Have you ever considered what a simple formula for hair dye can do? It can give birth to the idea of manufacturing beauty products and then selling them to the local hairdressers. The famous chemist who got this idea was Eugene Paul Louis, a young chemist from Paris who brought a revolution in the field of beauty products. And all of this happened in 1909 when he was just 17 years old. The company was named as L’Oreal and was registered in 1919.
Yes, you heard it right. L’Oreal, the world’s largest cosmetics and personal care brand. It works on the principles of research and innovation in the beauty field and is headquartered in Clichy, Hauts-de-Seine, France.
Product Divisions
From just a hair coloring business, then, to the powerhouse of the various cleansing and beauty products now, L’Oreal has come a long way. Currently, there are five product divisions that it is associated with. These division are:
- Luxury cosmetics
- Hairstyling products
- Specialized dermatological products
- Mass marketed consumer beauty products
- Body shop brands
To sell products only to the beauty salons, the company also has a professional products division.
Acquisitions
According to L’Oreal, acquisitions are a fundamental aspect of their business strategy and is key to the company’s long term success and growth. It keeps in mind those target companies that could play a role in increasing their product reach and acquire them in no time.
In 2018, it acquired Modiface, Giorgio Armani Beauty, and La-Roche-Posay. Currently, the company is the owner of 36 global brands. Two of the top acquisitions are Maybelline New York and Garnier, which are considered to be the cash cows.
- Maybelline New York: acquired in 1995, Maybelline New York is the critical component of L’Oreal’s consumer products division.
- Garnier: One of the largest brands in the L’Oreal’s family, Garnier, was acquired in 1965
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L’Oreal Paris’ Ad Campaigns
The one thing that this brand is well known for is its never-ending ad campaign. In late 1920, the advertising campaign was limited to the posters. In the 1950s, its outstanding advertising techniques, which include celebrities endorsing the products and showing it on the television has by far, made the brand much more successful. If now, every household is aware of this brand, it’s only because of the advertisements.
Now, here again, L’Oreal has been using a strategy of not using a single celebrity to promote this product globally. Instead, it’s using the local stars in each country to whom the ordinary people could relate. For example, Aishwarya Rai Bachchan promoting this brand in India and Viola Davis, promoting the same brand in some other country.
With around 5500 ad campaigns all over the world, it can cover every product line. It also provides separate ads for all its acquisitions intending to reach its target market.
L’Oreal follows the saying- ‘Events bring brands to life’ and so it actively takes part in sponsoring various events all over the world to make it’s brand visible to its target customers. The brand became popular when the slogan ‘Because I’m Worth It’ was given in 1973 by a New York copywriter Ilon Specht. It was a legendary and empowering slogan which carried the message of respect and recognition for women. Slowly and gradually, when the brand started to come up with products for men, and kids, changes were made from ‘Because I’m worth it’ to ‘Because you’re worth it’ and now finally to ‘Because we are all worth it.’
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The strategy that has helped the company grow
- Diversification of products: Not going by the concept of keeping the product identical has helped the company grow in every country that it entered into. It followed the strategy of keeping its different products designed according to the culture, income range, fashion, and customer demand in that particular country. The availability of products in different sizes and prices has also played a role in increasing the product reach in every corner of the world.
- Distribution channels: The brand has been able to maintain economies of scale because of its extensive distribution network (the brand has been expanded to around 150 countries). Through its well-connected distribution channels, the products are readily available in hair salons, spa, cosmetics market, etc.
- Research & Development: Continuous research and development are critical in the field of cosmetics. Proper tests are being taken before providing the products in the market so that anybody’s safety is not compromised. There are 6 R&D centers- in Japan, the USA, India, China, Aulnay and Chevilly, solely for this purpose.
Reasons why L’Oreal is very popular in the Indian market
- Localized products: One of the ways to attract consumers is to provide products that they could easily relate to and can afford too. For similar reasons, Colossal Kajal from Maybelline New York and Garnier Black Naturals are the two top sellers in the Indian market. It’s effortless for a product to enter a new market if it has the trust of the masses. And in a populated country like India, it’s very beneficial for any company to win the trust of the consumers.
- Bollywood Influence: One of the reasons why Indians, especially the youth, are very much interested in beauty and personal care is Bollywood. The use of beauty products in advertisements, web series, and movies by celebrities has a significant impact on ordinary people. Also, the demand for such products is continuously increasing due to the rich cultural traditions in India.
- E-Commerce: The potential of India’s e-commerce is well known in the world, which has proved to be a positive sign for the big brands. Through this, they are able to tap those consumers who don’t live in metropolitan cities. L’Oreal has taken up this opportunity to reach out to consumers in those towns where beauty products are not physically available in retail shops. The brand has started to offer products on nykka.com and also sells through Flipkart, Amazon, and Paytm.
L’Oreal is not limited to only selling products. The company runs its academy in India to train youngsters who want to make a career in this field. It also understands its corporate social responsibility. The company has launched its program to provide four months of training in hairdressing and beauty care to the underprivileged women in India.
Currently, the company controls 70% of the urban salon market in India. Seeing the brand identity and the image that this company has created, it surely has covered a milestone and has many more to achieve. The increase in awareness about personal care in the youth today will inevitably lead to more success of this brand in the coming times.
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