Case Study 7.1 L’Oreal’s Segmenting and Targeting Markets Tzu Yin Chung
California International Business University
Strategic Global Marketing
Dr. Tim Becker
April 17, 2013
L'Oréal, the world's largest cosmetics and beauty company was founded in 1907. After nearly a century of efforts, L'Oréal from a small family businesses jumped to the leader of the world cosmetics industry. L'Oréal Group has regions in more than 150 countries in the world with 283 branches, more than 100 agents, 50,491 employees, 42 factories and more than 500 high-quality brands. All kinds of cosmetics sold around the world are popular. This allows L'Oréal to take market segmenting even further by custom developing products that meet the needs of that particular country. By adopting a "global or nothing" strategy for all brands L'Oréal is able to market their products to countries all over the world. In order to clarify different product positioning in Asia, L'Oréal decided to move from “the open-shelf brand” in Europe up to “the top international brand” in Asia. L'Oréal set up their counters in the department stores for their marketing channel strategy. However, L'Oréal’s “accessible luxury brand” strategy was not succesful in Asia. The reason is that the image of the texture or packaging is still stuck in the "open-shelf quality". Texture and packaging in Asia is more delicate than the required standard in Europe. L'Oréal must prove that the quality of product has "significant improvement" to obtain market recognition while moving up their price, it didn’t perform well in the beginning. In 2003, L'Oréal invented new produce line in order to open up Japanese and Asian markets with whitening products. Unlike U.S. and European, the flavor of cream is more intense, more oily texture with delicate packaging to meet the needs of consumers in Asia. L'Oréal convey its French brand image of "Paris" through all kinds of global advertisments. Not only for promotion,...
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