Marketing Management L'Oreal Case

LOreal Case Study
Submitted to: (Group number :8)

Dr. Hufrish Majra
Submitted by :
Tanuj Jain HRB038
Gaurav Kataria HRB018
Mansi Gandhi HRB010
Rohit Raj HRB026
Divya Mekala HRB039
Q1. Was Loreals multiple segment strategy a successful

one. Substantiate with examples.
LOreal has engaged in many forms of Market Segmentation in their venture in

India, with different variables during different time periods. Firstly we will
discuss the segmentation methods when it first entered the market in 1991,
followed by what ensued after their makeover.
When it First Entered the Market
Gender Segmentation: LOreal first segmented the population into the different
sexes as they thoughttheir products combination of low price and natural
ingredients would fit Indias market, where womenuse plants and herbs as part
of their beauty culture. Their product specifically catered to the women
of India, though later our group discusses how it should carve a niche market
for itself in the Mens sector aswell.Income Segmentation: LOreal segmented
the market into 2 main segments: the poorer masses and the rest. It marketed its
product as low in cost to attract the poorer masses, and her efforts in reducing
ingredients to cut price reveals her aim to minimize costs as much as possible.
At this point of time, it was not yet targeting the affluent middle class or upper
class and thus did not make any distinct segmentation of the richer classes,
preferring to regard them as a whole entity.
The LOreal Makeover

After a poor start, LOreal approached the market with a different concept.
Presence of home brands posed problems as they had already captured a large
proportion of the masses market share. They offered cheaper products to buyers
at a price which LOreal was unable to match, and their long presence
hadestablished a strong sense of loyalty in the buyers, making it difficult to pry
them away. With theunderstanding that it needed to capture a different market, it
proceeded with a different from of segmentationin order to better identify its
target segmentsIncome Segmentation: This time LOreal separated a new
segment from the original 2 segments: thequickly rising middle class which was
gaining in affluence. This was very specific compared to the originaltwo broad
segments it identified as they saw that this was the fastest growing income class
that represented ahighly untapped market potential due to their radically
different mindsets from the masses.Psychographic Segmentation: LOreal
segmented India into different groups based on their thinkingand behavior from
the older, more conservative Indians who held conservative values of thriftiness
more strongly and stubbornly, and the younger one.
More impressionable generation who had developed a very different and
westernized view on spending and culture. Influx of brands like Tommy
Hilfiger, Benetton andeven MTV in 1991 greatly emphasized Western values
of luxury, beauty, and self-awareness leading to therise of a new segment of
people who did not view thriftiness with equal importance as their predecessors
butwere rather more willing to splurge on luxury goods which were previously
considered too expensive
andwasteful.Age Segmentation: By segmenting the market into the younger mid
dle class from the moreconservative, often older Indians, it had also inevitably
segmented the market based on age, and showed anincreased interest in
capturing the market share of the younger Indians.Benefits Segmentation:
LOreal further segmented the market on a benefits basis when it
introducedExcellence Crme. Being in crme form, it [was gentler on hair]
compared to the natural ingredients such asammonia which damaged and dried
up womens hair. It thus segmented the market into those who neededthe hair
dying and strengthening benefits of Excellence Crme and those who did not.
This was a crucialform of segmentation for LOreal as it underlined the core
concept of its marketing strategy to promisesuperior products with additional
benefits to consumers when choosing between LOreal and Home brands,and
subsequently has led to the immense success that LOreal has experienced in
India.LOreal has made use of various variables to identify the segments it
wishes to target, and alsoengaged in using Multiple Segmentation Bases (Age,
Income, Psychographic and Benefits) to
complementits Differentiated Marketing approach. This allows them to effective
ly identify several differentiatedsegments and design separate offers for each,
translating into stronger sales and a stronger position withineach market
segment. In the following section we discuss which segments were targeted and
the strategiesemployed by LOreal with its newly identified segments
Q2. What were the benefits of Masstige Positioning?

Ans. LOreal, in order to give a broader consumer base access to prestige was to
develop and sell products in the category known as masstige or prestige for
the masses. Masstige products were defines as premium but attainable and
reflected two key tenets:
a. They were considered luxury or premium products.
b. They had price points that filled the gap between mid-market and super-
premium products.
LOreal Paris was LOreals leading masstige brand and one of the first brands
globally to offer high quality at an affordable price.
The Brand generated nearly 50% of the companys total sales in Western Europe
and 20% in the US, and had over 3% of the global beauty and personal care
market.
Thus, we see by positioning itself for the mass market who couldnt afford the
ultra-premium products but were ready to a higher price for a premium product.
This positioning strategy helped them to generate such huge sales and provide
market penetration.
Q3. What steps did Loreal take in increasing customer

engagements and how did it strengthen its positioning?
Ans. LOral has often used A-list celebrity endorsers in highly successful ad
campaigns to push products to a wide range of age brackets, ethnicities, and
genders by creating customer engagement
LOral was also a major sponsor of the Cannes Film Festival and prepared the
actors and actresses with LOral makeup before they walked the red carpet.
Spokesmodels for the brand at
Cannes included many ultra famous faces like Aishwarya Rai.
LOral Brandstorm, is an initiative not only to recruit but to engage the target
group of students. Its a competition that challenges students to come up with a
new marketing concept for a series of LOral brands, had involved over 43,000
students from 285 universities in 43 countries since the competitions 1992
launch
LOral had a strong reputation as a leading print media advertiser but the
company gradually reduced some of its ad spending on traditional media and
shifted toward the Internet to engage a new segment of customers
Loreal's innovation has changed completely the nature of the contact between
them and their customers. It is at a forefront in initiating various modes to
engage its customers
In 2007, Garnier Fructis launched a user-generated website that was the focus of
a major campaign. The website asked users for input and views on certain styles
and allowed them to submit their own ideas and suggestions. Users had the
ability to upload their own samples of how they styled hair using Garnier
Fructis products, and they could win cash prizes or vacation packages. Content
on the site included information about the Garnier products and a series of
how-to videos with celebrity stylists using the products.
Creation of the virtual personal stylist, in collaboration with ELLE

magazine and Bloomingdales. To use the program, a shopper created an avatar
at an in-store 3D
scanning booth. The avatar was then stored on the Internet and accessible at
participating retail
stores. Shoppers used the avatar to try on makeup and clothes, eliminating the
hassle of changing-
room lines and multiple applications of skin-care products and cosmetics. This
increased the brand popularity and certainly increased customer engagement.
Another initiative to engage the salon owners and their customers was LOrals
grassroots campaign which helped more than 4,000 salons build Facebook
pages for their business.64 LOral offered instructional videos, and trained and
advertised credits, to the salons.
In 2010, LOral launched its YouTube channel, Destination Beauty, which

contained how-to
videos filmed by beauty bloggers who provided hair and makeup tips. Loreal
used established web personalities to pitch products, such as makeup artist and
blogger Michelle Phan. This increased the connect with customers who were
also common people and brought about engagement of masses digitally.
4. On what basis did they segment the mens grooming market

across the globe?
Answer : Loreal is a leading player in the beauty and skincare market, it has
been pushing boundaries of science to invent beauty and meet the aspirations of
women and men. Loreal began targeting men in the year 1999 when it
introduced Loreal Feriah for men and Casting colorspa for men in the year
2000.Loreal had to cater to diverse customer base an aging population in the
west, ethnic groups around the globe, aspiring customers in the east, emerging
markets and growing interest in health and beauty care among men all over the
world. Loreal launched a challenge for students to come up with a beauty
product range for the mens brand Diesel. Later the challenge also that involved
designing a new advertising concept to attract men to professional salons. It also
launched Garnier Men specialy designed products for men.

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What were L'Oreal's initial segmentation strategies when it entered the Indian market?

What steps did L'Oreal take to change its segmentation strategy after facing initial challenges?

LOreal Case Study

Submitted to: (Group number :8)

Q1. Was Loreals multiple segment strategy a successful

LOreal has engaged in many forms of Market Segmentation in their venture in

When it First Entered the Market

The LOreal Makeover

Q2. What were the benefits of Masstige Positioning?

a. They were considered luxury or premium products.

Q3. What steps did Loreal take in increasing customer

Creation of the virtual personal stylist, in collaboration with ELLE

In 2010, LOral launched its YouTube channel, Destination Beauty, which

4. On what basis did they segment the mens grooming market

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