Word: oreal
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Africa is a case in point. SoftSheen/Carson already has a strong presence in South Africa, where in 2002 it accounted for about 41% of that country's estimated $90 million black hair-care market. But L'Oreal wants to have as big an impact in other African markets. Oddly enough, this is where the U.S. comes in. Africans, says Evrard, "believe that if [a product] is good for the highly demanding U.S. black consumer, it might also be better for them...
Although many consumers know it for skin-care products like Plenitude, L'Oreal had its origins in hair care. In 1907 French chemist Eugene Schueller developed a line of synthetic hair dyes, known as L'Aureale, or Halo, and started selling them to Parisian hair stylists. Almost a century later, Schueller's once tiny company presides over a host of high-profile beauty names such as Lancome and Garnier. The company's top 14 global brands account for more than 90% of its $14.3 billion in consumer sales...
Despite the number of headline brands, there is very little cannibalization--a feat that L'Oreal pulls off because of its extraordinary commitment to positioning and marketing. Merrill Lynch analyst Sandhya Raju estimates that L'Oreal spends about 30% of its sales revenues on advertising and promotion, against an average 25% spent by its principal competitors. Take L'Oreal's move into China, where the cosmetics market grew 14% in 2002 and where L'Oreal's sales grew 61% that year. In L'Oreal's view, it is selling products to an archetypal Miss Yu, who is 18, still lives...
Acquisitions will permit L'Oreal to continue diversifying its revenue base and product range. In December L'Oreal bought Mininurse, a Chinese mass skin-care brand with a 5% market share. It bought a majority stake last year of Shu Uemura, a Japanese concern in which it owned a 35% stake. In the past decade, Western Europe's share of L'Oreal's overall sales has fallen about 12%, while the share of regions like Asia has risen more than 20%. L'Oreal also has its eye on India and Mexico. "It's a superb sales model," says Andy Smith...
...ever with L'Oreal, innovation is as likely to dominate the company's thinking as where to find the next group of willing consumers. In 2002 L'Oreal spent $594 million on research--about 3% of turnover and double that of its nearest rivals. In the stark laboratory not far from the Paris headquarters, for example, scientists are coming at the dermis from both sides--developing skin products that are applied externally as well as those that are ingested. High above the earth, a European space-agency satellite is transmitting data to L'Oreal about where global-pollution levels...