L'Oreal's Business Model

L’Oreal to me represents both the passion that I have for marketing and the love that I have for the beauty industry. I believe that every woman is beautiful in a unique way and beauty products enhance that already existing beauty. Searching for the need of your market segment is key and being able to meet those needs with excellent beauty products is success for a marketer. As a twenty two year old woman I had always been interested in make-up and beauty products but always believed that in order to look flawless, I had to have a personal beauty assistant. Two years ago I began to find YouTube videos in which beauty artists taught step by step how to do your make-up and hair. These artists reviewed beauty products and recommend their favorite products. I learned how to do my own make-up and hair and suddenly fell in love with the beauty world. I believe the beauty industry helps supplement that sense of security of looking good and feeling confident. And I personally believe that L’Oreal compliments their products with excellent marketing to create for their customers an excellent and fun shopping experience.

L’Oreal is the world’s largest cosmetic and beauty company. This company concentrates on hair color, skin care, sun protection, make-up, perfumes and hair care. L’Oreal’s mission is to enable all individuals to express their personalities, gain self-confidence and open up to others. They do so by offering all women and men worldwide the best of cosmetics in terms of quality, efficacy and safety. They also thrive to meet the infinite diversity of beauty need all over the world by adopting their products to new markets or developing new products for them.

L’Oreal can be broken down into 5 main category brands

Luxury Products	Consumer Products	Professional Products	Active Cosmetics
Lancome	Garnier	L’Oreal Professionnel	Dermablend
Giorgio Armani Beauty	L’Oreal Paris	L’Oreal Technique	La Roche-Posay
Yves Saint Laurent Beaute	Maybelline NY	Kerastase	Roger&Gallet
Biothem	Softsheen-Carson	Matrix	SkinCeuticals
Kiehl’s	Essie	Mizani	Vichy
Ralph Lauren		Redken
Shu Uemura		Pureology
Cacharel		Shu Uemura Art of Hair
Helena Rubinstein
Clarisonic
Diesel
Viktor&Rolf
Maison Martin Margiela
Yue Sai
Urban Decay

The luxury product category offer customers top products and premium service in department stores, specialty stores, and power outlets.

For consumer products, L’Oreal has developed high technology products that are sold at competitive prices and distributed through mass-marketing retailing.

The professional portfolio of brands meets the requirements of hair salons and provides customers with a wide range of innovative products.

In the dermo-cosmetic category, products are sold in pharmacies and specialist retailers. This technology is supported by advice from pharmacists and dermatologists that provide product efficacy for its users.

As you can see, L’Oreal owns the most important brands in each one of their categories. Over the years they have focused on the acquisition of new brands to penetrate new markets. Through a diverse brand portfolio L’Oreal has been able to reach from the very young to the more mature and even men.

The three main segments that are most interesting to me are young women, mature women, and hair professionals.

Young Women:

This segment is composed of women between the ages of 17 to 24. L’Oreal seeks to provide affordable quality make-up, hair products, and skin care through channels of distribution such as Wal-Mart, CVS, and Walgreens. In the make-up category, L’Oreal uses brand such as Maybelline to give teens and young adults the opportunity to have quality products that are comparable to department store brands but that are more affordable and wearable on an everyday basis. In the hair products category, with brands such as Garnier, L’Oreal provides convenience for young women who might not have the disposable income to spend money on a salon makeover, but who enjoy maintaining their hair healthy and up to date with color trends.

Hair Product Professionals:

This segment is made up by professionals in the hair products category, who work in a salon or who are currently going through cosmetology school. L’Oreal’s value proposition for this segment is to help beauty professionals grow by using their professional brands to continue to educate themselves and obtain the edge that would set them apart from the rest. This proposition is supported by the numerous classes and workshops that are offered to these professionals. At beauty schools they are taught the basics but it is their own responsibility to continue to evolve and learn new trends. These interactions with the brand allow the professional to develop their skills and provide a new offering for their clients. A better understanding of the product then turns into a regular usage of L’Oreal professional products and higher consumptions for the professional’s client.

Mature Women:

This segment is composed of women ranging from 35 years of age and older. This group is going through a transition from a young phase to a more mature phase. In this transition they seek to maintain the freshness of their skin and the youthfulness of their hair. L’Oreal’s value proposition for this group is to provide skin cleansers, moisturizers, and anti-aging products with professional quality ingredients. These products give women at-home anti-aging alternatives that are affordable and accessible at any time. Likewise, with brands such as L’Oreal Paris, L’Oreal offers to maintain the healthiness of these women’s hair by bringing their shine back and improving their appearance through beautiful and lasting hair colors.

These three market segments are of interest to me because when I think about them I can see my mother and I. We are both different in age but we both value personal appearance although our needs are different due to age. It is astonishing to me the high level technology that L’Oreal has developed over the years to satisfy these needs not only over age segments but over different country markets. L’Oreal is not only a company seeking to satisfy different tastes in beauty through colors and scents, but a company who is continually innovating to create the latest technology and remain a beauty icon for the future.

Sources:

L'Oreal/Brands: http://www.lorealusa.com/_en/_us/

L'Oreal/ Mission:http://www.lorealusa.com/_en/_us/html/our-company/mission.aspx?