Bringing Class to Mass

PLENTITUDE

LOREAL
Beauty products! Personal + Technology 300 mn $ on Research, 300 new patents Hair care distribution channels: beauty salons and mass outlets Skincare: Department and Specialty as well as mass Competitor: P&Gs Oil of Olay and Nivea

Revenue Distribution by Geography

Latin America 6% USA & Canada 20%

Asia 6%

Rest 5% France 23%

Rest of Europe 40%

AN INTRODUCTION

A journey from French to US

To reap What to change, & what to keep

Key Strategy: trickle down and fire up

Key Areas: improve topline, bottom line, target US

Key Problem Area Analyze if the French strategy will work in US?
Marketing product mix, premium pricing star system of investment Organizational structure

PLENITUDE
High end, superior performance but accessible 30% price premium US- Reduces signs of Aging 54% users in 40% of segment Stressed out and Age focused Positives L'Oreal brand, full product line

PROBLEMS
Product No Localization - Product designed for France market launched in US only with minor modifications. Problem of plenty Too many variants focussed on narrow segments resulting in a confused / non interested buyer. Over Delivery Product over delivered and hence overpriced compared to competition. Price Multiple price point- having 3 to 4 price points confused customers. Need to rationalize. Over Priced Product overprized for the target segment. Addressable Market - Only 40 % ( Stressed out & Age focussed Segment)

PROBLEMS
Place
No Salesperson Clearly hampered ability to communicate as PoP displays were poor substitutes. HBA section vs. Cosmetics Company had no prior relationship with HBA buyers. Took competition head on by being right next to Olay. Promotion Share of Voice 18.83% compared to 31% of competitor. Packaging - Lots of data. Suited for category with high involvement. But the mass segment is more visualize than verbalize. It gives our brand a therapeutic feel. Lost in Translation Messages just translated from French to US. Communication Focus Product ended up as an Treatment Product and less of a Daily Product

COMPETITIVE POSITIONING
Ponds
Older, down to earth

Oil of Olay
Traditional and generational

Loreal Plenitude
Caught in no mans land

The game
Brand Power L'Oreal The concept Plenitude The User and Market CHANGED!

R&D, Technology

REMAINED THE SAME

MARKET SIZE

Increasing Trend in Total Retail Market for Moisturizers and Cleansers. Stagnancy in Plenitude sales for both category.

US MARKET ANALYSIS
Assumed that advertising spending in all brand used for moisturizers and cleansers Plenitude has poor advertising performance than Olay and Ponds Plenitude brand not strong recognized in US Market study divide consumers into 5 segments:
22% 17% 26% 17% 18%

Unconcerned Price Conscious Socializers Age Focused

Ingredient Apathetic Stressed Out

ACCEPTOR/REJECTER STUDIES
Motivation for Trial Brand name cited Brand name meant Department store quality Respond to Product Formulas Young rejecters found it too heavy and greasy Didnt absorb into skin

Perception as Full Product Line Having large number of products but have plus and minus Individual products could be more helpful in through the line

Respond to Packaging Packaging seemed feminine and expensive look Confusing and have lot to read

Perceived Target Consumer Perceived targeted to older women Not for 20s, and maybe not even 30s

BRAND DEVELOPMENT
Taken from Exhibit 11

Brand

Aware

Ever Tried

Conversation Ratio

Currently User

Retention Ratio

Oil of Olay Ponds

Avon Revlon Plenitude Nivea

96% 93%
91% 90% 78% 76%

77% 52%
68% 35% 23% 26%

80 56
75 39 29 34

34% 16%
23% 10% 7% 6%

44 31
34 29 30 23

Low Consumers Ever Tried Low Conversation Ratio Low Current Used Low Retention Ratio

Poor Plenitude Sales Performance

COMPETITOR ANALYSIS
Aspects LOreal (Plenitude) Oil of Olay Ponds

Premium and Motivation for Expensive Trial

Product Satisfaction Sources Brand Imagery Good quality product

Generated by information / advertisement

Light and reasonably priced Traditional, generational brand

Seen as a staple of life

Reliable, accessible and reasonably priced Older and down-to-earth

Hard to understand

SWOT ANALYSIS
Weakness Strength
Great Research and Development Department Expertise in handling Cosmetics for years Known for Quality Superior Technological Products Lack of Awareness About L'Oreal Products in US Market Lack of Consumer Insight in US Market Confusing Packaging Too many Products posed confusion to Consumer

SWOT
Opportunity
Entering into mass channels Upscaling skincare business Available in speciality stores Launching new product Revitalift Eye to bring technological superiority.

Threat
Suitable skincare products for U.S market Pricing structure(Expensive) Competition with Ponds it is rated higher on availability and good value for money

PORTERS FIVE FORCES

Threat of substitutes
Low vertical competition.

Threat of new entrants

Difficult for a new entrant to enter to reach the same R&D expertise. Create a distribution network from scratch. High brand recognition & trust for LOreal

Low threat

Moderate threat.
Threat of Competitors High no of competing firms (Eg ponds, P&G). Rivals sell similar product/service

High threat

Bargaining Power of customers Low brand loyalty. Easy switchers.

Bargaining Power of Suppliers

L'Oreal has many suppliers in processing their product. So their bargaining power is low.

High Threat Low threat

4 PS PRODUCT, PLACE, PRICE AND PROMOTION

PRODUCT

PLACE

PRICE

PROMOTION

PRODUCT

PLACE

PRICE

PROMOTION

Product development needs to be given emphasis on:

Needs to be less oily, non-greasy Should be light and should easily get soaked into the skin Less of a make-up substitute and more of product quality in terms of value-benefits to the customer

PRODUCT

PLACE

PRICE

PROMOTION

PACKAGING
Simple packaging- Picture, Brand name, type of product Change the positioning statement from reduces the signs of ageing to something like younger looking skin locked down forever Model shown on the package should be young in her late 20s rather than on the modern women positioning as U.S mass perceive the product to be for the older women Single brand name followed by the type of product- Eg. LOreal Plentitude- moisturizer, cleanser, wrinkle defense, eye defense, treatment moisturizer rather than Excell-A3, Hydra Renewal, Action Liposomes that is beyond the understanding of the mass, leading to nothing but confusion Emphasize on the parent name Loreal than that of product linePlentitude as it has a higher connect among people Technological details along with user directions to be provided inside the pack and a lot of while space to be kept on the outer package

PRODUCT

PLACE

PRICE

PROMOTION

We decide to strategize our selection of place for effective sales

Mass merchandizing can be done in areas like malls, supermarket, hypermarkets, convenience stores of those products that have high sales/month. Eg
Sr. No
1 2 3 4 5

Product
Revitalift Face Eye Defense Wrinkle Defense Cream Excell Cream Hydra-Renewal Cream Jar

Size
1.7 oz. 0.5 oz. 1.4 oz. 1.4 oz. 1.7 oz.

% Volume
5,679,850 2,297,597 2,193,248 1,580,213 1,559,063

PRODUCT

PLACE

PRICE

PROMOTION

In drug stores and departmental stores, entire range of plentitude can be displayed.
Customer can get what they need for their skin In terms of understanding the technological aspects of the product, sales people can help them take a sound decision Product benefits and features can be effectively explained by the attendants making it customer centric & exclusive as against its players in the market Effective CRM can be established at these stores

Since Revitalift of Plentitude is doing good, make them available in all types of outlets by increasing the point of visibility

PRODUCT

PLACE

PRICE

PROMOTION

Price remains unchanged of LOreal product line Plenitude Selective pricing observed during promotion for customer attractiveness (refer Promotion slide) MRP remains unchanged

PRODUCT

PLACE

PRICE

PROMOTION

More towards technologically advanced Spend more on R&D to come out with the right product for their consumers

PRODUCT

PLACE

PRICE

PROMOTION

Positioning for the consumers who like to be highly involved(like to spend more money on themselves) More towards Stylish upper class

PRODUCT

PLACE

PRICE

PROMOTION

POINT OF PARITY

The product line:

Daily moisturizer Treatment moisturizer Cleanser

POINT OF DIFFERENTIATION For the consumer who love their skin and want to know more about the product to look young and beautiful (highly involved) For the people who think they are worth it They are technologically advanced For the upper class consumers Spend a lot on R&D Spend a lot on advertisements and for product support LOreal products are premium

PRODUCT

PLACE

PRICE

PROMOTION

SKUs in the form of sachets for sampling of moisturizers Cleaners coupled with moisturizers- Complementary offer Point of visibility at retail outlets. Eg. Counter Branding, flanches, shelf branding etc Use of Social media platform interactive website
Communicate the advantages of our treatment cream (it being thick and oily) Communicate about the different product lines and for what they must be used Develop a feedback forum- Accept the complains or suggestion of the consumers and address their grievances, if any

RECOMMENDATIONS PRODUCTS
Trimming productline: focus on mass products Re-formulating product basis customer feedback

CONSUMER
US consumer as opposed French are utility driven different positioning Promotions and campaigns to be localized for greater mass appeal

Leading range like REVITALIFT to be leveraged to promote other products More effective communication focused on product value to justify premium pricing

THANK YOU..!!

Group 3
Rajneet Kaur Rupani Ameet Khalsa Shraddha Nikam Akshay Patel Shivika Gupta Swati Joshi Anirban Ghosh Garima Malik Komal Suri Dewanshi Gautam Tejas Shinde