L’Oreal: Global Brand, Local Knowledge
This case study is about L’Oreal and how it has come today to be known as one of the largest advertisers and investors in research and development. The company has tapped numerous markets and established itself strongly through its various brands. There is a constant need to innovate and the products are new and better and attracting more and more customers at all levels of segmentation. The company is known for its acquisitions and that is how it has done much of its growth in the emerging economies as well as the US. The Company is known internationally for its portfolio of beauty and personal care products that are aimed towards catering to each level of market segment. It is an international success with deep rooted commitment and sensitivity towards local consumers’ needs and cultures. 1. Management Orientation:
L’Oreal’s management orientation is geocentric. This can be seen in the sales, half of which come from outside of Europe. L’Oreal has 23 global brands across 130 countries and has 38 factories all over the world (Henderson, R., & Johnson, R. 2010). The firm has promoted its national brands to the rest of the world as related by Owen-Jones. Owen-Jones promoted the five core businesses into becoming global. These included: hair care, hair color, skin care, color cosmetics and fragrances. If we look at the website of L’Oreal Paris, we can see its presence in five continents and numerous countries (L’Oreal Paris). It has also targeted emerging economies such as China and India. It has brands targeted for all of these different market segments in the different continents. Due to its progressive investment in research and development, L’Oreal has been able to cater to the multicultural expectations, tailored to meet the needs through impressive standards. 2. The Global Marketing Environments:
Needless to say, there have been numerous economic trends that have changed the way businesses work in today’s global economies. The financial markets have become global today and depend on capital movements. Employment in the manufacturing sector has declined. Businesses need to sustain themselves through global competitiveness and markets. Moreover, the advent of information technology has brought out many different perspectives and aspects of doing business. For L’Oreal, its main market was Europe. Half of its sales are generated from this continent and L’Oreal’s own identity has been nurtured by the European appeal, especially that of Paris (L’Oreal Paris). Europe in itself is a diverse market. European capitalistic economy is more or less led by government intervention at various levels. Government social spending and taxation relative to national income is high in many European countries and businesses have collaborative relationships with the governments. As can be seen in the case, L’Oreal has actively pursued mergers and acquisitions and confidently carried out global marketing campaigns and launched its brands worldwide (Henderson, R., & Johnson, R. 2010). Through this, L’Oreal entered the US market to promote its high quality and localized products. It bought Maybelline in 1996 and revamped the entire brand as fresh and affordable that guarantees as being trendy (Henderson, R., & Johnson, R. 2010). The US is a huge market when it comes to personal care. It is one of the largest economies in the world with high levels of branding and marketing thus it only seems fitting that L’Oreal cashed in on this opportunity of entering the US market (Henderson, R., & Johnson, R. 2010). It is a highly capitalistic country strongly believing in the freedom of economic forces and promoting competition to bring best offerings for the customers and consumers. The company has established a research institute for Ethnic Hair and Skin Research in Chicago. Since the US has one of the highest purchasing power parities in the world, it...
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