L'Oreal Building a Global Cosmetic Brand

Question 1:

Yes, of our point of view the strategies were primarily responsible for L'Oreals impressive financial performance and its amazing brand recognition. This is because it made sure that each of its brands had its own image and took care hat its image do not overlap with the image of another product or company. Developing of new innovative products a strong Development & Research Department with a lot of know how. They expanded in important national markets and invested in new facilities. Adding glamour to its brand to make it more appealing and famous was another factor for its worldwide known performance.

QUESTION 2 acquiring an existing brand Advantage
 Economies of scale
 Profit centers are already in place
 Expand geographically
 Better positioned to evaluate intrinsic value
 Complement your existing product lines
Disadvantage
 Hard to chose a befitting one
 Failure to clear seller's potential liabilities
 Over leveraging

creating a new brand Advantage
 Spread the culture of its own company
 Explore the new area
 Get the support from the local government
 Expand the effect of own brand
Disadvantage
 More expensive than acquiring the existing one ,hard to run
 Create the new market ,it will take a long time
 If it is fails, it may affect you main brand product

Question 3 L’Oréal maintained a large portfolio of brands and was present in all the four segments of the cosmetics market. What positioning strategy did the company follow to ensure that the image of its brands did not overlap? How and why did L’Oréal encourage competition among its brands in a particular segment and at the same time prevent the brands from cannibalising each other?
Encouragement of competition by L'Oreal among its own brands
It followed a multi brand strategy i.e same kind of products under different brands
It helps to adapt market differentiation and improve market shareby providing equal