L'OréAl of Paris: Bringing "Class to Mass" with PléNitude
Business and Management
Submitted By carazo
L’Oréal was born in Clichy, France in 1907, the offspring of technological innovation. Nearly 90 years later, the spirit behind answering the needs of a Parisian hairdresser in search of more subtle and lasting hair color for his clientele, was at work in the Health and Beauty Aids aisles of K-Marts, Wal-Marts, drugstores, and grocery stores throughout the United States as L’Oréal sought to bring “class to mass” in the skincare market.
From his office overlooking Fifth Avenue in New York City, Joseph Campinell, President of L’Oréal’s U.S. Retail Division explained L’Oréal’s strategy for the mass market: “We sell product in the department store and specialty store channels. The research and development we do in support of those brands like Lancôme and Biotherm can be leveraged into mass market outlets as well. We call this ‘trickle down and fire up.’ We trickle the technology down to the mass markets where the high volumes are and that fires up our next generation of products by funding the research and development. In the retail division we do what the company always does: drive sales with product technology. But, since the drugstores, mass merchants and grocery stores we sell through are “self- service” types of outlets, we have to support that technology with strong advertising, merchandising and promotions. We have been very successful with this in hair colorings. Our Preference by L’Oréal brand, with the famous advertising tag-line “Because I’m worth it,” has become the market leader. I’m sure we will get there with the Plénitude skincare line as well, though we clearly have some things to work out there.”
Carol Hamilton, Senior Vice President of Marketing for the L’Oréal Retail Division had assumed responsibility for Plénitude in early 1996. The Plénitude line, which included cleansers and moisturizers, had been a smashing success in the French skincare market following its 1982 introduction and was introduced to the U.S. market in 1988. In April 1996, Hamilton commented: “Plénitude has gone through a couple phases here. It had a very strong introduction in the United States, quickly becoming the #2 brand in the market, only behind Oil of Olay. And, the trade loved us. We were upscaling the skincare business and bringing new people into these mass channels from department stores. Plénitude sales grew pretty well through 1991 and we were achieving what we set out to do. We had told the trade we would spend big supporting the brand and we did; we were building a consumer franchise, brand equity, and good trade relations. We weren’t making any money. But, we didn’t worry about that too much since we knew from the beginning that we would have to invest in the market given the position Procter had with Oil of Olay. But then we just hit a four-year sales plateau. We had lost the #2 position to Pond’s. When I took on the brand, we had just regained our position as the #2 brand in moisturizers. However, it was still 8 or 9 years after the U.S. introduction and we still were not making any money here.