L´Oreal Marketing Plan
L’Oreal Nederland B.V.: Introduction of Products from the Garnier Institute of L’Oreal
[WITH INSTRUCTOR COMMENTS IN CAPS]
1
Executive Summary & Table of Contents L 'Oreal presently offers the following products in the Netherlands: Plenitude and Recital under the L 'Oreal brand name, and Ambre Solaire under the Garnier Institute brand name. L 'Oreal Nederland has been considering whether to introduce the Synergie skin care line and Belle Couleur hair colorants line into the Netherlands. Synergie and Bele Couleur are marketed under the Garnier Institute name in France. The Netherlands market has several challenges: new product launches are difficult (especially from a relatively unknown company like Garnier) and the distributor channel is becoming more powerful. Also, retailers have been offering their own private-label products and can develop them at lower prices within 6 months. We had first considered adding Synergie and Belle Couleur under the Garnier name and positioning them towards the lower end of the market price-wise. However, we feel this is inherently too risky. L 'Oreal, even under the Garnier Company name, does not want to wage war in the commodity market of cosmetics. There may not be enough product differentiation to disallow the Garnier products from cannibalizing the L 'Oreal products. People would eventually find out the Garnier and L 'Oreal were the same Company, and that could "cheapen" the whole product line. L 'Oreal is a premier supplier of quality cosmetics, and we did not want to become misaligned with the Company 's branding image. [PERSUASIVE REASONING] We feel bold moves are needed, so we are proposing to discontinue Garnier as a separate company in the Netherlands. It simply does not make sense. The Company does not have its own sales force, and it is difficult to have products reformulated to meet the specific needs in our market. What makes sense is to leverage the great name and reputation of L 'Oreal and use labeling such
[WITH INSTRUCTOR COMMENTS IN CAPS]
1
Executive Summary & Table of Contents L 'Oreal presently offers the following products in the Netherlands: Plenitude and Recital under the L 'Oreal brand name, and Ambre Solaire under the Garnier Institute brand name. L 'Oreal Nederland has been considering whether to introduce the Synergie skin care line and Belle Couleur hair colorants line into the Netherlands. Synergie and Bele Couleur are marketed under the Garnier Institute name in France. The Netherlands market has several challenges: new product launches are difficult (especially from a relatively unknown company like Garnier) and the distributor channel is becoming more powerful. Also, retailers have been offering their own private-label products and can develop them at lower prices within 6 months. We had first considered adding Synergie and Belle Couleur under the Garnier name and positioning them towards the lower end of the market price-wise. However, we feel this is inherently too risky. L 'Oreal, even under the Garnier Company name, does not want to wage war in the commodity market of cosmetics. There may not be enough product differentiation to disallow the Garnier products from cannibalizing the L 'Oreal products. People would eventually find out the Garnier and L 'Oreal were the same Company, and that could "cheapen" the whole product line. L 'Oreal is a premier supplier of quality cosmetics, and we did not want to become misaligned with the Company 's branding image. [PERSUASIVE REASONING] We feel bold moves are needed, so we are proposing to discontinue Garnier as a separate company in the Netherlands. It simply does not make sense. The Company does not have its own sales force, and it is difficult to have products reformulated to meet the specific needs in our market. What makes sense is to leverage the great name and reputation of L 'Oreal and use labeling such