L'Oréal of Paris

Bringing “Class to Mass” with Plénitude

- B A K E - syndicate
Maria Alfa Raniadita 29109317
Edhita Paradevi 29109324
Trisya Kansya Salea 29109329
La Ode M Arief Akbar 29109367
Case Background
 Plenitude line introduced in 1982.
 Very success in the France skin care market
 Strong introduction in US Market
 US sales grow pretty well through 1991
 After 9 years introduction in US still not make money
Problem Identification
Many
types of How to improve further upon
products Plenitude’s current
operations in the U.S ?

Premium
Brand
Pricing
Utilization
Strategy
Rethink all
Aspect

“Too
“Star”
French”
System
for US
How to introduce a new
product (Revitalift-Eye) into
the existing product line
L'Oréal
Founded by Eugene Schueller in 1907.
Initially develop and market a new hair coloring.
2,000 products with 500 brand names,150
countries.
Worldwide presence
Consolidated sales: 53.4 billion French Franc in
1995 from over 2,000 products
L'Oréal
Beauty, personal and high tech products
Cosmetics represent 81% of revenues
$300 million on research & 300 new patent
worldwide in 1996
Acquires Maybelline to broadened participation
in the mass market.
Combining Hair care and Cosmetics Division
Plénitude
 At 1982 launched in France
 Positioned as : high end, superior performance, but accessible (class to
mass strategy)
 Strategy :
◦ Firstly introduce moisturizer until it had helped established the
“technologically advance” image and then introduce cleanser
◦ Supported by massive advertising (star philosophy)
 Result : Achieving sales of one million units in 1983 and continue its
success in 1987
 Formula for success :
◦ Have technologically Superior Products
◦ Concentrate Resources and Support on newest “star product” to pull the
entire line
◦ Follow the golden rules of advertising : feature star product, provide
technologically superior evidence
The U. S Launch & Early
Result
• First test marketed in Atalanta and Dallas at 1988
• Strategy “class to mass”
• Positioning “ Reduces the Signs of aging”
• Covering 3 products :
• Basic moisturizers
• Treatment moisturizers
• Cleansers
• Before Plenitude entered, L'Oreal had good reputation
for its cosmetic and hair product, so the name was
critical to sell the products.
• Used the same formula "star" philosophy in advertising
as in France
Market Size and Brand
Market Size and Brand
Market Size and Brand

• Increasing Trend in Total Retail Market for Moisturizers and Cleansers.

• Stagnancy in Plenitude sales for both category.
US Market Analysis
• Assumed that advertising spending in all brand used for
moisturizers and cleansers
• Plenitude has poor advertising performance than Olay
and Ponds
• Plenitude brand not strong recognized in US
• Market study divide consumers into 5 segments:

22% 18%

17%

17% 25%

Unconcerned Ingredient Apathetic

Price Conscious Socializers Stressed Out
Age Focused
Acceptor/Rejecter Studies
Motivation for • Brand name cited
• Brand name meant
Trial • Department store quality

Respond to • Young rejecters found it too heavy and greasy

Product • Didn’t absorb into skin
Formulas
Perception as • Having large number of products but have plus and minus

Full Product Line • Individual products could be more helpful in through the line

Respond to • Packaging seemed feminine and expensive look

Packaging • Confusing and have lot to read

Perceived Target • Perceived targeted to older women

Consumer • Not for 20s, and maybe not even 30s

Acceptor/Rejecter Studies
• Olay  dry skin, light and soaked, ads on
Motivation for magazines
Trial • Pond’s  staple of life

Product • Olay  light and reasonable priced

Satisfaction • Pond’s  reliable, accessible, and reasonable
Sources priced

• Olay  traditional & generational brand

Brand Imagery • Pond’s  older, down to earth

Perception of the • Overwhelming & confusing

Plenitude Line • Need more time to read it
and Packaging
Shelf Shopping Study
Shopping • + : Fun, meet the different need of consumers,
Experience • - : So many selection, it’s very confusing

• Olay: Pink cream, old fashioned, nice

Competitors packaging
Brand Image • Ponds: Really heavy & greasy, for older women
• L’Oreal: Really expensive

Product Line • + : Very informational, very helpful

Presentation • - : Look complicated, very confusing
Developing the Plénitude Plan
• Introduced in 1995
• Quickly represented 20% of Plénitude sales with heavy
support
• Attract 40% new users to the Plénitude franchise & younger
customers  problem: consumer’s perceptions of the brand
(a treatment product for people who have problem)
• Options: Launch a new product as a Revitalift extension
 “Star product” philosophy  high support
 Bring out the product & not make it ours “star”
 Brand Development
Taken from Exhibit 11
Ever Conversation Currently Retention
Brand Aware
Tried Ratio User Ratio
Oil of Olay 96% 77% 80 34% 44
Pond’s 93% 52% 56 16% 31
Avon 91% 68% 75 23% 34
Revlon 90% 35% 39 10% 29
Plenitude 78% 23% 29 7% 30
Nivea 76% 26% 34 6% 23

Low Consumers Ever Tried

Low Conversation Ratio Poor Plenitude Sales
Low Current Used Performance
Low Retention Ratio
Competitor Analysis
L’Oreal
Aspects Oil of Olay Pond’s
(Plenitude)
Premium and Generated by Seen as a staple
Motivation for
Expensive information / of life
Trial
advertisement
Product Good quality Light and Reliable,
Satisfaction product reasonably priced accessible and
Sources reasonably priced
Hard to Traditional, Older and down-
Brand Imagery understand generational to-earth
brand
France vs. US
Unknown US consumer behavior
In France, successive product launch, but, in US
product launch simultaneously. It May
confused consumer.
Benefit Positioning in France of Aging
perception succeed while in US not succeed.
France consumer have more high concern
regarding beauty perception than US consumer
US consumer more pragmatism than France
consumer regarding beauty knowledge
France vs. US
FRENCH UNITED STATES
• Sophisticated in • Didn’t much know
using a skin care about skin care 
(technology need to educated
advanced product) them at the point-
• High-end market of-purchase
(not price sensitive) • Price sensitive
• Premium quality • Need effective
product
Revitalift
 Introduced in September 1995
 Product innovation incorporating pro-retinol A & E
 Treatment product for people who have problem
 Supported by $5 Million in TV advertising
 Quickly represent 20% plenitude sales
 Target Younger Consumer
 Bring new buyer
Revitalift Key Success
 Keep superiority in Research & Development

products
 Creating demand in a younger consumer market
 Improving the global L’Oreal Brand
 Increase sales and market share
SWOT Analysis
STRENGHTS
• Known with good quality
• Great Research &
Development department
• Have a good experience in
handling cosmetic product
SWOT
OPPORTUNITIES
• Big market in US
• Young consumer felt local
product is old fashioned
• Us maker has many channel
for L’Oreal product
WEAKNESSES
• Unknown about consumer
behavior in US
• The product cover
unattractive
• L’Oreal need to upgrade
awareness of US consumer
THREATS
• Expensive product Image
• Consumer’s loyalty to
competitor product
• Local product known about US
consumer behavior
Recommendation
Increase consumer knowledge by advertising
and at the point of purchase
Packaging modifications  simple information,
change the Plenitude name
Launch Revitalift Eye with star product
Use premium price to maintain product
prestigious
Step by step Product Line Extensions.
Target a younger executive woman to create
consumers base
thanks for your attention
 Exhibit 7. Market Size & Brand Shares on $ Basis
(‘91-’95)

Moisturizer - All Mass Outlets

1991 1992 1993 1994 1995
Dollar vol. (Retail $) $309MM $338MM $375MM $440MM $471MM
Plénitude 11,7 13,6 14,1 13,8 14,0
Olay 38,3 36,1 32,3 29,7 28,2
Almay 5,4 6,0 5,6 4,4 4,6
Nivea 4,8 5,5 6,0 6,2 6,2
Pond's 5,0 4,6 9,1 13,9 15,1
Alpha-Hydrox - 1,0 3,8 5,7 5,4
Neutrogena 7,0 6,5 5,7 4,8 5,2
Cleansers - All Mass Outlets
1991 1992 1993 1994 1995
Dollar vol. (Retail $) $252MM $288MM $308MM $308MM $328MM
Plénitude 3,2 3,2 3,1 3,1 3,4
Olay 11,0 9,9 7,6 6,4 7,9
Almay 4,8 4,8 4,9 4,4 4,1
Noxzema 22,9 24,4 23,8 22,9 21,6
Pond's 11,7 12,6 11,6 12,2 11,2
Neutrogena 4,9 4,9 6,0 6,3 6,2
Sea Breeze - - - 9,4 8,9
Clean and Clear - - - 4,9 6,7
 Exhibit 8A. Plénitude Product Line Pricing of Chain Drug Stores

Everyday
Size (oz) Trade Price ?
Average Retail
Moisturizers-Daily
Active Daily Moisturizer-Regular 4,00 4,72 7,11 2,39
Active Daily Moisturizer-Oil Free 4,00 4,72 7,17 2,45
Active Daily Moisturizer- SPF 15 4,00 4,72 7,21 2,49
Hydra - Renewal Jar 1,70 6,83 10,17 3,34
Hydra - Renewal Tube 1,60 6,09 9,13 3,04
Moisturizers - Treatment
Advanced Wrinkle Defence Crème - Jar 1,70 8,87 12,15 3,28
Advanced Wrinkle Defence Crème - Tube 1,20 7,07 10,30 3,23
Advanced Overnight 1,40 8,87 12,26 3,39
Eye Defense 0,50 8,87 12,07 3,2
Excell Cream 1,40 8,42 11,36 2,94
Excell Lotion 4,00 8,42 11,51 3,09
Serum 1,00 10,43 15,19 4,76
Revitalift - Face 1,70 8,87 12,31 3,44
Cleansers
Deep Cleansing Gel 5,00 5,50 6,97 1,47
Hydrating Clenasing Cream 6,00 5,50 7,07 1,57
Hydrating Floral Toner 8,50 5,50 6,94 1,44
Clarifying Foaming Gel 4,00 6,25 8,06 1,81
Clarifying Mask 2,80 6,25 8,09 1,84
Clarifying Toner 8,50 6,25 8,26 2,01
Exhibit 8B. Competitive Cleansers Pricing of Retail Drug Stores

Everyday
Size (oz) Trade Price ?
Average Retail
Procter & Gamble - Olay
Foaming Face Wash 6,78 2,12 3,17 1,05
Facial Cleansing Lotion 6,78 3,09 4,56 1,47
Refreshing Toner 7,20 2,69 3,98 1,29
Age Defying Daily Renewal 6,78 N/A 4,76 -

Pond's
Cold Cream 3,50 2,78
Self Foaming Cleanser 4,00 5,03 7,44 2,41
2 in 1 Cleanser - Tube 4,00 2,79 4,22 1,43
2 in 1 Cleanser - Pump 7,00 3,88 5,60 1,72

Neutrogena
Facial Cleanser 8,00 5,91 8,33 2,42
Deep Clean 6,00 4,10 6,07 1,97
Deep Pore 2,00 5,50 8,06 2,56

Noxzema
Medicated Skin Care 10,00 2,68 3,71 1,03
 Exhibit 8C. Competitive Daily Moisturizer Pricing of Chain Drug Stores

Everyday
Size (oz) Trade Price ?
Average Retail
Procter & Gamble - Olay
Original Beauty Fluid 4,00 5,86 6,59 0,73
Oil Free Beauty Fluid 4,00 5,86 6,65 0,79
Sensitive Skin Beauty Fluid 4,00 5,86 6,66 0,80
U/V Protectant Beauty Fluid 3,50 5,86 6,74 0,88
Original Beauty Fluid (Larger Size) 6,00 7,53 8,76 1,23
U/V Protectant Beauty Fluid (Larger Size) 5,25 7,53 9,60 2,07

Pond's
Dry Skin Cream 11,00 5,50 8,19 2,69

Nivea
Shine Control Mattifying Fluid 3,00 4,84 7,15 2,31
Facial Nourishing Lotion 3,00 4,58 6,87 2,29

Neutrogena
Combination Skin 4,00 7,50 10,43 2,93
 Exhibit 8D. Competitive Treatment Moisturizers Pricing

Everyday
Size (oz) Trade Price ?
Average Retail
Procter & Gamble - Olay
Night of Olay 2,00 4,49 6,45 1,96
Replenishing Cream 2,00 4,58 8,73 4,15
Age Defying Protective Renewal Cream 2,00 N/A 7,31 -
Age Defying Protective Renewal Lotion 4,00 N/A 7,36 -

Pond's
Age Defying Lotion 3,00 7,80 10,99 3,19
Age Defying Lotion 2,00 7,80 11,23 3,43
Prevent and Correct Lotion 4,25 10,80 14,94 4,14
Prevent and Correct Cream 2,50 10,80 15,20 4,40

Nivea
Anti-Wrinkle Cream 1,70 4,84 9,22 4,38
Optimale 1,70 4,58 10,52 5,94

Neutrogena
Healhty Skin Oil Free Bottle 2,50 7,50 10,55 3,05