L'Oreal

L'Oreal

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Problems/Issue Identification:
The case to consider is L'Oreal Nederland B.V. The birth of the L'Oreal began back in 1907 when, a young French chemist, Eugène Schueller, developed a new hair-color formula that was considered to be safe for hair. The new hair dye was named Auréole. "Eugène Schueller formulated and manufactured his own products, which he then sold to Parisian hairdressers. In 1909, Schueller registered his company, the Société Française de Teintures Inoffensives pour Cheveux ("Safe Hair Dye Company of France"), the future L'Oréal. The guiding principles of the company that would become L'Oréal were put into place from the start: research and innovation in the interest of beauty."(Wikipedia, L'Oreal) By 1920, this developing company employed 3 chemists and by 1950, the research team had grown to a 100 and has continued to grow to nearly 2,000 today. "L'Oréal got its start in the hair-color business, but the company soon branched out into other cleansing/beauty products. L'Oréal now markets over 50 brands and many thousands of individual products in all sectors of the beauty business: hair color, permanents, styling aids, body and skin care, cleansers and fragrances. They are found in all distribution channels, from hair salons and perfumeries to hyper- and supermarkets, health/beauty outlets, pharmacies and direct mail." (Wikipedia, L'Oreal) From the very beginning L'Oreal was founded on strong research and development techniques and today it has five worldwide research and development centers. "Two in France: Aulnay and Chevilly. One in U.S.: Clark, New Jersey. One in Japan: Kawasaki, Kanagawa. In 2005, one established in China: Shanghai." (Wikipedia, L'Oreal)
The Netherlands L'Oreal subsidiary is facing the new challenge of introducing two products under the Garnier name brand (a product line under L'Oreal) in order to start building up customer awareness in that particular region. According to our text, both products have been marketed successfully in France and the director, Yolanda van der Zandle needs to make the decision of whether or not to market one or the other or both (Cravens, 2002, pp. 135). Some test research has been done in the Dutch market so she is asking her marketing manager, Mike Rourke to review these test results and get back to her with his recommendations.

Analysis/Evaluation/Recommendation:
The first product to consider is the Synergie skin care line. The following criteria were to be examined; (1) Skin Care Market (2) Competition (3) Consumer Behavior and (4) Market Research.

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Related Searches

Our text states that overall the marketing research showed that there were many competitors especially in the Dutch market and that customers tended to be loyal to their current brands. It sampled 200 women between the ages of 18 and 55 that used skin care products at least three times a week and the research showed of those woman only 39% would buy the product even after knowing the price. Even with this being a relatively strong number the actual number of transactions per year would be one or two which in turn does not create a large demand for this product line (Cravens, 2002, pp.138-139). The second product to consider is Belle Couleur which had been successfully marketed in France for the past 20 years. The factors to be considered are similar to the skin care line; (1) Hair Coloring Market (2) Competition (3) Consumer Behavior and (4) Market Research. The text group was a bit larger, 412 Dutch women between the ages of 25 and 64 who had used hair color in the past four months. The research presented in out text explains the competition is somewhat comparable to the skin line competitors but of those in the pool the market research shows the marketing to weak. This would appear to give Belle Couleur a slight advantage in that is has marketed itself under the pretense it covers gray. As with Synergie, the consumers in this region were also considered very loyal to brand names and would possible avoid purchasing a new product because of the risk involved with coloring your hair (Cravens, 2002, pp.140-142). The sample of women where asked one question three times, would they buy the product. It was done before knowing the price, after knowing the price and then after they used the product. The percentages increased somewhat once the price was revealed but lowered significantly after use. When the women were asked why they disliked the product, many of the women thought their hair was too dark and that the promise that it would cover gray was not really the case (Cravens, 2002, pp.140-142).
Learning Outcome:
Based on the test results presented in the text, I do not believe the company should market either product but if forced to choose I would recommend only introducing the Synergie line under the Garnier brand. If the main goal is to try to build customer awareness for the Garnier line of products then even this product may be able to do this. Although the sales could be considerable less in the beginning allowing for the customer loyalty to build up, at least the product would be getting favorable response from consumers. As opposed to the Belle Couleur, which marketed on the premise it covers gray and failed to deliver. As well as the Dutch consumers were looking for a hair color that would give them lighter hair tones in contrast to the French consumers who liked the darker shades that Belle Couleur was known for. The real challenge in evaluating this case was determining whether or not increased sales was the real motivation in introducing one or two new products or building up a customer base for the Garnier line of products. I felt it was more along the lines of starting to get some name recognition for this new brand name under L'Oreal and that is why I felt it was safer to go with the Synergie skin care rather than the Belle Couleur that produced results of customer dissatisfaction.

References
1. Cravens, D.W, Critttenden, V.L, and Lamb, C W. (2002). Strategic Marketing Management. New York, NY: McGraw-Hill.
2. http://en.wikipedia.org/wiki/L'Or%C3%A9al
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