Loreal : body shop

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Information about Loreal : body shop

Published on March 3, 2014

Author: mohanaparna87

Source: slideshare.net


Project with Body Shop on analysing trends, customers and competitors. Insights to be used for NPD and further investment in the brand


GLOBAL COSMETIC INDUSTRY • Global MARKET Size by value : $382 billion. • The e-commerce of beauty products increased by 47% in 2011. • 2011 was the rebound year for One-brand shop, recording 32.1% growth. • In 2010, premium beauty growth in Russia leapt to 12%, consumer spending on the category in 2010 was 9%. • Brazil is world’s largest consumer of natural cosmetic products followed by India and China. • Natural and organic cosmetic market posted a double-digit growth , and its CAGR since 2009 exceeds 15%. • The keyword of cosmetics market in 2012 is “SMART.” Source : Premium Beauty News, Euromonitor International.

Global trends • Global male skin care • Growing diversity in men market growing at a rate • fragrances. self-tanning of 16% annually. lotions and creams. • • Growing popularity of Anti-aging Online sales Increased to anti-cellulite $11 billion in 2010. creams and skin care products • Growing trend towards "masstige", or premium, brands sold at lower prices. • Promotion of beauty from within. • Sun Care • Virtual experience based shopping. • According to RNCOS latest industry monitory report "Cosmetics Trends", nano-particles are nowadays increasingly being used to enhance cosmetics products quality and efficiency. Source : Global Beauty Industry Trends 2011

Global trends • Conscientious beauty : • Long-lasting beauty is • Time-saving : R&D Naturally another focus on areas like positioned, overriding organic and fair-trade theme. These products fast-drying nail beauty products are are hassle-free and a polish, 3 – in - 1 rapidly moving from good value-for-money. shower gel, facial niche to mainstream status. • High-tech wash and shaving foam for men. developments: with high-tech innovations. • • Catering to “all women” : products to address Alternative shapes is one of the newer trends in needs of consumers across and within different beauty packaging. ethnic groups. Source : New & Unique Innovations in the Beauty Market, February 2010

• INDIAN MARKET Indian beauty industry : Rs 3000 crore. • 40 percent of cosmetic sales catered to male consumers. • Apart from natural, organic and fair trade is the new movement in the beauty segment. • Cosmetic industry growth rate 15-20% . • Skin care @ 7-8 %, Herbal cosmetic @ 40%. • Beauty and personal care @ 18%. • Largest market in India : Western India 28% share. – Fastest growing regions : East and North East India. • Strong beauty sales in rural. • Consumers demanding enhanced packaging, more efficient product, enhanced functionality, versatility… Source : CMIE

porter’s 5 force AnAlysis of indiAn mArket • High concentration of suppliers. • Backward integration in brands. • High degree of imports. SUPPLIER’S POWER • High entry barriers. • Long-established companies. • Monopolistic competition. • Government regulations. • Distribution channels. • Economies of scale in big brands. NEW ENTRY • Major players targeting niche customers => Greater loyalty & low Buyer Power. BUYER’S POWER • Mature market . • Long-established companies. • Niche players. • Other non-organic products. • Home-made products. • Home facials. RIVALRY SUBSTITUTES


LUSH HANDMADE COSMETICS • COMPETITORS “WE REALLY DO PUT THE WHOLE FRUIT IN…!!! “ • Positioned as Natural handmade cosmetic brand. • Premium segment. • Word of Mouth advertising. • Strong CRM. • No animal testing. • Innovative approach. • Simple or no packaging. FOREST ESSENTIALS : “LUXURIOUS AYURVEDA” : Founded in 2000 • Luxurious natural and ayurvedic. • Super premium brand. • Supply across 5-Star hotels and spas. • Attracting customers from middle income segment. • USP : Light , pleasurable and utilitarian products. • Started with SHOP-IN-SHOP approach, now switched to their own retail outlets.


An indiAn consumer’s mindset

MINDSET TAKEN FORWARD... (kAno’s model) •Variety of flavors •Ambience •CRM •Eco-friendly brand •Offers •Availability •Reasonable price •Natural Ingredients •Brand Image •Effectiveness •Reliable •Significant Usefulness •Products as per skin type.

Who buys what?? Behavior & lifestyle TECHNOLOGICAL PRODUCTS • Blue-Collar workers • Unconcerned — buy products strictly on price, value, quality, and convenience. • Preppy Generation — Experiments with colors. • Attracted by Glamour & Glitz — Read a lot of fashion magazines, trendy, follows latest styling. • Wandering Customers — Have no prior product priority but buy the products most readily available and in demand. • Discount Customers — Most interested in products in sale and discounts. Mostly students or less earning professionals with no fixed priorities on brands.

Who buys what?? Behavior & lifestyle NATURAL PRODUCTS • White-collar workers • LOHAS — socially responsible, influencers, value practises of companies , meditate, exercise. • Naturalites — interested maintaining personal health. • The Living Natural consumer — Driven by awareness, eat organic foods. – “She’s finding new ways to use her old clothes, shopping vintage and thrift shops, and buying clothes made of recycled fabrics.” • The Core Fashionista — – “She is rethinking and redefining her sense of style and eco-chic. “ • The Walking Natural consumers —Trend followers. – “driven by wanting to belong to a greater community.” • The Spending Natural profile — – “Sense of exclusivity and entitlement are important to her. For her, buying natural connotes luxury, not any kind of sacrifice.”

WHY A MOVING TREND TOWARDS BEING NATURAL ? • 60% of skin products are absorbed & deposited in the blood system. • Average woman absorbs 30 pounds of ingredients in cosmetics over 60 years. • Users consume an average of 7 pounds of lipstick in a lifetime. • Contain aluminum, artificial colors, etc which cause major skin diseases in older ages. Source : Eco Healthy Living, PRLOG.2011 DEMOGRAPHICS • Rise in consumer spending power high income consumers have started to look for premium products, which essentially mean natural and organic cosmetics. • Consumers with increasingly active lifestyle are going green. AWARENESS • Health awareness as well as the desire for sustainability. • Entry of herbal and organic products. • Massive advertising and promotion strategy . • Consumers concerned about social and environmental issues. CELEBRITY INFLUENCE • Cameron Diaz, Madonna use Juice Beauty Products. • Brooke Shields use Weleda Products. • Jennifer Lopez etc use Dr. Hauschka Products. • Hillary Duff uses and endorses Nvey Eco Products.


CONSUMER CLASSIFICATION on Buying Frequency Want to buy, But lack resources. ASPIRERS • Want to be in the limelight, has role model, want to use luxurious (good fragrance, good feel) products. LOYALISTS • Influencers, brand loyal, value practises of companies & CRM. • Baby boomers + matures Once Always DRIFTERS • Motivated by latest trends, shifters, • Gen Y - 18-27yrs, Gen X - 28 – 40 Don’t stick to one particular brand. Makes purchases as per convenience. CONVENTIONALS • Driven by practicality and resources: • Young baby boomers • Recently married, looking for VFM products. UNCONCERNED / STUBBORN • Not concerned about the type of product they buy. , …!!!! Don’t make purchases on regular basis. “I don’t care”


TAPPING THE ASPIRERS, DRIFTERS AND CONVENTIONALS PRICE PROMOTIONS TARGET CUSTOMER Coupons For consumers to buy new / more products. Attract drifters and conventionals. Rebates To generate trust in the consumers. Price-off Deal Prices lowered for short durations / Attract drifters and conventionals. Trade-In To encourage repeated sales / Attract drifters . Loyalty Programs Memberships, rewards to loyalists. Sampling and Free Trials To encourage use of new unused products. Premiums Free service/ Attract drifters and conventionals. Online Contests and sweepstakes To attract new customers / Attract Aspirers. Source : Karen Gedenk, Price Promotions, Frankfurt - 2004

A step AheAd…. DRIFTERS CONVENTIONALS ASPIRERS Coupons Coupons Coupons Trade-In Premiums Contests Premiums Sweepstakes Coupons : Via electronic medium and Internet, promoting customer interaction. Trade-In : Encouraging customers to return used bottles for yearly redeemable points. Premium : Free offerings like F2F, Tele, Web-Based consultation and applications. Contests : Online contests on various social-networking sites. Sweepstakes : To be held online. “BIRTHDAY FREEBIES” for member customers.….!!!!!!

Swot analysis • Ethical standards and natural ingredients. • Lull advertising. • L’Oreal economies of scale and experience curve. • High pricing. • Own retail outlets. • Mild haircare products. • Focus on ethical beauty and humanitarian issues. • Innovative approach. • Increased interest of men in their appearance. (The ‘Metrosexual’ factor). • Increased preference and awareness of organic and eco friendly products. • Growing urbanization, and increased disposable income. • Higher SPF sunscreen range in India. • Their USP “green message” is being taken ahead by various other brands. • Brands offering natural cosmetics at lower prices. • New legislation banning animal tested products is bound to increase competition.

ANSOFF MODEL • Smaller SKU’s for travelling purpose. • For Indian market ideal sunscreen should effectively block both UVB and UVA rays, which is done with an SPF of 30 or greater. Source : Indian Journal of Dermatology, Venereology, and Leprology, New Markets Existing Markets Existing Products New Products Higher SPF range in sunscreen. Small SKUs in all product ranges to capture the ‘On-the-Go’ market. Improve online supply chain . Promotional Packaging. Sunscreen ranges for haircare. Water-resistant products. No Diversification .

VALUE PROPOSITION CURVE LOW HIGH The Body Shop Cosmetic Industry Price Packaging & Advertising Hi-Tech Scientific Image Glamorous Image PARAMETERS Natural Ingredients "Ethical" Concerns

PACKAGING “WAlk the Green journey” • Each and every product would have a booklet attached to it which mentions about the product, ingredients and social benefits associated with it. • Carry bags would contain different facts about “THE BODY SHOP” to make the consumers aware about the brand in – depth. • The consumers like LOHAS, Naturalites etc would take pride thereby increasing loyalty towards the brand. • This is in line of their values where they aim to “ACTIVATE SELF-ESTEEM” in the users for using the eco-friendly products.

PACKAGING “continuing the Green journey” • Wild flower seed bag to be attached to all the bottle shaped products & • Wrapping non-bottled product with a strip of organic bio – degradable paper infused with wild flower seeds. • This would be an initiative to encourage consumers plant seeds in their houses and then in their communities. • This is in line of their values where they aim to “ PROTECT THE PLANET”.

PROMOTING “pArtnership mArketing” • This is in line of “THE BODY SHOP”’s strategy of using recycled material for product packaging. • Consumers would be encouraged to be a part of company’s recycling practice. • Consumers would gain points on returning the used bottles back which could be further recycled. • The points accordingly can be redeemed in the year end.

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