L’OREAL has products for various categories
of consumers, both mass, medium and high end. The pricing strategy is based on
consumers’ perception of value (mass + prestige = Mass-tige market).
L’OREAL sells cosmetics through various
channels from department stores to professionals in the industry.
L’OREAL spends 3.5% of its revenues on
R&D.
L’OREAL’s portfolio management is
inseparable from its brand positioning strategy. Chailan (2010) sees 3 main
attributes to L’OREAL’s brand positioning strategy:
·
Radicalization: Brand multiplication
makes it necessary for each brand to emerge with its own DNA, and to render
brands completely discriminatory from each other.
·
Arbitration: dynamic and balanced
network of complementary brands
·
Expansion matrix: globalization
strategy, innovation attribution
R&D is centralized at L’OREAL, which
induces high economies of scope but conflict may arise when attributing
innovation to brands.
