Executive Summary
This is a sales promotion report focusing on the L’Oreal and Bourjois brands to determine the effectiveness of selected sales promotion methods. It begins with the analysis of the cosmetics market within which the companies operate to shed light on the background of the companies’ operations. An analysis of the target markets, segmentation, and positioning will help in indicating the effectiveness of adopted promotion strategies in attaining set promotion strategies. The paper will also assess the promotion strategies adopted by both companies and offer a comparison. This will highlight the major differences in marketing approaches of the companies hence indicating observable differences in the results (Kotler, 2001, p.121). The last part of the paper will include a critique and recommendations to the companies on improving their promotion approaches.
Market Description
The cosmetics industry is a growing industry dominated by a few established multinational corporations who serve the global market (Jones, 2010, p.11). France is the bedrock of fashion and cosmetics and established companies in the industry emerge from France. L’Oreal and Bourjois are among the biggest players in the cosmetics industry, having operated since the 20th century and maintaining popularity to date.
L’Oreal is a French company and the leading cosmetics company in the world dealing with skin care, hair color, sun protection, perfumes, make-up, and hair care. It also ventures into dermatology, tissue engineering, toxicology, and biopharmaceutical research fields. Bourjois is family, owned private French company dealing with cosmetics since its launch in 1863. The company has been in the market for years and has gained popularity in France and across the globe. Technology is a rising trend in the cosmetics industry embraced by both buyers and sellers with online sales reaching $301 billion in 2014. With the emergence of the internet, the industry has expanded, thus giving the dealers an opportunity to establish online stores for their products. Online stores enable the marketing of available commodities on the internet and facilitate ordering, shipping, payment, and communication between parties.
Segmentation, Targeting, and Positioning
Marketing begins with the identification of the target audience, which offers guidelines on the type of product to produce. Identification of the target market enables collection of information on their needs, tastes, and preferences that influence their choice of products (Quelch, 2000, p.55). Market trends hence influence a company’s decisions and guides in the production of competitive products. The cosmetics industry is not any different since preferences continue shifting depending on prevailing market trends. As a result, cosmetics companies require vigilance to retain their relevance and maintain their customers. L’Oreal operates in more than 130 countries; therefore, the company understands the varying ideologies in relation to beauty. Beauty is relative since some people will focus on the face, hair, or nails to enhance their beauty. The company has sought to promote beauty in a universal sense while acknowledging the preferences of customers from different regions. The company targets women of all ages hence widening its market segment. However, its focus on making women look younger has seen the company concentrate on mature women more through the production of anti-aging products and various products that enhance the appearance of youth. The firm uses mature women in its advertisements to create a mental picture among the customers that age can be beautiful. The company also segments its market in terms of geographic location to cater for their special requirements. The process ensures that customers get what they need hence achieving satisfaction from consumption of commodities. L’Oreal has a strong distribution channel that ensures accessibility of its products to customers in various countries (Sahota, 2014, p.95). It makes use of locals to assist in establishing distribution stores in various countries. Bourjois, on the other hand, focuses on young women between the age of 18 and 25 and promotes the French beauty culture. The company keeps up with fashion trends to produce make-up that matches the trends hence remains popular among the young women. Its advertising also features young women with the latest fashion trends so that young people can identify with the products. With the emerging global market, the company has sought to embrace modifications depending on customer preferences such as using color for Indian make-up. Online distribution has enabled the company to provide products in various areas on demand hence maintain their sales level.
Sales Promotion Examples
Discounts are an effective way to attract the attention of customers since it lowers the cost of acquiring a product (Cummins and Mullin, 2002, p.42). The 3-for-2 is a form of discount offer where customers get three items for the price of two products. Therefore, they only spend money on purchasing two items and get the third item free. Both L’Oreal and Bourjois use this form of sales promotion to encourage the purchase of their items, especially make-up products. The online platform is very useful when promoting these offers since customers get timely information on available offers and make purchases before expiry. Competitions are also effective in the promotion of products since they engage customers and ensure active participation. Make-up competitions are common for L’Oreal especially where contestants compete to apply make-up, and the winner walks away with a prize. They promote the make-up culture by portraying it as a fun activity for women to engage. These promotion tactics have worked well for the cosmetics companies since they have improved the corporate image and increased sales volume.
Promotion
The marketing strategy adopted by a company determines the marketing approach used by the company and eventually, the sales volumes (Horchover, 2002, p.37). L’Oreal has a marketing strategy that involves promotion of beauty across the countries of operation. Content advertising is, therefore, the major sales promotion method for the company as it seeks to inform the public on various outlooks of beauty and promoting beauty trends. The content covers beauty appeal, scientific claim, celebrity endorsement, and the promise of benefit from using the products. It uses this approach across its markets and modifies the message to appeal to the needs of the audience. It also takes an approach to connect emotionally with consumers to enhance their experience when using the product. The strategy enhances the level of customer satisfaction and ensures customers make repeated purchases. Bourjois, on the other hand, adopts a sales promotion strategy that focuses on current fashion trends and uses its lipstick product as the signature product of the company. That translates into the realization of high sales of its lipstick products overtaking sales of other commodities. Use of discounts as the main promotion method helps in realization of the promotion objective for the company.
Critique and Recommendations
Marketing approaches determine the sales volume of a company hence affect the profitability level of any business. An effective approach, therefore, leads to high sales revenue and profits as well as ensures customer satisfaction. Both L’Oreal and Bourjois are major players in the cosmetics industry that is expanding with the emergence of the internet. L’Oreal is, however, more established with a wider market share across the world. Its sales promotion methods involve content marketing as well as discounts. This is an effective way to communicate to customers and educate them about the company’s products. Due to a wide target market, the company should focus on segmenting its market and offering products tailored for various segments to enhance the emotional connection to the product. Bourjois, on the other hand, adopts discounts as the main promotion method for its products hence offering attractive prices. The company should expand its sales promotion methods to improve efficiency and widen its market (Cateora, 2000, p.86).
References
Cateora, P. R., 2000. International Marketing. New York: Harper & Row Publishers.
Cummins, J. and Mullin R., 2002. Sales Promotion: How To Create And Implement Campaigns That Really Work. London: Kogan Page.
Horchover, D., 2002. Sales Promotion. United Kingdom: Oxford Publishers.
Jones, G., 2010. Beauty Imagined: A History of the Global Beauty Industry. New York: Oxford University Press.
Kotler, P., 2001. Marketing Management: Analysis, Planning, And Control. New York: Prentice Hall.
Quelch, J. A., 2000. Sales Promotion Management. London: Prentice Hall.
Sahota, A., 2014. Sustainability: How the Cosmetics Industry Is Greening up. Chichester: John Wiley & Sons.
