L'oréal - Building a Global Cosmetic Brand

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Case Details:

Case Code : MKTG062
Case Length : 12 Pages
Period : 1993-2003
Pub Date : 2003
Teaching Note :Not Available
Organization : L'Orèal
Industry : Cosmetics
Countries : France

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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On The Road to Fame

By the 1970s, L'Oréal's products had become quite popular in many countries outside France. Jones' entry in the late-1970s marked the beginning of a new era of growth for the company.

During 1978-1981, Jones functioned as the head of L'Oréal's Italian business. Due to his exceptional performance, Jones was given the responsibility of looking after US operations (the company's most important overseas operation) during 1981-1984. Managing the company's US operations was not an easy task...

May Be? No, It 'Is' Maybelline

One of the first brands that L'Oréal bought in line with the above strategy was the Memphis (US) based Maybelline. The company acquired Maybelline in 1996 for $ 758 million.

Buying Maybelline was a risky decision because the brand was well known for bringing out ordinary, staid color lipsticks and nail polishes.

In 1996, Maybelline had a 3% share in the US nail enamel market. Maybelline was not a well-known brand outside the US.

In 1995-96, only 7% of its revenues ($350 million) came from outside the US.

L'Oréal decided to overcome this problem by giving Maybelline a complete makeover and turning it into a global mass-market brand while retaining its American image...

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