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I use the most

expensive
Hair colour in the
world
It’s not that I care
about money
It’s that I care about
my hair
It’s not just the
colour ,
I expect great colour
What’s worth more to
me
Is the way my hair
feels
Smooth and silky but
with body
Feels good against my
neck
Actually I don’t mind
spending more for
L’oreal
BECAUSE I ’ m WORTH ARKAPRAVA GHOSH
IT
etics group worldwide

rnational brands

lion euros of sale in 2009

e across 130 countries


Western Europe & North America accounting for 43.3% & 23.4% of total

KEY MARKETS:
Asia accounts for 13.2% of total
consolidated sales
PROFESSIONAL PRODUCTS
•L’OREAL PROFESSIONAL
•REDKEN
•KERATASE
•MATRIX

LAURENT •BIOTHERM • RALPH LAUREN • KIEHL ’S • SHU UEMURA • HELENA RUBINSTEIN • CACHAREL •

CONSUMER PRODUCTS
•L’ORÉAL PARIS • GARNIER •
• MAYBELLINE NEW YORK • SOFTSHEEN .CARSON •

ACTIVE COSMETICS
VICHY • LA ROCHE -POSAY •
• INNÉOV • SKINCEUTICALS •
in the black hair care industry , was founded in 1964 and acquired in 1998
Products, another successful manufacturer of ethnic hair and skin care
rged in that year to become SoftSheen - Carson

Overview of the black hair


care market
Johnson products was the largest in black business & the first
1960-1970 one
To be traded on the American Stock Exchange. Johnson was closely
followed by
1980 BlackSoft
skinsheen and care
& hair Pro-line
market had approached
$1 billion
1994 Black hair care market approached Only
$2 1.5% of the black disposable income was s
billion ,

Huge market
12.3% of the nation’s population potential & 34
& contributed the
% need forhair
to the growth diversific
care&market in th
1998 Carson Inc. acquired Johnson products from IVAX co. for
$90 million
With its “Dark & Lovely” black hair products , Carson became the market
leader in black hair-care products

2000 Carson could not survive the debt incurred by the purchase of
Johnson products &
Was sold out to L’oreal for $250 million & merged with “softsheen”
L ’ oreal brand
now gained control over 3 of the top 5 selling hair care
brands & 62 % of the African - American hair market
SoftSheen·Carson confirmed its position
2009 as No. 1 in the ethnic hair care
products market,
with new initiatives in three major
categories
üupgraded the Dark and üLaunch of ammonia-free
Lovely range with a more Dark and Lovely Colour
moisturising formula, Confidence Haircolor
richer in shea butter than
the other hair relaxers
on the market
üDiversified into the skincare market in South
Africa with Dark and Lovely Body. A line of body
milks enriched with vitamin E and glycerine, which
provide longlasting hydration
Source : Constructing corporate America : history , politics , culture  By Kenneth Lipartito, David B. Sicilia
THE JAPAN CASE : THINK LOCAL ACT
GLOBAL

TARGET SEGMENT: HIP , YOUNG & TRENDY WOMEN OF JAPAN

•Japanese women have small mouths & the concept


of
“mother of pearl” is very popular there
•This particular molecule created the effect of
water giving
the lipstick a wet look

L’oreal caterd to this segment with


atershine Diamonds”

as the market leader in the mass-makeup market in Japan

also launched the same product in US & Europe where it enjoyed a similar meteor

Source : The new strategic brand management : creating and


sustaining brand equity
Case of BRAND SUBSTITUTION :
GEMEY PARIS – MAYBELLINE
NEWYORK
In 1996, L’Oréalbought the American make-up brand
Maybelline, decided to promote it to a global make-
up brand & as a consequence to substitute it to
the local make-up brands, as Gemey in France

dered to be “a brand specialised in the different types of make-up targeting Fren

VAST DISPARITY IN POSITIONING

Maybelline was defined as “an in-brand of make-up from New York, target

rogression of the Gemey – Maybelline visual identity

1998 2000 2004 2010


Case of BRAND SUBSTITUTION :
GEMEY PARIS – MAYBELLINE
NEWYORK
ine New York #1 in make-up in the USA” both on the packaging and in communication

Gemey and Maybelline have of


Integration come together to
skyscrapers offer
into the you better technology
began in the second half of 2000
background of advertisements and sales outlet visuals, sponsor
slogans
Value Curves and Value Proposition

— The Body Shop made clear decisions regarding:


The Body Shop - Illustrative Example
– What factors could be reduced below the
industry standard?
The Body Shop
– What factors could be eliminated that the
industry had taken for granted?
– What factors should be raised beyond the
industry standard?
– What factors should be created that the
PERFORMANCE

industry had never offered?


— In so doing, The Body Shop created a unique
business model, brand and position that
ensured an sustainable competitive
advantage
— The Body Shop’s robust business model and
Cosmetic’s unassailable position was evidenced by
Industry L’Oreal’s acquisition of it in 2006
— Despite being an established, extremely well-
Price Packaging & Hi-Tech Glamorous Natural "Ethical" resourced competitor L’Oreal had been
Advertising Scientific Image Ingredients Concerns unable to compete against The Body Shop’s
Image
values and positioning…..whether The Body
Shop’s values were compromised by its
PARAMETERS acquisition, however, is a different matter!
—
EVOLUTION Greasy & Quirky urban Conscious
Reason for being Dress the tough
rocksolid Make people feel Help
fashonistas people
hedonism
guys different & carry a more
provocative pleasant
Value proposition Stylish jeans & Affordable fashion Fun ,
experience
workwear with a urban street wear imaginative &
used worn out look colourful
Differentiation Worn out look Urban street wear Happy
fashion&
colourful
Persona Tough , wild , Extravagant , Witty
clothing, culture
adventurous critical conscious
Associations Rebels , women , Political issues , Youth ,
cigarettes , gas religion , vitality ,
stations , leather sexuality , fashion happiness
Product range Jeans & workwear Jeans , clothing , Jeans ,
shoes , fragrances clothing ,
sunglasses ,
watches ,
Audience Tough guys Intelligent urban Hipsters
shoes , bags ,
wannabes
Emotional connectPal that gives fashionistas
Uncommonness - fragrances
Ego & mood
advice to be tough to make your life booster
1978-1993 1993-2000 2000-PRESENT
dd
motivation
y the
messages
brave”
for charectizes
&
lifeunexplainabletheir “how
first era
to” guides
mselves
agazines
s exemplified
by
they
selling
using
realize
jeans
models
thatthat
their
&looked
non
consumers
models
worn inarethe
really
same smart
picture
and they decide to change their strategy and
oashed
remember
and with
theirholes
campaigns
on them by creating a “mismatch buzz”
perception related to defective jeans on shelves
hanged
hed at their
to tight
feet”fitting
whichjeans
was &verymohawk
controversial
logo in Argentina since many people during the dictatorship w
2ohawk
gay sailors
logo soonkissingbecame a hit
OVERVIEW

dy shop opened at a small street in brighton


y about a1976
dozen inexpensive ‘natural’ cosmetics, all herbal creams and shampoos, a

anyone not have


Differentiated the freedom on the quantity they buy?
business
mind
model, body shop offers customers only the required amount of cosmetics specified
natural products , against testing on animals

could easily be copied by competitors


e with founders for rapid expansion of brand
Developed the idea of
franchising

as granted exclusive rights as user of the trade mark, distributor and, after an i
OVERVIEW

All Key
“Bodyadvantage
shop” built
of franchising
upon local market knowledge thus minimizing loss of r

gets listed on the stock market while still maintaining the franchisee model
1984

•Own warehousing & distribution network wherein products were delivered


Key •strategies
Started manufacturing with the trade not aid policy
followed

shop gained popularity worldwide mainly due to its sustainable development progra

ties in developing countries


sourcing ingredients
so that theyand
can accessories
sustainably from
finance
disadvantaged
their own socia
comm

2006:
ACQUISITION OF BODY SHOP BY L’OREAL
STRATEGIC RATIONALE
• Body shop L’oreal contribution to

contribution to the body shop


l’oreal ü Access to R&D
ü Naturally oriented practices ,
natural cosmetics improved product
with strong development for
identity & values body shop
ü Distribution ü Leverage L'Oreal's
expertise and marketing
access to direct expertise while
producer channels respecting body
ü A leading british shop identity

Established 2004 , a joint venture between
L'Oreal & Nestle

Diversification into the market of cosmetic nutritional supplements

This brand marked the launch of “nutraceutical development”

•Capture growing demand for skin products to retain


Key strategy youthfulness
•Tap the growing market for dietary supplements
d hair loss, as well as a product that claims to help protect the skin against UV

2004 also saw new haircare developments: by


launching Innéov Hair Mass, a product aimed at a
wide range
of women affected by low hair mass

The innovative feature of the product is the


taurine-based
formulation, which specifically targets the bulb
where the hair is made to produce clinically-
The market for nutricosmetics was practically empty & unexplored
Except for a few competitors like “IMDEEN”

elevance
BRAND FITin the associations and skills the two brands bring to the alliance

Nestlé’s reputation as leading and competent nutrition brand is highly


relevant when making a diet supplement. L’Oréal image as a beauty expert is
just as relevant when making a diet supplement meant to improving the quality
of your skin and hair
L’OREAL USA purchased Kiehl’s in 2000 as a part of a carefully planned
acquisition strategy

The US buildup was critical to the globalization of its business

By adding brands such as redken , maybelline , kiehl’s , softsheen-carson ,


L’oreal had created an international brand portfolio with wide range of
incomes & tastes in 140 countries
rance & hair care products were renowned for their high quality , effectiveness &

omer base was loyal and young


o advertising at allLittle
, onlyexpansion
through celebrities
, most business
touting
cametheir
from products
a singe neighborhoo

Unable to meet rising demand , sold itself


to L'Oreal
Foray into INDIAN
MARKET
Skin care in India is the most sought after personal care categ
global consumer majors given significant head room for growth (2
growing at 20% p.a.) with an estimated size of Rs25bn

With a GDP of 1.9 trillion $


& rising per capita incomes
India offers a lot of market
potential to tap

levels and favorable demographics (growing share of working women) are driving gro
L’oreal in india
Came to India in 1991 with its Ultra Doux range of shampoos
through its agent
Laboratories garnier
1994 – laboratories garnier becomes 100%
subsidiary of l’oreal
2000 – l’oreal launches its range of products in the
cosmetic market
Biggest contributor to the Indian revenue -
GARNIER

HAIR CARE SKIN CARE

Fructis Nutritioniste
USP : strong hair
Caters mainly to the natural segment ; beauty through nat

operates in the mid price & luxury segment


r garnered a 20% share inPerformance is mainly&attributed
the hair colourant dyes marketto being the first play

hair based colour below the price of Rs


Home highlighting kit ( 2005 )

entrate in all their products (combination of fruit acids , vitamin B3 . B6 , fruct


Technological
breakthrough :

name “Laboratories Garnier” was changed to “Garnier” in 2001 to facilitate the br


ptance in all the 5 continents it operates

tagline " Take Care " can be used across multiple categories without
Shampoo market in India generally caters to men & women ; kids &
teens category
Is totally absent

•Garnier as a brand is slowly targeting


the entire COMPETITION: PARACHUTE
STARZ
personal care market
•Adopting a segment by segment targeting
strategy
ids have market
ir care a mind is
of dominated
their own by
andHUL's
they Clinic
are brand
Plusconscious
brand and. So
thetapping them with
other players a
bein
Entry in the men ’ s fairness
segment
FMCG companies have been increasingly focusing on catering
to men’s grooming products
Men’s fairness segment is currently estimated to be around
Rs4.1bn and is growing ahead of overall skin care market in
India
ndustan
2005 with
Unilever
the launch
in 2007
of 'Fair
launched
& Handsome'
'MenzActive'
which
in still
this dominates
sub-category
the, but
space
thewith
prod6

long with fairness also catered to “face wash” and “moisturization” instead of jus

STRATEGY / DIFFERENTIA
TION
Diversification into 2 categories with
a single brand extension