Introduction to the Organization:
L'Oreal is the brand that stands as the second leading beauty and personal care manufacturer in the world, the first place being taken by Procter & Gamble. L'Oreal’s market ranking rises to number one globally, except shaving brands. Additionally, L'Oreal is the world leader for investment in research-and-development in the beauty industry, with 721 million Euros (Bt 27.4 Billions).
Development of Product Line:
The new development line that has been proposed is the body odor business, where it involves the preparation of perfumes and deodorants. The product range may vary from having sophisticated high-end products to middle and low-level individuals.
Stages of Product Line Development:
The product line development can involve a number of complex steps, which can be summarized as:
- Identifying the Product line
- Developing criteria
- Evaluating and Selection of Alternatives
- Test Marketing
- Development of a marketing plan
Potential Ideas for the New Product Line:
L’Oreal has been a leader in various products such as hair care, face wash and other different products of male and female beauty. It has associations with major Companies of global reach, and it has been able to cater the needs of a wide range of audience with various needs. However, there are certain areas where the product has yet to explore its opportunities. It is involved in clothing, accessories and all types of beauty products however, it is yet to explore the perfume market of its own and create a larger and more inclusive market. The five potential Ideas for the same can be:
- Merging with existing world famous brand Ralph Lauren to develop the product line.
- Introduction of a new L’Oreal high-end perfume brand.
- Develop a separate Research and Development section for understanding the scope of a new perfume product.
- Set up teams in each country and assess the potential market for the product in the countries where we have visited.
- Introduce low-end deodorants rather than the usually recognized L’Oreal high-end brands.
A specific Chosen Idea:
Among the five listed Ideas, the idea chosen is introduce deodorants rather than developing a high-end product.
Why the Idea?
L’Oreal has been associated with all types of beauty products and has been able to reach global audiences. But, as a global company it has not diversified itself into such a product that can reach audiences of lower and middle level and range. If L’Oreal goes for a high-end perfume range, it has to compete with world-renowned companies like Ralph Lauren and Gucci products. However, it was able to bring out a medium range product; people would be more interested because they would be able to use a product with global recognition at a price they can afford.
There are certain aspects to the introduction of a new product, which can be presented in the form of the SWOT analysis of the proposed product.
Screening and Evaluation:
The screening of the idea presented means eliminating the possible failing ideas and retaining the ideas that will lead to product success (Nzifst.org.nz, 2014). The screening of this idea will be based on the following:
- Feedback from the extended Company team and the prospective investors.
- The history of other successful high end Companies who have tried for new middle-end products.
- Market survey on the popular brands of deodorants existing in the market.
- Survey of tastes and preferences of the nature and smell of the deodorants used around the world.
- An analysis of the costs involved and the pros and cons of the project at hand.
Evaluation: The evaluation of the product is to be based on the criteria of factors for product screening. It is important to understand where the products stand when it comes to assessing their positions on the scale of various factors (Nzifst.org.nz, 2014).
Business analysis:
The business analysis involves understanding what the product features are and what additional features can be included in the product line. Business analysis should be in detail and more complex for those products, which have successfully survived the screening stage of NPD (New product development). This analysis helps in the determination of costs involved in the proposed new product development (Business.qld.gov.au, 2014). The steps involved in this complex process can be broken down as:
Product prototype:
The product prototyping stage is the most important one as it is the stage where the basic idea comes into a definite form, where others can also perceive the total concept. It explores the creative capabilities and opportunities that the idea brings along with it (Monosoff, T. 2014).
- The product will exhibit unique ingredients that
have not been experimented before.
- The product will have a unique cap,
that represents young sentiments.
- The cap will have unique
Color and will display colorful images to
Emotionally attach with the young population.
Test marketing:
The test marketing part of the plan includes identifying the appropriate market where the product can be tested for feasibility, acceptability and sustainability. The feasibility is to be assessed by understanding the ease in using and attaining the product. The acceptability is represented by the sales and the repeat sales of the customers. The sustainability of the product is to be assessed with the feedback that the customers give.
The test marketing strategies that can be used for this new product line of L’Oreal perfumes can be:
- A certain amount of perfume items is to be allocated for test marketing; the number should not exceed to result over availability of demand, and it should not be lower than the expected amount to be sold.
- A market where there is abundant population of middle class families should be the test market. Such market would give information about the prediction of the acceptability, accessibility and sustainability of the product.
- A different team should be allocated for the purpose of test screening purposes.
- Advertisement of small scale should be initiated to build a strong foundation for further advertisements and promotion in near future.
Commercialization:
The commercialization part includes developing a marketing plan in summary to prepare action plans about what implementation we are going to use for carrying out our plans.
Marketing Objective: The marketing objectives are summarized as:
The marketing demographics are:
Target Market: The target market for our product is the lower and middle-income level of developing countries. The age group is the young population who is economically active and loves to remain fresh all the time.
Segmentation: The segmentation is based on age groups and the income level. The segmented age group is from 20-40 years of age males and females and the income level is middle class, who still love to remain fashionable at their given budget constraint.
Specific marketing plans for increasing the overall effectiveness can be summarized as:
- Adoption of above the line and below the line promotion techniques to develop a base for the new product.
- Developing hoarding boards and sponsorship in various college events and magazines, so that we can connect to the young audience.
- Participation in beauty fairs and competitions at regional and local levels to enhance the brand image of the product as the new fashion trend.
References
Business.qld.gov.au,. (2014). Business analysis of new products | Queensland Government. Retrieved 4 November 2014, from http://www.business.qld.gov.au/business/business-improvement/new-product-development/strategy-analysis-new-products
Monosoff, T. (2014). Creating a Product Prototype. Entrepreneur. Retrieved 4 November 2014, from http://www.entrepreneur.com/article/80678
Nzifst.org.nz,. (2014). Creating New Foods. The Product Developer's Guide - Product Strategy Development: Idea Generation and Screening. Retrieved 4 November 2014, from http://www.nzifst.org.nz/creatingnewfoods/idea_generation6.htm
Nzifst.org.nz,. (2014). Creating New Foods. The Product Developer's Guide - Product Strategy Development: Idea Generation and Screening. Retrieved 4 November 2014, from http://www.nzifst.org.nz/creatingnewfoods/idea_generation6.htm
