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Loreal Case Study

4485 words - 18 pages

1.0 Case Overview

The Dutch market currently carries the Plenitude skincare range, and the Recital hair colourant, which is also a leading seller in Netherlands under the L'Oreal brand name. Meanwhile, Amber Solaire, a sunscreen, is the only product sold under the Garnier Institute brand name. L'Oreal Netherland had been considering whether to introduce the Synergie skincare line and Belle Couleur hair colourants line into the Netherlands. Synergie and Belle Couleur are marketed under the Garnier Institute name in France. Under the Garnier family brand name L’Oreal had successfully launched both the Synergie skin care and Belle Couleur permanent hair colouring lines in France. The ...view middle of the document...

Analysing the case study, it appears that the challenges may be due to some of the following factors:-

• Lack of brand awareness. Dutch consumers’ brand awareness and knowledge of Garnier is very limited and they have yet to form a brand image of Garnier.
• Adaptation to local market. Belle Couleur had not been modified to suit the Dutch market.
• Competition. Retailers can quickly develop and introduce their own private labels within four month. Also, they earn a higher percentage profit margin on their own brands. In addition, manufacturers could develop a competing product, complete with an advertising campaign within six months, resulting in product imitation.
• Consumer resistance to change. Most consumers of facial products tend to be loyal to their current brands. This resistance to change increases with the fact that the Dutch consumers have poor product knowledge and were not familiar with the technical products’ descriptions and the ingredients.

• Distribution network. The current L’Oreal distribution network involves many different types of retailers and outlets – forty percent drug chains and 25 percent food stores. This approach was effective for L’Oreal as consumers perceive L’Oreal as offering high-quality, innovative products, supported by good in-store merchandising. However, these outlets need a brand with high consumer awareness, something which Garnier does not possess yet.
• Difficult to identify competitive advantage. Both product lines do not have any differential advantage that may set them apart.
• Indirect competition from hair salons. As more women work outside their home, convenience with hair colouring will compel them to visit the hair salons.
• Cannibalisation of brand / product. L’Oreal already offers Recital and Plenitude under its brand name, in the same product lines. This may create unwarranted confusion as to the brand image and perception of both brands.

3.0 The Strategic Marketing Solution

In order to explore for strategic marketing solutions faced by L’Oreal, the SWOT analysis was carried out to determine the Company’s internal strengths and weaknesses, and the external threats and opportunities.

3.1 Analysis of Strengths, Weaknesses, Opportunities and Threats

Some of the strengths, weaknesses, opportunities and threats are seen as follows:-

Strengths Opportunities
1. Strong international brand presence.
2. Brand recognition and reputation for quality and value.
3. The continuing research and innovation in the interest of beauty which assures that the L’Oreal Cosmetics offers the best to their consumers.
4. Possesses leading-edge technology, and regularly and successfully introduces new products onto the market.
5. Belle Couleur and Synergie will continue to be manufactured in France.
6. Synergie will be made with natural ingredients and Belle Couleur has been successfully marketed in France for twenty years.
7. L’Oreal has a positive brand image with Dutch...

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