Influence of Misleading Advertisement on L’Oréal's Brand Image

This report investigates the influence of misleading advertisements on the brand image and reputation of L'Oréal, a prominent French personal care brand. The report examines the concept of misleading advertisements, highlighting how false or misleading claims can negatively impact consumer trust and brand perception. It explores how misleading advertising affects corporate strategy and governance, using L'Oréal as a case study. The research includes an overview of the current business environment, the importance of brand image, and the role of advertising in shaping consumer behavior. The study aims to understand the consequences of misleading advertising and recommend strategies for ethical marketing practices. The literature review covers the concept and meaning of misleading advertisement and its impact on brand performance. The report is structured to include an introduction, literature review, critical analysis, recommendations, and an action plan to provide a comprehensive understanding of the topic and its implications for L'Oréal.

Corporate Strategy and Governance
Tittle:
The influence of misleading advertisement on the brand image and
reputation of the business entity. A case on L’Oréal.
Writen By:
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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 a competitive advantage. Along with this, corporate governance defines as the whole
system which consists 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 (Helberger and et. Al., 2020). In addition to this, it has been said that the two main
term “corporate governance” as well as “corporate strategy”, both plays remarkably 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 the context of L’Oréal, it
has been analysed that the personal care organizations created a corporate strategy in which
company promote their products to attract a 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 (Hill, 2017)”. In the present environment, it has been examined that a large
number of products and services are there which needs effective marketing or advertisement so
that a large number of customers will be attracted towards them. The overall image of the
company is based on the advertisement method adopted by them so that they can influence
people to purchase their products and gain a competitive advantage. In addition to this, it has also
been identified that misleading advertisement highly affects business operations in an adverse
manner. The issue which might raise due to the misleading advertisement was basically related
to corporate governance as well as the corporate strategy of a business entity. In this report,
L’Oréal is chosen as the base organisation for completing the 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 a widespread concern with the implementation of effective corporate
strategy, where it becomes easy for them in order to execute well-defined advertisement
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operations within the firm to attract customers towards them. This report is based on the
investigation of the influence of misleading advertisement on the goodwill and reputation of the
company. It is said that advertising is an essential area for a business entity in order to raise its
global presence, which affects 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 creating their strong brand
image at the marketplace so that they can maintain their sustainability for a longer duration. It
has been examined that advertisement is one of the most essential parts of a business entity
which plays a 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
founded in the year 1909. Which is now the world’s largest cosmetic & personal care
organization. Their main aim is to create a positive brand image of the company which help them
in attaining higher growth at the 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 a large number of customers. Companies spend a huge amount of funds
in their advertisement functions so that they can grab the 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 topics in the current scenario. All these issues faced by a business entity are
because of non-effective practices as well as corporate strategies.
The main purpose of 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
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help them in attracting a large number of people towards them and earn more profitability at the
competitive environment.
Research Aim
The essential aim of the research is “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 a
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 the background of the project.
Literature Review Under the second most essential section, detailed information
associated with the objectives carried out by effectively considering the
secondary method.
Critical Review of
the Results
This is the section which will show the positive as well as the negative
influence of the outcome.
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Recommendation
and action plan
In the end, proper and well-defined recommendations including the
action plan are going to be created which help in getting beneficial
results within a specified period.
Literature Review
The literature review is the second section which defines as the procedure of gathering
data and information from different sites in which scholars, as well as authors, has given there
thought and viewpoint which aid investigators in order to carry out detailed study related to a
specific issue or topic (Bischi, Lamantia and Scardamaglia, 2020). This section assists the
researcher to conduct an effective theoretical framework which aids in order to address the
investigation issue with the assistance of relevant figures and facts. The literature review is
considered as one of the most effective and comprehensive summaries of all the previous
research conducted by researcher on various sort of business topics. The literature review
surveys include scholarly articles, journals, books, and various sources which are relevant to a
specific field of the research. Current literature review section consists of research's objectives
which will assist in getting favourable results within a specific period.
This is the section of investigation which assist in examining the overall research with the
help of theoretical framework which is effective in order to identify the viewpoints of different
authors who have a wide range of knowledge related to the chosen area of the study. In this
section of investigation, thought and viewpoint of various authors and scholars are going to be
discussed 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 is given to the
customers so that they will be able to create their customer's interest related to the product and
services. It is said that advertising is quite helpful in as it aid in developing decisions related to
the buying and purchasing of products. Misleading advertising arises 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
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also been identified that if a representation might influence the consumer to buy a product or
service which is being advertised by the company it is said to be a misleading advertisement.
Misleading advertising might have a serious sort of economic consequences, especially when
created toward the huge amount of audiences as well as when it might take place a 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 government. This
affects 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 a direct
influence on consumers by distributors, manufacturers, retailers along with advertisements,
websites and many more. Advertising defines 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 aspects 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 a symbol which might develop the potential number of general and the relevant public in
order to misapprehend along with the creation of an incorrect decision apart from whether this
symbol is consistent with the facts (Mahsan and et. Al 2020). Advertising may also be
recognised as misleading if 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 (Emond and et. al 2019). 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 the 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 is the goods, as well as service, are supplied is quite
misrepresented.
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Influence of misleading advertisement on the performance of L'Oreal
Based on viewpoint 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 their 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
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 Advertisement associations it 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 build 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 (Abbasi and et. al 2020).). 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.
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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 is an 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 that need to be improved 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 a more trustworthy digital economy for both brands and consumers.
Enhancing the area of digital transformation and a 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 in developing the brand image in the mind
of costumers. L’Oreal is promoting 3.0 marketing with the improvements in several areas
including upskilling employees, team productivity and consumer satisfaction while promoting
the products on large scale.
Another integral part to L’Oreal transformation has including rethinking the way it works
with agencies. For example, it must start marketing on the media process and to help better
understand the buying process on Facebook, Amazon, or Google. However, the 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 based on 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 lead to an increase in the customer segment. It is
new opportunities for the company in the new market so also gain a competitive advantage. By
improving the areas in a well-defined manner, it is said that the 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 the company will be able to get opportunity
and growth rate at the competitive marketplace.
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Methodology
Research Methodology plays very vitally as well as a crucial role when researchers need
to bring data and information associated with a topic within a given time frame. It has been
identified that a wide range of research methodologies are there used by the investigator which
consist of primary as well as the secondary method which assists them to pull out relevant
information for a particular topic. It has been identified that under the primary data collection
method, the researcher adopts 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 the researcher so that they
can analyse as well as interpret the data in order to draw the 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.
This sort of 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 a current investigation where L’Oréal is facing issues
associated with 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 defines as the most effective and suitable approach used by the
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 enough data and information so they can draw a valid conclusion. In addition to
this, it is said that primary research usually needs to address some
specific problem which needs 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 on their own. Apart from this, the researcher usually
emphasizes on addressing some specific issues with the help of in-depth
knowledge. Furthermore, the 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 the influence of
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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
takes 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 to get
favourable results within the specified period. This method is one of the most effective
approaches used by researcher to get fresh data where communication plays a very
crucial role in order to interact with the individuals for getting their opinions and views.
In reference to the current context, where the investigator selects a topic to investigate
where the interview method is chosen by the researcher. This is one of the costly and
time-consuming methods which affect the research cost and functioning in an adverse
manner (Chen and et. Al 2019).
 Questionnaire: This is another research approach used by a large number of an
investigator where they ask an ample number of questions to their respondents with the
help of printed document. It consists of questions which are related to the topic devised
for the purposes of a survey or statistical study. In reference to the current investigation,
the researcher adopts the questionnaire technique which is an effective method and get
instant responses related to the topic. For this, the proper format is set by researchers
where the number of questions is being asked by the researcher. It is said that an effective
questionnaire might easily be framed by the researcher for the topic. In addition, it is said
that feedbacks are given by respondents related to the topic assist in developing the
outcomes in a favourable way. This is the method which consumes low cost and help in
getting authentic and accurate information. Along with this, it can easily be said that
questionnaire is being developed for both small as well as large scale research which is
both cheap and time effective.
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In reference to the current investigation, it is said that researcher adopts questionnaire
method in order to gather authentic information for the research conducted on L’Oréal
which as a result help in drawing valid conclusion within the given time frame and in a
systematic manner. In addition to this, investigators adopt random sampling techniques so
that they will be able to perform the function in an effective manner. In this research, by
using a random sampling method, 40 respondents are selected by the researchers.
Secondary Research
Apart from primary research methodology, another method is secondary research which is
used by many researchers in order to get effective results within a limited time frame
(PRABURAJ and SANJEEVAN, 2020). This is the method which is highly different from the
primary method and is beneficial in various manner. Under the current research project, it is said
that investigator adopts secondary method where viewpoints of different authors and researcher
are being analysed and examined. It has also been identified that with the help of examining all
the data, the right information can be pulled out by the investigator with the help of considering
different external sources. Some of the most common sources to gather secondary research
consist of examination of newspaper, articles, online sources, books and many more.
Some of the parameters that has been selected to conduct the secondary research includes
the collection of journal articles or the purpose of gathering of information. These sources are
then used to collect the information from these existing sources.
All these articles and sources are used by the researcher so that they gain secondary data and
information in an effective manner and develop favourite outcomes in a well-defined manner. In
this research, which is based on L’Oréal, researchers adopt a secondary method where the
literature review section is developed by the researchers so that they will be able to get positive
outcomes in an effective manner. These methods are cost-effective and time-effective which aid
in concluding the whole research in a systematic manner (Maurya, 2020). In reference to current
research both primary as well as secondary research, methodology is used by investigator so that
they will be able to conclude the whole investigation in a systematic and well-defined manner.
Critical review of outcome
Critical review according to the primary research
Theme 1 : Unethical practice conducted by a business entity
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