LOreal Cross Cultural Marketing Strategy

L’Oreal and its brand are famous among all age group and in almost all parts of the globe. Amongst the fairer sex, L’Oreal is the best thing to happen. Their products and all aspects of their business be it cosmetics, lip gloss, eye liners and everything that can be bracketed in the personal care segment are a huge demand. Given the quality of their products and their reach in the market on a global scale; L’Oreal today have been among the market leaders in personal care segments, especially amongst the fairer sex and is growing by and large. Speaking of L’Oreal thus there is a great many areas to explore on their international business operation that have taken the world stage by storm. Not only has the brand value being demanded is huge in the market, but also the quality of the products that L’Oreal offers have made them the market leader for cosmetics, and any other personal care and its products segments.

Objective and Purpose of the Report

The focus of this report and its objectives is to undertake a study of L’Oreal operation and their market segmentation over a large arena of the global market and its influence in different cultures. In this paper four cultural segments where L’Oreal has its market base are identified, they are

India and Asian Market

United Kingdom and its concentration in Europe

USA and America

Australia

These four cultures identified, that is – India, United Kingdom, USA and Australia have their own cultural significance and identity. This paper and its research limit its analysis on the cultural dimensions, which we can simply classify as the subject study of cross cultural analysis and business operation and success of L’Oreal in cross-cultural context. The components of what defines cross cultural management of L’Oreal are discussed below.

An Overview: L’Oreal International Marketing Strategy

L’Oreal as we have heard is successful in its international marketing strategy for many reasons known and unknown. As one of the giants in the cosmetic industry, it is speculated that the company brand image plays a significant role for its successful adoption of international marketing strategy. Although internal and external forces also play a significant part overall that gives us an insight as to how L’Oreal adopt global marketing strategy.

Thus, we feel that the following point and its argument should give a gist of L’Oreal cross cultural marketing strategy.

Discuss how L’Oreal is adopting a global marketing strategy. And why it is important. Describe with examples.

Why should L’Oreal have an understanding of the different cultural distinctions for its different international markets?

L’Oreal Global Marketing Strategy and its Importance

When we relate back to the question as to how L’Oreal is adopting a global marketing strategy. And why it is important? The reason overall can be looked in respect of international management and its concepts that are universal in the notion behind it.

As we can read in the available reports that date back to 2005 it is believed that “L’Oreal is regarded as one of the most successful cosmetic giants. With a holding of US $18 billion business group, and over 17 international brands” (ICMRIndia) it says a lot as to why L’Oreal is adopting a global marketing strategy for its business and making its mark across cultures through its variety of products.

The reason behind L’Oreal global marketing strategy can be emphasized to the notion that “strategic formulation when carried out on a global scale as it happens with L’Oreal is meant to put its focus on the long term objectives of the company. As we are aware, the fact is that L’Oreal has numerous competitors in the market.” (Megaessays)

Thus, we can finally conclude that to stay abreast in the competitive ladder and when it matter to L’Oreal for instance “understanding consumer wants and needs as well as their socioeconomic, demographic and psychological characteristics is even more important in international market then it is in domestic market.” (Kaynak, 1993, p. 19) This is one reason as to why it is important to adopt global marketing strategy in the most specific ways by formulating with a clear and specific understanding of the market and its demands across cultural boundaries.

L’Oreal Cultural Dimensional Understanding and its Reason

As we have already discussed above, L’Oreal international marketing strategy is specific to meet the requirement of the market as and when it calls for. The question as to why L’Oreal should have an understanding of cross cultural market is in direct essence of comparative management and its practices. International marketing strategy as we understands in conceptual terms is referred to as comparative management. “Comparative management as we are conversant is the study of how management systematically differs among countries or cultures. It is also often referred to as that branch of management that is mostly practiced across cultures or cross-cultural boundaries.” (Schermerhorn, 2006, p. 129) From this brief we can understand that international business management or comparative business management is the application of pure management concepts, theory and principles in different enterprise of different countries in the most feasible ways so as to derive an influence or any factor related to corporation’s objectives in marketing their products for success across cultures in the international market.

Thus, the said reason itself is also emphasized in consideration of L’Oreal. However, the most salient fact is that understanding of different cultures be it Indian, US, UK or Japanese cultures for instance often bridge the gap of marketing communications and its conceptual forms. This is the fact and “the very essence of international advertising in such scenarios also comes to plays; that is to say, the more understanding corporations has of different cultures, the more advantages they derives in their strategic formulation of cross cultural communication mediums of their brands.” (Anonymous) Such instance of integrated marketing acknowledged the central figure or consumers who are the deciding factor in the market for success of brands.

Thus, we can conclude that understanding of different cultures is relevant be it through marketing communications or any forms is important as the first step to understand the various needs and wants of consumers in the defined cultural market arena, which we can mirror in context of L’Oreal internal market as well.

L’Oreal Marketing segmentations in Indian and Asian Cultural Demographic

L’Oreal and its market in India are huge. The effect and influence that L’Oreal creates for the youth of today, especially in India is also tremendous. As we are conversant with the fact, L’Oreal as global multinational cosmetic giants has its presence in almost all cultural spheres that defines the global market of the 21st century era.

In India as well it is not different, and L’Oreal commands a significant place in Indian cosmetic market. In order to under and comprehend the features of L’Oreal market in India, analyzing the market structure and its marcom is important. In that arguments, when featuring the marcom process of L’Oreal in India one thing is clear that Indianization of its marketing processes is very relevant. That is to say, “L’Oreal marketing manager’s strategist main target where to tempt the India middle class women and their fetish for upscale products, be it hair care or skin care products. The emerging middle class in India provide a great scope for L’Oreal, a French MNC to tap the demographic of India to its advantage, besides offering products that is quality oriented.” (NextBillion, 2007) Hence, L’Oreal marketing segmentation that attends to the need of the Indian middle class society was one aspect of L’Oreal success. As we often heard of the saying ‘culture is life’. This is true and we assume that L’Oreal entered India way back in 1997 with a clear understanding of what culture is all about in India with a visionary outlook.

The important thing to note is that “way back in 1997 cosmetic industry in India was at its nascent stage. Besides, local competitors and manufacturer of cosmetics and other personal segments and its products also are lesser. Most importantly, hair dressing industry in India is also minimal, which gives L’Oreal the scope to vision its reach and target the market in India with specific hair products.” (RediffBusiness, 2005)

With a large concentration in research and its development as well as huge investment, “L’Oreal in India and its story since 1997 have been a great change of fortune. All this can simply be emphasized to the strategic formulation of L’Oreal marketing strategy that concentrated at one segment from the entire decades and capturing the imagination of the market in India and its influence over the youth, who commands a huge number of consumer for L’Oreal products.” (RediffBusiness, 2005)

The return on investment made by L’Oreal in India paid dividends, “this assures L’Oreal to further expand its products list in India by setting up of a manufacturing unit in Pune 2003, so as it also cater to the Asian market as well, given L’Oreal product huge demands. In that respect came the introduction of fair cream, that is to say skin care products as well as hair care products that were its benchmark in Indian market, and other features of L’Oreal cosmetics, which also received huge response from consumer in Indian market.” (CosmeticDesign, 2004) As we are aware, Indians are very obsessed with theirs complexions.

Thus, the introduction of skin care products such as fairness creams and other allied beauty products by L’Oreal not only made a mark in the Indian market, but also registered a loyal consumer base in its products. Within a decade or so after the launch of all allied beauty products in India and after the successful manufacturing unit in Pune, as well as L’Oreal marcom that concentrated on reaching every part and segments of the Indian city play a significant role to change the fortune of L’Oreal in India. Somewhat we feel that Indianization of L’Oreal and its marketing was a success factor in India Diaspora. Marketing communication process that accumulates the IMC concepts to its advantage and to connect with Indian consumer and their cultural blends significantly changed the tide in favor of L’Oreal entry in India in 1997, wherein today L’Oreal share in the India market is huge, and most importantly also engrossing the loyalty of consumer base. Looking at these transformations, we feel that marketing of L’Oreal and its segmentation that concentrated on hair and skin care products in India in with a variety of brands plays a significant role in cross cultural marketing dimension of in Indian market and Asian dominated Diasporas, where India and its market is one such definition by cultural existence.

L’Oreal USA and its Cultural Dimensional Influence in North America

What is it about L’Oreal in USA, often regarded as the market segment that the company has a solid place of representation? Brand wise, we can speculate that L’Oreal products in USA are huge hits. This is true though. Besides, we feel that its connection with the culture in USA is also spectacular. As we are aware, L’Oreal a French cosmetic manufacturing company has a tremendous appeal amongst the middle class in US. The salon culture in US for instance covering the youth, middle age women’s and their obsession with beauty and all features of fashions is one example for the success of L’Oreal In US market.

Cultural wise we feel that “L’Oreal USA is the central focal market. Take for example the fact in which it is held that “being successful in America as the company chairman asserts is the ticket and gateway to other market on the global scale.” (L’Oreal) This is true since America culture has a huge influence worldwide. Specifically, US market is looked upon as the primary and stronghold market that the company boasts of. Products wise, its offers and all features and large variety of personal care products that directly meet the requirement of the Latin American culture. Besides, L’Oreal marcom and its processes in Latin America and in US in particular be it its PR or corporate sponsorship and anything that has to do with the integrated marketing communication bridge the gap with consumers in US market and in the greater arena of North America.” (L’OrealUSA)

From a cultural dimensional outlook and its analysis, we feel that company visionary outlook and clear understanding of the market is one sure success story of L’Oreal in US and America. As we can read form the interview snapshots in the media with the company chairman, there is a “a fact in which the company chairman also felt that going international has a lot to do with how MNC and its marketing as well as operation are successful in America, given that America as a market tremendously influence the global segmentation of any given typical firms, the same is the case with L’Oreal in that regard as well. In South America for precise, L’Oreal presence is huge and strong as ever before. The case is also not different in North America as well; where operations and all aspects of marketing in American culture are carried out from US headquarter.” (L’Oreal)

What has been the greatest turnaround for the success of L’Oreal in US in particular and in American market was the “dramatic acquisition by L’Oreal of Cosmair in the early part of 1994 shifted the tide in favor of the company to influence the market and its segmentation over a large American culture. Acquisition of Cosmair leads the way for L’Oreal to bank heavily on major brands, take for examples Maybelline, Matrix, etc, and the way that it opened for the company to saliently meet the dire needs of the cosmetic industry in America, assert the company chairman.” (L’Oreal) this gives evidence that L’Oreal and its success in American market and its strategy that was carried out from US and the think tanks in the corporate segment did gave L’Oreal a significant turnaround, strategically, be it brand segmentations, products offering, marketing’s as well as meeting and attending the needs of consumer,” (L’Oreal) that defines the cultural demographic undertaking of L’Oreal in America and its market.

Thus whet we feel is that L’Oreal USA is not only meant to target consumer in American market, but also to reflect the global arena and its demographic segmentations on a strategic roadmap. Ending this note, we feel that L’Oreal USA from an individual point of view has a universal appeal and is very reliant culturally as well when representing the westernization of L’Oreal strategic outlook and its cross cultural marketing strategy that have been a hit.

L’Oreal Australia and its cultural Dimension

As we are aware also, what’s in vogue is a huge influence in Australia, given the fashion sense of people in that region. Given the craze among consumer in Australia for L’Oreal products, this assures the company and its strategic think tank to invest heavily in research as the core foundation of the company success and its strength. With competitors all around, products of L’Oreal in Australia was something else. That is to say, the cultural demographic undertaking of L’Oreal in Australia was concentrated to meet the demands of the fashion industry and beauty conscious of consumers. With a variety of quality products such as hair care, skin care and other aspects of personal products in the beauty segment did the job for Australia operation and its presence in the market to command a place for itself.

Culturally, what have been the greatest strength of L’Oreal and its market presence in Australia was the company ability “to adapt itself to the market demands, its situation and most importantly the ability to come out with differently based products that are high in quality as well as scientifically proven to have a result in any form of hair and skin care regiments.” (MarketPublisher, 2010) Understanding of health consciousness of Australian and their specific acknowledgement of scientific data and all features of it convinced Australian operational head to strategies it’s brandishing by investing hugely in research and development of the products, as a means to adapt itself to the demand of the market, which paid dividends in terms of market shares in Australia.

Thus, Australia as a market destination is also westernized in the cultural sense. Taking a tour of the company website specific to Australia, we come to the knowledge that the “message and its content in the portal gives a clear picture what the company is all about in Australia as a subsidiary of L’Oreal Paris, the parent company. From a cultural dimensional background again, we feel that L’Oreal Australia is a repeat of American cultural success of the company,” (L’OrealAustralia) yet, strategically its concentration was in attending and to adapt itself to the market, where research and its impact played a significant role for the success of L’Oreal Australia. Besides, it also should not be forgotten that marketing and marcom process in huge segmentation and its reach amongst consumer in Australia is also a factor of success.

L’Oreal Europe and UK and its Cultural Dimensional Influence

The very questions that arise are what defines the strategic formulation and its success for L’Oreal in Europe and particularly in UK, where a major concentration of English people are there? There are many reasons for the success of L’Oreal in Europe and to be precise in UK market. Given that L’Oreal as manufacturing giants in hair care and skin care products being based in Paris itself is a huge impact forma marketing dimensional outlook.

The mass appeal of the brandishing that have been happening in Europe since the 90s which was a huge success factor for the brand to garner its share and market capitalization in whole of Europe, where the concentration of cultural aspects are diverse.

Not only do we find English speaking people in Europe and UK, but also people from many backgrounds and with different variety of mindset, purchasing power and most importantly the brand consciousness among the major inhabitants of European cultural background. For instance, UK is one example where we can see that brand has a huge appeal among the cultural demographic of people of different age groups and purchasing power. As we know, English people from a cultural demographic outlook are often speculated to be “the most obsessed consumer in the whole world. Global brandishing and its reach of L’Oreal in all segment of the global market played a significant role for L’Oreal to turn around the tide in its favor. The fact that L’Oreal is the most sought after brands in UK households,” (L’OrealUK) which further gives an insight that L’Oreal UK and its market concentration in Europe at large is focused to meet the entire demand of the region, where the central focal was its brandishing in Paris and London, the centre of world fashion, and where shoppers are huge. Hence, attracting buyers with different forms of marcom and its appeal altogether are somewhat a strategic formulation of L’Oreal Paris, as well as L’Oreal UK.

Thus, speaking of L’Oreal Cultural presence in Europe and in UK in particular it should not be forgotten that business environment in Europe, where European union have a huge influence through policy formulation also plays a centrifugal parts in the success of L’Oreal Paris and L’Oreal UK in European nations where the cultural demographic is considered by most to be overlapping. Such an advantages of overlapping culture provided L’Oreal to concentrate on the diversity programs of its strategy by it in brandishing, marketing, or any other factor related to operations in direct essence of L’Oreal CSR initiatives. As can be read in the case study, “L’Oreal initiative in Europe was concentrated to initiate the best values for its diverse consumers in the market, where the story and its strategic roadmap started from the company structure itself in making and adapting to the varied needs of consume by making them feel valued, which provides a sense of belonging. L’Oreal and its challenges that it has overcome in UK and Europe is the strategic and visionary outlook of company management to make the most out of what cross cultural marketing and its strategy can impact the company and its operation overall. This is what L’Oreal has been doing, and the focus has been put emphasized on cultural diversity programs” (CSREurope) for its operation in UK and European market segments.

Conclusion

Taking overall the general discussion we see reason enough to classify and differentiate that L’Oreal and its presence on a global scale is huge be it in UK which overall concentrates in Europe, USA and American market or India and its concentration in Asian market as well as in Australia as we have analyzed and compared and contrasted the different marketing strategy adopted by L’Oreal as one feature of cross-cultural marketing managements.

What we can reason is that understanding of culture plays a significant role to change the tide in favor of internalization that corporation undertake or strategies, given that internalization is all about focusing on a global scale and is quite different from domestic operation.

Hence, putting emphasis on this point, we feel that L’Oreal we feel that L’Oreal global marketing segmentation and its cross-cultural management that have been effective in almost all market across the globe is one factor of its success, internationally. Culture is life. This adage itself played a centrifugal point for L’Oreal opined, given that understanding of different cultural fabric and meeting the demands of the varied cultural dimension, thorough diversity, effective marcom, specific strategy and all aspects of its operational success to go international have been the befitting end result for L’Oreal and its success in Australia, India, US as well as in UK and in major capital of European nations.