Digital Marketing Plan for L’Oreal: A Multi-Channel Approach

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Digital Marketing Plan
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
“Demonstrate an understanding of the opportunities, challenges and impact of the digital
environment”....................................................................................................................................4
“Environmental analysis for L’Oreal digital presence”.................................................................5
Task 2...............................................................................................................................................7
“Critical analysis on the digital and the store presence of L’Oreal”..............................................7
Task-3............................................................................................................................................10
“Provide a plan for organizing digital marketing activities to support L’Oreal’s initiatives of
building multi-channel capabilities”.............................................................................................10
Task 4.............................................................................................................................................13
“Provide key methods to evaluate, monitor and measure the digital marketing effectiveness and
provide recommendations”............................................................................................................13
References......................................................................................................................................17
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Introduction
L’Oreal group is the largest corporation of the world in beauty and cosmetics sector which offers
innovative beauty products for men and women. It has the largest portfolio brand in the world
and has several outlets in 130 different countries. The growth of L’Oreal is quite strong and it
has an annual turnover of 3,891 million Euros. It is the leader in digital brand endorsement and
the e-commerce portal is the most significant platform for its success over the years. The
cosmetic market saw a fall in its GDP globally in the year 2011 which in turn influenced the
profit margin of L’Oreal.
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Task 1
“Demonstrate an understanding of the opportunities, challenges and impact of the digital
environment”
L’Oreal has an advantage over its competitors as it has a high intensity of its branding and a look
over towards its medium priced products with genuine quality. The cosmetic products have come
to a period of maturity in the product life cycle as more often customers purchase the repetitive
products (Simonsen, 2018). L’Oreal needs to pay more attention on the quality of the products
and their packaging in order to captivate new customers and also to withhold old customers. The
strengths and weaknesses of the L’Oreal Company in their digital marketing fields are
summarized below.
Strengths Weakness
 Largest brand in beauty and cosmetic
sector
 Continuous R & D
 Largest brand portfolio
 High quality products
 Too many sub divisions
 Lower profit margin
 Degrading segment in hair care
products
Opportunity Threats
 Targeting aging population
 Proposed acquisition of body shop
 Economic crisis
 New regulations
 Competition in intense market
Table 1: SWOT Analysis
(Source: Created by author)
The following challenges and opportunities are faced by L’Oreal in recent times which can
influence the planning of the company over the coming years.
Opportunities
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The first opportunity that L’Oreal needs to focus upon, is the sector of anti-aging products as
most of the developed countries have a high rate of aging population where most of the people
are aged between 50 or older (Ashraf et al., 2015). For instance, there is an estimated increase in
the 55 years old age group in US population from 21% in the year 2007 to almost 35% in the
year 2027.
The second opportunity that L’Oreal needs to focus upon is the acquisition of Body Shop as
there is an increase in the usage of more natural eco-friendly products in the countries like UK.
There is an expectation in the growth of annual rate in the “natural personal care” products
where it is expected to reach to $3 billion in the year 2021 (Rogers et al., 2015).
Another opportunity that L’Oreal needs to focus upon is the growth of cosmetic care products in
the Asian countries. The economical conditions of the Asian countries are estimated to have a
rise of 46% in the sales department (Allal-Chérif and Bidan, 2017). L’Oreal needs to concentrate
more upon this countries despite of the fact that they have their presence throughout.
Challenges
L’Oreal will be influenced by the following three challenges.
L’Oreal has to overcome the challenges of economical crisis in order to develop its market
globally.
There is a tough competition in the market of cosmetic and beauty segment where there are
several small companies and a few large corporations competing against to gain the market share
(Harf et al., 2017). L’Oreal faces the tough competition with several other big corporations like
Revlon and Estee Lauder which needs to overcome by L’Oreal in order to increase their profit
margin.
The challenge of implementing new regulations needs to overcome by L’Oreal as there are
several consumers producing new voices on the matter of inclusion of harmful chemicals in their
cosmetic products (Daft, 2015). The Food and Drug Administration in the US has imposed
several policies in the beauty and cosmetic department due to the public pressure which
enhanced a delay in the launching of new products by L’Oreal.
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“Environmental analysis for L’Oreal digital presence”
As stated by Epstein (2018), “Environmental analysis describes a framework of macro-
environmental factors used in the environmental scanning component of strategic
management.”The detailed analysis helps an organization to withhold their superiority in their
segmented department.
Political Factors
It is necessary for L’Oreal to cope up with the political aspects of the country in order to function
properly; hence, it is also necessary to comply with rules and regulations of the government (De
Mooij, 2018). For instance, there was a decline faced by L’Oreal in the department of
dermatology in US when they launched a brand named Galderma which affected the regulations
governing drugs. L’Oreal was restricted to use certain safe chemicals like Phthalates that is
carcinogenic. L’Oreal needs to follow the standards set by Advertising Standard Authority in
order to promote their brands so that it does not mislead the functions of the products.
Economic Factors
There is a need of adapting to the different economical problems and environments of the
country by L’Oreal in order to function from that country. For instance, L’Oreal got affected in
the year 2004 due to the continuous weakening of dollars and several currencies (Burton, 2015).
There was a fall in the GDP of the world in the year 2008 which affected L’Oreal towards their
economical downfall and there was a certain challenge for L’Oreal towards their development.
Social Factors
There is a certain importance of the culture of a country where the business needs to operate as
the culture consists of the attitudes, values and beliefs of the people of the country. For instance,
there is a high demand of recognizable external images of the products as people are quite
knowledgeable and educated to enhance the product quality and the effects of the cosmetic
products (Steger and Meima, 2016). The social media focuses on the product contingencies and
people are well aware of the social media facts.
Technological Factors
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The changes in the technology have an adverse affect on the availability of the products, the
product quality and functionality and their business operations. The constant change in the
technology means there is a demand on the update of the products which in turn affects the
product life cycle and the update speed of the cosmetic product (Schaltegger et al., 2016). For
instance, nowadays people have more channels of purchasing the products and thus L’Oreal has
a strong department of Research and Development which gives it a competitive advantage over
others.
Legal Factors
L’Oreal is the leader in the sector of beauty and cosmetic which needs to follow several legal
rules of the country in order to maintain their success. There is a tough competition for L’Oreal
outside and hence maximum of the customers are more influenced towards the product’s legal
aspects. L’Oreal is the brand for the upper elite classes of the society and hence they are more
concerned in following the legal stuffs. For instance, in the year 2010 L’Oreal faced a downfall
in their skin care brand in UK as they violated the law of providing safe chemicals to their
products (Liu et al., 2016). The Federation of UK provided them with several backups in order to
overcome the problem.
Environmental Factors
The international brands like L’Oreal plays an important role in making the planet pollution free
and beautiful by following the global standards. For instance, L’Oreal collaborated with Founder
Factory in order to promote such campaigns of keeping the world pollution free.
The external and the internal factors are responsible for developing the policies of the company
and hence L’Oreal being the leader in the cosmetic and beauty sector needs to have a proper
understanding of these factors in order to develop the policies of the company.
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Task 2
“Critical analysis on the digital and the store presence of L’Oreal”
The marketing communication is the holistic approach for ensuring flexibility of message and
integral media usage. There are two types of marketing channels namely, offline and online
marketing channels. E-marketing programs or campaigns pay per click and micro blogging are
included in the channels of online marketing.
There are unique characteristics and costs involved in every communication tools.
Advertising
Advertising is a tool that can be used to depict a long term image value of the product and
enhance quick sales. Advertising can be used to reach global market and produce good value of
the products. For instance, L’Oreal performs their advertisement through celebrities as brand
ambassadors for their cosmetic products which creates an impact on the target audience as this
can lay a significant impact of the products on the customers.
Direct Marketing
Telemarketing, direct mail and internet marketing have several distinctive characteristics. This
form of marketing is customized, up-to-date and interactive. For instance, L’Oreal has a strong
base in the digital marketing field as it operates mostly from the online field. The customer base
of L’Oreal is quite high and the form of direct mail with certain coupons and offers attracts most
of the existing customers.
L’Oreal is more focused on the investment in digital channels in order to restructure the media
tools. L’Oreal is concentrated on engaging its consumers with the help of digital initiatives like
video advertisement, personalized communication and online influencers (Kissel and Büttgen,
2015). The use of proper channels is being ensured by L’Oreal in order to enhance the revenue
growth.
Social Media for Mass Communication
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The social media has been used as a commutative tool by L’Oreal in order to engage mass scale
customers. L’Oreal is constantly working with the global and local influencers in order to
develop content for Instagram and Facebook. The company is in progress to adapt a strategy in
order to match the platform of social media to create social strategy for effectively targeting right
audiences (Aleksandrovs et al., 2015). For instance, the Maybelline brand of L’Oreal is in an
experimental stage with Snapchat for exploring WeChat in order to target UK customers. A
global audience can be reached by a proper media strategy which ensures L’Oreal to enhance
their business globally.
Using Influencers to Connect with Consumers
In the year 2018, L’Oreal has signed five different beauty bloggers of British to create an
influence on the online content of its products in order to engage the customers and provide more
information of their products. In last year September, L’Oreal has invested a lot in Tallify for
creating campaigns with the influencers of big brands of social media. The investment is made
up in collaboration with the Founder’s Factory which is a global incubator and accelerator of
London which supports the growth of five different great potential start ups every year. The
investment made by L’Oreal in Tallify shows the great significance of influencers in the
development of different strategies of digital marketing to engage the customers (Mori Junior et
al., 2016). These personalities provide better recommendations and thus help L’Oreal in bringing
credibility to the contents.
Personalization through Digitization
L’Oreal has an edge over its competitors in their technological field where they use different
tools in order to find the correct products for its consumers. L’Oreal has invested in Veleza
through the help of Founder’s Factory in order to obtain the beauty products that are able to
match the needs of personal. InsitU is also a start up that is being funded through the initiative of
Founder’s Factory which provides personalized products of natural skin care. The scientific team
is responsible for creation of the signature products and then delivering it to the home of the
customer with the customer’s name labeled on it. L’Oreal is in continuous progress of using its
technology in order to create a loyal base of customers through these personalized
recommendations.
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Justification:
L’Oreal has several outlets in different sections of the country and is one of the popular
international brands in the beauty and the cosmetic department. The profit ratio in terms of the
sales from the outlets is quite low as compared to the effective digital stores. The digital stores of
L’Oreal are focused on promoting their brands more tactfully by providing extensive images and
videos. In the recent years it has been found that the customers are more educated and they are
more focused on the digital platform as it provides the guidelines and the extensiveness of the
product with realistic images. The images of the brands and the promotion makes it quite
interesting and eye catching to the customers which is not available in the stores and thus the
sales are quite high in the digital platform.
Task-3
“Provide a plan for organizing digital marketing activities to support L’Oreal’s initiatives of
building multi-channel capabilities”
The plan of marketing communication which meets the objectives of the communication in
an organizational situation
L’Oreal is a very well known company of the France. The head office of this company is situated
in Paris. The amount of customers of this company is increased day by day. All of this customers
use digital marketing platform to purchase the L’Oreal products. In many countries such as
china, UK and Korea, it is a leading brand. In the present time L’Oreal uses digital platforms to
promote their products. There are two types of products that are manufactured by the company
such as luxury cosmetics and the active cosmetics. The marketing experts of this company use
different marketing communication plans in these two types of products.
Luxury cosmetics division
The luxury cosmetics are very good in quality along with this the market price of this kind of
cosmetics are too high. The marketing experts use of this company use some marketing
communication strategies to attract and promote the products to the common people. In the field
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of the digital marketing, the experts can use social network sites, mobile messages to promote
the products. The marketing experts of this company have to use Facebook, Instagram and
Whatsapp as the digital platforms of their products. The luxury products of the company will be
promoted by this social network sites. The experts can send messages about the facilities and
benefits to use those luxury products.
The multichannel capability plans also have to be prepared by the marketing experts of this
company. The company can arrange digital campaigns to promote the products. Along with this
many leading brands open many shops that owned by the company to sale the products (Ryan,
2016). Those companies also sale their products by the third party vendors such as the shopping
malls and other owner’s shop (Armstrong et al. 2015). This company should arrange digital
campaigns with all the users (mainly the students of schools, colleges and other teenagers) and
provide information about the products.
The marketing experts of the company also can adopt some direct communication plans as the
multi channel capability program. The marketing experts can collect the email ids or the contact
numbers while they purchase the luxury products. After that, they should call the customers or
contact with them through email and collect the feedbacks of them about the products. With help
of this plan, the customers feel more attached to the company and the company can improve the
products.
Active cosmetic division
The active products are already widely used by the customers. These type of active products are
the key factors to every company (Stephen, 2016). With help of these products the company can
attract many other customers to their products (Rowley and Keegan, 2017). The marketing
experts use the official websites to promote these types of products (Todor, 2016). Along with
this they use the television commercials to promote these products (Baltes, 2015). The L’Oreal
Company can use the official websites to promote these products. The marketing experts of this
company also can use the television commercials to provide the benefits, facilities and detailed
information about these kinds of products.
As a multi channel capability plan, the strategists of this company also use the digital campaign
and survey to attract the people to these products. As these are the active products of this
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company, the marketing experts of this company should use the shops owned by the company to
sale these products.
The marketing team has to communicate with the customers directly as the multi channel
capability plan. The marketing team should arrange an online survey on the customers of the
active products. They also have to note down their feed backs on this survey. It will create a
warm relation between the customers and the company. This relation helps to increase the sale of
the company.
Luxury cosmetic division Social Network Sites (Whatsapp, Facebook
and Instagram), Mobile messages, Digital
campaigns, asking feed backs by phone calls
and emails (as multi channel capability plan)
Active cosmetic division Official websites, Television Commercials,
Online survey (as multi channel capability
program)
Table 2: Digital marketing Plan
(Source: Created by the author)
Application of communication objectives that relates to marketing communication and
business objectives of an organization
Luxury cosmetics division
The business objectives of L’Oreal mainly include increasing sales, reaching out to more number
of consumers and earning more profits. The cosmetic companies use social network sites, mobile
messages and digital campaign to promote their products to the common people (Jarvinen and
Karjaluoto, 2015). Once, the common people gets attracted to their products they are willing to
purchase it and the rate of profit increases as a result. However, the luxury products contain
better quality ingredients and the price rate of these products is very high. Therefore, the middle
class people are not attracted to these products. The marketing strategies of this company
includes using Facebook, Instagram, Whatsapp, Twitter, in order to help the common and the
middle class people be aware about the better equality of these luxury products. They also
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