Global Marketing Channels And Physical Distribution

L’Oreal marketing plan in malaysia

 

1.0         COMPANY DESCRIPTION

         L’Oreal Malaysia, like the L’Oreal group, is organized in four operating divisions: Consumer Products Division, Luxury Products Division, Professional Products Division, and Active Cosmetics Division.

L’Oreal is a brilliant brand in cosmetics, toiletries, perfume and fragrances in the world which headquarter is in Paris, France _the global leader in the cosmetics market. Its operations include marketing, sales and distribution of its color cosmetics, skin care, hair care, hair color and fragrances. This company has the research group for recognizing the benefit market for the entire product. L’Oreal’s success story begins in 1907. They mostly focus on skin care, make-up, hair care and fragrance. L’Oreal includes some important brands such as Lancôme Paris, Garnier, Mabelline, Softsheen Carson, Matrix, and Biotherm. L’Oreal invests heavily market since 2001 (Euromonitor 2005). Their products are sold in about 130 countries. L’Oreal is divided into four categories – consumer into its research and development which gives them competitive advantage over its competitors. In France they have 63,358 employees. They employ 2,500 people just in the UK. L’Oreal owns the Body Shop. L’Oreal, world leader in cosmetics, has a modern and efficient growth model that is always looking to the future.

Consequently, the investments are based on the needs of MEN and WOMEN worldwide, within each market or distribution circuit that is present.

This company in Malaysia is located at Level 13A & 15 Uptown 2, No 2, Jalan SS 21/37, Damansara Uptown, 47400 Petaling Jaya, Selangor Darul Ehsan Malaysia.It is based in Petaling Jaya and consists over 500 employees and has a strong track record sales growth posting double digit increases from the last year.
L’Oreal Malaysia is included 4 operating segment:

ü    Active cosmetics division

ü    Luxury products division

ü    Professional products division

ü    Consumer products division

 2.1       Company Profile

ü            Before the facial cosmetics, L’Oreal was famous as a hair-colour formula developed by French chemist Eugene Scheuller in 1907. It was then known as”Aureole”. Scheuller formulated and manufactured his own products which were sold to Parisian hairdressers. It was only in 1909 that Schuellerregistered his company as “Societe Francaise de Teintures Inoffensive pour Cheveus,”the future L’Oreal. Scheuller began exporting his products, which was then limited to hair-colouring products. There were 3 chemists employed in 1920. In 1950, the research teams increased to 100 and reached 1,000 by 1984. Today, research teams are numbered to 2,000 and are still expected to increase in the near future. Through agents and consignments, Scheuller further distributed his products in the United States of America, South America, Russia and the Far East. The L’Oreal Group is present worldwide through its subsidiaries and agents. L’Oreal started to expand its products from hair-colour to other cleansing and beauty products. The L’Oreal Group today markets over 500 brands and more than 2,000 products in the various sectors of the beauty business. Such includes hair colours, permanents, styling aids, body and skincare, cleansers and fragrances. Indeed, the L’Oreal Group have reached the peak that all cosmetic brands sought after. Many factors contribute to the success of the Company. These will be discussed further in the proceeding parts of this study.

 

 

2.0         STRATEGIC PLAN & FOCUS

2.1         Vision

According to strengths of L’Oreal Malaysia, the company will tend to boost growth by introducing new products. They are planning to increase sales volume of this new perfume (named: ROMANCE for female –REVOLUTION for male) which are adopted to all local consumers’ wants into the market .The goal is increasing sale volume of this new perfume via effective and efficient distribution channels, branding promotion and aggressive advertisement. A guiding theme that articulates the nature of the business and its intentions for the future, based upon how management believes the environment will unfold. A vision is informed, share, competitive and enabling.

 

 

2.2         Mission

         They believe that every one aspires to beauty. Their mission is to help men and women in Malaysia realizing that aspiration, and express their individual personalities to the full. This is what gives meaning and value to their business, and to the working of their employees. They are proud of their work. The mission of the company is the answer of this question:

          Why the organization does exist?

2.3         Goals

ü  Financial Goals :

-       To achieve 6% growth yearly in revenue.

-       Capturing 6% of market share yearly and a minimum 26% for following years.

ü  Nonfinancial Goals :

-       Extend their services in perfume products.

-       Increase profit margin of perfume products line.

-       Obtaining customer loyalty (Generate 25% of repeat business in year 1 for new perfume).

-       Product consciousness through target market up to 36%.

-       Obtain a high level of customer satisfaction among 80%of consumers.

-       Make brand consciousness for products.

-       Make powerful brand affecting link with customer.

2.4         Core Competencies

2.4.1        The L’Oreal perfume will have core position and value proposition which is included:

ü  Luxury position.

ü  High product safety (the lowest possibility of causing physical allergic related to fragrance).

ü     Product availability.

ü Having fashionable shape and tastefully packaging.

2.4.2        Customer Service for new perfume

• Customer- center service model (customer satisfaction and customer loyalty)
• Business model (unique design and the ability of high adaption with any types of skins)
• For introducing new perfume, the company gives free several times test that customers want and even gives free tiny sample of perfume.

2.4.3         Strong Supply Chain Management and Distribution System

• The new perfume can make strong competitive market
• Their products are available by selective distribution channels and strong supply                    management control.

2.5         Key to Success

In order to make appropriate plans for the future, they must imagine which some things will be change. This planning is based on a number of assumptions which have been made about their market in the near future.

ü Population Growth (better market opportunities could be achieved through growth rate of population).

ü Political stability (Malaysia enjoys a stable political system so that provides safety of investment and predicts plan future).

ü Economical growth (Malaysia’s economy is related to GDP that has growth every year).

ü Educational group growth (Government plans to provide equal educational opportunities for all; Malaysia is faced by Increasing the number of international students).

 

3.0         Global Marketing Programs

It refers to marketing activity by company that emphasizes the following:

1. Standardization efforts.

2. Coordination across markets.

3. Global integration.

 

Evaluating our performance during preparing marketing plan:

During preparing marketing plan they started to evaluate their customer needs and wants toward their new perfume in order to know about their customer behaviors. Because they think which satisfying their customers is our precedence strategy. For this reason I conducted a survey which included 16 questions.

Also it included both of open ended and closed ended questions. We distributed our questionnaire among 30 participants, which 15 of them were men and another 15 were women. All of our participants were young which their age among (25 – 44) years. 70% of them were among (25- 29) and 30% of them among (26- 30). Most of them were student including (diploma, degree, and master) level which covered nearly 66% of our participants and 44% were employees. Also 80% of them were living from urban areas and the rest were living in urban areas.

One of our questions was asked about the brand that they use. None of them stated L’Oreal perfume. Another question was to stat the reason of none using L’Oreal perfume, most of them stated because of unawareness and unfamiliarity about their perfume.

The other questions were focused on customer needs and customer opinions of using their particular perfumes. The purpose of these questions was to catch their attitude of selecting their preferable perfumes. I asked them for what reason do they use perfume they answered as follow:

 

As it is seen most of them use perfume to make their self confidence in their society. Also we asked about product strategy (the color of the bottle), nearly 75% preferred clear and light bottle color. The answer for our question about the preferred size of the perfume is shown bellow in a pie chart:

 

 

72% of our respondents, which most of them were men preferred small size and 18% which most of them were women preferred medium size, and the rest selected large size.

 

Another question was about packaging. For this question 70% of respondents which most of them were women, they take care about the shape of the bottle but 30% of them which mostly were men, they don’t care about the shape. The answer of our question about the smell is stated bellow:

 

As it is shown, romantic smell has a large demand, it equals 60% and secondly is cool smell and it equals 30%, the last one is strong smell which the demand for this is low, just 10% of our participants opted this option.

In our conclusion we can say that these kinds of surveys can be very helpful to stress on customer needs and wants, it also helps to conduct marketing plan in a better way and to approach more toward customers in order to fulfill them in a right way.

-                 Evaluating our performance after launching our new product (perfume):

The purpose of their evaluation is to know whether our marketing tactics are working. This can be helpful when we use a combination of marketing activities simultaneously. In evaluating, their marketing should be accountable. So here’s a few ways to evaluate how well they are doing. (websitemarketingplan.com)

1. Looking at sales and income: they have to look at our sales and income for our new perfume. They should be going up! They have to measure it carefully with knowing that discounts or variances in fees will affect total sales values.
2. Asking clients: asking their clients in order to find out whether they are satisfied or not. And to find out what are our weaknesses.
3. Observing their advertising and promotion performance: we have to ask our self whether our advertising and promotion produce direct responses or not. For determining this point we have to make sure we are advertising in the right media. And we have to choose media to suit our selected audience. They give prospects a choice to people of how to contact them. They provide their contact methods in a various way such as phone, email, and website.
4. Observing our IT based system: they have to evaluate performance for their IT and networking system, checking their website day by day and updating it is important. They have to look at their online ordering and sales to find out how is it doing. In case if there is any problem, it is necessary to take right action to fix it as soon as possible.
5. Evaluating marketing tactics: it is important to evaluate our marketing tactics by doing surveys among people and investing on R&D to continue our innovation. The purpose of this is to focus on our customer needs and our point of difference.
6. Positive return on investment (ROI):  rather than just look at the “marketing budget” as one total, we really need to evaluate the cost effectiveness of our marketing activity. Even if we are getting a great ROI overall, maybe we can do even better by changing or eliminating unproductive tactics.

4. Conclusion:

       It seems reasonable to conclude that Market Globalization Drivers: Common Customer Needs, Global Customers and Channels, Transferable Marketing, Lead Countries. It is more important to do what is strategically right and what is immediately profitable. Global marketing is the growing convergence of consumer needs; Basic principle of marketing in every country is biggest challenges in globalization. Benefits Of Global Marketing involve cost reduction, improved quality of products and programs, enhanced customer preference and increase competitive advantaged. People believe on what they think.Satisfation level is with understanding the real market, create innovation, packaging, keep on adding innovation and understanding the power of the technology. Nowadays, in global marketing we can consider with advance technology, high knowledge of consumer, consumer demand and keeping on consumer expectation. Today, failing in business depend to expectation of consumer. Asia has a good market and it becoming more important because of face value. Meet the expectation is important in global marketing.Undrestanding consumer demand is important for making profit. When there is satisfaction, there is market. Global marketing include standardization efforts, coordination across markets and global integration. Challenge is create value in global marketing. Quality is expectation in global marketing.

In global marketing, we try to create problem. We want to create job and then gain profit. Every problem is money maker. All of the consumers are target price. Market is very comparative and sensitive. Globalization depend topolitical, consumer, market, legal and economic. Data is structure of business. Reality of research is important. Limitations to global marketing are cultural and political constraints, confirm to culture value system and national boundaries have begun their significance both as a psychological and physical barrier to international business

 

About the Author

I am a Mba STUDENT in malaysia. (EMS_SALEHI64@YAHOO.COM)

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