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Problem Identification

Problem Identification. Many types of products. How to further improve on Plentitude’s current operations in US? How to introduce a new product ( Revitalift -Eye) into existing product line?. Brand utilization. Premium pricing strategy. Rethink all aspects. “Too French” for US.

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Problem Identification

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  1. Problem Identification Many types of products • How to further improve on Plentitude’s current operations in US? • How to introduce a new product (Revitalift-Eye) into existing product line? Brand utilization Premium pricing strategy Rethink all aspects “Too French” for US “Star” system

  2. L’Oreal Background • L’Oreal started in Clichy, France in 1907 by Eugene Schiller • Annual revenue of 53.4 billion French Francs in 1996 ($1.09 billion US) from over 2000 products • Owns 25 global brands • Cosmetics • Hair color • Skincare • High-end: Lancome, Biotherm • Mass market: Plenitude

  3. L’Oreal Background • Cosmetics represent 81% of revenues • $300 million spent on research & 300 new patents worldwide in 1996 • Acquired Maybelline to broaden participation in the mass market • Combining hair care & cosmetics division

  4. Case Background • Plentitude line launched in 1982 • Very successful in the French market • Strong introduction in US market • US sales grow up until 1991 • After 9 years in the US, sales become stagnant in the US

  5. Plentitude Line • Launched in France in 1982 • Positioned as: • High end • Superior performance • Accessible (Class to Mass strategy)

  6. L’Oreal Marketing Strategies • Golden Rules of Advertising • Focus advertising on star product • Provide evidence of technological superiority • Depict an executive, up-to-date and assertive executive woman • “Trickle Down and Fire Up” • Revenue from mass market products to fund their R&D for high end products • “Maintain premium pricing to reinforce quality and performance”

  7. Plentitude US Launch • Test launch in Atlanta & Dallas in ’88 under “class to mass” strategy • Positioning was to “reduce signs of aging” • L’Oreal brand recognition was critical to selling products • Used same “star” philosophy formula as used in France

  8. SWOT Analysis

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