Le Roche-Posay, Loréal Assegnato (una volta) PDF

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Le Roche-Posay, Loréal Assegnato (una volta)
Ngày 01/04/1976 Apple Computer Inc., được thành lập bởi Steve Jobs, Steve Wozniak và Ronal Wayne để bán bộ sản phẩm máy vi tính cá nhân Apple I. Ngày 09/01/2007, Apple Computer Inc., được đổi tên thành Apple Inc., do lúc này công ty không chỉ cung c...

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JILL AVERY VINCE NT D E S SA IN M E T T E F U GL S A N G H J O R T S H O E J

La Roche-Posay: Growing L’Oréal’s Active Cosmetics Brand As 2018 neared its end, Laetitia Toupet, international general manager of L’Oréal’s La Roche-Posay brand reflected on the brand’s achievements over the past year. At €1 billion in revenue, La RochePosay had recently become the number one dermocosmetics brand in the world. 1 While Toupet was pleased with this feat, she believed that the brand was at a critical juncture. It was time to make some significant marketing decisions to try to accelerate La Roche-Posay’s future growth trajectory. La Roche-Posay was one of the core pillar brands of L’Oréal’s Active Cosmetics Division, which was devoted to dermocosmetic skin care brands that were selectively distributed through pharmacies and other healthcare-related channels and enjoyed strong relationships with dermatologists, who often prescribed these over-the-counter, non-prescription products to their patients as part of an overall treatment regimen. Dermocosmetics were cosmetic products with active ingredients (such as retinol or alpha-hydroxy acids) that were applied topically to the skin. Typically, the effectiveness of these active ingredients had been established through scientific clinical testing. Consumer interest in dermocosmetics was growing rapidly and, as a result, new competitors were aggressively entering the segment. As Toupet analyzed the changing landscape of the category, she realized that the market potential for dermocosmetics was quickly moving from a niche segment of patients with pre-existing pathological skin conditions to a broader swath of consumers interested in overall skin health and skin pathology prevention. As a result, La Roche-Posay had the opportunity to adjust its customer value proposition. With strong scientific grounding based in clinical research and close connections with 90,000 dermatologists worldwide, La Roche-Posay occupied an enviable quasimedical position in the skin care marketplace. Each of La Roche-Posay’s five sub-brands had been specifically designed to address a particular medical indication, and targeted consumers suffering from that particular skin pathology. This created a medicalized, clinical brand value proposition based in science, delivered to niche target segments. Toupet explained, Historically, our brand has targeted consumers suffering from dermatological skin conditions with the distribution of our products in a prescription-like manner from health professionals. Our medical heritage is still an important part of the way we market our products and drive brand advocacy, but our target clientele has expanded due to various Senior Lecturer Jill Avery, Executive Director Vincent Dessain (Europe Research Center), and Research Assistant Mette Fuglsang Hjortshoej (Europe Research Center) prepared this case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2019 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

This document is authorized for educator review use only by Giovanni Pino, University of Chieti until Sep 2020. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860

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La Roche-Posay: Growing L’Oréal’s Active Cosmetics Brand

trends that are having an impact on consumer behavior. We observe that consumers are increasingly health-conscious and place emphasis on environmentally- friendly products, which influences their lifestyle choices and thus shopping patterns… While we want to continue to leverage our heritage and history, it does raise questions as to how ‘clinical’ La Roche-Posay should be in our branding. Toupet was also struggling to decide whether and, if so, how to execute a unified marketing strategy and brand expression across geographies. While La Roche-Posay’s close relationships with dermatologists in markets such as France helped the brand reach consumers within a medical context, in other countries, consumers’ access to and usage of dermatologists was quite limited (globally, only 10% of consumers had access to a dermatologist), making it more challenging for the company to rely on dermatologist recommendations to drive sales. She explained, La Roche-Posay is distributed in more than 60 countries, where each has local context differences in terms of competitors, consumer behavior, and access to dermatologists. These context differences affect how the brand is perceived and what it can deliver. While we would like to address this fragmentation in our local marketing and distribution strategies, we also want to maintain a cohesive and uniform global brand expression that maintains the integrity of our brand. This is one of our biggest challenges. As she considered the future, she wondered whether the brand needed to shift more investment into direct-to-consumer branding efforts, maintain that investment in dermatologist outreach and support, or use it to mobilize new types of purchase influencers, such as its existing customers who were passionate advocates for the brand. Digital technologies were offering new opportunities and La Roche-Posay was actively pursuing the development of tools that could help consumers recognize and diagnose their own skin pathologies and seek treatment solutions. Her team had been experimenting with connected beauty applications and mobile health technologies, such as a wearable UV patch that monitored real-time sun exposure, transmitted the data to a smartphone application, and recommended a personalized sun protection routine. Would these types of digital initiatives help La Roche-Posay gain a competitive edge in the category or would they jeopardize the brand’s close relationships with the medical community? During 2018, L’Oréal had successfully acquired the Société des Thermes de la Roche Posay, one of the leading European thermal stations and the historical birthplace of the La Roche-Posay brand. It was the original source for the pure, natural thermal spring water that had provided La Roche-Posay with a unique and inimitable ingredient for its product formulations since the brand’s inception. Located in the picturesque town of La Roche-Posay in Western France, the thermal station provided hydrotherapy to more than 7,500 patients each year. Patients, under the care of nine resident dermatologists, benefitted from the thermal source’s water, which contained an unusually high concentration of selenium, a mineral with immunomodulating properties proven to reduce skin irritation. The station contributed €3.6 million in direct sales from patient treatment in 2017, but Toupet also saw it as a unique experiential asset that could be further leveraged to support and expand La Roche-Posay’s brand, and an important way to preserve and protect the brand’s most valuable ingredient, its water source.

2 This document is authorized for educator review use only by Giovanni Pino, University of Chieti until Sep 2020. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860

La Roche-Posay: Growing L’Oréal’s Active Cosmetics Brand

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Flowing from an Ancient Thermal Source The Thermal Center The discovery of the sourc e of pure, natural, thermal water that powered La Roche-Posay’s skin care products dated back to the thirteenth century. According to local legend, the constable, Bertrand du Guescelin, stopped at the springs of La Roche-Posay to quench his thirst. His long-suffering horse, afflicted with chronic eczema, took a dip in the water and, reportedly, was miraculously cured, much to the astonishment of the inhabitants of the tiny French village. Three centuries later, Pierre Milon, doctor to Kings Henry IV and Louis XIII, conducted the first formal analysis of the water’s composition, and official written documentation of its beneficial effects became available. The reputation of La Roche-Posay’s unique thermal water spread throughout France and in the nineteenth century, General Napoleon Bonaparte ordained the construction of a thermal hospital to treat his soldiers’ skin diseases. Eventually, in 1905, a thermal center opened to the public to treat various kinds of skin disorders. Eight years after its inauguration, the French Academy of Medicine declared the city of La Roche-Posay a “Thermal Spa Town” and certified the therapeutic effects of its unique water. The thermal center provided hydrotherapy for patients to assuage skin irritations associated with various pathologies. These treatments included filiform showers, massaging jets, dermatological wraps, or simply consuming filtered thermal water to cleanse and detoxify the body from the inside. The current patient portfolio suffered from the following skin pathologies: •

35% had eczema/atopic dermatitis, an inflammatory skin condition resulting in very dry thickened, cracked, scaly skin, redness, and itching,

•

31% had psoriasis, a chronic skin condition in which skin cells, driven by an overactive immune system, build up and cause scaly, itchy, dry patches,

•

10% had burn-related skin injuries and scars,

•

16% had skin-related adverse effects from cancer treatments including dryness, rashes, hand foot syndrome, cracks, tingling, and burning sensations.

Expenses related to an extended stay and treatments at the thermal center were fully reimbursed by the French national social security system, making the thermal center a popular destination for French patients who would receive a prescription for its services from their dermatologists. However, the center also welcomed patients from other parts of the world, who paid out of their own pockets for the healing experience.

The History of La Roche-Posay Laboratoire Dermatologique In 1975, French pharmacist René Levayer created the brand “La Roche-Posay Laboratoire Dermatologique” with a mission to develop therapeutic skin care products that could be recommended by dermatologists to their patients for the treatment of pathological skin conditions. The foundational ingredient in his products was the soothing natural thermal spring waters of La Roche-Posay, with its unique active natural ingredients, loaded with antioxidants to nourish, heal, and rebalance the skin. In 1989, the brand was acquired by L’Oréal as part of an overall strategy to consolidate its dermatological expertise and expand its presence in pharmacy networks. Since then, La Roche-Posay had served an integral role in the Active Cosmetics Division, alongside complementary skin care brands Vichy, Skinceuticals, Roger&Gallet, and Sanoflore, which were selectively distributed across 3 This document is authorized for educator review use only by Giovanni Pino, University of Chieti until Sep 2020. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860

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La Roche-Posay: Growing L’Oréal’s Active Cosmetics Brand

healthcare channels worldwide (see Exhibit 1 for L’Oréal’s and the Active Cosmetics Division’s financial information). Due to its recent success, La Roche-Posay was the biggest revenue generator of the Active Cosmetics Division, whose brands collectively achieved €2.28 billion in sales in 2018.

The La Roche-Posay Brand and Product Portfolio Every La Roche-Posay product was designed to create a better life for those with the most sensitive skin by alleviating their suffering from skin pathologies. Originally prescribed as adjunctive therapy to counter the skin-related side effects of prescribed drugs, the brand today offered a wide range of hypoallergenic skin care products with ingredients selected for compliance with sensitive skin specificities. The common denominator in all formulations was the inclusion of soothing antioxidant, natural, thermal spring water with demonstrated therapeutic properties to relieve skin inflammation. La Roche-Posay offered a complete range of skin care, cleansing, hair care, and corrective make-up products (see Exhibit 2 for the product portfolio). All products were safe and hypoallergenic with minimalist yet effective formulas benefitting from patented active ingredients. The large array of efficacious products, centered on five sub-brands with full product lines that accounted for 80% of La Roche-Posay’s sales, was heralded for its healing properties, safety, and good value. Collectively, the five sub-brands addressed the most common reasons for dermatologist consultations: Effaclar for oily, blemish, acne-prone skin; Toleriane for sensitive, allergic, and reactive skin; Lipikar for dry and eczema-prone skin; Cicaplast for healing and skin repair; and Anthelios for protective sun care. “We are very much a problem-solver brand,” Toupet noted. “La Roche-Posay’s skin care range represents the five solutions that we want to push and emphasize as the key pillars of our brand. People buy our products because they know that they work to alleviate the problems they have.” Each sub-brand received the endorsement of the La Roche-Posay brand on its packaging (see Exhibit 3). When developing the products, La Roche-Posay worked to reduce the environmental impact of its packaging which did not contain any PVC plastic. 2 All raw ingredients were meticulously screened to assess biodegradability, impact on aquatic life, renewability, and the use of green chemistry. Ecotoxicology experiments had demonstrated that 100% organic sun filters used in the Anthelios range did not have any bleaching effect on coral in sea water. 3

Research and Development Each sub-brand included regimens with moisturizers, cleansers, and treatments that had been developed in compliance with the strictest dermatological laboratory standards. On average, a La Roche-Posay product took two years to develop and was backed by the most rigorous of scientific standards. A dedicated team of toxicologists, researchers, and developers conducted up to 80 different trials to deliver state-of-the-art formulas favoring ingredients compliant with reactive, sensitive, or allergic skin types. More than 600 clinical and observational studies on 50,000 patients worldwide ensured the products’ safety and scientific efficacy. A renowned pioneer in the latest advances in dermatology, La Roche-Posay strived to provide tailored and effective treatments for its target clientele. In order to remain at the forefront of skin care advancement and to develop relevant products that addressed consumers’ needs, the brand team conducted 50-60 consumer studies to better understand the needs of consumers across different continents. The dermocosmetics market had evolved significantly since the La Roche-Posay brand was established, and consumer and clinical research helped the company develop a continuously improving understanding of skin pathologies and corresponding treatments. 4

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La Roche-Posay: Growing L’Oréal’s Active Cosmetics Brand

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Recent market studies had concluded that there was a clear correlation between skin complaints and various adverse effects, such as feelings of negativity, disrupted sleep patterns and decline in work, school or life achievement. By tracking the negative repercussions of skin concerns, the La Roche-Posay team had been able to scientifically measure positive change brought to the lives of patients by testing them before, after, and during a tailored treatment program. In 2017, L’Oréal allocated €914 million, 3.5% of its total sales, to its research and innovation (R&I) activities, one of the highest research expenditures in the industry.

Dermatological Partnerships The life-changing mission of La Roche-Posay was shared by the 90,000 dermatologists who recommended the products, all linked by a common goal of finding solutions for patients suffering from numerous skin conditions. Through the La Roche-Posay Foundation, the brand had long been committed to working alongside dermatologists as a helpful ally. Created in 1995, the Foundation supported research and scientific advances in the clinical, biological, and pharmacological fields of dermatology. In addition, it facilitated partnerships with medical professionals who, in return for helping conduct observational studies of La Roche-Posay’s products and their effects on their patients, were granted access to a wide range of training programs on the latest scientific innovations, developments, and methods. A scientific committee had been set up as part of a knowledge-sharing initiative, gathering dermatologists from Europe and Brazil to discuss trending topics in the field. An unprecedented collaboration between the president of the Spanish Dermatology Society and the La Roche-Posay Dermatological Laboratory in 1999 had led to the establishment of a Residents Course aimed at providing theoretical and practical education to junior dermatologists. Its relationship with dermatologists was an integral part of La Roche-Posay’s skin cancer prevention mission. In this context, the brand organized seminars, workshops, and knowledge databases to provide dermatologists with up-to-date information related to UV damage and training in dermoscopy to assess pigmented skin lesions and moles using specialized equipment to determine if they might be suspicious or not. If detected and diagnosed in a timely manner, 90% of skin cancer cases could be cured. 5 The brand also worked alongside dermatologists and oncologists to propose adapted skin care able to decrease the severity of cutaneous side effects of cancer treatments. In 2013, to support dermatologists who held a desire to become involved in community-oriented projects, La Roche-Posay launched its “Dermatologist from the Heart” program. This fund allocated grants to projects related to making dermatological care accessible to underprivileged populations, to practitioner training, and to free mole screenings for the general public.

Developing the La Roche-Posay Brand Reinforced by the brand’s active involvement in the science and advancement of dermatology, the core values of La Roche-Posay’s brand revolved around trust and authenticity. The mission of La Roche-Posay was encapsulated in its brand communications that highlighted the life-changing potential of its products: We understand that having sensitive skin, a pathological condition, or a skin disease is about so much more than just clinical symptoms. It is about the face you greet the world with, about the way you carry yourself, and the effect your personal well-being has on those around you.

5 This document is authorized for educator review use only by Giovanni Pino, University of Chieti until Sep 2020. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860

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La Roche-Posay: Growing L’Oréal’s Active Cosmetics Brand

We know that the benefits of better skin care can be far reaching not just for the patient, but for their friends and family too, who are too often also affected by the distress of their loved one’s skin issue. Whether soothing an irritation or blurring a scar, at La Roche-Posay we want to be an ally to all t...