Because You're Worth IT ...

Monday, April 25, 2011

Week 12~ Developing and Managing Products

L'Oreal's new product development strategy and the way they have successfully managed to achieve considerable market shares through consistent Research and Development efforts.
L’Oreal has not only followed a comprehensive, long term R&D strategy that has resulted in creating technological breakthrough products like Fructis, but it has also tried to address and maintain its balance between R&D-marketing interface.
Moreover, the company follows a three tier strategy for producing commercially viable products. The three structured strategy includes L’Oreal’s advanced research, applied research and product development, each stage having its own unique functions to perform in order to create successful innovations.

Article by: Moore, Elisha (THIS ARTICLE IS AWESOME I HAD TO POST IT !)
Why is new product development so important for a company like L'Oreal?
L’Oreal is a well established company in fashion business and in order to maintain its superior standing in the global market, it has to lay considerable emphasis on the strategies it employs for development of new products. Fashion has been defined by Paul F. Nystrom as ‘nothing more or less than the prevailing style at any given time’ (Hines & Bruce, 2001). Two important concepts can be derived from this concise definition: firstly, a style is not fashion unless it is commonly accepted (prevailing); secondly, fashion is transient (at any given time). These characteristics of the fashion phenomenon had profound implications for the supply chain, the product life cycle and the complexity of the markets served by L’Oreal and its competitions.
The speed at which fashion markets change is very high, with very short product life cycles. Many fashion items have product cycles as short as half a year, or even a few weeks. Consumer’s preferences depend on the season, on the social and cultural environment and on the effects of previous marketing communication for fashion items or substitute products (Mintel, 2005). Responding in a timely way to these changing demands is thus vital for success. Moreover, Crawford (1988) has also established that without new products, firms will certainly be at a stand still. The research also highlights that initial or early entry of new products can result in new market development, long term market dominance, and foreclosure of competitors’ responses.
The characteristics of the fashion industry require companies to make strategic choices about factors such as quality, speed, technology, price and flexibility: these factors define the positioning of a company (Abell, 1993). Drawing upon the information provided in the case study, it can be suggested that L’Oreal operates in the top end of the fashion market with clear market positioning, which can be depicted as follows:

L’Oreal’s targeted market segments can be characterized as fashion trend-setters, and these are the customers in the high and medium/high market segments: they demand products with innovative styles, realized in exclusive physical attributes with top-level quality by scientists and designers that have built the reputation of powerful brands. It should be noticed that firms that operate in the mass segment which targets fashion followers tend to imitate the high performing products of top brands like L’Oreal and therefore the competitive advantage of top brands recedes over time, making product lifecycle short. Given the high quality expected of its products and the short product life cycle prevailing in fashion, L’Oreal has adopted a vertical integration, which afforded it a full control of quality and operations. (Erica & Stefania, 2004).
Moreover, successful new product developments are likely to earn L’Oreal a superior market share and turnover thus increasing the value of the company. Also, L’Oreal has been a vanguard of fashion and in order to keep up with the expectations of its customers and consumers, the company has to lay in line new formulas that are carefully researched and tested for their effectiveness. For e.g. when the Japanese people were tired of having black hair and required an alternative to western hair colors due to their poor results, L’Oreal came up with an effective new hair formula that first bleached their hair and then dyed them according to their desirable color.

L'Oréal sales climb 9.3 per cent ... according to the company's first quarter sales

Quarterly sales
? million
1st quarter 2010
1st quarter 2011
By division

Professional Products
Consumer Products
Luxury Products
Active Cosmetics
Cosmetics total
By geographic zone

Western Europe
North America
New Markets, of which:
-   Asia, Pacific
-   Eastern Europe
-   Latin America
-   Africa, Middle East
Cosmetics total
The Body Shop
Group total

Bridal Week 2011 – PFDC collaborates with L’Oreal Paris

L'Oreal Paris and Pakistan Fashion Design Council (PFDC) announced their partnership in a press conference on Thursday with regards to the PFDC-L'Oreal Paris Bridal Week 2011 to be held in Lahore in September/October 2011. The bride's outfit, color palette, make up, accessories and overall look is important in Pakistani fashion therefore bridal fashion remains the most influential and primary form of fashion and style within Pakistan.
For this, the PFDC-L'Oreal Paris Bridal Week 2011 endeavors to define and present both contemporary and traditional Pakistani bridal fashion and make-up trends. PFDC - L'Oreal Paris team will showcase L'Oreal Paris' Beauty portfolio spanning across three days with over 15 runway shows.

Monday, April 11, 2011

Loreal EverSleek & New Feria !!!!

Week 11~ Intergrated Marketing Communications

L'Oreal's immediate Integrated Marketing Strategy has strong emphasis on personal selling which is dominating other markerting strategy's. Also. L'Oreal use of print media such as " Harper's Bazaar ans In Style" magazine is a proven effective advertising measure for the company. However, L'Oreal is not making effective use of internet and direct marketing and it's ad' campaigns are not drawing in it's target market. As a result, according to a report in, L'Oreal's SWAT team uncovered the disadvantages not emphasizing internet and direct marketing.
Futhermore, L'Oreal UK is in the  process of revising it's Integrated Marketing Communication and the improvement of "IMC" will have advertisements that will entice the younger generation to shop more of L'Oreal's products. Also, internet and direct selling will be integrated more with the strong an effective personal marketing.
L'Oreal is remaking it's Integrated Marketing Communications to fit the younger generation, but as the popular proverbs goes "If it's not broken don't fix it" because in an effort to rejuvenate younger faces, the company might very well loose the more "mature" faces.

Monday, April 4, 2011

Week~10 Product Concepts

L’Oreal distributes products whose objective is to satisfy an individual’s beauty and personal wants. The company’s make up brand is extremely convenient because it is inexpensive compared to other make-up companies such as Channel, Mac and Bobbi Browns. It’s also available in all make-up isles of all drugstores, such as Walgreens, CVS, and Duane Reade which makes it convenient to buy. L’Oreal has other companies such as Maybelline whose products are just as inexpensive and definitely worth it.
L’Oreal doesn’t just carry a single product line. Though they historically known for the make-up collection, they also have skin care, hair care and hair color products. The company established a product line extension when they expanded their mascara collection. For example, they invented many new mascara with the same effects however each item included something new. Over the past years, L’Oreal has modified some of their products, especially their shampoo products. It is now eco-friendly and their shampoos has been formulated with different natural ingredients, such as antioxidant horsetail plant extract, free-radical-countering lycopene and moisturizing bran oil.
Overall, L’Oreal experiences repeat sales from the same customers because they have a high brand equity and loyalty. They reward their loyal customers with gratis and discounts. Their marketers continuously find ways to get them to come back.
            I truly believe that their breadth of product mix has helped generate more profits. They offer a variety of products to choose from and different combinations of every type of make-up. Indeed, L’Oreal is a notable brand because millions of consumers possess loyalty and trust in their business. They do an excellent job showing that their products are always relevant and satisfying after all everyone does want their make-up to look GOOD and not CHEAP!