Brand Audit L'Oréal

I – Business Analysis

L’Oréal is a French brand with a turnover of 2 777 000 000,00 €. It is the world leader in beauty : makeup; cosmetics and haircare.

Current sales of L’Oréal : 22 977 millions of euros in 2013. The profit in 2013 is 2 961 millions of euros.

The sales have growth from 13 740 millions of euros in 2001 to 22 977 in 2013, so it has growth of 9 237 millions of euros in 12 years, and for the profit, it has growth of 1732 millions of euros during 12 years.

In 2014 :

Strategic initiatives is the “house of brands” L’Oréal strategy in which some 20 brands are used to span the relatively narrow area of cosmetics and skin care in the US. There is a high level of clarity, differentiation and leverage. Out of the 20 L’Oréal brands, four are “consumer products” and are distributed through drug and discount stores, 13 are “luxury products” distributed through department and specialty stores, four are “professional products” used by hairstylists, and four are “active cosmetics” sold to dermatologists and other specialists.

Several businesses are important financially and strategically now :

- Makeup

- Cosmetics

- Haircare

- Haircolour

- Skincare

- Sun protection

- Perfumes

In the future :

- Cosmetics for men

- Haircare for men

Men are expected to take care more and more about their body, their hair and their face, cosmetic for men is no more a taboo subject. Before, men were considered as gay if they used products like that.

Segments which are important financially and strategically now :

- Middle aged and working women : the main target.

- Young women between 20 and 35 years old : the second target.

In the future :

- Middle aged men, they take care more and more about their physical appearance.

II – Brand Architecture

Brand Portfolio

Brands of L’Oréal group are divided in segments on the basis of product. The portfolio is divided into four groupings, with little overlap in customers and outlets. Out of the 20 L’Oréal brands, four are “consumer products” and are distributed through drug and discount stores, 13 are “luxury products” distributed through department and specialty stores, four are “professional products” used by hairstylists, and four are “active cosmetics” sold to dermatologists and other specialists.

- L’Oréal Luxe (with Lancôme, Giorgio Armani, Yves Saint Laurent Beauté, Biotherm, Kiehl’s, Ralph Lauren, Shu Uemura, Cacharel, Helena Rubinstein, Clarisonic, Diesel, Viktor&Rolf, Yue Sai, Maison Martin Margiela, Urban Decay, Guy Laroche, Paloma Picasso).

- Consumer products division : L'Oréal Paris, Garnier, Maybelline New York, Softsheen-Carson, Essie.

- Professional Products Division (with L’Oréal Professionnel, Kérastase, Redken, Matrix, Pureology, Shu Uemura Art of Hair, Mizani, CARITA, Decleor).

- Active Cosmetics Division (with Vichy, La Roche-Posay, SkinCeuticals, Roger&Gallet, Sanoflore).

- The Body Shop.

I cannot speak about sub-brands because there are too much in every brands L’Oréal has in its portfolio.

BRANDS



Portfolio Roles :

L’Oréal Paris is aggressive with branding innovations such as Pro-Retinal A or Silk & Shimmer Conditioning Technology and is giving them legs, it is the strategic brand. It has a host of sub- brands and endorsed brands such as L’Oréal’s Age Perfect, Couleur Experte, and Feria. Finally, the firm also generates descriptive umbrella brands such as Eye Studio, Instant Age, and “Can I help you?” the L’Oreal Paris’ community site. Each brand has a role and the portfolio as a whole has energy and coherence. L’Oréal Paris is affordable luxury with excellence around the beauty Claudia Schiffer. Actually, it is the linchpin brand. Maybelline New York is trendy, innovative and infused with New York energy, it can have a linchpin role too.

Garnier and Softsheen & Carson are the silver bullets, Garnier is inspired by natural ingredients and dermatological science and Softsheen & Carson is focused on women of color who are looking for confidence, individuality and flair. There is not additional silver bullets needed.

All are highly differentiated with strong positions that connect to their audience.

Consider, in contrast, Shiseido, much more of a branded house, which spans a wide quality/price spectrum and struggles to resonate in segments targeted by L’Oreal, especially in the US and Europe, Shiseido can have a cash cow role.

There is too little attention paid to the brand portfolio and how each brand needs a role. In part this is due to decentralized organizations that fail to coordinate brands and in part this is because portfolio strategy is simply neglected.

III – Product-Market Context Roles

Substantial driver responsibility brands :

The brand which has substantial driver responsibility is L’Oréal Paris, every brands in the segment L’Oréal Luxe such as Lancôme and Yves Saint Laurent Beauté and even The Body Shop. Actually, brands which have the most equity are Lancôme, Yves Saint Laurent, Cacharel, Diesel... Because there are luxuous brands and they have a lot of value for customers. They really see these brands as chic, good quality products, prestigious... When a customer speak about a brand which is in the L’Oréal Luxe group, they don’t talk about the brand L’Oréal, they talk about the brand such as Lancôme, they don’t even know that it belongs to L’Oréal so all these brands have a good equity.

The Body Shop has a strong equity too and a substantial driver responsibility because everybody buys products from The Body Shop and not from L’Oréal,

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