L'Oreal Brand Extension and Growth Strategies

This assignment delves into the brand extension and growth strategies employed by L'Oreal, a leading cosmetics company. It examines various marketing models such as diversification, Tauber's brand extension model, and companion products to understand how L'Oreal leverages its brand value and innovates new ideas for growth opportunities. The study provides an in-depth analysis of the environmental and competitive analysis surrounding these strategies, offering insights into effective branding and marketing practices.

MG 412 Principles of
Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
Background on the Chosen Brand...............................................................................................1
Coverage of market trends including Key PESTLE issues.........................................................1
Explanation of the new product, proposed target market and key competition..........................2
Visual image of the brand extension...........................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
Online...............................................................................................................................................6

INTRODUCTION
Principles of marketing is the approach which involved various kind of activity that helps
to transfer the goods and services to the end consumers. Besides, that principles of marketing
promotes the product, price, place that helps to improve the company overall performance.
Presentation will be covering the important expects of marketing and how they promote Brand
and helps to gain the interest of target customers.
Background on the Chosen Brand
L'Oreal is the high leading cosmetic brand in across the world were they target women
who fond of beauty products and use in daily life. The focuses of L'Oreal towards the fullfillment
of target audience needs and wants.
Kapferer's Brand Identity Prism
Brand identity prism model helps to determine the new brand strategies and built up the
strong image in front of the customers. Brand identity model includes some following points.
Physique : Physique of the brand shows its unique identity through which they attract the
customer attention such as L'Oreal.
Personality : Personality represents the brand level and how they interact with outside the
world. Such as L'Oreal has presenting its appearance through its high quality beauty products,
through brand ambassador who well attract the target buyers.
Culture : culture define brand values and beliefs such as L'Oreal believes that in integrity,
respect, courage and transparency to employees.
Relationship: Relationship define the bond between company and its stakeholders. L'Oreal
made a strong bond by offering the faithful beauty products with no complains.
Reflection: the stereotype user of the brand. A brand is likely to have several buyer persona but
L'Oreal has gone with their target market.
Self Image: Company should try to build image as per their customer wants. L'Oreal always
meet the needs of its buyers and try to make them happy with nourishing product or services.
Coverage of market trends including Key PESTLE issues
Political : Political factors affect companies through often changes in code of conduct.
Manufacturing companies got highly affected by the political factor. Several policies and
procedures affect the growth of L'Oreal.
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Economical : Economic factors affect L'Oreal due to changing in exchange rate of the
state in which company working. GDP is the main factor that contribute the business of the
luxury products like L'Oreal.
Social : Social factors highly influenced cosmetic companies as per the trend and demand
of the customers. L'Oreal adopting high range of advanced technologies in order to meet out the
society needs.
Technological : Technological factor has been given high impact on the company
performance. L'Oreal is very much prone to acquire new technologies to satisfy their clients.
Legal : Due to high competition in the market L'Oreal facing high competition L'Oreal
full fills the all legal requirements and government implications in order to reduce the risk
factors.
Environmental : Environmental factors restrict global environmental safety laws that
must abide by the global standards. Environmental safety is must be the first priority of the
L'Oreal in order to gain the market stability.
Explanation of the new product, proposed target market and key competition
New Product
L'Oreal will plan to launch the new organic beauty brand into the French supermarket.
Organic beauty products are made up from natural ingredients with fewer chemicals and
artificial things (L'Oreal unveils new organic beauty brand, La Provencale Bio, 2018).
Proposed Target
For organic products customers are highly interested to buy. Target customers for the
new organic products are women.
Key Competitors
Major key competitors of L'Oreal are Mac Cosmetic products, Maybelline, Chanel;,
Urban Decay, Clinique. All these are the highly competitive as L'Oreal. For that, L'Oreal should
have required to adopt the new product strategy to sustained the brand image.
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Visual image of the brand extension
Ansoff's Grid Model
Market Penetration : Market penetration is the strategy that can help L'Oreal to a
growth strategy where the business focuses on selling existing products into existing markets.
This can help to gain company market share, secure dominance growth of L'Oreal and helps in
restructuring the market by driving out the key competitors.
Market Development
This strategy can help companies to rebuilt the image of existing products into the new
markets by launching the goods in different geographical market with new packaging.
Product Development
This is the another strategy that could adopt by L'Oreal to launch the new product into the
market where they launch new product extension for the buyers. This is the most competitive
strategy that helps company to remove the key competitors.
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Diversification
Diversification is the name given to the growth strategy where a business markets new
products in the new market. This strategy can also become effective in order to launch the new
organic beauty products in French market. Diversification strategy is the best way to minimize
the risk of competition.
Tauber's Brand Extension
The focus or aim of the Tauber model is to leverage the brand name and recognition in
different category. In order to launch the new product or services company should be acquired
different stages and steps of Tauber such as given below: there are two types of brand extension
first extension into related categories and second is Extension into Unrelated categories.
 Same products new form is the strategy to leverage the brand image in the market.
 Products with same texture, ingredients or components is the another way to explore the
new advantage growth and long lasting range of product or services.
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Illustration 1: Types of Brand Extension
Source :

 Companion products
On the basis of above image it has been found out that, L'Oreal company products
launches their products with extension into related categories where they change the
modification process of existing product or services. In order to leverage the company brand
value this is the best option to innovate the best idea and growth strategies.
CONCLUSION
As per the above presentation, it has been concluded about the L'Oreal brand value and
extension in order to develop the growth opportunity by the help of marketing principles. Study
described several models and marketing models to analyse the environmental analysis and
competitive analysis.
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REFERENCES
Books & Journals
Ahmed, J. U., Sultana, H. and Ahmed, A., 2018. Patanjali ayurved invades
India. Decision. 45(1). pp.75-91.
Lilien, G. L., Rangaswamy, A. and De Bruyn, A., 2017. Principles of Marketing Engineering
and Analytics. DecisionPro.
Pinheiro, M., 2017. How can L´ Oréal relaunch Fructis as a disruptive brand for Millennials in
Portugal (Doctoral dissertation).
Rincon, M., Rosengarten, K. K. and Ziegler, J., 2016. Bridging gaps: Professional positioning in
mass retail and the effects on a brand’s perceived quality–The Syoss case. LBMG Strategic
Brand Management-Masters Paper Series.
Šírová, V., 2015. Managing Marketing Report On L’oréal Group. CRIS-Bulletin of the Centre
for Research and Interdisciplinary Study. 2015(1). pp.31-46.
Online
L'Oreal unveils new organic beauty brand, La Provencale Bio. 2018. [Online]. Available
through :
<https://www.cosmeticsbusiness.com/news/article_page/LOreal_unveils_new_organic_beauty_b
rand_La_Provencale_Bio/148024>.
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