L?oreal marketing plan assignment

RATE. ] ??? A current trend in the skin care industry is stretching lines by adding specific products targeted at skin types such as sensitive, greasy, or dry. A particularly fast-growing category consists of antiaging and antiwrinkling creams. Complementing this trend is an emphasis on scientific development and natural ingredients. Hair Coloring Market ??? There are two types of hair coloring. Semipermanent colors wash out after five or six shampooings. Permanent colors only disappear as the hair grows out from the roots. ??? Growth in unit volume over the last four years for both colorants has been 15% per year. Both the increasing shares of the smaller brands and the decreasing shares of the leaders have sparked a 60% increase in advertising in 1989 for all brands of hair coloring. ??? Traditionally, hair colorants have been used primarily to cover gray hair. Recently, however, coloring hair has become more of a fashion statement. This partially accounts for the increased popularity of semipermanent hair coloring. Product Situation Synergie is a line of facial skin care products consisting of moisturizing cream, antiaging day cream, antiwrinkle cream, cleansing milk, mask, and cleansing gel. It is made with natural ingredients.

It’s advertising slogan in France is “ The alliance of science and nature to prolong the youth of your skin. ” Belle Couleur is a line of permanent hair coloring products. It is the market leader in France and is positioned as reliably providing natural colors with the advertising line “ natural colors, covers all gray. ” Since none of the competing brands have a clear advertising positioning statement describing customer benefits, Belle Couleur could be positioned as “ covering gray with natural colors. ” 3 Competitive Situation Skin Care Competitive Product Lines of Cosmetics PRICE RANGE (GULLDERS)* Lower end Nivea Visage** Ponds Middle Dr. d Hoog Oil of Oiaz (Procter & Gamble) Plenitude (L’Oreal) Synergie Upper End Yves Rocher Ellen Betrix (Estee Lauder) 9. 50??? 11. 50 5. 95??? 12. 95 10??? 11. 95 12 (day cream only) 10 95??? 19 95 11. 95??? 21. 95 POSITIONING Mild, modest price, complete line Anti-wrinkle Sober, nonglamorous, no illusions, but real help, natural, efficient, relatively inexpensive Moisturizing, antiaging Delay the signs of aging The alliance of science and nature to prolong the youth of your skin Different products for different skins, natural ingredients Institute line with reasonable prices, luxury products at nonluxury prices 10??? 26. 95 12. 95??? 43. 50 One dollar = 1 8 guilders, one British pound = 28 guilders, 1 deutschmark = 1. 1 guilders **Although Nivea Visage had a similar price range to Dr vd Hoog, consumers perceived Nivea as a lower-end product [YOU COULD ALSO JUST REFERENCE TABLE IN CASE AND NOT REPRODUCE IT HERE. EITHER WAY YOU NEED TO GIVE THIS TABLE A NUMBER AND REFERENCE IT DIRECTLY IN THE BODY OF YOUR PLAN. ] The Dutch market is especially competitive for new brands. A rule of thumb is that share of voice for a brand should be about the same as its market share. Exceptions are: Company Ponds Oil of Olaz Plenitude Share of Market 9% 10% 5% Advertising Expenditures 2. % 26% 13% Ponds is established and well known with loyal customers. Oil of Olaz and Plenitude are trying to develop brand awareness and brand preference. Any innovative products or new product variations in a line can be quickly copied. Retailers can develop and introduce their own private labels in 4 months. Manufacturers can develop a competing product and advertising campaign in 6 months. 4 Hair Coloring Major Brand of Hair Colorant Market Share (%) 1988 1987 Upper End 14. 95 Guilders Recital (L’Oreal) Guhl Lower Priced 9. 95 Guilders Andrelon Poly Couleur Others 1989 35 9 34 12 33 14 2 24 20 14 23 17 17 21 15 None of these brands have a clear advertising positioning statement describing customer benefits. Hair salons were indirect competitors in the hair coloring market. The percentage of women who had a hair stylist color their hair was not known, nor were the trends in usage of this method known. L’Oreal’s current market entry, Recital, is the leading seller although its share is declining. Guhl’s and Andrelon’s increases in shares between 1986 and 1989 reflect the general trend to using warmer shades, and these two brands were perceived as giving quality red tones.

Mass-market products are sold in drugstores and supermarkets. Synergie requires . 75 meters of retail shelf space. Hair Coloring [EDITORIAL: SPELL OUT NUMBER WHEN THEY BEGIN A SENTENCE] 58% of unit sales are through chain drugstores. 22% are through large independent drugstores. 20% are through small independent drugstores. 3% are through supermarkets. Shelf space is a limited resource. L’Oreal had planned to offer 15 shades of Belle Couleur (versus 22 in France). 1. 5 meters of retail space are needed to display the 15 shades. THIS WOULD BE A USEFUL PLACE TO COMPARE L’OREAL’S DISTRIBUTION -TOP OF PAGE 8 – TO SPECIFIC PRODUCT DISTRIBUTION AND DETERMINE GAPS, IF ANY] Customer Situation Skin Care Forty percent of the Dutch population is under 25 years old. Consumers in this age group are the heaviest users of cosmetics and toiletries. Similar to the rest of Europe, the Dutch population is aging and the fastest-growing segments are the 25 or older groups. There is an increasing number of Dutch women working outside the home. Although their participation rate at 29% is lower than the US rate of 50%, the Dutch rate is increasing more rapidly.

Dutch women are exhibiting greater self-confidence and independence. They have more disposable income and are using some of it to buy cosmetics on a daily basis. Despite rising incomes, Dutch women still shop for value, especially in cosmetics and toiletries. The Dutch market accounted for only 4% of total European Union (EU) sales of cosmetics and toiletries. Almost 50% of the 5 million Dutch women between the ages of 15 and 65 use traditional skin care products. Newer, specialized products have a much lower penetration. Consumers tend to be loyal to their current brands.

We are hesitant to introduce Garnier as a separate company at this time. The tag line, however, will start to produce awareness of Garnier that we may capitalize on as a separate unique brand in the future with its own sales force. We have two target markets. The first is women 25 and under. We will position the Synergie, Belle Couleur, and Ambre Solaire products to these consumers. These are the products that will include a ” tag” line of ” From the Garnier Institute of L’Oreal”. The second target market is women over age 25. We will position the Plentitude and Recital products to these consumers.

The quality will be similar, but we will distinguish the products to the end consumer through an integrated marketing action plan. Our intent is to manage the life cycle of cosmetic use by women in the Netherlands. New, younger consumers will be attracted to our Garnier tagged products. As they get older, we will offer a migration path to the more sophisticated, upscale, and classic L’Oreal products. [EXCEPT THAT CUSTOMERS ARE VERY BRAND LOYAL AND LOW IN RISK TAKING FOR THE HAIR COLOR PRODUCT? WILL THEY MIGRATE OR WILL YOU HAVE TO EVOLVE YOUR POSITIONING STATEMENT? The price point of the Garnier tagged products will be slightly lower than the original L’Oreal products. This will appeal to the younger consumers and to all others who are looking for value in cosmetics. However, we will not specifically market the value angle, since it may cannibalize L’Oreal Plenitude and Recital lines. We also do not want to ” cheapen” the L’Oreal name. In addition, someone who is solely interested in lower prices usually does not have a specific product in mind when shopping. They will see how competitively priced the Garnier line is as they are comparison shopping.

Promotion We will use a pull marketing strategy directed at end users. We will market the benefits of the products to our target segments: new, younger clientele and present established client base. The target segment for Garnier tagged lines will be Dutch females who are under 25. This is 40% of the Dutch population and they are the heaviest consumers of cosmetics and toiletries. In this competitive market it is very difficult to persuade women to switch brands, so we want to ensure our future by targeting the young buyer to use the Synergie and Bell Couleur products specifically [FOR THEIR F[FOR THEIR FIRST USE OF THESE PRODUCT CATEGORIES.

WE DON’T HAVE ANY INFORMATION ABOUT WHO INFLUENCES THEIR FIRST PURCHASE MOTHER, FRIENDS, OR RETAIL CLERKS? ]ng We will roll out a coordinated advertising campaign to emphasize the following points: 1. L’Oreal is getting better, with a new and refurbished line of products from our Garnier Institute. “ No longer should consumers question which Company to buy skin care or hair coloring products from, now they just have to decide which L’Oreal product to purchase! ” [I GUESS YOU[I GUESS YOU WOULDN’T OBJECT TO HIRING AN AD AGENCY AND USING THEIR COPY WRITERS? ]lenitude and Recital will focus on consumers over 25 years of age. Advertising will begin to refocus these products as being classy, upscale, and successful. 3. Synergie, Belle Couleur, and Ambre Solaire will focus on consumers’ 25 years and under. We will promote that these products are “ new”, hip, and fashionable. 4. We will use our positioning statements as appropriate in all mediums. We will use print and broadcast ads in women-oriented mediums several weeks before the new introduction of products to inform people of how L’Oreal is growing and changing to meet their needs.

The sales force will primarily help to achieve the marketing objectives detailed above. In order to provide extra motivation, we will tie financial incentives for the sales force to meet the objectives. Distribution We feel that the key components of this plan will align with our distributor’s expectations of previous successful L’Oreal product launches. We are introducing the Garnier name, but are promoting these products under the L’Oreal brand. We also have documented evidence of consumer acceptance. Moisturizing Cream 6 5. 5 5 4. 5 4 3. 5 3 After trial price not known After tiral price known After use price not known

Antiaging Cream 6 5. 5 5 4. 5 4 3. 5 3 g Br an d Al lP ar itic pa nt s Pl en itu rd e H oo After trial price not known After use price not known After trial price known d H oo g Br an d Al lP ar iti cp an ts Pl en itu rd e D f. V d O th er After use price known Consumer acceptance was documented on a 7 point scale with 7 being most likely to buy. Overall response showed 39% of all participants would certainly buy the Moisturizing Cream and 24% of all participants would certainly buy the antiaging cream. A good percentage of the respondents of the Belle Couleur study said they would buy after they used the product. STYLE COMMENT: PIE CHARTS ARE CAN OFTEN BE REPLACED Belle Couleur Buying Intentions After Use 21% 29% Certainly buy (5) Probably buy (4) Don’t know(3) 11% 9% 30% Probably not (2) Certainly not(1) O th er After use price known D f. V 12 BY A SINGLE, STRONG SENTENCE. ‘ FIFTY-NINE PERCENT ARE LIKELY TO PURCHASE. ‘] Lastly, we are supporting this product launch with the appropriate advertising and promotion. As with previous successes, we will support our retailers with strong in-store merchandising. Through the strong presell program detailed above, we expect more product to be distributed to drugstores and supermarkets. USEFUL TO ADD COLUMNS FOR SPECIFIC PRODUCT CATEGORIES – TABLES TWO AND THREE ANALYZED. ] Today 25% 35% 40% One-Year Projection 30% 25% 45% Supermarket Independent Drugstore Drugstore Chain In conjunction with this shift, we will work with our distributors to support partnering with us to develop and implement an improved Consumer Response System. The purpose of the Consumer Response System is twofold: 1. Strengthen the tie between L’Oreal and our distributors. This helps forge a better relationship and make our distributors more dependent on us (and our systems). 2. Acquire better point of sale data from our distributors.

THE CANNIBALIZATION ISSUE DESERVES MORE ATTENTION, HOWEVER, THIS IS VERY DIFFICULT TO FORECAST GIVEN EITHER THE CASE DATA OR ANY DATA. ESSENTIALLY THE ESTIMATE OF CANNIBALIZATION MUST BE BASED ON PERSONAL EXPERIENCE IN THE INDUSTRY AND PURE FAITH. THE MARKETING MANAGER MUST MAKE A JUDGEMENT OF WHO SHOULD EVENTUALLY CANNIBALIZE THE PRODUCT YOUR OWN LINE OR THE COMPETITORS. THIS IS WHY EFFECTIVE MARKETING MANAGERS ARE PAID EFFECTIVELY. ]v class=” cite-tabs”>