L'oréal Social Media Analysis

STEP 1 - PLANNING REPORT

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Table of Contents

1 Background on L’Oréal        2

2 Purpose of This Report        3

3 Theoretical Choices        4

3.1 Market Communication Models        4

3.2 How L’Oréal Communicates        5

3.3 How This Affects its Target Groups        7

4 Tools for Empirical Analysis        9

5 References        9

1        Background on L’Oréal

L'Oréal S.A. is a French cosmetics company, that was founded in 1909 when Eugene Schueller, chemist that developed an innovative hair dye formula, started selling it to the Parisian salons. They focus mainly on manufacturing beauty and hair products as they believe that “their mission is to provide the best in cosmetics innovation to women and men around the world with respect for their diversity” (L’Oréal, 2017). L’Oréal got its start in the hair-colour business, but the company soon branched out into other beauty products. Today, L’Oréal is the world's largest cosmetics and beauty company as it is present in 130 countries on five continents. The company currently owns 39 world’s well-known brands such as Maybelline, Lancôme and L’Oréal Paris (L’Oréal, 2017). They produce cosmetics in largest quantity in the world as they manufacture more than 500 brands and thousands of individual products in all sectors of beauty and fragrances (Success Story, 2017). Their products can be found in all kinds of distribution channels - from hair salons and perfumeries to supermarkets and drugstores.

When it comes to delivering L’Oréal’s message to the consumers, choosing the right channel to communicate with them is the key driver of revenue growth. It includes among others advertising, direct marketing, branding and packaging (Mars, 2013). L’Oréal uses most of them in their strategy as they try to ensure to use the right channels to communicate with each consumer segment.

Another important part of L’Oréal’s marketing communication strategy is the use of celebrity endorsers. Traditionally, L’Oréal made use of advertisements featuring all kinds of beautiful women which could be seen on TV advertising, billboards or magazine advertisements. All adverts involved one-way messages, which included the famous tagline: ‘because You’re Worth It’ (Ramzi Chamat, 2017). L'Oréal has been involved using celebrity endorsement, their so called ambassadors, since many years. The company supports its unique vision of beauty by 35 diverse international ambassadors who are models or actresses such as Blake Lively, Doutzen Kroes and Eva Longoria, who tell customers they are worth it in a variety of languages. With its different ambassadors all over the world L’Oréal pursues the purpose to address the different cultural requirements of their customers as well as to add glamour to their specific product and overall brand and  make it more credible, desirable and trustworthy.

With rising popularity of social media, companies decided to use social media influencers as their ambassadors as well. Furthermore, Adrien Koskas, general manager at L’Oréal Paris U.K. has stated in a interview: “influencers have a different value because they are the voice of consumers. They can help us craft better campaigns, content and products and get live feedback in the process. Through them, we can reach communities we couldn’t reach before, and make the face of L’Oréal Paris more inclusive”. Emma Williamson, L'Oréal’s manager for consumer affairs, said that “ [...] social media is really important for beauty companies, and at L'Oréal we understand this. We know that consumers are actively looking to online platforms for trend advice, look inspiration and product recommendation” (Williamson, 2015). These quotes point out the prominence of the use of social influencers in L’Oréal’s marketing communication strategy.[pic 2]

2        Purpose of This Report

Out of all different kinds of marketing communication that L’Oréal includes in their marketing strategy, we decided to focus mainly on celebrity endorsement and its subcategory – social media influencer endorsement particularly regarding online media. Nowadays, celebrity endorsement strategy is used more frequently as “brand or company’s reputation accounts for 75% of its value, and persuasion and influence are becoming ever-more central to customer purchasing decisions” (L'Oréal, 2017). Studies show that celebrity endorsement is very effective as just one endorsement can increase sales by 4% almost immediately (Olenski, 2016). Additionally, the rise of ad-blocking forces many brands in online marketing to reinvent their advertising strategies in order to reach and influence their customers without relying on display, search and social ads (Dolle, 2017). This, accompanied by the continuous rise and importance of using social media (Khanom, 2017), makes L’Oréal’s online celebrity endorsement strategy even more interesting to look into.

So L’Oréal has recognised the importance of online and social media advertising as well, as it enables the company to reach a wider audience and customize their message at the same time to use the right channel for each customer segment. Subsequently, this ensures better engagement with consumers which leads to better adaption (Trefis Team, 2017). Furthermore, nearly 92% of consumers trust an influencer more than an advertisement or traditional celebrity endorsement (Weinswig, 2016). With the help of a wide range of online advertising such as video advertising, online influencers and personalized communications and recommendations, L’Oréal wants to enhance the consumer engagement (Trefis Team, 2017). In this report, there will be analyzed how L’Oréal is doing in terms of their online celebrity endorsement strategy, starting with elaborating on the theory behind it.