Background: Loreal Wac

LOREAL WAC
 • In 2010, the world's so-called emerging economies contributed half of

all cosmetics. Lo Real has opened three new subsidiaries in Egypt,
Pakistan, and Kazakhstan. By increasing its client base to 2 billion, they
hoped to increase revenues from emerging regions. In the new age, CEO
aimed to preserve the company's worldwide leadership.
 In 2012 emerging markets were the key to sales. They had required a
new perspective on globalization as they believed that one product one
formula will not fit for people across the continents. This belief led to
the adaptation of key markets in key continents.
 Universalization was all about localizing the brand in local markets by
using local raw materials in cooperation with local office and laborities.
 India had led the way by increasing sales by 30%
Background
 L’Oréal was founded in 1909 by Eugene Schueller, and was took
over by Francois Dalle in 1957 who initiated the concept of
selling through several channels.
 In 1996 LO real acquired Maybelline and many other to expand
its portfolios and geographical presence.
 Loreal tightly coupled innovation and speed to market with
expansion of its geographic and consumer base. Loreal believed
that launching new innovative products was key spent 3.5% of
revenue on R&D in 2010.
 It developed and sold some products in a category known as
“masstige”. A product which was luxurious and premium and it
had price points that filled the gap between mid-market and
premium products.
 In 2010, Loreal applied its science to expand emerging markets
of China, India, Brazil, Mexico, and Europe. Loreal already took
in more than one third of its sales from these markets. Exhibit-2
shows 16.92% increase in net-income in FY2010 as compared
to FY2009. Exhibit-1 shows that percentage sales in FY2010 and
FY2011 increased in new markets across all the divisions.
 Organizing and Globalizing
 To cater to its multi-cultural customers, the company hired
ethically diverse spokespersons, advertised in ethnic magazines
and partnered with specific ethnic groups.
Moving ideas across boundaries:

 The company operated as a matrix and in order to learn from
each other and import other geographical product lines , they
moved staff and managers across countries.
 The Direction Marketing International (DMI) was responsible
for international development of products across different
locations and cultures.
Total Repair 5
 Tailored to solve the five most common hair problems faced by

women of any given country . It was marketed by the famous
ad stating 5 problems one solution, featuring Aishwarya Rai. All
the ads focused on scientific and research background of the
product.
 Total Reapir 5 was marketed as a franchise under the Elseve
brand , and became no 1 product in Brasil in 2008. Lo real
increasd the price to increase the appeal and also make it clear
to the customers that there was something special inside as
well.
 Unilever sold the products in 300ml whereas Lo real in 250 ml ,
in response P&G decided to launch Pantene , selling in 200 ml
which grew faster than Lo real
 With the Brazilian test being successful , they knew that their
product had a good chance of growth all over the world if it is
in Brasil , as Brasil had diverse section of women who had a
special care towards Hair
L'Oreal in India
 Loreal believed that local production would ensure that its cost
of gods sold would be proportionate to local price levels and
distribution was via a network of dealers and this decisions paid
off.
 Loreal focused on hair colour naturals in order to upgrade the
customers who were using cheap powders, this product was
customized to suit the Indian pocket.
India's Beauty Context
 India had a very elaborate traditions with complex rituals. It
was observed that beautiful were symbolic to fair skin and
sharp features in the past.
 Now, there is holistic approach to beauty. It means beauty is
closely linked to wellness. Natural ingredients and the no
makeup look became very popular.
 The challenge was the regional specificities in India, especially
the diff in northern and southern India.
 Existing relationship with distributors and shopkeeprs were
essential, because shelf space depended on the goodwill of
individual shopkeepers.
 In this rapidly changing cultural context, Loreal India had
averaged 30% growth in the decade ending in 2010.
Total REPAIR 5 in India
 In 2006, Loreal Hair franchise in india wanted to Indianize their
products, by solving the problem of oiling, cleansing and
conditioning their hair. And they also wanted to introduce the
concept of Sachets.
 They decided to launch the product priced around 130 rs and
needed to make sure that this shampoo was different from
Head and shoulders and solved all the 5 problems. Two yrs
after the launch Lo real had 6% market share in bottle market.
Garnier Men in India
 Oppurtunity : Indian men were divided into 3 segments – basic
lifestyles , trend followers and trend setters. It was observed
that Men's care accounted for 4% of Indias total skin care
market
 In 2009, Loreal decided to launch GarnierMEN in India. The
product range included facewash, Fairness Moisturizer SPF15
and oil control moisturizer. In 2012, the brand was still growing
at 50%
 Loreal also decided to focus on deodorant segment and
invested heavily across communication platforms and again
met with high customer expectation for its uniqueness.
The emerging market development made things much more exciting and
helped the organization in recruiting, training and development. The
cahallenge was getting the right people in the right places, in addition to the
right products in the right place.

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LOREAL WAC

 • In 2010, the world's so-called emerging economies contributed half of

Moving ideas across boundaries:

 Tailored to solve the five most common hair problems faced by

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