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Case Title:

L'Oreal in India: Marketing Middle Class Consumers with Premium Prices?

Publication Year : 2007

Authors: Sushma, Mercy Mathew

Industry: Cosmetics

Region:India

Case Code: CSB0016

Teaching Note: Available

Structured Assignment: Available

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Abstract:
India, in recent years, has emerged as one of the hot destinations for global cosmetics players. Overseas players like Unilever, Procter & Gamble and L’Oreal dominate the industry through targeting the growing middle class. Players like Hindustan Unilever Limited (Unilever’s Indian subsidiary), Procter & Gamble target their customers with mid prices; while L’Oreal Indiais targeting them with premium prices. This strategy helped L’Oreal to breakeven the sales and then record a huge increase in its profits. But considering the increasing competition and price sensitiveness among the Indians, it has to be seen how long can L’Oreal continue this success?

Pedagogical Objectives:

  • To analyse the opportunities and challenges for cosmetics players in emerging markets
  • To understand and analyse the Indian cosmetics industry and the changing consumer behaviour
  • To discuss the business model adopted by the players, particularly the multinationals
  • To analyse the reasons for L'Oreal's initial strategy failure in India
  • To discuss L'Oreal's revised strategy of targeting middle-class with premium price and its success.

Keywords : Emerging markets; Indian cosmetics industry; Cosmetics players; Customer segmentation; Indian middle-class consumers; Consumer behaviour; Market Entry Strategies Case Study; MNCs business model; L’Oreal India and strategies; Moving away from brand image; Mass vs premium product strategy in emerging markets

Contents:

  • Cosmetics Industry in India: A Competitive Landscape
  • Indian Economy: The Rise of New Middle Class Consumer
  • L'Oreal in India: Going Glocal?

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