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Channin Campbell
Samantha Chan
Sabrina Minaya
Erica Ryan
Rose San Juan
Itael Toibman
LOrals BACKGROUND
LOrals Strategy :
Quality, innovation and geographic
expansion
LOrals BACKGROUND
QUICK FACTS
LOral U.S.A.
Follow
PLNITUDE by LOral
PLNITUDE by Loral
LOral delayed
introduction of
cleansers until it
established a concrete
position in the French
mass moisturizer
market
Henkels
Diadermine
Nivea
19.6 %
13.0%
8.8%
US advertising positioning:
high end, superior performance but accessible
class of the mass (class to mass)
Reduces Signs of Aging
PLNITUDE U.S.A.
Advertising
1989
1990
Action Liposomes
1991
1992-93
1994
Excell-A-3
1995
Revitalift Face
1995
Sales
$31.7MM
Approx. $63.4MM
Advertising and
promotion
$35.5MM
$38.3MM
Pre-tax loss
-$25.4MM
-$12.5MM
5C Framework
Company
Competitors
United States
Oil of Olay, Ponds, Nivea
Worldwide
Estee Lauder, Clinique, Christian Dior, Chanel
Context
Consumer
Younger franchise
Working, successful and the career woman
Men
Collaborators
Department stores
Drug stores
Beauty salons
SWOT Analysis
Strengths
Innovative technology
LOral brand recognition
Product potential with Revitalift line
Mature skin market segment
Superior research & development
department
Experience in consumer cosmetic
products
Opportunities
Large US market
Opportunity to tap into younger
consumer segment
Many channels for LOral product
Revise pricing/marketing strategy to
increase consumer appeal
Opportunity to develop mature
market with Revitalift product
Weaknesses
No differentiation in daily
moisturizer/cleanser market
High advertising costs
Lack of profitability
Consumer behavior in US unknown
Unattractive product cover
No awareness in US market
Threats
Competition with Olays similar
product
Consumer loyalty to competitor
product
Expensive product image
Lack of acceptance from younger
market
Domestic products more widely
known
Problem Analysis
Will luxury companies in the next century, which
do not have the mass market base, have the
resources necessary to do the research to
compete?
I think the answer is no.
How LOrals Lindsay Owen-Jones, Chairman and CEO of LOral, saw the trickle
down and fire up philosophy.
Problem Analysis
The
LOral
LOral
The
Plnitudes
global success is
dependent upon its success in
the U.S. market.
LOral
Strategic Alternatives
Alternative #1: Focus on differentiation and target niche market
Description
Advantages
Disadvantages
Differentiate LOral
by focusing on
innovations in
specialty products.
Continues LOral's
success on innovation
Customers perceive
LOral brand for older
women or for women
with problems.
Advantages
Disadvantages
Eliminates consumers'
opportunity to make
choices
Advantages
Disadvantages
Enter competitive
pricing strategy
Current structure is 2
price points for
cleansers, 3 for
moisturizers, and 3 for
treatment moisturizers
Consumers would be
more likely to try and
convert to LOral
Negatively affect
financial performance
Advantages
Disadvantages
Target younger
customers with
cleansers and
moisturizers and older
women with the
specialty products
Financially challenging
to split marketing
resources
Advantages
Disadvantages
Educate American
consumers on how
French women take
care of skin
Financially costly to
educate women about
skin care
Not addressing a
consumer problem or
concern, but trying to
create a problem to
solve
Evaluation of Alternatives
Alternative #1: Focus on differentiation and target niche market
With this alternative one thing to watch out for is not taking too
much information out so that everyone is confused.
Recommendation
Our recommendation is to use a combination of
Alternative 1 and Alternative 2:
2.
1991
1992
1993
1994
1995
$309MM
$338MM
$375MM
$440MM
$471MM
Plnitude
11.7
13.6
14.1
13.8
14.0
Olay
38.3
36.1
32.3
29.7
28.2
Almay
5.4
6.0
5.6
4.4
4.6
Nivea
4.8
5.5
6.0
6.2
6.2
Ponds
5.0
4.6
9.1
13.9
15.1
1.0
3.8
5.7
5.4
7.0
6.5
5.7
4.8
5.2
Alpha-Hydrox
Neutrogena
Plnitude
Olay
Pond's
Alpha Hydrox
Nivea
Neutrogena
Revlon
Almay
Noxzema
Sea Breeze
Clean & Clear
$ Size Category (Retail)
Moisturizers
Cleansers
1995 Ad Spending3
14.0
28.2
15.1
5.4
6.2
5.2
4.3
4.6
$471MM
3.4
7.9
11.2
6.2
4.1
21.6
8.9
6.7
$328MM
$29.2MM
48.1MM
18.1MM
11.9MM
12.8MM
13.3MM
11.5MM
10.0MM
Alpha-Hydrox
Plnitude
Pond's
Nivea
Neutrogena
Olay
11%
35%
51%
73%
78%
88%
% Treatment
89%
65%
49%
27%
22%
12%
Financial Implications
Discussion Questions:
1.
2.
3.