Adidas and L'Oreal: Marketing, Strategy and Global Approach Analysis

This case study examines the marketing strategies of Adidas and L'Oreal, addressing their approaches to social responsibility, global market entry, and the advantages and disadvantages of their respective strategies. The Adidas section highlights the company's efforts in community projects, worker well-being, sustainable practices, and humanitarian aid, while also questioning the financial impact of its social focus. The L'Oreal section explores its global approach, including market segmentation, distribution strategies, and the use of local market information to innovate products. It also discusses the challenges of managing a global operation, competition, and the impact of economic changes. The analysis includes references to supporting materials and provides insights into the companies' successes and challenges in the competitive market.

ANSWERS OF CASE STUDY
Ques.20-18 Give as many examples as you can for how adidas defines common social
criticism in marketing?
Ans.20-18 Examples as how adidas defines common social criticism in marketing: -
 Adidas company joins as many community projects and provide financial support for
the projects.
 It ensures the well-being of it’s workers as seen in the case when owner of apparel
factory in Indonesia closed the factory, adidas was there to take care of the workers.
 It provides humanitarian aid, placement services and direct advocacy with the
government for improving the status of the workers.
 The company uses sustainable cotton which reduces the usage of water, maintain the
health of soil and also quality of the fiber.
 The company give assistance to it’s workers when they need any help related to the
factory.
 Adidas started campaign in Taiwan which will donate one pair of shoes, in the third
country, to the kids who have no shoes to wear on sale of it’s one pair of shoes. This
will help the needy people around the world. And also build image and reputation
around the world. (EvaShen, n.d)
Ques.20-21 Would Adidas be more financially successful if it were not so focused on social
responsibility?
Ans.20-18 According to the case, it’s surely that the financial position be more sound if not
so focused on the social responsibility. Adidas creates products that are environmentally
sound which are good to considered like it banned the use of chlorofluorocarbons for it’s
product and the most severe gas SF6 which deplete the ozone layer but because of all this ,a
lot of its revenue goes into appeasing the society in the name of the social responsibility and
its revenue continue to flatter. On the other hand, Nike shares in the market has greatly
expanded over the years. It shows that it took over the market dominance from Adidas.

Balance between financial, social and environmental performance need to be taken care of as
seen in the case of Ben & Jerry and The Body Shop in 1960’s. Both showed profitability for
many years as maintaining social and environmental performance as a part of their business.
But despite of good and strong social and environmental performance, both have fared poorly
in financial terms. This is very important issue to be considered as only focusing on building
the social image will affect the company’s profits also. Company needs to balance the two
factors for it’s sustainable development. Ignoring any one will have adverse effect.
This study shows that doing good does not guarantee financial success or being less ethical
does not guarantee financial disaster.
Ques.19-19 What are the disadvantages of L’Oreal global approach?
Ans.19-19 Disadvantages of L’Oreal global approach are as follows: -
 Working in a global market with too many sub division creates problem of handling
such a vast operation.
 Because of many sub division the firm become bulky and slow.
 Managing employee with global division is another big problem as L’Oreal has close
to 60000 employees. And the expenditure on it is huge.
 As the product rang differ, they had to invest higher amount in R&D, organic
processes and distribution which increase it’s expenses and lower the profit margin as
compared to it’s competitors.
 As it has global approach, competition is very heavy. Like one of it’s product i.e.
Garnier is suffering the brunt competition from both- HUL and P&G. Sunsilk is from
HUL and Head and Shoulder from P&G. These two are very strong and powerful in
their segment and give tough competition to L’Oreal .
 So many segments create a problem of dividing cash earned by the brand. And if
economy slumps them it will faces a very huge problem. There is a continuous change
in economy of any country, if any problem arises in any country then the cash inflow
will be stopped. This will cause a problem in overall cash flow and the working
capital management.
 Global marketing is good but required so much perfection and dedication. Any
mistake will lead to adverse effect which will have direct impact on the functioning of
the company.

 Global marketing has both sides i.e. positive and negative, it will be proved to be
positive if handle properly, if not then the consequences are disastrous.
Ques.19-20 Which strategy does L’Oreal employ for entering a new market? How
does the company benefit from this approach?
Ans.19-20 For entering into a new market L’Oreal employ the strategy of setting up
centers all over the world and getting information about the local markets for
developing and innovation the product on regular basis .They gather information by
home visiting and observations done in “bathroom laboratories” which are equipped
with high-tech gadgets .The team will be enable to understand the behavior of the
consumers all over the world.
After understanding the need, it segmented the market on demographic factor like
they have L’Oreal LUXE for upper middle and upper-class customers, Dark &Lovely
for African women’s. Universalization which emphasis on respecting the differences
in culture, desire and aspirations of the internal & external stakeholders.
As the market segmented, now they distribute the products through different medium
like Wholesalers, Retailers, Pops &Mom stores, and e-commerce websites. L’Oreal
continuously upskilling it’s team, by increasing visibility of tech e-commerce, getting
partnership with start-ups like Station F, Partech Ventures, Founders factory so that it
will be ahead of it’s competitors.
L’Oreal with different segment serves the businesses as well as the retail/individual
customers. For businesses, it’s customers are the Salons, Beauty parlors and SPAs
recreational outlets and for retail segment, it has young, upper middle income and
upper social customers with age group 20-45 years
People around the world are obsessed with superior quality product, increasing
urbanization and being socially accepted are some of the factors that help the
company to play well in the market and build it’s image and status for successfully
competes with it’s competitors like Revlon ,Lakme , Proctor & Gamble, and Unilever
etc. (Hitesh, 2018)
We have seen in the case study that L’Oreal expand it’s business by acquiring the
exiting business for successfully entering into the market as seen in many cases .This
strategy proved to be beneficial for it as it does not have to start from level one ,it just
need to raise the existing standard.

REFERENCES
1.Coursehero. (n.d.) retrieved from http://www.coursehero.com/file/p5847i3/Since-that-
Adidas-has-expending-very-very-Fast-Adidas-has-over-3000-retail/
2.Marketing91.(2018) retrieved from http://www.marketing91.com/marketing-strategy-of-
loreal/