L’oreal

Problems/Issue Identification:

The case to consider is L’Oreal Nederland B.V. The birth of the L’Oreal began back in 1907 when, a young French chemist, Eugиne Schueller, developed a new hair-color formula that was considered to be safe for hair. The new hair dye was named Aurйole. “Eugиne Schueller formulated and manufactured his own products, which he then sold to Parisian hairdressers. In 1909, Schueller registered his company, the Sociйtй Franзaise de Teintures Inoffensives pour Cheveux ("Safe Hair Dye Company of France"), the future L'Orйal. The guiding principles of the company that would become L'Orйal were put into place from the start: research and innovation in the interest of beauty.”(Wikipedia, L’Oreal) By 1920, this developing company employed 3 chemists and by 1950, the research team had grown to a 100 and has continued to grow to nearly 2,000 today. “L'Orйal got its start in the hair-color business, but the company soon branched out into other cleansing/beauty products. L'Orйal now markets over 50 brands and many thousands of individual products in all sectors of the beauty business: hair color, permanents, styling aids, body and skin care, cleansers and fragrances. They are found in all distribution channels, from hair salons and perfumeries to hyper- and supermarkets, health/beauty outlets, pharmacies and direct mail.” (Wikipedia, L’Oreal) From the very beginning L’Oreal was founded on strong research and development techniques and today it has five worldwide research and development centers. “Two in France: Aulnay and Chevilly. One in U.S.: Clark, New Jersey. One in Japan: Kawasaki, Kanagawa. In 2005, one established in China: Shanghai.” (Wikipedia, L’Oreal)

The Netherlands L’Oreal subsidiary is facing the new challenge of introducing two products under the Garnier name brand (a product line under L’Oreal) in order to start building up customer awareness in that particular region. According to our text, both products have been marketed successfully in France and the director, Yolanda van der Zandle needs to make the decision of whether or not to market one or the other or both (Cravens, 2002, pp. 135). Some test research has been done in the Dutch market so she is asking her marketing manager, Mike Rourke to review these test results and get back to her with his recommendations.

Analysis/Evaluation/Recommendation:

The first product to consider is the Synergie skin care line. The following criteria were to be examined; (1) Skin Care Market (2) Competition (3) Consumer Behavior and (4) Market Research. Our text states that overall the marketing research showed that there were many competitors especially in the Dutch market and that customers tended to be loyal to their current brands. It sampled 200 women between the ages of 18 and 55 that used skin care products at least three times a week and the research showed of those woman only 39% would buy the product even after knowing the price. Even with this being a relatively strong number the actual number of transactions per year would be one or two which in turn does not create a large demand for this product line (Cravens, 2002, pp.138-139). The second product to consider is Belle Couleur which had been successfully marketed in France for the past 20 years. The factors to be considered are similar to the skin care line; (1) Hair Coloring Market (2) Competition (3) Consumer Behavior and (4) Market Research. The text group was a bit larger, 412 Dutch women between the ages of 25 and 64 who had used hair color in the past four months. The research presented in out text explains the competition is somewhat comparable to the skin line competitors but of those in the pool the market