L'Oréal Brand Equity Analysis

This assignment tasks you with a comprehensive analysis of L'Oréal's brand equity. You are required to examine their various marketing strategies, identify their core competitive advantages, and assess how these factors contribute to the brand's strong consumer perception and market position. The analysis should draw upon relevant academic literature and real-world examples from L'Oréal's operations.

Running head: MARKETING MANAGEMENT
Marketing management
Name of student
Name of University
Author note

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Executive summary
The report was developed to focus on the various ways by which the marketing activities
were managed at L’Oreal, Australia to sustain in the competitive business market place. Being
one of the major organisation within the cosmetic industry, the company’s mission statement was
to promote innovation and enhanced the quality of products to keep the customers satisfied and
their buying behaviors influenced. The 5Cs marketing was used to determine the company and
its products, its customers, business partners and competitors in business. From the
organizational context, the political, social, economic and technological factors that created an
impact on the business functioning was also understood. The company partnered with Good360
to provide support to the poor people in Ayustralia and this was a major step to create positive
mindset among the customers. The new anti aging cream was targeted to a specific customer
segment to ensure that their needs could be fulfilled and the company could gain competitive
advantage.

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Table of Contents
Introduction......................................................................................................................................4
Issue 1..............................................................................................................................................4
Issue 2..............................................................................................................................................6
Issue 3............................................................................................................................................10
Issue 4............................................................................................................................................11
Issue 5............................................................................................................................................12
References......................................................................................................................................15

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Introduction
The report focuses on the various concepts of marketing by analyzing the business
organisation named L’Oreal within the cosmetic industry. The report will demonstrate the
operating environment as well as develop useful marketing strategies for enhancing the
marketing processes’ efficiency and consider the external and internal factors that can contribute
to the marketing efficiency. To analyse the organisation and its operating environment, various
aspects will be covered including the business organisation’s mission statement while the 5C
approach will be used to determine the customers, collaborator, competitors and the entire
organizational extent. By obtaining relevant information from this, it will be easy to conduct
market researches and understand the threats that may be posed by the competitors
(Loreal.com.au 2018). This will also help in setting up various functions and develop marketing
strategies for targeting specific market segments, enhance the value proposition and position the
products properly in the market too.
Issue 1
L’Oreal, Australia is one of the leading company in beauty within the cosmetic industry
that provides the best quality cosmetic products and beauty services to the customers not only in
Australia and but to customers all over the world. The company belongs from the cosmetic
industry and the mission statement of the company is to share beauty with all through delivery of
the best quality beauty products that can keep the customers satisfied and at the same time keep
them beautiful with progressing age and healthy skin. The mission statement of the company is
to enable cosmetic innovation for all. The beauty brand has been committed to excellence in the
beauty products and services and contributed largely to the beauty and healthy skin of the

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individuals by allowing them to express their positive attitudes, behaviours, personalities and
even gained self confidence (Bresler and Lubbe 2014). According to the company, beauty is a
common language and so to ensure proper value statement, the organisation has provided the
best cosmetics innovation from the perspectives of quality, safety, health and effectiveness. The
slogan used for advertising purposes is “Because you're worth it”. The company follows the
vision of fulfilling the diversity of beauty needs and even drew inspiration from many women to
go beyond limitations and invested on the development of new products for becoming
successful in the future. “Beauty is a commitment”, as stated by the organisation in its values and
beliefs, which has enriched the beauty of people and created universalisation through promotion
of new beauty products for each and everyone in different market segments of Australia (Kotler
et al. 2014).
The company to enhance the rband awareness and make people more centered on the
products and services delivered by L’Oreal follows the marketing strategies. This would not only
influence the buying behaviors of the consumers but could also result in high level of customer
satisfaction. The marketing strategies followed by the company are distribution, promotions,
managing corporate social responsibilities and extending the brand through internationalization.
To stay ahead in the competition, the company has enhanced the distribution network by
providing incentives and delivering more products and services to the retailers, distributors and
keep those products in stock (Shen and Bissell 2013). To enhance brand promotions, L’Oreal has
also provided complimentary lip guide after making purchases on a particular amount of money.
Celebrity endorsements were done as well for ensuring that the products and services gain more
exposure in the different market segments and influence the buying behaviours of the consumers.
The company has supported campaign for safe cosmetics usage to enhance the confidence of

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customers to buy the products and maintain global business sustainability too. Marketing
strategies also included advertising and promotions to promote innovation of products and even
delivered products according to the needs of customers in the different market segments. Global
advertisements’’ spending has increased as well to enter the mass markets and keep the
customers informed about the new products and services delivered by the organisation (Hitt,
Ireland and Hoskisson 2012). To manage the corporate social responsibilities properly, L’Oreal,
Australia has conducted researches to spend the fellowships for purchasing the various
equipments and machineries. The company also handled the child care costs and travel costs to
maintain consistency all throughout the research activities.
Issue 2
The 5Cs of marketing is used by L’Oreal to conduct analysis of the various areas that are
related to the marketing activities managed by the organisation. The 5Cs marketing has been
effective for the organisation to create a well defined marketing plan and follow proper
guidelines to make the best decisions and improve the profit and this allowed for gaining
competitive advantage within the competitive cosmetic industry in Australia. The five major
components of the model are customers, company, competition, collaborators and organisational
context (Berthon et al. 2012).
Company
The offerings of the organisation, brand image and identity, culture, goals and objectives
are considered as the major components of the first aspect of the 5Cs marketing analysis. The
organisation’s strengths and major resources used by the company along with the weaknesses
could be the other essential aspects required for the management of marketing activities with

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ease and effectiveness. The major strength of the company is its ability to conduct researches and
promoting innovation by focusing on the beauty and thereby ensuring that the company offers
the best quality cosmetic products to the consumers. Due to high level of dedication to the
research, the company has been one of the leading cosmetic industry despite the huge
competition in the market (Solomon 2014). The company also specializes in dermatological and
pharmaceutical areas to focus on the development of new products and services and maintain
quality in terms of the products and services offered.
The weaknesses of the company are decentralized organizational structure, multiple sub
divisions of the company and lower profit margin than the other cosmetics company. This
problem has arisen due to the immense investments and costs incurred while managing the
advertising and promotional activities. The scopes and opportunities of L’Oreal are immense
because the company delivers its products and services to women of all ages. The company can
further focus on hair styling, color, skin care products and perfume products too. Being one of
the leading cosmetic company in Australia, the company also can target mass market by
expanding globally. L’Oreal has also taken the benefits of having a good market share and with
multiple patents registered by the company, it has become easy for managing the licensing
activities and ensured global expansion (Morgan, Katsikeas and Vorhies 2012).
One of the major threats could be the high competition level and economic downturn as
well. The products and services are of good quality, tough sometimes, the customers might think
that those had not been inclined with their basic needs and thus could skip buying. The company
was trying to focus on hair care products though it failed miserably due to the products offered
by Clairol, which is a leading hair care brand (Kim et al. 2012).

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Customers
The company is serving the customers and managing the corporate social responsibilities
properly to make sure that it not only benefits the customers but also contributing largely to the
community. It is important for L’Oreal to understand the behaviors and lifestyles of the
customers to influence their buying behaviours (Mintz and Currim 2013). The customers mainly
want something unique from the company that can keep them beautiful or long time and at the
same time, maintain healthy skin and hair. L’Oreal has offered products to every customer
segments, from young to adults for ensuring that the products could enter new market segments
easily and increase the customer base. The behaviours of customers are dependent upon the sales
promotion done by the company, prices set, distribution and diversification of the products too
(Nagasawa and Kizu 2012).
Collaborators
The distributors of Loreal include Giorgio Armani, Cacharel, Diesel, Lancome, Kiehl’s,
Clarisonic, etc. The products division for the consumers are Loreal Paris, Essie, Maybeline,
Magic, etc. There are no such suppliers because the company produces its own products and
made conscious choices and decisions to reduce the environmental footprint. One of the major
objective of the company is to archive sustainability, which has been possible by working in
partnership with Good360 to provide support to the poor people. By managing partnership, the
company contributed to the excellence by providing more than $1 billion worth of products to
the Australians who were vulnerable to some kind of harm or suffered from poverty. Rather than
using the supplies, the organisation promoted sustainable approaches through use of renewable
energy, reduced the water wastage and even manage the reengineering package for using less

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plastic materials. There are few suppliers though who have been verified as sustainable suppliers
(Kizu and Nagasawa 2012).
Competitors
The major competitors of Loreal are Clairol, The Estee Lauder Companies Inc, Chanel,
Estee Lauder, etc. The competition level is high and so it has posed serious threat for the
company to sustain in the marketplace. A’kin, Lanolips, Sodashi, The Jojoba company are new
entrants in the market which can also give stiff competition to L’Oreal.
Context

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The organizational context means the various factors that have impacted the business
performance like the political, legal, technological, social and economic factors. The impact of
EU law has restricted the production of various products consisting of chemicals like Phthalates.
L’Oreal follows the obligations to deliver the best quality products that are safe and healthy and
do not contain any harmful chemicals. The European Parliament and the Council of the
European Union to create ban on animal testing products approved seventh Amendment
cosmetics directive (Osterwalder et al. 2014). The economic downturn was a major issue for
L’Oreal, though the program of Young Women in science fellowship resulted in higher sales
when compared to the last year’s profit. With the higher living standards, the consumers are
focusing more on the brand image and demands for quality and convenience related to the
cosmetic and skin care products has increased. With the advancement in technology, L’Oreal has
conducted research and development activities and even registered more than 500 patents
considering the cosmetics and dermatology fields (ter Heide and Gontarz 2017). The quality of
products and services has also improved with the use of new machineries and equipments,
furthermore promoted innovation too.

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Issue 3
The customers of Australia are more focused on quality regardless of the prices that have
been set for the products and services provided by the organisation.
The customers want something that cannot only fulfill their demands and preferences but
will also influence their behaviours to make purchases consistently (Loreal.com.au 2018).
The competitors that posed serious threats for the company were Revlon, Garnier,
Lakme, Yardley and Chamber.
The context of business has changed due to the political, economic, social and
technological factors that have created an impact on the business functioning. With the immense
scopes brought through globalization, the consideration of political factors like fulfilling the
Government obligations, managing the import policies and managing the rate of interest and
exchange have contributed positively to the organisation. The rates of exchange could affect the
way L’Oreal had been functioning and so according to the GDP rate, the prices should be set
properly to keep up pace with the changing business environment. The cust9mers in Australia
are less concerned about the prices of products, rather they are more conscious about the quality
of products and services (Yoo, Donthu and Lee 2014). Therefore, in order to meet up to their
expectations the company offered new product line including anti ageing cream and hair care
products too.
By collaborating with Good360, the products that remained unsold had been delivered to
various charities and this supported the people suffering from poverty. The poor people were
also provided with personal care goods, blankets and clothing s that they could live a good and

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healthy life in the future. L’Oreal, Australia is the silver sponsor of White Ribbon and it is
managed to make sure that any sort of violence is prevented against the women (Loreal.com.au
2018).
Issue 4
Initially, L'Oreal was focused in selling its products to the countries like United States,
and Japan as the market in these countries was very much open for foreign trade. However, the
current scenario and the concept of globalization has urged L’Oreal to spread its business to the
different countries like Australia, Russia, Asia, Eastern Europe, and Africa, which are the
promising players of the market and their rising economies are likely to be even higher globally
in the future. Australia is one of the flourishing and thriving target markets for Australia due to
its high economics and consumer segmentation position. The main reason why L'Oreal would
benefit from trading in the Australian continent is due to the culture of the people in the
Australian continent. The population is not only advanced but they are willing to pay whatever it
takes to lead a cheerful and healthy lifestyle. Not only the Australian women but also men are
much obsessed about their living lifestyles, in terms of attractive looks and presentation. L'Oreal
would be more successful in Australia due to the anti aging cream, which has been launched in
recently launched. Main reason following this is that anti aging cream would spike a growth in
market of the country. However, with rise in the number of competitors emerging with this
category of product in the market, it has become necessary for the company to keep a strong
foothold on the anti aging cream segment (West, Ford and Ibrahim 2015).
L'Oreal is facing a great challenge from other major competitors in the cosmetics industry
but it is still prevailing at the top of the list because of its strategies in the marketing mix

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(products, promotion and pricing according to the place (Hollensen 2015). The people of the
Australia can afford to purchase first-class products. Therefore, it can be considered that the
value proposition of L'Oreal in Australia would be much promising than some of the other
countries where the people are not much interested in the premium products. L'Oreal is very
cautious in the selection of the price tag for all the products. L'Oreal deals its price band for
products in a range of moderate to low price, depending on the country and the assortment of the
product and the quality. Thus, with reference to the value proposition of L’Oreal, the pricing
structure has been kept in congruence to the quality of the products that L'Oreal delivers and
would be delivering to its patrons (Osterwalder et al. 2014).
L'Oreal has extended its reach in more than 130 countries and is constantly looking for its
expansion. L'Oreal possesses around 23 global brands, which would make it a versatile company
for all consumers. The flagship of the company has reached around € 25.83 billion in the year of
2016 and ever expanding in its net profit every year. Generation such profits in the existing
competition is a certain positioning statement for the company. However, based on the target
market, L’Oreal can certainly generate more revenue with respect to the response from the target
market, the wide product assortments in correspondence to the brand’s product quality and
excellence (Goetsch and Davis 2014).
Issue 5
A detailed 4P marketing mix strategy is used for identifying the products, prices, places
and promotions done by L’Oreal.
Products

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There are many brands offered by Loreal and few of the major products of the company
are Loreal Lux products including the Kiehl, Lancome, Ralph Lauren, Giorgio Armani, etc. The
consumer product division consist of L’Oreal Paris, Maybeline New York, Garnier, Sampoo and
the active cosmetic divisions include Vichy, Sanoflore, etc. From the marketing strategy
illustrated in the above section , a new anti aging cream is also introduced to influence the
buying behaviours and allow the company to generate more revenue, furthermore gain an
increase in the market share too (Loreal.com.au 2018).
Price
L’Oreal, being one of the major cosmetics brands has distributed the consumer product
division brands in the retail channels for making those available easily for the customers. It will
attract the mass market and the prices of the products are also reasonable. The products are
available online too, because of which, the customers can even pay premium prices because of
the good quality. To penetrate new market segments with different price levels, the company has
continuously innovated and kept prices of products reasonable (Morgan, Katsikeas and Vorhies
2012).
Place
The products are available on the online shopping websites and with its huge distribution
networks, the shops are present in more than 130 countries. The products and service are
available at retail shops, supermarkets and at kirana stores for attracting more customers by
targeting the mass market (Huang and Sarigöllü 2014).
Promotion

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Celebrity endorsements are common for L’Oreal and popular celebrities promoted the
brand like Jennifer Lopez, Naomi Watts, Aishwariya Rai Bachhan, Katrina Kaif to create
awareness among the customers, Promotions have been done through digital advertisements and
the word of mouth marketing promotions strategy has also aid of for the company to generate
enough revenue in business. Social media involvement has also improved the efficiency of
promotional activities (Bresler and Lubbe 2014).
References
Berthon, P.R., Pitt, L.F., Plangger, K. and Shapiro, D., 2012. Marketing meets Web 2.0, social
media, and creative consumers: Implications for international marketing strategy. Business
horizons, 55(3), pp.261-271.
Bresler, M. and Lubbe, I., 2014. Marketing management.

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Chan, H.K., He, H. and Wang, W.Y., 2012. Green marketing and its impact on supply chain
management in industrial markets. Industrial Marketing Management, 41(4), pp.557-562.
Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper
Saddle River, NJ: pearson.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases:
competitiveness and globalization. Cengage Learning.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand
equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132).
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Kim, K.H., Jeon, B.J., Jung, H.S., Lu, W. and Jones, J., 2012. Effective employment brand
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Kizu, Y. and Nagasawa, S.Y., 2012. Creating the New Brand Equity through EcoDesign of
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Kotler, P., Keller, K.L., Ancarani, F. and Costabile, M., 2014. Marketing management 14/e.
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Loreal.com.au. (2018). L'Oréal Australia, world leader in beauty - L’Oréal Group. [online]
Available at: https://www.loreal.com.au/ [Accessed 21 Jan. 2018].

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Mintz, O. and Currim, I.S., 2013. What drives managerial use of marketing and financial metrics
and does metric use affect performance of marketing-mix activities?. Journal of Marketing,
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ter Heide, M. and Gontarz, K.M., 2017. A brand positioning strategy recommendation for an
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