loreal ppt
TRANSCRIPT
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Bringing Class to Mass
PLENTITUDE
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LOREAL
Beauty products! Personal + Technology 300 mn $ on Research, 300 new patents
Hair care distribution channels: beauty
salons and mass outlets
Skincare: Department and Specialty as
well as mass Competitor: P&Gs Oil of Olay and Nivea
France
23%
Rest of
Europe
40%
USA &
Canada
20%
Latin
America
6%
Asia
6%
Rest
5%
Revenue Distribution by
Geography
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ANINTRODUCTION
A journeyfrom
French to
US
To reap -What to
change, &what to keep
Key Strategy:trickle downand fire up
Key Areas:improve top-line, bottom
line, target US
Key Problem Area -
Analyze if the French strategy will work in US? Marketingproduct mix, premium pricing
star system of investment
Organizational structure
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PROBLEMS
Product
No Localization - Productdesigned for France marketlaunched in US only with minor
modifications. Problem of plentyToo many
variants focussed on narrowsegments resulting in aconfused / non interested
buyer. Over DeliveryProduct over
delivered and hence overpricedcompared to competition.
Price
Multiple price point- having 3to 4 price points confusedcustomers. Need to rationalize.
Over PricedProductoverprized for the targetsegment.
Addressable Market - Only 40% ( Stressed out & Age focussed
Segment)
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PROBLEMS
Place
No SalespersonClearly hamperedability to communicate as PoPdisplays were poor substitutes.
HBA section vs. CosmeticsCompany had no prior relationshipwith HBA buyers. Took competitionhead on by being right next to Olay.
Promotion
Share of Voice18.83% comparedto 31% of competitor.
Packaging - Lots of data. Suited for
category with high involvement. Butthe mass segment is more visualizethan verbalize. It gives our brand atherapeutic feel.
Lost in TranslationMessages justtranslated from French to US.
Communication FocusProductended up as an Treatment Product
and less of a Daily Product
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COMPETITIVEPOSITIONING
LorealPlenitude
Caught in nomans land
Oil ofOlay
Traditionalandgenerational
Ponds Older, down
to earth
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The game
BrandPower -
L'Oreal
Theconcept -
Plenitude
R&D,
Technology
The User andMarket
CHANGED!
REMAINED THE SAME
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Increasing Trend
in Total Retail
Market forMoisturizers and
Cleansers.
Stagnancy in
Plenitude sales for
both category.
MARKETSIZE
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26%17%
17%
22% 18%
Unconcerned Ingredient Apathetic
Price Conscious Socializers Stressed Out
Age Focused
Assumed that advertising spending in all brand used for
moisturizers and cleansers
Plenitude has poor advertising performance than Olay
and Ponds
Plenitude brand not strong recognized in US
Market study divide consumers into 5 segments:
US MARKETANALYSIS
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ACCEPTOR/REJECTERSTUDIES
Motivation for Trial Brand name cited
Brand name meant
Department store quality
Respond to Product Formulas Young rejecters found it too
heavy and greasy
Didnt absorb into skin
Perception as Full Product Line
Having large number of productsbut have plus and minus
Individual products could bemore helpful in through the line
Respond to Packaging
Packaging seemed feminineand expensive look
Confusing and have lot to read
Perceived Target Consumer
Perceived targeted to olderwomen
Not for 20s, and maybe noteven 30s
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Brand Aware EverTried
ConversationRatio
CurrentlyUser
RetentionRatio
Oil of Olay 96% 77% 80 34% 44
Ponds 93% 52% 56 16% 31
Avon 91% 68% 75 23% 34
Revlon 90% 35% 39 10% 29
Plenitude 78% 23% 29 7% 30
Nivea 76% 26% 34 6% 23
Taken from Exhibit 11
Poor Plenitude Sales
Performance
Low Consumers Ever Tried
Low Conversation Ratio
Low Current Used
Low Retention Ratio
BRANDDEVELOPMENT
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AspectsLOreal
(Plenitude) Oil of Olay Ponds
Motivation for
Trial
Premium and
Expensive
Generated by
information /
advertisement
Seen as a staple
of life
Product
Satisfaction
Sources
Good qualityproduct
Light andreasonably
priced
Reliable,accessible and
reasonably
priced
Brand
Imagery
Hard to
understand
Traditional,
generationalbrand
Older and
down-to-earth
COMPETITORANALYSIS
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Strength
Great Research and DevelopmentDepartment
Expertise in handling Cosmetics for years
Known for Quality
Superior Technological Products
Weakness
Lack of Awareness About L'Oreal Products inUS Market
Lack of Consumer Insight in US Market
Confusing Packaging
Too many Products posed confusion to
Consumer
Opportunity
Entering into mass channels Upscaling skincare business
Available in speciality stores
Launching new product Revitalift Eyeto bring technological superiority.
Threat
Suitable skincare products for U.Smarket
Pricing structure(Expensive)
Competition with Ponds it is ratedhigher on availability and good valuefor money
SWOT
SWOT ANALYSIS
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Threat of substitutesLow vertical competition.
Low threat
Threat of new entrantsDifficult for a new entrant to enter to reach the sameR&D expertise.Create a distribution network from scratch.High brand recognition & trust for LOreal
Moderate threat.
Bargaining Power of customers
Low brand loyalty. Easy switchers.
High Threat
Bargaining Power of SuppliersL'Oreal has many suppliers in processing theirproduct. So their bargaining power is low.
Low threat
Threat of Competitors
High no of competing firms (Egponds, P&G). Rivals sell similar
product/service
High threat
PORTERSFIVEFORCES
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4 PSPRODUCT, PLACE, PRICE AND
PROMOTION
PRODUCT PLACE PRICE PROMOTION
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Product development needs to be given emphasis
on:
Needs to be less oily, non-greasy
Should be light and should easily get soaked into the skin
Less of a make-up substitute and more of product quality
in terms of value-benefits to the customer
PRODUCT PLACE PRICE PROMOTION
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We decide to strategize our selection of place for
effective sales
Mass merchandizing can be done in areas like malls,
supermarket, hypermarkets, convenience stores of those
products that have high sales/month. Eg
Sr. No Product Size % Volume
1 Revitalift Face 1.7 oz. 5,679,850
2 Eye Defense 0.5 oz. 2,297,5973 Wrinkle Defense Cream 1.4 oz. 2,193,248
4 Excell Cream 1.4 oz. 1,580,213
5 Hydra-Renewal Cream Jar 1.7 oz. 1,559,063
PRODUCT PLACE PRICE PROMOTION
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In drug stores and departmental stores, entire range ofplentitude can be displayed.
Customer can get what they need for their skin
In terms of understanding the technological aspects of theproduct, sales people can help them take a sound decision
Product benefits and features can be effectively explained by theattendants making it customer centric & exclusive as against itsplayers in the market
Effective CRM can be established at these stores Since Revitaliftof Plentitude is doing good, make them
available in all types of outlets by increasing the point ofvisibility
PRODUCT PLACE PRICE PROMOTION
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More towards technologically advanced
Spend more on R&D to come out with the right product for their consumers
PRODUCT PLACE PRICE PROMOTION
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PRODUCT PLACE PRICE PROMOTION
Positioning for the consumers who like to be highly involved(like to spend more money
on themselves)
More towards Stylish upper class
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POINT OF PARITY
The product line: Daily moisturizer
Treatment moisturizer
Cleanser
POINT OF DIFFERENTIATION
For the consumer who love theirskin and want to know more aboutthe product to look young andbeautiful (highly involved)
For the people who think they areworth it
They are technologically advanced
For the upper class consumers
Spend a lot on R&D
Spend a lot on advertisements andfor product support
LOreal products are premium
PRODUCT PLACE PRICE PROMOTION
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SKUs in the form of sachets for sampling ofmoisturizers
Cleaners coupled with moisturizers- Complementaryoffer
Point of visibility at retail outlets. Eg. Counter Branding,flanches, shelf branding etc
Use of Social media platforminteractive website Communicate the advantages of our treatment cream (it being
thick and oily)
Communicate about the different product lines and for whatthey must be used
Develop a feedback forum- Accept the complains or suggestionof the consumers and address their grievances, if any
PRODUCT PLACE PRICE PROMOTION
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PRODUCTS Trimming product-
line: focus on mass
products
Re-formulating
product basiscustomer feedback
RECOMMENDATIONS
CONSUMER US consumer as
opposed French areutility drivendifferent positioning
Promotions andcampaigns to belocalized for greater
mass appeal
Leading range like REVITALIFTto be
leveraged to promote other products
More effective communication focused on
product value to justify premium pricing
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THANKYOU..!!
Group 3Rajneet Kaur Rupani
Ameet Khalsa
Shraddha NikamAkshay Patel
Shivika Gupta
Swati Joshi
Anirban Ghosh
Garima Malik
Komal Suri
Dewanshi Gautam
Tejas Shinde