Project Report: L'Oreal's Financial and Marketing Strategies Analysis

This project report provides a detailed financial and marketing analysis of L'Oreal. It begins with an overview of the company's financial performance, including profit and loss calculations and market share data for key brands within different categories. The report then evaluates the main issues associated with exploratory and descriptive research designs used by L'Oreal, such as focus group limitations, reliance on secondary data, open-ended questions, and expert survey outcomes. Finally, the report examines L'Oreal's product positioning strategies, discussing the pros and cons of both narrow and broad approaches and offering recommendations for future strategies. The report references several academic sources to support its findings and recommendations. The report highlights various aspects of the company's performance and market position, offering insights into its research methods and strategic approaches. The report is a valuable resource for students studying marketing and business analysis, providing insights into real-world applications and challenges.

Running Head: Accounting financial analysis report
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Project Report: Accounting financial analysis report

Accounting financial analysis report 2
Que 1)
Financial study:
a) Financial performance:
Calculation of profit and loss a/c
(Amt in $ MM)
Sales 63.54
Less: Cost of goods sold 9.355
Less: Advertising and promotional
expenses 38.3
Contribution 15.885
Less: Fixed cost 3.385
Profit/Loss 12.5
(Lee, 2005)
The total profit of the company is $ 12.5 MM in 1995 which depict about a good
performance of the company.
b) Market performance:
Sales and Markets Shares of key brands by category
(Amt in $ MM)
Brand Moisturizers Cleanser Total
Oil of Olay 28.2 7.9 36.1
Ponds 15.1 6.2 21.3
Plenitude 14 3.4 17.4
Noxema 6.2 21.6 27.8
All Others 15.2 30.9 46.1
Total 78.7 70 148.7
(Dolan, 2002)
According to the table the above are the market share and the sales of the company.
c) Calculation of market performance:

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Sales and Markets Shares of key brands within Moisturizers
(Amt in $ MM)
Brand Daily
Moisturizers
Treatment
Moisturizers
Oil of Olay 3.102 25.098
Ponds 7.701 7.399
Plenitude 4.9 9.1
Noxema 4.526 1.674
All Others 7.296 7.904
Total 27.525 51.175
Brand Daily Moisturizers Treatment
Moisturizers
Oil of Olay 11% 89.00%
Ponds 51% 49.00%
Plenitude 35% 65.00%
Noxema 73% 27.00%
All Others 48% 52.00%
Total 2.18 2.82
According to the table the above are the market share and the sales of the company.
Que 2)
Evaluation of MR:
a) Main issues of exploratory research:

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Exploratory research design helps the comapny to determine the best designs of research,
method of data collection, designs of final research etc. It must draw definitive explanation
and recommendation according to the extreme caution. Mainly this research is conducted
on the basis of the secondary research, formal qualitative research, informal qualitative
approach etc. the main objective of this research is to collect the information on the
preliminary basis which would help the company to define and suggest some hypothetical
issues (Fox & Bayat, 2007).
According to case study, L’Oreal has applied this exploratory strategy to analyze the
market ad launch the new products into the market to enhance the profitability and grab
the market share. The following issues have been faced by the company due to exploratory
research:
1.Focus group:
Focus group of the company raise the issue in front of the company about the target
market and this step do not provide a specific answer as the group has been made by
the company of 10-12 people.
2.Secondary research:
Company has used the secondary data to conduct their research type which has not
offered the exact information which was required by the company to manage and get a
result.
3.Open ended question:
The question which has been asked while this research was open ended. And thus they
do not offer the exact result of the main questions of the company.
4.Expert surveys:
Comapny has conducted the expert surveys to get a better result in this research. But at
the end, the concluded result was not of any use of the company and thus the company
is required to look over the issues and resolve it.
b) Issues with descriptive research:
Descriptive research design helps the comapny to determine the characteristics of the
population on which the research has been conducted. It must draw definitive explanation
about “when”. Mainly this research is conducted on the basis of the situation, formal

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quantitative research, informal quantitative approach etc. the main objective of this research
is to collect the information on the preliminary basis which would help the company to define
and suggest some hypothetical issues (Ethridge, 2004).
According to case study, L’Oreal has applied this descriptive strategy to analyze the
market ad launch the new products into the market to enhance the profitability and grab the
market share. The following issues have been faced by the company due to exploratory
research:
1. It do not provide the better result of the research
2. The concluded result from this case study of descriptive research was quite
manipulative
3.This case study do not focus over the main idea of the organization
4. They have observation nature and due to which the studies are of repeatable nature
5. It has been reflected at various level which launching the products and changing the
strategies of the company
Que 3)
Positioning issues:
Comapny has positioned its products into the market under the various creative punch lines
and slogans such as “I am a modern woman, who uses only premium quality technology
advanced products.” Though some pros and cons are always there of the positioning strategy
of L’Oreal which are as follows:
a) Narrow treatment:
Narrow treatment is when the company is focusing over the comapny positioning itself.
The pros and cons of it are as follows:
Pros:
i.It creates the awareness about the company name.
ii. Enhances the level of the loyal customer (James, King & Suryadi, 1996)
iii. Motivates the people to check the products at least
Cons:

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i.More time is required
ii.Cost consumption
iii. Less creative
iv.Less courage is involved
b) Broad treatment:
Narrow treatment is when the company is focusing over the comapny positioning itself.
The pros and cons of it are as follows:
Pros:
i.Less cost is required to set a positioning into the customers mind
ii.It creates the awareness about the product of the company.
iii. High creativity
iv.More courage is involved (Swanson, 2004)
Cons:
i.Less company awareness
ii.Less motivation about the company (Dolan, 2002)
Recommendation:
According to the report and the analysis, it has been recommended to the company to use the
broad positioning strategies sot maintain the better position into the market and achieve the
target of the company.

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References:
Dolan, R. J. (2002). Marketing management: text and cases. McGraw-Hill Irwin.
Dolan, R. J. (2002). Marketing management: text and cases. McGraw-Hill Irwin.
Ethridge, D.E. (2004) “Research Methodology in Applied Economics” John Wiley & Sons,
p.24
Fox, W. & Bayat, M.S. (2007) “A Guide to Managing Research” Juta Publications, p.45
James, E., King, E. M., & Suryadi, A. (1996). Finance, management, and costs of public and
private schools in Indonesia. Economics of Education Review, 15(4), 387-398.
Lee, S. J. (2005). Case study of L'OREAL: innovation and growth strategy.
Swanson, E. P. (2004). Publishing in the majors: A comparison of accounting, finance,
management, and marketing. Contemporary accounting research, 21(1), 223-255.