L’Oreal Marketing Strategy

Question Discuss about the LOreal Marketing Strategy. Answer: Introduction This academic paper is focusing on critical evaluation of marketing strategy employed by LOreal in order to conduct sustainable business with haircare products. In this particular essay, the learner has chosen Nigeria as the business location of LOreal. In order to conduct this essay, the learner has investigated the marketing mix of LOreal for increasing awareness regarding the haircare product in Nigerian market. This academic paper is consisting of various marketing frameworks, which are effective for getting a clear view regarding the effectiveness of LOreals marketing mix. Apart from that, the learner has also investigated the issues faced by LOreal while implementing the marketing mix for retaining Nigerian customers. In order to conduct sustainable business in competitive market, it is highly important to implement effective marketing strategies. This essay will emphasize the issues of adopted marketing mix by LOreal and its impact over business sustainability. Moreover, this essay is also focusing over branding strategy of LOreal in respect of Nigerian market. Branding strategy of the company is an important factor, which is having a huge impact over customers buying behavior. Following is the background of LOreal. LOreal is one of the leading cosmic manufacturer organizations in French market. The company is conducting business in world market since 1909, which is more than 100 years. Headquarter of the company is situated at Clichy, Hauts-de-Seine. Total employee strength of the company is 78600 as of 2014. Total asset of the company is 28.219 billion as of 2014. The company is conducting business in global market by providing quality cosmic products such as haircare products, beauty products, health care products and many more (Loreal.com, 2015). This essay is going to evaluate the current marketing strategy of this company in relation with Nigerian market. When it comes to Nigerian economy, the country is known as a middle-income market. However, in case of manufacturing sector, the country is acquiring the third position among the continent. Thus, the Nigerian market is suitable for LOreal to conduct sustainable business with effective marketing mix (Aaker, 2010). Following is the critical evaluation of marketing strategies, which are adopted by LOreal for retaining customers in Nigerian market. Discussion Marketing mix refers to the strategies implemented for promoting a product or services. In case of LOreal, the company is focusing over implementing effective strategies for increasing product awareness among customers in Nigeria. Marketing mix is consisting of seven components such as product, price, promotion, placement, people, packaging and positioning. In order to conduct sustainable business in Nigerian market, the company has implemented effective strategies for each elements of this marketing framework called 7Ps of marketing mix (Adair, 2011). Following is the critical evaluation of marketing mix of LOreal in accordance with the competitors of the company in Nigeria such as Avon, Johnson and Johnson and Procter and Gamble. The competitors are also conducting effective strategy implementation for acquiring market share in Nigerian market. In order to get a critical analysis of the effectiveness of marketing mix, it is important to investigate the marketing strategies of these rival organizations in respect of Nigerian market. Product is the major component of marketing mix. In order to conduct sustainable business in global market, it is highly important to maintain product policies. Thus, LOreal is manufacturing high quality products for satisfying the customers (Adcock, 2010). Apart from that, the company needs to maintain the feasibility between the advertisement and actual product quality. It helps in increasing reliability of the customers in targeted market. In this competitive market, rival organizations of the company are also implementing this strategy for attracting customers towards their brand. For an example, Johnson and Johnson is manufacturing high quality product especially for children. Thus, the company is assuring regarding less use of chemical components (Beck, 2010). Price policy refers to the strategy, which helps the company in estimating the price of the product depending on organizational expenses and economy of the target market. LOreal has implemented an effective pricing strategy for acquiring the high position in Nigerian market. The basic strategy of the company is to be flexible regarding the product pricing. Price policy is the most flexible or variable element of marketing mix, therefore rival organizations continuously implement different pricing strategies for creating barriers. According to Boone and Kurtz (2012), LOreal has adopted a low pricing strategy in Nigerian market for attracting the customers. On the other hand, Bose (2010) has stated that Procter and Gamble, which deals with Fast Moving Consumers Goods, has adopted the pricing strategy as per the product value and quality. The low pricing strategy of LOreal is hampering customers reliability, which is directly affecting the brand image of the company. Therefore, LOreal s hould adopt the pricing strategy according to the activities of rival organizations for gaining competitive edge. Overall, the current strategy is beneficial for the company. However, it can be harmful for the company in future perspectives (Bowman and Gatignon, 2010). In contrast with that, pricing strategy of Procter and Gamble is making the company cost leader in Nigerian market. Promotion is the most important activity, which helps in increasing product awareness among the targeted customers. From the very beginning, LOreal is focusing over investing huge amount for product promotion. The company has adopted celebrity endorsement strategy by hiring models and celebrities (Chernev, 2010). This strategy of the company is highly effective for increasing reliability of the consumers. However, implementing this strategy for promoting products is also having certain risk factors. First, LOreal is not the only one company who has adopted celebrity endorsement. Therefore, rival organization can also take the advantage of this promotional strategy (Dalgic, 2010). Secondly, the brand image of the product is depending over social image of the employed celebrity. That means, if the celebrity gets involved in any short of scandals then it will be difficult for the company to conduct sustainable business (Boulding et al. 2010). Apart from celebrity endorsement, LOreal has also adopted online advertising the strategy. That particular strategy of the company helps in increasing product awareness by reaching to the actual targeted consumers. On the other hand, Johnson and Johnson has also adopted this marketing strategy by publishing video advertisement in social media for acquiring market share in Nigerian market. This strategy is effective for providing product information to the customers in an effective manner. However, Farahmand (2011) argued that bandwidth issue can create barrier for the viewers of the advertisement. Moreover, the information provided by LOreal while conducting social media advertisement is sensitive and can be misused by the rival organizations for creating barriers. Placement policy refers to the process, which allows the company in increasing product availability in market. In case of LOreal, the company is focused over increasing supply chain in Nigerian market for increasing product availability. As the Nigerian market is full of competition, the suppliers power is not a big issue for the cosmetics companies. However, targeting the proper customer segment for proper product is required for conducting sustainable business (Ferrell et al. 2010). In case of LOreal, the company is targeted especially female customers for selling their products. On the other hand, Johnson and Johnson has targeted children for conducting business in global market. Therefore, it can be said that, the placement policy is fully depended over organizational requirements and the placement policy employed by LOreal is effective for the company (Kim and McAlister, 2011). People is an element of marketing mix, which allows the company in building strong relationship with the customers. In case of LOreal, the company has implemented effective strategies for building communication with Nigerian customers. It is highly effective for getting customers feedback regarding the product quality. In this manner, the company is able to share organizational information with the consumers (Lim and Lusch, 2011). This process is highly effective for knowing the expectation of customers. That helps in improving product quality accordingly to the customers expectation. However, conducting this process frequently can harm reliability level of the customers. Therefore, it is important to conduct this process but in not frequent manner. The competitive market required a high communication with the consumers (Mohammed and Rashid, 2012). Thus, rival organizations are also implementing strategies for building emotional attachment with consumers. LOreal is getting a clear vi ew of rivals organizations strategies for their communication model, which is effective for gaining competitive edge. Packaging is one of the components of marketing mix, which is effective for increasing interest of customers towards the brand. LOreal is focused over quality packaging of product by adopting innovative technologies (Patel, 2011). In Nigerian market, the company as adopted five layers hygiene packaging for maintaining and assuring the product quality. However, this particular strategy has increases manufacturing cost, which is hampering the overall profitability of the company. However, Woodruff (2010) argued that this strategy is having huge impact over satisfying the customers and increasing the product value as well. Competitive organizations are also implementing attractive packaging for their products, which ensures recycling of the product packages. That effectively helps the company in improving the brand image. However, In case of LOreal there is no such strategy implemented by the company. Positioning refers to the marketing strategy, which helps in developing a strong brand image among the customers mind (Young and Javalgi, 2010). The tag line of the company is Because I am worth it, which is effectively helping the consumers to recall the brand name in global and Nigerian market as well. Moreover, the way the company promotes their product is effective for attracting customers attention towards the brand. As LOreal is one of the leading cosmetics manufacturer organizations in global market, the brand image of the company is very strong. Thus, it can be said that positioning strategy of this company is effective in case of Nigerian market (Oguzor, 2014). After conducting the critical evaluation of adopted marketing mix of LOreal, it can be said that the company is having different advantages and disadvantages while conducting business in Nigerian market. The socio-economical status of Nigeria is not that strong, which is creating barrier for the company in conducting sustainable business (Gilaninia, Taleghani and Azizi, 2013). Moreover, different organizations are manufacturing same product, which is increasing market competition. Therefore, the company needs to restructure the required marketing strategies for developing strong market position in respect of Nigerian market. However, Kim and Park (2013) stated that the pricing strategy adopted by the company for this particular continent is effective for attracting customers towards the brand. Nigerian market is having different weakness in relation with sustainable business. For an example, lack of power supply is one of the most important disadvantages, which is creating barriers f or cosmetics manufacturing organization like LOreal (Moradi, Aghaie and Hosseini, 2013). Now, in this particular market scenario, LOreal has implemented the above discussed marketing strategies for conducting sustainable business. The following section is consisting of the analysis of to what extent the marketing strategy of LOreal is effective for conducting sustainable business in Nigeria. From the literature review, it has been found that each of the competitors of LOreal is having different strategies of market expansion. It has been found that PG is having price flexible strategy to meet the demand of consumer at the time of demand. For LOreal it can be said that as the products are limited to female only, hence when the organization increases its manufacturing cycle, then demand will be met without increasing the price. On the other hand, it is even true that with high demand, price must be increased so that more revenue is gained (Obikeze and Eze, 2013). If LOreal increases its price, then customer has the probability to move on to Avon as the later provides similar products with same price. This will be a competitive advantage for Avon. When PG is considered, it can be found that it sells FMCG products for all types of customers and thus, other products will adjust price flexibility. For LOreal, if beauty products are categorized for male as well, then surely div ersification strategy will gain more customer base within short period. For diversification, promotion is eventually required, and from literature review it has been found that PG used media celebrities for promotion, but later it proved negative impact on the company. If publicity of celebrity is negatively impacted, it will surely affect products of company as well, as they represent the brand image of a company (Srivastava, 2010). Hence, it is better for LOreal to deal with online promotion or digital media platform for attracting more customers. Digital platform is the widest virtual environment that engages all types of communities to respond simultaneously. Primarily due to categorized product diversification, LOreal will surely expend much of its capital, thus digital platform will create customer awareness with less expenditure. Operational cost will even be saved if promotion is done primarily through social media platform. If economy of Nigeria is considered, then it is sure that high price will negatively affect sales. Thus, it may reduce brand loyalty as well. PG generally has many products other than beauty category, and Johnson and Johnson has a stable pricing for its products. Thus, LOreal must not increase the price of products, but must increase the quantity of beauty products for female and some sub-products for male with lower cost in contrast with the competitors. Lowering of cost depends upon operational cost, which will be reduced by conserving the expense on promotion (Gilaninia, Taleghani and Azizi, 2013). Much of the consumer of Nigeria is found to not deal with beauty, thus, this is the responsibility of LOreal to create customer demand by provocative promotions. Some of the models from local Nigerian have to be engaged as a part of promotion, who will give the image of possible changes by using products of LOreal only, and thereby making a new trend of beauty enhancement among customer . Thus, promotion may be considered as the primary objective of marketing mix for LOreal, which will create customer trend and not to follow existing customer preference. When it comes to the product placement, the strategy of LOreal is effective in contrast with the Nigerian market. In case of Nigerian market, there are different organizations are providing beauty products and healthcare products. Therefore, competition of this market is remarkably high. The most important weakness of Nigerian market is weak road network, which is hampering transportation of goods. However, the literature review section shows that, the company is able to increase the supply chain in Nigerian market for increasing the availability of products. That helps the company in conducting a sustainable business by attracting more customers towards the brand (Farahmand, 2011). As Nigeria is little bit of backdated in relation with technological innovation, it is difficult for the company to conduct communication with customers. In this particular environmental situation, LOreal has implemented online communication with the customers. Most of the people of this continent are not able to access internet connection; therefore, this strategy of the company is not effective for this environment. In order to communicate with the customers, the company should conduct a direct communication process. That will help the company in getting customers feedback in effective manner. Knowing the feedbacks of customers will help the company in improving product quality as per the customers requirements. In order to fulfill the corporate social responsibility, LOreal is focused over using renewable resources for product packaging. It helps the company to reduce environmental issues in Nigerian market (Mohammed and Rashid, 2012). Moreover, this strategy of the company helps in reducing organizational cost and increasing profitability. Therefore, this strategy of the company is effective for increase reliability of the customers. In this manner, the company is also able to conduct a sustainable business. Brand image of the company is already in a high position in world market. The literature review section is emphasizing that LOreal is the one of the leading cosmetics manufacturer in global market. Therefore, the strategies of the company are also effective in Nigerian market. Customers are satisfied with the product quality and pricing, because the combination of product quality and product price in effectively increasing the product value. LOreal should measure the requirement of Nigerian customers for improving the product quality for conducting sustainable business. Apart from that, the company should focus over the customer evaluation process for knowing the requirements of the customers. As LOreal is fulfilling the corporate social responsibility, it will be easy for the company to avoid any kind of legal issues in Nigerian market. Therefore, the company should maintain this practice for future progress of business in Nigerian market. Conclusion After conducting this essay, it can be concluded that LOreal is conducting sustainable business in Nigerian market. In order to assess the marketing strategy of the company, the learner has provided a critical evaluation of marketing mix in relation with LOreal. From this section, the learner came to know that, the company is conducting effective product, price, promotion and packaging strategies in relation with the Nigerian environment. On the other hand, the strategy of communicating with customers is not feasible with the Nigerian environment. That is effectively creating barrier for the company in conducting sustainable business. In order to avoid this particular issue, the company should restructure the strategy of effective customers evaluation process. That helps in knowing customers requirements and improves the product quality accordingly. While evaluating the marketing mix of LOreal, the learner has also compared the strategies with rival companies of LOreal, which is help ful for getting a clear view of the effectiveness of marketing mix adopted by the company. The overall analysis shows that, LOreal need to implement effective strategies for conducting sustainable business in Nigerian market. 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