L'Oreal Paris: Strategic Market Expansion

Introduction

Marketing strategic planning is effective for the multinational corporate firms to manage their operations worldwide and secure future market share by market expansion and promoting the organisational products and services. The paper explores new market opportunities for the organisation and designs a new product of the company L’Oreal Paris, which is a famous brand in the skin and hair care industry. The study also provides a scope to analyse competitive position and explore new ways to promote their new products in the market. The organisation L’Oreal Paris is a famous brand, which is a French personal care company providing high quality products ranges which are fruitful for the customers (L’Oreal Paris, 2020a). The major products of the company are such as hair care, and makeup products, perfume, skin care, hair colour and sun protection products, which create strong customer base for the organisation in the market. The organisation is successful to hire more than 87000 employees worldwide and the organisation is also efficient to expand their business worldwide. The company L’Oreal Paris is also successful to generate the revenue €29.87 billion in 2019, which further ensures strong financial position of the company in the global fashion and beauty industry. The company’s annual growth rate is increasing at 4.2% and the company has 25.8% market share in the global cosmetics and beauty products industry (L’Oreal Paris, 2020b; Statista, 2018). The organisation is hereby efficient to establish the business and it is also capable of creating new products in the market. The aim of the company is to gain more one billion customers across the globe through creating new products for meeting the diverse needs and desires (L’Oreal Paris, 2020a).

Methodology

The data analysis is related to secondary data collection method, where in order to conduct the study efficiently, the data and information are collected through reviewing secondary sources of information such as books, journals, business letters and the journal articles. In this study, in order to collect the data related to the brand, the company corporate website is utilised as well as the annual report of L’Oreal Paris is also helpful to gather the data related to market growth, competitive advantage and revenue and sales volume. In addition to this, the news articles and the observational research as well as the website such as Mintel and Statista are also utilised in this study to collect authentic data and information about the brand and competitive market structure and conduct the analysis further to create a new product base for the organisation to expand their business innovatively.

Findings

Brand value:

The brand value depends on the characteristics of the business, where the organisation is capable to running their business in a systematic and sustainable way. The Kapferer’s Brand Identity Prism is effective for understanding the brand value and identity of the organisation. The organisation is efficient to maximise their profitability and sales volume by providing high quality products to the customers as well as improving their marketing advertisement and promotional activities. The brand value of L’Oreal Paris is also high, where the quality products and effective pricing policy of the company attract the customers across the international markets. In the cosmetics and beauty care industry, the organisation is successful to gain competitive advantage and expand their business sustainably by rising market share. The growth rate of the firm is also good where L’Oreal Paris is a successful brand to create their image in the market and strengthen their customer’s base in long run (L’Oreal Paris, 2020c).

Target market:

STP analysis is effective to identify the target customer’s base where the company can retain the long run and loyal consumers in the organisation. In this regard, the segmentation can be done through identifying different customer base. The organisation L’Oreal Paris segments the consumers market by age group, gender, and skin and hair type, economic class of the customers. Targeting the customers is a critical phenomenon where the customer’s needs and preferences require to be acknowledged efficiently. L’Oreal Paris tries to target the age group from 18 years onwards till 65 years, where the customers are willing to use the skin and hair care products. The demand in the age group between 22 to 38 years is high as well as the demand is moderate in the age group between 39 to 55 years and it is low between 56 to 66 years. According to the hair and skill type such as dry or oily, the organisation target both the customers in these categories and develop diversify products to support them to get better hair and skin (L’Oreal Paris, 2020d).

New market analysis:

The organisation needs to expand their business across the UK countries, and compete with high end fashion brand efficiently. The market share of the company in the Asian countries as well as other western countries is high, but the company must utilise the countries across the UK in order to establish the brand sustainably. As per the PESTLE analysis, the political stability the UK, economic growth and social development as well as technological advancement in the UK, legal framework and government cooperation are effective to support the business of L’Oreal Paris for successful expansion (Jan and Victor, 2019).

Explanation of new product:

The new product is a skin care products, where the company is going to create night care cream and also day care cream to support the customers for anti aging treatment. There are different skin care products of L’Oreal Paris such as hydra genius, pure clay, age perfect skin care and pure sugar. The brand should focus on new product diversification through introducing the night and day cream for skin hydrate where the customers would be able to get better skin and ensure anti aging treatment.

Competition:

There is high competition in the UK where the competitive brands are such as MAC, Maybelline, Dior, Urban Decay and others which are also playing efficient role to serve the customers with high end product range (Cunha, 2017).

Conclusion

L’Oreal Paris is efficient to set up their business and gain high market share and bard expansion through creating new product range in night and day cream would be successful for the organisation to sustain in the industry and enhance their performance.

Reference List

Cunha, M.D.C.D.O., 2017. L’Oréal: Ombré hair kit consumer-focused product development to find new market opportunities (Doctoral dissertation).

Jan, A.D.A. and Victor, S., 2019. Measuring the Effectiveness of Segmentation, Targeting and Positioning Strategy of L’oreal Products in Kingdom of Saudi Arabia. IJO-International Journal of Business Management, 2(09), pp.68-79.