L'OrÐ"©Al: Bringing “Class To Mass” With Plenitude

L'OrÐ"©al: BRINGING “CLASS TO MASS” WITH PLENITUDE

REPORT

Analysis and Recommendations on the PlÐ"©nitude Strategy

Analysis of the Problem

Plenitude by L’Oreal was introduced to the US market in 1988. Eight years since its introduction, it has quickly become the #2 brand in the market only to lose it later to Pond’s. Plenitude also hit a four-year sales plateau and was still not making any money in the US market.

L’Oreal’s problems and root causes should first be identified and addressed. The root causes of L’Oreal’s problems are:

1. Wrong assumptions of the target market

2. Applying a market strategy based on the those assumptions

3. Continuing to do so for an extended period even given the results

The target market

When L’Oreal planned to release Plenitude in the US market, it is assumed that what would be successful for the French market would translate to the same success in the US market if the same formula was applied.

The model of an “executive woman” had mass appeal thus was so successful in France. However, as clearly shown later on in the market studies done in 1995, the market segments that attracted Plenitude the most was the “stressed out” and “age focused” segments which only made up 40% of the market. Also, the acceptor/rejector studies indicated that consumers perceived that Plenitude was specifically targeting older women.

Analysis of the “Dollar Shares” table combined with the “Moisturizer Units Sold” table (on page 309) shows that Plenitude actually leads in the “treatment” category. On the other hand, they are only third when it comes to the “daily” category (see appendix). This all contributes to the fact that Plenitude does not have the mass-market appeal which it needed for the “class of the mass” strategy to work. People viewed L’Oreal as a high-end, a step-up, more expensive and only for older women.

Evidently, consumer behavior in the US is different as compared to that in France. What would work in France would not necessarily work in the US.

The marketing strategy

The strategy used called “class of the mass” had these aspects:

• Technologically superior products

• Focused resources and support on “star product”

• Golden rules of advertising:

1. Feature star product

2. Provide evidence of technological superiority

3. Depict an executive woman who represents the target market

The implementation of this strategy in the US did not have the same effect as in France. The root causes for this are:

• The featuring of a technologically superior product, the fact that L’Oreal is French, the tag line “Reduces the signs of aging”, plus the depiction of an executive woman may all have contributed to the current perception and position of Plenitude вЂ" for older women, and expensive.

• The product itself had some issues. It was thought to be greasier and oiler than the competition.

• The fact that the full product line was released all at once in the US did not give consumers time to get used to one product at a time. The “star” product system worked in France because products were released one at a time.

• Display in Health and Beauty sections in drugstores and supermarkets do not have the same effect as in department stores since there are no accompanying sales people. Consumers are overwhelmed and do not know which to product to use.

• In relation to the previous point, the packaging does not help either. It was too confusing with too many words in the box.

Because of these problems, Plenitude still wasn’t making money after 8 or 9 years in the US. Losses for 1995 amounted to $12.5 million. These problems would have to be addressed to turn Plenitude around.

Solutions and Recommendations

L’Oreal established four key objectives that would presumably improve the brand and its performance:

1. Improve the top line

2. Get the bottom line improving in the right direction quickly

3. Get the US to be a major contributor to the brand globally

4. Create suitable skin products for the US customer at the same time those products should fit within L’Oreal’s technology portfolio

To achieve these goals, L’Oreal has to address the issues mentioned above. I believe that the first key step in this has already been done вЂ" doing and in depth research of the market and Plenitude’s

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