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Marketing Plan of L'Oreal

            This report involved the performance of marketing plan in respect to L’Oreal Company especially in respect to its shampoos brand and the environmental analysis indicated that there has been higher competition level in the industry. The company has certain major strength points such as good reputation, huge diversity of products within the shampoos division and as such, the marketing objective as considered appropriate is to achieve higher market share in the shampoos division. This can be achieved through targeting high end customer groups that are concerned with their hair and through adapting a suitable marketing mix strategy.

Introduction

            This marketing plan is mainly in respect to L’Oreal shampoo with a view to enhance its marketing image and thereby to increase its sales. The important aspects of marketing plan that are discussed includes a situation analysis, environmental analysis, competitor analysis, customer analysis, SWOT analysis and the designing of marketing mix.

Situational Analysis

            An analysis of the existing situation with respect to the market of shampoo indicates that there are various major players in the market that has resulted into stiff level of competition within the industry. There are various companies offering different kinds of shampoos targeting different customer types. The situation with respect to shampoo dealers in the industry implies that different sellers are targeting different customer types such as shampoos for dry hair, dandruff, oily scalp etc. There is higher competition level in the industry and branded companies such as L’Oreal, Dove, Johnson and Johnson, Garnier and many more. The situation is therefore highly difficult for the shampoo companies to penetrate the existing market.

Environmental Analysis

            The environmental analysis through Porter Five Forces model is performed as follows:

  • Bargaining power of buyers: The bargaining power of buyers is significantly higher because there are various shampoo brands available and this provides them with the opportunity to select from a wide range of shampoo products.
  • Bargaining power of suppliers: The bargaining power of suppliers has been relatively less because of large number of global shampoo provider along with various small players in the industry (Tuan, Michel, and Muthukrishnan 2002).
  • Rivalry among existing Firms: The firms providing shampoos for different hair related problems are many which lead to huge competition among them. The major competitors of L’Oreal include Procter & Gamble, Unilever Group, Colgate Plamolive, Avon Products, Johnson and Johnson and many more.
  • Threat of substitutes: The threat of substitute is higher because there are various soaps being available that could be utilized for hair related problems.
  • Threat of new entrants: The threat of new entrant is higher because there are existing global players that have higher level of significance in the industry and they have well established reputation that makes it difficult for other players to make significant impact (Aaker and Joachimsthaler, 2000).

Competitor Analysis

            An analysis of the competition level in the industry implies that there are various global players in the industry that have significant level of reputation and presence. The major competitors within such industry are Procter & Gamble, L’Oreal Group, Unilever Group, Avon Products, Colgate-Palmolive Co, Johnson and Johnson and many more. The existence of so many players at the global level poses significant level of threat in the form of higher competition level within such industry. In terms of major market leaders, Procter & Gamble occupied the market leadership position in the industry in 2011 with 11.5% market share, L’Oreal Group with 9.8% and Unilever with 7.8% in 2011. These are the major industry players in dealing with the shampoos and other cosmetic products.

Customer Analysis

            Shampoos are the essential daily care products that are used on day to day basis by customers. With the increase in the number of companies providing shampoos and higher competition levels, there are various such variants of shampoo`s being available in the market. The customer expectations have increased significantly, and they look for different variants of shampoos for their different hair related problems. As for instance, the major hair related problems that are aimed to resolve by customer from using shampoos include dandruff problems, oil hair problems, dry hair problems and many more. Because of such higher customer expectations levels from shampoos, they are categorized has highly demanding. With respect to the customers of L’Oreal, they have higher level of expectations from the company especially in respect to dandruff products and this is mainly because of positive overall reputation being achieve by the company (Frazier, 1999).

SWOT Analysis

            A analysis of the strengths, weaknesses, opportunities and threats in respect to L’Oreal is performed as follows:

  • Strengths: As far as the strengths of L’Oreal is concerned, it has the ability to think outside the box which allows the company in delivering innovative shampoos and other cosmetic products. Apart from this, it has well segmented portfolio across different pricing tiers.
  • Weaknesses: The weakness of the L’Oreal in terms of its shampoo division performance is that it has been less dynamic which has affected its market share in 2011. In addition to this, its shampoo division has been less dynamic in natural/organic sections.
  • Opportunities: There are significant levels of opportunities being available for L’Oreal to further tap into natural/organic market segment. The diverse range of products and services allows for attaining good potential to achieve higher market share.
  • Threats: In terms of threats are concerned, the economic diversity is a major threat to the company as propelled by the Eurozone debt crisis. Further, the growing competition level in the international markets is also acting as a major threat to the company’s performance (L’Oreal Company Profile- SWOT Analysis, 2012).

Objectives

            The main objectives of this marketing plan are

  • To achieve the position of number 1 in the industry in terms of most successful provider of a range of shampoos and thereby higher market share.
  • To position L’Oreal as the most quality provider of a range of shampoo brands in satisfying the customer requirements for different hair related problems

Target Market

            In achieving the above objectives, the selection of an appropriate target market is essential and in the context of given case of L’Oreal, it is identified that the best possible target market for its shampoo related products include the women that are highly conscious with their health. This includes women in the age group of 15-40 years and the target market for shampoos also include the men in the age groups of 20-40 years, as they are also highly concerned with their health conditions.

Marketing Mix

            The marketing mix strategy for L’Oreal shampoos is indicated below

  • Product: The strategy in relation to shampoo product of L’Oreal should be to cater to the diverse needs of the stakeholders of the organization regarding their different health related problems. These mainly include shampoos for hair protection, color protection, damage repair, and various other hair related problems.
  • Price: The pricing strategy should be to offer higher quality products at higher prices because L’Oreal has achieved a reputation of being the quality provider of cosmetic products. It should therefore adapt a pricing strategy of higher prices for its shampoo related products so that the attainment of higher market share to the company can be possible (Smith, 1986).
  • Place: With respect to the place strategy, an analysis of L’Oreal shampoos indicate that the company has its presence across all parts of the world, and as such, the place strategy should have been to penetrate its shampoos across all the major parts of the worlds to achieve higher market share.
  • Promotion: The promotional strategy of the company is to perform wide range of advertising and promotions among its targeted audience through adapting a range of promotional mediums such as web advertising, advertising through print media in the form of newspaper, magazines etc. It should also include digital advertising such as the use of TV advertisements etc. 
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