L'Oreal: Building its empire in Indonesia through its luxury brand, Lancme - Term Paper Example

Marketing Strategy Outline Any marketing strategy will depend on availability of clientele and the spending capa of the consumer. Promotion of any ‘Luxury Cosmetic’ in the market therefore involves thorough research of socio-cultural-economical environment of the target population. The Republic of Indonesia has a 240.3 million strong population inhabiting numerous islands covering a total area of 2 million square kilometers. The country boasts of a literacy rate of 90.4% and is a progressive Asian economy with tremendous potential for fast moving consumer products (Web, 2011).

L’Oreal recently announced a plan to build its largest ever factory in Indonesia to cater to the growing Asian market for L’Oreal products with an intention to reach an envious target of producing 500 million units a year (McDougall, 2011). Indonesia has a thriving, educated young population, good life expectancy at an average of 70 years and therefore has great potential for the marketing of cosmetic products. Skin lightening products’ have high potential for being promoted in the cosmetics’ section as the ethnic constitution of the country comprises mostly of brown skinned people.

The major thrust for this marketing endeavor is therefore on the sale of ‘Whitening Lumilight Spa’s in combination with ‘Lancome Whitening Cream,’ the current market segment for such products being a large one. 1. Objective: This strategy for marketing whitening products manufactured by L’Oreal is selected because this particular cosmetics’ giant is a world leader in such products, and local manufacturing allows for easy placement of the products in the market. Moreover, women in Indonesia usually have brown skin which makes them harbor desires for a fairer skin.

Current international exposure to good looking female models and the desire to look beautiful is omnipresent in Indonesian women. Whitening products are therefore easy to sell. 2. Target Market: The target market is young urban women within the age group of 16-35 years. Women of this age group usually are conscious about their looks and spend a high percentage of their earnings on beauty products. Students, working women and housewives are the primary target for this market. As Indonesia is an important hub in the ASEAN (Association of South East Asian) countries, women in major urban cities of Indonesia like Sumatra, Madura, Java and Bali, as well as major metropolitan locations in neighboring countries will also be targeted for this market.

The market is split into three groups by age, viz. youngsters (16-25 years), office ladies (26-35 years) and career women (> 35 years). 3. Positioning: The products will be positioned in the mass market by developing packages which are affordable to all three identified age groups. Smaller, easy to carry attractive packages in the form of tubes are to be made available at retail chains and supermarkets for use by youngsters’ while the sale of larger packages and spa equipment is to be targeted at women who have facilities to install such products at home.

Beauty salons and pharmacies are ideal locations’ for display and sale of such products. The products will be competitively priced in direct competition with similar products produced by rival companies. 4. Marketing mix 4P’s: We intend to sell ‘Whitening Lumilight Spa’ in combination with ‘Lancome Whitening Cream,’ as a bundled product at an introductory price of $250 per unit. This price is competitive when one compares it with the rates of such products’ from rival companies.

The bundled product is to be displayed at prominent retail chains, boutiques, beauty salons and pharmacies in the major metropolitan markets of the country. We intend to market the least expensive product near universities where youngsters abound. Our distribution channels include already established retail chains of L’Oreal. In addition we intend to recruit a new sales promotion team, exclusively dealing in the sale of this bundled product. The product is to be actively promoted on local media and through billboard displays and hoardings at popular spots in the cities and also within existing supermarkets.

Product: Lumilight is the latest proven technology wherein LEDs (Light Emitting Diodes) are used as a noninvasive technology to rejuvenate the skin. Light, micro currents and polarized currents are used in this technology to improve facial muscle tone and reduce hyper-pigmentation and acne. Lancome is an already established international luxury brand promoted by L’Oreal with high consumer acceptability. Advantages of Lumilight technology is to be advertised in media and through distribution of relevant literature to representatives of the target market at beauty salons, supermarkets and directly to home.

The product has an attractive package prepared by the best artists’ of the company and the introductory offer is lucrative in terms of the purchasing power of the target female population within Indonesia. Demonstrations’ at Spa’s are an essential feature which has been introduced for leveraging the product into the market. The bundled product carries a prominent warranty label which will satisfy the finicky clients in the market. Price: We intend to sell whitening lumilight spa therapy and Lancome whitening cream as a bundle during introductory period for $ 250/ unit.

In the long term, we plan to sell the spa tool and the whitening cream separately. Later, we will sell the spa tool for $199 and the whitening cream for $65 as individual products. In the first year, our financial objective is to sell 2,000,000 units of the bundle. We predict the revenue for the first year would be $ 500 million. We also anticipate for a loss no more than $ 50 million. Attractive and feasible financing options are to be made available to customers’ with good credit rating. Place/ Distribution: Distribution channels include boutiques, supermarkets, hair salons and pharmacies.

The product is to be made available for home delivery too, keeping in view the large section of housewives in Indonesian society. Promotion: The bundled product is to be promoted through the traditionally prevalent and popular advertising media in Indonesia as well as through mobile marketing as text messages on cell phones. We intend to advertise the product extensively on social websites like Myspace, Facebook and Twitter, keeping in view their current popularity in the country. Additional explanation for Product pricing: We have decided the current product pricing at $ 200 per unit based on the prevalent spending power of an average Indonesian female client.

The country as such has experienced a growth in GDP (Gross Domestic Product) in recent years and is a thriving ASEAN economy (Web, 2011). The country now has more than 26 cities with population figures of 200,000, with majority of them being young. The present female population in Indonesia is upwardly mobile, keen for female recognition in society, as well as fashion conscious (Siregar et al, 2010). Our targeted clientele is therefore available, and also able to afford this product. References Bureau of East Asian and Pacific Affairs-Background Note: Indonesia, Retrieved December 11, 2011 at: http://www.state.gov/r/pa/ei/bgn/2748.

htm McDougall, A. (2011).L’Oreal to open largest ever factory in Indonesia, Retrieved December 11, 2011 at: http://www.cosmeticsdesign-europe.com/Market-Trends/L-Oreal-to-open-largest- ever-factory-in-Indonesia Siregar, L., Hamdani, S. & Oktofani, E. (2010). Indonesian Women in Their Own Words, Retrieved December 13, 2011 at: http://www.thejakartaglobe.com/culture/indonesian-women-in-their-own-words/362437