The L'oreal: Segmentation, Targeting and Positioning (Essay Sample)

Segmentation, Targeting and Positioning L’Oreal
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Table of Contents TOC \o "1-3" \h \z \u Introduction PAGEREF _Toc451359997 \h 2Literature review PAGEREF _Toc451359998 \h 2Adams, R. (2011). Fragmentation And Segmentation: Marketing Global Benefits. International Business & Economics Research Journal (IBER), 10(9), p.59. PAGEREF _Toc451359999 \h 2Hassan, S.S. and Craft, S.H., 2011. An examination of global market segmentation bases and strategic positioning decisions. International Business & Economics Research Journal (IBER), 3(9). PAGEREF _Toc451360000 \h 4Discussion PAGEREF _Toc451360001 \h 5Content marketing PAGEREF _Toc451360002 \h 5Education PAGEREF _Toc451360003 \h 6Aspiration PAGEREF _Toc451360004 \h 6Empowerment PAGEREF _Toc451360005 \h 6Brand segmentation PAGEREF _Toc451360006 \h 6Conclusion PAGEREF _Toc451360007 \h 9References PAGEREF _Toc451360008 \h 10
Introduction
L’oreal has been hailed for being able to position all its products and brands admirably and strategically by competitors, customers, and observers. Despite having many brands and products under its umbrella it has managed to a different yet effective and tailored slogan for each brand depending on the target market for each. It has segmented its market based on geography, demographics; culture, age, gender and economic status. It targets different market segments differently (Hassan and Craft, 2012). Some of its products are luxury brands, consumer products, professional products and active cosmetics. Specific departmental stores carry luxury brands; hairstylists use professional brands, dermatologists carry specialist's brands, and drug and discount stores carry consumer products. The fact that the company has a wide range of products over different markets and regions makes it a good case to examine its segmentation, targeting, and brand positioning strategy.
Literature review
Adams, R. (2011). Fragmentation and Segmentation: Marketing Global Benefits. International Business & Economics Research Journal (IBER), 10(9), p.59.
Market segmentation is an important aspect of marketing where the marketer uses market preferences and tastes to define customer preferences and make decisions on which markets they should target. It involves dividing the market into identifiable groups. Segmentation is based on marketer’s definitions of the market or by using customer preferences and using these preferences to segment the market. The bases for market segmentation usually include geography, demographics, psychographics, benefits sought by the consumer and the usage rate of then consumers. Geographic segmentation involves dividing the market into homogeneous groups based on their location. The products and the marketing strategies are similar to the homogeneous group. Demographic segmentation is the subdivision of the market based on the either age, marital status, or family life cycle or economic status. Psychographic segmentation involves the division of the market based on their beliefs and their lifestyle. When selecting an appropriate target marketing strategy, the strategies include undifferentiated, differentiated or concentrated strategies.
Market segmentation assists the company master the features of target markets and to design a marketing mix. The marketing mix is a marketing plan used by business through considering product, price, sales promotion and selling place whereas marketing segmentation act as the best mix of a specific market. Segmentation, targeting, and positioning are marketing techniques used by a company to gain the competitive advantage in the market. The combination of market segmentation strategy with product differentiation strategy leads to the effective way of matching organization product strategy to the characteristics of target market segments. Segmentation effectiveness depends on arriving of segments which are measurable, accessible, substantial, actionable and differentiable. Successful segmentation strategies ensures better planning and more effective use of firm resources. Organizations should adopt the use of market segmentation strategies for more efficient and effective competitive advantage.
Target marketing involves evaluating the attractiveness of each segment and determining which market the company should venture into; the marketer then tailors the product to the needs of the specific target markets. This is the step that comes after segmenting the market. The next step in target marketing is market differentiation where the marketer tailors the product to every market segments needs by customizing, enhancing, simplifying the products or adjusting the prices of the products. The final step in target marketing is market positioning where the organization should evaluate competitor products and determine where its product will bear the competition.
Hassan, S.S. and Craft, S.H., 2011. An examination of global market segmentation bases and strategic positioning decisions. International Business & Economics Research Journal (IBER), 3(9).
Brand positioning is the summary of what the band entails. According to this article, a product's positioning is the way it is defined by the consumers. i.e. the part the product or brand occupies in the consumer’s mind. As such the marketer of any given brand must put a lot of thought in how they wish the product to be viewed by their target consumers, competitors and the whole cosmetic industry. Positioning may be done by the brands qualities, prices, benefits, global or local reach or a combination of any of the above factors. The factors chosen by any given company to represent its brand determines its success or failure in its target market. A company may even use different qualities to position its products in different markets. For example, because the Chinese great value locally made products the organization can market its hair products on the basis that it is made by a branch of the company based and funded in China. It may market the same line of products in the USA as being affordable yet of high quality.
Rebranding and repositioning involve the renewal of a brand image in the minds of potential and previous customers. When segmenting a market, the marketer must ensure that the market is measurable i.e. its purchasing power, prices and that the profiles of the segments are easily accessed.
Discussion
Decentralized organizations are a good example of the failure or success of their marketing strategies. Poor brand positioning strategies result in marketplace confusions, internal wrangles, poor branding strategies, misplaced and ineffective marketing strategies as well as poor market penetrating techniques (Hassan and Craft, 2012). Poor segmentation also results in loss of resources, revenues, and poor pricing mechanisms within the target market. It also results in misplaced completion and expansion strategies.it is therefore very important for every company to have a clearly stated and well-thought marketing strategy before the commencement of any marketing activities.
Marketing research also contributes to the formulation of a successful marketing strategy. Every company or organization should carry out extensive and comprehensive research on the product they want to introduce, the marketing gap they want to fill, the existing competition, the rigidity or flexibility of the market they want to penetrate and the influencers of consumer decisions within that market. The research will help the company determine the method they should use to segment their market and the specific market segment.
Content marketing
Education
The company has taken up educating their consumers on how to take care of their skin health. It uses online videos, magazines and it provides its female consumers with information about their products and other ways they can take care of themselves. This positions the company in the consumers minds as not just a business but as a friend who is ready and willing to share essential information. This strategy also attracts new customers (Beauty Inc, 2016).
Aspiration
The company has been sponsoring events such as the golden globes and other runway projects attended by renowned celebrities and actresses who have large following and influence. By doing this, it positions itself as a luxury brand and an aspiration for the attendees and their fans. The glamor and the positioning of the event itself has an influence on the positioning of the brand itself (Hassan and Craft, 2012).
Empowerment
The company also has slogans that are aimed at empowering its customers and leaves them with a positive outlook for themselves and consequently of the brand. It has positioned itself as a source of strength and confidence for its customers and users. Therefore, most of its customers are loyal and are likely to recommend the products (Beauty Inc, 2016).
Brand segmentation
The organization uses a universalization strategy where it aims to dominate the global cosmetics market. The company aims to conquer the global market using the brands that it already has. The brands are already universally known making it easier to generate their market in new regions or target markets. It builds new products for the new regions but uses the same brand names for the products. The company formulates, produces and adapts new products to new markets; in a way it seeks to make global products local (Trefis Team., 2011). The new products are customized to suit the needs of the local consumers based on the segmentation method used by the company.
The company uses a combination of different segmentation methods including geographic, psychographic and demographic segmentation. It uses the same brand name for markets in the USA, Europe, and C...