developed lipsticks containing vitamins; as soon as this was told to the women they were more comfortable in using the product. European countries are mostly developed, here L’Oréal has the liberty of publicizing the brand value rather than focusing on pricing, the benefit to L’Oréal in these markets is that it already well establish and the brand well knows so it can concentrate on grabbing the attention of individualistic feminist women.
Pricing is not a concern in these markets so L’Oréal can afford to have punchlines like-“I am worth it” because these punchlines justify the high pricing of the products and fulfill the feeling of exclusivity of high-end clientele. Now let’s take another example from the European and our markets, L’Oréal brands in these markets are quite well established. L’Oréal products have been used there for few generations now; once young consumer of the L’Oréal brand has started aging and the same street-smart products could not position to them, they have started becoming the mature citizens; now their priorities have changed.
A recent market report suggests that the new target segment in the cosmetics industry is 40 plus women who once used teenage cosmetics products. The thrust is on anti-aging products because it not only adds the new customer base but retains the once teenage customer also. The customer from the baby boom generation reaches the retirement age and tries to maintain a healthy and youthful look and finds out that their favorite cosmetics brand is still making products for them. L’Oréal capitalized on their desire to look youthful and started marketing its anti-aging products, it has signed sixty-year-old Diane Keaton to represent the Age Perfect Pro-Calcium skincare line.
Also, L’Oréal has signed Scarlett Johansson, Penelope Cruz, Eva Longoria, and Beyoncé Knowles to promote specific cosmetics lines according to the age groups. Now this tells us how L’Oréal used the desire of customers to position its products. The French conglomerate believes that only two different cultures as far as fashion concerns are dominant, represent by two flagship brands L’Oréal Paris and Maybelline New York. L’Oréal has been projected as a French origin with elegance, high-end presentation, and obviously high pricing.
Whereas the Maybelline product line represents the street-smart American babe who is looking for the value of the money. America seems to be the growth engine of the world, in the cosmetics industry as well. L’Oréal has understood this and they made a strategy based on the trends in the USA and that’s how Maybelline came into existence. Maybelline currently is the second-largest brand in the share of unit sales of cosmetics products and number one in makeup brands. It claims to be totally consistent with today’s confident woman. Maybelline products targets three customer segments; youngster (16 to 25), office lady (26-35), and career women (35 plus).
The marketing mix for the Maybelline line of products consists of two main strategies; foreign consumer cultural positioning; and, symbolic New York City imagery that women can relate to everywhere. Maybelline promotion includes the different way of grabbing attention including promotional coupons; online advertising; sponsorship of fashion shows; signing fashion icons as spokesperson of the product; free makeup consultancy and providing scholarships, etc.; we can see as American cosmetic market is a mature market so L’Oréal tries to rely on mature marketing tactics. In the early 20th century, even American society was not very much open to makeup and skincare products.
People thought that only sinful women should wear makeup; but, eventually with the economic independence that the American women gained; makeup and cosmetics started coming into the mainstream. Cosmetics apparently became the symbol of new self-belief that the American women were beaming with; and remember even Maybelline claims to be totally consistent with today’s women; there are several other punchlines like ‘maybe she’s born with it’, ‘maybe it’s Maybelline’; all the punchlines keep the self-confidence of women in the center as if its not the makeup but its the attitude that has to be worn.
That’s why women of every nationality and culture started identifying themselves with the product; and, this became the symbol of the 21st-century woman. The mindset and the lifestyle of the customer heavily impacted by the culture. Culture defines by different norms, values, interactions, language, and other personal components shared by groups of people across the world. It is a social phenomenon that defines people’s interests, thoughts, and other behaviors they may exhibit in social life.
From one country to another, humans have evolved and developed different types of expressions, beliefs, and behavior; which can be difficult to understand for someone who does not belong to the same culture. Culture is the way how the members of a particular group interact with each other on the sharing of the available means; now that determines what is going to be the need for a particular product in that society; that also decides whether a particular advertising strategy will work or not; and, how exactly that will interpret by the target customers.
In different markets, consumer requirements and consumer behavior may vary. Cultural aspects deeply impact consumer behavior; the impact may be direct or indirect. The cultural distinction creates the consumer behavior difference, as it can notice between the Asian and European continents where the culture and the behaviors are very different. Being a global organization L’Oréal certainly needs to understand the cultural differences and position its products; accordingly, otherwise, the results may be far more different than they are at this moment. The thrust has to be on hitting the right customer with the right product.
This can be possible only if one has a deep knowledge of local culture and beliefs. A very interesting example would be lipstick use in China; according to research, only 3% of women use lipstick for makeup. The reason that was supposed to be behind this low percentage of lipstick use is even weirder; women in China have concerns about ingesting lipstick. L’Oréal surveyed to see whether this is just an age-old saying or it holds some truth; based on the findings it came up with a lipstick that had vitamins in it, and in turn, the demand for L’Oréal vitamin lipsticks increased. Another example could be really handy; in India long hair consider necessary for a woman to consider beautiful.
L’Oréal considered this fact while launching its shampoo product in India; and, it focused on publicizing the fact that using the Garnier Fructis shampoo helps in getting long and strong hair. This strategy made the product very popular in India. In China or India, people like to have a fair complexion. In Asia, women take special care of their skin. People want radiant skins and lotions that can nourish their skin against the sun; whereas in the United States people would rather buy tanning cream.
On basis of this knowledge, L’Oréal can position their whitening creams in India; and, the interesting part is the way the advertisements could interpret; the way the advertisements for the fairness creams make in Asian countries can interpret as racial advertisements in the USA; but, in Asian countries that seem to be quite usual. Now that’s where the knowledge of the culture and beliefs comes in handy and helps to avoid unnecessary problems. From a business point of view; companies have to adapt themselves to the culture of each country in which they want to have a business. Because of the differences in culture between countries; companies need to adjust their products and services according to local demands.
This will help them to create and develop a brand image across the globe bases on a large number of globally-recognized products. L’Oréal was able to be successful in these markets; because it adapted to the ground realities of the particular market yet it followed a standardized strategy. If we consider the marketing mix of Maybelline, it has a two-pronged strategy; one for the foreign markets is the global street-smart image of the American chic.
The global street-smart image of New York chick can admire in almost all the urban centers, be it India, China, or Brazil. However, there has to be the right mix of local flavor as well. The most important part of L’Oréal’s strategic plan is to opportunity hunting or the marketing of its products worldwide. From the initial days, it already started catering to the demands of women worldwide. To do that efficiently, they were expected to be well aware of the diversities of women across the globe.
Once they knew the diversities their job was to come up with a different line of products suitable to women from all parts of the world. Innovation has been the keyword for L’Oréal and this was made possible through constant research and development over the years. The group has already covered most parts of the world and still striving to cover more. To do so, the L’Oréal group has to keep respecting other people’s identity, ideas, and culture. L’Oréal has to keep valuing different cultures and nationalities to get their brand value up; and, it seems that they have been doing it really well.
The success story can continue further because even today products of L’Oréal touch the cultural values instilled in the potential customer’s mind. L’Oréal just doesn’t sell the product it makes the customer buy the idea of dreaming big; but, remaining rooted in the core cultural values. It has carefully devised its global marketing strategy and customized it to the local needs; and, that’s the reason people from Africa to Europe and America to Australia are using the L’Oréal products.
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