Principles of Marketing

This study material explores the principles of marketing, focusing on brand extension, target market analysis, and competitive analysis. It discusses L'Oréal's brand strategy and its new product launch in the cosmetics market.

Principles of
Marketing

INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
Existing brand and Brand Values...........................................................................................2
Description of the Target Market...........................................................................................2
Analysis of the New Market including Trends.......................................................................2
An Explanation of the New Product.......................................................................................3
Comparative Analysis............................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Marketing is defined as the function of management which are responsible for developing
the marketing strategies and selling activities followed by the promotions and advertising
functions. Marketing is itself the very vast function which includes the activities from the
production of products to the after selling services activities (Definitions of marketing, 2020).
Organization chosen here is the L'Oréal, it is one of the leading international cosmetics company
founded in 1909 in France. It mainly deals with the products like hair care, skin care, hair colour,
sun protection, perfume and make up. The following discussions are made on the brand overview
and it’s values in the market about the brand extension process with a new product and a new
market, what can be the target market of the new product range, analysis of such markets which
includes various trends of it, whole explanation of the new product range and the competitive
analysis of the brand with other existing leading brands of L'Oréal and finally the conclusion of
the whole process in context of an organization that is L'Oréal.
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MAIN BODY
Existing brand and Brand Values
Brand is defined as the reputed organization which has a proper image in the market due the
products and services they are serving to the people like L'Oréal. Brand extension is defined as
the launching of new products under the same brand name for example L'Oréal brand extension
is hair styling appliances like hair dryers, hair straighteners and curlers. Kapferer’s brand identity
prism states that the new brand extension must consist the following features like the hair styling
appliances should have the attractive physique, decent personality, different but positive
accepted culture, good self image, better reflection of the products and the long lasting
relationships with the customers and the market stability. This model helps the firm in gaining
the loyalty by the customers towards it’s products and brand as well (The brand identity prism
and how it works, 2020)
.
Description of the Target Market
L'Oréal has a great STP model concept on it’s new product launching that is segmentation,
targeting and positioning of the new product range. It can help the firm to choose it’s target
market and where it can exactly place it’s products in order to the better reach of the customers.
Segmentation is the process where firm analyse all the markets for it’s products by examining
their features, merits and demerits to choose that in which market it’s product can be better fit
and can gain the maximum number of purchases. Targeting is the next step of the STP model in
which the company finally chooses it’s target market like L'Oréal has chosen the professional
salons, North America, Asia Pacific and online distribution channel for their products. And
finally the positioning part, which states that the product must be placed where customers can
pay attention to it like showrooms, stores and on online sites as well (The segmentation,
targeting and positioning model, 2020).
Analysis of the New Market including Trends
PESTLE model can be the one of the method through which the analysis can be done for
the L'Oréal Company. Political factors are unfavourable for the company due to the instability in
the political factors. Economical factors are favourable because of the growth in gross domestic
product and more employment. Social factors are unfavourable because customers becoming
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more conscious about the cosmetics products on their skins and hairs. Technological factors are
favourable due to the digital innovation development in the market. Legal factors are
unfavourable due to strict regulation and pressure by consumers over the brand. Environmental
factors are favourable due to environmental sustainability initiatives by the company (What is
PESTLE analysis?, 2020). Another model that can be considered is Ansoff’s growth matrix
which consist four parts that are market penetration which says growth of the company in
existing market with existing product range. Product development says that the new product with
existing markets. Market development says that the existing product in the new market and the
last diversification says that the new product in the new market. L'Oréal has chosen the product
development means launching of new products in an existing market (Ansoff Matrix, 2020).
An Explanation of the New Product
Tauber’s Brand Extension Options can be the one of the model which gives the firm
various options to extend it’s firm. It has basically four parts. First is that the firm can either
innovate the features off the existing product. Second is the developing of the new product under
the same brand name. Third is developing the product with different brand name. Fourth is
creating the franchisee of the brand in order to expand accordingly to the target markets. L'Oréal
has chosen the second form that is the developing of a new product under the same brand name
(Brand Extension, 2020).
Comparative Analysis
Basis L'Oréal Babyliss
Quality It provides of high quality
products.
It provides comparatively
low quality products.
Price It offers products of high
price.
It offers products of low
price as compared to the
L'Oréal.
Cable It is containing generous
cable.
It is having short cable.
Temperature It has the feature of
controlling the temperature.
Some of it’s products don’t
contain the temperature
control feature (How to write
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a comparative analysis,
2020).
CONCLUSION
It is concluded that the innovation in the product strategy is important for every organization
in order to grow and develop it’s company. Marketing strategies and it’s principles are the
primary part to study about the brand extension because it is essential to examine the market
through it’s research and analysing it’s competition in an industry. It is necessary to observe
various things before brand extension process like knowing about that what exactly the
marketing is, studying about various models like Ansoff’s matrix, PESTLE model, brand
extension concepts, how the comparison can be done from other brands, deep study about the
STP model and brand identity prism model and working of them. All these functions are very
significant to examine because it helps the company to determines the it’s whole strategy is
going on a right way or not and more importantly, organization can also gain the very good
competitive advantage by analysing all such activities related with the principles of marketing
which helps the firm to grow, develop and expand it’s image, reputation and loyalty towards the
brand.
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REFERENCES
Online
Ansoff Matrix. 2020. Available Through <
https://corporatefinanceinstitute.com/resources/knowledge/strategy/ansoff-matrix/
#:~:text=The%20Ansoff%20Matrix%2C%20also%20called,by%20its%20return
%20on%20equity.>./
Brand Extension. 2020. Available Through < https://www.managementstudyguide.com/brand-
extension.htm>./
Definitions of marketing. 2020. Available Through < https://www.ama.org/the-definition-of-
marketing-what-is-marketing/>./
How to write a comparative analysis. 2020. Available Through <
https://writingcenter.fas.harvard.edu/pages/how-write-comparative-analysis>./
The brand identity prism and how it works. 2020. Available Through
<https://howbrandsarebuilt.com/blog/2018/12/21/the-brand-identity-prism-and-how-
it-works/>./
The segmentation, targeting and positioning model. 2020. Available Through <
https://www.smartinsights.com/digital-marketing-strategy/customer-segmentation-
targeting/segmentation-targeting-and-positioning/>./
What is PESTLE analysis?. 2020. Available Through < https://pestleanalysis.com/what-is-
pestle-analysis/>./
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