NETHERLANDS MARKETING STRATEGY

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• Garnier currently offers one product in the Dutch market...

• How can Garnier successfully grow market presence without negatively impacting L’Oréal’s current market share?

L’Oréal’s Objective in the Netherlands is to increase Garnier’s brand presence

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• Increase brand awareness for the Garnierfamily brands

• Minimize cannibalization from the introduction of Garnier products

• Meet the needs of the Dutch market

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L’Oréal’s Decision Criteria

• Short-run strategy (0-12 months)

• Launch Garnier Synergie skin care products

• Increase L’Oréal Recital’s distribution

• Long-term strategy (12-36 months)

• Develop improved products for L’Oréal and Garnier

• Wait and see with Synergie anti-aging skin care line

We recommend L’Oreal develop its products to better suit the market’s needs

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Market analysis

Company analysis

Recommendation

Implementation

Risk Mitigation

Expected Results

Conclusion

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A high per capital income and growing number of women in the workplace makes the Netherlands an attractive market

Fastest growing population: Age 25 or older segment

Increasing number of Dutch women working

29% labor force participation for women (and growing)

4th in per capita income but 6th

in per capita spending on cosmetics and toiletries

Price conscious

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Accurate colour results are a major value driver for Dutch women

Volume growing at an annual rate of 15%46% of Dutch Women used hair colorant (up from 27%)Brand loyalPreference for lighter shadesPermanent colorant (73%)Semi-permanent colorants

Grew from 12% to 27%Fashion drivenDemand for warmer shades

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Dutch women care about natural ingredients in their cosmetics and skin care products

2nd-largest sector of Dutch cosmeticsVolume growth: 12%Sales growth: 16%2.5 million Dutch women aged 15 to 65 use skin care products Consumers are brand loyal:

Performance mattersLoyalty increases with age

Products heavily advertised and sold on the basis of brand image

Market share determined by share of voice

Increased interest in natural products

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Market analysis

Company analysis

Recommendation

Implementation

Risk Mitigation

Expected Results

Conclusion

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Current International Position shows a strong standing for both L’Oreal and Garnier

Largest cosmetics manufacturer worldwide

Subsidiaries in over 100 countries

$6.8 billion in sales (+12%)

$417 million in profits (+14%)

Sales breakdown:

France: 24%

Rest of Europe: 42%

L’OREALIndependent operation

Belle Couleur

Permanent hair color

Successful in France for over two decades

Market leader

Synergie

Skin care products

Successfully launched in France

GARNIER

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Garnier’s Current Position in Netherlands suggests low brand awareness

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Garnier

L’Oréal

Operates under same division as L’OréalCurrently manages one brand in the sun screen categoryMinimal brand presence

Brand is well perceived by Dutch consumersPlénitude: A mid-market, high quality skin care productRecital: A high-end, high quality hair colouring product

Recital is losing market share due to aggressive distribution strategy, private-label brands and salon services

Market analysis

Company analysisProduct lines

Recommendation

Implementation

Risk Mitigation

Expected Results

Conclusion

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L’Oréal Recital’s declining market share can explained by an increasingly competitive market

Strengths

Weaknesses

Current market leader with one-third of the market

No clear positioning statementMarket share decreasing over the past two yearsNo semi-permanent formulation

To protect current market share, L’Oréal should develop a semi-permanent formula for Recital to meet market demands

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Avoiding cannibalizing by introducing a new product: L’Oréal Plénitude

Strengths

Weaknesses

Reputation for high qualityAnti-aging line appeals to older demographic

Unclear differentiationThreat of cannibalization from Synergie

To differentiate Plénitude from Synergie, L’Oréal should emphasize its anti-aging benefits to women 35 years and older

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Strengths

Weaknesses

Only product with a strong positioning statementPositioning statement resonates with Dutch women

Current colours are too dark for Dutch womenPositioning statement is not consistent with resultsBuying intentions decreased after use

Belle Couleur is unable to meet market needs; Garnier should delay its launch until product improvements are made

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Garnier Belle Couleur must be reformulated to meet the needs of the target market

Strengths

Weaknesses

Buying intentions increased after useDifferent positioning from Plénitude

Dutch market is very competitiveNeed to maintain share of voice to maintain market share

Garnier should launch Synergie skincare without anti-aging line and emphasize natural ingredients that are scientifically proven

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Garnier Synergie offers its target market a unique value proposition

Market analysis

Company analysis

Recommendation

Implementation

Risk Mitigation

Expected Results

Conclusion

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Launch Belle Couleur

Launch Synergie

Launch Both Launch Neither

Increase Garnier’sbrand awareness

Minimizes threat of cannibalization

Meets Dutch market needs

L’Oréal’s Decision Criteria

… Launch Synergie only

Market analysis

Company analysis

RecommendationPositioning

Implementation

Risk Mitigation

Expected Results

Conclusion

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Synergie will be positioned as high-performance, high-value skin care products for women aged 20-35

Synergie is a worry-free, natural skincare line for young women who care about

healthy skin.

Reliable Natural Smart Choice

High Value High Performance Understated

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Synergie and Plénitude will be positioned as high value for women 20 to 35 years old

Price

HighLow

PerformanceHigh

Low

Ponds

Nivea Visage

Yves Rocher

Ellen BetrixSynergie

Plénitude

Dr. vd Hoog Oil of Olaz

Upper End

Lower End

Middle/ Value

Dead End

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Synergie and Plénitude will be differentiated on the basis of ingredients and demographics

Anti-Aging

Science

Ponds

Nivea Visage

Yves Rocher

Ellen Betrix

Synergie

Plénitude

Dr. vd Hoog

Oil of Olaz

Science-Mature

Natural-Youth

Science-Youth

Natural-Mature

General Purpose

Nature

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Garnier will target the value-conscious segment with Synergie

Target consumer profile:Aged 20-35Recently graduated university and started workingHas tried multiple skin care brands with mixed results (not brand loyal)Looking for brand to use with consistent resultsValue and performance conscious but not brand focusedThinks natural ingredients are better for skinUnfamiliar with technical product descriptions and terms

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Synergie PositioningSynergie is a worry-free, natural

skincare line for young women who care about healthy skin.

Dutch Consumer Needs

Growing consumer segment that is value conscious and cares about natural ingredients

Competitive Landscape

No direct competitor in high-value segment

Company Capabilities

“Alliance of science and nature” – natural products that don’t sacrifice performance

The positioning is aligned with capabilities, consumer needs and the competitive landscape

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Market analysis

Company analysis

Recommendation

Implementation

Risk Mitigation

Expected Results

Conclusion

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Low

PerformanceHigh

Low

Synergie

Plenitude

Dr. vd Hoog

Oil of Olaz

Middle/ Value

Product Line Price

Dr. vd Hoog 10-11.95

Synergie (Garnier) 9.95-16.95

Oil of Olaz 12

Plénitude (L’Oréal) 10.95-19.95Price

Price the Synergie line in the mid-range to appeal to its value-conscious target market

Synergie should be priced below Plénitude to target younger demographic

0-2 months 2-4 months

Prepare Customize literature

Train new hires

Create a beauty buzzEducate target

marketSell bundling option

to retailers

4-12 months

Launch time!Free product trials

Advertisements

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Launching Synergie will require a high level of coordination between sales teams and distributors

1 2 3

Increase sales force

Training period of two months

Define sales incentives

Distribution strategy:Leverage current distribution network

Grocery stores and chain drug stores in densely populated urban areas

Incentivize retailers with L’Oréal-Garnier bundling option

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1Prepare for Synergie launch

Secure optimal shelf space

Place near Plénitude

Find the face of Synergie

Dutch celebrity spokeswoman

Educate about benefits of natural ingredients

PR efforts with women`s magazines and local TV stations

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2Create a beauty buzz

Free product samples

Mass mailing to select neighbourhoods

Local charity events

Product demonstrations

Shopping malls located near distribution outlets

Outdoor advertising

Public transit, bus shelters, shopping malls

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3Launch time!

Market analysis

Company analysis

Recommendation

Implementation

Risk Mitigation

Expected Results

Conclusion

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Cannibalization of Plénitude sales

Position Plénitude and Synergie for different target marketsEven with some cannibalization, overall L’Oréal-Garniermarket share will still increase

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risk mitigation

Highly competitive skin

care market

First-mover advantage in high-quality, high-value natural segment – gain share before others can enterEmphasis on natural positioning for Synergie –increase reluctance to switch due to possible allergic reaction

Declining market share for Recital

Develop a clear positioning statement and build on position as current market leaderIntroduce semi-permanent formulation to meet market demands

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risk mitigation

Lost opportunity for mid-range

hair colour

Still no competitors in the mid-range hair colour marketReformulate Belle Couleur to increase chance of successful launch in future

Market analysis

Company analysis

Recommendation

Implementation

Risk Mitigation

Expected Results

Conclusion

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Expected Results

Dutch skin care market:

2.5 million consumers

56 million guilders

10% market share for L’Oréal-Garnier = 5.6 million guilders

Plénitude 5%

Synergie 5%

Skin Care Hair Colour

… Increase in L’Oréal-Garnier market share and profits

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32 million guilders in revenue 2 million in profits

Permanent hair colour market:

1.7 million consumers

88 million guilders

30% market share for Recital = 26 million guilders

• Profitability

• Revenue

• Sales volume

• Market share

Direct Metrics

• Retailer penetration

• Retail and wholesale margins

• Market share versus share of voice

• Brand awareness and consumer purchase intention

Indirect Metrics

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Metrics for Success… Indirect metrics drive top- and bottom-line results

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THANK YOU