Harmonizing to the instance survey, L’Oreal Netherlands selling director was sing presenting the new merchandise lines of Garnier Family trade name in tegument attention merchandise lines called Synergie and in hair colourising merchandise lines. These merchandises lines were successfully introduced in France. However the mark market, consumer behaviour, perceptual experience and trade name consciousness towards the merchandises in Netherlands were non rather the same with those France. The job is which one or both of them should be offered to Dutch consumers. However, L’Oreal Netherlands had presently merchandises to fulfill the same demands of clients which are the Plentitude for tegument attention and Recital for hair colour market. Plus, these bing merchandises were confronting a batch of competition.
Cosmetic consumers tend to be trade name loyal in fright that they will hold experience negative consequences when trying to utilize a new or different trade name. This is another obstruction Garnier must get the better of in add-on to establishing a merchandise line to a market with small trade name consciousness. Dutch consumers will go on to buy merchandises that they know, usage and trust, because they have had positive results after merchandise use. It is known that fond regard to a certain merchandise merely becomes stronger with age, so it ‘s imperative that a new merchandise line reach the immature consumer who will merely turn progressively loyal as they grow older. Cosmetic consumers research merchandises to go familiar with the points that they want to purchase, hence, both merchandise packaging and advertisement of the new merchandise lines demands to be enlightening, to guarantee the decorative consumer understand that the Garnier trade name will carry through their wants and demands.
Dutch consumers have really small consciousness of Garnier and they have non formed a trade name image ; this makes it really hard to interrupt into a market where consumers tend to be trade name loyal. Although Dutch adult females have more disposable income, the fastest turning section is adult females 25+ who shop for value and lone purchase tegument attention merchandises 1 to 2 times per twelvemonth, doing it really hard to set up a new trade name in the tegument attention market. The Dutch research section conducted research on the Synergie merchandises and the consequences were reasonably similar to viing trade names including L’Oreal ‘s current offering, Plentitude. An particularly fast turning class consists of anti-aging picks and yet the research consequences declined after participants used the Synergie anti-aging pick. Dutch adult females are progressively interested in merchandises with natural ingredients, but they are n’t familiar with proficient merchandise descriptions, which is portion of the current place statement that Synergie provides ( “The confederation of scientific discipline and nature to protract the young person of your skin” ) .
The tendency over the past 4 old ages has been towards the semi-permanent colorant, yet about 73 % of Dutch adult females us lasting hair coloring. There is a batch of possible in this market, but there are strong rivals. As mentioned, L’Oreal has an offering in this class and smaller trade names have entered the market over the past few old ages every bit good. Currently none of the rivals have a clear placement statement depicting client benefits ; hence Belle Couleur appears to hold a competitory advantage with its current placement as “natural colorss, covers all gray.” But there are two major jobs with the Belle Couleur line. First, the market research conducted revealed that after usage participants who ‘probably would non ‘ or ‘certainly would non ‘ purchase the merchandise increased from 13 % to 32 % , with many adult females stating that their hair was excessively dark and the coloring material “did n’t cover the gray.” Secondly, Dutch consumers tended to utilize of course light colorss, but the Gallic manufactured Belle Couleur is formulated to give a classical dark blond expression and it is L’Oreal ‘s policy to non modify the merchandise for a new market.
In footings of distribution, L’Oreal has a positive image with Dutch retail merchants and they need to do certain that any new merchandises they offer provide high quality and advanced, while demoing consumer credence. We do non believe that either of the possible lines offers what distributers expect from L’Oreal. Therefore if they decide to establish the new line-ups there may be some hazard of losing current L’Oreal distribution as the Garnier lines will be shipped with L’Oreal in order to derive distribution rapidly.
L’Oreal central office wants to present more Garnier merchandises in other countries including the Netherlands over the following few old ages. There is possible to travel into both skin attention and hair colourising markets as the one-year volume growing rate is 12 % and 15 % severally, but more work demands to be done to understand the mark market and to come up with a construct and value that resonates with the Dutch consumer. In order to travel into the tegument attention market, Garnier needs to place the Synergie line as a “natural moisturizer” that is sold at a sensible monetary value, and so they have to retest this construct and utilizing a lower monetary value to find if there is a possible mark market for a new trade name line up. They besides need to be prepared to pass a batch of money upfront on advertisement in order to derive market portion. To travel into the hair attention market Belle Couleur needs to modify its merchandise to cover grey hair, they have a strong placement statement that resonates with consumers who want colour to cover grey hair. Either they need to re-formulate the merchandise to cover the Dutch consumer ‘s grey hair or they need to alter the placement statement and stress the lower monetary value offered by Belle Couleur. It is critical that the Garnier merchandise line launch is successful so that they can construct a positive trade name image, make consumer value and guarantee future success of its merchandises in the Netherlands.
Based on the current placement statements and market research for each line-up, the informations merely does non back up strong consumer credence. Something would hold to be done to better the consumer perceptual experience of the trade names, such as a stronger placement statement, a focussed selling program, or a better merchandise in general. Besides, since the subordinate is responsible for the debut of the merchandise, there is a possibility that the L’Oreal gross revenues force becomes overwhelmed by holding to sell in both merchandises at one time, while maintain the current L’Oreal offerings. L’Oreal would besides hold to buttonhole for a batch of shelf infinite in both apothecary’s shops and supermarkets. They can non trust on the retail merchants merely passing them the shelf infinite, particularly since they do non hold an established trade name name in the Netherlands.
Marketing Mix ( 4 P ‘s )
Merchandise: The differential advantage is natural ingredients
Monetary value: It offer as the mid-price scope. Synergie will be able to vie with the outside rivals. However, it has to vie within L’Oreal trade names ( Plenitude ) .
Topographic point: distributed through independent drug shops, drug concatenation, and besides nutrient shops. L’Oreal might enlarge the market through distribute via supermarkets. In Dutch market, L’Oreal was perceived as the high quality, advanced merchandises. I think I would n’t make the negative image for the Synergie to be distributed through supermarket. It would likely comprehend as convenience and have more differential advantages towards other rivals which normally distribute through the traditional distributers.
Promotion: As I mentioned earlier, the chief job is cannibalization. L’Oreal needs to concentrate on the placement of each merchandise. So, the Synergie should extremely advance and emphasize advertises on the natural ingredients place. This helps to separate the mark market who chiefly interested in natural ingredients ( Synergie ) and who chiefly interested in anti-aging ( Plenitude )
Merchandise: The job is the bulk of Dutch market love to hold the brighter hair colour. It sounds impossible for Belle Couleur will win in Netherlands if the merchandise is non re modified. Even some people will love to purchase Belle Couleur, those people are the Recital ‘s purchasers who love L’Oreal merchandise and want to hold it lower monetary value. So, they satisfied with Belle Couleur. Therefore, it is besides the cannibalization job. If the L’Oreal is willing to spread out the market of the low monetary value hair colour merchandise, they better repositing of the Belle Couleur by differentiate its quality or advantage from Recital. For illustration, allow Belle Couleur offer the brighter sunglassess of hair colour to vie with other rivals and besides satisfy the bulk of Dutch market.
Monetary value: The mid-price scope. There is no 1 offering this monetary value scope. It is rather competitory.
Topographic point: Lapp as Synergie, Belle Couleur was sold through the drug ironss and independent drug shops. L’Oreal might administer through supermarket besides. In add-on, the Belle Couleur required a batch of infinites ; usually the supermarkets have a big sum of infinite than apothecary’s shops. It wo n’t hard every bit much to negociate to establish the lines of merchandises.
Promotion: Right now the Recital faced the losing market portions. That ‘s mean its demand to pass more on publicity run. Therefore, to present the new lines of hair colour in this downswing of the industry. L’Oreal will hold to carefully see implementing the publicity of the debut of Belle Couleur. Of class, the merchandise is non strongly favourable in the Dutch market. And the France industries will non redevelop or custom-make the merchandise for Dutch market.
If the Netherlands operation decide to present the Garnier lines of merchandises, there are some issues that need to be considered excessively ;
- Limited resources: there is a limited gross revenues force. It is stated that Netherlands division will utilize the same gross revenues force for both L’Oreal bing merchandise and Garnier new merchandise lines. This might take to uneffective work. L’Oreal demands to come up with the solution such as the compensation, inducements, etc. to better motive.
- L’Oreal bing merchandises: Due to less clip and money to keep the lines, this might take to gross revenues bead or uneffective direction of the presently lines. Besides, L’Oreal need to develop the defend scheme for the Plenitude and Recital to support their place against the competition.
- Recital ‘s losing market portion: this line now requires attending from the directions.
In my positions, it largely depends on the budget of the Netherlands division and besides the market state of affairs. If there is the budget sufficiency, they might be able to advance the Synergie- tegument attention lines. They must measure the state of affairs by comparing the cost-benefit analysis. Keep in head that to develop the demand, L’Oreal needs to to a great extent advance Synergie in the natural ingredients subjects in order to distinguish it from the Plenitude. This besides helps protect from the rivals to establish the natural ingredients concern before L’Oreal. For Belle Couleur, they should non present it because it will make the negative image towards the Garnier trade names because it is non customized for the Dutch market. It would loss repute for the hereafter of the Garnier household trade names.
- The natural ingredient was going more consciousness. It will be the good chance to take advantage with the new invention merchandise. It tended to be the high growing market.
- From the market research ; it was revealed that Dutch adult females shopped for value in decorative and toilet articless. Synergie will be introduced in the in-between monetary value scope. Thus, in the low-priced preferable consumers mind, it will be the better pick, and it can vie with the upper terminal monetary value scope rival such as Yvs Rocher, Estee Lauder.
- The consequences of the purchasing purpose for Synergie merchandises were a great support to present this line. From all participants and the monetary value is known, 24 % will surely purchase anti-aging pick, and 39 % will surely purchase the moisturizing pick.
- Synergie was successfully introduced in France. It has a possible to success besides the Dutch market. ( New-Product Development Strategy )
- However, the cannibalization exists in the moisturizing pick, 52 % of the Plenitude ( presently L’Oreal line ) users from the market proving will surely purchase Synergie ‘s moisturizing pick.
- If taking to present the Synergie, L’Oreal have to pass a batch of money promote and introduce Synergie, and besides have to pass a batch of money to support the bing merchandises ( Plentitude ) .
- Any advanced merchandises could be rapidly copied, it is really hazardous market.
- In order to construct the trade name consciousness in Dutch market, Plenitude, the bing lines, spent to a great extent on advertisement to develop the trade name penchant. Surely, Synergie have to pass a batch to make trade name acknowledgment with the new Garnier trade name.
- The tendency shown that adult females will increase working outside, so there will be more demand for the decorative and toilet articless merchandises. However, different section might take to different solution. There is no warrant that Synergie which win in France will finally win in Netherlands every bit good. Due to factors such as smaller population one 4th of France, different consumer penchants, life styles. These factors might take to failure and loss in the debut.
- Belle Couleur had marketed successfully for two decennaries in France. It was classified as the market leader at that place. It is in the mature phase or hard currency cow phase. It is wisely manner to relaunch this merchandise in other markets to bring forth hard currency every bit long as possible.
- There is no direct competition exist in the mid-price scope. In the market of hair colorant, there are merely upper terminal and lower priced offer to the market. This is considered as the monetary value advantage.
- The consequence of the market testing was slightly unfavourable for the consequence of hair colour. Most of the participants dissatisfied with the concluding colour, they thought their hair was excessively dark and it did n’t cover grey. The merchandise did n’t modify for the Dutch market. It is merely similar market what you produced, non produced the merchandise that market want.
- Lapp as the Synergie, there is presently L’Oreal merchandise in the hair colour market in Netherlands. That is Recital. Thus, the cannibalization will be. The new merchandise will likely run into the outlook of these bing mark markets. It is possible for the satisfied L’Oreal ( Recital ) users to switch to the lower monetary value trade name ( Belle Couleur ) . In other words, Belle Couleur offers the same quality merchandises to fulfill the same demand of the same mark of the Recital merchandise with lower monetary value.
- Belle Couleur required about 1.5 metres for the retail shelf infinite, which is rather big sum of infinite. It is non easy to negociate with that much of infinite in the apothecary’s shops, or any retail merchants. In order to allow them transport our lines, L’Oreal needs to hold the grounds of consumer penchant, and the principle for merchandise development which both are hard standards to run into for the Belle Couleur lines.
After sing both pros and cons of both merchandise lines, the chief job that arises in the debut of these new merchandises is cannibalization. If the company decides to present any of these merchandises, they might give their gross revenues of the bing merchandises ( Plenitude and Recital ) . In other manner, L’Oreal might hold to shifting the bing merchandises. It is a must to clearly sort the merchandises place. Presently, the Plenitude and Synergie are classified as the same quality and serve the same clients, and besides vie in the same monetary value scope. L’Oreal might utilize shifting scheme to clearly divide these two trade names to cut down the cannibalization jobs. They should hold different mark market and fulfill them independently.
One obvious benefit to establishing both lines would be the impregnation of the Garnier trade name name into the Dutch market. By establishing both merchandise lines, Dutch consumers would go even more familiar with the Garnier trade name name and potentially be more willing to seek the merchandise. If Garnier can acquire over the initial challenge of interrupting consumer trueness to their current merchandises, by demoing that they are offering a alone merchandise that works good and entreaties to their demands, so they should see success from establishing both lines. L’Oreal has a policy of holding subordinates financing their ain merchandise debuts and selling programs. By establishing both, L’Oreal would hold a bigger budget to work with, therefore increasing their ability to make the Dutch consumers. There is clearly a batch of hazard associated with establishing both lines.