Ch. 8 - Segmenting and Targeting Markets

L'Oreal, the world's largest cosmetics and beauty company, was founded in 1907 by the French chemist, Eugene Sculler. After a little over a century of steady growth, L'Oreal has jumped from being a small family business to become the world’s leader in the cosmetics industry. Today, the L'Oreal group has regions in more than 150 countries in the world that are home to 283 branches, more than 100 agents, 50,491 employees, 42 factories, and more than 500 high-quality and popular brands of cosmetics. Their "global or nothing" strategy allows L'Oreal to take market segmenting even further by custom developing and marketing products to meet the specific demands of any given country or region.Loreal's Segmenting and Targeting Markets

    In order to clarify different product positioning in Asia, L'Oreal decided to move from “the open-shelf brand” in Europe up to “the top international brand” in Asia. In Asian countries, L'Oréal set up their counters in upscale department stores according to the Asia specific marketing channel strategy. However, this “accessible luxury brand” strategy did not meet the levels of success they anticipated. The reason for this is that the image of the texture or packaging of their products failed to reflect the luxury image that are so important to marketing in Asia. They failed to understand the significance of the fact that texture and packaging in Asia is more delicate than the required standard in Europe. L'Oréal must prove that the quality of their product shows "significant improvement" if they are to obtain market recognition while moving up their prices in the Asian markets.

 In 2003, L'Oréal created a new line of teeth whitening products in order to open up Japanese and Asian markets. Unlike those products made for the U.S. and Europe, the flavor of the creams and gels sold in Asia have a more oily texture and a more intense flavor. In order to meet the expectations of consumers in Asia, they are also more delicately designed and packaged. 

Ch. 8 - Segmenting and Targeting Markets

In a world that is constantly changing, Communication teams play a key role. Their mission is to increase awareness, ensure long-term reputation and build up the image of the L’Oréal group and its brands.

Nowadays a brand or a group’s reputation accounts for 75% of its value and persuasion and influence are becoming ever-more decisive in buying. The challenge for brands is therefore to have effective communications that will make them stand out in a saturated environment.

Moreover, with the ever-greater number of information sources and channels, media relations, public relations and special events are now only one aspect of working in communication for L’Oréal. The trend is towards multi-channel strategies that include communication 2.0/social media and multi-targets (journalists, bloggers, influencers, celebrities, consumers, the scientific community, employees and other influencers) who use the entire range of communications tools, partnerships, events, sponsorship, media relations, CSR, crisis management, public affairs, etc. to increase awareness of the group and its brands.

Ch. 10- Product Concepts

                                   
                            

For L’Oréal, science and beauty products are a combination of expertise and sensitivity. The fields of research and innovation are not purely creative but also based on an understanding of customer needs and a view of the cosmetics market now and in the future.

L’Oréal’s research and innovation teams constitute a multicultural community that includes a large number of disciplines (over thirty specializations) in every branch of science and this trend is set to grow in the future. These teams are driven by a shared enthusiasm: inventing and perfecting innovative high-performing cosmetics, contributing to the well-being of men and women all over the world. They achieve this by forever exceeding the boundaries of life- and materials-sciences without ever losing sight of what their customers want.

L’Oréal’s Research and Innovation is divided into 4 main branches: advanced research(developing knowledge in the major scientific fields related to L’Oréal’s business and the creation of predictive evaluation models), applied research (creating formulae and developing new product concepts), development (developing new formulae for providing the brands with safe, innovatory products) and support functions (regulatory affairs, patents, customer surveys, etc.).

ADVANCED RESEARCH

Advanced Research teams create and develop performing and sustainable actives. By feeding the group métiers with new products, their work allows L’Oréal to take up the challenges of innovation and sustainable development.

L’Oréal researchers are looking for:

• Improving their knowledge in many scientific fields (biology, biotechnology, biophysics, chemistry, physics, physical chemistry, modeling…)
• Being open to the world through what we call “open innovation”
• Creating from upstream new models for evaluation of the actives safety and performance, by using very varied tools and methods (from numeric to reconstructed skin)

APPLIED RESEARCH

L’Oréal Applied Research teams create the prototype formulas of the actives stemmed from the Advanced Research. They also select the formulas that lead to new cosmetic properties or improve those already existing. Responsible for the right technology transfer with the Advanced Research, they study the behavior of the ingredients stemmed from the “local” research or suggested by the group’s suppliers, by approaching them as “product concepts”. After a complete evaluation, they can then hand over to the development teams the job.

DEVELOPMENT

Development teams work out new formulas and make sure that the best performing products will be available for the markets in the best safety conditions for both consumers and the environment. They provide the brands with a constant stream of innovative products and make for them recommendations for use based on the regulatory specificities of the different countries where the group is established.

SUPPORT FUNCTIONS

They include:

• Analytical evaluation, safety and global efficiency evaluation of raw materials and formulas
• Knowledge of the different regulations for the product validation and communication and the establishment of regulatory records.
• Industrial protection of the discoveries made within the group
• Resources management (projects, teams, budgets…)
• Consumer insights