Read two cases and answer following questions

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Marketing Excellence Much of the company's early international expansion is credited to Sir Lindsay Owen-Jones, who transformed L'Oréal from a small French business into an international >> L'Oréal cosmetics phenomenon with strategic vision and precise When it comes to globalizing beauty, no one does it brand management. During his almost 20 years as CEO better than L'Oréal. The company was founded in Paris and chairman, Owen Jones divested weak brands, in- more than 100 years ago by a young chemist, Eugene vested heavily in product innovation, acquired ethnically Schueller, who sold his patented hair dyes to local diverse brands, and expanded into markets no one had hairdressers and salons. By the 1930s, Schueller had dreamed of, including China, South America, and the former invented beauty products like suntan oil and the first Soviet Union. His quest was to achieve diversity and "mest mass-marketed shampoo. Today, the company has the needs of men and women around the globe, and make evolved into the world's largest beauty and cosmetics beauty products available to as many people as possible." company, with distribution in 130 countries, 27 global Today, L'Oréal focuses on five areas of beauty ex- brands, and more than $30.8 billion in sales. pertise: skin care, hair care, makeup, hair coloring, TAPPING INTO GLOBAL MARKETS CHAPTER 8 243 and perfume. Its brands fall into four different groups: In Japan, for example, L'Oréal developed Wondercurl (1) Consumer Products (52 percent of sales, includes mass- mascara specially formulated to curl Asian women's marketed brands like Maybelline and high-technology eyelashes, which are usually short and straight. Within products sold at competitive prices through mass-market three months, Wondercurl mascara had become Japan's retailing chains), (2) L'Oreal Luxe (27 percent of sales, in- number one selling mascara, and young women lined up cludes prestigious brands like Ralph Lauren perfume that outside stores to buy it. L'Oréal continued to research the are available only in premium stores, department stores, market and developed nail polish, blush, and other cos- or specialty stores), (3) Professional Products (14 per- metics aimed at this new Asian generation. cent of sales, includes brands such as Redken designed L'Oréal believes its future lies in emerging areas such specifically for professional hair salons), and (4) Active as Asia, Africa, and Latin America, where it expects to Cosmetics (7 percent of sales, includes dermo-cosmetic find millions of new customers over the next few years. products sold at pharmacies, drugstores, and medi-spas). Marc Menesguen, L'Oréal's managing director-strategic L'Oréal believes precise target marketing-hitting the marketing, explained, "Our projection for 2020 is that right audience with the right product and message at the 50% to 60% of sales will be coming from [emerging] right place is crucial to its global success. Owen-Jones markets." As a result, new research centers have popped explained, "Each brand is positioned on a very precise up in these countries, and the company is working ag- [market] segment, which overlaps as little as possible with gressively on understanding these consumers' needs and the others." developing beauty products to satisfy them. The company has built its portfolio primarily by pur- Well known for its 1973 advertising tagline- chasing local beauty companies all over the world, revamp- "Because I'm Worth It" - L'Oréal is the leader in beauty ing them with strategic direction, and expanding the brand products around the world. The company spends ap- into new areas through its powerful marketing arm. For ex- proximately $5 billion in advertising each year, making ample, L'Oréal instantly became a player with 20 percent it the third-largest advertiser. As Gilles Weil, its head of market share) in the growing ethnic hair care industry when luxury products, explained, "You have to be local and as it purchased and merged the U.S. companies Soft Sheen strong as the best locals, but backed by an international Products in 1998 and Carson Products in 2000. L'Oréal image and strategy." believed the competition had overlooked this category be- cause it was fragmented and misunderstood. Backed by a Questions deep portfolio of brands and products, SoftSheen-Carson is now the market leader in the ethnic hair care industry. 1. Review L'Oréal's brand portfolio. What role have local L'Oréal also invests significant money and time in its and global marketing, smart acquisitions, and R&D 22 local research centers around the world. The com- played in growing those brands? pany spends 3.5 percent of annual sales on R&D, more 2. What are the keys to successful local product than one percentage point above the industry average, researching and innovating products that meet the local launches like Maybelline's Wondercurl in Japan? needs of each region. 3. What's next for L'Oréal on a global level? Who are its Understanding the unique beauty routines and needs biggest competitors? If you were CEO, how would of different cultures, climates, traditions, and physiologies is you sustain the company's global leadership? critical to L'Oréal's global success. Hair and skin greatly dif- Sources: Andrew Roberts, "L'Oréal Quarterly Sales Fire Most since 2007 en Lugory Perfume fer from one part of the world to another, so L'Oreal listens tilberborg ikninenWork Aprl 22, 2010; Richard Tomlinson, L'Oréal's Global Makeover to and observes consumers across the globe to gather a Fortune, September 30, 2000; Chroen Carvajal. Terrational Busine; Prinping be the Cameras deep understanding of their beauty needs. L'Oréal scientists Howary, Forbes: Nievember 27, 2000; lack Nett, how L'Oreal Pan Winter Wienegun Shares study consumers in laboratory bathrooms and in their own Best Practions around the Globe," Albertising Age, June 11, 2012; L'Orial, www.boreal.com homes, sometimes achieving scientific beauty milestones. Marketing Excellence morning. In 2002, he plunged into Times Square from a crane to announce his new mobile phone business. In >> Virgin Group 2004, he appeared at a New York City nightclub wearing flesh-colored tights and a strategically placed portable Virgin roared onto the British stage in the 1970s with the CD player to introduced a line of hip techie gadgets called innovative Virgin Records, the brainchild of entrepreneur Virgin Pulse. Branson has attended press conferences Richard Branson, a high school dropout who signed dressed in an astronaut's suit and angel's wings, driven unknown artists and began a marathon of publicity that across the English Channel in an amphibious car, and continues to this day. The flamboyant Briton sold Virgin even bared his bottom to the press when Virgin Atlantic Records in 1992 and has gone on to launch more than landed in Canada for the first time. His good-natured 400 companies worldwide whose combined revenues humor and flamboyant personality attract media attention exceeded $24 billion in 2012. and customer admiration around the globe. Reports say The Virgin name—the third most respected brand Virgin's press coverage equates to $1.6 billion in media in Britain and the Branson personality help sell the value per year. company's diverse portfolio of branded air travel, rail- Although Branson avoids traditional market research, roads, financial services, music, mobile phones, cars, he stays in touch through constant customer contact. wine, publishing, and medical devices. The Virgin Group When he first set up Virgin Atlantic, he called 50 custom- looks for new opportunities in markets with underserved, ers every month to chat and get their feedback. He ap- overcharged customers and complacent competition. peared in airports to rub elbows with customers, and if Branson explained, "Wherever we find them, there is a a plane was delayed, he handed out gift certificates to a clear opportunity area for Virgin to do a much better job Virgin Megastore or discounts on future travel. than the competition. We introduce trust, innovation, and Virgin Unite is a nonprofit foundation that tackles customer friendliness where they don't exist." global, social, and environmental problems with an entre- Some marketing and financial critics have pointed preneurial approach. A team of scientists, entrepreneurs, out that Branson dilutes the brand and covers too many and environmental enthusiasts work with Virgin to rein- businesses. There have been some fumbles: Virgin Cola, vent the way we live and work to help make people's Virgin Cosmetics, Virgin Vodka, and Virgin Brides have lives better." Virgin Green Fund is a private equity firm all but disappeared. But despite the diversity, all Virgin investing in renewable energy and resource efficiency Group's brands stand for quality, innovation, and fun. sectors. Virgin established the Earth Challenge in 2007 to Branson is a master of the strategic publicity stunt and award $25 million to any person or group who develops knows photographers will turn up if he gives them a good a safe, long-term, commercially viable way to remove reason. When he took on stodgy British Airways in 1984, greenhouse gases from the atmosphere. Submissions he wore World War l-era flying gear to announce the for- are being reviewed by a team of scientists, professors, mation of Virgin Atlantic. The first Virgin flight took off laden and environmental professionals. with celebrities, media, a brass band in full swing, waiters Now knighted by the Queen of England, Sir Richard from Maxim's dressed in white tie and tails, and free-flowing never does anything small and quiet. He once said, champagne. The airborne party enjoyed international press "Lavish praise on people and people will flourish; criticize coverage and millions of dollars' worth of free publicity. and they shrivel up." This philosophy has led him to many When Branson launched Virgin Cola in the United successes both in business and in life. Whether looking States in 1998, he steered an army tank down New for a new business, generating publicity in his charac- York's Fifth Avenue and blew up a Coca-Cola sign, gar- teristic style, or encouraging research to help the planet, nering interviews on network TV news shows the next Branson does it with a bang. 686 PART 8 CONDUCTING MARKETING RESPONSIBLY FOR LONG-TERM SUCCESS Questions Sources: Peter Ekind, "Barson Gets Grounded Fortune February 5, 2007.pp. 13-14, Alan Deutschman, "The Enlightenment of Fichard Branson, Fast Company, September 2006, p. Andy 1. How is Virgin unique in its quest to be a socially respon- Serwer, D. Bran's Profits: Equal His Joie de Vivrel." Fortune. Odober 17, 2006, p. 57; Kary sible and sustainable company? Capell with Wendy Zelner, Tichard Branson's Next Big Adventure, " Businesdeck, March 3, 2004 pp. 44-46; Melanie Wek, "Red Baron," Forbes July 3, 2000, pp. 151-60, Sam Hil and Glenn 2. Discuss the contradiction between Virgin's negative Hikin. Radical Marketing Now York: Harperikusiness, 1999): "Baron Pledges Three Billion Dollars to environmental impact (via air and rail) and the green Does lidard Baruan ileally Oum? The Guardian, January 7, 2012, Carmine Gisli, "The Key to a message and communication efforts behind endeav- Inting Helationship in Business and in Marriage. Forte, April 10, 2014; Virgin, www.virgin.com ors such as the Earth Challenge.
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Running head: GLOBAL MARKETS

Tapping into Global Markets

Students Name
Course Instructor
Institutional Affiliation

GLOBAL MARKETS

2
Tapping into Global Markets

L’Oréal’s Portfolio and How the Company Grows Its Brands
L'Oréal is a company that has excellent goals and anything it seems to touch blossoms
into something unique and compelling. They have decided to use all the finances they can find to
furnish the marketing and advertisement of their product. First off, local and global marketing
has played a significant role in the promoting the growth of the L'Oréal brands. You find that the
company takes a liking into local beauty companies that seem to have potential all over the world
and renovates it into something everyone will want. They use strategic direction in order the
expansion of that local company benefits from its powerful marketing strategy. Global marketing
is also evident, and it has also played a significant part in the growth g the brands because
L'Oréal achieves the goal of making sure that everyone in the globe can have access to their
product.
It has set up research centers all over the world so that it can ide...


Anonymous
Goes above and beyond expectations!

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