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A term report submitted to Sir Javaid Ahmed, being a part of the semester assignment for
Maketing Management course.

SUBMITTED BY:
Syed Abid Haider (12784)
Muhammad Umer Hafeez khan (13013)
Midhat Nadeem (13229)
Sehrish Khan (12676)
Rida Rais Ahmed (13141)

DATE OF SUBMISSION:
9th August 2012
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LETTER OF TRANSMITTAL

9
Th
August, 2012


Mr. Javaid Ahmed
Course Instructor for Marketing Management (MBA-R3Y)
Institute of Business Management


Dear Mr. Ahmed:

We are pleased to submit our report on Loreal one the leading company in
cosmetic industry.
We have worked hard in making this report. We hope that it will fully serve its
purpose. We appreciate your support in making this report and we also look
forward to your feedback which will be helpful for us. Please check the enclosed
report.
Sincerely,
Syed Abid Haider (12784)
Muhammad Umer Hafeez khan (13013)
Midhat Nadeem (13229)
Sehrish Khan (12676)
Rida Rais Ahmed (13141)

Encl. (1)

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LETTER OF ACKNOWLEDGEMENT


We would like to thank Allah almighty for giving us the courage, strength and
opportunity to work on this report. Making this report really would not have been
possible without the grace of Almighty.

We would specially like to thank Miss Wafa Kalia from Marketing and Sales
Department for giving her valuable time and providing valuable information
about LOreal.

And last but not the least; we would like to thank all those who gave their advices
and technical support that led to the completion of this report and our Dear
FACULTY SIR JAVAID AHMED with whosesupport and guidance we are able to do
this task.

Respectfully yours,
Syed Abid Haider (12784)
Muhammad Umer Hafeez khan (13013)
Midhat Nadeem (13229)
Sehrish Khan (12676)
Rida Rais Ahmed (13141)



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TABLE OF CONTENTS

1. LETTER OF TRANSMITTAL ................................................................................ 3
2. LETTER OF ACKNOWLEDGEMENT ................................................................. 4
3. TABLE OF CONTENTS ......................................................................................... 5
4. COMPANY INFORMATION ............................................................................... 6
5. CONSUMER BEHAVIOUR MODEL ................................................................... 8
6. VALUE DEFINITION .......................................................................................... 16
7. VALUE CREATION ............................................................................................. 28
8. VALUE COMMUNICATION .............................................................................. 37
9. COMPETITIVE STRATEGIES ............................................................................ 49













V
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LOREAL GROUP
For more than a century, LOral has devoted itself solely to one business:
beauty. It is a business rich in meaning, as it enables all individuals to
express their personalities, gain self-confidence and open up to others.
LOral has set itself the mission of offering all women and men worldwide
the best of cosmetics innovation in terms of quality, efficacy and safety. It
pursues this goal by meeting the infinite diversity of beauty needs and
desires all over the world.
Since its creation by a researcher, the group has been pushing back the
frontiers of knowledge. Its unique Research arm enables it to continually
explore new territories and invent the products of the future, while drawing
inspiration from beauty rituals the world over.
Providing access to products that enhance well-being, mobilising its
innovative strength to preserve the beauty of the planet and supporting local
communities. These are exacting challenges, which are a source of
inspiration and creativity for LOral.
By drawing on the diversity of its teams, and the richness and the
complementarity of its brand portfolio, LOral has made the
universalisation of beauty its project for the years to come.
FACTS & FIGURES

RESEARCH & INNOVATION:
- 3 676 employees of 60 different nationalities working in 30 different
disciplines.
- 19 research centers in 5 regional hubs, 16 evaluation centers, 50 scientific
and regulatory departments across the world
- 1/3 of the R&I budget devoted to Advanced Research
- 100 active cooperation agreements with leading academic and research
institutions.
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HUMAN RESOURCES:
68,900 employees in 66 countries
A commitment to developing the competencies and expertise of all
employees to support the groups continued growth:
- 5 development centers around the globe - in Shanghai, Rio de Janeiro,
Dubai, New York and Paris
- An online, next-generation learning offer
- A wide range of in-house tailored training programmes

A strong commitment to diversity:
- 113 nationalities
- 58% of managers and 38% of management committee members are
women.
L'Oral is ranked among the world's most attractive employers (n3
worldwide among FMCG companies for business students) (2011 Universum
survey).

LOREAL PAKISTAN
L'Oreal Pakistan Private Limited is a wholly-owned subsidiary of the L'Oreal
Group. The Company's business presently is divided into two divisions:
consumer products and professional. The consumer products' business is
made up of three brands: L'Oreal Paris, Garnier and Maybelline New York.

These three master brands, each have several differentiated franchises, such
as Excellence, Dermo Expertise, Colour Naturals, Studio Line, Skin Naturals
and Elvive, which cater to diverse beauty and personal care needs.

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CONSUMER BEHAVIOUR MODEL
MODEL OF CONSUMER BEHAVIOUR:
Consumers make many buying decisions everyday and buying decision is the
focal point of the marketers effort. The central question from marketers is
how do consumers respond to various marketing efforts the company might
use? The starting point is stimulus-response model of buyers behavior.


This figure shows that marketing and other stimuli enter the consumers
black box and produce certain responses. Marketers must figure out what
is in the buyers black box.



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CHARACTERISTICS AFFECTING CONSUMER
BEHAVIOUR:
The following are the certain factors
which influence the consumer
behavior:

Learnings:

LOreal is spreading its word of
mouth by establishing different
kiosk in different parts of city and by
attracting people. Also through their
successful below the line activities
that take place after every four
months. Especially on occasions like
Eid and other festive holidays.

TYPES OF BUYING DECISION BEHAVIOR:
LOreal lies under the category of
Dissonance Reducing buying
behavior.
Since the consumer here is highly
involved due to the price and its
diversified range of products that
it offers. Also when it comes to
skin care and cosmetics people do
not wish to take any risk so the
consumer becomes highly involved
in it. And because of few brand
differences in comparison with
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their competition.
Almost all their competition has the same product portfolio making the
customer experience dissonance after purchase.
CONSUMER DECISION-MAKING PROCESS:

NEED RECOGNITION:
Loreal saw a need in Pakistani industry for women who want to use branded
and premium products. So they establishedtheir brand in Pakistan.
Pakistani industry has potential and there is a need for an established brand.
Their product range is diversified ranging from cosmetics and creams for
different age groups and for different solutions. The company is creating
awareness for people by providing through promotional campaigns and
activities.
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INFORMATION SEARCH:
The consumer has information for Loreal
coming in from advertisements and their
personal selling activities. Also a facebook
fanpage has also been created to serve
cutomers with any information that they
require.
Loreal also provides on the spot information
through their trained staff that is always available at stores while managing
kiosks.
EVALUATION OF ALTERNATIVES:
Consumers evaluate alternatives in terms of the functional and psychological
benefits that they offer. Loreal understands what benefits consumers are
seeking and therefore which attributes are most important in terms of
making a decision.
They have segmented their market into different age groups who seek
different solutions for different needs. And Loreal has managed to cater
almost everything that the competition is providing but by always giving
consumers something extra.
PURCHASE DECISION:
In purchasing decision, purchasing is done after the evaluation of
alternatives by a customer which product to buy and what benefits they are
getting from the companys product, are they providing value?
After all this questions and evaluations customer makes a choice of
purchasing. Sometimes purchase intention does not result in an actual
purchase. Loreal facilitates the consumers to act on their purchase intention.
They use variety of techniques to achieve this. The sales promotion,
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discounts, personal selling and various activities at malls provide an
incentive to buy now.
POST-PURCHASE BEHAVIOR:

It is common for customers to experience concerns after making a purchase
decision. This arises from a concept that is known as cognitive dissonance.
The customer, having bought a product, may feel that an alternative would
have been preferable. In these circumstances that customer will not
repurchase immediately, but is likely to switch brands next time.
To manage the post-purchase stage, LOreals marketing team persuades the
potential customer that the product will satisfy his or her needs. Then after
having made a purchase, the customer should be encouraged that he or she
has made the right decision. This is usually done by the communication

Cognitive Dissonance
?
Did I make a good decision?
Did I buy the right product?
Did I get a good value?
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between customer and the brand promoters that are hired by LOreal at the
time of various activities at malls. They are usually cosmetologists and
dermatologists who are available at malls for free consultation.
RECOMMENDATIONS:
LOreal lacks in creating more brand
differences from its competition
hence making consumers stay in the
dissonance region.
The Marketing Manager is hence
advised to consider the following
recommendations to move
consumers from dissonance reducing
to complex buying behavior.

Work needs to be done on post
purchase behavior:
The consumers need to be fully satisfied of the purchase
they have made to reduce them to stay in the dissonance
dimension. Hence there should be places where LOreal can
exhibit its products and customers can seek advice at all
times, before or after purchase. They should genuinely feel
that they are receiving value out of the premium price that
they are paying.


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Differentiation:
Regardless of LOreal being the market leaders,
there is less work done on creating high brand
differences by the company from its
competition. Either they counter Act or come out with a similar product as
off competition or stay preemptive or introduce products on monthly basis.
But not much variation seems to take place. Cosmetics and creams tend to
remain the same.
LOreal can treat different cosmetics consumers differently:
The Market of professional users, such as
make-up artists, salon owners are
consumers with different behavior.
Hence Marketers can cater them on more
personal and preferred way. Not only are
they potential consumers but also brand
promoters when they talk or apply our
products on their clients.
Awareness:
Consumers will automatically get more
involved if they are educated about skin and
makeup. Hence to make consumers reach the
complex buying behavior area it is important
that awareness is created about issues related
to skin that cannot only be healed by use of
creams but also be concealed through use of
makeup.

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Relate LOreal with a Good cause to make
consumers more involved:
BODY SHOP has created a soft corner in consumers
mind and heart since they do lots of CSR activities,
especially there non animal testing approach has made
them very successful and popular in the eyes of
consumers.
Consumers when purchasing Body Shop products are highly involved and are also aware
that there money is being used for the right causes. As the company cares about society,
they will certainly take good care of their consumers.
Similarly to make consumers and society more involved in LOreal as a Good Caring
brand they should start working for any Good cause similar to their nature of business.






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VALUE DEFINITION
MARKET SEGMENTATION FOR LOREAL
SEGMENTING CONSUMER MARKETS:
GEOGRAPHIC
Country Pakistan, India, Sri Lanka, Bangladesh, Thailand, Canada,
Mexico, North America,Western Europe, Middle East,
Pacific, Rim, China
Country
Region
East, West, North, South
Density Urban, suburban, exurban, rural
Climate Northern & Southern
DEMOGRPAHIC
Age Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 65+
Gender Female, Male
Family Size 1-2, 3-4, 5+
Family life
cycle
Young, single, married, no children, married with children,
single parents, unmarried couples, no children under 18, other
Occupation Housewives, working women, professional and technical,
managers, craftspeople, retired, students, unemployed
Income Deprived (less than Rs.90000), Aspirers (Rs.90000-200000),
Seekers (Rs.200000-500000), Strivers (Rs.500000-1000000)
Education Undergraduate, graduate, postgraduate
Religion Catholic, Protestant, Jewish, Muslim, Hindu, Sikh, Parsi,
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Buddhist, other
PSYCHOGRAPHIC
Social class Upper-Upper, Upper-Middle, Upper-Lower
Lifestyle Achievers, Experiencers, Strivers, Survivors
Personality Lively, extrovert young girls, compulsive, gregarious,
authoritarian, ambitious
BEHAVIORAL
Occasions Regular Occasion, special occasion, holiday, seasonal
Benefits Quality, service, economy, convenience, speed
User status Potential user, first-time user, regular user, non-user, ex-
user
User rates Heavy user, medium user, light user
Loyalty
status
Medium, strong, absolute, none
Readiness
Stage
Aware, interested, informed, intending to buy, unaware,
desirous
Attitude
towards
product
Enthusiastic, positive, indifferent, negative, hostile

We are living in a fast paced environmentwhich is full of stress and
pollution. Women are quite concerned with the health of their skin in
todays unhealthy environment. For busy women, it is important to find
cosmetic products that can protect their skin. Today, more and more women
realize the important of keeping their skin healthy. Unhygienic conditions in
our environment have increased the sales of mineral makeup. Therefore,
LOreal cosmetics have segmented the market with respect to females and
offers different categories in terms of colors and shades for different age
groups. The company offers nail polishes, glosses, lipsticks, eye markers, hair
care products for every market segment.
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LEVEL OF SEGMENTATION:The level of segmentation for LOreal is that it
focuses on customer group seeking a distinctive mix of benefits i.e. niche
marketing. Loreal marketers understand their customers needs so well that
the customers willingly pay a premium.



TARGET MARKETS FOR LOREAL
Makeup is an essential part of most womens look from a dab of blush to
shiny lip shades; women luxuriate in using makeup to enhance their natural
beauty. There are cosmetic choices for the career women, the mom-on-the-
go and even the pre-teen who receives her first makeup kit from mom. Each
has her own makeup needs, and cosmetic companies work to target their
brands accordingly
LOreal is a premium brand and it only targets the elite class which is not
much affected by their inflation, though their status is much important
andLOreal offers innovative products therefore people go for it and it is a
successful brand in the niche market.
In 2008 their sales rapidly declined due to unsuitable economic conditions in
Europe and America, thus, LOreal decided to penetrate into new markets of
Asia. They researched that people living in emerging countries consume 10
times less cosmetic products than those in developed countries but they had
a believe with a constantly growing GDP, this level should rise very quickly.
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This set of countries, which accounts for more than 85% of the world's
population, already represents 50% of the global cosmetic markets and is
continuing to increase. The shift in the global cosmetics market is happening
now. The acceleration in the New Markets zone is spectacular. Its share in
the group's sales has doubled every 10 years, reaching 33% in 2011, and will
probably represent more than half of their sales in less than 10 years.
MARKET SEGMENTS MADE BY LOREAL WITH RESPECT TO
SEGMENTATION VARIABLES:

On the basis of segmentation chart, LOreal divided the market into
following segments:

1. Cosmetic shops
Cosmetic shops will be able to present LOreal products directly to
the consumers. Cosmetic shops may include retail stores in all
leading shopping malls.

2. Departmental stores
Departmental stores are able to give exposure to LOreal products
also giving the option of salespromotion and personal selling in that
particular store.

3. Whole sale retailers
Wholesale retailers provide the product extra availability in the
market for both retail stores and business markets.

4. Beauty parlors
Well recognized Beauty Parlors carry LOreal products to satisfy
their own customer needs and to attract quality customers.

5. Makeup artists
LOreal approach makeup artists who render their services to many
agencies privately.
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6. Modeling agencies
Modeling agencies use LOreal products for preparing their models
for outdoor shoots, fashion shows and other events.

7. Film agencies
International Film Agencies prefer using LOreal products to
prepare their actors and actresses for outdoor shoots and indoor
shoots.
TARGETTING FROM THE SEGMENTS MADE BY THE COMPANY:
LOreal evaluated the various segments, and then targeted the following as
the best and profitable segments to be targeted based on segments
evaluations:
1- COSMETIC SHOPS:
GEOGRAPHI
C VARIABLES
DEMOGRAPHI
C VARIABLES
PSYCOGRAPHI
C VARIABLES
BEHAVIORA
L VARIABLES

Urban areas,
Dense
population
Income of
cosmetic shops
in leading malls
is upto LOreals
standard i.e.
between
Rs.35000 to
80000
Achievers,
Experiencers,
Extrovert,
lively young girls
do visit the
cosmetic shops in
malls.
Occasional
purchases,
First time
users,
Cosmetic
shops in
leading malls
visited by elite
class
Consumers.


2- DEPARTMENTAL STORES:
GEOGRAPHI
C VARIABLES
DEMOGRAPHI
C VARIABLES
PSYCOGRAPHI
C VARIABLES
BEHAVIORA
L VARIABLES
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Urban areas,
Dense
population
Dept. stores are
visited by elite
class,
educated
females who are
seeking premium
quality, working
women
Achievers,
elite class
females,
who like
socializing i.e.
Extrovert females
visit dept. stores
Heavy users,
who are aware
of quality
Brands,
intending to
busy visits
dept. stores.


3- MAKEUP ARTISTS:
GEOGRAPHI
C VARIABLES
DEMOGRAPHI
C VARIABLES
PSYCOGRAPHI
C VARIABLES
BEHAVIORA
L VARIABLES

Urban areas,
Dense
population
Highly paid,
Income is
Rs.100000+,
Are Educated,
Age: 25 to 50
Achievers,
Lively,
Extroverts,
Elite class.

Loyal to
brand,
Quality
seeking,
Heavy users,
Regular users,
Aware of
brands.



4- MODELING AGENCIES:
GEOGRAPHI
C VARIABLES
DEMOGRAPHI
C VARIABLES
PSYCOGRAPHI
C VARIABLES
BEHAVIORA
L VARIABLES

Urban areas,
Dense
population
Income
Rs.50000+
Educated,
Age: 25 to 55
Extroverts,
Lively,
Experiencers,
Achievers.
Regular users,
Heavy users,
Quality
seeking,
Intending to
buy.

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POSITIONING STATEMENT FOR LOREAL


"From hair color to cosmetics, cleansing, serums and
treatment, we are unique for providing such a vast range of
products that deliver instant and significant results."

Their positioning statement is very precise and complete highlighting and
covering all the products they provide. Their positioning in the mind of
consumers as well as those who does not use it is that it is a premium quality
product, the price speaks it all and the quality of their cosmetics is amazing.
Their lipsticks have that shine and softness that you once just look at them
you can feel the uniqueness in the texture. Those who are their customers do
not believe in switching because they are satisfied with what they are getting
because they are getting. In fact a lot of school and college going young girls
are their potential buyers because they save their pocket moneys to buy their
favorite lipsticks. The positioning is as a premium brand and is recognized as
an international brand.


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RECOMMENDATIONS
LOCAL MARKETING :
Loreal is currently engaged in the level of segmentation which is Niche
marketing level. Loreal has gained economies through specialization; it has
the growth potential and is a profitable company. But as Loreal is expanding
its markets worldwide, it may now move to the local marketing level of
segmentation as to tailor to the needs and wants of local customer groups in
trading areas, even individual stores. There is a growing trend of grassroots
marketing where the marketing activities concentrate on getting as close and
personally relevant to individual customers as possible. Therefore, Loreal
may take the advantage from this trend of grassroots marketing and avail the
benefits of local marketing level which will increase its sales.
GEOGRAPHIC SEGMENTATION:
The size of geographical markets is an important consideration while
deciding the concentration of marketing efforts. Loreal may focus on the
geographical segmentation for its products as the market potential varies
from country to country and even within the same country. Loreal has been
evaluating the geographies but still more calculations to be done to capture
various markets. Loreal may implement the T&C (Town and Country)
Framework to help its marketers prioritize markets and choose suitable
advertising media for the selected market. The T&C framework is a set of
guidelines which along with the data available in the National Readership
Surveys, uses sociocultural regions as the basic geographic unit for analysis.
T&C framework will help Loreal as it evaluates and prioritizes each region
based on social, cultural, economic factors and media reach.
INCOME SEGMENTATION:
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Loreal may bring changes to its income segmentation. Income determines
the ability of consumers to participate in the market exchange; therefore, it
is set after deep analysis aiming to attract consumers who helps in building
the brand image and provides the company with profits. Loreal, in Pakistan
is targeting to customers with income levels between Rs.35000 to Rs.80000+
which has made its positioning as an expensive brand not in everyone reach.
It is the brand associated with the status and for the elite class. Loreal may
take into consideration that the markets in South Asia as well as in other
emerging markets, they can capture and succeed only if the middle class
sections of consumers participatein the market exchange, and become
consumers of products and services. However utilizing the dormant
potential of these markets requires innovative thinking. The buying capacity
of the middle class is raised many folds and the present shift in the fashion
consciousness has made the middle class more towards the high quality
cosmetics as well. If large firms approach this market with the bottom of the
pyramid (BOP) consumers interests at heart, it can also lead to significant
growth and profits for the company. Loreal may evaluate of ways to cater to
the requirements of middle class customers in a way that it be beneficial for
the company as well as for the customers.
USER STATUS:
Loreal is continually focusing on its regular users, company is improving and
introducing products focusing the users of the product and for increasing
their satisfaction level whereas in my opinion, it may aim to convert the non-
users into users and then into the regular users phase of user status. This will
increase the market share of the company as well as the sales will increase
rapidly. Loreal may make such strategies as to attract non-users towards its
products.

TARGET MARKETS FOR LOREAL:
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LOreal is a premium brand and it only targets the elite class which is not
much affected by the inflation, though their status is much important. Loreal
targets females who are status conscious and wants to be associated with the
brand as to status symbol. Loreal is using the market specialization pattern
to target customers. The firm concentrates on serving many needs of a
particular customer group i.e. the elite class. Loreal has gained a strong
reputation in serving particular customer group and has become a channel
for additional products this customer group can use. There is a downside to
Loreal focusing on needs of particular customer group i.e. the customer
group may suffer budget cuts or shrink in size.Therefore, Loreal may attempt
to serve a number of customer groups with the products they might need.
Loreal can cover whole market by using differentiated marketing.

DIFFERENTIATED MARKETING:
In differentiated marketing, the firm operates in several market segments
and designs different products for each. Loreal may market brands that
appeal to women of different tastes. Older consumers, middle-aged women,
youthful hipsters, enthusiasts, all look for different features in the cosmetics,
the firm can cater to all these groups of customers by applying differentiated
marketing concept. Differentiated marketing typically creates more total
sales than undifferentiated marketing.
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POSITIONING:
Loreal is positioned as a premium quality product, their price speaks it all.
The brand is strongly positioned as the product associated with status and
product for upper-class. The positioning statement of Loreal mentions that it
provides with the vast range of cosmetics that deliver instant and significant
results. Positioning statement is not as strong as it should be. They have
skipped mentioning the customers in the statement whereas a good
positioning statement answers three questions: (1) who are the customers?
(2) What is the set of needs that the product fulfills? (3) Why is the product
the best option to satisfy those needs?. Loreal may add the customer part in
its positioning statement. A firms desired positioning thus is the organizing
force among the marketing mix elements to ensure their synergy.
Positioning is the support for the development of the marketing mix. Loreal
has focused on having premium quality product position and has developed
the marketing mix accordingly, but this positioning has put up barriers for
the firm to now enter into new markets as to cater to other customer groups
and expand the segments. Positioning strategies needs to be altered as to
provide way to capture other market segments which will result in increased
market shares and sales.

PISITIONING STATEMENT CONSTRUCTION TEMPLATE:

Source:http://marketingcampaigndevelopment.wordpress.com/2011/05/20/
how-the-positioning-statement-exercise-saved-a-companys-reputation/

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CONCLUSION:
In order to design a successful marketing strategy, market segmentation,
target market selection and positioning of the products needs to be done in
an appropriate manner as these three are the prerequisites to developing
marketing-mix. They allow the firm to focus its efforts on the right
customers and also provide the organizing force for the marketing-mix
elements. Product positioning, in particular, provides the synergy among the
four Ps (product, price, place, promotion) of the marketing plan.







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VALUE CREATION
PRODUCT LINE
There are several reasons for a company to develop their strength through
Product Line. The main objective for product line is to induce up-selling. For
example LOreal had developed a new researched based True Man Mineral
Foundation, which induces consumers to switch to better product than a
simple Mineral Foundation. Therefore, LOreal is too much into innovation.
This strategy gives them leverage to increase the trust of the consumer,
which enhances with their new research products. Moreover, consumer is
satisfied when uses it.
The second perspective is they give hard competition to their competitors by
maintaining a well-researched Product Line for the consumers. This adds
value to the brand and in the lives of the end user as well. This strategy with
the passage of time builds Brand Credibility of LOreal and gave value to
their consumers.
Simultaneously with up selling, brand wants to achieve the target of cross
selling. It was observed in a BTL activity that ambassadors while guiding
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women about loreal products. They point that for the best results you have
to ise
It is mentioned by Kotler that department like sales, who have direct
interaction with consumers suggest the marketing department to increase
product line. This decision results in customer satisfaction, but beside this a
good marketer would take a rational decision. This judgment should be
based on cost benefit analysis of launching a new product.


Skin bases Eyes Lipsticks Blush-On
True match
mineral
foundation
Volume million
mascara
Range of color
riche lipsticks
Baby pink
Mousse Double extension
mascara
Range of
infallible lipstick
(16 hour lasting
and kiss proof)
Skin pink
True match
compact
powder
Water proof liner
Liquid
foundation
Range of mono
eye shadows

Range of trio eye
shadows



BRANDING
LOreal symbolizes luxury and glamorous and is for the women who wants to
get best. The customers know it is a premium product which is described by
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the high value and high price. They are innovative since they believe in
bringing out new product very rapidly. If not bringing a new product, then
innovating and enhancing the existing products. For example they bring new
shades in mousse,face powder and lipsticks are developed every now and
then.
The value creation through branding of LOreal is an excellent process. By
business week LOreal ranked as no.1 beauty Products Company is ringing up
healthy sales in skincare product.


Jennifer Lopez is the brand ambassador who is endorsing LOreal
internationally. It is stated by various media that Jennifer has bought a sex
appeal to the brand and she is using LOreal products for years, which itself
talks about LOreal branding. It is also stated in the media that Jennifer the
endorsement queen, when started endorsing the brand, it adds to the high
value of the brand and induce people to purchase.
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Online social networks, BTL activities for experiential marketing and
different celebrities are introduced by LOreal to create their brand equity.
LOreal set community strategy, which is helpful in building a trustworthy
brand by different types of interaction of consumers with the brand.
Through this process they are concern to create brand authority and
identity. Brands of authority help consumers actualize their needs and
identities by lending expertise and assistance. Brands of conversation engage
in a dialogue, engendering a sense of connection through which consumers
communicate, share experiences, and interact.

The study quoted, which is taken after consulting a research paper by Boston
School of Management. They suggest a graph, which notifies LOreal as a
mainstream brand and a symbol of authority.

LOreal brand strategy is always the same, they connect with the people who
can associate with the brand community and strengthen the brand essence
and values. Many successful brands adopt community strategy and select
tools right for the corporation, the consumer, the collaborators, the
competition and the brand.


Brand Awareness:
The elements of brand awareness are
Does a person know about the brand?
If they then how much people who are familiar with the brand prefer
to use it?

Bar chart depicting the percentages about the brand awareness of LOreal
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An overwhelming majority of respondents who are familiar with the brand
have used the product as well. The statistics for the usage among the people
who are familiar are as follows.





Brand Identity
The brands Identity of loreal in the mind of its consumers are very well
positioned concerning their competitors.

















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Product Attitude:
The third brand characteristic that was investigated was the Attitude
towards LOral products. The respondents were asked to rank according
to their perception / attitude, seven variables describing the products. The
product attitude variables included in the survey were Interesting,
Beneficial, Enjoyable, Superior, and fond of, Value for Money, Exceptional



Brand Personality:
The brand personality defines what consumers perception is about the
brand and its image. In front of them how it is?
The variable that hit first on the mind of consumers thinking about LOreal
are Successful, up-to-date, glamorous and feminine.


Brand Loyalty
It is mentioned by the personnel that maintain a brand loyalty is very
necessary, it shows that the brand is well positioned in your target
market.The brand audit make it clear to them that about 40% of the target
market is loyal and slightly loyal.


DISTRIBUTION

Distribution is the channel of delivery your product to the end consumer.
This is the point where companies can create value for their customers by
different process. Most ideal is by adopting vertical marketing system. It will
enhance the productivity of the company.

in the case of LOreal, their products are distributed exclusively.
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Distribution policy is exclusive only nominated stores in Karachi, Lahore and
Islamabad for example in Agha, Naheed, Forum and in upcoming future they
are planning to move to Faisalabad for the fact that in Punjab the spending
ratio is comparatively more.
Distribution channel:
LOreal Pakistan distributors consumers
Company nominated outlets consumers:
Aghas
Naheed super market
Forum
Park Towers
And others

PRICING
The first thing to mention for pricing is the pricing objective. LOreal
positioned its product as PRODUCT QUALITY LEADERSHIP by providing
premium quality at a premium price to its customer base.
LOreal created their value through premium pricing and disseminating
premium value to its consumers. The brand audit result has been presented
before, which shows that people are satisfied and there is relatively less
feeling of cognitive dissonance among the consumer relating it to pricing.
LOreal placed themselves on PREMIUM VALUE i.e. they are giving High
Value on High Price.

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RECOMMENDATION

Proposed Product Line
LOreal products are not manufactured in Pakistan. Despite of the fact, that
they have a large market in sub-continent. Therefore, they have to develop
their manufacturing plants in this region to reap maximum benefit. This will
definitely decrease their cost and create ease in distribution. Though, this
step must be taken after objective scrutiny of the sales of LOreal.

The product line is well maintained by LOreal and they are progressing well
in it and giving hard time to its competitor in reference to hit a segment with
unmet need.
Other than product line they have brand extension like Garnier to meet the
needs of customers who are not able to afford
LOreal, in short they are one way or other
making most of their customers

Proposed Distribution
Moreover, a time has passed to LOreal Pakistan;
now being a premium brand they should have
their distribution outlet connecting directly to
consumers. This will enhance their experiential
marketing, which is a pattern of adding value to
the lives of your customers.
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Online ordering and delivery of products at the door step. This must
be carried in a subsidized rate would definitely add value to the
product.

Proposed Branding
In Pakistan, the branding of LOreal can be enhanced by endorsing the
products by various celebrities. Like Iman Ali, Sanam Baloch and etc. The
reason being Sanam Baloch as brand ambassador, she is a rising star in
dramas of Pakistan. After MAC cosmetics, Luscious is the main competitor
and they are using Mahira Khan as their brand ambassador.

Exclusive LOreal stores should be opened like Nike did. Loreal may have the
colletion of Jennifer Leopez and a store on their endorser. This will engage
consumers in their brand and build more brand equity

Proposed Product Line
The product line is well maintained by LOreal and they are progressing well
in it and giving hard time to its competitor in reference to hit a segment with
unmet need.
Other than product line they have brand extension like Garnier to meet the
needs of customers who are not able to afford LOreal, in short they are one
way or other making most of their customers.

Pricing
As we have discussed the company practice that they are offering high value
for high price. But, regardless of it in some season they have to go for
promotional pricing, which adds new user to your portfolio. The interesting
fact is that LOreal experiential marketing makes the user their loyal
customer. Moreover, company should develop an online ordering system
and for initial customers offer subsidized home delivery, this would
definitely work for professionals. Mostly use loreal as status symbol and
when distribution is easy you create value with it.

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VALUE CUMMINCATION

Since the brand is still in the introductory phase of its product life cycle. The
use of integrated marketing communication mix tools is limited to few in
order to communicate value to selective target audience or we can call it
focus marketing. The major tools which the brand uses to communicate
value to its customers are Advertising , Personal selling, Interactive/Internet
Marketing. The use of other communication tools like public relations direct
selling is limited.
Audience and Objectives:
The aim of the LOreals communication strategy is to basically deliver the
value created for the females both young and middle aged, and also the
professional segment of the customers including Beauty saloons and
Professional Make Up Artists.
In determining the message to be communicated, the Management saw
buyers as expecting one of the four types of rewards from a product that is
Rational, Sensory, Social and Ego Satisfaction. In case of LOreal since it
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targets the elite class segments of the customers both in females and
professional, the buyers expect the LOreal products to fulfill their social ,
ego and esteem satisfaction if they use LOreal products. The target audience
have overcome the physiological and safety needs if we see according to the
Maslows Hierarchy of needs 38theory
Target Audience Their Expectations Value to be
communicated
Lively young girls (age
15 to 25 years).
To be looked as most
beautiful and different
from others. To be
looked as more
fashionable.
The company wants to
communicate that
LOreal products are the
best in class premium
products by use of
which the customers
can achieve the sense of
esteem, social and ego
needs. The high in
status, elite customers
of LOreal feels the
sense of satisfaction of
their underlying
emotions of being
different and above all.
Middle aged women of
elite class especially
working women (age :
25 to 45 years)
To have a sense of
achieving ego
satisfaction and a sense
of being different from
others.
Professional segment of
the customers ( top
class makeup artists and
film agencies
To be considered as best
in class in the industry.
More style and more
fasionable.

Value definition:
The above mentioned users and other business to business customers like
departmental stores and the cosmetics shops, the value communicated is
that if they are spending more they are actually adding more value to their
self esteem and emotional needs in the case of above mentioned customers
and the sense of being the best in town because of carrying best in the world
brand in case of later, B2B customers.
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The firm is operating business in High Product Quality and High Price
segment that is the Premium Cosmetics category in which it is reaping out
high margins instead of operating for maximum market share.
Objectives:
To communicate to its elite customers the sense of high status, fashionable
and healthy and safe cosmetics. Since the upper class now become more
aware and conscious about the hazardous effects on skin by using low price
and low quality products and the consequent health issues.
Current companys practice:
The company is at the moment using the two most important tools of
communication mix that is advertising and personal selling and using
effectively the blends of two. Let us now examine how the LOreal brand
managers are linking advertising with personal selling in detail
Linking Advertising to Personal Selling :
In order to ease the process of purchase decision by the customers, LOreal
has adopted the strategy of blending excellently the two important tools of
communication mix that is Advertising and personal selling.
Customers readiness
stage
Effect of the
communication tool
used
Mode/tool of
communication



Awareness
Information, attraction
and knowledge to
customers.
creating new customers,
indicates introduction
of new products.


Advertising
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Liking


Personal Experience/
sensing and feeling

Advertising and
personal selling


Purchase


Convey more
information,
Customers dont have to
wait for long for queries
to be resolved

Personal selling


The effectiveness of Advertising is greater in awareness stage and goes down
subsequently in the later stages of buying decision process. At the same time
the effectiveness of Personal selling is to aid the later stages like order and
repurchase stages of the buying decision process. LOreal has though
intelligently used the blend of their association.
We now turn to these two Communication tools used by LOreal in detail.
Advertising:

The two major courses of advertising, the company use to follow are
professional advertising and trade advertising. In Professional Advertising
the major targets are the beauty experts and saloons in order to encourage
them to use the brands products. This is not the only motive of the company
which it wants to achieve, the company also wants to achieve the goal of
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encouraging professionals to specify and recommend the brands products
usage by the end users.
The other mode of advertising the company uses is the trade marketing
advertising like in case of lifestyle exhibitions. The purpose of this mode of
advertising in again two folds. Firstly the company wants the advertising
targeted to channel members especially wholesale and retail combo giants in
order to encourage them to stock, promote and resell the brands products.
And secondly to advertise it to end users.
Personal Selling:

The other tool of the Integrated Marketing Communication mix the
company uses to communicate the value is the Personal selling approach by
engaging customers in various BTL activities. The purpose of this approach is
that despite of being cheaper in cost than ATL activities like traditional
media and is more focused as well. So, for a company who has adopted focus
strategy for marketing, the BTL activities are fruitful and delivering the
results. Also the BTL activities are more quantitative than the ATL activities
which are actually more qualitative.This includes placing stalls in malls and
participating in exhibitions as discussedearlier as well.
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Interactive/Internet Marketing :
With the rising new horizons of marketing approaches, the interactive and
internet marketing has achieved significant heights among the
communication mix tools. LOreal in Pakistan is also using it efficiently and
effectively in order communicate their messages and adds up for value to the
customers. The interactive media allows for a back and forth flow of
information where users can participate and modify any information
available to them readily by personal
experience etc. The fan and
professional page of LOreal on
facebook provides a medium of this to
the customers.Despite of the fact that it
has been now three years of its launch in
Pakistan, the brand managers at
LOreal are still just focusing on the
three major cities of Pakistan that is
Karachi, Lahore and Islamabad. The
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company have plans to extend their business in the tier two cities especially
of the province of Punjab like Gujrat, Sialkot and Faisalabad in the next
stage. While extending the businesses in other cities knowing the fact that
the buying potential of the consumer has significantly raised over the past
few years and the trends of awareness as far as cosmetics industry is
concerned has dramatically changed, the company should include the other
tools of communication mix in order to achieve their objectives. LOreal in
India has been using all the tools of communication mix so effectively over
the years that it has achieved the position among the top cosmetics brand of
India as far as market share is concerned.
RECOMMENDATIONS:
In order to achieve the position among the top cosmetics brands of the
country as far as the Market share is concerned, the marketing managers at
LOreal are now planning to move from a focus strategy to more diversified
and expanded strategy. Already with the low cost brand of Garnier, the
company has tapped the middle and lower segments of the society and made
their presence obvious there. To extend the LOreal Brand to the expanded
market in the near future, the marketing managers at LOreal needs to
review the marketing plan.
For developing a promotional plan for communicating value in the new
future circumstances, the marketers must understand where the brand has
been, its current position in the market, where they wants to go and how
they will reach there. After reviewing the marketing plan the next step is to
analyze the promotional program situation, then the marketers has to
analyze the communication process which they have adopted in the past and
which they want to achieve according to their new strategy. Budget
determination and allocation is very important at this stage of integrated
marketing communication planning. The next stage of the planning process
is the development of Integrated Marketing communication program. Once
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the program is developed, strategic objectives have been set and also are set
the individual objectives, budget, message, and media strategy for each of
the tool of marketing mix. Then the marketers job is to integrate and
implement the marketing communication strategies. In the end it is also
important to monitor evaluate and control Marketing Communication
Program.
Having briefly described the overall program change recommended for the
future strategy of LOreal marketing manager, we now turn to analyze each
promotion mix tool and their integrated effectiveness required necessary to
align achievements with goals.




Since the brand is still in the introductory phase of the product lifecycle, the
individual strategies which the marketing managers should adopt keeping in
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mind the fact that in present circumstances they should discontinue the
Brands focus strategy towards more geographically and segment wise
expanded strategy.
Advertising:
Advertising is the term given to any paid form of non-personal
communication about product, services, idea or even an organization by an
identified sponsor is considered to be the most effective way of
communication of all times. The fact that it is paid reflects that the space or
time for advertising is usually must be bought. It involves mass media like
television and newspapers that can cater to a huge group of customers at the
same time. There are several drawbacks to use this source of communication
as well like the audience generally has no opportunity of immediate
feedback.So the marketer should be very careful while drafting the content
and message of the advertisement and he or she should anticipate that how
the audience will interpret and respond to it.
The purpose of recommending the focus on mass media advertisement to
the company is that the effect of television is the most on the customers
especially that of the country like Pakistan. Since the company is willing to
expand its business to other major cities of Pakistan, so the purpose of
reaching the maximum number of prospects and to aware them about the
brand, the advertising especially on print and electronic mass media is
important.
As discussed earlier the two forms of advertisement LOreal is focusing on
areProfessional Advertising and Trade Advertising. Beside that the company
should opt for the National advertising mode in which the large companies
advertise on a nation wide basis and in most regions of the company. The
goal is to make consumers informed and reminded of the company and
brand. In the neighboring country of India, this has been the source of
remarkable success for LOreal to be among the top nationwide cosmetics
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brands. Since many factors which effect the marketing strategies are the
same in the two countries, the best practices adopted there can be adopted
by the brand in Pakistan as well. There are also multiple examples of various
other products and brands strategies as well which showed equal success in
both Pakistan and India.
It is also to note that the cost effectiveness of advertising and public relations
is the most in creating awareness among the customers. LOreal has been
among the top companies around the globe who expends more on
advertising. It can be use to create brand images and symbolic appeals for a
company or brand. Another advantage of advertising is to create a response
of the consumer when differentiation across other elements of the marketing
mix is difficult to achieve. Advertising campaigns which become popular
among consumers can attract customers attention and can generate sales.
These types of campaigns also sometimes are expanded to successful
integrated marketing communication program.
Publicity / Public Relations:
It is another important tool of an organizations promotional mix. Publicity
is a form of nonpersonal communication about a product or brand not
directly paid for. It comes usually in the form of story or editorial. LOreal
can enhance the effect of brand awareness to the mass audience by
appearing more in fashion magazines and booklets available at beauty
saloons. The company can attempts to get media coverage and run a
favorable story about the product or brand to effect the awareness, opinions,
knowledge of the target customers. The advantage of publicity over the other
forms of promotion is the authenticity of credibility. Low cost with desired
results is the other advantage.
Public relations is different from publicity in a sense that in PR, organization
plan systematically and distributes information to the customers in order to
manage the brand image in the mind of consumers. LOreal can attempt to
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manage the publicity and public relations both in terms of creating
awareness to the masses in a controlled way because an uncontrolled use of
these tools can sometimes harm the brand, product or organizations image
as well.
Personal Selling:
Since personal selling is the most widely used promotional tool by LOreal in
Pakistan and this tool helps in the later stage of customer acceptance of the
product usually at the ordering phase, it is recommended to run this tool
more strategically. By running more strategically means person to person
sales presentations involves more immediate and precise feedback from the
customer so it is of utmost importance to train the counter representatives
more professionally instead of hiring non experienced people as usually is
seen in the BTL activities counter. That can seriously damage the brands
elegant image in the mind of consumers.
Interactive / Internet Marketing:
As discussed earlier this tool is being used extensively by LOreal, in order to
improve the performance of this important tool it is required to ease the flow
of the two way flow of information. Customers queries should be promptly
responded because unsatisfied customers can initiate a chain reaction of bad
word of mouth campaign about a product, brand and organization. It is also
recommended that LOreal should develop a local website in Pakistan as well
as it has prepared in many of the countries beside the global site. This can
help customers to obtain quick information about the products, their
features according to the local needs. In the future changing marketing
strategies of LOreal in Pakistan, it is highly recommended.
Celebrity Endorsement :
In order to make the targeted females more at ease with the Value for Money
they want, celebrity endorsement is an important tool of communicating the
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value in this industry as well. Like it has been the Best Practice in India as
well where LOreal endorse the value the target audience is looking for by
the most famous and beautiful celebrity Ms. AISHWARIA ROY for its
premium class products. Who fascinates the young and middle aged females
to opt for the LOreal products in order to get the value and benefit they are
seeking for looking more beautiful in case of younger targets and both
beautiful and lesser in ager in case of middle aged women



CONCLUSION:
As final words of this report, I would like to state that whatever tools of
communication mix the company might adopt to run its expanded business
in future in Pakistan, it is very important that the message company delivers
and the consumer gets should be the same and consistent as far as value for
customer is concerned. The appropriateness of the ratio of the mixs tools
should be such that it creates more results with lesser costs bear by the
company in todays competitive cosmetic industry. The effectiveness of each
tool at each stage of product life cycle and customers stage is already
analyzed in the preceding paragraphs.



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COMPETITIVE STRATEGIES
As per information available from interview with Ms. wafa kalia we have
come to know that LOreal is the leader in the growing cosmetics industry
despite the competition in the market. LOreal has the largest market share
in the relevant product market. They lead in price changes, new product
introduction, distribution coverage and promotional intensity.
Objective
There strategic objective is to retain their position as a market leader of
cosmetics industry by maintaining their market share.
COMPETITORS OF LOREAL
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It would be a simple task for Loreal to identify its
competitors. Major competitors of Loreal in Pakistan
are
INTERNATIONAL
COMPETITORS
mac cosmetics
Revlon
Etude

LOCAL COMPETITORS
luscious cosmetics
atiqa odho cosmetics
Saeed ghani


After examining consumer behavior
model and identifying their
competitors LOreal focus its attack
on following classes of competitors.
Strong versus Weak
LOreal aim that their weak
competitors are Saeed ghani and
Odho cosmetics because both
company offer limited products in
different products line specifically
Skin care line and Face makeup line
.So it would be profitable for LOreal to grab the customers of these
companies by utilizing limited recourses.
Close versus Distant
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LOreal also compete with the competitors that resemble them most
(Luscious and MAC cosmetics ) because they are offering almost same
product line like LOreal is offering.





STRATEGIES PRACTICE BY
L
O
R
E
AL
GR
O
W
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TH STRATEGIES
LOreal is following growth strategies:
A). Market Penetration
LOreal also follows differentiation strategy in which they introduce new
products in different product lines to differentiate their products with
competitors. Like,
In Hair care line they introduce hair Color Protecting shampoo.
In Makeup Lips line they introduce Color Riche lipstick
B). Market Development
Currently they are present in only 3 major cities of Pakistan (Karachi, Lahore
and Islamabad).They will be targeting the other major cities of Pakistan in
order to expand the total market.

DEFENSIVE MARKETING STRATEGY
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LOreal is defending its market share by continuous innovation in every
product line .They keep increasing their competitive strength and value to
customer by providing comprehensive solutions. As we know that the best
defensive strategy is the courage to attack yourself, so LOreal identify their
weakness that they are not offering any product for men. So they develop
separate product line for men named MEN EXPERT HYDRA ENERGETIC
in which they offer Cleansing liquid, Shaving foam, after shave balm
and moisturizers
So by using this pre-emptive defensive strategy, LOreal sent message
to their major competitors Luscious and Mac cosmetics that they will
need to fight to gain market share.

STRATEGIES
PROPOSED FOR
LOREAL
Attaining and remaining top in the industry require the ability to create and
continue to develop innovative products.

Establish research and development centre Specially in Sub-
continent region (Flank Strategy)
LOreal Should establish a system that will enable them to innovate new
product according to regional requirement. They can set up a research and
development unit or something similar in Pakistan which helps them to
identify the needs of local consumer as it would be a flank attack on their
major competitors Luscious and MAC cosmetics .This focus on innovation
ensures growth and helps LOreal to have a huge competitive edge over its
domestics rivals
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Introduce new product line of Especially for Sub-continent
region (Flank Strategy)
LOreal should look into specific product lines for huge population of South
Asian countries. They can develop specific products for South Asian people
because their skin tone are different from others people around the world. It
could be a kind of flanking defense strategy for LOreal because this area is
still untapped and could be attacked by their competitors. It will give LOreal
more opportunities to increase its market share.

Introduce new product line for men

LOreal could improve its marketing strategy by improving products for
males. Current research on men shows that men are increasingly becoming
concerned with their appearance and sales of mens related product growing
faster and faster. LOreal should capitalize on this growing interest by
creating a new lines for mens Such as hair care for men and also Hair color
line for men .

Online Purchasing from Loreal website

They may introduce online purchasing facility for their customers in which
customer could select the desired product for purchase which will be
delivered to them at their door step which ultimately decrease the
customers time and energy. It will help LOreal to serve their customer more
efficiently.

Digital Marketing

Different social media channels are really effective and increase consumer
engagement with your product. As we have observed LOreal does not have
a well consumer engaged facebook page, which is a best opportunity to grab
your consumers.

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Social media channels like twitter, Pinterest and LinkedIn should be used to
create consumer engagement to increase their potential market. Pinterest
according to Mashable is the leading social media channel, which is effective
in branding women products. Though, knowing this powerful fact LOreal
has no influential presence on this channel. This can be an advantage for
competitors, which should be kept by loreal in mind to work on these
channels effectively.

According to Mashable, at the recent moment the most interesting
campaign running on pinterest is related to women products. According to
ignitesocialmedia.com 80% users of Pinterest are women, which comprises a
huge market for any cosmetic product with respect to any social media
channel.