L'Oreal's Global Branding Strategy

 
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Case Details:

Case Code : MKTA020
Case Length : 14 Pages
Period : -
Pub Date : 2005
Teaching Note :Not Available
Organization : -
Industry : -
Countries : -

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Introduction

In 2005, the $18.89 billion L'Oreal group was the largest and the most successful cosmetics company in the world, with over 17 international brands. L'Oreal was ranked 49th by the Business Week Interbrand survey conducted in August 2004. Its brands were valued at $5902 million ($5600 million in 2003). L'Oreal sold makeup, perfume, and hair and skin care products to both men and women in 150 countries. The group reported its 18th consecutive year of double-digit growth in December 2004. Since 1989, L'Oreal's sales had grown at a compounded annual rate of 12% to $1.7 billion.

"L'Oreal combines the double-digit top-line growth of a hot technology company with the bottom-line comforts of a well-run bank. What sets L'Oreal apart is its consistency over time."1 - pointed out an observer.

A decade ago, about 75% of the company's $5.5 billion annual sales were from Europe, the bulk of it in France. In 2004, 85 % of L'Oreal's consolidated sales were in markets outside France.

In the late 1990s and early 2000s, when the Asian and the Latin American economies were considered too risky, and several international companies performed poorly, L'Oreal had surged ahead.

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As an analyst put it, "L'Oreal is the only real global leader in every segment of the industry."2 Whether it was selling Italian elegance, New York street smarts, or French beauty through its brands, L'Oreal had reached out to a wide range of customers across incomes and cultures. Under Lindsey Owen-Jones (Owen-Jones), L'Oreal's CEO for 17 years, L'Oreal had fine-tuned its global branding strategy.

As Owen-Jones' term at L'Oreal drew to a close, industry observers wondered if his successor, Jean-Paul Agon (Agon), would be as deft as Owen-Jones in managing L'Oreal's complex brand architecture and delivering profits. L'Oreal also faced new challenges with companies like Procter & Gamble (P&G) deciding to give a special thrust to their beauty products. Would L'Oreal be able to hold on to its seemingly invulnerable position in the global cosmetics market?

L'Oreal's Global Branding Strategy - Next Page>>


1] Morais, Richard C. "How do you make consumer brands work overseas?" Forbes, 27th November 2000, Vol. 166, Issue 14, pp.170-176.

2] Edmondson, Gail. "The Beauty of Global Branding,” BusinessWeek, 28th June 1999, Issue 3835, pp.70-73.


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