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.