1310Report on LOreal.docx
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1310Report on LOreal.docx
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1310ReportonLOreal
ASSIGNMENT
MARKETINGACTIVITIESANDEXPORTSUCCESS
ANALYSIS
Students’names:
ZiyuWu
QianyingWu
Students’ID:
1000253
1000252
Supervisor:
OutiKivirinta
Date:
11.10.2010
CONTENT
Background……………………………………………………3
Macroenvironmentanalysis………………………………………4
TableshowingbranchesofL'OréalGroup…………………………5
L'OréalSWOTAnalysis…………………………………………5
P&GSWOTAnalysis……………………………………………6
L'OréalPESTAnalysisinChina……………………………………7
L'OréalinChina…………………………………………………7
L'Oréal’s4PSTRATEGY…………………………………………8
L'Oréal’sOperationForminChina…………………………………9
StrategicChoicesofL'Oréal’………………………………………9
ExportMarketingPlan…………………………………………11
ProblemsfacingL'Oréal’inChina………………………………12
CompetitiveAdvantageofL'Oréal………………………………12
References………………………………………………………13
Background&History
TheL’OréalGroupistheworld’slargestcosmeticandbeautycompany.Itwasfoundedin1909byEugèneSchuelle,whostartedtodevelopahairdyeformulacalledAureole.Toselltheproductsformulatedandmanufacturedbyhimself,heregisteredhiscompany,theSocieteFrancaisedeTeinturesInoffensivespourCheveux(SafeHairDyeCompanyofFrance).ThisistheoriginalL’Oréal.
L’Oréalstartedinthehair-colorbusiness,andsoonbranchedoutintoothercleaningandbeautyproducts.Concentratingonhaircolor,skincare,sunprotection,make-up,perfumesandhaircare,thecompanyisactiveinthedermatologicalandpharmaceuticalfieldandisthetopnanotech--nologypatent-holderintheUSA.In1920,thesmallcompanybeganitsinternationalbusiness,andthemarketreachedUSA,Canada,EnglandandBrazil.In1963,L’Oréalbecamealistedcompany,thusprovidinganewwayoffinancing.Inthefollowingyears,itpurchasedmanycosmeticcompanies,includingMaybelline,Lancôme,Biothern.TheBodyShopandsoon.
L’Oréalcurrentlymarketsover500brandsandmanythousandsofindividualproductsinallsectorsofthebeautybusiness.Thecompany'sproductsarefoundinawidevarietyofdistributionchannels,fromhairsalonsandperfumeriestohyper-andsupermarkets,health/beautyoutlets,pharmaciesanddirectmail.
L’Oréalhasfiveworldwideresearchanddevelopmentcenters:
twoinFrance:
AulnayandChevilly;oneintheUS:
Clark,;oneinJapan:
Kawasaki,KanagawaPrefecture;andin2005,onewasestablishedinShanghai,China.AfuturefacilityintheUSwillbeinBerkeleyHeights,NewJersey.
InChinaintheyear1996,L’OréalcooperatedwithSuzhouMedicalSchoolestablishingL’OréalSouzhoucoltd.Alsointhesameyear,L’OréalsetupafactorytomanufacturetheproductsofMaybelline.In1997,L’OrealestablisheditsrepresentativeofficeinShanghaitochargetheaffairsinChina.AndnowL’OréalistheleadingbrandinChina’sbeautybusiness.
TheMacroEnvironmentforL’Oréal
Economictrends:
theglobalmarketisrecoveringfromthelasteconomicrecession.
Politicaltrends:
ashifttowardsgreenerpolicies,indicatingthatthecosmeticsindustryshouldupdatetechnologytoprovidesaferandcleanermake-ups.
Technologicaltrends:
newtechnologieshavebeenappliedtomorecosmeticproducts,andcosmeticproducersarecompetingagainsteachotherinproductinnovationandservice.
Legaltrends:
thegeneralthemeisthebeautyindustrywillbechargedofhightaxes,asit’saindustryofhighprofits
Social/Culturaltrends:
moreandmorepeoplepursuebeautygloballyanditiscommontohavemoreopportunitieswhentheskinismorecharming
Demographictrends:
thewesternparttendstobeagingwhiletheeastisgrowingfastandhasalargebasis.Resultsindifferentproductsshouldbedesignedfordifferentplaces,e.g.anti-aginginwesterncountriesandwhiteningineasterncountries.
TheCompetitorsofL'OréalGroup
Listoftoptencosmeticscompanies:
1.L'OréalGroup
2.TheProcter&Gamble(Maxfactor,ANNASUI,HugoBossetc.)
3.EsteeLauderCosInc(Clinique,BobbiBrown,M.A.C.etc.)
4.Shiseidocoltd(CDP,Shiseidoetc.)
5.Unilever
6.LVMHGroup(Guerlain,ChristianDior,Givenchyetc.)
7.Johnson&Johnson
8.WellaGroup
9.KAOGroup
10.RevlonInc
Inthefollowingpassage,adetailedSWOTanalysisofP&Gcompanywillbeshown.P&GcompanyownscosmeticsbrandssuchasOLAY,COVERGIRL,andSK-Ⅱ.AndinChinaP&GisthebiggestrivalthatL'OréalGroupfaces.BrandssuchasShiseidoandLVMHGrouparemoreofaluxuryproductanddon’thavemuchmarketshareintheaveragemarket.Thisisbecausetheyareaimedatprovidinghighqualityproductswithconsiderablepricefromthebeginning,thusifenterthelowermarket,therewillbeside-effectsonthecurrenthigh-endmarket.Becauseit’shardtoreorganizethebrandimageandbringsdowntheprestige.Peoplewhobuythesebrandsliketobeseparatedfromthemajority,andprovidingproductsfortheaveragepublicissomethingtheywouldnotliketosee.
TableShowingBranchesofL'OréalGroup
L'OréalGroup
CosmeticsBranch
ProfessionalProductDivision
L'OréalProfessionnel•L'OréalTechnique•Kérastase•Redken•Matrix•Mizani•ShuUemuraArtofHair
ConsumerProductsDivision
L'OréalParis•Garnier•MaybellineNewYork•SoftSheen-Carson•CCBParis
LuxuryProductsDivision
Lancôme•Biotherm•Kiehl's•HelenaRubinstein•ShuUemura•YSLBeauté•GiorgioArmaniParfumsandCosmetics•Cacharelcosmetics•RalphLaurenFragrances•DieselFragrances•PalomaPicassofragrances•Victor&Rolfparfums
ActiveCosmeticsDivision
VichyLaboratoires•LaRoche-Posay•SkinCeuticals•Innéov•Sanoflore•Ombrelle
TheBodyShop
TheBodyShop
DermatologyBranch
GaldermaLaboratories
L'OréalSWOTAnalysis
Strengths
•Thelargestsellerofhair-careandbeautyproductsintheworld.
•Productsarediversificatedbypriceorculturalimage,andtargetgroupsarelarge.
•Investmentinresearchanddevelopment,whichenablescontinuingproductinnovation
•Scaleeconomyinpackagingandadvertising
•Reputationforquality
•Successfulbrandingstrategy.Manypeopledon’trealizealltheabovebrandsbelongtoL'Oréal,andthisistheirstrategy.L'OréalitselfisamiddleclassbrandandifassociatedwithHRorLancôme,peoplewouldclassifythemintomiddleclasstoo.Alsowhenonebrandfallsout,it’slikelythatpeoplestillsupporttheremainingbrands.
•Middleclassproductsespeciallydesignedformen
Weakness
•Decentralizedorganizationalstructuremakesitdifficulttocontrolandcoordinateglobally,especiallywhendealingwithbrandimage
•Lackproductsforbelowaveragepeople
•Profitmarginsareslightlybelowsomeofitssmallerrivals
•Lessfocusedondailyconsumergoodssuchasshampoo
Opportunities
•Potentialofthetargetedmarketsishuge.L'Oréalhasconcentratedonhair-stylingandcolor,skincare,cosmeticsandfragrances,thefastestgrowingfiledinthebeautybusiness.Andinthedevelopedcountries,thenumberofpeoplepursuingbeautyproductsisgrowing.
•Numerouspatentregisteredproducts,whichdiffersgreatlyfromothers.
Threats
•Thegrowingcompetitioninthecosmeticsfield
•Theinstabilityofcustomers’preferences
•Localbrandsmakingjointventurewithcompetitors,orinternationalcompetitorsmakingacquisitions
•L’Orealitselfhastoomanybrandsthatit’shardtofocusresources
Procter&GambleSWOTAnalysis
Strengths
•Oneofthebestmarketersintheworld
•TightlyintegratedwiththelargestretailersintheUSandaroundtheworld
•Adheretothesuperiorbrandmanagementsystem,creatingauniquebrand
•Hasastrongcorporateculture-PVP(purpose,corevalues,principles)
•Strongmarketingexpertise
•Theestablishmentofaworldwideorganizationwithabundantresource
•Productinnovation
•Distributionchannelsallovertheworld
Weakness
•Theshortageofeconomicdevelopmentandgrowthinateamenvironment
•Thelackoffaceproductmanagementexperienceintheeraofexcess
•Therapidevolutionofretailformats,insufficientunderstandingofmediaforms
•Healthandbeautywomenonly
•UsingWesternmarketingtheory,inordertooperatetwoorthreefive-starwayintothemarket
•Expansionforbrandsislimited
Opportunities
•Consumers’livinggoodsincrease,tendtopersonalized,innovative,affordable,goodeffectoftheproduct
•Thegeneralpublicoutdoorhealthconsciousness,rapidlygrowingtissuemarket
•Consumersbecomemoresophisticated,knowhowtochoosethebrand
•TheincreasingpopularityoftheInternet,makinginformationandcommunicationchannelstoincrease
Threats
•Dailyconsumergoodsisinanfiercecompetition
•AstrongattackfromUnilever
•Fightwiththefullrangeofindustriesandenterprises
•Consumerawarenessofenvironmentalprotection,productsafety,environmentalrequirementsincrease
•Keycompetitorsexpandingtheirproductportfoliosthroughacquisitions
•Increaseinrawmaterialprice
L'OréalINCHINA
IntheChinamarket,L'OréalGroupprovidesmostofabovebrands(showninthetable)andtookoverChinesebrandsYuexiandLittleNursetoenterthelowerendmarket.Thetargetedgroupisvariedfromhigh-consumingrichtothegeneralpublic.Intheyear2008,L'OréalGrouphasrealizedsalesof6.952billionYuaninChinaandwasgrowingattherateof27.7%comparedtothesameperiodlastyear.BrandsuchasMaybellineevenaimsatprovidingsomethingthateveryChinesewomanshouldbeabletohaveandwouldliketohave.
PESTAnalysis——China’sCosmeticsMarket
PoliticalFactors:
•EversinceChinajoinedWTO,wehavebeencomplyingwithourpromisetoreduceimporttariffsforforeignbrands,andprovideconvenienceforthemtoenterChina’smarket.Withtheenteringoflarge-scaleinternationalbrandstoChina'scosmeticsmarket,ourcosmeticsmarketshavebecomemoreglobalize.
EconomicF
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