L’Oreal of Paris: Bringing “Class to Mass” with Plenitude
...isturizer market was a leading 19.6% as against Henkel’s Diadermine 13% and Nivea’s 8.8%. Plenitude’s, and in general L’Oreal’s, perceived formula for success was as follows; having technology superior products, concentrating resource and support on newest “Star Product” to pull the entire line, depicting an executive woman who is up-to-date and assertive. Plenitude in U.S.A: Plenitude was first tested in Atlanta and Dallas in 1988. With moisturizer market share reaching as high as 14% in the test markets and good supporting, diagnostic data, L’Oreal launched the brand across the nation. The US strategy was to introduce the entire line of products as it had been already developed in France. Three main categories were covered; basic moisturizers, treatment moisturizers and cleansers. All core elements of the French success formula were followed except that some of the products were adjusted to the US consumer’s preferences like, lighter texture, lesser heavily perfumed products, etc. By 1995, net sales doubled that to when this was first introduced in 1990. However, advertising and promotion spending had increased from $35.5MM in 1990 to $38.3MM in 1995 as Plenitude regularly kept introducing new products. With cost-of-goods sold at 25% of gross revenues, the brand lost $12.5MM pre-tax in 1995. Market Research: The following points came out about L’Oreal and its competitors at the end of various market researches: 1. Plenitude was disproportionately used by “Stressed out” and “Age Focussed” groups by as much as 54%. 2. Plenitude had room to grow but had to establish a more secured place among skin care consumers. 3. L’Oreal’s brand name was a primary motivator for trial while not many took Plenitude as a brand name very seriously. 4. It was seen as a department store quality in mass outlets. 5. Some found the skin cream to be too greasy while others thought there were far too many products in the Plenitude Line. 6. Most felt that the packaging was not done properly. There was far too much written on the packet. There was a lot of scientific information on it too. It did not clearly say what the pack contained eg; the package for moisturiser bore a name of “Excell A”. 7. Most importantly, most women felt that this product was for old and aging women who were worried about their wrinkles. So their consumer was narrower than expected. 8. Oil of Olay was seen as traditional, generational brand. Ponds was seen as an older and down-to-earth product. What can L’Oreal do? 1. ...