Market Segmentation and Target Market Analysis

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Over the years, the world’s cosmetics and beauty products sector has remained invulnerable to the challenging market forces. Today, the global cosmetic industry is characterized by an increasing trend involving the combination of several benefits under one beautifying commodity. For instance, the BB creams which comprise a blend of colour correction features, natural and medical advantages as well as sunscreen benefits. The current trend in the United Kingdom’s cosmetic industry shows that the market is the third largest in Europe. Besides, the UK’s cosmetic exports are likely to increase at an average rate of over 5% in the next five years (L’Oréal - Annual Report 2016, 2018). The market also demonstrates a rather high purchasing power, strong legislative structures, lack of new markets, and a constant entrant of world’s brands. As a result of these forces, L'Oréal needs to develop and implement an effective marketing mix that ensures that the company increases its competitive edge, market share and maintains its position as the world’s most prominent cosmetic brand.


Despite the remarkable progress in the sector, there has been a notable decrease in the usage of hair styling products in the past two years. The decline in the usage of these commodities by approximately 6.9% resulted to the overall decrease in the cosmetic market by around 4.5%, representing over 1.18 billion pounds (L’Oréal - Annual report-2016, 2018). According to Mohammadzadeh et al. (2017, p.227), the decline in the usage of hair styling products in the UK owes the fear of chemicals included in these commodities that have caused hair damages among users. Following the launch of L'Oréal’s multi looks hair styler, the company believes that this product would obtain a higher customer appeal since it does not contain harmful chemicals relative to other brands.

L'Oréal focuses on targeting its new hair styling products at the young generation including 14-44-year-olds. The fact that almost all young girls and teenagers own hair straighteners and they want to look good contributed to the company’s target market decision (Nugroho & Irena, 2017, p. 37). Alongside the product being different, L'Oréal enjoys an ideal customer base to launch its hair styler into the UK market since the company already has a significant market share. Also, since the brand offers new features to the market while integrating other L'Oréal recognized brands, there would be sufficient room for it in the company’s portfolio as well as the entire market (Nguyen 2015, p. 104).

In choosing the target market, the company divided the broad market into smaller segments of consumers with distinct behaviour, characteristics, and needs that necessitated individual marketing approaches. Each market segment assessment will be in respect to behavioural, psychographic, demographic and geographic features. The organization aims at selling the new hair styler in all regions across the country, all though it will be more available to the densely populated areas, especially the urban areas.


The new brand that L'Oréal anticipates to introduce in the market is the L'Oréal Multi Looks Hair Styler. The hair styler is different from other existing brands since it does not contain harmful products. To increase its efficiency in straightening and styling hair, the hair styler comes with various attachments including a concentrator nozzle, straightener, ceramic bristle, curler and a ceramic brush. The hair styler may be considered as a high-performance product since it is associated with other features like an adjustable heat temperature and plug-in charger (L’Oréal - Annual report-2016, 2018). It also comes in several colours according to the customer’s choice. Some of the benefits users are likely to obtain from using the product include its high portability, its highly advanced travel design as well as the fact that it constitutes many components under one product. Furthermore, the product is efficient and functions towards giving the users a high-performance experience that not only produces straight hair but also gives hair a sleek, streamlined and smooth appearance (Dussaud et al. 2013, p. 119).

The products life cycle expectation is such that once the product is introduced into the market, there will be slow growth in sales. Meanwhile, after the consumers become aware of the product, its features, and benefits, the sales will grow steadily. In other words, customer satisfaction with the brand will lead to improved customer loyalty of the product, and hence customers will advertise the brand through word of mouth (Present, Styler & Item, 2018). Accordingly, even without marketing campaign, at the growth stage, the product sales will undoubtedly rise and reach a maximum due to the simple fact that consumer demand is high. On the other hand, at the maturity phase, the rise in sales begin to level off, requiring L'Oréal to invest heavily in promoting the brand to extend the product’s life. At this phase, effective marketing strategies are a prerequisite due to the intensified competition within the cosmetic industry. Equally, product positioning will assist the company to enhance its competitive advantage and market share. Positioning the brand in the market will entail the company’s initiatives towards product differentiation (Moschis, G. and Bovell 2013, p. 358). For instance, even though the brand uses standard packaging, its packaging is different from other beauty products because it consists of two distinct packages and a pouch with two smaller pouches to carry the attachments.


Given the versatility of the new product and that it attracts customers from a broad spectrum of market segments, it is only appropriate for the company to adopt a mass marketing strategy. Even though the firm will exclusively rely on mass marketing due to the product being highly versatile, it will also be crucial for L'Oréal to direct most of its marketing efforts towards the target market-younger generation. Therefore, it will require the corporation to restructure its mass marketing strategy such that it incorporates methods that appeal to the youth (Mohammadzadeh et al. 2017, p. 222). Digital marketing channels such as social media, online influencers like British beauty bloggers; video advertising will actively engage customers. Moreover, the company should use social media platforms such as Instagram and Facebook to interact with the target customers on a large scale.  The organization should, therefore, adopt a strategy that matches social media platforms with the brand to generate a practical approach that not only targets the right customers but also increases the company’s competitive edge.

Similarly, L'Oréal should consider implementing content marketing in its marketing campaign strategies ensuring that brand placing focuses on useful and informative content. Palade (2011, p. 233) states that a light-hearted form of digital advertising will significantly provide the users with an interactive platform that increases awareness about the new hair styler. An example of a digital communication marketing activity for L'Oréal is the Beauty Squad campaign which entails the integration of the company’s brand with different influencers generating blogs, articles and YouTube videos conveying messages about the latest brand (Present, Styler & Item, 2018). The company’s promotion budget across the product lifecycle phases will entail a larger percentage of funds allocated at the maturity stage. For instance, the introduction phase (15%), growth stage (30%), maturity stage (45%), and the decline stage (10%). Consequently, although the customer-centric marketing practice seems to be costly for the company, it is crucial towards increased profit margin. This is because the interaction and network concept in the strategy will establish mutual relationships between the company and customers.


The organization will employ the competitive pricing strategy which will involve critical evaluation of the prices competitors offer. To establish an appropriate competitive price, L'Oréal will have to consider factors like the product lifecycle, especially the phase the product is in, for example, during the introduction phase. The best competitive pricing approach would be for the company to cheaply price the product, relative to the competitors’ prices (Palade 2011, p. 243). Although this initiative is essential in creating an attractive suggestion for the customer base, it is undesirable since the business will not obtain more revenues. Nevertheless, the company seeks to make substantial profits from the pricing strategy since the product is high end and it could be manufactured in low-cost countries. This implies that the production costs for the commodity will be high in comparison to competitors (Nugroho & Irena 2017, p. 37).  Conversely, setting the price at around 80 pounds is an excellent market price that will still enable the company to attract a broader customer base and hence realize considerable profits.


Since the company has a global market reach, the product will be distributed throughout the world including the United States, across European countries, Middle East, Mexico, China and Hong Kong. Besides, beauty shops and malls will function as primary retail distributors for the product in these countries. L'Oréal is a leading global cosmetic company and will, therefore, require the right website for online selling in addition to worldwide shipping services (Nguyen 2015, p. 104). These distribution channels will also play a vital role in the marketing of the products since retailers, and the website will create contacts, expertise and provide a broader scope of knowledge about the brand respectively. In fact, since retailers have direct contact with the customers, the sales process becomes easy, economical and efficient thus saving the company costs related to direct sales. 


Unfortunately, the successful launch of the product in the market may be affected by external environment risks, mainly economic, competition and consumer risks. From the perspective of consumer risks, some customer’s may perceive the product not to be useful or demand reduction in the prices (Krishnan et al. 2017, p. 48). The company also faces competition from other cosmetic manufacturers including Phillips, Chambo, and Revlon. Intensified competition would mean that the market is characterized by new entrant firms who might develop a similar product and sell it at a lower price than the company. Equally, this will require the company to conduct extensive market research and advertising to ensure that the product maintains its positions in the market. On the other hand, from an economic risk perspective, due to social and economic challenges in most developing countries, the brand could experience selling problems in these countries (Krishnan et al., 2017, p. 48). The solution would be to lower the price of the commodity, though this initiative would result in losses for the company.


During an economic crisis, sales of cosmetic products are typically affected by market forces. This owes to the continuing and increasing use of beauty products by women, although there is a growing increase in the usage of these products among men throughout the world. L'Oréal seeks to introduce a new hair styler that will primarily target females between the ages of 14 to 44 years who belong to the UK’s middle class, particularly those living a fast-paced lifestyle since the product is efficient and makes hair styling easy. For L'Oréal to increase its competitive edge in the industry, it is crucial that it uses effective marketing strategies like digital advertising to attract a potentially larger customer base.


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Krishnan, S., Amira, N.S., Atilla, U.N., Syafawani, S. and Hafiz, M., 2017. The usage of cosmetic in Malaysia: Understanding the major factors that affect the users. Management, 7(1), pp.48-51.

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September 18, 2023

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