Global Marketing Strategies of LOreal in India
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 2744 words||✅ Published: 1st Jan 2015|
The company started doing business in India in the year 1991 through a distributor. Following the lead of Hindustan Unilever, it launched its first product, a shampoo called the Garnier Ultra Doux. Lately, it was established as L’Oreal India under the L’Oreal group. Today it ranks second in the global cosmetics group in India.
L’Oreal’s approach stands out to be predominantly aggressive compared with its competitors. The most recent step of the L’Oreal group is the new high-tech industrial unit in Pune. It manufactures many types of hair care, hair color and skin care products to meet up the growing demand. It is one of the first plants to implement L’Oreal’s newest GHP (Good Hygiene Practices). The executives of L’Oreal thought that the combination of small cost and natural ingredients would be a good match for the Indian market.
L’Oreal operates three divisions in India-
The Consumer Products Division
The Professional Products Division
The Active Cosmetics Division
There is bank in North Bombay, a future hairdresser’s are shaping the traces of volunteer models which are forcing trainees to loose on their hairs. It is not surprising that 85 percent of women in India have long and straight hairs and most of the women’s in India prefers home remedies which are recommended by their mothers and the natural tone is dark. Most of the girls use vegetable oil as their hair oil instead of fancy conditioners. It creates a challenging environment for any kind of company entering in such competition and trying to sell the beauty products to such a huge crowd of around 1.1 billion which are not an alien but also profligacy.
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Since the company L’Oreal has launched its first academy in Bombay in the year 2006 where only total of 73 hairdressers were graduated from all over the country. It is around six month course which makes the person capable of working as a junior in the international standard salons which is growing day by day in India’s big cities or metropolitan cities. L’Oreal distribution networks have also played an important role in the country over the past decade where more than 30000 hair dressers use the product of the same company and also helped in establishing 300 salons in the past few years all over the country.
L’Oreal uses various global marketing strategies on a worldwide scale and also taking the full advantage of the operational differences which are global and also the opportunities with the aim of getting their global objectives. According to some of the specialists of the cosmetic brands in china which are very successful, the modern woman of china does not use much makeup until the time of early 1990. The people of china used the products to show their culture and not for the purpose of beauty. For example the women used the color on the nails for showing their social class and not for the fashion or the beauty purpose. But after the early 1990 the use of makeup increased in china and because of this various cosmetic companies came into the market of china. L’Oreal has a history associated with china back to 1907 when one of the chemist named as the Eugene Schueller launched a hair color formula and after two years he also registered his company which was named as Societe Francaise de Teintures Inoffensive pour Cheveux which in future known as the L’Oreal. At present L’Oreal is one of the biggest companies of cosmetic and beauty with the total revenues of around 14 billion euro and approximately 52000 employees are employed in this company. This company has many global marketing strategies and one of which is growing the company which is sustainable strategy for L’Oreal. This strategy includes the management of brand carefully and also the careful acquisitions by the company. In the present scenario each and every company in the market faces a huge competition and in the case of L’Oreal they faced the competition very carefully and with full planning in Chinese market. For example this company sells their good quality product at the price cheaper than the companies like Olay and ponds which are launched in the market by the big giants and the specialist of the field known as the Procter and Gamble. This company has turned into a force which is global by clearing the different country’s cultural cachet into its vitals, by fully focusing on biggest 10 global brands concentrated on the color of hair, hair care, cosmetics color and also the fragrances. One of their best strategies is the acquisition of the local companies and also the brands which are established in the market of china. Because of this strategy of becoming a local brand, this company caused the acquisition of the brand named as Mininurse from Raystar in the year 2003 and one more in the year 2004 named as Yue-Sai. One of the best things of this company is that they learn from their mistakes and try to cover it very quickly. For example they learned from their negative experience with the Biotherm brand initially in US and this company has only few amounts of stores in Shanghai, Beijing.
In china, L’Oreal markets around 14 brands only in china which includes Lancome, Biotherm, Shu Uemura, Vichy etc. This company has a brand strategy of the diversification of the brands which fits in the culture of china. Unlike other companies this company embody their country of origin and not to seek homogenize of their brands for making palatable in entire cultures. According to one of the example L’Oreal in the year 1996 acquired a company of cosmetics of US and started their work for the makeover of the company which included the removal of the headquarters from Memphis to the city of New York for the promotion of its US origin. L’Oreal also takes a huge amount of risks during their work. For example this company acquired the well established and the successful brands of cosmetics in china. L’Oreal is not only targeted towards its market group but it also stands out culturally and this company also faces the risk of cannibalizing by marketing the local brands. L’Oreal realizes that their entire customers are individuals and not the entire market and because of this only it has managed to stand its brand very strong. L’Oreal has a great future in china as the demands of cosmetic products are increasing at a very rapid rate in china and L’Oreal with all its global marketing strategies which are discussed above will gain lot of profit in upcoming years.
Definition of Global Marketing Strategy-
There are various developments which can be seen in the international trade and increment in the importance of the e-commerce which are influenced by various factors which are making the implication of global marketing strategies in the businesses. The strategies which are adopted helps the firms making increment in the profit potential and share in the market. (Codija, 2010)
If we now try to define Global Marketing Strategies then it can be defined as the set of techniques and procedures which is adopted and used for studying the sentiment of the consumer, developing the new products and analysis of economic indicators in which the operation of the firm is operating. There are various kinds of strategies which are basically focused on the distribution and promotion of techniques which is used when the product is sold to multicultural clients. There are some firms and companies which hire international advertising agencies that help in the development of the global marketing strategies. There are not only marketing strategies which is only focused, other than that product development, price policies, promotion and distribution channels also plays an important role in the Global Marketing strategies.
Cultural Distinction in L’Oreal-
As we already know about the L’Oreal which is one of the largest companies all over the world in the sector of all kind of cosmetics. There are many countries which consist of different cultures according to which the company, L’Oreal has to develop its products in a particular country. The total worth of the company L’Oreal in the year of 2005 was $18.89 billion which was huge and among the most successful cosmetics company around the world. There are exactly seventeen international brands around the globe and L’Oreal was ranked 49th by the survey conducted by the Business week among various brands in the month of August 2004. Around a decade ago, there was about 75% of the company’s annual sales belongs from Europe and in 2004, 85% of the consolidated sales of the company were from the markets outside the France.
The most important factor which affects the micro and macro global strategy is the influence from the cultural societies and the social environment which includes the factors like family structure, social class, consumption pattern, decision making and market segmentation or they will try to make some kind of partnership to make their marketing at the global level by the local company. There is a main concern regarding global strategist which is the level of material culture in each and every region. There is a demand of the limited product lines for the corporations or firms which are planning to invest in the material culture which is less advanced such as semi industrialized nations in which most probably demand is more towards limited product lines. The firms have to cope with the greater amount of time to accept new service, complicated distribution systems and simpler advertisements.
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There is another cultural influence other than the one discussed in the above parts that is Aesthetics which is a reference to the stylistics’ taste of the society. This is the important element for making decisions related to the advertisement, product designing and packaging and similarly the universal education level of the society will show us the complication of the promotions, products and packaging but there may be some impact on the strategy related with the distribution and supply channel which is staffed by the locals. There are many other social influences which are listed as consumer attitude with respect to risk taking, family organization, religion, material gain and various other factors which also contributes to the cultural influence of the company like L’Oreal.
The L’Oreal has also strived to incorporate its total sales strategy into some other culture which can be result into failure. As we can take example of the General Motors which has met with the mishap that has attempted to market the Nova automobile in the Mexico and Spanish translation of ‘Nova’ refers to the ‘no go’. There are many other examples regarding mishaps which have occurred in many companies with the variance of different cultures around the globe.
As we talk about India which is also a multi cultural society, the brands like L’Oreal is adopting the local culture and preferences are also critical and there was a statement given by the L’Oreal India’s chief operating officer that “Increment in the blockbusters have led to the innovation in the product for the country”. L’Oreal was launched in the year 1997 when the company launched its professional products division and targeted on the largely unstructured hairdressing industry and sells its salon brand such as Kerastase, L’Oreal Professional and Matrix. There were around five regional training centre’s which were inaugurated to educate the salon owners and stylists and launched academy namely International Hairdressing Academy in Mumbai in 2006 which basically offers instructions related to the basic and advanced styling and there was a provision of regularly introduction of the international stylists to take workshops and seminars.
There are various kinds of customers which are located in various location of the country which are targeted in which mainly luxury products are sold in the India’s cosmopolitan cities such as Mumbai, Delhi and Bangalore instead of them there is a tough competition which can be seen in the segment of the small customers whether accessories, cosmetics and fragrances. There are many cultures in India which provide us better opportunities which can be seen in the cities like Ahmadabad and Aurangabad that are lacking in luxury products but the development is too fast which is the main target of the companies like L’Oreal.
There was a setup of wholly owned Indian subsidiary operation in the year 1994 with the launching of the product of shampoo that is Garnier Ultra Doux shampoo. This was the period when there is explosion of television viewing and Indian women has taken great interest in the international beauty pageants but there were tangible changes which were visible only in few years ago when women has shown interest in joining the workforce. There were two key turning points which were Disposable income and exposure to globalized culture. (L’Oreal)
The L’Oreal Company in India is the fastest growing subsidiary in the L’Oreal group and is around $200 million Company. In this emerging market there is lack of product penetration which provides us generous room for growth. There is launching of new manufacturing plants in India with the production capacity of around 100 million units a year. There is three division of L’Oreal in India which includes Consumer Products Division, Professional products division and Active cosmetics division.
L’Oreal mainly focus on the young women which are prone towards the beauty in which its continuous efforts has been in the field of encouraging women to pursue their career in the field of Science, L’Oreal India which has been announced from seven consecutive years. There are various operations pursued in various countries which shows its multicultural attitude, that is, there are around 42 factories around the world, 46 billion units are manufactured and around 95 percent of the factories are ISO 14001- certified. There are various variations among the cultures around the world according to which there are different kind of demand from the company around the globe. There are many programs which are being run by the L’Oreal which supports many people which are disadvantaged, suffering from illness. There has been adoption of La vie, de Plus Belle by the association of cosmetic professional which has also supported most of the companies in and around the France but mainly it has focused in France only. In the year 2007, L’Oreal has founded a foundation which has provided funds to the Samusocial of Paris, which is a municipal emergency service that basically provides medical aid to the people who are homeless. There is such good work which is also conducted by the L’Oreal that has not only maintained its status in the marketing sector else they have developed their reputation in the social works also. (L’Oreal’s Global Branding Strategy)
As we have seen about the L’Oreal which is a world class company with its registered office in Paris and has developed reputation in the field of cosmetics. They have mainly focused on the hair color, skin, hair care, make-up, sun protection except that company has also actively participated in the pharmaceutical and dermatological fields.
There is an adoption of some techniques by the L’Oreal in order to enter in the market and competition, which basically injects its brand name with the vitality with the youth. It basically creates storms or we can say brainstorm of ideas. There is continuous 14th year of ruling by this company in the field of cosmetics and there are various chances given to the undergraduates in their last two years to become Brand Manager on one among the signature lines of the L’Oreal Company.
There were two countries which were taken India and China in which the condition and status of the L’Oreal is discussed. There has been a cultural distinction which has been shown in the above paragraphs around the globe.
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