L'Oreal's Marketing Strategy using Consumer Behaviour
Using consumer behavior to develop a
marketing strategy is a five stage process. An understanding of consumer
behavior theory and concepts is critical at each stage as marketers gather
information, develop marketing strategies to influence consumer decisions, and
evaluate the effects of their marketing efforts.
1. MARKET ANALYSIS:
It
involves gathering data and tracking trends related to the company, competitors,
conditions and consumers.
2. MARKET SEGMENTATION:
It
is a portion of a larger market whose needs differ somewhat from the larger
market. Let’s see how L’Oreal did this.
Attractive Segments to Serve:
L’Oreal serves all segments irrespective of the differences in cultures,
desires and aspirations.
3. MARKETING STRATEGY:
It
involves setting appropriate levels for the marketing mix as a function of the segments
being targeted and the market conditions that exist.
L’Oreal is the largest company in the world that deals in
personal care industry. Founded in the year 1909, this international beauty and cosmetics company has its head office in Paris.
L’Oreal has a vast and varied interest, as it also is active in fields like
tissue engineering, toxicology, dermatology and biopharmaceutical research.
Some of the companies who provides L’Oreal with competition in India are as
follows-
Product in the
Marketing mix of L’oreal:
L’Oreal has a portfolio endowed with
international standard of brands covering a wide range of products while
satisfying the needs of every customer present in any part of the
world. All its products pass the international standards of testing. The
company deals in activities related to cosmetics, skin care, hair color, make-up,
sun protection, hair care and perfumes. In India, L’Oreal operates
through four different divisions that are as follows:
·
Active cosmetics include brands like Vichy, Inneov and Sonaflore.
·
Luxury products include brands like Diesel, Ralph Lauren and YSL.
· Professional products include brands like Technique, Matrix Essentials, Mizani
and Kerastase.
·
Consumer products
(personal care) include brands like
Ombrelle, Maybelline, Essie, Garnier, Magic and Colorama.
Some of the consumer
favorite products of the brand are eyeliner, mascara, eye shadow and
primers for eyes, primer, powder, foundation, concealer and blush for face. lip
liner, lip gloss, lip balm and lip color for lips, nail polish and remover for
nails, hair colors in various shades for hair, Shampoo,
conditioner for hair care, moisturizers, cleansers, toners for skin care and
hair spray, serum for hair styling are also used. L’Oreal also has a kid’s line
of products. All the products are available in different product sizes
and different price ranges. L’Oreal is also planning to penetrate the
Ayurvedic and herbal industry in the Indian cosmetic section. They are having
ongoing talks with some of the companies like VLCC and Biotique.
Place in the Marketing mix of L’oreal:
L’Oreal
has development and research centers in six places worldwide like
Japan, France US and China and its products are available in one
hundred and thirty countries of the world. The various products are found in
various outlets like perfumeries, hair salons, super markets, pharmacies,
beauty outlets and even through direct mail. Besides this, the brand has its
own website and has tie-ups with other shopping sites on internet.
With all the needed
product information, the consumers can make purchases from any part of the
world. In this changing times internet has become one of the most important
outlet for successful purchasing and buying.
L’Oreal’s operations in India are on an ever-growing path as the
awareness of the beauty products has resulted in the brands growth and
popularity. Its operations in India are through its fully owned subsidiary
“L’Oreal India”.
The company has set up a
manufacturing plant in the city Pune in Maharashtra, India. Most of the
products are imported from abroad and the rest are manufactured in this plant.
The successful growth of the brand in India is credited to the
efficient supplychannels and distribution policies. In one of its
kind distribution strategy,L’Oreal has appointed skillfully trained
hairdressers that work in their own salons and outlets by providing
professional services to the consumers. This includes various treatments and
product awareness campaigns that help in creating a new consumer base. This has
led to a number ofL’Oreal salons in India, where consumers come for
professional and efficient treatment and these salons are for both the gender
men and women.
Price in the Marketing mix of L’oreal:
The biggest revenue
earner for L’Oreal in India is the products related to consumer division. The urban
consumer is not as price conscious as was portrayed earlier. For premium
products, the consumers are ready to dole out premium prices. As many of the
L’Oreal products belong to the high qualitative product group, the company had
to maintain a premium pricing policy for those products. The company
has decided to maintain its value added pricing policies for all its
products. Some of the brands under L’Oreal have products that cater to the
middle class section of the society and the pricing policy for these products
is reasonable so that the consumers can easily afford them.
Sometimes, in order to
penetrate a new section of the market, the company has offered discounts and
schemes especially on introductory products. This leads to the minimization of
prices and leads to an increase in sales figure resulting in further revenues.
In order to strike a reasonable balance between its products and prices the
company has taken steps to increase its Stock Keeping Units, as this will help
in creating a balance over the pricing policies.
Promotion in the Marketing mix of L’oreal:
L’Oreal has an
advertising slogan that has always defined the brand. The first slogan was “Because I’mWorth it”. This
was later replaced by “Because
you’re Worth it” and in the year 2009, this was again changed to “Because we’re Worth it”.
The changing times along with the mindset and concept can be seen in the
changing slogans. The shift to the letter “we”
was to denote the consumer involvement in all the brand products.
L’Oreal is a truly
international brand and hence its advertisements are at a premium level.
Attractive and well-known models of international caliber are the part of
its promotions. In India, the advertising campaigns are operated through
local methods as well as through global methods to appeal to a wide range of
consumers. The advertisement agency recruited is “McCann Erickson”. Former Miss World“AishwaryaRaiBacchan” has
been its brand ambassador and international face and presently the actor “SonamKapoor” has been in the
L’Oreal advertisements. The ad campaigns are in numerous television channels,
radio, fashion magazines, hoardings and neon signs.
Free products as samples are provided with other products or at salons to market the new items. Sometimes discounts are offered on some products to increase the sales figures and to promote the products. In many cases, surveys for customer satisfaction are carried out amongst the people who have used these products. The results are then published as part of the promotions. For some of the L’Oreal brands the company has adopted a “viral marketing strategy” under which the brand and its products are marketed through marketing messages. The use of internet has opened new doors for every brand and in every field be it marketing or promoting.
Free products as samples are provided with other products or at salons to market the new items. Sometimes discounts are offered on some products to increase the sales figures and to promote the products. In many cases, surveys for customer satisfaction are carried out amongst the people who have used these products. The results are then published as part of the promotions. For some of the L’Oreal brands the company has adopted a “viral marketing strategy” under which the brand and its products are marketed through marketing messages. The use of internet has opened new doors for every brand and in every field be it marketing or promoting.
4. CONSUMER DECISION MAKING PROCESS:
It
is a series of steps starting with problem recognition and moving through
information search, alternative evaluation, purchase, use and post purchase evaluation.
Marketing efforts can be targeted to these different stages.
5. OUTCOMES:
While
profit maximization is often a goal at the firm level, possible adverse effects
at the individual and societal level are of importance to firms, government organizations
and regulators.
Firm Outcomes:
Revenue
is increasing every year for the last 10 years. Increase in revenue in 2017 has
been 4.8%. Marketing strategy of L’Oreal using consumer behavior has paid off.
Societal Outcomes:
Social
Welfare:
L’OREAL SHARE AND CARE PROGRAMME:
Propelled
two years back, the "L'Oréal Share and Care" program furnishes
representatives in the 67 nations with an all inclusive arrangement of social
advantages. More than 100 activities have additionally been set up by backups,
making L'Oréal, in every one of the nations, one of the main businesses as far
as social strategy.
This programme addresses the essential needs of employees in four areas: health, welfare, parenthood and quality of life at work. Some of the main measures include:
- At least twenty-four months paid in the event of death or permanent incapacity
- An access to major treatments with a reimbursement of at least 75% of related costs
- A minimum paternity leave of 3 days paid at 100% of the salary
- A minimum maternity leave of 14 weeks paid at 100% of the salary
Because of these measures, 96% of workers presently advantage from a dimension of wellbeing spread that is lined up with best practice in their specific nation. Also, future moms are ensured no less than 14 weeks of paid maternity leave, wherever on the planet.
Despite the fact that this is a worldwide program, given L'Oréal's longing to make these advantages really general, it likewise expects to address neighborhood issues. In Canada, for instance, L'Oréal's 1,200 workers have an adaptable advantages plan. The point is to offer advantages that suit the diverse individual circumstances of the staff. An 'individually' arrangement of advantages has demonstrated its value, since "60% of our representatives have picked discretionary inclusion," as indicated by Catherine Bédard, Human Resources Director at L'Oréal Canada.
In Central America and Argentina, L'Oréal Mama** has demonstrated mainstream with moms. Alongside 105 days of maternity leave (15 days more than is stipulated by national law), they additionally advantage from shorter working hours every week on their arrival to work and a month to month commitment toward the expense of childcare for youngsters matured up to three years of age. The majority of this is given while keeping up dimensions of compensation that is comparable to their gross pay.
In Jakarta, "we have given careful consideration to working conditions," clarifies RestuWidiati, Human Resources Director of L'Oréal Indonesia. Subsequently, the 300 home office representatives were moved in 2013 to progressively current office premises, which incorporated a lactation space for youthful moms.
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