L'Oreal

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Summary:
Executive summary
8C’s
Strategic alternatives
Strategic recommendation
Tactical marketing plan

Executive summary:
The strategic problem is: L’Oreal can’t duplicate the success of the ‘’class to mass’’ strategy in the US market for the Plenitude products line. The main critical causes led to this problem are:

* US consumers behavior is totally different from French consumers consumer * Positioning of the Plenitude product line which was not suitable to the US market * Brand perception by the US consumers

* The inadequate execution of ‘class to mass’ strategy in the US market Opportunities
Repositioning the Plenitude brand may help attract a wide range of US young consumers Higher consumer expectations from the brand
Strategic alternatives:
* Position the plenitude as a treatment targeting older market segment * Review the plenitude product line design and communication in order to attract the youth market * Keep the plenitude as the premium brand without the mass strategy

I. Situation analysis:
1. Market attractiveness:
“Plénitude” market is the consumer goods market particularly Health and beauty aids and specifically body care items market. Market $ volume: $799MM- Moisturizers: $ 471MM and cleansers: $ 328MM Market growth: Average 11% for moisturizers and 7% for cleansers

Market forces:

* Potential of entrants (high) We have to use our core competencies (technology and marketing) to differentiate “Plénitude” from competitor product. * Body care items become a commodity product so barriers to entre the market can be overcame by mass volume production, quality, promotion and pricing. * No product differentiation: the same benefit from all brands (skin care product) Consumers can switch easily between competitors * Competitors have an easy access to the channel (multinational consumer goods companies are in the market P&G, Unilever, J&J) and the product is in the mass-market consumer goods. Competitor uses the mass production leverage to be aggressive in prices. * Market growth: the market has a 2-digit growth Competitor attractiveness

* Buyer power (high): We have to be aggressive in our marketing strategy to gain and keep our customers

* Customers are confused in their perception of products benefits and are price sensitive Customers can switch easily to competitors

* Competitive Rivalry (high) We have to differentiate “Plénitude” from other product in the market
* The body care market is mass-market industry where costumers have the possibility to choose among a high number of products with the same benefits from many competitors.

2. Competition analysis:
The company is competing against US Market leaders
* P&G
* Unilever
* J&J
And with the strongest European competitor:
* Nivea
Many other competitors are selling in the Market: the 7 strangers company in the Market have less than 20% Market share. Products attractiveness:
Aspects | L’oreal (plénitude)| Oil of olay | Pond’s | Motivation for Trial| Premium and Expensive | Generated by information \Advertising | Seen as a staple of life| Product satisfaction sources | Good quality product | Light and reasonably priced | Reliable accessible and reasonably priced | Brand imagery | Hard to understand | Traditional, generational brand | Older and down to earth|

Competition analysis:
STRENGTHS * Competitors master marketing and selling goods in the US mass-market * Simplified products adapted to the mass-market * Customers comfortable with their product (Trustiness)| WEAKNESSES * Technologically a step behind * Old fashioned products |

3. Company competition advantage:
Core competencies of the company are:
* Production and innovation in advanced body care products * Marketing and selling high body care quality products

Competitive Advantages:...
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