CHP 1: INTRODUCTION

The continuous liberalization of international trade and the elimination of barriers of international business leads to a growing competition in the global market. Internationalization and globalization are phenomena that concern all businesses regardless of their geographical location, size or purchasing power.

The globalization of world economy results in a convergence of consumer needs, which leads to an emergence of large homogeneous segments across the national markets. In this context, we often meet with the term 'global consumer'. The concept of global marketing is based on targeting the global consumer. A uniform marketing strategy and mass production allow global companies to achieve economies of scale and therefore a competitive advantage caused by reduction of costs.

Low costs, strong bargaining power, financial resources and managerial know-how are the main factors that make global companies more successful than those focusing on local brands and local consumers. One of the world's leading companies, whose international marketing is based on a global approach, is the L'Oreal company.

The intention of this article is to analyse the global marketing strategy of the L'Oreal professional products division and its four major brands, Matrix, Redken, L'Oreal Professionnel and Kérastase.

L’Oréal – the leader in the global cosmetics industryL'Oreal is a global company which is present almost all over the world. Over a

hundred years of its existence, the original French cosmetics company called Société Française des Teintures Inoffensives pour Cheveux evolved into a multinational corporation, which operates in 130 countries and has more than 68,000 employees. Its global products portfolio is represented by 23 global brands which control 15% of the world market of cosmetics.

The market of cosmetics is evolving continuously and is influenced by new trends, such as growing segment of male cosmetic products, emerging market of nutritional supplements (nutricosmetics), increasing consumer's knowledge and his demand for a natural origin of products, ecology and protection of the environment (biocosmetics).The success of L'Oreal is caused in particular by a substantial investment in research and development, an excellent exploitation of new trends and a subtle policy of acquisitions by which L'Oreal strenghtens it's position in the strategic markets. Annualy, L'Oreal expends about 3-4% of it's total turnover on research and development, which makes this company number one in R&D in the world. The L'Oreal laboratories have developed groundbreaking innovations such as the first shampoo without soap, first quick hair decolorizer, first highlight enhancing shampoo, first hair color without ammonia or an artificial human skin called Episkin. An important partner of L'Oreal is the Nestlé company, which is also the largest shareholder of L'Oreal. Global partnership between the two companies resulted in the foundation of Galderma Laboratories, which deal with dermatologic research and Innéov Laboratories undergoing development of nutricosmetics products.

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L'Oreal is a cosmetic company, which makes some of the world's biggest beauty products. L'Oreal's success story begins in 1907. It has been the market leader in the cosmetics and toiletries market since 2001 (Euromonitor 2005). Their products are sold in about one hundred and thirty countries worldwide. L'Oreal is divided into four categories - consumer products, professional products, luxury products, active cosmetics. They mainly focus on skin care, make-up, hair care and fragrance. L'Oreal includes some important brands such as Lancôme Paris, Garnier, Mabelline, Softsheen Carson, Matrix, and Biotherm. L'Oreal invests heavily into its research and development which gives them competitive advantage over its competitors.  

Science, The Driver Of Innovation In Cosmetics: For over a century, L'Oréal has built its development on a conviction: only strong research can create cosmetic products that are capable of generating real results. Its Research & Innovation model, unique in the cosmetics industry, is organized around three major entities:

Advanced Research, tasked with continuously enriching scientific knowledge about skin and hair around the world, and discovering new active ingredients;

Applied Research, which develops formulation systems, which are then played out in the different families of products;

Finally, Development, which provides the brands with innovative formulas adapted to their identity and to consumer expectations around the world.

To be closer to consumers around the world, Research & Innovation strengthened its global presence. It includes 19 research centers worldwide, organized into 6 poles. The European pole integrates the global center for Advanced Research as well as the 3 global centers that define, for each of the 3 lines of business - hair, skin care and make-up - a global strategy and spearhead the portfolio of innovations. These global centers serve as the hub for a network that includes 5 other regional poles in the United States, Japan, China, India and Brazil. The mission of these poles? To adapt the global strategy to the specific features of their markets. But they are also there to invent new products that may become global innovations. In addition, 16 evaluation centers are tasked with observing and listening to local consumers. Finally, some fifty scientific and technico-regulatory departments ensure compliance of the products with local regulations.

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Objective Of The Study

1. To analyze L'Oréal as a company2. To analyze L'Oréal with reference to the various strategic management techniques3. To discuss the approach to promoting diversities4. To analyze the marketing strategies5. To analyze the brand image of L'Oréal

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CHPT 2: RESEARCH METHODOLOGY

PRIMARY SECONDARY

QUESTIONNAIRE METHOD WEBSITES

NEWSPAPER ARTICLES

The primary data used in this project is questionnaire method. The purpose of this questionnaire is to find out if L’Oreal has a good brand image and how cosmetic products should be marketed. The questions are prepared for the consumers to know their views on the L’Oreal products.

The secondary data is found from newspaper articles of times of india, business today and many more. Other information has been derived from many websites such as www.loreal.com, www. loreal -paris.co.uk , www. loreal professionnel.com , Wikipedia, etc.

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CHP 3: COMPANY PROFILE

The L’Oréal Group is the world's largest cosmetics and beauty company. With its registered office in Paris and head office in the Paris suburb of Clichy, Hauts-de-Seine, France, it has developed activities in the field of cosmetics. For more than a century, we have devoted our energy and our competencies solely to one business: beauty. L'Oréal has chosen to offer their expertise in the service of women and men worldwide, meeting the infinite diversity of their beauty desires. L'Oréal is committed to fulfilling this mission ethically and responsibly.

History:

In 1907, Eugène Schueller, a young French chemist, developed a hair dye formula called Auréale. Schueller formulated and manufactured his own products, which he then sold to Parisian hairdressers.

On 31 July 1919, Schueller registered his company, the Société Française de Teintures Inoffensives pour Cheveux. The guiding principles of the company, which eventually became L’Oréal, were research and innovation in the field of beauty.

In 1920, the company employed three chemists. By 1950, the teams were 100 strong; that number reached 1,000 by 1984 and is nearly 2,000 today. L’Oréal got its start in the hair-color business, but the company soon branched out into other cleansing and beauty products. L’Oréal currently markets over 500 brands and many thousands of individual products in all sectors of the beauty business: hair colour, permanents, hair styling, body and skin care, cleansers, makeup and fragrances. The company's products are found in a wide variety of distribution channels, from hair salons and perfumeries to hyper - and supermarkets, health/beauty outlets, pharmacies and direct mail.

From 1988 to 1989, L’Oréal controlled the film company Paravision, whose properties included the Filmation and De Laurentiis libraries. StudioCanal acquired the Paravision properties in 1994.

Later, in 1993, L’Oréal was faced with problems due to animal rights activists who constantly protested about the use of animal testing by the company.

L’Oréal purchased Synthélabo in 1973 to pursue its ambitions in the pharmaceutical field. Synthélabo merged with Sanofi in 1999 to become Sanofi-Synthélabo. Sanofi-Synthélabo merged with Aventis in 2004 to become Sanofi-Aventis.

On 17 March 2006, L'Oréal purchased cosmetics company The Body Shop for £562 million.

L'Oréal's famous advertising slogan is "Because I'm worth it". In the mid 2000s, this was replaced by "Because you're worth it".

Protest group Naturewatch states that L'Oréal continues to test new ingredients on animals. The company states that no animal testing for finished products has taken place since 1989 and that L'Oreal has invested significantly in alternative methods for chemical safety testing, though they implicitly acknowledge that they continue to perform animal testing of ingredients.

In November 2012, L'Oréal inaugurated the largest factory in the Jababeka Industrial Park, Cikarang, Indonesia, with a total investment of US$100 million.[11] The production will be absorbed 25 percent by domestic market and the rest will be exported. In 2010 significant growth occurred at Indonesia with 61 percent increase of unit sales or 28 percent of net sales.

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L'Oréal Mission:

For more than a century, L’Oréal has devoted itself solely to one business: beauty. It is a business rich in meaning, as it enables all individuals to express their personalities, gain self-confidence and open up to others.Beauty is a language.

L’Oréal has set itself the mission of offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy and safety. It pursues this goal by meeting the infinite diversity of beauty needs and desires all over the world.Beauty is universal.

Since its creation by a researcher, the group has been pushing back the frontiers of knowledge. Its unique Research arm enables it to continually explore new territories and invent the products of the future, while drawing inspiration from beauty rituals the world over.Beauty is a science.

Providing access to products that enhance well-being, mobilising its innovative strength to preserve the beauty of the planet and supporting local communities. These are exacting challenges, which are a source of inspiration and creativity for L’Oréal.Beauty is a commitment.

By drawing on the diversity of its teams, and the richness and the complementarity of its brand portfolio, L’Oréal has made the universalisation of beauty its project for the years to come.L’Oréal, offering beauty for all.

L'Oréal Ambition:

Beauty for All, Beauty for Each. At L’Oréal, we are convinced that no single and unique model of beauty exists, but an infinite diversity, changing with the times, through cultures, histories, individuals. To draw ever greater numbers of women and men to use our products, is to go forward to meet extremely diverse populations with a vision of the universalization of beauty.

Observe Local customs of Beauty. At the heart of this project, our Research and Innovation reinvents itself to create cosmetic products adapted to the very great diversity in the world. In every part of the world, we have created Research platforms, veritable centers of expertise in the service of a personalized beauty.

Providing Access to Cosmetic Products. In a market in full mutation, every year L’Oréal makes new advances toward making the best cosmetic products available to all. With a portfolio of 27 international brands and an organization planned according to distribution circuits, we have the ambition to meet the needs of every consumer according to his or her habits and lifestyle.

To Accelerate the Localization of their Products. To win over another one billion consumers around the world is an ambitious project that motivates all our teams. An adventure that is economic but also human, it calls for a rapid increase in our numbers and an accelerated transformation of the enterprise in all its aspects, research, production, marketing, teams in sales, human resources, administration.

CHP 4: CONCEPTUAL FRAMEWORK7

4.1 PEST Analysis for L'Oreal

A) Political Factors

The political challenge is that L'Oreal should conform to all the different government leadership styles in various countries it operates within. L'Oreal faced a decline in the dermatology branch led by its Galderma brand due to new legislations governing drugs (Euromonitor, 2005). The EU law affects L'Oreal. L'Oreal is restricted in their use of certain kinds of chemicals, such as Phthalates which is carcinogenic (The Rules Governing Cosmetic Products in the European Union). L'Oreal is obligated to produce safe products that do not contain any harmful substances. Also, legislation for advertising is also affecting L'Oreal. L'Oreal has to follow the rules set by Advertising Standards Authority. For example, advertisements cannot be misleading that over-exaggerating the functions of a product (The Control of Misleading Advertisements Regulations 1988).

B) Economic Factors

L'Oreal should adapt to all the different economic environments and problems in all countries it operates in. For example in 2004, L'Oreal was affected by the continued weakness of the dollar and other currencies (L'Oreal Annual Report, 2004). Due to the factors such as rates of economic growth, there was a sharp and unforeseeable drop in consumer spending in Europe which affected L'Oreal's result in 2004 (L'Oreal Annual Report, 2004).  Inflation in UK due to rise in oil prices could mean that people have less disposable income to spend on L'Oreal's luxury products. L'Oreal must adapt to the fluctuating exchange rates as it operates on a global scale. Market structure affects a company's strategy. L'Oreal is involved in a monopolistic market, where there are many competitors producing similar products. (Brassington & Pettitt, 2004). Therefore, L'Oreal is affected greatly by its competitors on pricing, promotion, place and products. L'Oreal has to differentiate itself from competitors in terms of the 4Ps in order to attract customers. E.g. Vichy offers product that protects hair against sun-light, this is an innovative product which helps L'Oreal differentiates itself from the keen competition.

C) Socio-cultural factors

L'Oreal have to be in line with the changing consumer life styles. L'Oreal has to be aware of all its customer tastes, beliefs and awareness issues in each of the markets it operates in so that their advertising will be sensitive to these differences. L'Oreal has to take into account the religious and cultural factors when advertising in different countries. L'Oreal should focus more on the changing customer preferences as many customers prefer more organic and natural products. For example L'Oreal was forced to withdraw its advertising campaigns in the UK for its cellulite treatment Perfect Slim, because it had a physiological effect rather than a cosmetic (Soaps, Perfumery and Cosmetics, 2005). L'Oreal is also involved in a number of charitable and socially aware initiatives around the issues of health and wellbeing, for example L'Oreal Professional Products signed an agreement with UNESCO with regard to a joint HIV/AIDS education programme (Euromonitor, 2005).

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D) Technological factors

L'Oreal uses technology to develop new products and also invests heavily on its research and development (Euromonitor, 2005). It uses e-commerce as a means to distribute products, such as Lancôme which provides consumers with the benefit of online shopping (Euromonitor, 2005).

4.2 The Marketing Mix for the Luxury sector of L’Oréal

A) Product

The luxury product division of L'Oreal develops prestige brands offering skin care, fragrances, make up and hair care. The various brands it offers are Lancôme, Biotherm, Helena Rubinstein, Giorgio Armani, Ralph Lauren, Cacharel, Kiehl and Shu Uemura. L'Oreal invests heavily into its research and development, therefore the above brands are known for their innovation, performance and quality (www.loreal.com). Every product benefits from the ground-breaking work of the Group's scientific research teams based in France, the USA and Japan (www.loreal.com). Packaging has become a key development area for L'Oreal as part of its research and development function, for example, Ralph Cool fragrance from Ralph Lauren uses bright pink packaging to attract the 15-25 year target market (Euromonitor, 2005). Customers buy luxury products as it is high quality and offers good service.  

B) Price

The luxury products are in the premium priced category. In order to inspire their customers that their products are the highest quality, they ensure to use the highest quality raw materials and offer the best service. The luxury products are high priced and are similar to its competitors. Although the luxury products sector has not been generating good profits, its brands such as Biotherm and Lancôme have had good sales.

C) Place

These products are distributed through large department stores and travel retail outlets, their main aim is to add value and with great prominence on customer service (Euromonitor, 2005). They are placed more exclusively in order to make the customers feel they are differentiating themselves from mass retailing products. L'Oreal also uses e-commerce to distribute its products such as Lancôme which presents the customers with the benefit of online shopping (Euromonitor, 2005).

D) Promotion

These products are promoted through advertising, public relations and sponsorships. L'Oreal invests heavily in marketing. Brands such as Biotherm, Lancôme, Ralph Lauren advertises through magazines such as Glamour, Marie Claire etc where testers of skin cream and perfumes are attached free of charge. They also advertise through television. In large department stores, luxury products such as Lancôme's Aquafusion - free testers are given to the customers to promote their products. For example, for Lancome's PR campaign, Lancôme taxis were used to give celebrities free lifts to the after show party of the Colour awards in London.

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E) People

L'Oreal recruits talented individuals with a difference (www.loreal.com). They provide professional training for their staffs. In the large department stores where L'Oreal markets the luxury products, high qualified staffs are employed to give professional advices to customers, aiming at building rapport between service provider and customers and maintaining customer loyalty.

F) Process

The well trained staff offer one to one services, for example care to the consumer's individual needs. Further, the ability to purchase L'Oreal's luxury products via internet reduces queues at physical locations.

G) Physical Evidence

This is with regard to ambience of the retail stores and boutiques where L'Oreal sells their luxury products. For example, Lancôme boutiques are well designed with easy access to all the products and well qualified staff at every counter to help with any customer queries and also to provide professional advice. Also their boutiques are decorated with bright and eye-catching posters of the various products ranges. The staffs are smartly dressed and have a friendly manner and are enthusiastic, polite and helpful.  

4.3 SWOT analysis for L'Oreal

A) Strengths

High market profile strategies :  One of the strengths of the luxury category is that they have high profile marketing strategies which help them to reach the targeted audience (Euromonitor, 2005).

E- Commerce : Investment into e- commerce has benefited its luxury product such as Lancôme e-shop and Le Club des Createurs de Beaute (Euro monitor, 2005).

Growth of premium brands :  Despite economic uncertainty in many markets, the growth of luxury products is stable (Euromonitor, 2005).

B) Weaknesses

Distribution : One of the weaknesses of the luxury product is that they sell through smaller and more exclusive channel such as large departmental stores as compared to the other sector (Euromonitor, 2005).

Target market : Another drawback of the luxury division is that they mainly produce products targeting the female sector.

Dependant on Western Europe :

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According to L'Oreal's annual report its sales is too dependent on Western Europe and North America with weak market share in dynamic and emerging market.

Sales : L'Oreal's luxury products division had good sales in skin care, make-up, but the sales of perfumes were not satisfactory as compared to Clarins (Euromonitor, 2005)

C) Opportunities

Successful launch of new products : L'Oreal has made several acquisitions in 2004, such as Japanese brand Shu Uemura and China's Mininurse and Yue Sai. This provide an opportunity to gain access into Asia Pacific as well as development of products produced specifically for the South East Asian Skin (Euromonitor, 2005)

Expansion into emerging markets : L'Oreal has been expanding its operations into Eastern Europe, Asia pacific, Africa, China and India. For example the acquisition of Soft Sheen and Carson which is mainly targets all ethnic groups, particularly of non white skin and has been successful in US and South African markets. (Euromonitor, 2005)

Market Segmentation : L'Oreal targets new groups such men as it has launched its new men grooming products. (Euromonitor, 2005)

Market for mature woman : L'Oreal continues to benefit from the world's changing demographic as the number of mature woman grows with nourishers/anti-agers products becoming increasingly popular (Euromonitor, 2005)

Urbanisation : L'Oreal benefits from the growing global urbanisation and drives demands for product in the mass market for products such as Garnier (Euromonitor, 2005).

Men's grooming products : L'Oreal has launched various products specially targeting the men category. They have launched products such as Redken for men and L'Oreal's Paris men expert to compete with Procter and Gamble's merger with Gillette.

D) Threats

Chinese ban on direct sale : Chinese market is considered to be one of the biggest markets for L'Oreal in the future, but the ban imposed by the government on direct sale due to the scandals from "pyramid selling" lost a lot of market share. Even though the ban has been removed the authorities and the government still discourages direct sale. (Datamonitor, 2005)                                              

Harmful ingredients in cosmetics : L'Oreal uses many harmful ingredients in their products. For example alpha-hydroxyl acid which is used in different moistures and tones can cause skin cancer (Data monitor, 2005). Due to the fact that the L'Oreal brand is very technological driven and consumers being aware of the health risks, more people prefer products containing more natural and organic ingredients (Brand strategy, 2005)

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Competition :Procter and Gamble: Procter and gamble's merger with Gillette is one of the threats to its global share due to the fact that L'Oreal does not have an involvement in oral hygiene and is trying to increase its presence in men's grooming products (Euro monitor, 2005).

Nivea Threatens L'Oreal : Global competitor brands like Nivea threatens L'Oreal's skin care products as L'Oreal needs to emphasis more on its advertising campaigns in order to create awareness and maintain the interest of its consumers over the time.                                        

Government regulations : L'Oreal is at risk of bending government regulations regarding packaging of its products. Failure to abide these regulations could have serious consequence for its growth in the future (Euromonitor, 2005).

4.4 Boston Matrix of L'Oreal and its competitors

 A) Star position

One of the top competitors of L'Oreal is Procter and Gamble. In the BCG matrix it is placed in the "star position" because Procter and Gamble is one of the global leaders in the cosmetic industry (www.pg.com). P&G's merger with Gillette shakes up the cosmetic and the toiletries market. They launched several men's grooming products.The company believes in branded products and services of superior quality and value that improves the lives of the world's consumers (www.pg.com). As a result they built strong leadership sales, profits and value creation, allowing the company to expand properly (www.pg.com). Thus we place this competitor of L'Oreal in this position because it shows high industry growth rate and high relative market share.

B) Cash cow

L'Oreal believes in gaining in depth understanding of the hair and skin care products through its research and development divison. The reasons for its boom in the cosmetic and toiletries industry are its wide portfolio. Positive outlook for the cosmetics and personal care products market helps L'Oreal to aggravate their sales (L'Oreal annual Report). Its key strengths in the global cosmetic market are its drive to use technology to develop new products and the resources given to its research and development (www.loreal.com). The launch of its mass market brands including Garnier, whose Fructis hair care range has enjoyed extensive geographic growth during the last financial year. Its anti-wrinkle products, eye contour creams and moisturizers with sun protection were very successful and helped the company to build a strong position in the cosmetic industry. Thus we can conclude that L'Oreal is placed in the "cash cow" position in the BCG matrix.

C) Question mark:

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Avon cosmetics as a competitor to L'Oreal is placed in the ?question mark' position in the BCG matrix because the company shows low market shares and they do not generate much cash. As a result there is large net cash consumption (Porter, 1998). One of the reasons for the lack of market share and the growth of the company is that, they suffer from a weak inconsistent image and they have less brand recognition as compared to other multinational brands (Euromonitor).

4.5 Competition and price positioning

The most important competitors of L‟Oreal on the professional products market in the Czech Republic are Wella, Schwarzkopf, Londa and Indola brands. Worldwide, it is especially Schwarzkopf (Henkel) and Wella (Procter&Gamble).

The brands of L'Oreal have the highest price and positioning on the market. Kérastase is positioned as an exclusive brand for the most demanding customers. The second most expensive brand is Redken. Third place is represented by the L'Oreal Professionnel brand. Fourth place belongs to Biolage product line, which, although a part of the portfolio of Matrix, has a different positioning than other products of this umbrella brand. The fifth place is represented by Matrix, an affordable brand for most hairdressing salons.

4.6 International brand policy Four major umbrella brands fall under the professional product division:

L'Oreal Professionnel, a leading premium brand from France, the vehicle of new technological breakthroughs in the field of hair colouring,

Kérastase, an exclusive premium brand, the flagship of L'Oreal in the field of hair care. It‟s image is based on innovation, individualized care and an original three-phase process of application,

Matrix, an affordable brand designed for the typical consumer, with a strong position in the United States,

Redken, a premium brand whose image is based upon the country of origin, United States, and New York.

4.6.1 Matrix

The Matrix brand was founded 1980 by an American hairdresser Arnie Miller. Miller wanted to offer hairdressing salons a clear range of products that would allow them to grow further and, at the same time, express their own talent and creativity. Within a few years, Matrix became the number one brand on the professional hair cosmetics market in the United States and Canada. The brand was overtaken in 1992 by a pharmaceutical company, Bristol-Myers Squibb, from which it was bought by L'Oreal in 2000.

The brand's vision is: "The Matrix allows all professional hairdressers to turn a passion for beauty into personal success". The mission states that Matrix is "a leading and iconic brand of professional hair care with a commitment to partnership, innovation and support activities". The fundamental principles of Matrix are simplicity and fun, reliability, trust, and availability only in hairdressing salons.

Matrix products are designed especially for small and medium-sized hairdressing salons that desire to use affordable professional products. An advantage of the brand is a

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strong business background and leading position in the U.S., which is a proof of quality and reliability of products.

A) Product The number of product lines under the Matrix umbrella brand is quite high. Product

lines are designed in a manner that their application is simple and safe, but comprehensive and with immediate results. Matrix product lines include hair dyes as well as hair care products (shampoos, conditioners) and styling products. The most famous brand products are Socolor.beauty, Amplify, Sleek.look, Curl Life, and Matrix Men. Slightly apart from these product lines stands Biolage, a brand of natural hair care products, which has a different positioning and figures among the more expensive product line. The packaging is colourful and attractive and is in conformity with the brand's principles - fun and professionalism. The packaging of Biolage products highlights their natural composition.

B) Price Lower cost is one of the characteristics of Matrix products. It is the least expensive

brand of L'Oreal professional products division. Therefore, Matrix can achieve a wide distribution. The price is influenced by the price of the competitors (in particular Schwarzkopf, Wella and Londa). The quality and price of Matrix products is higher than those of italian brands or Schwarzkopf, but lower than Wella or other brands of L'Oreal.

C) Distribution The distribution of Matrix is based on its original objective, which is the availability of

products for salons of all sizes and purchasing power. Matrix products are sold through well-established hairdressing wholesalers. Matrix offers its distributors a business model that allows them to be involved and participate in sales. The role of the distributor lies not only in storage, shipment and sale of Matrix products, but also in providing information, organizing training events and gaining new clients through its network of sales representatives, to whom Matrix pays 75-85% of salaries. Matrix products are intended exclusively for hairdresser. Selling products to final consumers is prohibited, even under the threat of financial sanctions. For this reason, there is no official online sales channel.

D) Communication The communication is based on the typical red color which attracts attention. As Matrix products are available in hairdressing salons only, communication takes primarily the form of push strategy and is targeted at hairdressers. Marginally, it is focused on the end-consumers, particularly through PR and advertising campaings. Advertising takes the form of advertisements in fashion magazines and journals for professional stylists, such as Us Weekly or InStyle. PR is built up in life styles magazines as Elle and Cosmopolitan. Matrix emphasizes its leading position on the U.S. market, as well as overall company values such as protection of the environment or diversity. The sales promotion is focused on merchadising, i.e. direct presentation of goods in premises of wholesales, and on providing samples to hairdressers. Matrix also organizes training programs and events for hairdressers. The biggest event of this kind is the Matrix Global Academy in New York, designed for hairdressers from around the world. Personal selling through sales representatives plays an irreplaceable role in the communications mix of Matrix. The task of the sales representatives is to present and explain the advantages of Matrix products. The website of Matrix is aimed at professional hairdressers. Among others, the pages contain offers of training courses and advices about the application of products to

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various types of hair, about hair colouring and styling, etc. The pages also contain a set of professional hair care and colour videos, Matrix CRAFT TV. Matrix is established in social networks like Facebook, Twitter, YouTube and Flickr.

4.6.2 Redken

Redken is a premium and relatively expensive brand of the L'Oreal professional products division. The brand was founded in 1960 by a model Paula Kent and her hairdresser Jheri Redding. The brand name comes from the initials of the two family names (Redding and Kent). Redken builds its image on a scientific approach to beauty and its slogan is “Beauty through science“. Redken gradually gained a strong position on the U.S. market and later on in other countries. In 1993 it was bought by L'Oreal. The company has thus extended the portfolio of its professional products division and expanded its scope to the strategic U.S. market. After an earthquake in 1994, the seat of Redken has moved from Los Angeles to its original location on Fifth Avenue in New York, which is sometimes presented as a part of the brand's name (Redken 5th Avenue NYC). The fundamental values of Redken are fashion, science and inspiration. Its mission is to help hairdressers to “learn better, earn better and live better”.

A) Product Redken offers a comprehensive portfolio of hair care products. It contains hair colouring products such as Color Fusion or Shades EQ and decolourizers Up to 7 and Lift 5/15. Hair care products line covers the needs of all types of hair. "Prescribing" by the hair stylist is based on a diagnosis of hair. For instance, All Soft products are designed for dry/brittle hair, Color Extend is designed for coloured hair, Extreme for hair spoiled due to excessive lightening, waving or mechanical damage as a result of brushing. Intensive care treatment Redken Chemistry is a specific feature and competitive advantage of the brand. Redken responds to the growing segment of men's cosmetics and offers a line of professional hair care products for men called Redken For Men. The portfolio of Redken also contains styling products such as Rewind 06, Quick Dry 18, 10 and Gutsy Rough Paste 12 (world's best-selling product of Redken). Redken products are built on three fundamental principles: acidic pH, protein and water. They have a high-tech positioning. Hair care products are delivered in coloured packages with a typical shape. Colour coding allows an easier understanding and recognition of product lines. Packaging design of styling products (hair sprays, gels, etc.) is silver. Silver color should give these products an industrial tinge, the large numbers on the packaging shall reflect the energy and rhythm of New York and also indicate the degree of fixation that each product provides. Packaging of Redken for Men has a different shape and is decorated in dark gray, while individual products are distinguished by particular color headline. The packaging therefore primarily points out that it is a product for men.

B) Price Redken is a high-tech brand and therefore has a premium positioning and the prices are

relatively high. Technologically advanced products have a higher price, while basic hair care products (shampoos, conditioners) are more affordable. Pricing strategy is not completely standardized. For example, in the Czech Republic, Redken has been implementing the price skimming strategy, but along with the development of Internet and growing consumer awareness, it is not maintainable in long term. For this reason, Redken has - particularly within the European Union - a problem of parallel imports. For example, the price of some products in Germany, Austria and especially in the U.S., is lower than in the Czech Republic, resulting in the so-called gray import of these products to the Czech Republic.

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C) Distribution Redken products are intended solely for hairdressing salons. Its worldwide distribution is based on sales representatives, which is the same case as for L‟Oreal Professionnel and Kérastase brands. In some countries, such as the Czech Republic, however, Redken does not use agents. The reason is that L'Oreal took over Redken from a local distributor, which operated on a different principle. There is no official online sales of Redken products. Distribution of Redken is presented as a rather selective one. In addition to hairdressing salons which are using multiple brands, there are also special salons using only Redken hair care products, which bear the name "5th Avenue". The number of these salons is not high. There is also a special kind of hairdressing salons which are called Redken Loft and cooperate with Redken at the highest possible level. Loft is a modern concept of salon that fully integrates the core values of Redken. Redken Lofts occur worldwide.

D) Communication Redken is trying to build a worldwide image of an exceptional and innovative

urban brand which creates new trends and connects top fashion with business. The characteristic color of Redken is black combined with white and various tones of gray. Redken‟s communication campaign is strictly global. In case of hairdressing salons, Redken uses the slogan "Get Inspired. Be part of it". This slogan is not translated to national languages as the translation could be rather detrimental. In case of end-customers, Redken uses the slogan "Get Inspired. See your stylist". Contrarily, this phrase is translated into national languages. The brand builds its image on the U.S. origin and the affiliation to L'Oreal is not mentioned. A strength of Redken on the American market is a close cooperation with fashion magazines (advertising and creation of new collections). Redken also actively participates in New York Fashion Week. The communication is especially targeted at hairdressers, but its purpose is also to maintain brand awareness. PR of Redken is built through sponsorship of some fashion events and cooperation with world leading designers in fashion shows and presentations of new collections. Sales promotion of Redken includes a sophisticated merchandising. Redken offers hairdressers a modern promotional equipment, such as special stands, banners and lighting systems. Much attention is devoted to the development of selling skills of hairdressers. Redken offers a range of specialized workshops and e-learning sessions. Hairdressers are given advices about how to distribute promotional materials and products in the hairdressing salon, so that their profits are maximized. Other promotional materials are business cards, postcards, posters, graphic templates of gift vouchers, loyalty cards and e-mails. Redken‟s global website is of high quality and contains useful information for both end-users and for hairdressers and stylists. Redken achieves excellent results in terms of web visibility through cooperation with the world's largest search engines.

4.6.3 L'Oréal Professionnel

Along with L'Oreal Paris, L'Oreal Professionnel is one out of the two global brands of L'Oreal which contain the name of the company it their name. Unlike Redken, L'Oreal Professionnel emphasizes the name of parent company and of the home country. L‟Oreal Professionnel is a strategic and dominant brand of the professional products division, dedicated to large salons, a vehicle of technological progress and innovation is the field of hair colouring. L'Oreal Professionnel builds its image on Paris and everything that it symbolizes - haute couture, emergence of fashion trends, French elegance and style. The brand is based on

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a continuous collaboration between scientists from the laboratories of L'Oreal, who have expert knowledge, and hairdressers, who are familiar with art, creativity and hair techniques. L'Oreal Professionnel combines technology with fashion. The basic principles of the brand L'Oreal Professionnel are "creativity, innovation and partnership."

A) Product L'Oreal Professionnel products range is very wide and includes all types of hair care and colouring products. L'Oreal Professionnel is trying to completely cover the target segment. As mentioned before, most recent technological innovations in the field of hair colouring are first introduced to the products of L‟Oreal Professionnel brand. The best-known hair colouring products are Majirel, Richesse, Luocolor and Color Supreme. Among hair styling products, we can mention Tecni.art. Hair care products portfolio includes such brands as X-Tense for smooth long hair or Dulcie for long-term shape and volume.

B) Price L'Oreal Professionnel has a premium brand positioning and its price is above the market average. In comparison with Kerastase and Redken, it is an affordable brand. Like Redken, L'Oreal Professionnel is confronted with the problems of parallel imports in the Czech republic because of price differentiation on different national markets.

C) Distribution Unlike Matrix, L'Oreal Professionnel does not use any system of distributors. However, sales representatives play a key role in its distribution. They are the intermediaries between salons and L‟Oreal Professionnel marketing departments. It is necessary to train the representatives and motivate them to be able to deal with the owner of salons in the same spirit. The information flow continues to individual hairdressers who communicate with end-consumers. Consumers can then transmit the information to each other via the aforementioned word-of-mouth. Like other brands, L'Oreal Professionnel focuses on salons that sell only products of L'Oreal Professionnel. In the case of Redken, these salons were labeled with "5th Avenue", in the case of L'Oreal Professionnel, they carry the name "Expert".

D) Communication L'Oreal Professionnel is seeking to gradually build its long-term PR and to occur near

fashion centers. Twice a year, L‟Oreal Professionnel introduces Color Collections, a collection of fashionable hairstyles and colors, which presents a combination of global fashion trends and technological knowledge. L'Oreal Professionnel also organizes L'Oreal Color Trophy, a public hairdressing contest of talents. New trends of L'Oreal Professionnel are presented in French Inspiration Show, a fashion show which is broadcasted live on the Internet. The Internet is becoming an increasingly important way of brand communication with hairdressers and end-consumers. L'Oreal Professionnel web pages have a uniform global design and are focused primarily on image building. For this reason, do not contain too many details. All L'Oreal brands are also trying to exploit the phenomenon of social networks such as Facebook, Twitter and Youtube. The strongest brand in this regard is Redken, which is due to socio-cultural reasons which arise from its American origin. Maintaining brand awareness is also done through the press. Articles about L'Oreal Professionnel appear in magazines like Elle, Vogue, Harpers Bazaar, Dolce Vita, etc.

4.6.4 .Kérastase

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Kerastase was founded in 1964 by the CEO of L'Oreal, François Dalle. The brand's name comes from a combination of the words Keratine (keratin protein) and Extase (Ecstasy). Kerastase has always been presented as a highly technologically advanced brand that brings hair perfection and splendour. Core values of the brand are top technology, hairdressing expertise and individual care of customers. Kerastase reflects the latest research of L'Oreal laboratories in the field of hair care. An excellent expertise of hairdressers who work with Kerastase products is guaranteed by severe criteria of selection. Kerastase hair care is based on a fully individual approach to every customer. Kerastase products have an excellent reputation and belong to the category of luxury products.

A) Product Product policy of Kerastase is based upon the fact that salons do not only sell

products themselves, but especially the rituals associated with their application. The application process consists of diagnosis, determination of the most appropriate care, and application through a hair massage. This is an important distinguishing factor and a strength of Kerastase. Kerastase products fall uniquely under the field of hair care. Throughout the world, a partnership with L'Oreal Professionnel is maintained. L‟Oreal Professionnel provides Kerastase salons hair coloring and other services. Kérastase brand includes eight core product lines. It is Nutritive for dry and sensitized hair, Reflection for protection and long lasting shine, Specifique for special scalp problems, Soleil for hair exposed to sunlight, Noctogenist for tired hair, Nutrients, a supplemental nutrition of hair, Résistance for weakened or damaged hair and Biotic for protection of natural hair.

B) Price Kérastase is a luxury brand with a very high positioning, so the price of products is very

high. It is the most expensive brand of the professional products division, and one of the most expensive brands at all. For instance, on the Czech market there is only one more expensive brand of hair care, Alterna. High cost is currently one of the possible weaknesses and competitive disadvantages of the brand, as cheaper brands represent a potential threat.

C) Distribution The distribution of Kérastase products is highly selective. Kérastase can be

distributed only in salons that use L'Oréal Professionnel hair-colouring products (i.e. in the salons "Expert"). Education and training of hairdressers is a crucial aspect, since the hair care is prescribed to customers completely individually. A bad hairdresser could easily damage the reputation the brand, therefore the selection criteria are very strict. Kérastase also uses a network of sales representatives to communicate with the management of hairdressing salons. The highest level of cooperation with hairdressing salons is represented by the concept of "Kérastase Institute" salons. These are very luxury salons which embody Kérastase core values and positioning.

D) Communication Kérastase has a very good image, which is one of the strengths of the brand. As in

the case of other brands, the word-of-mouth plays a crucial role. Therefore, Kérastase focuses on merchandising techniques at the point of sale. It provides salons with posters, leaflets and booklets, special racks and wall decorations. Promotional materials use scientific symbols such as molecules. An interesting promotional tool is a special standardized form for hairdressers, on which they establish diagnosis for their customers. Articles about Kérastase appear in fashion magazines like Marie Claire, Harpers Bazaar, Elle and InStyle. Kérastase also uses opinion leaders such as celebrities and famous hairdressers. Kérastase website is aimed at both hairdressers and end-consumers. They are visually uniform and translated into many

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languages, including Czech. However, the quantity of information varies considerably. In the area of Internet communication, there is also the use of several blogs and social networks.

4.7 L’Oréal Approach in Promoting Diversities

Diversity is an important issue for L’Oréal. It consists of recognizing, accepting, valuing differences and capitalizing on them to accelerate the company's growth. As the undertaking has multiple dimensions, L’Oréal prefers to talk about diversities in the plural. In this field as in others, the group started by taking initiatives, then measured the progress made to professionalize and extend the approach on an international scale.

For L’Oréal, measuring is an essential part of the approach, because it makes it possible to steer the policies being implemented in the area of diversity and in this way, to make progress in these areas. The group accelerates the deployment of its Diversities policy and its corporate values wherever it has a presence and whenever it opens new subsidiaries.

A) The roll-out of Diversity Charters in different countries

The signing of the Ethics Charter in 2000 and of the Global Compact in 2003 were L’Oréal's first commitments to promoting non-discrimination and respect for individual differences. With the signing of the Diversity Charter in France in 2004, and action plan was defined, supported in 2006 by the creation of a global diversity network in the subsidiaries. Since then, several Diversity Charters have been signed in the European subsidiaries: Belgium (2007), Germany (2008), Spain (2009).Over recent years, L’Oréal has stepped up its approach by being directly involved, alongside other partners, in the creation of national diversity charters. This has been the case in Italy, in collaboration with the Sodalitas association in 2009, in Sweden in 2010 and in Poland in 2012. This process continues and is growing. In parallel, the group's commitment has spread in France to other dimensions of diversity, such as professional equality, parenthood, social background or even age: the creation of the Parent-Friendly Charter (2008), the "Plan Espoir Banlieues" (2008), and company agreements relating to the employment of Seniors (2009).

B) The Diversities Policy 2010-2015

L’Oréal's ambition is to become the recognized world leader in the management of diversities. This leadership ambition incites us, in order to be effective, to focus our policy on three strategic lines of action: human resources, marketing/communication and purchasing; working in priority on three issues: gender, disabilities and social and ethnic background. Defined in this way for the period 2010-2015, the group policy from now on involves all the subsidiaries. With a shared goal, it prioritizes action to facilitate a rapid and global deployment.

C) Main actions19

Diversifying our sources of recruitment to look for and acquire talents that represent greater cultural and social diversity.

Reduce the difference in salaries between men and women to the point that they disappear.

Nurture the emergence of talents of women at the top level of the organization. Enable and promote the employment of people with disabilities, in compliance with

national laws or by going beyond them. Make L’Oréal products accessible to all consumers. Practice a responsible purchasing policy, especially one that acts against exclusion.

4.8 L'Oreal's Global Branding Strategy

4.8.1 Brand Management

L'Oreal had built a dozen or so mega brands rooted in the local culture and appealing to different segments of the global market. Instead of homogenizing the various brands and making them palatable in myriad cultures, Owen-Jones decided to embody their (the brands') country of origin, turning what many marketing gurus considered a narrowing factor into a marketing virtue. As a senior L'Oreal manager put it, "You have to be local and as strong as the best locals but backed by an international image and strategy. We have made a conscious effort to diversify the cultural origins of our brands."...

4.8.2 Brand Extensions

L"Oreal realized the need for caution in case of brand extensions. The company extended its brands after doing a thorough research. When L'Oreal decided to enter the kids shampoo category in 1998, it debated whether to launch a new brand or go for an extension. The company realized the L'Oreal name, long associated with women's hair care, would capture instant credibility with moms. But Kids was really a child-oriented product. When L'Oreal first unveiled its L'Oreal Kids shampoo line early 1998, retailers were skeptical. "Retailers say the value isn't there. We say it is, that the child establishes value. We were pretty tenacious." - mentioned Carol Hamilton, 45, senior VP-marketing for the L'Oreal retail division of Cosmair...

4.8.3 Advertising And Promotion

L'Oreal backed its product innovations with the twelfth-largest media budget in the world. In the late 1980s and early 1990s, "external charges", which included L'Oreal's advertising and promotions expenditure jumped from 37% to 47% of sales. L'Oreal increased its global ad spending to $1.25 billion in 1998, putting it almost on par with Coca-Cola. L'Oreal had a unique promotion policy for all its brands. A brand, which sold in mass-market outlets, advertised and promoted itself in a way similar to brands sold in department stores...

4.8.4 Corporate Structure

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L'Oreal was organized as a clutch of small profit centers, some with as few as ten employees. The company's work culture encouraged audits and budget meetings to focus less on the spilled milk of the past, and more on leading indicators of how things would look at year-end.These meetings encouraged discussions to find out which overlooked products showed signs of life but were undercapitalized and which products were not matching expectations and needed pruning. The structure allowed L'Oreal to move fast...

4.8.5 Competition

L'Oreal faced competition from various formidable rivals. On one side, cosmetic majors like Revlon and Avon and Nivea vied for shelf space. On the other, there were the giant FMCG companies like Unilever and P&G. There were also local competitors like HLL-Lakme in India, Dark and Lovely in Africa, and the erstwhile Shu Umera in Japan (L'Oreal later acquired this brand)...

4.8.6 Future Outlook

As Owen-Jones raced to expand international sales, he realized the need to ensure that his brands did not confuse consumers, leading to brand cannibalization. Owen-Jones also faced uncertainty surrounding the company's future. Bettencourt, 79, had indicated she did not want the arrangement with Nestle to change in her lifetime. Nestle had promised to respect her wishes. But after her death, it was not clear whether Nestle would be as compliant with her only child, Francoise. Nestle had about $13 billion tied up in L'Oreal, and with 26% of its shares, it could launch a takeover bid...

4.9 L’Oréal Paris Brand Ambassadors

As the top beauty Brand sold in retail outlets, L’Oréal Paris makes the most innovative products accessible to everyone. Its ambassadors embody a certain beauty ideal summed up in the legendary signature: “Because you’re worth it.”

With 50 products sold every second worldwide, L'Oréal Paris offers from all continents male and female beauty products of all types (makeup, skin care, hair care, styling, hair color and men), from the excellence of its Research Laboratories. The worldwide success of legendary franchises such as Color Rich lipstick, Revitalift skin care, Elnett hairspray, Preference hair color or Hydra Energetic skin care for men, reflect the brand’s unique expertise from the greatest beauty experts. Including Christophe Robin for hair color, Stéphane Lancien and John Nollet for haircare and styling, Joëlle Ciocco for skin care, Tom Bachik, manicurist to the stars, or Orrea Light, Color Designer.

L'Oréal Paris shares a unique vision of beauty, supported by 35 diverse international ambassadors, icons such as Jennifer Lopez, Beyoncé Knowles, Freida Pinto, Jane Fonda, Eva Longoria, Julianne Moore, Liya Kebede, Gong Li or Hugh Laurie. The exceptional careers and charismatic personality of L’Oréal’s ambassadors resonate in the motto "Because you're worth it", a truly universal message of empowering beauty for the last 40 years. Each year, L'Oréal Paris magnifies its beauty ambassadors and worldwide celebrities from nearly 20 international red carpets, including the Cannes Film Festival, for which L’Oréal Paris has been the Official

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Makeup Artist for the last 16 years. The Film Festival provides the constantly renewed opportunity to highlight the superiority and expertise of its products accessible to every consumer.

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CHP 5: DATA COLLECTON AND ANALYSIS

Q1.

We come to know that 90% of people have used L’Oréal products in the last one year.

This shows that people prefer using L’Oréal products and trust the products.

Q2.

This graph depicts that how frequently a normal person uses L’Oréal product.

CHP 6: CONCLUSION