20-10-2012, 04:46 PM
L 'Oreal - Facial Cosmetics
L \'Oreal -.docx (Size: 57.38 KB / Downloads: 44)
Before the facial cosmetics, L’Oreal was known as a hair-color formula developed by French chemist Eugene Schueller in 1907. It was then known as”Aureole”. Schueller formulated and manufactured his own productswhich were sold to Parisian hairdressers. It was only in 1909 that Schueller registered his company as “Societe Francaise de Teintures Inoffensives pour Cheveus,”the future L’Oreal. Scheuller began exporting his products, which was then limited to hair-coloring products. There were 3 chemists employed in 1920. In 1950, the research teams increased to 100 and reached 1,000 by 1984. Today, research teams are numbered to 2,000 and are still expected to increase in the near future. Through agents and consignments, Scheuller further distributed his products in the United States of America, South America, Russia and the Far East. The L’Oreal Group is present worldwide through its subsidiaries and agents. L’Oreal started to expand its products from hair-color to other cleansing and beauty products. The L’Oreal Group today markets over 500 brands and more than 2,000 products in the various sectors of the beauty business. Such includes hair colors, permanents, styling aids, body and skincare, cleansers and fragrances. Indeed, the L’Oreal Group have reached the peak that all cosmetic brands sought after.
When it First Entered the Market
• Gender Segmentation: L’Oreal first segmented the population into the different sexes as they thought their products’ “combination of low price and natural ingredients would fit India’s market, where women use plants and herbs as part of their beauty culture”. Their product specifically catered to the women of India, though later our group discusses how it should carve a niche market for itself in the Men’s sector as well.
• Income Segmentation: L’Oreal segmented the market into 2 main segments: the poorer masses and the rest. It marketed its product as low in cost to attract the poorer masses, and her efforts in reducing ingredients to cut price reveals her aim to minimize costs as much as possible. At this point of time, it was not yet targeting the affluent middle class or upper class and thus did not make any distinct segmentation of the richer classes, preferring to regard them as a whole entity.
The “L’Oreal Makeover”
After a poor start, L’Oreal approached the market with a different concept. Presence of home brands posed problems as they had already captured a large proportion of the masses’ market share. They offered cheaper products to buyers at a price which L’Oreal was unable to match, and their long presence had established a strong sense of loyalty in the buyers, making it difficult to pry them away. With the understanding that it needed to capture a different market, it proceeded with a different from of segmentation in order to better identify its target segments
L’Oreal targeting and positioning its products
L’Oreal now targets the young affluent middle class females, especially those with graying hair, and also maintains some effort in targeting the masses. It saw a need to target this new untapped market for maximum profits as it not only possessed the purchasing power that masses lacked, but more critically a modernized mentality that made these people more receptive to purchasing L’Oreals’ more luxurious and expensive products.. While retaining their core values of thriftiness, [the young middle class were more willing to spend on luxuries and formed the heart of transformation of consumer spending in India].
L’Oreal also target women that sought benefits from using its products. Since there was previously no product that solved women’s hair greying problems, L’Oreal introduced Excellence: Crème that promised additional benefits apart from just dying of hair. It did not damage hair like henna or ammonia but even promised to strengthen it. The young middle class fit into this segment well because unlike their older predecessors, who did not mind using products that damaged their hair as long as they were cheap due to monetary problems, these women were more educated and concerned for the need to have healthy beautiful hair, as well as more equipped with the purchasing power to do so. Cheap harmful products would not appeal to them as much as high quality L’Oreal products which justified their higher price with higher benefits.