The Marketing Strategy of L'Oreal Paris: Analysis and Recommendations

This report provides a comprehensive analysis of L'Oreal Paris's marketing strategy, specifically focusing on its approach within the Australian market. The executive summary highlights the brand's penetration strategy, product segments, new product rationale, target customer description, and marketing mix. The introduction establishes L'Oreal's position as a global leader in cosmetics, emphasizing its continuous evolution and focus on the young generation. The report delves into the company's history, financial performance, and sustainability initiatives. It details the product segments, including various brands and their positioning. The new product rationale focuses on understanding the income groups and cultural roots of Australian and African women. The report also explores the target customer description, emphasizing the brand's message of boldness and its appeal to a wide age range. The marketing mix strategy, including product, price, place, and promotion, is thoroughly examined, with a conclusion summarizing the key determinants of the brand's success and future directions.

The Marketing Strategy of L’Oreal Paris 0
Title: The Marketing Strategy of L’Oreal Paris
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The Marketing Strategy of L’Oreal Paris 1
Executive Summary
This report summarizes the international beauty brand -L’Oreal Paris and its penetration strategy
in demographic markets of Australia. The large emphasis is on the major holdings of L’Oreal
brand and this is followed by the product segment summary. The need for the new product in the
Australian markets is largely emphasized. A description about target customer and marketing
mix strategy has been provided, followed by a conclusion.

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Contents
Introduction......................................................................................................................................3
Company Summary.........................................................................................................................3
Product Segment Summary.............................................................................................................4
New Product Rationale....................................................................................................................5
Target Customer Description...........................................................................................................6
Marketing Mix Strategy...................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8
Appendix........................................................................................................................................10

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Introduction
L’Oreal is a Paris based personal care firm and its products are majorly focused towards
skin care, make-up, sun protection, hair color, hair care and perfume. The cosmetics market is
rapidly progressing in Australia and this is evident from the needs of the consumer skin care
products. L’Oreal is an international brand that has been continuously evolving its brand
marketing strategy and tactics to become the world leader in cosmetics range of products. The
aspirant young generation is the target market for L’Oreal and the brand has underwent a number
of transitional phases. At present, the company has been operating research and development
centers in six countries (Slater, Hult and Olson, 2010).
Company Summary
L’Oreal Paris is one of the global leader of beauty products. The company was
established by Eugene Schueller in year 1909. The company is known for some of the best
cosmetic products in its portfolio. The L’Oreal Paris has made the investment of thousand
million dollars in the research and development and more than four hundred patents have been
filed. The present worth of L’Oreal Paris is estimated to be about $107 billion dollars. The
business of L’Oreal Paris has been growing at double digit numbers. The net profit derived
through the cosmetic activities has been 1.6 billion Euros (Abdullah Saif, 2015). The company
has its operations in more than 100 countries and employs approximately fifty thousand people.
According to the rankings given by Fortune Global 500, the L’Oreal was ranked at 353. By the
end of year 2016, the company had an operating profit of 4.5 billion Euros and shows revenue of
25 billion Euros.

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The company launched creative sustainability plan in year 2013 and expects to reach 1
billion customers by the end of 2020. The company has been involved with producing the skin
care products that have people to make better choices. The business operations of the company
are targeted towards encouraging people to busy sustainable products (Mandal, 2017).
Product Segment Summary
A beauty product enhances the self-confidence and changes the body personality. The
L’Oreal Paris group has a separate research and development unit and encompasses 34 brands
under its product set. The brands L’Oreal has a brand message- “The one beauty product for all”
and challenge your unique persona with boldness through the wide range of products. The
company has been successful in positioning itself as the ethical beauty cosmetics and Care
Company. The rationale behind the company upcoming with universal product categories for all
is to respect every caste, creed and culture. This also takes into account the aspirations of young
generations (Varadarajan, 2015). The widespread L’Oreal Paris brand portfolio encompasses
following products-Dark & Lovely, Lancome, Giorgio Armani, Urban Decay, Ralph Lauren,
Maybelline. Some of the professional products of L’oreal Brand are-Kerastase, Matrix, Redken,
Pureology. Some of the biggest names have been associated with this brand. The professional
products of L’Oreal brand are a commitment towards the enhancing looks of women. A different
category of product has been launched by the company for the African Women-Dark and
Lovely. Beauty is universal and science in itself. The brand understands the diversity of
communities existing in Australia and makes an effort to preserve the nature (Phillips and
Hallman, 2013).

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New Product Rationale
The L’Oreal brand encompasses vast majority of products under a single brand name.
The company provides latest trends, personalized tips and best skin care and hair styling
products. The brand L’Oreal has been successful in reaching out to the African and Australian
Women. The company targets the people of different income groups and has been able to create
a benchmark in almost every country. The company has been planning to make investments in
Australia. The brand L’Oreal has been able to create a monopoly in Australia through its
acquisitions. The company has been a big hit in India and planning to expand its operations in
Australia (Feng, Li and Zhang, 2014).
The rationale behind launching a new product into the Australian markets is to
comprehend the income groups of different Australian and African women. The idea behind
launching a new product in the market is to understand the cultural roots of a particular nation.
This makes women courageous and better present to the world. The beauty market is ten billion
dollar industry and not only pays massive attention to the women beauty product, but also to the
men grooming. Beauty products must be applied with safety and must draw attention from its
ancestors.
Target Customer Description
The L’Oreal brand was launched with a strong message in society. The company has
some of the biggest names associated with its brand-Jennifer Lopez, Katrina and many more to
its credit. The study undertaken emphasizes on the different target market groups for brand
L’Oreal. The company focuses on product consumerism specifically when identifying the target
market for its products. The brand very well positions itself into the market. The L’Oreal brand

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deciphers the premise behind what are the inherent feelings when a woman is asked about age?
The simplest is-the maturity comes with age. The society always wants that women must look
beautiful, but the brand L’Oreal Paris has emphasized on boldness of a women through its skin
care products. The target customer is between the age groups of 15 to 70. The company beauty
and styling experts have tried to answer a beautiful remark on a women-What goes inside a
women if, ever had a grey hair. The L’Oreal Paris brand is upcoming with wide portfolio of
products that shows a transition of being a girl to woman. The company sustainability programs
are targeted towards the point where the pricing does not matters at all. The target customer of
L’Oreal brand is mature enough to differentiate between the luxury and necessities (Maglaras,
2009).
Marketing Mix Strategy
The International beauty brand-L’Oreal Paris faces massive competition from Hindustan
Unilever, Emami and others. The marketing mix 4P’s have been described below-
Product- the Company has extensive range of product to its brand name. To name them-these
include consumer products, professional products, active consumer products and luxury
products. The Indian cosmetics industry is undergoing a phase where the beauty products are
inexpensive and readily available. What is a one factor that differentiates the brand L’Oreal Paris
from others? It is not only the mascara that a woman wears in its eyes, but the boldness depicted
through the L’Oreal product clearly differentiates itself from the other brands.
Price-The L’Oreal Brand has launched its retail outlets in Australia and continuously involved
with assessing its pricing strategy. The company L’Oreal has adopted the skimming pricing
strategy and geography based distribution of products (Du and Chen, 2014).

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Place-The Company operates through retail outlets and has a team of professionals that creates
awareness regarding the different products to the community. The Australia is witnessing the
launch of f L’Oreal beauty salons in huge numbers and available for both genders
Promotion-The Company has been launching different product/brand strategies for promotion
and advertising of it products. The company ensures the higher customer involvement in its
products through its bold slogans and different category of products (Codini, Saccani and Sicco,
2012).
Image Source: (www.loreal.com)
Conclusion
Customer Satisfaction is one of the key determinants behind the success of a brand. The
L’Oreal brand has all its strength in promotion and marketing. The L’Oreal brand is opening

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doors for virtual marketing and maintaining the pricing balance in different demographic areas.
The company has taken a step to change the mindset of women’s through its value and worth
(Hinterhuber, 2017).

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References
Abdullah Saif, N. (2015). How does Marketing Strategy Influence Firm Performance?
Implementation of Marketing Strategy for Firm Success. International Journal Of Innovation
And Economic Development, 1(3), pp.7-15.
Codini, A., Saccani, N. and Sicco, A. (2012). The relationship between customer value and
pricing strategies: an empirical test. Journal of Product & Brand Management, 21(7), pp.538-
546.
Du, P. and Chen, Q. (2014). Skimming or penetration: optimal pricing of new fashion products
in the presence of strategic consumers. Annals of Operations Research, 257(1-2), pp.275-295.
Feng, J., Li, X. and Zhang, M. (2014). Agile Pricing: How Online Product Reviews Influence
Firm Pricing Strategies. SSRN Electronic Journal.
Hinterhuber, A. (2017). Implementing pricing strategies. Journal of Revenue and Pricing
Management, 17(1), pp.1-2.
Loreal.com. (2018). Key figures: brands, employees, sales - L’Oréal Group. [online] Available
at: https://www.loreal.com/group/our-activities/key-figures [Accessed 5 Sep. 2018].
Loreal.com. (2018). Organization: Research & Innovation, Production, Distribution - L’Oréal
Group. [online] Available at: https://www.loreal.com/group/our-activities/organization
[Accessed 5 Sep. 2018].
Maglaras, C. (2009). Dynamic Pricing Strategies for Multi-Product Revenue Management
Problems. SSRN Electronic Journal.
Mandal, P. (2017). Understanding Digital Marketing Strategy. International Journal of Scientific
Research and Management.

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Phillips, D. and Hallman, W. (2013). Consumer Risk Perceptions and Marketing Strategy: The
Case of Genetically Modified Food. Psychology & Marketing, 30(9), pp.739-748.
Slater, S., Hult, G. and Olson, E. (2010). Factors influencing the relative importance of
marketing strategy creativity and marketing strategy implementation effectiveness. Industrial
Marketing Management, 39(4), pp.551-559.
Varadarajan, R. (2015). Strategic marketing, marketing strategy and market strategy. AMS
Review, 5(3-4), pp.78-90.
Appendix
Appendix A:

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Figure 1: L’Oreal Marekting Strategy
Appendix B:

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Figure 2: Organizational structure of L’Oreal Paris
Appendix C:

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Figure 3: The Dividend history in EURO