Marketing Strategy and SWOT Analysis of L’Oréal
Without any doubt, L’Oréal is one of the biggest and best-known beauty companies in the world. Founded in 1909 by a chemist, this small French-based company started by selling hair dye products and has grown to become the world’s largest cosmetics company. The company owns an impressive portfolio of international brands that allows it to hold products that respond to the diverse needs of customers. All these may seem enough to explain why L’Oréal is as successful as it is, but let’s go through the marketing strategy and SWOT analysis of the company to understand the reasons behind its success and continuous growth more thoroughly.
Let’s start the journey from the mission and vision statements of the company.
Vision Statement of L’Oréal
L’Oréal’s vision statement for the coming years is to win over another one billion consumers around the world by creating cosmetic products that meet the infinite diversity of their beauty needs and desires.
The vision statement of L’Oréal shows that the company understands its power and potential and is very confident and optimistic about its future growth. It thinks about the future and works on its self-improvement to keep up with time.
L’Oréal shows you that you can find something among its products despite your preference, needs, and wants and still, it strives to make its offering more diverse to be able to rich more people and allow them to choose.
Mission Statement of L’Oréal
L’Oréal’s mission statement is to provide the best in cosmetics innovation to everyone around the world.
From their mission statement, I understand that the customer is a priority and the main focus of the company. It wants to rich different people, be present in the lives of different types of consumers and despite their social status and preference offer something that can be suitable for that exact person, meanwhile assuring that the product will have high quality and something new.
Now, it is time to look at the branding strategies used by L’Oréal.
To understand what strategies the company uses let’s discuss the following post from the Instagram page of L’Oréal:
What did you think, when you looked at this post? It was unexpected to see a picture like this, wasn’t it? When you think about the Instagram page of a giant beauty company, you unconsciously expect to see something glamorous, sleek, sophisticating, etc. The post speaks about the goals of the company and the actions that it has taken to achieve the goal.
The picture and the text of the post are a perfect representation of the way the company positions itself. This post is not one of a kind and you can find many similar posts on L’Oréal’s page. It becomes obvious that the company thinks not only about itself, but strives to become more sustainable, thinks about the environment, and wants to give back to society. All these are identifying that L’Oréal is a representative of the Caregiver Brand archetype.
Now, you may ask what Caregiver Brand archetype stands for?
Desire: to shield and protect people from getting harmed.
Aim: helping others.
Strategy: getting things done for others
Let’s move on to messaging levels of Caregiver Brand archetype:
- Level One: noticing a person in need
- Level Two: looking after and taking care of someone’s encumbrance
- Level Tree: offsetting self-care with care for other people
- Level Four: promoting the welfare of others, despite the risks or costs for you
The Caregiver Brand archetype would be favorable for your brand if:
- the customer service brings a competitive advantage to the brand
- it is related to nurturing (teaching materials, cookies, etc.), supports and takes care of families (products from fast-food to minivans)
- it is involved in the public sector, caregiving fields
- it helps people to take care of others and stay connected with them,
- it enables people to takes care of themselves
Brand Archetypes. Why we need them in practice?
Brand Archetypes. Why we need them in practice?
All of us know that many companies have problems in presenting their key values and attitudes. Sometimes our messaging leads to misunderstanding or it does not represent what we aimed to say in reality. Here of course the importance of the brand archetypes is very crucial. How to create a good company culture?
What are its values? Here are some questions that need to be answered properly. “8 steps to a complete archetypal branding” eBook tells us a lot. We have written a book that goes deeper in these notions and reveals archetypes in specific ways. Just uncover the brand archetypes with “8 steps to a complete archetypal branding” eBook.
Now, let’s dive into the SWOT analysis of this beauty giant.
Strengths
Innovation, continuous R&D: When we talk about beauty and cosmetics products, continuous changes, improvements, and innovations for the formulas are a must. L’Oréal gives significant importance to R&D and innovation and has a very strong team of scientists, dermatologists, and cosmetologists.
Diversified brand portfolio and range of products: L’Oréal’s portfolio of brands is very impressive, which allows the company to offer a diversity of products that can satisfy a wide range of needs.
Strong integrated marketing communication: All brands in L’Oréal’s brand portfolio are known to have very powerful and effective integrated marketing communication. These brands have very strong media presence and at the same time are very skillful in their point of purchase marketing. Also, the brands in the company’s portfolio do lots of celebrity endorsements and sponsorships.
Widespread distribution, accessibility: Products from L’Oréal can be found in more than 130 countries around the world. In addition to that, they have warehouses and factories in different parts of the world which makes it have more fixed expenses.
Weaknesses
Severe competition: There are hundreds of beauty brands in the market, which create severe competition for L’Oréal, despite it being one of the biggest companies in this fast-growing industry. L’Oréal is very strong, but still, even comparably small companies can become competitors for the company if they are good at what they do
Heavy investments in R&D: Research & development is connected to very high costs and expenses for every company in the beauty industry. As we know L’Oréal does heavy investments in this field and considers innovation inseparable part of its journey. This means that the profit margins of the company could be way more if it wouldn’t invest as much in R&D as it does. L’Oréal needs to make sure that these immense investments are effective and will pay off.
Too many subdivisions: L’Oréal owns nearly 50 brands and has very diversified product range which makes the infrastructure of the company very complicated. Due to their large operation management handling of the company can be very hard and full of risks.
Opportunities
Industry expansion: The beauty industry is one of the fastest-growing industries in the world. While it’s in the process of growth, L’Oréal has a chance of further expansion by entering new sectors and offering new products in this industry. The company has the recognition, influence and all the means to do this.
Creation of new products: Previously discussed investments in R&D will help L’Oréal to come up with new formulas, new products, that will give the company the chance for further growth
Natural, organic production: As we know the world moves toward natural and organic production and more and more people reach for these types of products. L’Oréal didn’t ignore this movement and since 1983 it cut animal testing, and to this day it is continuously working on staying green.
Online shopping: Online shopping platform makes L’Oréal more accessible for consumers and can be a great way of cutting the costs of working with retailers.
Threats
Constantly changing environment in the beauty industry: The nature of the cosmetics industry and the preferences of consumers are changing very fast. Every day we can see a new product on the market with very specific characteristics. Thus, L’Oréal needs to be very quick and flexible to maintain its place in the market and not only keep its existing customers but also attract new ones.
Global economic crisis: Changes in the financial environment can be very harmful to companies in the beauty industry. In times of economic crisis, consumers will no longer be willing to spend as much money on beauty items as they used to which may result in big losses for a company like L’Oréal whose portfolio consists of not only drug store products, but also expensive luxe products.
New competitors: In the fast-growing beauty industry, despite existing companies, new brands enter the market all the time. It may seem that there are already enough companies in this field, but surprisingly new companies manage to enter the market and reach success very fast if they have something special to offer. New competitors entering the market continue to make the existing competition more intense and can affect even such beauty giants as L’Oréal.
It’s time to move on to target audience of the company.
To find out which segment is being targeted by L’Oréal, let’s take a look at the following commercial featuring famous Cuban-American singer Camila Cabello.
We can see a successful, famous, confident, and beautiful young lady in the video, who speaks throughout the commercial aiming to inspire and motivate the viewer and make them believe that they also can succeed like her. She is promoting self-love, confidence, and beauty.
During the commercial at one moment, we can see the actual product that is being promoted by Camila on her vanity. It seems like her whole journey is being represented in a small video. At the end of the commercial, Camila tells the legendary and timeless phrase of the brand “Because you’re worth it”.
After combining all the characteristics of Camila, that were shown in the commercial, and the way she was promoting the product, it becomes clear that the segment that L’Oréal chose to target is Carpe Diem.
So, who are Carpe Diems?
Lifestyle and Values:
People who belong to the Carpe Diem target segment are very active, approachable, friendly, and warm. They prefer living their lives actively. In general, they enjoy life, love spending time with their friends, and have fun. At the same time, they realize the importance of working on themselves, creating a good career, being financially stable and independent in any sense.
They live in a moment and love adventures and taking risks. They like taking actions spontaneously and are less organized in their private life compared to the professional ones. They like taking care of themselves, eating healthy, going to the gym, and exercising. Representatives of this segment like partying, visiting pubs and cafes, going to the cinema, attending cultural and other interesting events.
Shopping Preferences:
Carpe Diems love following trends in fashion, beauty, music, etc. and give huge significance to their appearance and the way they look. They pay great attention to the quality of the products they are buying and using and think that it is better to have a few high-quality products than many low-quality ones. This segment has a very loyal purchasing pattern, and rarely switches between brands. The overall shopping process is always very pleasing and enjoyable for Carpe Diems.
Interesting facts about the segment:
- They like playing cards, and challenging games like poker is an ideal choice for them.
- When reading a book, they give preference to biographies and literary books.
- If they own a car, they love it and like to drive fast and energetic.
- Surprisingly, they don’t like watching TV, and if they do, then it is something mainstream like movies, sports, music, etc.
- The Internet is an inseparable part of their lives. They use it all the time both for entertainment and for connecting with people. They may even use the internet to find a date. Also, they like to play games on this platform and join different competitions.
- This segment is not hating the radio. It likes it and listens to it if there something that truly interests and engages.
16 Personalities (why do you need them in your business?)
Carpe Diems are one of the most powerful and solvent segments in 16 personalities. They always follow the trends of the given period and try to be the leader of the trend․ For example, be a successful businessman, or successful athlete or rapper. They are very talented, but at the same time are lazy and ambitious.
They love to achieve great success at the expense of their talent, their skills. You also should choose the right target (ideal buyer persona) for your business and in this context, you should research all 16 Personalities, 16 types of clients that you may meet during your daily business and marketing activity. To find out more about 16 types you can click below to get our e-book “16 Personalities”.
Summing up, L’Oréal has been around for more than a century and owns very strong brands that deserve separate attention and discussion on their own as well. I hope, you were able to gain an understanding of how this giant was able to succeed and what marketing strategies it uses to keep its place in this dynamic industry. Check out the main page of our website for more posts like this.
