L'oreal Consumer Buying Behaviour - MET STUDENTS

1. 1. MET STUDENTS
2. 2. LOreal was founded in the year 1909 by Eugene Schueller, a
French chemist who developed an innovative hair color formula.
Today, the LOreal Group is the world's largest cosmetics and
beauty company and its headquarter is in the Paris suburb of
Clichy, France. It got its start from the hair color business but
soon it developed activities in the field of cosmetics,
concentrating on skin care, sun protection, make up, perfumes
and hair care. LOreal main branches are Cosmetics, The Body
Shop and Dermatology. L'Oreal is active in the dermatological
and pharmaceutical fields, however Cosmetics is the key
revenue generator. It is also the top nanotechnology patent-
holder in the United States. LOreal famous advertising slogan is
"Because Im worth it". It has recently been replaced by
"Because you're worth it". Its portfolio of brands includes the
cosmetics range of L'Oreal Paris and Maybelline NY, shampoo
range Garnier, luxury products such as Lancome and active
cosmetics such as Vichy. Its closest global competitor in the
premium make-up segment is Revlon. INTRODUCTION
3. 3. FOCUSED STRATEGY TO BECOME GLOBAL BRAND Hair
color Skin care Hair care Fragrances Cosmetics
4. 4. CONSUMPTION PATTERN Age remains important factor in
consumption, especially in beauty product Younger generation
is more open in consumption of cosmetic products rather than
the older generations It targets the age group of 18-35 years
knowing this age group needs to look attractive 65 % of the
older women population has started using cosmetics as they
don't want their illusion of being a youth disappear China saw a
surprising growth in the industry as they had only one child to
pamper. Growth was significantly higher and reached up to 65
70 % of the population # Place of Purchase Percentage 1
Cosmetic Store 41 2 Pharmacy 32 3 Departmental Store 18 4
Internet 9 According to a survey conducted in India 2015 below
are the preferred purchasing location:
5. 5. EVALUATION OF ALTERNATIVES 1. Competitors Brand -
Revlon, Avon, Proctor & Gamble, Este Lauder, are the
competitors and have got alternative products 2. Natural
Products - Oils, Egg white, Shikakai, Ritha, lime Juice, Curd 3.
Ayurvedic Products Patanjali
6. 6. Groups individuals according to the occasions when they
purchase, use or think of buying a product.Occasions Groups
individuals according to the benefits they seek from the product.
Benefits Sought Groups individuals according to the level of
usage they make of the product, be it Heavy, Medium or Light
usage. Usage Rate Groups individuals according to whether they
are non-users, p potential users, first-time users, regular users,
or ex-users. User Status Groups individuals according to their
level of loyalty to the product. Hard core loyals' always
purchase the product Whilst 'Soft core loyals' will sometimes
purchase another brand Switchers' will not specifically seek out
a particular brand, but rather purchase the brand available to
them. Loyalty Status BEHAVIOURAL SEGMENTATION
7. 7. High quality conscious They shop cautiously Perfectionist
Price Equals Quality consumers Prefer products coming from
well know stores Brand conscious Like to seek products which
give them pleasure & enthusiasm They are usually less price
sensitive Novelty - Fashion conscious Shop for fun & leisure
Recreational conscious Best Value for money spentPrice
conscious Unworried about the expensesCareless Buyer
Always buy the same brandBrand Loyal Confused about the
choices of the products & storesConfused
USER&THEIRBEHAVIOUS
8. 8. LOREAL HAIR CARE SEGMENTATION SEGMENTATION
When it First Entered the Market Gender Segmentation:
LOreal first segmented the population into the different sexes as
they thought their products combination of low price and natural
ingredients would fit Indias 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
Mens sector as well. Income Segmentation: LOreal
 segmented the market into 2 main segments: 1)the poorer
masses 2)the rest.
9. 9. PROBLEM Presence of home brands Cheaper products
Strong sense of loyalty SEGMENTATION 1. Income
Segmentation: This time LOreal separated a new segment from
the original 2 segments The quickly rising middle class 2.
Psychographic Segmentation: LOreal segmented India into
different groups based on their thinking and behavior from the
older, more conservative Indians and the younger more
impressionable generation who had developed a very different
and westernized view on spending and culture. 3. Age
Segmentation 4. Benefits Segmentation: LOreal further
segmented the market on a benefits basis when it introduced
Excellence Crme. Being in crme form, it [was gentler on hair]
compared to the natural ingredients such as ammonia which
damaged and dried up womens hair. This was a crucial form of
segmentation for LOreal as it underlined the core concept of its
marketing strategy to promise superior products with additional
benefits to consumers when choosing between LOreal and
Home brands, and subsequently has led to the immense
success. The LOreal Makeover After a poor start, LOreal
approached the market with a different concept.
10. 10. ROLE OF INFLUENCERS Demographics: The
demographic shifts really influence a companys products with
the recent trends whereby ageing population, aspiring
consumers in emerging markets and other trends Competition:
Rivals such as Procter & Gamble (P&G) , Estee Lauder and
Unilever have always had a fierce and cut-throat competition in
the industry and it certainly did with LOreal grabbing the most
opportunities and winning over consumers hearts with new and
innovative products. Political: Government rules and regulations
always come into the picture and tend to change bring about a
lot of changes and as well as in the 1970s where the French
government wanted to control Frances top companies and
because of this Gesparal was formed as holding company
otherwise LOreal could have add problems because sometimes
state run companies are lack inefficiency as well as innovation.
 Customer Preferences : Customers are seen as ever changing
until they find one product which they prefer and become loyal to
the same applies in the beauty industry where consumers will
jockey between brands.
11. 11. Social Influences: With the new trends and urban
flairs changing around lifestyle plays a key role as well as the
question of only celebrities are used in advertisements and so
cannot relate to an ordinary woman in society keeps on posing s
serious question. Economic: Cosmetics are normally
considered as a luxury product well during times of a dismal
economy LOreal could face the problem of lack of consumer
demand and so try to look into other countries plans and policies
to try lifted the country out of recession. Technological
:Business operates in a world of rapid technology and so LOreal
has to keep up with the pace otherwise could lose its market
position. Advances in technological methods has had a positive
intake from the companies as it allows them to reduce product
obsoleteness and so advances in production methods have
created products with longer life spans.eg the creation of the
express finish fast dry nail enamel really became popular having
huge amounts of sale everywhere Globalization Has been the
major driving factor to many of the external influences as it has
allowed the spreading of production, communication and
technologies. Other Factors: Globalisation is seen as a
stretching of social, political and economic activities across
political frontiers and therefore all this factors have to be included
in the policies and decision making of LOreal.
12. 12. EXCERPTS FROM THE CEOS INTERVIEW TO
FORBES MAGAZINE There has been optimism among global
companies since a new government took charge in India. LOreal
has said that the country will be among its top five markets by
2017. Are you on your way to achieving that? We have always
been very optimistic about India. The Indian people, too, are
upbeat and it is fantastic because economic development is
linked to optimism. India is the most important reservoir of
people for LOreal. I dont know if India will be among the top five
markets by 2017, but it will definitely happen. The objective of
 the team here is Rs 7,000 crore in revenue by 2019. Indias long-
term potential is the most important thing for us. Several
companies have now begun to shift their best talent and R&D to
this part of the world. Is LOreal doing that too? Yes. We have
redefined our main objective as Beauty for All. So, we now
serve both men and women. And we redefined our strategy as
universalisationa strange word that I invented. We defined
this to mean globalisation while respecting the differences and
desires of consumers around the world. Beauty is very different
from detergents and other categories: It is diverse because of
the skin people have, the climate they live in and also as a result
of their tradition and culture. Purchase decisions Jean-Paul
Agon, chairman and CEO of L'Oreal
13. 13. EXCERPTS FROM THE CEOS INTERVIEW TO
FORBES MAGAZINE-contd Will LOreal move more
manufacturing operations to India given the recent Make in
India campaign? It could, but at the moment, it is mainly Make
in India. Eventually, the investment that we make in India can be
used to serve other countries. Have you decentralised decision-
making to ensure that the best decisions are taken by people on
the ground and not by those sitting in your headquarters?
Absolutely. This is part of our Make in India strategy. People
who are here should be able to decide what works here. In India,
we have our own laboratories, marketing teams and factories,
and it is in their hands to ensure we are successful. For instance,
we are the number one make-up manufacturer in the world. But
when we started in India, we did not think that the make-up
market here was an opportunity for us. It was the decision of our
team here to ensure that make- up is one of our priorities in
India. It decided to invent products that are innovative and
relevant to Indian consumers. And so, they came up with the
Colossal Kajal, which is under a Consumers in this part of the
world are very fashion conscious Not fashion conscious, but
beauty conscious, especially people from India, China and
Brazil. Which is why I believe the best is yet to come. The
second thing is that consumers in India are very demanding.
They have this beauty tradition and they know how to recognise
 good quality. At the same time, since the average income is low,
they have to make sure that the product they buy is the best.
14. 14. "Our ambassadors in India are distinguished
personalities in their own right and are well known across the
country. Aishwarya is synonymous with L'Oreal Paris, and this is
because she has been with us for more than 10 years," says
Manashi Guha, general manager, L'Oreal Paris, India. BRAND
AMBASSADORS- BIGGEST FACTOR IN PURCHASE
DECISION French cosmetics group L'Oreal Paris has four
celeb brand ambassadors in India:Aishwarya Rai Bachchan,
Sonam Kapoor, Freida Pinto and most recently Katrina Kaif.
15. 15. BRAND LOYALTY Brand loyalty is a measure of the
attachment that a consumer has to a brand and reflects how
likely that consumer will be to switch to another brand, especially
when that brand makes a change either in price or in product
features L'Oreal Paris is a trusted brand. The company boasts
high brand loyalty and terrific repeat business. Once a female
consumer finds a makeup or beauty product that she likes, she
tends to stick with it. This opens L'Oreal Paris up to a whole host
of content marketing opportunities around education. How-to
videos, DIY, and providing facts to consumers are essential
ways the brand promotes itself to its customers, all while
providing useful information and attracting new fans.
16. 16. As we know the brand loyalty of LOreal is very high
and hence LOreal follows a pull strategy. Customers of LOreal
go directly to the outlets and buy the products. Garnier being an
important brand of LOreal in both hair care and skin care is
available all round the globe easily. In Indian market the hair
care products of garnier like garnier fructis, ultra doux etc is
available in both organised and unorganized retail shops in India.
To popularize its product line LOreal has occupied brand
corners in many big malls and retail outlets in which garnier
products get a major chunk. LOreal has tie ups with many big
beauty salons and parlors who can promote and sell its products.
Over the past decade the company has trained more than
30,000 hairdressers in India in the use of its products. And it has
helped to establish about 300 salons in the past five years.