L'Oréal Flashcards
1
Q
Today
A
- world’s largest beauty company and owners of 3 of world’s top selling (Maybelline, L’Oréal Paris, Lancome)
2
Q
Beauty industry before
A
- culture-specific and fragmented (ethnicity, gender, demographics,..)
- cosmetics formerly associated with prostitution
3
Q
Characteristics of beauty industry
A
Prestige cosmetics (40% ) vs mass cosmetics
L’Oréal unusual position as does both
- presence in every distribution channel
- Lancome: world’s leading premium cosmetics brand
4
Q
Historical Evolution
A
- rising incomes
- urbanization
- changing values
- Perfumes: traditional beauty product
- toilet soap: first beauty product of modern industry
- Mass production and mass marketing techniques
- In Europe, product innovations from pharmacists and chemists
- American developments: mascara, shampoo, hair dyes
- In 1950: US accounted for more than 1/2 of the world beauty market
5
Q
Obstacles to building a global beauty business
A
- consumer preferences varied widely
- lack of access to distribution channels and marketing (outside America: restrictions on media advertising)
- differences in both human physiology and government regulations
6
Q
L’Oréal: divisions
A
- luxury product division (Kiehl’s, Lancome)
- Consumer products (Garnier, Maybelline)
- Professional products (hair care products to salon professionals: Kérastase, L’Oréal Professional)
7
Q
L’Oréal’s Evolution
A
- 1907 France by Eugene Schueller with first synthetic hair-color formula
- France home of haute couture
- After WWII: expanded to US, but with little progress
8
Q
Growing the American business
A
successful in US only when
- 1980s: acquired 2 American luxury brands: Ralph Lauren and Helena Rubinstein
- series of acquisitions
9
Q
What did l’Oréal buy when it bought these businesses?
A
- not people
- not products
- access to distribution channels
- established market positions/Brands: US beauty ideals
- new business models (Kiehls’: marketing without advertising, celebrity enforcement)
- L’Oréal develops into “global stock exchange” of beauty ideals
10
Q
Tactical acquisitions: nourish existing core brands
VS
strategic acquisitions: global potential
A
- Maybelline (at first not evident, but accessible brand with American values, and street smart, complemented L’Oréal Paris)
- Matrix: democratic positioning, symbolized American dream
11
Q
Why not develop their own brands?
A
had vast technological and marketing resources but
- cost enormous
- organic growth slow
- heritage in brands
