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MASTER OF BUSINESS ADMINISTRATION LS

MKT6205E: MARKETING MANAGEMENT
MAY 2024 SESSION
INDIVIDUAL ASSIGNMENT

MARKETING MKT6205E
Module Name Module Code
MANAGEMENT

Module Leader DR. GANESH RAMASAMY Individual Assignment

Student Name NG XINLE Student ID i24026656

I certify that this assignment is my own work and where materials have
been used from published sources, they have been properly
acknowledged. I understand I will receive a mark of 0% for this
assignment and may receive further penalties if the content is found to
be plagiarised.

Student’s Ng Xinle
Declaration
Signed: ____________________________________________

13/6/2024
Date: _____________________________________________

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Table of contents

1.0 Introduction……………………………………………………………………………….3
2.0 Growth of Brand Portfolio………………………………………………………………..4
2.1 Local and Global Marketing ……………………………………………………..4
2.2 Smart Acquisitions ……………………………………………………………….5
2.3 Research and Development…………………………………………………….....6
3.0 Key to successful local product launches ………………………………………………...6

4.0 L’Oréal’s future on a global level………………………………………………………...8

4.1 Marketing Strategies and Planning on Marketing, Region and Division………...8
4.2 Competitors……………………………………………………………………….9
4.3 Recommendations on Leadership and Positioning………………………………10
4.0 Conclusion……………………………………………………………………………….12
5.0 References………………………………………………………………………………..13

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1.0 Introduction
Effective marketing hinges on understanding, creating, delivering, capturing, and sustaining
customer value. Strategic planning prioritizes managing businesses as an investment
portfolio, assessing business strength by market growth and company fit, and establishing
strategies (Kotler.P. et al., 2016). Large companies operate on four levels: corporate, division,
business unit, and product (Baines et al., 2021). The marketing plan, central to coordination,
operates on strategic and tactical levels, detailing target markets, value propositions, and
marketing tactics. The goal of strategic planning is to align the company's businesses and
products to achieve desired profits and growth (Varadarajan, 2012). The complete cycle of
strategic planning includes planning, implementation, and control.

L’Oréal, founded in Paris over 100 years ago by chemist Eugene Schueller, started with
patented hair dyes and expanded to beauty products like suntan oil and mass-market shampoo
by the 1930s. Today, L’Oréal is the world’s largest beauty company, distributing 27 global
brands in 130 countries, with over $30.8 billion in sales.

In this paper, by examining pertinent literature, reviewing previous research, and analysing
marketing materials related to marketing strategies and planning, mission, marketing tactics,
marketing research are discussed. The paper also explores future by forecasting demand and
trend.

Figure 1 : Complete planning, implementation, and control cycle of strategic planning

Source :www.google.com

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2.0 Brand Portfolio

2.1 Local and Global Marketing
L’Oréal’s brand portfolio exemplifies strategic growth through local and global marketing.
Sir Lindsay Owen-Jones transformed L’Oréal from a modest company into an international
cosmetics powerhouse. This is an example of Corporate and Division Strategic Planning
which involves accessing growth opportunities. Owen-Jones’ strategic vision involved
divesting weak brands and focusing on product innovation, driving L’Oréal’s expansion into
global markets, including China, South America, and the former Soviet Union (Darroch,
2010). This strategic diversification aimed to meet the beauty needs of men and women
worldwide, making beauty products accessible to a broader audience. This is a clear example
of Corporate and Division Strategic Planning where he defines the corporate mission,
establishes strategic business units (SBUs) and assigning resources to each SBU
(Hoopes,2013)

Besides that, he also focuses on business unit strategic planning by categorizing the products
offered and segmentized the target market (Tomczak et al., 2017). Today, L’Oréal’s brand
portfolio focuses on five areas of beauty expertise which are skin care, hair care, makeup,
hair coloring and perfume and categorized into four distinct groups, targeting specific market
segments and consumer needs for example consumer products (52% mass-market brands),
L’Oreal Luxe (27% premium brands), Professional Products (14% salon-specific brands), and
Active Cosmetics (7% dermo-cosmetic products sold in pharmacies and medi-spas).

Lastly he too did not neglect on the marketing planning (Proctor, 2020). L’Oréal, a global
leader in beauty products, prioritizes marketing strategy, investing around $5 billion annually
in advertising as the third-largest advertiser. As Gilles Weil, head of luxury products, noted,
“You must be as strong locally as the best locals, but with the support of an international
image and strategy.”

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Figure 2 : The Role of Strategic Planning

Source : www.edugonist.com

2.2 Smart Acquisitions

L’Oréal's smart acquisitions is a form of integrative growth which is build or acquire
businesses related to current businesses to its marketing strategy. Aligning with its mission of
precise target marketing by purchasing local beauty companies with specific target market
segment. Through SWOT analysis, L’Oréal identifies opportunities and threats which are
external environment, leveraging acquisitions to capitalize on trends and mitigate risks.
Internally, it evaluates strengths and weaknesses to ensure acquisitions complement its
portfolio. Goal formulation guides acquisitions for brand growth. Strategy formulation
integrates brands seamlessly, maximizing market penetration which STP is practised. STP
stands for Market Segmenting, Targeting and Positioning. This phase involves analysing
market segments, selecting target segments, and positioning the product or service to
effectively meet the needs of those segments. STP helps in determining how to allocate
resources and develop marketing strategies to achieve the business unit's objectives within
the market segments it targets. Program formulation develops tailored marketing to reposition
acquired brands also known as revamp. Implementation leverages marketing expertise for
growth expanding the brand into new areas through L’Oréal's powerful marketing arm .
Feedback monitors performance, ensuring alignment with business objectives. This approach
solidifies L’Oréal's as a global beauty leader.

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Figure 3 : The Strategic Planning Gap

Source : www.edugonist.com

Figure 4 : The Business Unit Strategic Planning Process

Source : www.edugonist.com

2.3 Research and Development

L’Oréal's R&D investment, exceeding industry standards at 3.5% of sales, drives tailored
product innovation to meet diverse regional beauty needs. This, coupled with internal
marketing research, marketing intelligence and research investigation, provides up-to-date
insights into overall market, competition, threats and opportunities which used to measure
progress, adapt strategies, and ensure continual improvement in brand performance (Bradley,
2013). These data allow Loreal to understand the unique beauty routines and needs of
different cultures, climates, traditions, and physiologies.

3.0 Key to successful local product launches

In Japan, L’Oréal orchestrated a brilliant local product launch with the unveiling of
Wondercurl mascara, meticulously tailored to address the specific needs of Asian women,
particularly those with short, straight eyelashes. This strategic initiative propelled Wondercurl
to the summit of Japan’s cosmetic market, capturing the title of the country's top-selling

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mascara within a mere three months. The response was remarkable, with young women
eagerly queuing outside stores to secure this innovative product. Seizing on this initial
success, L’Oréal conducted thorough market research to gain deeper insights into the
Japanese consumer landscape, leading to the expansion of its product portfolio to encompass
nail polish, blush, and other cosmetics tailored to the preferences of this burgeoning Asian
demographic. This swift and decisive action not only capitalized on the initial excitement
surrounding Wondercurl but also generated additional revenue streams as consumers,
impressed by the quality of the mascara, were more inclined to explore and purchase other
products within L’Oréal’s expanding range (Wilson & Norton, 1989). It exemplifies the
essence of market penetration strategies, leveraging the success of one product to drive sales
of complementary offerings, thereby maximizing market share and profitability.

Looking ahead, L’Oréal envisions significant growth opportunities in emerging markets such
as Asia, Africa, and Latin America. They anticipate that by 2020, a substantial portion,
between 50% to 60%, of their sales will emanate from these regions. To realize this ambitious
projection, L’Oréal has made strategic investments in establishing new research centers in
these markets. These centers facilitates deep understanding of the diverse beauty needs and
preferences of the burgeoning customer bases in these regions. This proactive approach is
market development strategies, focusing on expanding into new geographical territories to tap
into previously untapped consumer segments (Bradley, 2013). By tailoring their products and
marketing strategies to suit the unique cultural and demographic characteristics of each
region, L’Oréal aims to establish a strong foothold and capitalize on the immense growth
potential offered by these markets.

Renowned for its iconic advertising slogan—“Because I’m Worth It”—L’Oréal has solidified
its position as a trailblazer in the global beauty industry. This slogan encapsulates the essence
of customer value proposition, emphasizing the empowerment and self-worth associated with
using L’Oréal products. With an annual advertising expenditure exceeding $5 billion, L’Oréal
shows its unwavering commitment to brand awareness, consumer engagement and
promotions (Duan & Sheinin, 2014). Gilles Weil, the head of luxury products at L’Oréal,
succinctly captures the essence of the company’s strategy, emphasizing the imperative of
maintaining both local relevance and international resonance. This strategic alignment
ensures that L’Oréal’s products resonate with consumers across diverse cultural and
geographical landscapes while retaining the overarching brand image and strategy that
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underpins the company’s global success. This integrated approach to marketing and brand
management exemplifies the principles of strategic alignment, ensuring that all facets of the
organization work cohesively towards achieving common objectives.

4.0 L’Oréal’s future on a global level

4.1 Marketing Strategies and Planning on Marketing, Region and Division
According to L’Oréal 2023 annual report, CEO Nicolas Hieronimus foresees the "dopamine
effect", which entices consumers seeking both well-being and pleasure from beauty products.
This aligns perfectly with L’Oréal's 115-year legacy. L’Oréal aims to surpass competitors
leveraging its scientific expertise, innovation, digital prowness, and diverse brand portfolio.
L’Oréal will realign its regional presence to capitalize on global growth focusing on
opportunities and risks in Asia and emerging markets, while reinforcing its stronghold in
Europe. Although consumer products and luxe has the most sales contribution at 36.8% and
36.2% respectively, however dermatological beauty and consumer product contributes to
higher growth at +28.4% and +12.6%. In addition, they will also advance its sustainable and
inclusive transformation initiative, L’Oréal for the Future, aligns with new European
sustainability reporting standards (L’Oréal annual report, 2023).

Figure 5 : Breakdown of L’Oréal 2023 sales

Source : L’Oréal annual report 2023

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Figure 6 : L’Oréal for the future

Source : L’Oréal annual report 2023

4.2 Competitors
L’Oréal is break into 4 divisions which are consumer products, luxe, dermatological beauty
and professional products. Each division has its own segmentation, target and position. A
market segment is a group of customers with similar needs and wants. Market targeting
involves evaluating the attractiveness and feasibility of each market segment and selecting
one or more to enter. Firms assess segments based on their overall appeal and alignment with
company objectives and resources. Large companies may use differentiated or
undifferentiated strategies to cover the entire market. Positioning involves crafting the
company's product and brand image to secure a unique and memorable spot in the minds of
the target market (Jackson & Shaw, 2009).

Figure 7 :Market Targetting

Source : www.edugonist.com

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Under consumer products division, Coty is the competitor of L’Oréal, while Dior is under
Luxe, Clinique is under dermatological beauty and Schwarzkopf Professional is under
professional products. Since dermatological beauty has the highest growth at +28.4% let’s
zoom into this competitor. In the realm of skincare, Clinique distinguishes itself by forefront
of skincare and cosmetics, offering a comprehensive range of products meticulously crafted
in their laboratories. Founded on the principle of the essential three-step regimen—cleansing,
exfoliating, and moisturizing—Clinique's creations undergo rigorous clinical testing by
dermatologists, ensuring they meet the highest standards of allergy testing, fragrance-free
formulation, and suitability for diverse skin types. Originally dedicated to enhancing women's
beauty, Clinique expanded its vision in 1976 by pioneering a men's product line, marking a
groundbreaking move in the cosmetics industry. This adaptability to evolving customer needs
has been pivotal in Clinique's enduring success, consistently introducing an array of products
that align with market trends.

Beyond skincare, Clinique has diversified its offerings to encompass hair care and makeup,
enriching its marketing mix to cater to varied beauty needs. The product line spans across
categories such as skin care from cleansers to masks. Clinique addresses concerns such as
dark spots, aging, dryness, and oiliness, ensuring comprehensive skincare solutions. Besides
that, it also ventures into makeup offering an extensive array including blush, eyeliner, lip
gloss, and more. Clinique empowers individuals to express their unique beauty through
quality cosmetics.
Lastly, fragrance catering to both genders. Clinique presents a range of perfumes and
deodorants, exuding sophistication and allure. Clinique's commitment to innovation, quality,
and diversity continues to redefine standards in the beauty industry, earning the trust and
loyalty of discerning customers worldwide (Team, 2023).

4.3 Recommendations on Leadership and Positioning

As the CEO of L'Oréal, my focus is on driving growth and sustaining leadership in the global
beauty industry through strategic initiatives. This involves defining a clear vision that
emphasizes innovation, sustainability, and customer-centricity (Barsh and Davidson, 2008).

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Promoting an inclusive culture where every voice is valued and fostering agility in decision-
making to quickly adapt to market changes are also key priorities.

Positioning L'Oréal as a brand that champions "Beauty for All" by emphasizing inclusivity,
diversity, and personalization is essential. This means offering products that cater to a wide
range of skin tones, hair types, and personal preferences. Over the next 10 years, we should
focus on market expansion and penetration by entering emerging markets in Asia, Africa, and
Latin America with localized products and strategies, while enhancing our presence in
existing markets through improved distribution and e-commerce. Technological integration is
critical, with AI and machine learning being incorporated into product development, supply
chain management, and customer service. Offering personalized beauty solutions using AI for
customized skincare and haircare can set us apart (Marketing with ai, 2021).

To stay ahead of trends and consumer demands, we must establish innovation hubs in key
regions and launch a dedicated fund to invest in beauty tech startups and emerging
technologies. Our future market segments must include Gen Z and Millennials, focusing on
sustainability, inclusivity, and innovation through digital-first strategies. Expanding the men’s
grooming segment and promoting self-care among men, as well as introducing products that
focus on health, wellness, and holistic beauty, will also be crucial.

In marketing, we need digital eg paid and earn media with mobile-first strategy, optimizing
content for mobile devices and investing in AR and VR for immersive experiences. Utilizing
AI to analyze consumer data for personalized marketing and product recommendations,
strengthening collaborations with influencers, and creating a seamless omnichannel
experience are essential steps (Negi, 2023).

Highlighting our sustainability efforts in marketing campaigns will attract environmentally

conscious consumers and educate them about the benefits of sustainable products. Our
strategy must include enhancing sustainability and ethical practices by reducing our carbon
footprint, using sustainable ingredients, and promoting recycling (Baines et al., 2022).
Accelerating digital transformation across all business functions, from R&D and production
to marketing and customer engagement, is crucial. Investing in R&D to develop innovative,
high-quality products that address emerging consumer needs, particularly in health, wellness,

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and environmental impact, will keep us ahead of the curve. We aim for sustainability
leadership, striving to achieve carbon neutrality by 2035 and adopting a full lifecycle
sustainability approach for all products.

By implementing these strategies, L'Oréal can continue to innovate, lead in sustainability, and
maintain its position as a top global beauty brand.

Conclusion
Effective marketing management involves understanding, creating, delivering, capturing, and
sustaining customer value, managed through strategic planning at corporate, division,
business unit, and product levels. L'Oréal, founded over 100 years ago in Paris, has grown
into the world's largest beauty company. Key to its success are strategic growth through local
and global marketing, smart acquisitions, and R&D investment. L'Oréal's brand portfolio
includes diverse product lines, catering to various market segments globally. The company's
future strategies focus on sustainability, digital transformation, personalized beauty solutions,
and expanding into emerging markets, with a strong emphasis on inclusivity and innovation
to maintain its global leadership.

(2400 words)

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5.0 References

Baines, P. et al. (2021) ‘Marketing environment and strategy’, Fundamentals of

Marketing [Preprint]. doi:10.1093/hebz/9780198829256.003.0006.

Baines, P., Rosengren, S. and Antonetti, P. (2022) ‘Marketing, society, Sustainability, and
Ethics’, Marketing [Preprint]. doi:10.1093/hebz/9780192893468.003.0022.

Barsh, J., Capozzi, M. M., & Davidson, J. (2008). Leadership and innovation. McKinsey
Quarterly, pp. 1, 36.

Bradley, N. (2013) ‘Introduction to marketing research’, Marketing Research [Preprint].

doi:10.1093/hebz/9780199655090.003.0002.

Darroch, J. (2010) ‘Pushing product-market boundaries by pursuing growth opportunities and

creating new markets’, Marketing Through Turbulent Times, pp. 89–105.
doi:10.1057/9780230251182_8.

Duan, J. and Sheinin, D. (2014) ‘Advertisement-evoked arousals and advertisement repetition

effects’, Developments in Marketing Science: Proceedings of the Academy of
Marketing Science, pp. 464–467. doi:10.1007/978-3-319-10951-0_175.

Hoopes, D. (2013) ‘Strategic Business Unit (SBU)’, The Palgrave Encyclopedia of Strategic
Management [Preprint]. doi:10.1057/9781137294678.0607.

Jackson, T. and Shaw, D. (2009) ‘Fashion marketing segmentation, targeting and positioning
(STP)’, Mastering Fashion Marketing, pp. 51–85. doi:10.1007/978-1-137-09271-7_3.

Kotler, Philip & Keller, K. (2016). Marketing Management. Upper Saddle

River, New Yersey.

L’Oréal annual report (2023) L’Oréal Finance. Available at: https://www.loreal-

finance.com/eng/annual-report (Accessed: 09 June 2024).

Marketing with ai (2021) Intelligent Marketing: Employing New-Age Technologies, pp. 21–
50. doi:10.4135/9789354792984.n2.

Negi, A. (2023) ‘Augmented reality (AR) and virtual reality (VR) as a sales and marketing
strategy’, Constructive Discontent in Execution, pp. 317–334.
doi:10.1201/9781003314837-18.

Proctor, T. (2020) ‘Marketing planning and implementing marketing strategy’, Absolute

Essentials of Strategic Marketing, pp. 100–111. doi:10.4324/9781003005704-12.

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Team, M.S. (2023) Clinique Marketing Strategy & Marketing Mix (4PS), MBA Skool.
Available at: https://www.mbaskool.com/marketing-mix/products/17478-clinique.html
(Accessed: 09 June 2024).

Tomczak, T., Reinecke, S. and Kuss, A. (2017) ‘Market-oriented business unit

planning’, Strategic Marketing, pp. 97–170. doi:10.1007/978-3-658-18417-9_4.

Varadarajan, R. (2012) ‘Strategic marketing and marketing strategy’, Handbook of

Marketing Strategy [Preprint]. doi:10.4337/9781781005224.00009.

Wilson, L.O. and Norton, J.A. (1989) ‘Optimal entry timing for a product line
extension’, Marketing Science, 8(1), pp. 1–17. doi:10.1287/mksc.8.1.1.

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