L'Oreal Bringing Class To Masses

Introduction

Nine years after introduction of Plйnitude to the US market, L'Orйal was still making losses. Some of the treatment creams were successful as niche products (e.g. Revitalift) but to be able to succeed in the daily moisturiser market, L'Orйal has to reposition its value proposition for the mass market.

Analysis

L'Orйal was an established brandname in the US for haircare products, which should have eased successful market entry into the facial cream category. By introducing Plenitude, a new brand with a foreign sound, L'Oreal had not established category membership effectively for each range of products. Customers either were not aware of or did not appreciate the key points of parity to make this connection. The marketing mix was not tuned to the US customer and therefore the key message was lost to clarify the product benefits to the customer. Plenitude had become market leader in France by targeting all potential buyers. However, the demographic usage in France appears different from the US, where usage of face creams is used over a more diverse age range. US advertisements were based on a successful french marketing campaign, where one product offered the benefit of 'reducing signs of aging' , displayed with a 'french-looking' woman. Two of the five skin care segments were targeted, only 40% of the total market. This resulted in entry into the treatment cream market - more of a niche market than the market for daily facial creams. The results of the perceptual mapping (exhibits 9 and 10) indicate Plenitude offers advanced technology and would appeal to premium customers prepared to spend higher prices for the best results. This suggests L'Oreal's target market selection is correct but the positioning is misaligned. The packaging of the products displayed high levels of information (exhibit 12) and the point of sale design represented a 'drugstore feel' (exhibit 5a). This appealed to customers who were technically aware and taglines had a scientific edge. The products were priced in the premium category , 15-20% above the competition. This approach was not aimed at mass market consumers and negative feedback highlighted a large number of alienated customers. The three market surveys generated good qualitative information but most of this was contradictory without collerating this data to other variables such as age or location. Overall it did tend to substantiate L'Oreal being the stronger brand and being known as a high quality supplier of innovative personal care products. Surveys (exhibit 11) revealed that most consumers were aware of the products (78%) but only one third had tried them. A major concern is the customer retention rate - of the customers who tried Plenitute, only 7% were loyal to the brand. The positioning of Plйnitude in the US meant it competed against Clinique and Esteй Lauder, also targeting the same customer segments. However, Esteй Lauder appealed to upper class and Clinique appealed to customers wanting to spend money on themselves. The value proposition of