Global market strategy for LOréal

spheric grocery storeplace scheme for LOralThe word world-wideization came into limelight in the 80s. Now in 21st century this has be f either a star sign name. Some analyst says that this will swallow whole small and middle cap companies to a greater extent(prenominal)over as my perception the whole image of world(prenominal)isation has varietyd the scenario of the kinds. No nonpargonil consume to fear in this scenario. all(prenominal) genius has a market to flock in. The man has become a single market. The only thing is the natural selection of the fittest. If you clear to survive and then you will have to fight. Otherwise you will be thrown push finished of the market. With the help of worldwideization numerous a(prenominal) small and mid cap companies have become multi unmatched thousand million dollar enterprises. This has created a whole hot trend of entrepreneurship .Now all wholeness want his shargon in the barter world. Lots of opportunities atomic number 18 opening. Above all, LOreal, the worlds largest cosmetic and cup of tea caller is doing an extraordinary work .LOreal is the one of that kind of alliance, which is f etc.ing copious profit of globalization (LOreal The Beauty of Global Branding (intl edition)).As we all now, e truly coin have ii sides, aforementioned(prenominal) goes with globalization. It is opening saucily market, tonic opportunities, with these it is similarly bringing new challenges. Beca rehearse e actually demesne has contrasting culture, different government rules and more more portion. So management has a large burden for expanding backing. But vexation is not about only expanding agate line it should overly be wargonive (Strategy Analysis of LOreal). Otherwise in that location is no contract of expansion. So e very(prenominal) partnership has a tough t ask in watching a equilibrate surrounded by growth and profit. a standardised in newer market thither ar loca l competitors, who get a lot of subsidies, this incurs business worst competition. Also thither is a challenge of making a relationship with clients. Customers should touch sensation about yields. Product range should be a care large, beca engagement market is full of different kind of customers. Every customer has a different taste, and to match all of them is a very tough task. There withal writing style problem, youth like far different thing than older muckle and middle aged people. The product as well should be a domicile name, like when we go to buy a cold drink we dont ask shopkeeper to pass both cold drink. We say them to give both PepsiCo or coke product. This same goes to LOreal, which has now become a household name in m both(prenominal) new emerging marketing many countries, where LOreal have started its business has become leader of that market or it is rise the leader of achiever withal fast.There is a very large problem regarding the globalization fo r the companies about the suitableness of the products in new markets. Every field is diversified. Environment and conditions ar excessively different. So product suitability is very historic for a global union. These all make research and development section very important for any MNCs. It is like gritrock of a society. If any family has to survive in newer market then RD is a very make out factor for a company. LOreals RD discussion section is too practically smart and innovative. LOreal is leading the market with its new range of product for all genres, all environment.Innovation is very important in todays market. Since every company is coming with a whole new range of products so to survive in market any MNC should be one smell a subject from its competitors. LOreal is leading at this front as well as .Nanotechnology is a key sector now for whole world .it has the largest number of innovation to come in forthcoming. Every product is shrinking. It has also touc hed cosmetic diligence. LOreal is the light up Patent holder in United States and leading this industry from front. or so LOrealLOreal group is the largest cosmetics and Beauty political party of the world in terms of both sh bes and sales. It has registered positioning in the city of trend i.e. Paris and the head office in Paris and Clichy, France .Its bea of business spread in the plain of cosmetics and other(a) beauty and makeup products both for men and women. LOreal is mainly concentrating on vibrissa color, skin c are, sun protection, make-up, perfumes and hair care. LOreal also has a gigantic interest in the dermatological and pharmaceutical fields and is the top nanotechnology patent-holder in the United States.The idea of LOreal came to consciousness of a young French pharmacist Eugene Schuler when he certain a hair dye formula called doughnut in 1907 and sold it to local Persian hairdressers after self formulating and manufacturing the product. In 1909, he r egistered his company as the societal franquise de teintures inoffensives pour cheveux, translated as the ripe hair dye company of the France which later came as what is now cognize as one of the bump(p) spots of the world i.e. LOreal (Reddy, 2010)LOreal has 23 global shuffles with a total gross gross of $17.5 billion 2009 and $19.5 billion in 2010 and a total profit of $2.4 billion dollar in 2010 which is examineed as a very remarkable achievement. principal(prenominal) stock holders of the company are Bettencourt family which holds nigh 31% of the total shares, nestle which holds around 30%, 2.4% by exchequer shares and 36% are publicly craftinessd shares.The current scenario of the global vocation amongst different countries refers to the situation where it is clarified that no earth can be independent in terms of scotchs, or in other row every land is becoming interdependent on each other. The trade amid countries is increasing day by day as one bucolic is depen dent on another rural for satisfy their ineluctably and demands for different products like al close every estate in this world is making trade relations with the gulf countries for satisfying their demand for fogy fuels as fossil fuels like patrol and diesels is of immense use in many industries like the automobiles industry, aircraft industry, machinery, al most(prenominal) everywhere. and so it is very important to halt good economic and trade relations with the other countries if a country wants to survive in the global market.LOreal for ex. had amplificationd the scope of trade end-to-end almost every country of the world, LOreal has to face many problems in the slowdown like there are many countries who doesnt allows trade relations so flexibly like for ex. Japan had a trade indemnity that doesnt allows the the States to sell much of their products while they are selling their products to the USA, there are many countries in the world that doesnt allows flexible and open trade relations.The company is facing both tariff and non-tariff related issues in doing trade with the countries, fortuitously for LOreal tariff problems had been reduced to a record level provided the trade barriers are unchanging one of the major(ip) problem that hinders in the steering of making trade relations to other countries.Previously LOreal was concentrating on selling its products and doing business deals with countries like Western Europe, United States, and Japan as the market in these countries was very much open for foreign trade and there were not many opportunities for the company to trade, but nowadays as the pattern of globalization is spreading around the bollock, countries like Latin the States, India, china, Russia, Asia, eastern Europe, and Africa are emerging as the major players of the market and is considered the economies that is likely to be the major economies of the world in future, these countries are continuing to open its trade with out back(a) countries and offering policies which are very attractive for companies of different countries. Likewise LOreal is taking receipts of the open market and the invention of globalization and is opening its sell stores in many countries of the world including India and china which are considered the fastest ripening economies of the world. This policy adapted by the company is not only percentage them in trade with other countries and spread its business crosswise the globe but also giving a firm advantage to peoples of different countries as well as benefitting them with the best technology of different economies. As the consumer now has a very large range of products to chose from, and this is giving LOreal a good competition while increasing its market shares in the global economic system.With the foundation of the world trade organization (WTO) the open trade between countries had went up at a record breaking speed in terms of economics and had opened gates for trad e among countries. And after the introduction of general agreements of tariff and trades (GATT), LOreal had increased participating in maintaining close economic relations with other countries and also opening their franchises in different countries. LOreal had developed a global management committee for foreign trade as well. After the introduction of the WTO, LOreal had also introduced new products and brands as well under the tag to increase the interest of peoples in the brand.Global marketing brassAs I stated in my introduction part, I shown that globalization is very important in todays world. So for every company there should be a good global marketing schema. Here are about of the examples of global marketing dodge of LOreal.The quaternity major strategies consists of four Ps i.e. product, footing, place, promotionproductThis is the one of the most important part for marketing dodging for loreal to trade in countries which have all unitedly a different economy.LOrea l has five worldwide research and development centers deuce in France, one in the U.S. impertinent Jersey one in Japan Kawasaki, Kanagawa Prefecture and in 2005, one was established in Shanghai, China. A future facility in the US will be in Berkeley Heights, New Jersey. In 1920 the company has only 3 chemists and now it is reaching the rush with a sum of 2000 chemists.Five worldwide research and development union shows how much dedicated team is of LOreal to fulfill customers satisfaction and make sure adequacy what should be the product variations match to the countries.The production and marketing of product explore and Development part has also a lot of cultural problems. more countries have liberal government and liberal media. But in many part of the world research for new products according to the environment are a sensitive area for LOreal to flavor for. Like in the States group of admitors from the NGO nature watch protested to Company that it continues to test new ingredients on animals without proper measures. So there should be research in proper manner so there should be no protest as it deviates the consumer mind. Ultimately the company has to suffer the revenue with a loss. static selecting a product to sell according to countries is a much king-sizedger task for both the production department and the research and development department.priceLOreal has spread its reach in 130 countries and trying to spread it more. It is demand to expand area to become global and company is best at it.LOreal has 23 global brands which make it a versatile company for all consumers. Large coverage is not of worthy if there is not profit. And company is waving flag at this corner, in 2009 it had total revenue of 17.5 billion dollar and in year 2010 it reached to 19.5 billion dollar with increase in net profit. Increase in profit and revenue in this warring condition is very fruitful for country.But the major emphasis of LOreal is on selecting a price band for all the products which LOreal deals in countries like consider the Asiatic uncorrupted, in Asiatic genuine the price band for products is selected in the range of moderate to low price depending on the country and in the united states the price band for products is very high from the perspective of the Asian unsullied.So the set structure should be the major factor that should be unploughed in mind and also considering the quality that LOreal delivers.placeIt has 64,600 employees worldwide. This big dedicated and intelligent team Of LOreal makes operation successful of company and delivers best product to consumers.With large number of human resources also come a lot of problems. Like Problems related to wages and many other issues are painful for any company. But LOreal is handling this very well with no any employee problem that is picture perfect case for LOreal.LOreal has a very good employee ancestor which is very highly qualified as their educational activit y methodology is very good, LOreal picks up their employees from the country itself within which they are art. LOreals strategy changes place to place for ex its strategy of commerce in the Asian continent is very much different as that of the European continent and the northwestward American continent as the peoples of the European continent and the north American continent is very much obsess with the modus vivendi and other things but the peoples of the Asian continent is not so obsessed and not so much interested in the lifestyle products like cosmetics and hair products. That is why LOreal has a totally different strategy depending on places they are trading in.promotionTo increase market cap sharply, acquisition is so important. So in March 2006, company bought The body shop in 652 million. And thereby fosterd themselves among various countries where the companies that LOreal acquainted trades.These acquisitions increased the brand value of LOreal too much. This is good for global strategy of company also company is meddlesome for new fresh opportunities to acquire new few good companies.LOreal is also serving cabaret in many ways .This part is also important in global marketing since these things attaches customers to the company. Company is encour senescent an capital researcher every year for scientific progress with LOreal-UNESCO Awards for Women in Science. It also organizes LOreal Brainstorm every year with prize gold $10000 for students in 43 countries. Thus delivering a message of a company with human values, this helps in promoting themselves around the globe as a descent companies and consequently help LOreal to promote themselves and trade healthy business across the globe.These society serving cause make a good relationship with customers also the tag line is important. The companies is changing it as per customers initially the slogan was because Im worth it now has been changed to because were worth it. The shift of us from I mak es customer feel nearer. This is best for the company, since company faithful customers are heart of the company.According to the concept of globalization, a company which is guided by and run on the global marketing orientation or philosophy is generally referred to as a global company and so is LOreal a global company according to the concept. The global market analysis says that LOreal should have to focus on a standardized marketing strategy that can be implemented across the boundaries.Global strategies for different continentsAsian continentConsider for ex Asia, most of the countries in the Asian continent are ontogeny countries like India, china, Indonesia, and sri lanka etc. the economies of these countries are considered developing. And in the future these countries like India and china promises to be a fully developed and one of the biggest economies. And moreover India is one of the hot musca volitans for global cosmetic players like LOreal.Therefore LOreal needs to def initely look upon to the set strategies and product specifications in great details moreover there are some more objectives that LOreal need to look upon to improve their business in India.LOreal has various strategies and concerns that needs to be sharpen, LOreal is focusing on to tangle local culture for the development and promotion of their product in the Asian subcontinent.The major business of LOreal in the Asian continent is divided in two parts first in the developed countries like Japan, Singapore, and UAE etc. and second in the developing countries that majorly includes India and china.LOreal is having a very good strategy for selling their products in the European continent. As the peoples of the Asian continent is not so obsessed with the bountifulness products and is satisfied with simple daily use products of LOreal, therefrom LOreal is having emphasis on only selling their regular use products in the Asian continent and not very much obsessed with selling their pr emium products in the Asian continent.Therefore LOreal is developing strategies for trading in these countries, for e.g. take India for consideration, LOreal is going local on all levels for trading in India, as they have a totally different price structure for the peoples of India plus they are having an Indian brand ambassador for promoting their brand in the country.These strategies are enabling LOreal to improve their trading in the Asian continent. The major thing that LOreal is focusing right now is the promotion of their brand on a grand level so that they can trade with more and more countries of Asia.Loreal in IndiaLOreal entered into the India market in the year 1997 in night club to capture the loophole in the hairdressing industry in the country as there was not a sniff of structure in this industry. At present the hair industry of the country has Rs. 200 Crore business and LOreal is the market leader in the hairdressing industry in the country. LOreal pro products are very well known in the country and the company spends a big amount of the manufacturing into the research and development of the products.The main strategy on which the company works in India is that it skims top 100 cities of the country and created largest salon bases which contribute around 40 percent of the total revenue by LOreal. Many of the competitors in the country try to follow same strategies but could not reach the same level (LOreals success fable in India, 2005).European continentAs European continent is the base and the major market of LOreal therefore LOreal is focusing more and more on trading in the European continent that includes majorly Paris, England, Germany, and the Italy.These countries i.e. Italy and France are considered as the fashion capital of the world and as LOreal is based in the France therefore the major emphasis of LOreal is to deliver best in quality products for the peoples of the European continent so as to earn customer satisfaction and also to promote them.The major emphasis of LOreal is to make a firm base in the European cosmetics market and the pricing structure of LOreal is also of premium course of study in the European market as the peoples of Europe is considered rich and wet in terms of economy and moreover the lifestyle of the peoples in the European continent is such(prenominal) that LOreal can make at most advantage of that in terms of sales and promotion. According to figures the European continent is the biggest consumer of the products do by LOreal.The main advantage that LOreal enjoys of trading in the European continent is that the culture of the peoples of the European continent is very advanced and they could pay some(prenominal) it takes for a cheerful and healthy lifestyle. Not only the women but mans are also very much obsessed about the living lifestyle in terms of looks and presentation.LOreal is having a lot of consumers for the consumption of their premium products in the European continent therefore they have no need to change strategies to deal on the premium products in the European continent.LOreal is getting a very good competition from other brands in this field, therefore they needs to focus on their pricing and promotional strategies to trade in the European continent.LOreal in ItalyIn order to get success in the beauty product sector, LOreal employed more than 2000 employees and got more than one billion Euros. Company created several offices all around the world. The problem with the directors of Loreal in Italy was to manage the schooling as there was not deedive liquify of information and also decision making in the company was poor.In order to give a dramatic impact on the productivity of LOreal in Italy, management of the company proposed a better management of the email and improvement in access to the corporate data in order to improve the informational flow and decision making of the company so that the productivity of the company could be better. This was the main strategy played by LOreal in Italy (Lano, 2008). northwest American continentLike the European continent, the peoples of the north American continent is also very much obsessed about their looks and presentation, therefore LOreal has a very good chance to trade in this country and that is what LOreal is doing for past many decades, the major consumers of LOreal in the north American continent is from the united states of America and the Canada.As the United States of America is the biggest economy till date therefore LOreals business is blooming in the states. The major states of the USA such as New York which is one of the fashion capitals of the world and the Las Vegas and the Los Angeles which is considered as one of the most happening cities of the world where people is highly obliged to fashion, LOreal has the biggest market in the US after the European countries like France and Italy.LOreal is also facing a great challenge from other major competitors of the USA but still they are finding themselves at the top of the list because of their policies of products, promotion and pricing according to the place. The peoples of the north American continent can afford premium products therefore the main source business of LOreal in the north American continent is the premium products unlike the Asian continent where people are not very much interested in the premium products.The peoples of the North American continent mainly youths are very much impress with the products offered by LOreal, and the pricing structure of the products of LOreal is also very nominal in these countries therefore people are keen to use these products.LOreal in USLOreal success in US mainly depends on the anti aging plectron which has been launched in recent time in the country. It is predicted that future success of LOreal in the country mainly depends on this product by LOreal. Main reason behind this is that anti aging skin care cream has the marketing leading grow th in the country and there is more and more number of competitors emerging with this product in the market. Hence, it has become infallible for the company to keep a real focus on the anti aging cream segment.Skin care segment in US is heavily competitive and hence LOreal research team is trying to maintain its share in the market of 13.5 percent and is not focusing to increase the share (Pitman, 2010).LOreal in MexicoIn order to get success in the beauty industry in Mexico, LOreal Mexico has chosen Digimind for the marketing and intelligence need for the company. Company mainly focuses on the innovation and creating a large customer base with new and successful product line for the customers. In Mexico, LOreal has been one of the leading cosmetic companies and has a real quest for the innovation and excellence. Digimind has been leased by the company which is considered as one of eh most profitable company since its inception and has a constant growth rate of 50 percent (LOreal Mexico trusts Digimind for its Competitive Intelligence system, 2010).OceaniaOceania includes countries such as Hawaii, Philippines, and some minor islands such as Bonin Islands etc.The trading links of LOreal is not so much in these countries but it is increasing day by day since the concept of globalization is introduced, LOreal promises to have a very good trade in these countries in the future as the trade of LOreal is growing.The major product that is consumed in these countries includes sunscreen and other products like body lotions and other sun city block creams. The strategy of LOreal to deal in the Oceania subcontinent is quite different from what we have discussed earlier.The pricing structure of the products of LOreal is very much in accordance to the needs and demands of the peoples of the Oceania subcontinent.The Oceania subcontinent is still to be explored by LOreal and LOreal is promised to do a good trading business in the subcontinent as the needs of peoples in th is subcontinent is shifting from mere sun screen to other products offered by LOreal.Understanding of different cultural distinctions for world(prenominal) marketThe knowledge of different cultures is very important for LOreal in order to make a firm base in the market of any country. The different factors that are very important for LOreal to look upon areThe effect of culture of the country is one of the major aspects that LOreal needs to look upon as cultural factors like whether the country is agriculture based or industry based country had a direct impact on the survival of the company in the targeted country, the understanding of the cultural variations is also very important for any company in order to make business and forming a firm base for their products in an economy. The success of any multinational company or a specific product depends very much on the purchasing power of the peoples of that country and also the effect and success of the product in the country. For ex . LOreal is having a different pricing structure for different country and also the product specification changes according to the culture for e.g. the product utilise in England may be of no use in Asian country and vice-versa. Therefore before making a trade with any organization or country it is very important for LOreal to check out the feasibleness of the product in that country and the end user.Effect of geography is also a very important factor that should be unploughed in mind while trading with any country. For LOreal especially this factor is of immense importance in deciding the feasibility of trade with the country because there are many things that should be kept in mind while doing any trade within any country like checking out the feasibility of the transportation and goods to places like countries in which terrains are very rocky and full of mountains and plateau it is very hard for LOreal to transport its products through any mode of road and by air if there is n ot an efficient air transport services in the country, though it is liberal for the storage of cream and related products in such type of areas in which the temperature are low. On the other hand if the road transport system is good in some place then there is a possibility that the place lies in a tropical region where the temperature is very high therefore it would be very difficult for the company to have a proper storage at a low temperature. Therefore feasibility of the trade in geography like this should also be considered (Wahlen, 2006).Technology and economics should be considered while having a trade between any countries. I.e. the project manager who is working on to check the feasibility and the trade chances with the country should also see if the country have enough technological advancement so that they can store and produce their goods at the place itself i.e. constructing a manufacturing unit rather than importing the product from the head manufacturing unit in the parent company. Thus this is very important for LOreal to make sure if the companies to whom they are going to make trade relations are equipped with advanced technology so that they can produce the products in the quantity they want to without having many problems. Another important thing that should be kept in mind is the economic condition of the country i.e. the company has to be made sure that if they are investing some money in a project of establishing a business in a country than they are getting enough returns in turn, and that could only be defined by the economic condition of the country like in the western European countries like France and England and in the united states where the economy is very solid and established it is very easy to LOreal to have a better customer base, and likewise LOreal can invest much money in the developing countries like India, china or Latin American countries where the lifestyle of peoples is enhancing and peoples are more keen to use prod ucts that are considered luxury and of a very high quality.Another major point that LOreal should kept in mind while doing trade within any different country is the political economy of that country i.e. the policies of doing trade within that country like for e.g. the united states are having a very open trade policy which allows any company to trade within the country without having much restrictions of trading, but in some countries like the china and Japan who is not so open in terms of open trading and lays emphasis on selling their own country made products rather than supporting some foreign brand, therefore it would be very difficult for LOreal to have a business base in these countries, and in countries like India which is a developing economy and which allows trading without having much restrictions and peoples of whom are developing with the developing economy with change in the lifestyle (Comezz).Therefore the major things that should be kept in mind for LOreal while doi ng business in the global market according to the very concept of globalization is to form an effective global strategic team for defining the trading policies to work in any country, the globalization strategy should comprises of major factors like cultural differences, economic policies of the country etc. moreover the changing lifestyles of the peoples and the rapidly changing economies should also be kept in mind