L'Oreal Nederland B.V.: Product Introduction Essay

Case Study Analysis Prepared by Supervised by Mr. Year 2009-2010 ? Case synopsis •L’Oreal headquarter is in France and require from their subsidiaries around 100 countries to introduce two or more from their product within the few years. L’oreal Netherland director faces two difficult decision whether to introduce Synergie the skin care product and Belle Couleur hair product or one of them. If they introduce them in the Dutch market what will happen for their product from the same company that may compete them or take the force sale of their product in the market. L’Oreal presently offers the following products in the Netherlands: Plenitude and Recital under the L’Oreal brand name, and Ambre Solaire under the Garnier Institute brand name. L’Oreal Nederland director has been considering whether to introduce the Synergie skin care line and Belle Couleur hair colorants line into the Netherlands. Synergie and Belle Couleur are marketed under the Garnier Institute name in France. •The marketing manager of L’oreal Nederland is wondering If they go ahead with an introduction they will need to develop marketing program for the products line.

L’Oreal Nederland already sell other brands of L’Oreal products in the market. If they introduce Garnier what will happen to them. •They have done extensive marketing research on consumer reactions to Synergie and Belle Couleurs and they are going back to the top management with their recommendations. •Dutch consumers had little, if any, awareness or knowledge of Garnier and had not formed a brand image. The Garnier sunscreen was a new product and few Dutch women knew of the brand. It was, therefore, very important that any new Garnier products launched in the Netherlands have a strong concept and high market potential.

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To accomplish this the products needed to offer unique, desired, and identifiable differential advantages to Dutch consumers. Products without such an edge were at a competitive disadvantage, and would be likely not only to fail but also to create a negative association with the Garnier name, causing potential problems for future . •Forty percent of the Dutch population was under 23years old and the consumers of this group are the heaviest for cosmetics. Also Dutch population was aging and fast-growing segment were the 25 or older group. Issues headquarters would like to introduce more Garnier product lines into Dutch market over the next few years. •Dutch consumers had little, if any, awareness or knowledge of Garnier and had not formed a brand image. The Garnier sunscreen was a new product and few Dutch women knew of the brand. •Introduction of Garnier products will impact L’Oreal products. •Products without such an edge were at a competitive disadvantage, and would be likely not only to fail but also to create a negative association with the Garnier name, causing potential problems for future. Any innovative products or new product variations in a line could be quickly copied. •establishing a new brand was especially difficult since Dutch women typically purchased facial creams only once or twice a year. Dutch women were showing an increasing interest in products with “natural” ingredients, but they were not as familiar as the French with technical product descriptions and terms. •Belle Couleur is formulated towards darker shades and Dutch women prefer naturally lighter hair colors. and L’Oreal unwilling to change the formulation since all research centered in Franc. Concern about the development of chains with their central buying offices, and the proliferation of new brands with little differentiation from brands currently on the market. •Concern the retailers need for shelf space for the new products line. Alternatives Course of ActionProsCons 1. Redesign the packing under one name for both product “L’oreal” from the Garnier institute Will repeat the Garnier name twice and increase the brand image awareness. Will cost the company the redesigning cost and libels. 2.

Educate the Dutch women of the Synergie skin care that made from natural integrity in modern institute by using the highest technology methods. Changing the idea of our competitors brand that Dutch women believe that we give different advantage and will buy the product, accordingly our market share will increase. The associated cost of educating them by using mails, sending cards, T. V ads, calls and press ads. This cost will be deducted from the marketing Budget but should be less then the profit that we may get it by using this method. 3.

Reducing the price of Garnier products less then L’oreal product. This will fill gap in for mid-market products in portfolio and will compete other mid-market brand and will give chance to buy more from our productsFear of competing our original L’oreal products in the market and accordingly their sale force percentage descend. 4. create new distribution channels like Hair dress salon. Women working out side home who are dressing their hair over there will form brand image and our revenue will increase, and increase availability of our product.

More distribution expenses. 5. Creat the need by using French Model in hair color and introduce the 7 hair color that not matching with the Dutch women concept of hair color. Increase revenue by introducing all 22 types of Belle Color and gain new customers, this also will fill the demand of younger demography who link using Belle Color for hair style and fashion. Fear to put negative impact of Dutch cultural and impact all L’oreal products and Garnier too, and then large loss of the investment. 6- L’Oreal open a chain of cosmetics stores featuring all of their products.

Availability of L’oreal and Garnier products as a chain stores will bet the competitors of retailers and manufacturers moreover, it’s an ads for the company. Retailers buyers will have negative impact and sell other brands and may not buy L’oreal products. 7-offering Loyalty bonus and giving free gifts, with warrantee of useful made of natural integrants or your money back. Maintain our customers and changing the loyalty of Dutch women who shop for value and switch to buy or brand who give deferent advantage.

Fear of allergic reaction of the Dutch women. Recommendation solutions •Garnier is new in the Dutch market and women in this market didn’t form the brand image or have a little knowledge of it so we will increase the ads and extend the name of Garnier by redesigning the packing of L’oreal to be libeled “Another name of L’oreal beauty from Garnier institute “so both of the two product will be shown in the market as one and the name of Garnier will be repeated twice instead of one time, by doing that company will create brand image awareness. The Best Of the name can be shows like that in both products lines. • The Garnier plenitude and Recital product are already introduced in the market, so our goal here is to keep up selling with the same sale force and focusing our sale to the older and at the same time we will introduce the two product lines of Synergie and belle Couleur along with our previous product of Amber Solaire Sunscreen to the young population. of L’oreal. •Synergie and belle Couleur will rank the 5fifth after the 4 competitors.

The slogan of belle Couleur is not matching with what the product give to consumer it is saying that “cover all gray” but it didn’t cover gray so we will withdraw these product that are not matching with Dutch women market 7 out of 22 types and 15 Belle Couleur left , and will change the slogan to be “Belong to beauty ,Belong to Natural” • Looking for more distributing channels will increase our sale force like hair dressing salon because a lot of Dutch women work out side home and dressing their hair in hair dress salon, getting new hair style without knowing the trend of using this style or the method is our chance to put out ads there and distribute our belle Couleur product along with recital over there. •Offering loyalty bonus like “buy again and get discount and gift free” when the consumer buy any one of our product we can offer them a gift and when repeating purchasing will get discount and gift. “This offer is valid for three months only” •Writing a clear warrantee of our product “Garnier from L’oreal simply is the best, IF NOT MATCHING THEN YOUR MONEY BACK”. We will make big Advertising of Synergie and belle Couleur before we introduce them in the market “two moth before” Campaign ads will be there in order to create a brand image and awareness of it, and after that distributing them in every distribution channel and outlet within 3 months that retailer and manufacturer can’t copy them. •After sale service is another chance to have the customer loyalty by introducing the deferent advantage of buying our product. By getting the customer telephone number and asking them for our product, at the same time we can ask several question that help us in our research data collection. •The director of the L’oreal Nederland should assign two marketing managers, one is the manager of L’oreal Products and the other one manager of Garnier product line, even when both of them from the same original company and Garnier having libels with L’oreal brand.

Both managers will look after marketing analysis for both product lines and will report to the head director of any tendencies or changing or errors that might be happens in order to improve the product to satisfy consumers needs and wants. ACTION PLAN PRODUCT Product-mix width Skin Care Hair careSunscreen product-line length Plenitude Recital Amber Solaire Synergie @ Belle [email protected] L’oreal product like Plenitude, Recital and Amber Solaire will continue selling them in the market under the same Brand and maintaining the sale force of them. Garnier products of Synergie and Belle Couleur will be introduced to the market in the same packing of L’oreal and a libels will be stake on them mentioned “From the Garnier institute”.

Both product market will rank the fifth product available in the Dutch market for the first year, because of the four competitors for both of them in the market. Belle Couleur line of 22 variation will be reduced to 15 variation to match the Dutch women need. The positioning statement for Belle Couleur will change to the following; “Belong to beauty ,Belong to Natural” These are the packing of Belle Couleur according to Dutch women who prefer naturally lighter hair colors and we will not introduce the darker shades. The positioning statement for Synergie will be as follow; “Natural for Beautiful skin” These are the packing of the Synergie that shows the leaves of trees to indicate that the product made from natural integrity. Price

The price for Synergie skin care is high as the marketing research show that the buying intention was dropped when the price was known so we will reduce the price of Synergie to deal with this response. The average price in Guilder will be between 11-95 to 21. 95 as shown in the exhibit-1. Our average price will be (15. 95guilder) The price for Belle Couleur Hair coloring is reasonable as the market research shows buying intention generally increase after participating told the price. So the price will remain the same as indicated in the study(12. 95 guilders). Buying intention Moisturizing Cream Buying intention Antiaging Day cream Promotion As mentioned in the study that 40 percent of the Dutch population was under 25 years old. Consumers in this age group were the heaviest users of cosmetics and toiletries.

But the Dutch population was aging and the fastest-growing population segments were the 25 or older groups. So we will focus our ads in this segment and will be our target segment the female under 25 for the new products line. The massage of Synergie as mentioned above is “Belong to beauty ,Belong to Natural” And this will form the brand image with the Dutch women and will assure that this product is Natural. The massage of Belle Couleur as mentioned above is “Belong to beauty ,Belong to Natural” We will offer loyalty Bonus that may increase our sale by offering discount in repeating purchase or offering a gift with any item from L’oreal brand carrying a tag from the Garnier institute.

For example” when a person buy any Synergie or Belle product will get free bottle of Amber Solaire. T. V Ads will show that all L’oreal and Garnier are made from natural integrants and when represent any one of them in the ads must show other products of the same line. offering free gift for short time. In the newspaper and magazine that female are interested in will advertise with free small sample from our product to test then buy and if it’s not matching then your money back with big ads that Garnier is the best’ of L’oreal . In radio we will repeat a short massage after best program that women like to listen to and the massage will “To look better buy Garnier of L’oreal all natural” or “natural beauty of Garnier” Distribution

L’oreal own goal for developing any new product was to introduce only those products that had different advantage with evidence of consumer acceptance. We will align with our distributor’s expectations of previous successful L’Oreal product launches. We are introducing the Garnier name, but are promoting these products under the L’Oreal brand. Consumer acceptance Consumer acceptance was documented on a 7 point scale with 7 being most likely to buy. Overall response showed 39% of all participants would certainly buy the Moisturizing Cream and 24% of all participants would certainly buy the antiaging cream. A good percentage of the respondents of the Belle Couleur study said they would buy after they used the product.

Belle Couleur buying intention after use Sales Breakdown for Skin Care Products in Supermarkets and Drugstores Type of Store Unit Sales (%) Dollar Sales (%) Supermarkets18%11% Drugstores8289 100100 Sales Breakdown for Skin Care Products by Type of Drugstore Type of Store Unit Sales (%) Dollar Sales (%) Chains 5737 Large independent 3139 Small independent2124 100100 L’oreal current product Now After one Year Supermarket25%30% Independent drugstore 35%25% Drugstore Chain 40%45% If we use other alternative like L’Oreal a chain of cosmetics stores featuring all of their products 50% and 25% for drugstore chain, 15% for supermarket and 10% for independent drugstore.

Alternative suggestion for Both product lines L’oreal chain of Cosmetics 50% Drugstore chain25% Supermarket15% Independent drugstore 10% The product family will be as follow; References: •Prof . Dr. MARKETING MANANGMENT first edition. MALAYSIA,PP25, 26to30. &64to70 •Kotler. (2003),A Framework for Marketing Management, 2nd Edition ,ppt-Louisiana State University – Shreveport •[accessed 6th November 2009] • [accessed 6th November2009] •Aulton Durham (2009):business in box, USA , available from: [accessed 10th November 2009] •http://www. bizlibrary. com/portals/0/implemietatiom _planning_worksheet. doc[accessed 15November 2009] •http://www. loreal. come Best Regards…


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