L'oreal case study

Document Type:Proposal

Subject Area:Engineering

Document 1

This is evidenced by the fact that as of 2010, the percentage of revenue allocated to research and development upstaged the competition by as much as 2 percentage points (Hernderson and Johnson, 2012, 1). The company focused on becoming global and achieved this by focusing on making national proven brands more global. This paper focuses on the measures that the company took, in order to become and remain successful, amidst stiff competition in a dynamic market place. Marketing Strategy Adopted by L'Oreal The company seems to approach marketing from various different perspectives. This approach can be referred to as the marketing mix strategy. The company was traditionally a women's brand but in 1999, the company started targeting men with products such as L'Oreal Feria and Casting ColorSpa, both men's products (Hernderson and Johnson, 2012, 2).

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Acquisitions in companies in multicultural markets also secured the company's position in market segments that the company had not previously charted before. Price L'Oreal was always known for its prestige. The company did not compromise its quality in order to suit its pricing needs especially for middle to lower income consumers. Instead, the company acquired companies that could achieve this purpose while maintaining its brand integrity. The company was transitioning from a national company to a global one with different consumers who had different needs. Product promotion was an essential part of this process and the company took it in stride. The company spent over 4. 56 billion dollars in advertisement worldwide, the large largest as of 2009 and an additional 7 billion dollars in marketing outlays.

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Initially, most of the ad spend was channeled to television, print and billboards but with the increasing preference to digital media, the company has continually pivoted its advertising towards internet marketing. The execution of the market strategy was therefore effective since the products being marketed were already tested under various conditions which increased chances of success for the company. Company Organization The internal organization of the company is specifically structured to execute its marketing strategy. The company was organized into three major groups; the cosmetics, the body shop and dermatology branches. These three branches are further broken down into consumer products. luxury products, professional products and active cosmetics divisions. Setting Goals and Tactics The company is looking into the future and has set goals and objectives to achieve within a given time given time frame.

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By 2020, the company plans to have increased its consumer base to 2 billion and increase sales from emerging markets by 20 percentage points within the same time frame (Hernderson and Johnson, 2012, 4). In a sense, setting goals is the crux of the marketing strategy. With the management having set the goals to achieve within the time frame allocated, it is easier to come up with tactics through which it should market its products so as to achieve the goals within the allocated time frame. Advertising Methods/Brand Awareness Advertising methods are an integral part of the marketing plan. 7% of their revenue on research and development, L'Oreal spent 3. 5% of its total revenue on research and development (Hernderson and Johnson, 2012). While the research and development the company undertook paid off in the long term, in the short term, shareholders had to get lower dividends and therefore the trade-off.

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Print Vs Digital Media Initially, L'Oreal had a strong reputation in print media, with a high level of consistency in most high end fashion magazines. The firm invested heavily in this form of advertising because it believed that print would still continue to be a dominant factor in its marketing efforts. An individual surfing the net is likely to get distracted and looking at other more interesting materials compared to print media where there are lower chances of being distracted. This leads to the competition that is in digital media platforms with emphasis to advertising (Hernderson and Johnson, 2012, 7). Like mentioned above, digital media has a lower barrier of entry given its low costs. This means that millions of companies, regardless of their size are clamoring for the attention of the consumers.

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There are high chances therefore that the company can miss reaching its target audience. The Importance of Research One of the most pertinent issues in the L'Oreal case study is the importance of research before implementation of a marketing strategy; global or otherwise. The case study details in minute detail the lengths that the company went into in order to research new markets and the target audience. The company spent as much as 3. 5 percent of its revenue towards research and development. This involves researching new markets and its challenges, the competition, trends, target audience and their preferences. Other companies with the capability to acquire other companies strategically to meet its objectives instead of spending copious amounts of finances and facing numerous risks that face start-ups.

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In addition to this, the company aligned its brand with reputable images that its audience could identify with. For example, the company was at the time one of the core sponsors of the Cannes Film Festival, an international event that is associated with prestige and glamour. This both maintained the image that was associate with the brand as well as attracted potential consumers. In addition to this, the company negotiated terms with film makers to place their products in various high budget films to attract audiences. The protection of the brand allowed the company to maintain its reputation while at the same time catering for the diverse needs of a global audience. It is important for companies to establish an image and once it resonates with their core audience, try to maintain the image at all costs.

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