L'Oreal , case study
CEMS Case Study
“L’Oréal (A): Fighting the Shampoo Battle”
Case Study
“L’Oréal (A): Fighting the Shampoo Battle”
At the end of June 1997, L’Oréal’s Chairman and CEO, Lindsay Owen-Jones, called a meeting to study the European shampoo market. Although L’Oréal had several shampoo brands, among them Elsève, the shampoo market had never been one of the company’s main priorities because margins were extremely narrow. In addition to that, consumers perceived very few differences and therefore positioning and differentiating a particular brand was a trying task.
Still, Lindsay Owen-Jones was convinced that L’Oréal’s Elsève brand had a lot of potential. It was the market leader in France and the challenge was to make it a leader throughout Europe. This would involve constant research on new formulas, targeting new market segments, introducing new packaging, a new communications strategy and maybe even changing the trademark, typography and colours.
L’Oréal couldn’t ignore the competitive environment that surrounded the firm.
Competitors were very active and aggressive. Procter & Gamble had recently introduced Wash & Go, a 2-in-1 shampoo and conditioner. One of the meeting’s main subjects of discussion was the high penetration rate that this product had achieved in its introduction. Would the 2- in-1 concept be valid in the long term or was it just another passing fancy? How should Elsève react to their competitor’s new product?
Neither could L’Oréal overlook the fact that there was serious competition from other major brands –among them Pantene, the European market leader– which were very international and increasingly using global marketing strategies. The question was whether Elsève could become part of this international group of brands. Elsève’s experience and the keys to its success in France were very likely points to keep in mind when designing a global strategy for the rest of the world...
Copyright © 2000 CEMS.
This case was written
“L’Oréal (A): Fighting the Shampoo Battle”
Case Study
“L’Oréal (A): Fighting the Shampoo Battle”
At the end of June 1997, L’Oréal’s Chairman and CEO, Lindsay Owen-Jones, called a meeting to study the European shampoo market. Although L’Oréal had several shampoo brands, among them Elsève, the shampoo market had never been one of the company’s main priorities because margins were extremely narrow. In addition to that, consumers perceived very few differences and therefore positioning and differentiating a particular brand was a trying task.
Still, Lindsay Owen-Jones was convinced that L’Oréal’s Elsève brand had a lot of potential. It was the market leader in France and the challenge was to make it a leader throughout Europe. This would involve constant research on new formulas, targeting new market segments, introducing new packaging, a new communications strategy and maybe even changing the trademark, typography and colours.
L’Oréal couldn’t ignore the competitive environment that surrounded the firm.
Competitors were very active and aggressive. Procter & Gamble had recently introduced Wash & Go, a 2-in-1 shampoo and conditioner. One of the meeting’s main subjects of discussion was the high penetration rate that this product had achieved in its introduction. Would the 2- in-1 concept be valid in the long term or was it just another passing fancy? How should Elsève react to their competitor’s new product?
Neither could L’Oréal overlook the fact that there was serious competition from other major brands –among them Pantene, the European market leader– which were very international and increasingly using global marketing strategies. The question was whether Elsève could become part of this international group of brands. Elsève’s experience and the keys to its success in France were very likely points to keep in mind when designing a global strategy for the rest of the world...
Copyright © 2000 CEMS.
This case was written