Analysis of Marketing Process and Environment: L'Oreal Report

This report provides a comprehensive analysis of L'Oreal's marketing strategies and its business environment. It begins with an introduction to the marketing process and its key elements, using L'Oreal as a case study. The report then delves into the macro and micro environmental factors affecting L'Oreal, including political, economic, social, technological, environmental, and legal factors (PESTEL analysis), as well as Porter's Five Forces. It examines market segmentation, targeting, and positioning (STP), and discusses L'Oreal's application of the marketing mix (4Ps and 7Ps). The report further explores L'Oreal's marketing strategies in both B2B and B2C contexts, highlighting how the company adapts its approach to different market segments and customer needs. The report concludes with a summary of key findings and insights into L'Oreal's marketing success.

Table of Contents
Introduction:.................................................................................................................. 1
Task 1:.......................................................................................................................... 2
Task 2:.......................................................................................................................... 5
Task 3:.......................................................................................................................... 9
Task 4:........................................................................................................................ 11
Conclusion:................................................................................................................. 13
References:.................................................................................................................13

Introduction:
The unit argues about the marketing planning and different aspects of marketing process. The
unit initiates with the discussion of elements of the marketing process in L’Oreal. Further, it talks
about different marketing strategies and the environment of the business that has its effects on
the marketing strategies of the company. Later part of the unit argues marketing mix that
involves 4p’s and extended marketing mix that involves 7p’s of marketing. The last part of the
unit discusses about difference in the marketing strategies and the requirements in different
market segments by the customers. The explanation is supported by the marketing strategies of
L’Oreal in b2band b2c marketing.
Task 1:
Newsletter:
Marketing elements: L’Oreal
Introduction:
Marketing is the concept that deals with creating awareness about the product in the market.
Marketing helps in stimulating the public to buy the product. It is about targeting the right people
at the right time for the right product. It is the foundation of sales. Marketing is done by
following a process known as marketing process. This process involves various elements. It is
very important for the marketing team of the organisaton to have the knowledge about these
elements as they form the basis for all the marketing strategies that have been formed. For better
understanding of these elements, L’Oreal marketing process has been studied.(Beamish, 2004)
The first element is the market research and finding the needs in the market by analyzing the
environment.It is very important and critical to research the market before making the marketing
strategiesfor a product. This research involves identification of the marketing factors that affect
the product, the environment of the business and the requirement of the market. As far as
L’Oreal is considered, it is the long standing and old brand that is serving the market for years. It
is the company that not only focuses on improving the products but alsodoes market research to
know about the competitor’s products. This helps the company to come up with more innovative
products than competitors. L’Oreal launched the makeup cleanser with the small towel that helps

to remove makeup easily. This strategy is the extension of the product that already exists.
(Beamish, 2006)
Second element is STP (segmentation, targeting, positioning) who are the customers the people
that should be targeted. As the mission of the company is to cover the world market, L’Oreal
focuses on launching the products that are favorable to the women all over the globe.
(Cherunilam, 2010)
The third element is the marketing mix. Marketing mix is formed by combination of product,
price, place and promotion. L’Oreal is into cosmetic business and manufacture cosmetic products
for women. As far as price is concerned, L’Oreal is the brand that believes in serving all kinds of
people and thus launched its products in variable prices. The professional range of the brand is
for the people who have high price purchasing power while the normal range is for the people
below that class. Place of the product is undoubtedly urban areas. L’Oreal is the brand that is
more focused into serving urban areas from the franchisee stores, online or retailers as well.
Promotionalactivities of L’Oreal involves advertising, personal selling, store selling, campaign
etc.
Another element of marketing process is marketing strategy, which company must apply
marketing tools and frameworks such as SWOT analysis.The basic marketing strategy of the
company is to cover more and more market area. The mission statement of the company suggests
that the brand wants to serve all over the globe with its products.
Last element of marketing process is sales. Marketing ends where sales starts. Marketing process
is conducted in order to increase the sales of the product. Research suggests that the sales of
L’Oreal have increased by 1.17% in 2016. This determines that the innovation in the products
and the marketing strategies of the company is worth performing. (Choi, 2010)
Now, the discussion is about the marketing approach of L’Oreal. Organizations opt for
approaches to market the product. It can be market oriented approach or product oriented
approach or production orientation approach. Initially when the concept of marketing has come
into existence, organizations believe in product oriented approach of marketing. This means they
used to produce the product and stimulate its demand in the market. In this approach of product
orientation, customers face the problem of product failure as they produce the products that do
not match up with the needs of the customers. Now the things are changed, more and more of the
organizations are concentrating on marketing oirneted approach rather than being product

oriented. L’Oreal is the organisation that concentrates on market and consumer wants rather than
the product. Marketing oriented approach by the organisation forces them to look for the needs
and wants of the customers before manufacturing a product. Now a day, customers are very
intelligent and restrict the non essential products. This is the reason that organization need to
consider the needs of the customers during product manufacturing and marketing. (Djordjevic
and Dejordjevic, 2012)
L’Oreal has the objective and goal to cover the world market. This can only be done by using
market oriented approach as the company focuses on creating the products that satisfy the needs
of the people. L’Oreal’s products and solutions are created to meet up with the several
preferences and choices of precise client segments within just every single target market place.
As an illustration, gentlemen may perhaps like various natural beauty materials from adult
females. With the identical vein, youthful visitors may perhaps have a preference for several
natural beauty products and solutions from seniors. L’Oreal has stored on studying the variations
and constructing products which meet up with the brand new demands. L’Oreal has many stores
at different parts of the world having products that meets the cultural, social and economical
demands of the people at that area. This means that L’Oreal focuses on serving the market with
the relevant products according the customer’s choice in that market.
Although these elements of marketing support the marketing practices of the company but it also
has some of the disadvantages. Marketing research is the very long and an expensive process to
be done. It is very difficult to synchronies all the steps of the process. Formation of marketing
strategy is also a very difficult process as it requires skillful employees to formulate the policies.
Conclusion:
This is very essential for the organisation to be market oriented these days. This is because
customers are very demanding and particular about their needs and wants. Organizations have to
manufacture products and bring out innovations in the products that can match up worth the new
demands and needs of the customers. This customer focus approach somehow decrease the risk
of product failure as the companies are [producing the products that are needed by the customers.
The only effort that the company needs to make is to innovate their marketing strategies so that
they can influence the customers to buy their product instead of competitor’s product.

Task 2:
Introduction:
This report discusses about the business environment and various factors that affect the
functioning o the business like L’Oreal. It focuses on all the factors like marketing segmentation,
targeting, strategies etc of L’Oreal. This report provides the learners with the outline of the
marketing plan and process of L’Oreal.
Macro environment: Macro environment consists of all those factors that are external and has
their impact on the business functioning or the marketing strategies of the organisation. This can
be studied by PESTEL analysis of the company. (Jain, 2000)
Political factors: L’Oreal needs to consider all the government legislations and the policies of the
countries where it is operating. The political factors includelabor laws, tariffs, trade restrictions,
tax policies etc. L’Oreal needs to manufacture safe products in order to restrict any harm to the
customer. Government of nay of the country has right to take action on any wring practices by
the company.
Economic factors: Economic factors involve the economic growth and fluctuations in the
economy of the country as well as of the world. Multinational companies like L’Oreal get
affected by any change in the economic policies of the any of the country. The change in
exchange rates affects the exits business of the company. Since 2004 L’Oreal’s revenue has
increased by half and its profits have almost doubled net profits of 17.6% in 2013 alone.
Social factors: Social factors deals with the change in the product type and marketing strategies
according to the change in culture of the location and the lifestyle of the people. L’Oreal is
known as the leader of change. This is because the company focuses on inclusion of cultural
aspects and social lifestyle of the people in the business processes where the company is
operating. The strategies and the product of the company vary according to the location.(Kerin,
2006)
Technological factors: these are the factors that concentrate on the advancement in the process
according to the change in the technology in the market. L’Oreal is known for its knowledge and
research in hair and skin care, the company believes in research and innovations.
Environmental factors: Change in the environment affect the functioning of the companies like
L’Oreal as they are dependent on some of the natural products for manufacturing purposes. They

also get affected by the environment of the country they are operating in. they need to launch the
products according to the environment of the country and the location. (Kotler, 1999)
Legal factors: The legal laws like discriminatory Act, employment laws etc affect the policies of
the company. As L’Oreal is the multinational company so it has to consider different laws of the
countries accordingly in their policies.
Micro environment:porter’s five forces :
Bargaining power of buyer: Which means customer threat organization by forcing down prices.
Customer is the one who decides the price of the products in this case. In case of cosmetic
industry, the bargaining power of customers is higher than the seller. This isbecause there are
varieties of manufactures in the market that are selling the same kind of products with
competitive prices.
1. Bargaining power of suppliers: Supplier bargaining power means that suppliers are the
one who decides the prices. In this case, the supplier bargaining power is also high as
there are many competitors in cosmetic industry.
2. Threat of substitutes: This force happens when a new product will be replaced with
organization product. Cosmetic industry is the industry with high competition.
Competition in the sense of competitive companies as well as competitive products.
L’Oreal lipstick can easily be replaced by Revlon lip gloss. This is the reason the rate of
threat of substitute is very high.
3. Threat of competitors: L’Oreal is one of the biggest brands in the industry. In spite of
being the biggest brand, the company faces high competition with the competition like
Revlon, Mac, etc. (Pride and Ferrell, 2008)
4. Threat of new entrant: Threat of new entrant for loreal is low. This is because the
industry needs immense research and innovation to enter into and the customers are
brand loyal in this industry. They do not easily swithch to other brand s or new brnds.
People are very conscious about the skin products they use.
Market segmentation:
Market segmentation refers to the classification of the customers or the market according to their
common characteristics. Segmentation is done in order to divide the market into smaller
segments so that different practices have been used for targeting or attracting different markets.

This is because all the practices cannot be used to attract all the type of customers. Market can be
segmented by in many ways:
 Demographic segmentation: The market can be segmented on the basis of their sex, age
and race. L’Oreal offers the range of product portfolio that includes 32 brands with
different product line. The people with every age and gender can find the relevant
products for them from this wide range. (Reed, 2006) L’Oreal Man Expert is the range
that consist of all the products like shaving creams, face wash, fairness creams etc to
serve the male customers while the company attracts the women customers by its range
of lipsticks, face-wash, BB creams etc.
 Psychographic: L’Oreal provides the products with variable price rage. The customer
product division porducts are for middle class and the L’Oreal luxe product range is fir
upper class people.
 Behavioral: Customers buy the products in which they can find the self reflection.
L’Oreal attracts the customers who belongs to different lifestyle and have different
personalities. Customers that love nature also has the product range from L’Oreal as well
as the customers that believes in chemical products.
 Geographical segmentation: This segmentation deals with the criteria of segmenting the
customers according to the location. In this L’Oreal segment the customers according to
the place they live at and serve the way they want to be served. (Worthington and Britton,
2006)
Targeting strategies:
There are majorly four targeting strategies that can be used by the company like L’Oreal to serve
the market:
 Undifferentiated strategy: According to theirstrategy, companies used to serve whole
market with the same ad undifferentiated marketing strategies.
 Differentiated marketing strategies: In this marketing strategy, company used to found
multiple target market and serve them differently.
 Focused: It is the strategy in which multiple target market hasbeen found but the
company only focuses on the relevant target market that can be more beneficial for the
organisation.

 Customized marketing: This marketing strategy is used by the company that have
different customer basis. The companies serve the customers according to their
customized requirements.
Make up range of L’Oreal is the most important product that can be marketed using
differentiated marketing strategies.
Product repositioning:
Concerning different brands of L’Oreal, each of them has positioned itself with different
positioning messages. TwoL’Oreal’s brands are competing in the same product division, where
Garnier is well known for natural ingredients and strong scientific research while Maybelline
New York stands for glamour, New York energy spirit, and innovation, could demonstrate the
distinctive positioning. Therefore, L’Oreal focuses on a differentiation strategy by highly
differentiating its products as a result of the many market segments.
Buying behavior of consumers:
There are various factors that affect the buying behavior of the people:
 Cultural and economic factors: Different customers with different culture have different
views and perception on the same product. This is because of their beliefs and views
regarding the product and the environment that influences them. For example, in spite of
retailers selling the products, people in Brazil find it easy to buy from door to door
sellers. L’Oreal’s uses this technique in Brazil to sell the products. Therefore, the culture
of the people affects the marketing strategies of the company.
 Social factors: Other than culture, the social life of the people and the reference groups
around them also affect their buying behavior. L’Oreal uses social media as the technique
to reach its customers as people are so much influenced by it.
 Psychological factors: Psychological factors include learning, beliefs, attitude, perception
and motivation. To have an impact on consumer’s perception L’Oreal adopt the strategies
of celebrity endorsements and advertising. This affects the customer’s perception about
the product.

Task 3:
3.1 explain how products are developed to sustain competitive advantage
L’Oreal is the company that focuses on maintaining the sustainable competitive advantage over
others by its brand image. They are the market oriented company that concentrated on
customer’s needs and wants before manufacturing a product. The selection of distribution
channel for any company depends largely on the nature of product. L'Oreal is a company which
produces cosmetic products. Company need to create an effective distribution channel by which
it can reach to maximum household that will also helps to emerge a sustainable development.
Lake of effective distribution channel will lead to make the company backwards as in the
cosmetic business there are many substitutes available with the customer and they can switch
there demand from one product to another easily. Less intermediaries should be kept in order to
have more margins per sale as with the increase in the intermediaries individual profit share
keeps on reducing. L’Oreal is the company that is known for its research and innovation. It is
very important for the companies to innovate the products according to the need of the customers
to be in the market. The two main strategies that L’Oreal uses in order to sustain competitive
advantage are the market analysis by using marketing oriented approach and by research and
innovation.
3.2 explain how distribution is arranged to provide customer convenience
Many distribution strategies have been used by the companies to provide convinience to their
customers. Company can only increase their sales by making their products approachable.
L’Oreal produce two forms of products, one is customers based and others are professional
products. Various distribution channels that have been used by L’Oreal in serving the general
consumers are retail shop, door to door sales, public relation, direct marketing etc. the
professional range of products have been sold by salons. Salons are the medium that can be used
by many cosmetic brands to reach to the customers. This is because it affects the customers in
positive way.
3.3 explain how prices are set to reflect an organization’s objectives and market conditions
Various pricing strategies have been used by the companies according to the brand image, the
situation of the market and the phase of the business. L’Oreal is the company that already has a
great brand image. Brand image brings loyal customer for the company and thus company does
not need to lower down its prices for penetration. The main aim f the company is to cover the

world market therefore;L’Oreal uses different pricing strategies at different places. When the
company is launching a new product in consumer product range, company uses penetration
strategy by keeping the price of the product low. L’Oreal is the company with premium pricing
strategy because the company needs to maintain its image and brand. Premium pricing is the
strategy that can be used by the companies to earn higher revenues. Differentiation is the
competitive advantage of L’Oreal and premium pricing is the appropriate industry to introduce a
product with differentiated and unique characteristics. This strategy can only be used by the
company that already has some of the competitive advantage over others in the industry.
3.4 illustrate how promotional activity is integrated to achieve marketing objectives
Different promotional activities have been used by the companies in order to achieve their
marketing objectives. According to the case, marketing objective of L’Oreal is to position
themselves in the mind of the customers as the brand with innovation and safe products. This can
only be reached by making people aware of the products and their formations. L’Oreal uses
practices like endorsements, campaigns, advertisements etc to promote their products.
Personification of the products allows the customers to relate themselves with the product, this
help the companies to increase their sales. Promotional activities should be aligned according to
the marketing objectives of the company. L’Oreal has the marketing objective to make their
customers relate with their products. Endorsements of the products by celebrities help the
organizations to achieve this marketing objective. (Millington, 2016)
3.5 analyze the additional elements of the extended marketing mix
The extended marketing mix involves physical evidence, process and person.
Process: Process involves the overall description of the processes that takes place in making the
products. Process considers the factors like the focus of the organisation. L’Oreal is the market
oriented company that focuses on customer’s needs and wants. R&D is the main department of
the company that supports the organisation with innovative products.
People: People involve all the humans associated with the product or brand. It involves
customers, suppliers, employees etc
Physical evidence: It involves the experience of the brand while using different functioning and
processes. It also involves how a brand projects its image in the market. L’Oreal uses the great
packaging that attracts the customer’s attention. This helps the company to attract the customers
and influence them to buy the products.

Task 4:
4.1 plan marketing mixes for two different segments in consumer markets:
The marketing mix is the combination of Product Promotion Price and Place for any company.
This company gets its product tested first in the international testing market and than make it
available to the customer. Product of L'Oreal are classified into different categories like luxury
product ,active cosmetic,consumer products and the last is professional products. L'Oreal has its
market in more than one hundred and thirty countries world wide and in this developed century
internet has become the most famous place for the products to b sold with full knowledge about
the product. The price of the l oral products range from low to high depending upon the nature
of the products as consumer products are sold at low price in comparison to the premium
products. L’Oreal serves two type of consumer segment. One is the business to business market
and another is the business to customer market. It is very important to use different strategies to
market the products in different segments. Marketing mix of the company has been discussed
below in two different segments:
Marketing mix B2C B2B
Product Consumer products like make
up kit, shampoos, conditioners
etc.
The products that L'Oreal
serves in business to business
market are high professional
range of the products like hair
dressers, processional range of
skin care treatment products
etc.
Price The price of the products is
variable according to the
product and the class the
product is for.
In this, prices are premium in
nature as it is for the
professionals of hair and
beauty care.
Place Place involves retailer shops,
franchisee stores etc.
Place involves salons,
franchise stores etc
Promotion The promotional activities that
has been used to advertise and
selling products are
advertisements, endorsements
campaigns etc.
The methods used to promote
and sell the product involves
door to door sales to salons,
seminars etc
4.2 illustrate differences in marketing products and services to businesses rather than consumers

There is a big difference between marketing products and services to consumers and business.
As far as the consumer marketing is considered, market analysis is done on the basis of the
general needs of the customers and the companies can attract customers by attractive packaging
while the business customers can only be attracted by providing them with quality products in
low range. The biggest business customers for brands like L’Oreal are Salons. Salons are place
which can be used as the medium to earn revenue as well as to promote the products. Salon
marketing allows the brand to reach up to higher masses. The motivation behind buying the
products is different among b2b and b2c marketing. The information that is required by the
consumers is also very different in both the cases. L’Oreal’s iconic slogan “because you're
worth it” doesn’t tell us about the product. Instead it’s about how it makes you feel. Their
marketing strategy is all about how it benefits you. The main aim of b2c marketing is to make
the connection between the product and the customers so that the customer buys the product. The
marketing campaigns are also very short in this case. The most important thing in b2b marketing
is the trust among the customers. This is because the switching cist in b2c marketing is very low
and the customers can easily switch to another brand. Therefore, organizations need to make
efforts to bring trust among the customers about the brand.
A B2b buyer is information oriented and seeks information related to the benefits of the product
in terms of money and resources. Therefore, the messages that need to be made for b2b
marketing should be relevant to the product contents and benefits rather than the feel. B2b
marketing is used to educate the target audience about the product. This is because purchasing in
b2b is not an instant decision. Multiple process and people are involved in b2b purchasing them
hence, influencing those people is very important by providing them with the logical benefits of
the products. (Millington, 2016)
Consistency is the major point that needs to be considered in both the type of marketing, it is
very important to be in the contact with the customers in both the cases.
4.3 how international marketing differs from domestic marketing:
There is a big difference in the domestic and the international marketing marketing as the
domestic marketing is done within the boundaries of own country whereas promotion of product
is done across the boundaries in the international marketing. There is less government
interference in the domestic marketing in comparison to the international marketing. In the
international marketing latest technology is used whereas domestic marketing can b done by