Staying On Top Of The World

With globalisation and fast-paced innovation, the market for cosmetics has seen tremendous growth over the recent years. Worldwide annual expenditures for cosmetics today are estimated to stand at US$19 billion. And, among all brands available, L'Oréal Group, which tops the list of cosmetics producers, has gained 15.8% of the world cosmetics market share as of June 2009 (http://www.wikinvest.com/stock/L'oreal_(LRLCY).

The L'Oréal Group was founded in 1909 by chemist, Eugène Schueller. Initially named as Société Française de Teintures Inoffensives pour Cheveux (French Company of Harmless Hair Dye), the company first started off in the hair-colour business, before branching out into the beauty and cosmetics industry. L'Oréal Group produces products for professional stylists as well as non-professionals for home usage. Under the L'Oréal Group brand name, there is a string of distribution brands categorised as Consumer Products, Professional Products, Luxury Products, and Active Cosmetics. All these products are being distributed around the world to 130 countries.

What has made L'Oréal Group a brand that is so branded, wanted and loved by all? L'Oréal Group has definitely found the formula for great global branding through their goals, people and ethics, operations, brand distribution as well as brand relationships.

One of the main reasons L'Oréal Group succeeded in becoming a wanted brand is because of its beliefs and focused goals. From its parent company to its subsidiaries, L'Oréal Group has aligned its vision of aspiration to beauty with a mission to reach out to every man and woman around the world. L'Oréal Group has also initiated a priority for diversity as their brand culture and gained partnerships with several universities, associations and agencies in France, the USA, Latin America and South Africa, enabling them to recruit candidates of different backgrounds including minority groups in the society. Growing their brand with this team of diverse people, L'Oréal Group has succeeded in creating consistent brand alignment to move in sync towards the same goals.

In L'Oréal Group, ethics are being included through brand trainings at all levels as well. Implemented through leadership guidance for the management, communicative trainings, and by monitoring overall performance, the ethics instilled among the people helps to reinforce their brand culture and brand alignment, which leads to a better focus and achievement of the brand vision.

Key leaders in L’Oréal Group have also set the brand direction towards successful growth. Visionaries such as Sir Lindsay Owen-Jones has helped widened the target market of L'Oréal Group, turning a Europe-based organisation into one that can compete in an international market. Jean-Paul Agon, the successor CEO to Sir Lindsay Owen-Jones, lead the company to pursue natural products for its brands, establishing L'Oréal Group among the world’s most ethical companies in managing environmental and social issues. Subsequently, the only daughter of the founder, Liliane Bettencourt inherited her father’s fortune as the principle shareholder for L'Oréal Group and created Bettencourt Schueller Foundation to aid, support and develop projects in medical, cultural and humanitarian fields. With strong leadership and proper brand direction, L’Oréal Group has established brand trust and better brand perception for its sub-brands.

Another major contribution to L'Oréal Group’s successful growth is through their operations. From the productions using light refraction technology (http://www.cosmeticsdesign.com/Product-Categories/Processing-equipment/L-Oreal-focuses-on-photonics-to-enhance-colour-cosmetics), consistent quality and monitoring, as well as workplace safety standards, L'Oréal Group has been very dedicated to research and development, constantly providing newly improved products to meet with the constant changes of market demands. In addition, 93% of the cosmetics are being manufactured locally at 42 manufacturing plants situated all around the world (www.loreal.com), lowering the costs of productions and enabling better management of its brand distribution.

Being the world’s largest cosmetics producer, L'Oréal Group also has the advantage of building a strong brand distribution network. Emerging markets such as Asia, Eastern Europe and Latin America has opened up opportunities for L'Oréal Group to place its brands around the world, making it easy for consumers to access their brands and products. Because of brand distribution, now their consumer products contribute most to the sales volume (48% as of 2008 income) for L'Oréal Group (http://www.wikinvest.com/stock/L'oreal_(LRLCY). Among the notable brands categorised under the consumer segment includes L'Oréal Paris, Garnier, Maybelline New York, Softsheen-Carson and CCB Paris.

Throughout its century long establishment, L'Oréal Group has received numerous awards and recognitions since 2001 for its sustainable development, diversity, ethics, recruitment, financial communication and product innovation. Being recognised has helped to boost L'Oréal Group, making its brand name even more prominent and differentiated among the other brands on shelf. This also leads to obtaining brand trust from both existing and prospective consumers for brands under L'Oréal Group.

Apart from building brand associations with consumers around the world, L'Oréal Group also focuses on building its brand relationships with two of its most valuable target audience. One of L'Oréal Group’s ways to bond is through its incorporation of the growth of research and science with women. L'Oréal Group joined forces with UNESCO since 1998 to promote women in scientific research and encourages promising young women to pursue a career in this field. On top of that, L'Oréal Group also builds strong relationships with its suppliers, by gaining brand trust from both local and international suppliers, as well as encouraging them to propose new ideas and working alongside with the teams of researchers and technicians in the L'Oréal Group. By establishing these strong and transparent brand relationships, L'Oréal Group will be able to secure the future for its sub brands.

Evidently, the successful story of L'Oréal Group has come about a long way since it was founded… from its goals, to its people and their ethics, systematic operations, brand distribution and also their strong brand relationships. As the cosmetics and beauty industry continues to bloom, L'Oréal Group has further plans such as releasing products with lower prices in order to reach out to more market segments and maintaining their brand leadership. Through continous efforts in building its brand, L'Oréal Group will be able to expand its empire in the cosmetics market and gain more mind share and market share, establishing a stronger brand presence in the world.

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