Ch. 6 - Consumer Decision Making

Walking through any department store, it is hard not to come across a Lancome counter. But what makes people stop by and purchase their very first or their favorite product from Lancome? Before purchasing a product from Lancome, the buyer goes through a consumer decision process which all of us go through in order to consider every important aspect of a potential product. The first and most important stage of the process is need recognition, that is, where the consumer recognizes what product is able to meet their needs. The customer has needs and wants which are influenced by internal or external stimulus. For example, an external stimulus such as a recommendation appealing to the good quality of a moisturizer can increase the likelihood that the moisturizer will be purchased.

An example of a strong external stimulus is Lancome's Elite Rewards loyalty program which seeks to increase customer acquisition and retention.

Naturally, when customers  recognize a need, they look for specific information about it. People have many opportunities in order to find valuable information regarding a cosmetic they are interested in. One way of searching is internal information search such as looking at previous experience with a product. Personally, I think this is a very reliable method if you don't want to make a mistake with the purchase decision. Lancome's clientele usually return to purchase more cosmetics. An example is Bienfait Multi-Vital Day Cream which  enjoys a very good reputation among customers who often return to purchase more of the product. A different way of searching for particular information about a product is external information source. Customers review opinions and reviews available from nonmarketing-controlled source, such as those which we can read on web forums, blogs or consumer opinion sites, to get a sense of how others view a product. Second form of external information search is marketing-controlled information source, such as mass media advertising. Lancome spends a great amount of money to advertise its products well and to provide reliable information about its product. In addition, Lancome's famous faces like Julia Roberts,Penelope Cruz or Kate Winslet, make Lancome a trusted brand and their products more desirable. 

Another stage of the consumer decision process is the evaluation of alternatives. This stage is where customers evaluate all the advantages and disadvantages of the product one more time before making a purchase. Usually, Lancome's clientele rely on the information made available by the mass media or base their decision on the quality of and information provided by customer service. It looks like Lancome greatly meets its clientele's expectations. According to Forbes magazine, the brand's sales were up 10% in 2012.

Ch. 5 - Developing a Global Vision

Lancome has been on the market since 1935. It began selling its products in about thirty countries in the first six months of the company's existence. The company has been a global brand since it became a subsidiary of L'Oreal Group in 1964. It entered the United States in 1950 and now sell its products in over 160 countries around the world. Its products  are sold at department stores, exclusive beauty stores, duty-free shops and boutiques. Lancome owes its global market growth to country-specific advertisement.

One of Lancome's advertisements that target the
Chinese market.

For example, Lancome developed  the Teint Miracle foundation in their Japanese laboratory with the Japanese consumer in mind. However, it became a global success because woman around the world wanted to have a beautiful skin like the Japanese. Lancome began selling its products in Japan in 1978 and it now has 112 shops, mainly in department stores. But Lancome's real conquest is the China market where it has spread into more than 40 Chinese cities and 18.000 retailers.

However, the company's tremendous success in China is mainly due to the web and by the adaptation to the local culture. Many Chinese customers for instance still do not feel comfortable making their payments online. In order to get around these concerns, Lancome's e-boutique allows clients  to pay for their products at the time of delivery. In addition, the goods are delivered by bike to improve the delivery time even though this method o delivery is incompatible with the Western idea of  luxury brand. Another strategy for enhancing e-market in China was creating the community website Rose Beauty. Rose Beauty not only raises awareness about products among clientele but also gathers information about the needs and desires of customers. The uses Chinese local social networks (Kaixin, Renren, Sina Weibo) to help brand build one of the biggest online community in cosmetics.

Lancome has grown to become one of the largest and recognizable cosmetic brand in the world with sales exceeding 350 million dollars in 2010.

Ch. 4 - The Marketing Environment

Bienfait multi-vital SPF 30 day cream from Lancome, a brand of the Luxe division of L'Oreal Group, is product highly recommended by many women. Only by reading reviews about it can I understand why it is purchased even by young women in their twenties. The formula of the cream was designed especially for women with visible effects of environmental damage and dehydrated skin. The actual target market of it is the early Y generation and below. Sunscreen, one of the ingredients of the cream, helps prevent sunburn and prevents premature aging of the skin caused by the sun. Although the main purpose of this cream is protection and moisturization, it contains a variety of other beneficial ingredients such as a complex of nourshing vitamins like E, B5 and CG. Women including me always love good moisturizers because it gives a comfortable feeling and makes the skin hydrated and healthy looking. Unlike many facial creams on the market that only moisturize and nourish the skin, Bienfait multi-vital SPF 30 also offers sun protection and so provides all a woman needs for her skin. This combination of ingredients makes it a unique and desirable cosmetic on the market.

There is a large variety of products on the market, but when it comes to picking one for yourself you want the best available product for a good price. For a luxury brand like Lancome, forty six dollars per good quality cream is relatively affordable in the eyes of regular customers wanting good cosmetics. The company provides generous complimentary samples with purchases so that people can get to know Lancome's products and get more for their money.

Like many companies today, Lancome uses social media to increase brand awarness. For Lancome, social media are important because through them, managers can listen to and engage their clients. Lancome relies on web sites such as Lancome.com where user-generated content coexists with product descriptions and where customers can invite their Facebook friends and freely discuss Lancome's products. By combining data from online customer purchases made through Lancome's website and data extracted from their customers' social media profiles (e.g., Facebook), the company gets to know its clients. This process helps them to predict likely future purchases and drive advertizing and rewards campaigns in order to offer clients the right incentives to make those purchases.

Ch. 3 - Ethics & Social Responsibility

              As I mentioned in my previous post, this year L'Oreal has been recognized for the fourth time by Ethisphere Institute as one of the most ethical companies in the world. For L'Oreal, company behavior is as important as its economic performance or the quality of its products. L'Oreal's code of business ethics applies to all employees of the L'Oreal Group and its subsidiaries. The code of business ethics lays out the rules of good conduct that are expected from L'Oreal employees. Nowadays, many firms join United Nations Global Compact in order to extend their social responsibility aspect. L'Oreal has supported UNGC since 2003 and in September 2013 was selected for inclusion in the United Nation Global Compact 100 – a new global stock index that combines corporate sustainability and baseline financial performance. UNGC challenges businesses to support ten principles regarding human rights, labor, the environment and anti-corruption:

• Human rights: L'Oreal in particular fight the exploitation of the children in the workplace below 16 years of age.
• Labor:  L'Oreal respects worker's rights and fights with all kind of discrimination.
• L'Oreal supports the fight against corruption and publicly states a zero–tolerance policy on corruption.
• L'Oreal is working continuously to significantly reduce its environmental footprint. For example, in India, one of L'Oreal's factories named Pune Factory, works hard at achieving sustainable production with satisfying results.
• Reduce water consumption: Between 2005 and 2014, the Pune Factory has reduced its water consumption by 42%.
• 70% of the electricity used by the factory comes from wind energy.
• Since 2012, cardboard and paper containers have been replaced with recyclable plastic boxes that last longer.

With respect to social responsibility, L'Oreal also aims to eliminate forest destruction from all its supply chains by 2020 and at the same time empower consumers to make sustainable consumption choices. The program's goal is to benefit both the environment and society.

L'Oreal is also known for its community involvement. L'Oreal, together with the United Nations Educational, Scientific and Cultural Organization, established Award L'Oreal-UNESCO for exceptional women researchers who have contributed significantly to scientific progress. Each laureate is awarded a grant of $100,000. 

For 16 years, L'Oreal has been involved in the beauty industry charity project "Look Good...Feel Better" which was created for women with cancer. The goal of the project is to help these women look better and through looking better lift their spirits so that they can face the illness with greater confidence.

Ch. 2 - Strategic Planning for Competitive Advantage

L'Oreal is a successful and internationally recognizable beauty company, a leader in skin care, makeup and hair color. L'Oreal has gained its competitive advantage through developing a strong competence which is affected by a variable factors. The first core of its competency is a level of diversification of its product. The company manufactures and markets a range of makeup, perfume and skin care products in over 130 countries, what makes the better brand recognition all over the world, and at the same time gives esteem over the competition. Second, very important aspect for increasing competitive advantage is product innovation. L'Oreal currently employs over 3,200 research stuff in 30 fields and invests each year 3,5% of their revenue for research and new product creation. Moreover, L'Oreal is one of the most ethical companies in the world. It was recognized internationally three times for promoting the highest ethical standards by the Ethisphere Institute for its ethical business practices, social corporate responsibility, fight against corruption and sustainable development.

As a company concerned about the environment, L'Oreal just recently has committed in campaign “Scharing beauty with all” to achieve zero deforestation in all its supply chain by 2020. This is a step towards their bigger goal of manufacturing beauty products while preserving the planet. Next to the Maybelline, Garnier and Yves Saint Laurent Beaute, L'Oreal plans to attract one billion new customers while making a positive impact on the world by 2020.

This year L'Oreal has launched its first marketing campaign to promote its brand manifesto"Beauty for all". Film brings to life its strategy of globalization, but with clear respect for differences in needs, desires, dreams,culture and traditions. It expresses the power of beauty of ordinary people around the world and illustrates the L'Oreal's conviction that beauty is essential.

Ch. 1 - Overview of Marketing (Brief History and Mission Statement)

L’Oreal, one of the leading fashion and cosmetics manufacturers in the world. In 1907, Eugene Schueller, a French chemist, developed an innovative hair color formula.Two years later, in 1909, Schueller set up a company and named it ‘Societe Francaise de Teintures inoffensives pour Cheveux’. The company manufactured the hair dye in Schueller home and sold it under the brand name Aureole.After manufacturing and selling the cosmetics products in Paris for a few years, Schueller started exporting to other European countries like Holland, Austria, and Italy.

Starting with a capital of 135,000 francs it was transformed into a limited-liability company in 1939 by a merger with Fonciere Driant under the name Societe l’Oreal which as an adaptation of one of the brands ‘L-Aureole’. In 1963, L’Oreal became a publicly traded company. It has transformed from a french company in the early 1900s to a global titan in the 2000s. Its product range included makeup, perfume, and hair and skin care products, which were tailored according to the consumer needs. L'Oreal Group owns many international brands which are divided into five divisions, namely L'Oreal Luxe, consumer products, professional products, active cosmetics and Body Shop. By 2003, the L’Oreal group had entered 130 countries, through its 290 subsidiaries and around a hundred agents. The company is active in three main sectors: cosmetics, dermatology and pharmacy.

L'Oreal believes that everyone aspires to beauty. Our mission is to help men and women around the world realize that aspiration, and express their individual personalities to the full. This is what gives meaning and value to our business, and to the working lives of our employees. We are proud of our work.