LOreal Global Marketing Strategy

LO documentary Global Marketing St appreciategyLOreal is a expectant lawsuit of how world(prenominal) stigmatization scheme washbasin be habituated to feed revolutionary egression opportunities when e actually other(a) companies were non going great guns. In the late 90s and early 2000s when the Asian and Latin Ameri tail end economies were rachitic and doing poorly, and numerous international brands struggled, LOreal surged ahead. How did it happen? The answer lies in their beautifully border bang state convey forcet as it elaborates their understanding of the marketability of their result and the regard at of merchandising it globally at LORAL we believe that e actually angiotensin converting enzyme aspires to beauty. Our mission is to help men and women around the world realize that aspiration, and express their individual personalities to the full. This is what gives meaning and mensurate to our business livestock, and to the working lives of our employees. We ar proud of our work. (Source LOreal website, www. loreal.com) 1In 2005, the $18.89 billion LOreal sort out was the nigh successful cosmetics brand. According to the business week survey 2004 LOreal was ranked 49th. LOreal marketed beauty intersections e.g. Makeup, perfume, and sputtercare and hair products to both women and men in some 150 countries. The LOreal group reported its 19th consecutive socio-economic class of mental check digit offshoot in December 2005. Since 1989, LOreals sales had grown at a compounded annual rate of 12% to 1.7 billion. Analyzing the kind of growth story it has written an analyst has securely described it as the linked Nations of beauty .the kind of global presence LOreal has it can nevertheless be compared to the United Nations.LOreals global branding dodge thats doing wonders has been actively spearheaded by Owen J anes him self-importance. Lindsey Owen J wholenesss has been the chief executive officer of LOreal for nearly two decad es and a chairman forthwith, and under his attractership LOreal has authentically fine tuned its global branding strategy. Interestingly some press reports sort us that he has been seen roaming around highways in foreign markets to understand the unseasoned and existing tr contains. And without any doubts his interesting work style seems to work wonders. The branding strategy of LOreal has such an impact that LOreal seems to be the just global leader in e truly segment of the cosmetics industry, right functioning of its products seems to be the distinctiate .whatever its trying to carry the French elegance or street briskness of America is getting good response throughout the world .and LOreal has been adequate to(p) to r separately its consumers across the national and heathenish boundaries.Owen Jones says We have this great strategy back in the head office of how we are going to do it worldwide. But when you go out and look at what is happening, is t here a big gap between your projections and the reality of what you see and hear? It is so important to have a world vision beca sp revoke otherwise decentralise consumer goods companies with many brands can fracture into as many little move if somebody isnt pulling it back the other way the whole duration with a central vision. This really explains why he prefers roaming in the streets for his strategy making sort of than sitting in the boardroom.Having said all that its placidity evident that the global branding strategy of LOreal has paid huge dividends to the friendship overall. In order to understand this splendid growth story we need to see how just now LOreal applied their strategy to the countries that were undefiledly distinct as uttermost as the lifestyle, spending pattern and conclusion is cin one caserned. LOreal was started in France, has a good brand revalue in the united states of America, is reaping good dividends from India and has a remarkable presence in Japan. These are opposite complex societies with incompatible needs, so how exactly LOreal managed to be equally successful in all these places? This question needs some fact finding to be through on the theme of country specific products and strategies adopted by the cosmetics conglomerate. Thats what exactly we will try doing in the next section of this case meditate.In India 4 billion 7.5 ml sachets are sold every year and thats a staggering 66% of total shampoo consumption in India. Most of the urban Indian women (96%) use shampoo, however only 46% use foundation. For hair care a huge 74% tribe of Indian women nonetheless rely on home remedies, 42% use henna and 94% use hair oil, as far as the LOreals sale per person in India is concerned is just 10 cents compared to 28 Euros per person in France. In India scrape lightening creams (fairness creams) constitute to a greater extent than 50% of skincare market people seem to be unfounded for getting for getting fairer. (Source LOreal, Ni elsen)These facts are self explanatory rough the temperament of Indian market and its clearly stating that the strategy employ in the States or any other European countries is not going to work in India. regular army is a hop on market as far as cosmetics consumption is concerned India is an emerging economy with most of the cosmos below 35 years of age and a huge plan optic class. The cosmetics market is growing approximately at an annual rate of 16% in India, still a long way to go. The youth in urban centers is very concerned closely the image save the larger section is still off the contrive map. Interestingly plain after the success story of corporate India , apparently its still a country that is very much billetnership oriented. The great Indian middle class is aspiring but still has the community driven cultural values intact.LOreal has taken this fact very much into consideration succession preparing the marketing strategy for India. A very good example woul d be the launch of garnier fructis shampoo in India. The concept was to rely on thinking rather than relying on advertising a brand. The head of getting quint times stronger hair was the central oral sex that created the hype, through word of sassing or network marketing. Initially it was positioned as product for young and teenagers, once the product was established in the market it tried to change or rather increase the can base by shifting gears. In a recent advertisement of garnier hair color a missy is shown advising her mother to try the garnier product and explaining the benefits. Again it relies on the concept of stem getting spread by word of mouth to some other client segment. This is the best example of marketing in a closed community driven society. There is one much than remarkable thing about this entire campaign the catch line take care. It shifts the focus from the product to the shopping mall value of Indian society caring about others and the entire adv ertisement becomes more than of a good advice rather than publicity.China is the worlds most populated country in the world and that makes it very clear that it has the say-so of being the biggest consumer market. These days Chinese women are spending on an amount 10 to 15% of their income on cosmetics products, an urban Chinese lady would use 2.2 cosmetics products on an average every morning. Evidently most of them want to be fashionable and the LOreal cowman line if you want to be fashionable, just film Maybelline, really seems to work. Masses are make to believe that this is something that represents America and it ought to be trendy. Maybelline is the product line for the masses and LOreal really uses the tendency of masses to look towards the USA thats why the Maybelline products are displayed against the backdrop of shiny skyline of stark naked York City Chinese women prefer skincare and beauty products. According to a research by LOreal in mainland China women are con cerned about the radiance of their skin and prefer skin nourishing lotions that protect their skin from skin-drying winters. Un want us customers most Chinese women uniform skin whiteners rather than tanning products. Its a sign of beauty for Chinese women. Also, the texture of Chinese hair is thicker and more course than typical US Caucasian hair. This requires unalike product, and really a different skill set to efficaciously sell and get these products moving in China. LOreal has dedicated research facilities for these and other issues, and followed up with more innovations to suit the needs and preferences of Chinese consumers. There is one more very interesting fact about Chinese cosmetics industry Chinese women are very concerned about the ingesting of delineates. This is the most interesting feed attitude about Chinese women. Now following its global strategy LOreal even took this into consideration and pay offed lip rouges containing vitamins as soon as this was told t o the women they were more comfortable in using the product.European countries are mostly developed, here LOreal has the liberty of publicizing the brand value rather than focusing on pricing, the benefit to LOreal in these markets is that it is already hale established and the brand is well known so it can concentrate on grabbing the attention of individualist feminist women. Pricing is not a concern in these markets so LOreal can afford to have punch lines like-I am worth it because these punch lines justify the high pricing of the products and fulfill the feeling of exclusivity of high end clientele.Now lets take another example from the European and us markets, LOreal brands in these markets are even-tempered well established. LOreal products have been used in that location for few generations now once young consumer of the LOreal brand has started aging and the akin street fresh products could not be positioned to them, they have started becoming the mature citizens now th eir priorities have changed. A recent market report suggests that the new target segment in the cosmetics industry is 40 plus women who once used the teenage cosmetics products. The thrust is on anti aging products because it not only adds the new customer base but retains the once teenage customer also. Customer from the baby boom generation reaches the retirement age and tries to hold up wellnessy and youthful look and finds out that their favorite cosmetics brand is still making products for them. LOreal capitalized on their desire to look youthful and started marketing it anti aging products, it has signed sixty year-old Diane Keaton to represent the Age Perfect Pro-Calcium skin care line. Also LOreal has signed Scarlett Johansson, Penelope Cruz, Eva Longoria and Beyonc Knowles to promote specific cosmetics lines check to the age groups. Now this tells us how LOreal used the desire of customers to position its products.The French conglomerate believes that only two different c ultures as far as fashion is concerned, are dominant, represented by two flagship brands LOreal Paris and Maybelline new York. LOreal has been projected as a French origin with elegance, high end presentation and obviously high pricing. Whereas the Maybelline product line represents the street smart American babe who is looking for the value of the money.America seems to be the growth engine of the world, in the cosmetics industry as well. LOreal has understood this and they made a strategy based on the trends in the USA and thats how Maybelline came into existence. Maybelline currently is the flake largest brand in share of unit sales of cosmetics products and number one in makeup brands. It claims to be all in all consistent with todays confident cleaning woman. Maybelline products targets triplet customer segments youngster (16 to 25), office lady (26-35) and career women (35 plus). Marketing unify for Maybelline line of products consists of two main strategies foreign consum er cultural positioning and typic New York City imagery that women can relate to everywhere. Maybelline promotion intromit different way of grabbing attention including promotional coupons, online advertising, sponsorship of fashion shows, signing fashion icons as spokesperson of the product ,free make up consultancy and providing scholarships etc. we can see as American cosmetic market is a mature market so LOreal tries to rely on mature marketing tactics.In the early 20th century, even American society was not very much open to makeup and skin care products .people thought that only sinful women should wear makeup but eventually with the economic independency that the American women gained makeup and cosmetics started coming into mainstream. Cosmetics apparently became the symbol of new self belief that the American women was beaming with and remember even Maybelline claims to be totally consistent with todays women, there are several other punch lines like maybe shes born with it, maybe its Maybelline, all the punch lines keep the self confidence of women in centre as if its not the make up but its the attitude that has to be worn. Thats why women of every nationality and culture started identifying herself with the product and this became the symbol of the 21st century woman.We always say that the world has saturnine into a small village. Production houses are becoming more and more global. But same cant be said about the consumers as they would still be using the products because of their own reasons. Someone in the USA can use a product just to feel max however the same product could be used in the UK for health reasons. So the companies need to identify the demands of a specific market to effectively satisfy the demand while planning the globalised marketing strategy.Therefore the altercate posed to the companies is whether they should just keep changing their strategy according to the culture or can they consider every customer as a global customer with all common needs. Thats the irony we are suppositional to work with these days on one hand companies are on a global platform more than any other point of time in history however they have to adapt to the mental capacity and lifestyle of the customer as well.The mindset and the lifestyle of the customer are heavily impacted by the culture. Culture is defined by different norms, values, interactions, language and others personal components shared by groups of people across the world. It is a social phenomenon which defines peoples interests, thoughts and other fashions they may exhibit in the social life. From one country to another, humans have evolved and developed different types of expressions, beliefs and behavior which can be difficult to understand for someone who does not belong to the same culture. culture is the way how the members of a particular group interact with each other on the sharing of the available means, now that determines what is going to be the need for a particular product in that society, that also decides whether a particular advertising strategy will work or not and how exactly that will be interpreted by the target customers. In different markets consumer requirements and consumer behavior may vary. Cultural aspects deeply impact the consumer behavior the impact may be direct or indirect. The culture trait creates the consumer behavior difference, as it can be noticed between the Asian and European continent where the culture and the behaviors are very different.Being a global organization LOreal certainly needs to understand the cultural differences and position its products accordingly otherwise the results may be far more different than they are at this moment. The thrust has to be on hitting the right customer with the right product. This can be possible only if one has a deep knowledge of local culture and beliefs. A very interesting example would be of lipstick use in china according to a research only 3% women use lipstick for makeup. The reason that was supposed to be behind this low percentage of lipstick use is even weirder women in china have concerns about ingesting lipstick. LOreal conducted a survey to see whether this is just an age old saying or it holds some truth, based on the findings it came up with a lipstick that had vitamins in it and in turn the demand for LOreal vitamin lipsticks increased.Another example could be real handy in India long hair is considered necessary for a woman to be considered beautiful. LOreal considered this fact while launching its shampoo product in India and it focused on publicizing the fact that using the garnier fructis shampoo helps in getting long and strong hair. This strategy made the product very popular in India.In china or India people like to have fair complexion. In Asia, women take special care of their skin. plenty want radiant skins and lotions that can nourish their skin against sun .whereas in the United States people would rather b uy tanning cream. On basis of this knowledge LOreal can position their whitening creams in India and the interesting part is the way the advertisements could be interpreted .the way the advertisements for the fairness creams are made in Asian countries these can be interpreted as racial advertisements in the USA but in Asian countries that seems to be quiet usual. Now thats where the knowledge of the culture and beliefs comes handy and helps avoiding unnecessary problems. From a business point of view, companies have to adapt themselves to the culture of each country in which they want to have business in.for example,Because of the differences of culture between countries, companies need to dress their products and services according to the local demands. This will help them to create and develop a brand image across the globe that is based on a large number of globally recognized products.Based on these examples we can say that LOreal was able to be successful in these markets bec ause it suitable to ground realities of the particular market yet it followed a standardized strategy. If we study the marketing mix of Maybelline, it has two pronged strategy -one for the foreign markets another is the global street-smart image of the American chic.The global street smart image of New York chick can be admired in intimately all the urban centers, be it India, china or Brazil. However there has to be a right mix of local flavor as well.The most important part of the LOreals strategic plan is opportunity lookup or the marketing of their products worldwide. From the initial days it already started catering to the demands of women worldwide. In order to do that efficiently they were expected to be well advised of the diversities of women across the globe .once they knew the diversities their job was to come up with different line of products suitable to the women from all parts of the world .Innovation has been the keyword for LOreal and this was made possible thro ugh constant research and development over the years .the group has already wrap uped most parts of the world and still striving to cover more. In order to do so LOreal group has to keep respecting other peoples identity ,ideas and culture .LOreal has to keep valuing different cultures and nationalities to get their brand value up and it seems that they have been doing it really well.The success story can bear further because even today products of LOreal touches the cultural values instilled in strength customers mind .LOreal just doesnt sell the product it makes the customer buy the idea of dreaming big but still remaining rooted to the core cultural values .it has carefully devised its global marketing strategy and customized it to the local needs, and thats the reason people from Africa to Europe and America to Australia are using the LOreal products.LOreal has been doing clean well in terms of global presence and monetary growth. The mission today is to understand consumers needs and expectations so as to meet them as effectively as possible along with widening the scope of global line of products.