Corporate Strategy & Governance: L'Oréal and Misleading Advertisements

This report examines the influence of misleading advertisements on the brand image and reputation of L'Oréal. It begins with an introduction outlining the issue of misleading advertising and its impact on corporate strategy and governance. The research includes a literature review that explores the concept of misleading advertisements and their effects, followed by a methodology section detailing primary and secondary research methods. The report critically reviews the outcomes of the research, offering recommendations and an action plan for L'Oréal to improve its advertising practices and protect its brand image. The study aims to understand the concept of misleading advertisements, assess their impact on L'Oréal's performance, and identify areas for improvement in their promotional strategies.

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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Research Aim
The essential aim of the research is “To investigate the influence of misleading
advertisement on the brand image and reputation of the business entity. A case on L’Oréal.”
Research Objectives
The potential objectives for the specific research are defined below:
 To understand the concept and meaning of misleading advertisement.
 To investigate the influence of misleading advertisement on the performance of L'Oreal.
 To determine the areas in which L'Oreal requires to emphasize on enhancing
advertisement while promoting their products.
Research Questions
The well defined and systematic research question for this research project are going to
be described as under:
 What is the concept and meaning of misleading advertisement?
 What are the influence of misleading advertisement on the performance of L'Oreal ?
 What are the areas in which L'Oreal requires to emphasize on enhancing advertisement
while promoting their products?
Structure of the project
Introduction This is the first section which will put light on the issue which is misleading
advertisement which might affect the goodwill and reputation of the
business entity. Apart from this, the present section enclosed with the aim
and objectives consisting of rationale, structure as well as background of the
project.
Literature Review Under the second most essential section, detailed information associated to
the objectives carried out by effectively considering secondary method.
Critical Review
of the Results
This is the section which will show the positive as well as negative
influence of the outcome.
Recommendation
and action plan
At the end, a proper and well defined recommendations including the action
plan are going to be created which help in getting beneficial results within
specified time period.
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Literature Review
Literature review is the second section which define as the procedure of gathering data
and information from different sites in which scholars as well as authors has given there
thought and view point which aid investigators in order to carry out detailed study related to a
specific issue or topic. This section assist the researcher in order to conduct effective theoretical
framework which aids in order to address the investigation issue with the assistance of relevant
figures and facts. Literature review is considered as one of the most effective and comprehensive
summary of all the previous research conducted by researcher on various sort of business topics.
The literature review surveys includes scholarly articles, journals, books, and various different
sources which are relevant to a specific field of the research. Current literature review section
consist of research's objectives which will assist in getting favourable results within specific time
period.
This is the section of investigation which assist in examining the overall research with the
help of theoretical frame work which is effective in order to identify the viewpoints of different
authors who have wide range of knowledge related to the chosen area of the study. In this section
of investigation, thought and view point of various authors and scholars are going to be discussed
in order to get favourable outcomes related to the research issue.
Concept and meaning of misleading advertisement
As per the opinion of Schaltegger and Wagner, 2017 it is said that the concept of
misleading advertisements can be understood that necessary information are given to the
customers so that they will be able to create their customers interest related to the product and
services. It is said that, advertising are quite helpful in as it aid in developing decisions related to
the buying and purchasing of products. Misleading advertising arise at the time of promotion of a
commodity, product or service where business organisation develops a representation to attract
the attention of customers and public which are basically false or materially misleading. It has
also been identified that if a representation might influence the consumer in order to buy a
product or service which is being advertised by the company it is said to be misleading
advertisement. Misleading advertising might have serious sort of economic consequences,
specially when created toward huge amount of audiences as well as when it might takes place
long period of time. It has been concluded that it can influence the goodwill and brand image of
the company in an adverse manner and sometimes might pay some sort of penalties to the
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government. This affect the overall market share and sales of the company in a negative manner.
It has been identified that misleading advertising covers all these claims which as a result made
direct influence on consumers by distributors, manufacturers, retailers along with
advertisements, websites and many more. Advertising define as the form of effective
communication which is implemented to persuade a particular group of individuals in order to
take some innovative and new action towards the brand, organisation and company along with its
offering, its products as well as services.
Advertising considered as one of the most crucial and important aspect which help in the
economic development and growth of marketers along with various companies in competition. In
addition to this, the term misleading advertisement define as the kind of any representation as
well as symbol which might develop potential number of general and the relevant public in order
to misapprehend along with creation of an incorrect decision apart from whether this symbol is
consistent with the facts. Advertising may also be recognised as misleading if an essential data
that the average buyers required to create an informed decision is pending. Misleading
advertising also covers assertion and claim which are developed instantly to the consumers with
the help of manufacturers, distributors as well as retailers, along with the advertisements,
websites and many more. Apart from this there are some examples of misleading advertisement
which help in understanding the concept of misleading advertisements in an effective way. For
instance, false claim related to the features of goods and service, such as the colour, size as well
as weight of the product are different from the product advertised by them. Along with this, the
price as well as way the price is being calculated is usually misrepresented like products which
are advertised at the sale prices, but at the time of sell are not same. The method are the goods as
well as service are supplied is quite misrepresented.
Influence of misleading advertisement on the performance of L'Oreal
On the basis of view point of Roberts, 2020, it has been identified that due to misleading
advertisement company face negative impact on the growth and success of a business entity
which affect their overall reputation and goodwill. If talking about misleading advertisement, it
is said that company gain attraction of large number of customers at the initial stage but after
sometimes there overall image get reduced at the competitive marketplace. In addition to this, it
has also been analysed that due to negative influence of advertisement done by business
organisations, they affect their growth and development in long run. According to the viewpoint
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of Advertising standard authority, L’Oreal promote anti-wrinkle cream product through Oscar
winning actor Rachel weisz which is appeared good to be true. “Skin looks smoother” so this
kind of product affect lot in order of performance of the company. By the ASA is banned
because this advertisement shows fake promising with the customers. The beauty product
industry stops ripping off consumers with dishonest images. It’s directly effect on the image and
goodwill is going down. These are misleading advertisement which influence the mentally of
customers and attract them towards their offerings which in long run affect the customer base in
highly adverse manner. Organisation putting lot efforts to make the picture more flattering, using
a lot of light but ASA ruled that cosmetics advert could present their brands in the best possible
lights. ASA said this kind of techniques are banned because they show misleading to the
consumer which impacts directly on company production process and post production technique.
L’Oreal spokesperson again come back to built the image in the mind of customer and
also provide explanation regarding this but they lot of effect on production system or create an
image as false representative, so it is directly impacted on sale revenue, market share and profits
of the company. This as a result says that doing misleading advertisement by a business entity
highly affect the reputation and goodwill of a company and reduce overall market share as well
as customer base in a negative manner. For avoiding such situation, it is necessary for the top
management team of a business organization that they must modify their marketing strategy and
promote actual characteristic and features of the product.
Areas which needs to be improved by L'Oreal while promoting products to gain reputation at the
marketplace
As per the thought of Maurya, 2020, it is identified that there are ample number of areas
which need to be improved by higher authorities so that they can regain their reputation and
goodwill in an effective manner. L’Oreal is one of the leading companies across the globe. There
are various aspects need to be improvement towards the promoting of their products. It includes
company entering into 3.0 marketing which is called a new period of transformation. Fast-
growing market and create more trustworthy digital economy for both brands and consumers.
Enhancing the area of digital transformation and lot of innovation must be created in cosmetic
products. Also change the market strategy and marketing plan as well as come with new
operations and execution plan which is more helpful to developing brand image in the mind of
costumers. L’Oreal is promoting 3.0 marketing with the improvements in a number of areas
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including up skilling employees, team productivity and consumer satisfaction while promoting
the products in large scale. Another integral part to L’Oreal transformation has including
rethinking the way it work with agencies. For example, it has to start marketing on media process
and to help better understand the buying process on face book, Amazon, or Google. However
company come with the excesses of new advertising technologies have been pushed their limits,
while come in a very timely manner to re-stage of conversation around transparency, consent and
permission based marketing. Organisation also focuses on a service which is provided to the
customers and changes their shorter formats, touches points etc. Organisation putting efforts in
R&D so developing a new product on the basis of interacting with the peers, who may come
from different cultural, team managers must discuss their work with top management. Find out
the recognizing new-product opportunities in order to flexible perspective can lead to unexpected
opportunities for product innovation. Targeting to the new Market for developing of new
products which leads to increase the customer segment. It is new opportunities for the company
in the new market so also gain the competitive advantage. By improving the areas in a well
define manner it is said that company will be able to promote their products and offering in a
positive manner. With the help of enhancing all the areas in an effective manner, it can easily be
understood that company will be able to get opportunity and growth rate at the competitive
marketplace.
Methodology
Research Methodology plays very vital as well as crucial role when researchers need to
bring data and information associated to a topic within given time frame. It has been identified
that wide range of research methodologies are there used by investigator which consist of
primary as well as secondary method which assist them in order to pull out authentic information
for a particular topic. It has been identified that under primary data collection method, researcher
adopt different sort of methods and techniques so that they will be able to gather authentic and
accurate information related to the topic. Apart from this, it has also been analysed that they
collect fresh and raw data which is organized by researcher so that they can analyse as well as
interpret the data in order to draw valid conclusion in an effective and desired manner. Whereas,
in secondary data collection, researchers gather information with the help of external sources
such as books, newspaper, journals, articles, government data and many more. These sort of
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method includes thought and opinions of various authors related to a specific topic. This as a
result will aid investigators in order to examine their thoughts as well as develop views as per
their own opinion. In reference to current investigation where L’Oréal is facing issues associated
to misleading advertisements, researcher adopt both primary as well as secondary data collection
methods which are going to be discussed as follows:
Primary Research
Primary research define as the most effective and suitable approach used by researcher so
that they will be able to gather fresh information related to the topic from a specific group of
people. For this researcher needs to fix a particular sort of sample size so that they will be able to
gather sufficient amount of data and information so they can draw valid conclusion. In addition
to this, it is said that primary research usually needs to address some specific problem which
needs an in-depth analysis. In relation to the current context, it has been identified that primary
investigation is conducted on basis of information and data which is gathered by the investigator
by their own. Apart from this, researcher usually emphasize on addressing some specific issues
with the help of an in-depth knowledge. Furthermore, primal benefit of adopting this sort of
method is that whole research will be done by considering that the data are authentic which will
assist in developing favourable results in an effective manner on the specific topic which is
influence of misleading advertisement on the goodwill and reputation of a business entity. For
this, researchers have examined different sort of primary research techniques so that they will be
able to conclude the whole investigation in a positive manner. These methods are questionnaire,
online as well as offline survey, interviews, observation and many more. These methods are
going to be discussed as follows: Interviews (Telephonic or face-to-face) : An interview refers to a conversation which take
place between interviewer as well as interviewee where different sort of questions are
being asked. In reference to the context of research, it has been identified that qualitative
research includes face to face interviews method which will assist in order to get
favourable results within specified time period. This method is one of the most effective
approach used by researcher to get fresh data where communication plays very crucial
role in order to interact with the individuals for getting their opinions and views. In
reference to current context, where investigator selects a topic to conduct an investigation
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