L'OREAL GROUP'S INTERNATIONAL MARKETING STRATEGIES

L'Oreal Group's International Marketing Strategies

L'Oreal Group's International Marketing Strategies

Introduction

In 2005, the $18.89 billion L'Oreal group was the largest and the most successful cosmetics company in the world, with over 17 international brands. L'Oreal sold makeup, perfume, and hair and skin care products to both men and women in 150 countries. The group reported its 18th consecutive year of double-digit growth in December 2004. Since 1989, L'Oreal's sales had grown at a compounded annual rate of 12% to $1.7 billion. L'Oreal Group backed its product innovations with the 12th largest media budget in the world. In the late 1980s and early 1990s, "external charges", which included L'Oreal's advertising and promotions expenditure jumped from 37% to 47% of sales. L'Oreal increased its global ad spending to $1.25 billion in 1998, putting it almost on par with Coca-Cola.

Many cosmetic brands are popping up recently, perhaps, due to the increasing consumers of products that beautify and enhance the physical appearance of a person. Even though the market is already full of the said cosmetic brands, the company L'Oreal Groups could still be considered as the leading supplier of cosmetics and hair-color. This study is a brief overview of the marketing concepts and strategy of the said company. The company profile will be presented to be able to give a clear view of the market to which the company belongs to. An internal and external (SWOT) analysis of the company will also be provided in this paper. Another area will be specifically devoted to the implementation of the marketing strategy of the company as well as the ethical issues raised by these marketing strategies.

Company Profile

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 products which were sold to Parisian hairdressers. It was only in 1909 that Schueller registered his company as “Societe Francaise de Teintures Inoffensives pL'Oreal Group's 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. Many factors contribute to the success of the Company. These will be discussed further in the proceeding parts of this ...