
кейси для індивідуальної роботи 2014 н.р. / L'OrщalGroupein Beauty and Personal Care
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Pyramid brand structure for wider retail channel coverage
Garnier next big thing |
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L'Oréal Paris pioneer in |
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Lancôme gains momentum |
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masstige |
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•Garnier is L'Oréal's mass brand and is positioned in the low-to-mid-priced segment. The brand has been the company's focus for growth, as it drives its global expansion. L'Oréal operates a strict brand policy, and brands are designed with specific channels in mind. The company is careful not to place a brand in the wrong retail channel. For example, its premium products are for department stores. L'Oréal Paris, at the higher end of the mass range, is mid-market through retail outlets such as Boots, Superdrug, while Garnier is suitable for any type of mass channel.
•Emerging markets lack widespread modern retail infrastructures and countries such as Pakistan and India rely on kiosks in the remote areas. To establish strong presence in these markets, L'Oréal needs to bring kiosks under its retail coverage, and Garnier is the brand for this.
•L'Oréal Paris is a mid-to-upper-mid brand, designed to offer high-quality cosmetics at affordable prices, which can be described as masstige. The brand is represented by leading celebrities across the world, upholding the brand's multiethnicity and diversity. Using global celebrities infuses a glamour essence to the brand. L'Oréal Paris can be described as a pioneer in offering a high quality glamorous brand at an affordable price, thus presenting strong competition for premium brands such as Estée Lauder. In 2010, L'Oréal Paris recorded year-on-year growth of 6%, with a share of just over 3% in the global beauty and personal care market. The brand generates 45% of its total sales in Western Europe and another 20% in North America. L'Oréal Paris's leading products are hair care, skin care and colour cosmetics.
•Lancôme is L'Oréal's long-standing premium brand, with strong brand equity. After a period of relative stagnation, Lancôme was revived with the launch of the muchpublicised Genifique – based on 10 years of research designed to reactivate youth genes. Genifique was very well received, catapulting Lancôme to the forefront of technological development, a much needed move to give it momentum. In 2010, Lancôme held a near 5% share of the global premium beauty and personal care market. The brand recorded 5% year-on-year growth – continuing to benefit from Genifique and other new launches.
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Brand Strategy |
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Brand website more interactive to enhance brand experience
•L'Oréal has benefited from successful launches in recent years based on new and more advanced technology, but the company will benefit more by exploring new media to further enhance its brand experience. It has launched iPhone applications, but could make its brand websites more interactive. For example, Estée Lauder’s brand website allows users to upload their own photos and try on different shades. One of OPI’s features is the step-by-step guidance to using its products. In addition, consumers can also have a play with different shades on different skin tones and nail lengths. MAC helps users find the right foundation with the help of video footage. Users also have the option of live chatting on MAC websites.
•These are some of the features that L'Oréal could consider adopting. Internet users are projected to increase, and by making its website interactive it can drive more traffic.
% of world population
% of World’s on Internet
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Strategic Evaluation
Competitive Positioning
Geographic and Category Opportunities
Opportunities in Key Categories
Brand Strategy
Operations
Recommendations
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Operations |
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L'Oréal sets up regional hubs to assess consumer ritual
•In its bid to expand globally, L'Oréal has been looking to develop regional research and development centres to develop better understanding of regional consumer needs.
•To this end, L'Oréal operates 18 research and development centres, out of which one is in China and one in Brazil. Alongside its 18 research and development centres, L'Oréal also operates 13 evaluation centres to assess rituals and routines practiced by consumers. The hubs are life-size replicas of bathrooms to see how shoppers act at home. This has helped the company develop interesting insight into consumer beauty habits in different markets. For example, a Korean woman uses 23 different products and spends 45 minutes getting ready.
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Regional Research & Development Centres
11 in |
1 in |
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China |
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France |
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3 in the US
2 in Japan
1 in Brazil
Key Point: L'Oréal has regional research and development centres to enable it to understand local preferences and thus develop products suited to the locale. For example, the research centre in China studied Chinese hair type and hair care custom for three years, which eventually led to the development of a range of hair care products designed for Chinese hair based on local preferences and hair care practices.
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L'Oréal Factory Locations
North America 10
Factories: 2 in Canada
and 8 in the US
1 in Mexico
Europe 20 Factories: 14 in |
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France, 2 in Spain, 1 in Italy, 1 |
2 in China |
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in Germany, 1 in Poland, 1 in |
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Belgium |
1 in Turkey |
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1 in Israel
1 in Japan
1 in India
2 in Brazil
1 in South Africa |
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In September 2010, L'Oréal opened a factory in Russia, but it is not operational yet and hence not |
1 in Indonesia |
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shown on the map. L'Oréal is also working on opening new factories in Indonesia, Egypt , Mexico |
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and to extend the one in India. |
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L'Oréal factory breakdown by category
L'Oréal Factory Locations by Category
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No. of factories |
Location |
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France 4, Belgium 1, Italy 1, Germany 1, Poland 1, US 4, |
Consumer Products |
22 |
Mexico 1, Brazil 2, South Africa 1, India 1, Israel 1, Turkey 1, |
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Indonesia 1, China 2 |
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Luxury Products |
5 |
France 3, US 1, Japan 1 |
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Professional Products |
3 |
Canada 1, US 1, Spain 1 |
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Active Cosmetics |
2 |
France 2 |
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Dermatology |
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France 1, Canada 1 |
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Raw Materials |
4 |
France 3, Spain 1 |
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Key Point: L'Oréal's manufacturing facilities are mostly in Western Europe, as the region is its largest market, followed by North America, another strategic market. L'Oréal has manufacturing plants in China, Indonesia, Turkey and India, as these markets became strategically important and the company intends to have a greater presence in these market. However, manufacturing facilities in emerging markets are only for Consumer Products, as these products are the main focus for these markets, with Garnier being the primary brand.
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Beauty/Personal Care: L'Oréal Groupe |
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© Euromonitor International |
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Strategic Evaluation
Competitive Positioning
Geographic and Category Opportunities
Opportunities in Key Categories
Brand Strategy
Operations
Recommendations
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Recommendations |
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Beauty/Personal Care: L'Oréal Groupe |
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Leverage value for money and brand experience
Focus on The Body Shop |
Make brand websites more interactive |
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•L'Oréal should increase its focus on The Body Shop brand. Increasing health and wellness concern is creating opportunities for naturally/organically placed brands. The Body Shop was a pioneer in this field and enjoys strong brand familiarity although its credibility in recent years have suffered. Investment in product launches and marketing campaigns could see The Body
Shop’s sales rise at a higher rate. Moreover, the brand has potential in markets such as China, India and Brazil where consumers prefer naturally/organically placed brands and also have the income power.
•L'Oréal has made a number of successful launches based on sophisticated product technology. The company will benefit more by combining its sophisticated product range with more interactive brand websites, to help enhance brand experience. L'Oréal could make use of video footage, live chat and other interactive tools to represent its brands. The penetration of internet users has a strong growth projection. By making its brand websites more interactive, L'Oréal will drive greater internet traffic.
Consider further expansion in Indonesia and Iran Leverage value for money
•L'Oréal has been prioritising growth in emerging markets including BRIC and frontier markets. In 2009, L'Oréal opened new subsidiaries in Egypt and Pakistan. Other markets L'Oréal is likely to benefit from are Iran and Indonesia. Iran will be amongst the top five countries to drive value growth in colour cosmetics and deodorants, while Indonesia will be the fifth leading country to drive value growth in skin care. L'Oréal’s high-quality brands at accessible price points could help drive growth in these markets.
•L'Oréal has relied on value for money to drive growth in the face of the economic downturn. It has incorporated some sophisticated product technology into its mass range, which helped its sales grow. Value for money is a trend that is likely to continue into the future and L'Oréal will benefit from continuing with this strategy.
•Moreover, L'Oréal will benefit by introducing this trend in the emerging markets as well, where limited income creates a strong growth opportunity for its more accessibly-priced mass range.
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