L'Oreal Plenitude Case Study

Problem Analysis

The huge success of L'Oreal Plenitude in French as the premium skin product with "class to mass" strategy was the primary reason for L'Oreal to expand the product to US market. The company started to enter the US market skin care in 1989 through mass channel by introducing the entire product line (14 SKU's) that had been developed in France, instead of launching the product one by one. Before Plenitude entered the US market, L'Oreal had had good reputation for its cosmetic and hair product, so the name was critical to sell the products. The company used the same formula "star" system in advertising as in France by putting bulk of dollars on the newest, most technologically advanced product. Even though Plenitude had a very strong introduction in the US by becoming the #2 brand in the market, the brand performance had been rather disappointing. In 1995, they had lost an approximate $12.5 million on the brand, and lost the #2 position to Pond's.

In 1995 and 1996, the company conducted three market research studies. From those studies, the company found out that the value proposition for Plenitude's daily cleanser and moisturizer was not that well established because of the "star" system. The studies also proved that American women had differences in pace of life, they just didn't have time to read a label about their skin products. They thought that the skincare line was too complicated and in particular the boxes and the labels would take too long to read. Many consumers thought that because of the product message "Reduces Signs of Aging", Plenitude was targeting older women. The company needs to decide how to improve further upon Plenitude's current position in the US, in terms of promotion, product offerings and packaging so the consumers would see it as a premium, effective, easy-to-choose brand at every age. Another important decision to be made is how to introduce the new product (Revitalift-eye) into the product line.

Recommendation

The company can change the product message from "Reduces Signs of Aging" to "Perfect Skin for Every Woman." This message will help Plenitude to clarify its target market not only for women in their 50s but also women in 20s, 30s,and 40s. To reduce confusion, L'Oreal Plenitude can divide its product lines into several sub brands, for example, L'Oreal Plenitude Pure Balance Series for women who have oily skin, Nutrient Series for women who have acne problem, etc. L'Oreal can provide in-store brochure or leaflet as the guideline or regime to choose the product. The guideline can start by asking the question such as; what kind of skin do you have?, Are you in the age 20s, 30s, 40s or 50 plus?, etc. After the consumers use the guideline, they will know which product they need. L'Oreal can also use direct mail (catalogue) to educate the consumers and promote their product. The catalogue will also give consumers the guideline