Market Segmentation of L’Oréal

We cannot trust a conversation on beauty brands if it does not reference L’Oréal. The company has been a trendsetter in the industry and a trusted beauty partner of millions. More than a century-long history of worldwide success proves that their understanding of customer needs is on another level. Their diverse portfolio, alongside flexible marketing strategy and target segmentation, has taken them as far as today. L’Oréal owes its success to a complex of factors. We will discuss their superior segmentation strategy and analyze the company from different dimensions. Let’s discover L’Oréal’s formula of success together!

L’Oréal forms segmentation strategy by rebounding from customer needs…

Product development of every great company begins with their customers. Every product is an answer to a user need. Consequently, companies must perfectly adjust to fit the solution and address the specific needs of customers. By analyzing this commercial, we will form a better image of the targeted segment of L’Oréal.

The commercial features famous American actress Eva Longoria. The main idea of the commercial is the problem of straight hair that mess up very quickly. The famous actress talks about her worries, which all women share.

This is a little, but the advertisers do a smart trick. L’Oréal wants to emphasize that regardless of fame or success, women face similar issues with beauty.

Eva’s lines “You know the drill” accent the commonality of such problems. L’Oréal did a great job in gathering their customers around a beauty problem that worries them all. This idea captures the attention of many customers who seek a solution.

Besides the emotional part, L’Oréal has a trusted reputation as a global brand. They offer a product with a guaranteed solution, and this combines with the attractive personality of Eva.

Additionally, L’Oréal uses the authority and influential name of Eva as a powerful weapon of attraction. To elaborate, if a star trusts L’Oréal as the best solution for straight hair then it is the real deal. L’Oréal utilizes appeal to authority to increase the effect of advertisement on viewers.

The company utilized a combination of different techniques to achieve their desired results. By analyzing this commercial, we can conclude that L’Oréal targets the segment of the Fulfillers.

Who are the Fulfillers?

Lifestyle and Values.

Representatives of this segment construct their life around their business and career. Every component of their life has the effect of their career on it. Fulfillers have a constant drive to climb up the career ladder. This mostly affects the life decisions and sacrifices they have to make.

Additionally, they like taking risks and challenges. They look at risks as new potential opportunities and chances to experience growth. Their families have to adapt their priorities and approach them with sympathy.

They might miss some family events because of their career. Additionally, they seek recognition for their success and achievements in their field.

Fulfillers like to go out to cafes, bars, or dancing places to hang out with their friends. They like eating out more than cooking for themselves or eating at home. That is mostly because they do not have the time for cooking.

Being modern and following trends is typical for them. They like going out for the weekends to balance active relaxation with their saturated week life. Travelling 2-3 times in a year is normal because they are interested in exploring foreign cultures.

Attitude to Shopping:

Fulfillers like using a wide variety of brands. The main preferred brands are the premium ones, and they do not save money on quality. They are willing to pay more for it, and most do not consider the price. They are mostly among the early adopters of new brands and products. Shopping is a leisure activity and improves their mood.

Fulfillers tend to make quick decisions about buying because they have fewer things to worry about. This explains the increased possibility of impulse buying. Fulfillers like trying out new brands, but would still purchase the ones that they like.

As you might have already guessed, they mostly like luxury brands. Because they like sports and a healthy lifestyle, they purchase a lot of sporting equipment as well.

Other interesting facts about Fulfillers:

• They focus on technology and consume media on cars, motorcycles and IT topics. Staying up-to-date on these topics is important, sometimes even for business.
• Internet is the primary source of information. It finds usages for banking services, booking hotels and some daily activities. Sometimes they follow forum discussions as well.
• TV and radio are mainly for entertainment purposes. They consume radio mostly while driving and TV for news, sports and shows.
• Fulfillers are interested in art and culture events. They might spend their time with friends during these kinds of events.
• They will go to the cinema to watch movies and combine movie watching with gathering with friends.
• Fulfillers like trying new foods and risks; another point proving their love of risks and trying new things.

16 Personalities (what is for your business?)

As we can see, the main target audience for the “L’Oréal” brand is the ‘’Fulfiller’’ segment, which is the synonym of success and leadership. His decisions are always risky, sharp, and fast. But in the end, they are always justified and bring final success.

They are considered as people of the result, they are very brave, resourceful, and very practical. L’Oréal has targeted the Fulfillers, as they are customers “No 1” in all existing “16 Personalities“.

L’Oréal’s positioning plan serves the planet…

L’Oréal is a global company, and thus they have a positioning plan that must suit the whole planet. As a worldwide-famous brand, L’Oréal needs to have a diversified strategy for every location. They have a positioning plan that cherishes ethical behavior towards customers and the environment.

The company preaches the importance of quality and safety in products. No product can survive in the market at the expanse of one of these two. This refers to their global strategy, regardless of the location or the specifics of markets.

L’Oréal has three main areas of focus – the planet, the people, and the products. Their operations must benefit the planet and preserve it. Their products must be just what the customer needed. Finally, the brand must improve the lives of its customers.

Being a global brand means that despite conquering a specific niche, the brand must include the widest segment possible. This idea leads to the diversification of the portfolio. If customers want a beauty product, they are sure to find it in L’Oréal’s portfolio.

L’Oréal positions itself as a sustainable business. Their actions must not only be of less harm to the planet but also improve the planet. They want to encourage sustainable behavior in their customers and suppliers as well.

The program of sustainable commitments for 2030 is a document speaking about a distinct set of actions. This program includes an action plan for not only the company but their surroundings as well. If they utilize Earth’s resources, they must do it in a responsible way to continue enjoying planetary goods.

Marketing mix gives a key to many questions…

Product

A brand that is present in every corner of the planet must-have products for literally everyone. With changing standards of beauty and health care, L’Oréal must be among the earliest reactors. They are at the forefront of progress, and sometimes dictate trends and changes in the market.

To expand their influence from a product-offering standpoint, L’Oréal has a portfolio that branches in all directions. Their strength is in their ability to address the needs of narrow audiences. Those specific needs form larger segments of people, and earning their loyalty brings to major success.

Consequently, L’Oréal has four main product divisions; each including brands for various applications and segments. Those segments are Professional Products Division, Consumer Products Division, L’Oréal Luxe and the Active Cosmetics Division. Every division has its primary target segment with varying lifestyles and attitudes to beauty.

Product lines are diverse as well. Their product portfolio includes cosmetics, skincare, hair color, make-up, sun protection, hair care, perfumes and many other categories.

L’Oréal has to satisfy the needs of the whole planet’s population, their portfolio has to be big. With so many different cultures and beauty standards, addressing the diverse needs is a big challenge.

Price

Pricing strategies of typical global brands are flexible enough to consider the specifics of every market. Having many product divisions also solves the complex issue of pricing strategy. Every division has its customer. The division occupies a certain price range and offers a choice for a customer.

Eventually, customers can consume L’Oréal products according to their ability to spend. Their pricing strategy is flexible and inclusive enough to be suitable for customers.

For instance, the L’Oréal Luxe products are for a narrow segment who are willing to pay for premium brands. This division includes collaborations with famous fashion houses, which explains its premium pricing strategy.

Professional products are specifically for beauty businesses. Consumer division is the biggest division of L’Oréal in terms of affordability and size of the segment. This is the division with regular products, and thus, with mid-level pricing.

At L’Oréal, the pricing strategy has a distinct formula. Customers now that paying extra for L’Oréal products means paying for more quality and reliability.

Place

L’Oréal conquered the world. They are present in more than 130 countries and continue their expansion. L’Oréal has paid significant attention to its distribution strategy. They even acquired other companies to help them expand even faster.

With such an aggressive expansion strategy, L’Oréal is present in every department store, pharmacy, cosmetics store, mall, supermarket and retail outlet. Surely, they adjust their product offerings according to the location. For example, Indian stores mostly feature products from Consumer Products Division.

L’Oréal also invests in training specialists in using products of their Professional Products Division. The company co-finances such training programs to make sure that beauty specialists market and use the products properly.

Besides the dominant physical presence, L’Oréal walks with the progress as well. With the drastic growth in e-commerce, L’Oréal makes sure to have the same presence in online stores as well. Entering these markets enables to organize to a more flexible and efficient distribution of products.

Promotion

Our analysis of the commercial is already an example of how L’Oréal approaches its promotional activity. Such a strong brand requires even popular individuals for promoting it. It is not a surprise that the main heroes of promotional activities are successful and popular women.

Advertising beauty products can even expect the brand to invite famous women to participate. Eva Longoria is the first example that we have discussed. International superstars like Jennifer Lopez, Naomi Watts, Kate Winslet, Helen Mirren, Viola Davis and many others have featured in L’Oréal ads.

Besides the TV, L’Oréal uses various channels for advertising as well. For beauty products, print and digital advertising are other effective ways to promote the brand. Another crucial channel is the online presence. Currently, the social media accounts of brands generate more traffic and engagement than any other channel. Additionally, the activity of customers is trackable and can help the brand in analyzing behavioral patterns.

L’Oréal has one of the most astonishing brand stories in the history of global brands. They have started in France and expanded their influence over the entire planet. They have strived to become the ultimate beauty partner for every customer they could get. Their superior marketing strategy and positioning plan helped them conquer the heart of millions. In our dynamic world, they have stayed flexible enough to keep up with changes. Moreover, they pave the road for others and take on the risks and challenges of the market. That is it for today; make sure to check out more posts like this on our website.

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