Loreal Market Analysis

To: Ms. Carol Hamilton

From: Lilian Wu

Market analysis

One of the reasons that L’Oreal’s French success doesn’t work in the US is the existing competition. First of all, various brands that Americans are familiar with, such as Olay, Noxzema and Pond’s, own the largest dollars share within the market of cleansers and moisturizers and these skincare brands have more affordable prices than L’Oreal Plénitude does. In addition, customers who shop in the HBA section are not familiar with the Plenitude products and there is no salesforce to introduce them. Also, it is an obstacle for L’Oreal to catch buyers’ eyes away from other major competitors like Olay and Pond’s, since their products might be at eye-level on the shelves. Last but not least, Olay and Pond’s both feature their reliable and generational brand images, which might increase customers’ positive perception toward the brands. For example, Olay’s symbolic pink glop roots to consumers’ minds, while Pond’s commercial was so impressive that customers could remember it after 10-20 years.

Target analysis

I suggest we adjust our marketing strategies to attract a larger target audience. Plénitude emphasizes its products high quality and performance, thus the products are expensive for price sensitive customers and young customers who are at average income level. In addition, the participants mentioned that the product is too oily and heavy for younger skin types in the FGI, which means they think that Plénitude is suitable for older women. Though, according to the survey, our current strategies effectively work to influence the target audience, 54% of Plénitude users in “stressed out’’ and “age focused” groups, the remaining 46% of Plénitude users, “ingredient apathetic” and “price conscious socializers”, should be focused on as well. That is to say, users in these two groups want to look better with a cheaper price.

Recommendation

Based on the marketing research, my recommendations are as follows.

Product –

• Product line

First of all, I suggest that Plénitude reduce the SKU units of cleanser, because cleanser is not their main product and the market growth is lower. Also, compared to Pond’s and Olay, Plenitude provided too many types of product that make consumers feel really overwhelming. Secondly, I suggest that Plénitude develop a new product line for younger customers. Thus, we can provide products that fit younger customers’ needs and provoke more purchase.

• Product design

I suggest that Plénitude use a more straightforward description on the package to let customers know the products. In the FGI session, some participants mentioned that the names and packaging of Plénitude products are confusing. Consumers found it complicated when purchasing Plénitude products because there are a large number of products and a lot of text on the package.

Place – Department stores and duty free stores in the airports can be added to existing retail channels, since Plénitude is positioned as an easily accessible and high-end brand. But I suggest that only best sellers are able to available in those stores. In this way, Plénitude not only gains exposure in the market but also maintains its premium value that customers usually purchase products with higher prices in department stores and duty-free stores.