CRM Corporate Profile Example - LOreal PDF

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Example of CRM profile for assignment 1...

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Company Profile Analysis:

L’Oreal Module: Corportate Reputation Management Module Tutor: Jane Tonge

Company Profile Analysis 1.0 Introduction L’Oreal has significantly dominated the ‘cosmetics’ market sector since its launch in 1909 by Eugene Schueller (L’Oreal 2013). As the current market leader, L’Oreal is accountable for 68,900 employees worldwide contributing to the sustainability of their reputable sales levels currently reaching $28.88bn (Forbes 2013). Its development and high level of establishment has stemmed from its global presence and broad product portfolio to target a range of consumers. (Forbes 2011)

1.1 PESTLE Analysis Issue/ Trend Political India, China and other countries either have no animal welfare laws or laws that go completely unenforced (Peta 2013) Economic Deep price promotions on midmarket branded toiletries and cosmetics; consumers will be reluctant to adjust to full-price shopping (Mintel 2010).

Positive Impact on L’Oreal Not applicable

Negative Impact in L’Oreal Trading, selling and producing within these specific countries will damage the perception of consumers due to the lack of ethical consideration.

By using promotional pricing consumers are more inclined to try L’Oreal products and therefore more likely to continue purchasing in the future.

This could be detrimental to their midrange cosmetic line. As consumers become reliant on these pricing strategies consumers are more likely to look at other brands when the offers are not available.

Social Ageing population with more interest in personal appearance than previous generations of retirees should boost demand for products. (Mintel 2010)

This gives L’Oreal the opportunity to expand and create product ranges within many of their brands, giving them a large mark up and profit. Also gives them potential to expand their celebrity ambassadors with successful marketing campaigns. L’Oreal is using technology very differently to ensure they maximise their market share. They have created websites for all the brands to explain their contribution to beauty (Marketing Week 2013). Not applicable

It would be very risky for L’Oreal to focus all their efforts within this area. As consumer trends can easily change especially due to changes within the economic environment.

Through L’Oreal releasing their sustainability plan it supports the cosmetic industry green initiative its reassuring consumers are environmental agencies that L’Oreal is trying to make a difference.

The sustainability plan can been seen as being ambitious due to setting results that need to be achieved so far into the future, it could be argued that L’Oreal may not be able to show results die to changeable factors.

Technological Online growth means retailers will need to make digital investments while also maintaining a store base. (Mintel 2010) Legal Chinese government requires that all cosmetic and beauty products have to be tested on animals before they get realised for sale (Bloomberg 2013) Environmental A number of life-cycle analysis studies show that the highest environmental impact of cosmetic products is at the consumer level (Organic Monitor 2013).

Due to L’Oreal’s varying target consumers and brand heritage using technology to modernise their communication could affect the traditional consumer perception. L’Oreal have be campaigning against animal testing for years and claim there are other methods to use, this would be a massive step back in their ethical campaigning.

1.2 Key Issues: 1. Reoccurring issues concerned with animal testing through the production of L’Oreal products. 2. False interpretations derived from airbrushing of advertisements to further enhance results of the products. 3. Misleading and exaggerated effects of products described similarly to the effects of beauty enhancing drugs.

1.3 Target Publics Consumers: L’Oreal’s ethical practice makes significant impact into the decision making process of consumers. Activist Groups: Satisfying their needs will reduce negative press surrounding issues from being published. Governments: Trade laws and cultures vary internationally which should be prioritised within L’Oreal’s decisions. Buyers: By developing positive relationships with retailers, L’Oreal will ensure effective distribution of their product. Employees: Improving the perception of the brand ambassadors will help promote the brand values to consumers. Suppliers: Decisions to create relationships will be based on the suppliers’ level of corporate social responsibility. 1.4 SWOT Analysis Strengths L’Oreal has outlined a new sustainability plan it hopes will help it reach its target of 1 billion new consumers by 2020 by producing more products with less environmental impact (Marketing Week 2013).

Opportunities Strong on-going outperformance of the premium segment because of mass market consumers’ aspirations and also due to greater resilience among more affluent shoppers (Mintel 2010).

L'Oreal also has to maintain a steady stream of new products (every year, roughly 20% are new) in order to extend market share in the face of stiff competition (Harvard Business Review 114)

In 2012 over half of L’Oreal’s sales came from new markets outside Europe and North America, mostly in emerging economies, up from only a third as recently as 2009. In 2012, sales grew in the Asia Pacific region by 18.4% and in Africa and the Middle East by 17.6%. (Harvard Business Review)

L'Oreal’s tagline is recognised globally – ‘We’re worth it’. By using ‘Celebrity Ambassadors’ to promote the L’Oreal message it is taking on a more sophisticated approach to celebrity endorsement (L’Oreal 2013). Weaknesses Images giving consumers false impressions of the benefits through using their products from airbrushing celebrities has caused several adverts to be banned and critiqued. Examples: Julia Roberts; L’Oreal Revitalift was banned due to misleading and exaggerated performance (Daily Mail 2012). Furthermore there was controversy with L'Oreal whiting the skin of Beyoncé which caused outrage among fans (The Guardian 2008).

Perfume, make up and skin care accounted for 30% of the travel retail sector in 2012. In response to this growing market L'Oreal has created a new travel retail division (Reuters 2013). Threats L'Oreal is situated in an innovative sector, in which there remain opportunities for new, niche brands to cut through allowing multi-brand retailers to cherry-pick suitable brands (Mintel 2010) L'Oreal has battled with animal testing claims for years and now states that only 1% of its ingredients are tested on animals (L'Oreal 2013). This could still negatively affect consumer’s choice to purchase the products.

L’Oreal received warning to stop advertising skincare products through using language that makes them sound like drugs (Foxnews 2012). This is misleading consumers due to exaggerating effects. 1.5 Porter’s Five Forces

(L’Oreal 2013)

1.6 Stakeholder Map

1.7 References BBC News. (2013). L'Oreal to buy Chinese skincare firm Magic Holdings. Available: http://www.bbc.co.uk/news/business-23721935. Last accessed 11th Nov 2013. Bloomberg, N. (2013). China Animal Testing Complicates L’Oreal’s Expansion. Available: http://www.bloomberg.com/news/2013-08-21/rabbits-pay-the-price-as-l-oreal-to-p-g-expand-in-china.html. Last accessed 15th Nov 2013. Handley, L. (2012). Q&A: Georges-Edouard Dias, L'Oreal. Available: http://www.marketingweek.co.uk/strategiesand-tactics/digital-strategy/qa-georges-edouard-dias-loreal/4000627.article. Last accessed 18th Nov 2013. Hong, H-J. Doz, Y. (2013). L'Oreal Masters Multiculturalism. Harvard Business Review. 91 (6), 114. L'Oreal. (2013). History. Available: http://www.loreal.com/group/history.aspx. Last accessed 26th Nov 2013. L'Oreal. (2013). L'Oreal Luxe. Available: http://www.loreal.com/brands/loreal-luxe.aspx. Last accessed 25th Nov 2013. Mintel, Monk, H. (2010). Beauty Retailing - UK - January 2010. Available: http://academic.mintel.com/display/479768/. Last accessed 28th Nov 2013. Monitor, O. (2013). Environmental Impacts Of Cosmetics: Consumers hold the key. Available: www.organicmonitor.com/r2504.htm. Last accessed 15th Nov 2013. O'Reilly, L. (2013). L’Oréal outlines 2020 sustainability goals. Available: http://www.marketingweek.co.uk/news/loral-outlines-2020-sustainability-goals/4008356.article. Last accessed 25th Nov 2013. Peta. (2013). The Global Leather Trade. Available: www.peta.org/issues/animals-used-for-clothing/leatherindustry/global-leather-trade/. Last accessed 28th Nov 2013. Poulter, S. (2012). 'Misleadingly exaggerated': Rachel Weisz advert banned after L'Oreal admits to airbrushing. Available: http://www.dailymail.co.uk/femail/article-2094440/Rachel-Weisz-advert-banned-LOreal-admitsairbrushing.html. Last accessed 21st Nov 2013. Reuters. (2012). FDA warns L'Oreal about drug-like claims for anti-aging creams. Available: http://www.foxnews.com/health/2012/09/11/fda-warns-loreal-about-drug-like-claims-for-anti-aging-creams/. Last accessed 19th Nov 2013. Russell, J. (2013). L'Oreal launches ambitious green plan, but stumbles on animal testing regulations. Available: http://www.nzherald.co.nz/environment/news/article.cfm?c_id=39&objectid=11148198. Last accessed 18th Nov 2013. Sweney, M. (2008). Beyoncé Knowles: L'Oreal accused of 'whitening' singer in cosmetics ad. Available: http://www.theguardian.com/media/2008/aug/08/advertising.usa. Last accessed 24th Nov 2013. Trefis, T. (2011). L'Oreal: Acquire to Survive? Available: http://www.forbes.com/sites/greatspeculations/2011/01/18/loreal-acquire-to-survive/. Last accessed 17th Nov 2013. Trefis, T. (2013). L'Oréal Group. Available: http://www.forbes.com/companies/loreal-group/. Last accessed 20th Nov 2013. Wendlandt, A. (2013). L'Oreal says travel retail boom creates 'sixth continent'. Available: http://uk.reuters.com/article/2013/11/21/uk-loreal-travel-idUKBRE9AK0N320131121. Last accessed 24th Nov 2013....