L'Oréal Brand Extension: Applying Marketing Principles and Analysis

This report examines L'Oréal's brand extension into hair styling appliances, utilizing marketing principles and strategic analysis. The report begins by introducing L'Oréal as a leading global brand in skin and hair care, then outlines the methodology employed, which relies on secondary data sources. Key findings include an analysis of L'Oréal's existing brand values and target market using Kapferer's Brand Identity Prism and the STP model, respectively. The report also incorporates a PESTLE analysis to assess external factors influencing the new product launch and uses the Ansoff Matrix to identify growth strategies. Furthermore, it explains the new product using Tauber's Brand Extension Options and provides a comparative analysis with Babyliss, a competitor in the hair styling appliance market. The conclusion summarizes the importance of market research, brand value analysis, and strategic planning for successful product launches.

Principles of Marketing

EXECUTIVE SUMMERY
This Report discuss about the brand extension of the company. L’Oréal is a world famous
brand for skin and hair care. Now L’Oréal is going to launch new products that are Hair Styling
Appliances. Company use PESTLE analysis because company operating their business in so
many foreign companies so company need to identify that in this time which factors affect most
in Brand Extension. With the help of Ansoff Matrix Company select one strategy for new
products. In this report, company use Kapferer's Brand Identity Prism model so that company
effectively create their new product brand value. This report also discusses about the competition
factors through conduct comparative analysis with the different company.

Table of Contents
EXECUTIVE SUMMERY.....................................................................................................................................2
INTRODUCTION...................................................................................................................................................4
METHODOLOGY..................................................................................................................................................4
FINDINGS..............................................................................................................................................................4
Existing Brand and Brand Values......................................................................................................................4
Description of Target Market.............................................................................................................................6
Analysis of the New Product..............................................................................................................................7
An Explanation of the New Product...................................................................................................................8
Comparative Analysis.........................................................................................................................................9
CONCLUSION.......................................................................................................................................................9
REFERENCES......................................................................................................................................................11

INTRODUCTION
Principle of marketing is essential for the marketing strategies and it needs a specific idea
of marketing and companies can utilize the marketing principles for promotions of their products
and services. For this report, L’Oréal organization is Chosen and it is largest in France consider
as a world biggest manufacturer which provide high quality cosmetic, hair and skin care
products. The market share of this company is considered in Western Europe was 20% and the
estimated market about £ 220 Billion. The main aim of this report is to introduce a new product
in the market and identify the STP process for the marketing and also use PESTLE analysis to
determine the external market situation and use Ansoff's Grid model.
METHODOLOGY
Methodology is a practical method which help to carried out a research in a most
appropriate and better way. The research methodology is determine the as a procedure which
used to recognize, select and analyse the detail and information about any topic or matter. In
research methodology, all the form of data collection methods and techniques are mentioned.
Data can collect from two sources primary and secondary. For this report, secondary source of
data collection method is used.
FINDINGS
The finding of this report is based on the on some points which discussed below-
Existing Brand and Brand Values
Brand is considered as a name of products and services which takes recognition by itself.
With the help of brand, people easily identify and differentiate a products and services from the
other similar products. Brand extension also known as category extension.
Kapferer's Brand Identity Prism
This model is given by Jeab- Noel Kapferer in 1996. This model is performing as a
diagram which helps to understand the whole concept of brand and brand identity. This model
considers some elements which all the elements related to another.
 Physique – Company demonstrates the brand it contain visual features of the brand. For
example, L’Oreal women skincare products basically dedicated to all the women's.

 Personality –L’Oréal products mainly promote by the very beautiful and attractive
personality women to create brand identity.
 Culture – It considers all the countries culture and their values. For example, L’Oreal
mainly focuses on brand excellence, innovation, beauty and expertise.
 Relationship- L’Oréal customers strongly and fully trust on their brand and use the
products and also recommend it.
 Self-image- L’Oreal creates an impressive image of their brand so that company easily
launch new products.
 Reflection- L’Oréal brand reflect as a high valuable and trustable brand which is also
helpful to introduce new products.
Description of Target Market
L’Oreal is about to introduce a new product name “Hair Styling Appliance which
includes hair dryers, hair strengtheners and curlers. With the help of STP model L’Oréal
easily target their audience for their new brand extension.
STP Model
Figure 1Kapferer’s Brand Identity Prism, 2018

Figure 2, STP Marketing Model, 2018
 Segmentation –L’Oreal segments their market according to the products and recognizes
same groups of customers and divides the groups.
 Targeting – To target market company analyze that which group of audiences are mainly
focus on the L’Oreal new brand products. L’Oreal target young and middle age women’s
for their new product. Company target professional salons and also personal grooming in
North America and Asia Pacific and other countries through online distribution channels.
 Poisoning - L’Oréal make sure that their brand occupies the correct position and
influence the mind of the target audience.
Analysis of the New Product
In this report, PESTLE analysis is used to analyze the new product. This discussed
below-
PESTLE Analysis
 Political Factors L’Oreal is about to launch new product that is Hair Styling Appliances
in the market so company need to focus on the political Factors like trade regulations and
foreign trades because company operates all the foreign countries.
 Economical Factors - These factors includes all economic growth changes , inflation,
recession, demand , supply , exchange rate includes.L’Oreal is about the brand extension
in the market so company need to analyze the demand and supply of the products in the
international market.

 Social factors- social factors like religion, cast, culture, family , education , structure and
population.L’Oreall need to consider these factors so that company easily maintain all the
social difference and other discrimination.
 Technological Factors - L’Oreall requires maintaining internet connectivity, social
media platforms, factors so that easily launch new products and customers buy it with the
help of social media.
 Legal Factors -, L’Oreall consider organization law, securities law and other government
law, rules, regulations, policies so that company effectively launch their new products.
 Environmental Factors - L’Oreall includes geographical, ecological, natural
factors.L'Oréal products used worldwide across the whole world all the factors affect
positively and negatively both on the market.
Ansoff Matrix
Figure 3Ansoff Matrix, 2020
It is consider as a strategic planning method which help manager, executive, marketers to prepare
strategies for future development. It is also called "product -Market matrix" because it deal with
products line and market places through 4 stages which discussed below-

 Market penetrations- In this stage, this matrix consider that how to sell old products and
services to the old customers so L’Oreal evaluate all the aspects and do proper planning
and make strategy to sell existing products to existing customers.
 Market Development -In this step, L’Oreal company plan a strategy that how to take
entry in new market. L’Oreal is a big brand so it's not very difficult to enter a new
market.
 Product and Development- In this strategy, this matrix develop a new products and
services for existing customers.L’Oreall is going to launch a new products so it is
essential for the company to focus on product and also promotion factors and need to do
some changes on it. Company need to apply this strategy to launch new products in the
market and focus on the internal capabilities so that it driving the innovation.
 Diversification - This strategy show that how to company launch new products in new
market.
An Explanation of the New Product
L’Oreal new product is extension of their brand. With the help of Tauber’s Brand
Extension Model company do brand extension which discussed below-
Tauber’s Brand Extension Options
Brand Extension model developed by Edward M. Tauber's. He is known as father of
"Brand Extension" and described that how a well established brand carries out one category to
another category through introduces a new products. Edward M. Tauber's studies many brand so
that he analyzed 7 approaches which is most fit and appropriate. These approaches are similar
products in a modified form, distinctive components, products companion, expertise, customer
franchise, features, design an ethnic image. L’Oreal focuses about their new brand extension to
consider these approaches. L’Oreal is very much concerned about the product packaging.
L’Oreal conducts many researches so that company design an attractive packaging for their new
products.
Comparative Analysis
Comparative Analysis of L’Oreal with Babyliss discussed below-

L’Oreal Babyliss
 L’Oreal all products are very high in
quality that’s company is famous
worldwide.
 It is big brands so all the products very
high in price.
 L’Oreal all products are temperature
controlled and provide many features
with heat setting.
 Babyliss product is lower quality as
compared to the L’Oreal.
 Less Price of products.
 Company do not provide temperature
control and heat setting in some
appliances.
CONCLUSION
According to this report it is concluded that for launch a new product launch in the
market company need to do some research about the market and analyze the brand value with the
help of Kapferer’s Brand Identity Prism and describe the target market through STP model and
explain about the target market. This analyse the new product PESTLE analysis is done and also
used Ansoff model and use product and development strategy. Tauber’s Brand Extension
Options model for do brand extension of new product and conduct comparative analysis with
other competition in the market.

REFERENCES
Books and Journal
Caileigh lombard , 2018, The Brand Identity Prism and how it works, viewed 21 December 2018,
https://howbrandsarebuilt.com/blog/2018/12/21/the-brand-identity-prism-and-how-it-works/
STP Marketing, 2018. Online, Model </https://expertprogrammanagement.com/2019/11/stp-
marketing-model/>
What is PESTLE Analysis </https://blog.oxfordcollegeofmarketing.com/2016/06/30/pestel-
analysis/>
What is Ansoff Matrix, 2020, Online
</https://corporatefinanceinstitute.com/resources/knowledge/strategy/ansoff-matrix/>