Background

Business Problem Statement Alternatives

Presented by T-GEMBA Team 2:

Recommendation
SWOT Analysis

Lesley Ann Anderson, Patricia Castaeda-Davis, Patricia Eaton, and David Holcombe

LOreal started in Clichy, France in 1907 Annual revenue of 53.4 billion French Francs in 1996 ($1.09 billion US) Owns 25 global brands
Cosmetics Hair color Skincare

High-end: Lancome, Biotherm Mass market: Plenitude

LOreal Corporate Marketing Strategies

Trickle Down and Fire Up

Revenue from mass market products to fund their R&D for high end products; e.g. Lancome and Biotherm Maintain premium pricing to reinforce quality and performance

LOreal Corporate Marketing Strategies Golden Rules of Advertising Focus advertising on star product Provide evidence of technological superiority Depict an executive, up-to-date and assertive executive woman

Plenitude Skincare Line Class for the Mass

1982 launch in France Designed for mass market (class of the mass) 1987 became market leader in France Decided to export class to mass formula to U.S.

and other global markets

Strategic Marketing Decision

Continue with their star product system of promoting Plenitudes new Revitalift Eye or Develop the younger franchise through improving their value proposition in cleansers and daily moisturizers

Alternatives
1. Stay the Course 2. Target Mainstream 3. Combined Approach
Innovative Technology Product Sophisticated Treatment
(Moisturizers & Cleansers)

Launch Daily Line

Moisturizers & Cleansers

Simplified Mass Market Channel Mother/Daughter

Technical Leader Sophisticated & Simple Full Range of Products Mass Market Channel Stress Out & Age Focus Mother/Daughter Skin Care Leader Full Range of Products Innovation for All Technical Leader Sophisticated
Products Priced by Value

Mass Market Channel Place Stress Out & Age Focus

Star Products Promotion Trickle Down & Fire Up Cooperating Retailers Higher Price Point Price because Im Worth it Priced for Innovation

Best Products and Price Easy to Use Innovation Retailer Leveraging

Price Competitive because I can afford it Value pricing

Improve the top-line Get the bottom-line moving in the right direction. Position the U.S. to be a major contributor to the brands position globally. Ensure suitable skincare products for U.S. customers within LOrals technology portfolio.

Alternatives
1. Stay the Course
Innovative Technology Product Sophisticated Treatment
(Moisturizers & Cleansers)

Mass Market Channel Place Stress Out & Age Focus

Star Products Promotion Trickle Down & Fire Up Cooperating Retailers Higher Price Point Price because Im Worth it Priced for Innovation

Stay the course Reinforce LOreal skin cares position as a innovation technological leader Stay focused on mature skin segment treatment products Revitalift Continue daily moisturizers and cleansers Stay in mass market channel Star product promotion strategy Maintain premium pricing

Strengths
Competitive Edge Innovative technology LOreal brand recognition Revitalift product potential Mature skin market segment

Weaknesses
No differentiation in daily moisturizer/cleanser market High advertising costs Lack of profitability

Opportunities
Further develop mature skin segment with Revitalift Eye Gain mass market share via Revitalift product Revise pricing strategy and reduce advertising costs

Threats/Risks
Competition from Olay in mature skin segment Lack of acceptance from youthful customers