L’Oreal Nederland B.V.: Introduction of Products from the Garnier Institute of L’Oreal
[WITH INSTRUCTOR COMMENTS IN CAPS]
Executive Summary & Table of Contents L'Oreal presently offers the following products in the Netherlands: Plenitude and Recital under the L'Oreal brand name, and Ambre Solaire under the Garnier Institute brand name. L'Oreal Nederland has been considering whether to introduce the Synergie skin care line and Belle Couleur hair colorants line into the Netherlands. Synergie and Bele Couleur are marketed under the Garnier Institute name in France. The Netherlands market has several challenges: new product launches are difficult (especially from a relatively unknown company like Garnier) and the distributor channel is becoming more powerful. Also, retailers have been offering their own private-label products and can develop them at lower prices within 6 months. We had first considered adding Synergie and Belle Couleur under the Garnier name and positioning them towards the lower end of the market price-wise. However, we feel this is inherently too risky. L'Oreal, even under the Garnier Company name, does not want to wage war in the commodity market of cosmetics. There may not be enough product differentiation to disallow the Garnier products from cannibalizing the L'Oreal products. People would eventually find out the Garnier and L'Oreal were the same Company, and that could "cheapen" the whole product line. L'Oreal is a premier supplier of quality cosmetics, and we did not want to become misaligned with the Company's branding image. [PERSUASIVE REASONING] We feel bold moves are needed, so we are proposing to discontinue Garnier as a separate company in the Netherlands. It simply does not make sense. The Company does not have its own sales force, and it is difficult to have products reformulated to meet the specific needs in our market. What makes sense is to leverage the great name and reputation of L'Oreal and use labeling such as "From the Garnier Institute" on particular products in order to differentiate them and promote them in the market. [INTERESTING] Therefore, we will offer the following products, all from the L'Oreal Company: Plenitude from L'Oreal Recital from L'Oreal Synergie from the Garnier Institute of L'Oreal Belle Couleur from the Garnier Institute of L'Oreal Ambre Solaire from the Garnier Institute of L'Oreal We will differentiate the L'Oreal and Garnier Institute labeled products through targeting different customer segments. Plenitude and Recital will focus on the older, more upscale segment of the population. Synergie, Belle Couleur, and Ambre Solaire will be primarily targeted at a younger, trendier, and more fashion-conscious audience. We will position the L'Oreal products at the high end of the mass market and the Garnier products at the middle portion of the mass market. We felt it very important in this competitive market to "capture" consumers early and win their loyalty as future customers. That is why we are positioning the Garnier products this way. We can also better manage the life cycle of a particular customer through our line stretching. For example, a customer gained through effective marketing at a young age can continue with Synergie or continue on to the Plenitude line of products. [WORKS WELL WITH CONSUMER BEHAVIOR, MARKET SEGMENTS, AND THE CHANGES IN DEMOGRAPHICS]
The details on how we will accomplish this, along with more background, are all detailed in the following sections: I. Current Marketing Situation II. Opportunity & Issue Analysis III. Objectives IV. Marketing Strategy V. Action Plan VI. Controls & Contingency Planning VII. Projected Profit and Loss Statement I. Current Marketing Situation Market Situation • Any new Garnier products launched in the Netherlands must have a strong concept and high market potential. • Launching new products necessitates offering unique, desired, and identifiable differential advantages to Dutch consumers....
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