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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Please note:

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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Excerpts Contd...

Cashing in on The Maybelline Formula

Maybelline's success proved Jones' philosophy of creating successful cosmetic brands by embracing two different yet prominent beauty cultures (French and American). Commenting on this, Guy Peyrelongue, head of Maybelline, Cosmair Inc., US Division, said, "It is a cross-fertilization." L'Oréal followed this strategy for the other brands it acquired over the years, such as Redken (hair care), Ralph Lauren (fragrances), Caron (skin care and cosmetics), SoftSheen (skin care and cosmetics), Helena Rubenstein (luxury cosmetics) and Kheil (skin care) (Refer Table III).

L'Oréal acquired the above relatively unknown brands, gave them a facelift, and repackaged and marketed them aggressively...

Future Prospects

L'Oréal's efforts paid off handsomely. The company posted a profit of € 1464 million for the financial year 2002, as against € 1236 million for the financial year 2001.

Its overall sales grew by 10% in 2002, and much of this increase was attributed to impressive growth rates achieved in emerging markets like Asia (of the 21% increase in sales volume, China contributed 61%), Latin America (sales grew by 22% with sales in Brazil increasing to 50%) and Eastern Europe (sales grew by 30% with sales in Russia increasing by 61%)...

Exhibits

Exhibit I: L'oréal -Consolidated Financial Statements (1997-2002)
Exhibit II: A Brief Note on the Global Cosmetics Industry


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