L Oreal External Analysis

Topics: Skin, Marketing, Competition Pages: 4 (735 words) Published: February 24, 2011
L’ Oreal External Analysis (Dutch Market)

Environmental Analysis:
There are several demographic changes in the Netherlands which influence the Dutch market. * Fast aging of population
* Fast growing segments now are 25 or older
* Increasing number of Dutch women work outside home
* Dutch women are delaying childbirth

Due to these demographic trends, Dutch women are becoming more self-confident and independent. Thus they have more disposable income to spend on cosmetics. Despite high per capita income in the Netherlands, per capita spending on cosmetics and toiletries is low.

Cultural Trends:
Dutch women still shopped for value and have an increasing interest in “natural” ingredients.

Technological Trends:
Many companies are seeking for technological innovation in the field, but innovation in products could be quickly copied.

Market/Sub Market Analysis:
Emerging Submarkets:
In the skin care market, different products have different position in quality and price. Thus, submarkets emerge by price and product. There are lower end, middle and upper end markets.

Size and Growth:
The skin care market is a fast growing market; it is the second largest fragment of the whole Dutch cosmetics and toiletries market. The market is still in its growth phase and therefore offers potential for new product lines.

Distribution Systems:
The main channels for selling skin care products are supermarkets and drug stores between which drug stores account for much more sales. Among those drug stores, chains and large independent ones are major distribution channels.

Cost Structure:
As a rule of thumb, share voice of a brand in this market should be about its market share. But new brands empirically need more share in promotion than its market share.

Trends in the Market:
The current trend in the market is to add specific products targeting different skin types. Furthermore, the Dutch market is very competitive...
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