The paper “ How Has Multi-Brand Strategy Affected LOreal's Market in China? “ is a delightful variant on the thesis on marketing. The demand for cosmetic products all around the world has highlighted the need and importance of developing strategies that are aimed towards providing products at competitive prices. This has highlighted the need and importance of understanding the strategy which different business uses. The research thereby looks to explore L’ Oreal’ s marketing strategy in China and focuses on the different aspects associated with multi-brand branding and other strategies so that proper formulation of strategies can be developed and the future path which the player looks to adopt can be determined. China possesses the most population in the world, which spread unevenly on the land of China.
Although around one-third of Chinese people live in the cities, the buying power from these cities is so strong that it cannot be ignored and make the Chinese market one of the major markets. It is really necessary for business seekers to be aware of where the cities are and what is happening there. Chinese cosmetics market is one of the fast-growing markets in China, according to the performances and the activities happened in the past 10 years. 1.2.
Background of the Topic 1.2.1. Huge Chinese Cosmetics MarketChinese people’ s demand and life concept have changed dramatically with the development of the economy, this witnessed the point of growth of cosmetic and skincare products worldwide. It is calculated that in the past 10 years, the average annual sales increase of Chinese cosmetics industry is around 25%. Many internationally renowned multinational companies like P& G, Unilever, and L’ Oreal have already entered the Chinese market.
Meanwhile, some local cosmetic companies like Jahwa and Longliqi have also started a fierce competition with the multinational companies. However, foreign brands have taken up more than 70% of the Chinese market. 1.2.2. L’ Oreal Entering the Chinese MarketL’ Oreal has always observed the Chinese market as a promising market. It entered China since the 1980s and set up its first factory in 1996. Nowadays, L’ Oreal has already extended its business to more than 500 cities in China, with 14 famous brands under L’ Oreal (eg. L’ Oreal Paris, Maybelline, Garnier, Lancome, etc). The company even succeeded in acquiring two Chinese local brands— Little Nurse and Yue-sai, which indicates its accelerating pace of expanding in China. 1.2.3.
Multi-brand strategy increases a company’ s competitive advantageWith the expansion of business scale and increase in variety series, the multi-brand strategy has become a more and more important means in the market competition. The multi-brand strategy means the marketing of two or more similar and competing products by the same firm under different and unrelated brands, while these brands eat into each others' sales. It has some advantages such as: Take up more retail shelf space. Once accepted by retailers, the multi-brand of a company can take up more shelves in the shop, which increased the chance of being seen and selected. Helps meet different consumers’ demand. When a company develops different brands, while each brand focuses on the needs of a particular sub-group, this helps increase the group’ s trustiness and brand loyalty as well as the company’ s brand competitiveness.
Alan Middleton, Brands, what a concept[J], Marketing, Toronto: Nov. 7, 2005. Vol. 110, Iss. 36; p10
Broniarczyk, Susan M, Alba, Joseph W. The importance of the brand in brand extension. Journal of Marketing Research, 1994.
Berkman, H. & Gilson, C. Consumer Behavior Concepts and Strategies, Kent, Boston, 2001
Brassington, J. and Pettitt, M. Principles of Marketing, 2nd Edition, Prentice-Hall, 2001
Bateman, T. & Snell, S. Management: The New Competitive Landscape. 6th Edition, McGraw Hill, New York, 2004
Chrisan, P. Marketing: A Behavioral Analysis, McGraw – Hill. New York, 2001
Clegg, C. & Walsh, S. Change Management: Time for a change. European Journal of Work and Organizational Psychology, 13 (2), pp. 217-239, 2004
Czinkota, M.R. & Ronkainen, I. A. International Marketing, 7th ed. South-WesternPublishing: Australia, 2004
Coughlan, A., Stern, W. & Adl Ansary, E. Marketing Channels, 7e, ISBN 9780131913462 ISBN 10:0131913468, Pearson Education, 2006
Chen, I. Understanding Customer relationship management: people, process and technology. Business Process Management Journal, 9 (5), 672-688, 2003
Chawla, A. Marketing Management for the Airline Industry. Workshop on Marketing of Educational Institute, Programme, and Services, 2003
Cook, D. & Dave, D. Structural element of service quality product. International Journal of Business Performance Management, 2004, 6 (2), 189-207
Carol Hamilton, President-General, Manager, L’Oreal Paris Division L’Oreal, Advertising Age, 2004. Vol 75(40), p16
Cavusgil, S.T., & Zou, S. Marketing Strategy-Performance Relationship: An investigation of the Empirical Link in Export Market Ventures[J]. Journal of Marketing, 1994.
David A. Aaker & Kevin Lane Keller, Consumer Evaluations of Brand extentions[J], Journal of Marketing; Jan 1990;54,1; Academic Research Library
Doole, I., and Lowe, R. International Marketing Strategy. 3rd Edition, Bedford Row, London, Thomson, 2001
Daniel, C., Charles, L. & Joseph H. Marketing, 5th edition, south-western. New York, 2003
Duncan, T. Principles of Advertising & IMC, 2nd ed. New York: McGraw-Hill/Irwin, 2008
Drummond, G. and Ensor, J. Strategic Marketing, planning and control, 2nd Edition, Butterworth Heinemann, 2001
Daniels, J.D., Radebaugh, L.H. & Sullivan, D.P. International business: environment and operations,11th edition. New Jersey: Pearson Education, 2007
Firoziyan, M., Hasangoli, T. & Stiri, M. Investigation of the effectiveness of the services on different processes affecting consumer decision. Commercial Management Magazine, 1 (3), pp.125-146, 2009
Fletcher, R. and Crawford, H. International Marketing: An Asia-Pacific Perspective, Pearson Australia, 2011
Hill, L.W.Ch. & Jones, R.G. Strategic management: An integrated Approach. (6th ed.). Boston: Houghton Mifflin Company, 2004
Ismailpour, H. & Ghafarieashtiyani, P. Marketing, 3rd edition, A university of Tasmania, Australia, 2002
Kevin Lane Keller, Brand synthesis: The multidimensionality of brand knowledge[J], Journal of consumer research. Gainsville: Mar 2003. Vol. 29, Iss. 4; p595-p601
L’Oreal Calls Review for Maybelline and Garnier Direct Work, Campaign (London), 2004, p3
Lv Wei. Strategy Management. Beijing: China Machine Press, 2002
Li Fei. Distribution Design and Management. Beijing: Sting Hua University Press, 2003
Laric, V. & Lynagh, M. The New Marketing, IMC and the role of Online Promotion, Proceedings of ASBBS, ASBBS Annual Conference: Las Vegas, 16 (1), 2009
Mullins, J. W., Walker, Jr., O. C., & Boyd, H. W. Marketing management: A strategic decision-making approach (6h ed.). Boston: McGraw-Hill Irwin, 2008
Priya Raghubir, Kim Corfman. When do price promotions affect pretrial brand evaluations? Journal of Marketing Research, 1999
Richards, R Kind, Daniel C Smith. Threats to the external validity of brand extension research. Journal of Marketing Research, 2001
Roger, A., Hartley, W., Barkowitz, N., Rudelius, W. Marketing, 8 edition. New York. New York: The McGraw-Hill Companies, 2006
Subramanian Balachander & Sanjoy Ghose, “Reciprocal Spillover Effects: A Strategic Benefit of Brand Extension”, Journal of Marketing, January 2003. P72
Stephanie, C. & Timothy, G. Customer Retention is Not enough. Journal of Consumer Marketing. 22 (2), 101-105, 2005
Trudy White-Matthews, Philip Coppard, Are brands really important?[J], Oct 25, 2004. Top of Mind: Brand Business, Vol. 109, Iss. 34; pg.32
Tulin, E, and Joffre Swait. Brand Equity as a SignalingPhenomenon[J]. Journal of Consumer Psychology, 1998.