L’Oreal of Paris: Bringing “Class to Mass” with Plenitude L’Oreal, a long time hair care, skincare, and cosmetic leader, was faced with a positioning problem of their Plenitude skincare line. The Plenitude line, which included cleansers and moisturizers had been a smashing success in the French skincare market following its 1982 introduction and was introduced in the U. S. market in 1988. It had grown quickly to become the #2 brand in the market, behind Oil of Olay. Plenitude was marketed as an upscale product bringing new people into mass channels from department stores.
A four-year sales plateau was reached and their #2 position was lost to Pond’s. Carol Hamilton, Senior Vice President of Marketing for the L’Oreal Retail division was faced with a division that wasn’t making any money after an 8-9 year introduction into the U. S. market. Carol Hamilton believed that there were four key areas to focus on to improve their position. 1. Improve the top line-break through the sales plateau and move more products to maintain a strong position. 2. Get the bottom-line moving in the right direction quickly. 3. Get the U. S. in a position to be a major contributor to the brand’s position globally. . Make sure that they had suitable skincare products for the U. S. customer while maintaining the L’Oreal technology portfolio. Multiple aspects of the organizational structure had to be rethought. A new brand positioning needed to be crafted. Did they have too many products? Was the premium pricing appropriate for all of the products? Is the “star” system of putting all their media dollars behind their newest and most technologically advanced product still the best way to go? Are the aspects of their strategy “too French” for the U. S. market? How do they utilize their powerful asset- the L’Oreal brand name?
In order for L’Oreal to achieve their desired goals they need to develop their positioning strategy. The first step is to develop and communicate their positioning strategy. They need to target the customers that they can satisfy in a superior way and then position their offering so their target market recognizes the company’s distinctive offering and image. Results from the September 1995 Facial skin Care Market Study showed that 54% of Plenitude users fell into “Stressed Out” and “Age Focused” groups. Olay users only showed 36% falling into these categories.
Additionally, young rejecters of the Plenitude formula found the brand to be too heavy or greasy. Therefore, target customers would be those that fall into a more mature segment of the population, as well as, falling into the “Stressed Out” or “Age Focused” groups. Once the target market is identified, a customer-focused value proposition needs to be created. Additionally, identifying the competition and identifying the ideal points of parity and points of difference brand associations. The points of difference between the leading skincare brands were identified in the Acceptor/Rejecter Studies.
The results can be broken down into the following categories: Motivation for trial of Plenitude, Response to product formula, Perception of Plenitude as full product line, Response to Plenitude packaging, and perceived target customer. The L’Oreal brand name was cited by many as a primary motivator for trial demonstrating the strong brand image. The products are seen as department store quality in mass outlets. However, the product formulas were viewed as too heavy or greasy to young rejecters. Uniformly, people saw the Plenitude line as having a large number of products; for some this was a plus, for others a minus.
The packaging of Plenitude seemed overwhelming to many consumers. Additionally, some felt the products were targeting older women due to the focus reducing the signs of aging. The second acceptor/rejecter study was of Oil of Olay and Pond’s. Oil of Olay trial was generated by many mechanisms; from grandmother use to advertisements in Seventeen magazines. Pond’s was seen as a staple of life; from seeing commercials 20 years ago to being inexpensive and readily available on the shelves. Acceptors of Oil of Olay found it to be light and reasonably priced where acceptors of Pond’s saw it as reliable, accessible and reasonably priced.
Oil of Olay was seen as the traditional, generational brand where Pond’s brand imagery was older, down-to-earth. The Shelf Shopping Study for Plenitude revealed positive aspects that included appreciating the continual release of newer products and research and the multiple product line. The negative aspects were primarily based upon the large product line that continually offered new products creating confusion and frustration. The same study for Oil of Olay revealed the brand image to be seen as old fashioned but with long standing reliability.
The brand image of Pond’s was viewed as being really heavy and “gross” and as a product for “old ladies”. The L’Oreal name is considered as a step up and as having a French twist. Often times, it is viewed as being really expensive with packaging that is chaotic and complicated. However, the extensive detail and information was considered an attribute to some customers. Based upon all of the above information they can develop their strategy. My proposals are as follows: 1. Straddle their positioning by creating a “best of both worlds” targeting young and older consumers.
They need to continue marketing their Plenitude treatment products to the older consumers but also develop/market a preventative product for the younger clientele. The focus for the younger clientele would be a regimen that starts in the twenties to maintain their youthful appearance. The youth focused strategy would create brand awareness and product use that could carry forward for many years. 2. The focus of their differentiation strategy should be on product innovation and extensive skincare research along with the already in place perception of having a more exquisite product line.
These areas are what set them apart from their competitors and is their competitive advantage. The treatment areas are where their technological skills stand out and help establish the “class” part of their proposition and technological superiority of their brand (L’Oreal). They are providing highly researched and effective products, at convenient retail locations, with drastically lower prices than similar products found in department stores. 3. I would recommend continuing with the “star” product system, putting all their marketing support behind the latest product and then switching on the next when ready. . I would recommend phasing out unprofitable products such as Excell eye cream and Hydra-Renewal Cream Tube. Simplifying the product line would decrease the overwhelming feeling while selecting their products. 5. Modifying the packaging to only include targeted product statements should be addressed. The boxes and displays are confusing and overwhelming. Additionally, I would create a product regimen list at each retail location to establish a daily skincare regimen addressing various needs.
The regimens would include skin type, age of consumer, and special needs. Clearly establishing a daily plan would not only make it easier for the consumer to select their products but it would also suggestive sell additional items. 6. Pricing Adjustments should not be across the board. Differentiating their product as a superior technologically advanced item validates the need for a higher price. However, simplifying the pricing structure to a smaller number of price points would make the line easier to shop.