We accept

Loreals New Product Development Strategy Marketing Essay

This report is dependant on L'Oreal's new product development strategy and just how they have successfully were able to achieve significant market shares through regular R&D efforts. The truth continues with an information into L'Oreal's inventions which have been successful on the list of diverse segments of the global market.

L'Oreal has not only followed a comprehensive, long term R&D strategy that has led to creating innovative break through products like Fructis, but it has additionally tried to maintain its balance between R&D and marketing software.

Company overview

L'Oreal UK is the Group's fourth major subsidiary in European countries and fifth in the world and has been present in the united kingdom for 75 years. Also A significant player in the united kingdom makeup market, turnover in 2006 come to Ј626 million and 67% of women in the united kingdom use one or more L'Oreal product. Roughly 170 million devices were produced at the Llantrisant factory in 2006 and almost 70% of the manufacturing plant productivity is exported. abroad Recent purchases have included a natural waste normal water treatment place and better home heating, ventilation and light systems. The brand new distribution centre next to the factory addresses an area of over 18, 000m2 and can house up to 10 million products and 300 people are used at the manufacturer. 25% of the permanent staff spent some time working for L'Oreal for over 20 years. (www. loreal. co. uk)


Innovation is the most crucial stage for a firm and it carries significant risk in the context of product failures that might occur immediately after their launch in the market. The product failure rate can be as low as 30% and since high as 90% in this regard. (Antil, J. 1988). The global market is characterised by different preference habits of consumers. Therefore when confronted with swiftly changing consumer preferences, technology and competition, companies should continuously supply the global market with new products that fulfill all segments of the market. This requires systematic Research & Development and advancement by companies in order to generate successful products which may have a significant market demand. Regarding L'Oreal, the business has always tried out to be innovating through their R&D work. The truth sites the exemplory case of L'Oreal's Feria range that was specifically innovated for Asian people. Product invention is a intricate task and it needs careful planning by the company based on the above mentioned factors.

Today the global market is a fiercely competitive environment in which the important focus on for companies is to capture increasing comes back to size while lessening / minimizing costs of creation with great acceleration and flexibility (Kotabe, 1990). L'Oreal as a global chain tries to attain these goals through its regular R&D innovations to be able to produce products that are marketable throughout all international market.

L'Oreal's R&D technology expends about 20% more for new product development as compared to its competition such as Procter & Gamble and Unilever, occupying number one position on the market.

Why is new innovation so important for an organization like L'Oreal

L'Oreal is a more developed company popular business and to be able to keep up its superior position in the global market, it has to focus on the strategies it uses for technology. The speed of which fashion marketplaces change is high, with very short product life cycles. Many fashion items have product cycles as brief as half of a year, or even a few weeks. Consumer's preferences depend on the growing season, on the cultural and ethnical environment and on the consequences of previous marketing communication for fashion items or alternative products (Mintel, 2005). Responding in a timely way to these changing demands is vital for success. Additionally, without services, firms will surely be at a stand still And Research also illustrates that early admittance of new products can lead to competitive gain and permanent market dominance.

The characteristics of the fashion industry require companies to make tactical selections about factors such as quality, quickness, technology, price and overall flexibility: these factors determine the positioning of an company (Abell, 1993). Pulling upon the information provided in the case study, it could be suggested that L'Oreal runs in the most notable end of the fashion market with clear market placement.

L'Oreal's targeted market segments can be characterised as fashion trend-setters, and these are the clients in the high and medium sections. They demand products with innovative styles, with top-level quality by scientists and designers that have built the trustworthiness of powerful brands. It ought to be noticed that firms that operate in the mass section which focuses on fashion followers have a tendency to imitate the high performing products of top brands like L'Oreal and then the competitive good thing about top brands recedes as time passes, making product lifecycle brief. Given the high quality expected of its products and the short product life pattern prevailing popular, L'Oreal has followed a vertical integration, which afforded it a full control of quality and businesses (Erica & Stefania, 2004).

Therefore, development is a crucial and intricate process which has a direct effect on the company's prestige, which justifies the value of such advancements. Therefore L'Oreal must come up with such improvements that not only appeal to the various segments of the global market, but also improve the company's position after they penetrate the marketplace. hence L'Oreal would need to invest heavily in the launch of new products and be positive about the effectiveness, marketability and practicality of these products. .

Moreover, successful creativity is likely to earn L'Oreal an excellent market show and turnover, increasing the value of the company. Also, L'Oreal is a front type of fashion and in order to keep up with the anticipations of its consumers, the company has to lay down in line new formulas that are carefully explored and tested because of their success. For e. g. when the Japanese people were sick and tired of having black scalp and required an alternative solution to western hair colours due to their poor results, L'Oreal developed an effective new hair solution that first bleached their hair and then dyed them regarding to their desirable colour.

Therefore it is clear that for a corporation like L'Oreal, operating in a volatile and turbulent fashion industry, to make a sustainable competitive benefit should have a quick ground breaking product development routine. Because L'Oreal will try to grab the utmost market show through the release of impressive products that are not only different but also cater to the different sections of the international market.

Problems of handling Technology and has L'Oreal resolved these problems

In order to start new products efficiently, companies like L'Oreal have to invest a great deal of time and energy in research and development. Pondering profitable/effective new ideas and utilizing them are the primary issues to be attended to and in this respect L'Oreal's R&D works the task of discovering successful innovations while the implementation lies in the hands of how these enhancements are advertised. If L'Oreal launches a new product that cannot be sold effectively, the R&D initiatives would be marked as inefficient and ineffective.

Before starting or marketing any new product locally or internationally, a company has to be sure that its technology would be differentiated from other products and is dependant on consumers' choices. Such ideas are likely initiated by marketing and then R&D takes over the task. Once the R&D process is complete, the start of new product requires the company's scientists/engineers to observe the market certainty and employ different ways of marketing their product. Any carelessness in this framework would not only bring about product failures after they are launched, but would also harm the company's image.

For companies like L'Oreal which continue steadily to thrive on innovation because good ties between marketing and R&D to perform their activities during the process of releasing impressive products in the global market.

However, reality shows up a bit complicated because studies have shown that R&D and marketing tend to have different perceptions and interpretations of the characteristics of a new product, particularly in conditions of its technological innovation and the scope to which it influences the established use patterns. The truth is, marketing perceives a more critical role of a new product for placement in a market segment than R&D. Also marketing perceives a higher degree of customization of individual products than R&D. Wang and von Tunzelmann (1997)

However, the necessity for long-term invention always exists and the experts have to be given some independence to design new formulas that aren't unveiled unless desired.

The different views of innovation-marketing are influenced by their different personality, ethnical backdrop, time orientation, ambiguity, tolerance and degree of detail of dialect used (Griffin and Hauser, 1996). Therefore for companies like L'Oreal the innovation-marketing user interface must be managed in such a way so it satisfies both the needs of innovation as well as marketing.

According to a study conducted by Wang in 1997 the advancement and marketing functions were found to have collaborated in accomplishing responsibilities in three areas.

* Conceptual development, discovering and assessing relevant information

* Strategic development, market placement and product differentiation

* Implementation, Internal and exterior communication.

For L'Oreal these three functions are an important thought along the way of innovation without which inventions might involve a high amount of risk, resulting in product failures. Once the concept for new product is developed through in depth research, L'Oreal focuses on identifying its target market sections for effective market positioning accompanied by laying a much better emphasis on differentiating its products from its opponents like Procter & Gamble and Unilever. Therefore it must maintain a careful balance between creative innovation-marketing.

An important website link also exists between the innovation-marketing management. For example, a solid mismatch between what is desired by customers and what is developed by L'Oreal would reduce the company's ability to anticipate market response to its new product. This would result in a reduced level of self-confidence on the potency of marketing (Shankar, 1999). Therefore, in this framework, a clear knowledge of customer needs would be helpful in determining a company's development timing. Which means that by effective management of invention and marketing interfaces, companies will come up with better strategies both in terms of source allocation and accessibility timing.

It has been seen that most companies that spend great deal of time and effort on innovation to create new ideas, have created such products that led to a scientific break-through, captivating a huge market show.

In case of L'Oreal, the company has been spending a great deal on its invention office, (spending about 20% higher than its competitors').

L'Oreal utilizes 2500 chemists, biologists, pharmacists and the company's R&D aims to deliver 2000 new suggestions to its marketers in order to launch 2000 new products each year. It not only has to develop successful ideas, but also find a perfect online marketing strategy that addresses the prospective market segments for the new products, their setting, sales, market talk about and earnings goals at first stages. It therefore tries to maintain the total amount between creative advancement - marketing.

The company not only analyzes the marketability of its services but also studies its success through its careful invention process. For e. g. when the marketers desired a super fruit based hair shampoo for the European market, L'Oreal's R&D overran the activity and it took the company 10 years to create Fructis, which captured L'Oreal a 28% talk about in the European market alone. This is, in fact, a result of the long-term R&D attempts of the business and L'Oreal attempts to follow a three-level technique for successful management of creativity to marketing user interface. Also the company launched a sun lotion entirely for children, the Ambre Solaire Children's Sunshine Lotion, which got three years because of its launch and development. Therefore L'Oreal has tried out to solve most of the problems caused by an imbalanced innovation-marketing software and needs to lay a greater emphasis on fulfilling the individual needs of creativity and marketing respectively. It needs to continue by having a clear concentrate of the technological innovations and fashion trends.

L'Oreal takes on the new product development screening process during its advancement phase when the business evaluates ideas produced from its advanced research and whatever is being done externally (beyond your company). L'Oreal makes certain that in order to improve the enthusiasm of its products among consumers it requires to evaluate the effectiveness of its new formulas and offer a clear gain to the consumers to be able to get it accepted by the people. It was this new product development screening process that led to the introduction of Ambre Solaire children's sunlight lotion by L'Oreal after three years of full research, thus, creating a formula that offered maximum safety to children's sensitive skin area that instilled the self-confidence of the parents in the new product.

L'Oreal has tried to unveiling its products which can be seen as a these thorough screening process processes, and they have succeeded to a significant extent. However, through the screening process process L'Oreal also needs to be sure that its new product developments are steady with the business's objectives, they are feasible in conditions of product design and are suitable for the identified aim for markets.


After analysing this circumstance in great aspect, both in conditions of marketing literature and practical application, it can be undersood that global companies like L'Oreal have to keep in collection with the technical changes as they bring about designated product or process design transformations. Creativity plays a substantial role in this respect, without which any new method/idea struggles to be processed into a tangible new product. This involves professional scientists/engineers to be hired by companies and L'Oreal expends a good deal on selecting such pros who can come up with effective, innovative and marketable ideas.

The need to react quickly to the strong global market pushes requires companies to combine swiftly to the perceptions and needs of both product coders and potential consumers Therefore, in today's fierce global competition, it is challenging to differentiate. products and companies are required to have sufficient knowledge about their target marketplaces/segments locally as well as internationally. Therefore product testing is another important process that needs to be carried out by companies to be able to truly have a closer look at competitive products and evaluate their own product demand and L'Oreal seems to stand out in this regard as it utilizes specialists who carefully screen competitors' products in great information.

All this must be synchronized with a highly effective online marketing strategy that is in balance with innovation functions of the company, which eventually builds up new product's image in the various targeted segments, hence, boosting the business's prestige. It is not easy to get customer satisfaction without long term effort.

More than 7 000 students trust us to do their work
90% of customers place more than 5 orders with us
Special price $5 /page
Check the price
for your assignment