L’ Oréal: Global Brand, Local Knowledge

Introduction

L’Oréal has set itself a mission; ‘Beauty for all by offering all women and men worldwide the best cosmetic innovation in terms of quality, efficacy and safety.’ To achieve this so that everyone can benefit from their innovation, L’Oréal has taken all the necessary steps to understand, learn and adapt to the infinite diversity of beauty needs, desires and culture of each consumer.

This unique strategy adapted by L’Oréal is referred to as Universalisation. Universalisation, simply put is globalization which respects differences; differences in terms of tradition, climate, hair and skin types. L’Oréal understands that they perform in a global market and no two consumers are the same. As a result, they have tailored their products to meet the needs of all their consumers, respecting their differences. This is made possible by L’Oréal’s scientific experts and “geocosmetics” who operate from their worldwide research centres and innovation hubs locally to better understand consumers, using science to fulfil their beauty desires.

What is L’Oréal doing?

L’Oréal sees the world as one global market, their aim being to put their brand everywhere by promoting its various national brands to the rest of the world. The firm understands that consumers come from varying customs and have different traditions. Their locations vary and they all have diverse needs and expectations, different hair and skin types. Hence, the reason for choosing the unique Universalisation strategy and tailoring products to meet each consumers’ desires, needs and traditions.

L’Oréal spent heavily on R&D. This drove their uniqueness as they believed that launching new innovative products on a regular basis was key to achieving Universalisation and becoming a leading player in the beauty and skin-care market. Innovation is their expertise.

Although seeing the world as one global market, L’Oréal treated and approached each region differently, by creating “geocosmetics” to study the beauty trends around the world and deliver the best products for that region. It must be noted that based on the market they entered, new brands would be created, or adjustments were made to existing L’Oréal products. The latter is referred to as the adaptation of the product into a new market where the L’Oréal brand name would remain the same, but the firm would have made some adjustments.

L’Oréal aggressive growth strategy is because of notable acquisitions of companies such as Lancome, Garnier, Redken, Maybelline and Yves Saint Laurent all of which have enabled L’Oréal to enter new beauty aid areas and expand into emerging geographic markets. The acquisition strategy, particularly of local firms, is the main market entry strategy used by L’Oréal. Also, L’Oréal takes an aggressive approach on entering emerging markets because they understand the benefits of entering these markets early. One of the advantages of entering an emerging market is the high growth rate potential, once the product performance and price is adjusted to local needs, the L’Oréal brand can become established in the market eliminating competition. L’Oréal has invested heavily in India, Pakistan and China, two popular emerging markets.

How are they executing the Marketing Strategy?

Product:  

In terms of the product, L’Oréal is using several product strategies, 1. Tiered Product Strategy- this can be seen by having their product at different divisions based on price.  For example, The Consumer Product division; these are distributed through mass-markets channels such as Garnier, L’Oréal and Maybelline. The Luxury Products Division- these are the prestigious international brands, the Professional Products Division and the Active Cosmetics Department.  
2. Product approach strategy in terms of their brand architecture. 3.  Adaptation and innovation of the products, new products/brands were created depending on the market being entered, while some markets adjustments were made to the product and the brand name remained unchanged.

Placement Distribution:

The distribution channels that are used by L’Oréal to sell their products are Key Opinion Formers or influences, that is the hairdressers, hair salon owners, sales representatives. In store execution of their products, products must be displayed in a specific manner and must be placed at a location in the store, guided by the company’s planograms. For example, L’Oréal Paris was sold through retail outlets but with restriction on product placements, shelf space, and displays to maintain its higher-end feel. The company’s strict brand policy did not allow brands to be sold outside of their specific designed channels. For example, the premium brands, such as Yves Saint Laurent and Lancome were sold in department stores, while low-end brand, notably Garnier, would be available in all mass-channel retail outlets.