Influence of Misleading Advertisement on Brand Image and Reputation: A Case Study on L’Oréal

Corporate Strategy and
Governance

Table of Contents
TITLE - The influence of misleading advertisement on the brand image and reputation of the
business entity. A case on L’Oréal...................................................................................................4
Introduction......................................................................................................................................5
Statement of the issue.............................................................................................................5
Overview of the present Research..........................................................................................5
Background of the Research...................................................................................................6
Purpose as well as Significance of the investigation..............................................................6
Research Aim.........................................................................................................................7
Research Objectives...............................................................................................................7
Research Questions................................................................................................................7
Structure of the project...........................................................................................................7
Literature Review.............................................................................................................................8
Concept and meaning of misleading advertisement...............................................................8
Influence of misleading advertisement on the performance of L'Oreal.................................9
Areas which needs to be improved by L'Oreal while promoting products to gain reputation at
the marketplace.....................................................................................................................10
Methodology..................................................................................................................................11
Primary Research..................................................................................................................12
Secondary Research..............................................................................................................13
Critical review of outcome.............................................................................................................14
Critical review according to the primary research.........................................................14
Recommendation and action plan..................................................................................................19
Recommendation..................................................................................................................19
Action Plan...........................................................................................................................19
........................................................................................................................................................21
........................................................................................................................................................21
........................................................................................................................................................21
CONCLUSION..............................................................................................................................22
REFERENCES..............................................................................................................................23

TITLE - The influence of misleading advertisement on the brand image and
reputation of the business entity. A case on L’Oréal.
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Introduction
Statement of the issue
“Misleading advertisement led business organisation to play with their goodwill and
reputations.”, is the current statement for the issue which is going to be discussed in this report.
Overview of the present Research
Corporate strategy refers to the corporate actions of a business entity which have the
main aim to accomplish organizational goals and targets in an effective manner along with
getting competitive advantage. Along with this, corporate governance define as the whole system
which consist of various rules, process as well as practices with the assistance of which a
company can gain proper directions with the help of which it can easily perform its business
functions. In addition to this, it has been said that the two main term “corporate governance” as
well as “corporate strategy”, both plays very effective role in the whole process and functions of
a business entity. Corporate strategy refers to the method with the help of which a business entity
can effectively create a range of directions which aid in attaining the predefined targets in a
positive manner. In context of L’Oréal it has been analysed that the personal care organizations
created a corporate strategy in which company promote their products in order to attract large
number of customers towards them. It is said that the advertisement leads to misleading
consumers by using phrases such as “Boosts the activity of genes”. In the present environment,
it has been examined that large number of products and services are there which needs effective
marketing or advertisement so that large number of customers will be attracted towards them.
The overall image of the company is based on advertisement method adopted by them so that
they can influence people to purchase their products and gain competitive advantage. In addition
to this, it has also been identified that misleading advertisement highly affect the business
operations in adverse manner. Issue which might raised due to misleading advertisement was
basically related to corporate governance as well as corporate strategy of a business entity. In this
report, L’Oréal is chosen as the base organisation for completing the particular project. It is a
French personal care brand where its headquarter is located in Clichy, Hauts-de-Seine along with
a registered office in Paris. The business entity is widely concern with the implementation of
effective corporate strategy, where it becomes easy for them in order to execute well defined
advertisement operations within the firm to attracting customers towards them. This report is
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based on the investigation of influence of misleading advertisement on the goodwill and
reputation of the company. It is said that advertising is the essential area for a business entity in
order to raise its global presence, which affect the overall performance of the company by
attracting customers towards their offerings.
Background of the Research
In the current competitive business environment, it has been identified that the potential
aim of each and every small and large business organisation it is create their strong brand image
at the marketplace so that they can maintain their sustainability for longer duration. It has been
examined that advertisement is one of the most essential part for a business entity which plays
huge role in the enhancement of brand reputation by providing their customers relevant
information about their offerings. L’Oréal which is a French personal care brand deals in unique
and high quality beauty as well as personal care products. The business entity was funded in year
1909. Which is now world’s largest cosmetic & personal care organization. Their main aim is to
create positive brand image of the company which help them in attaining higher growth at
competitive marketplace. Advertisement or marketing is considered as the most effective tool
which is adopted by a business entity in order to raise their market share by reaching large
number of customers. Companies spend huge amount of funds in their advertisement functions
so that they can grab attention of their customers towards them and raise their market share and
image in an effective manner.
Purpose as well as Significance of the investigation
The present report which is developed is particularly based on the point that the influence
of misleading advertisement on the goodwill and reputation of an organisation, which is one of
the most emerging topic in current scenario. All these issues faced by a business entity are
because of non effective practices as well as corporate strategies. The main purpose behind
conducting the investigation is to improve the thought as well as knowledge related to the topic
or area of study. This refers to the wide area of investigation which shows the influence of
misleading advertisement on the functionality of a business organisation. This study will aid in
providing brief information related to corporate governance as well as corporate strategy. This as
a result implemented in the organisation which help them in attracting large number of people
towards them and earn more profitability at the competitive environment.
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