Analyst
L'Oreal of Paris: Bringing "Class to mass" with Plenitude
Ana Paula Terzi-Palombo
1) Describe Plenitude's position in the US market in the early 1996. Why has it apparently been less successful in the US than in France when the French "success" formula was used in the US?
Because L'Oreal had a commitment with the trade that they would keep investing and supporting its brands financially and considering that P&G had a very strong market position in the "masstige" skin care category, long term ROI and profit were forecasted for the following years. It was planned that L'Oreal would gain share and well establish its brand Plenitude.
Despite careful planning, L'Oreal failed to meet profit targets 8 years after the US introduction of Plenitude due in past to Ponds' price strategy and Oil of Olay maintaining its leadership amongst other issues (see answer to question 2).
L'Oreal then decided to carefully study through research why The French success formula was not very successful in the US.
The French formula was a little twisted when it was transferred to the US: Plenitude was launched in France with one "star" product that became successful and other products then followed its footsteps. In the US, 14 SKU's were introduced at the same time with complicated technology terms written all over the carton and package to convey to the mass consumer that technology was their competitive advantage. Amongst other reasons, I state in question 2 that are complementary to this answer, it should be mentioned that general cultural background is important and should always be taken into consideration when a local initiative seems to have good potential for geographic expansion.
Desk research should have been extended way beyond French borders. Marketing is a complex discipline that is influenced by culture, business environment, technology development and of other factors. This means that a one-size-fits-all' approach is unlikely to achieve results
Ana Paula Terzi-Palombo
1) Describe Plenitude's position in the US market in the early 1996. Why has it apparently been less successful in the US than in France when the French "success" formula was used in the US?
Because L'Oreal had a commitment with the trade that they would keep investing and supporting its brands financially and considering that P&G had a very strong market position in the "masstige" skin care category, long term ROI and profit were forecasted for the following years. It was planned that L'Oreal would gain share and well establish its brand Plenitude.
Despite careful planning, L'Oreal failed to meet profit targets 8 years after the US introduction of Plenitude due in past to Ponds' price strategy and Oil of Olay maintaining its leadership amongst other issues (see answer to question 2).
L'Oreal then decided to carefully study through research why The French success formula was not very successful in the US.
The French formula was a little twisted when it was transferred to the US: Plenitude was launched in France with one "star" product that became successful and other products then followed its footsteps. In the US, 14 SKU's were introduced at the same time with complicated technology terms written all over the carton and package to convey to the mass consumer that technology was their competitive advantage. Amongst other reasons, I state in question 2 that are complementary to this answer, it should be mentioned that general cultural background is important and should always be taken into consideration when a local initiative seems to have good potential for geographic expansion.
Desk research should have been extended way beyond French borders. Marketing is a complex discipline that is influenced by culture, business environment, technology development and of other factors. This means that a one-size-fits-all' approach is unlikely to achieve results