Brandstorm L oreal Essay Example

Brandstorm L oreal Paper In the travel industry it doesnt matter which language you speak, which traditions and cultural habits are appropriate or whether it is AM or PM. This industry seems to have its own culture, rules, traditions and inhabitants. LOreal calls the Travel retail market the 6th continent in the world. A borderless continent with its own economy (duty free shops which are ours open), its own capitals: top airports (e. G. Dublin, London Heathers, Hong Kong, Paris Rosins) and its own inhabitants (1 billion): the global shopper/ international traveler: families and business people. Nowadays, shopping has converted into determinant factor while traveling and in some cases a component of choosing a travel destination or the prime motivation to travel. The Economist even talks about the golden hour whenever a passenger steps through the security scanner into the world of travel retail. Travel retail has been growing at about 12 percent in the past few years (LOreal resource pack). A similar growth is expected in the next two to three years, putting it at double the growth rate for the luxury goods market, said Luck Cola, head of luxury goods research at financial services firm Examine BAN Paris. We will write a custom essay sample on Brandstorm L oreal specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Brandstorm L oreal specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Brandstorm L oreal specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Based on these developments Jean-Pula Agony, Chairman and CEO of LOreal Group, sees opportunities for LOreal in the retail travel industry. According to him is Travel retail a key channel for winning over one billion new consumers. This brand development plan aims to explore the opportunities for one of LOreal luxury brands: Lana ¶me, in the travel industry. The first part of this paper focuses on two core pillars; (1) the brand Lana ¶me and (2) the travel retail market. We will first define the segment, target group and positioning (STEP) of Lana ¶me. Additionally we will identify the core associations, strategy and challenges the brand Lana ¶me is facing. Furthermore, in we will identify the market of the travel industry by a racket analysis. Thereafter we will define the role of retail in the travel retail industry. Then we will dive into the competition for Lana ¶me within the travel retail industry by doing a Porter five forces analysis. We will also provide a customer analysis containing the needs and characteristics of the customers/ travelers within the travel retail market. Concluding, we will provide a full SOOT analysis for Lana ¶me in the travel industry and zoom into the opportunities for Lana ¶me in the travel retail industry by proposing an Innovative travel retail service. The second part of this paper consist of our innovative idea and introduces the sub-brand Lana ¶me Travel. We will pitch this innovative experience by addressing whom We see as our potential consumers and how we attract them to our service/experience at the airport. In addition we will provide the strategy, the positioning, the marketing communication initiatives and the brand elements for Lana ¶me I Travel. At the end, a sales pitch about our Lana ¶me I Travel will wrap up our thoughts. Our analysis, and content is based on a self-conducted survey (appendix 4) (N=65) where both free association about the brand Lana ¶me as questions on liker scale about shopping behavior, competitors and brand value are questioned. In this paper we refer to our self-conducted survey as: (Survey Lana ¶me, 2015). In addition to this survey we have used academic and non- academic articles, Rogers and Jorge survey referred as (Labile, 201 5) and the articles in the LOreal brainstorm package. Enjoy reading! 2. Lana ¶me This year, LOreal is celebrating 80 years of beauty with THE brand of women: Lana ¶me. Amanda Patient founded Lana ¶me in 1935, as a fragrance house. The name Lana ¶me comes from a small chateau Lana ¶me which inspired Patient who added the accent mark D to the o, in order to convey French elegance in every language. LOreal acquired the company in 1964 where it became part of LOreal luxury department and offers 3 product categories: skin care (45, 1 %), make-up (21 ,7%) and fragrances (33,2%) (LOreal resource pack). Now the brand has been developed itself in more than 130 countries. During its 80 years of existence, Lana ¶me has established a brand identity containing some key associations: Expensive, luxury, women, mascara, quality, beauty and trustworthy (Labile, 201 5; own survey, 201 5) appendix rod cloud. 2. 1 Lana ¶mes target group: The typical Lana ¶me customer is an elegant and sophisticated woman around the forty years old (Paupers Labile, 2015). Lana ¶me users view Lana ¶me as elegant, luxurious, and high in quality. Furthermore, they do consider Lana ¶me to be expensive however, compared to for example Channel they do not consider Lana ¶me to be overpriced (Paupers Labile, 2015). 2. 2 Lana ¶me performance: In the travel retail industry is LOreal the market leader. Lana ¶me has the largest market share in the Duty Free beauty products category with over 20% (source: generation). Lana ¶mes total brand value is ranked at the 90th place and valued at 6,3 billion USED (Source: Forbes) thanks to successful products such as their best-selling fragrance (ranked as 4th in the world) La vie est. belle, known for its iconic smiling bottle. . Define the travel retail market The Travel Retail market is an upcoming and increasingly growing market. The travel retail distribution channels consist Of; cruises (4%), airports (57%), downtown duty free shops (33%) and airlines (6%) (LOreal resource pack). Hence, the air traffic is the main driver for the travel retail industry and the focus in this paper . Air traffic is continuously growing by 5% on average per year, and represents over 6 billion international flights in 2013. In 201 3, 1. 87 billion people traveled by plane and spend 1 159 billion USED on various top product categories such as tobacco (7%), Wine and spirits (1 7%), Jewelry and Apparel (12%), Fine foods (12%) and Fragrance and cosmetics (30%) (source: illustriously. Com; LOreal resource pack). Asia-Pacific is the most vibrant region for travel Retail, accounting for 37% of all sales (TEA). The most visited airport in 2013 was London Heathers, with 67 Million passengers (Source: IAC). 3. Airport trends and developments In todays speed-driven, globally networked economy, airports are developing into hubs for commerce. Similar to a traditional metropolis of a central city and its outlying suburbs, the airport is becoming the focus of a sprawl of businesses in what has been dubbed the reiterations. What this means for cosmetics and perfumes is that airport shops will no longer be solely for duty- free gifts and indulgences. In the future airports will look like sophisticated shopping malls with not only shops but also a variety of entertainment opportunities such as golf clubs, cinemas and spa centers. Many airports are growing into bigger places focusing on an integrated and personalized experience for travelers while also considering sustainability. The focus areas for airports are (technological) developments such as: atomization and self-service, personalization and nature spaces where people don not have the feeling they are locked up. Retailers can effectively integrate those trends into their services. Several examples are; nature parks, a beauty spa, museum or for instance; loyalty programs, mobile advertising and higher level of in-store services by touch-screen technology which revive an on-the spot- personalized experience. In addition, some concept stores add digital imagery on a shop wall. Some representative modern top airports with top figures in terms of passenger traffic and providing the above mentioned examples are: Istanbul, Doth, Koala Lump, Taipei and Dublin international airport (traffic evolution; LOreal resource pack). 3. 2 What makes the travel retail market unique? There are several factors playing a role, which makes the Duty free travel retail market unique and distinct from the domestic market. Access to the shops is restricted to people who are traveling and in possession of a raiding pass. Travelers passing through airports are from across the globe, international multi-lingual context In travel retail, brands only have a small window of opportunity to attract and engage customers and convert sales Duty-free and travel retail stores are Often open 24/7 Food, drink and duty free tobacco products are normally intended for consumption outside of the country in which they are purchased, the final destination of the products could be anywhere in the world. Only a limited range of products (often luxury brands) are sold in duty free and travel retail shops and cannot be found on the High Street. In addition many products purchased at duty free and travel retail shops are intended for gift giving, with special editions of products and promotions being supplied only to the travel retail sector. Airport duty free and travel retail shops do not compete with the domestic market; rather they compete with each other as passengers have the option of shopping at different airports departure, arrival or transit airport. The European Commission most recently confirmed this position during their investigation into the acquisition of World Duty Free by Autograph, published in May 2008. . Consumer analysis of travel retail consumers The consumer in the travel retail market is the international shopper; they are not only shopping where they live but also wherever they are. Some important general demands of the International shopper are: high interest in good quality/ high end products, convenience and fast/quick service. The international shopper consists of both families and business peo ple who have different, purposes and needs while traveling. This means that retailers have a difficult mission: tailor their offerings to the different needs and purposes (private or business) of the global shopper, whether they are Brazilian, Chinese, Russians or middle Eastern. The upcoming paragraphs will provide an overview and a clear description about the potential global shopper, there needs, motivations and consumer expectations. 4. 1 Characteristics of the global shopper As the travel retail market has grown, the demographics of travel retail have changed dramatically. Indeed, the significance of Chinese and Russian travelers dwarfs other groups. China accounts for 27% of the total market and Russia for 15%. Number three is Indonesia with Its really linked to GAP per capita. As soon as GAP per capita starts to rise and people have ore disposable income, they want to travel, and when they travel, they want to shop. For 82 %of Chinese travelers, shopping is their number one priority, dropping to 56% and 48% respectively for Middle East ern and Russian consumers. The Chinese consider shopping a fundamental part of their travel experience (source: illustriously. Com). It is thus Important to notice that absolutely not solely European or the American travelers are of interest for Lana ¶me, but especially the new emerging nationalities such as the Chinese and Russian shoppers are the biggest spenders (LOreal case study). Another ewe phenomenon is called: the demagnification of traveling. Demagnification means an increase Of the middle class in traveling. This new influx of travelers transforms the travel retail market, which is evolving from a business model focused exclusively on luxury towards a more diversified offer. 4. The needs of the global shopper The global shopper can travel for two purposes; private or business. These two purposes determine the needs of the global shopper. Generally, business travelers demand efficiency and convenience, whereas tourists are generally seeking for entertainment, and browse stores in order to reduce waiting time. Besides these two different purposes, retailers have to deal with the different nationalities of global shoppers. For instance Japanese women want translucent skin products, whereas European woman or North American woman demand bronzing powders. Lana ¶me has to respond to these different needs by, comprising more various products sets, tailor personal service (a beauty consultant who speaks every language) organize different festival or event by nationality (Ramadan, Chinese new year) and offer membership or free gifts after an expenditure of a certain amount and use in- depth data analysis to capture the needs of the potential customers. 4. The motivation to purchase at the airport The main purpose of visiting a duty free store is to purchase a gift, secondly to browse the store and thirdly to take advantage of airport prices (LOreal resource pack). However, we also asked in our self-conducted survey: what the motivation is Of people to buy cosmetic related products. Results show, that consumers purchase cosmetics in duty free stores mainly for personal use (63%) and secondly as a gift (20%) (Survey Lana ¶me, 2015). However, these results are not fully in alignment with Lana;mes resource pack (201 5), where buying a gift is the number one reason to purchase cosmetics. Several other factors affecting consumer behavior in buying beauty products are: store design, price, brand image, availability and good service, good design/ packaging, innovative features and excellent quality. An advantage for travel retail could be that airport travelers are known to be more receptive to marketing communication messages than the average consumer, as they are effectively stuck in airports in search for entertainment. 5. Competitor analysis of Lana ¶me The Travel Retail operating in the six continent results in a new level of competitors for Lana ¶me. On one hand is the national competition expunged. Nevertheless, the main competitors of Lana ¶me are campaigning all around the world on the same tax-free airport boutiques to attract the same global shoppers. In the upcoming paragraphs we will first discuss the main competitors Lana ¶erne is facing in the travel retail as suggested by Yodels (1999). This is theory is based on original ops marketing of McCarthy. Since we are solely focusing on Travel Retail, the Place will be left out. These are namely the airports worldwide and that was already a selection, for showing competitors. Instead of the place, we will show any special offers/campaigns done in the travel industry. According to our survey we detected the following main competitors for Lana ¶me when focusing on the travel retail business: nearly half of our respondents stated Clique as the main competitor in the market with 46%, followed by Channel (37%) Lana ¶me (31%) and Esteem Lauder (29%) (Lana ¶me survey, 2015). The other competitors mentioned in the survey were Clarions, Shied and Christian Dior. However, in the following researches we discovered that Christian Dior also takes a dominant position in the luxury beauty travel market. Therefore, we decided to focus on four main competitors and also included Christian Dior. We will introduce these competitors, their product, price, promotion and target group in table 1 . Additionally to the competitor analysis, we performed a Porter five forces analysis to identify the main threats in the travel retail industry (Porter, 2008). Looking at Porters five forces for the travel retail industry (figure 1), the travel retail industry looks competitive for Lana ¶me. The main threats are the high existing rivalry (the four dominant competitors mentioned in table 1), high buyer power and a high threat for substitutes. In the travel retail industry, there are many luxury brands offering similar products and services. This makes it hard to differentiate. In addition do the buyers in this industry have the power to easily switch to the competitor. However, incumbents such as NC ¶me and Channel have a competitive advantage compared to new entrants. The level of RD, technology, brand portfolio and distribution/ infrastructure are highly developed for incumbents and therefore hard to compete on for new entrance. Figure 1: Porters five forces (Porter, 2008). 6. SOOT Travel Retail for Lana ¶me Based on the results of our self-conducted survey, our competitor analysis and customer analysis, we made a SOOT-analysis (figure 2). We identified our main strengths pertain to Lana ¶me, namely: (1 ) An innovative product line and (2) high quality, (3) Lana ¶mes trustworthiness and lastly (4) Lana ¶mes cohesive brand image. Firstly, Lana ¶me seems to take advantage of LOreal distribution channels and RD investments, which makes the innovativeness and introduction of new products for the Lana ¶me possible. Secondly, based on our survey results and the results of Lullabies survey (2015), do people have high quality perceptions of the brand Lana ¶me. Additionally, is the brand well established and does it have a strong heritage because Of its 80 years Of existence. This Strong heritage has gained the brand trustworthiness and credibility. Lastly, the associative networks of our self conducted survey and Lullabies survey (2015) look very similar. It seems that people come up with the same associations, when they think of the brand Lana ¶me. Even between men and women there are not many differences in the associative network of Lana ¶me (Appendix. However, this cohesive brand image could also be seen as a weakness for the brand. As the brand primary targets women it is weird that men come up with the same associations and women do not have more unique associations with the rand. One of the major problems could be this last point. The brand Lana ¶me does not evoke many unique associations, which could function as a point of difference in their product category. In addition, does a cohesive brand images makes the brand inflexible (difficult to introduce a product line for men). A general threat in the travel retail industry is terrorism. The 9/11 terrorism attacks caused the travel industry a major drop in passengers. These external factors are beyond the control of any retailer but can have immense influences on sales. In addition can security restrictions cause imitations for beauty travel related products, such as liquid volume or package size. This is also beyond the control of retailers. Another threat could be the rise in demand of organic natural products. However, this could also be an opportunity for Lana ¶me. Another big opportunity for Lana ¶me is the growing luxury goods market in BRICK economies (Chinese, Russian travelers having the highest shopping budget). Lastly, we consider personalization and atomization; such as self-service an opportunity for Lana ¶me to differentiate on. Figure 2: SOOT analysis Of Lana ¶me in the Travel Retail industry Case study 2 7. Brand development plan Lana ¶me I Travel 7. 1 Introduction of Lana ¶me I Travel Fasten your stables and discover Lana ¶me I Travel. The objectives of Lana ¶me I travel are twofold: (1) creating brand awareness by development and visibility of Lana ¶me in the travel retail industry, (2) enhance customer loyalty and recruit new customers by responding to current trends at airports: efficiency, self-service and personalization. 7. 2 Introducing the Lana ¶me Travel experience Taking all the above into consideration, we came up with the following innovative experience: a high end Lana ¶me Travel beauty wall, wrapping all rodents in high quality leather tests with a personal message (see appendix 2 3). The wall will have a very exclusive appearance and has to stand for luxury and high quality, as this is found to be expected of Lana ¶me (Paupers Labile, 2015). This unique wall will entail five different rows of content. The rows within the wall can be divided into: skin care, make-up, fragrances, travel kits and a gift packages. Research by paupers and Labile (2015) pointed out that people strongly associate Lana ¶me with Perfume, make-up and cream/care, for that reason they most definitely had to be incorporated onto the wall. Regarding the skin care, make-up and fragrances the most iconic products will be used; advance genuine (skin care), absolute rouge lipstick and hype ¶SE mascara (regarding make-up) and the La vie est. belle fragrance (see picture below). These products are chosen due to the fact that they are world wide most known and used. In 2009 for example, Genuine won 130 international awards and sold more than 9 million bottles (LOreal online article). For this reason they Will be most likely to satisfy the desires of the global traveler, which Lana ¶me is trying to target. The travel kit of Lana ¶me I Travel will consist of a miniature version of the above-mentioned iconic products, except for the lipstick. In addition there will be several customized Lana ¶me I Travel products: a miniature sewing kit, a nail file, ear plugs, a toothbrush and a sleeping mask and a nail polish, which changes with the seasons (see picture below). The mask will be in black silk with the Lana ¶me travel logo on the front in pearliest white. Furthermore, the Lana ¶me I Travel gift package will consist of a La vie est. belle fragrance, a body lotion and a small passport telling the history of Lana ¶me. The most unique attribute is the personalized leather etude. Every product or package extracted from the wall will be placed into a high quality leather etude (appendix 2). This etude can be personalized by choosing a desired color (four options) and by writing a message in gold on the leather etude through a screen on the machine. After completing the desired color and message, the leather etude will be created and issued within only 5 minutes. Below you can find a suggestion how the machine will look like. The focus will be on the high- end appearance and it would be possible to larger the machine to create the o-called wall.