Market Trends

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Market Trends Opportunities

• Mens hair coloring is one of the fastest growing
  segments of the hair-coloring market
• Younger men have already started using hair
  coloring products
• Nearly one-third of men stated that they have
  made changes to their hair, including hairstyle
  and coloring, and an additional 15 said they
  would be willing to do so in the future
• According to Statistics Canada, each household
  spends 834 on Personal care in 2003.
• In total, there is 9,844,052,280 spent in
  personal care in 2003

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Hair Color Industry
Inelastic demand hair color is a seasonal
purchase not regular purchase
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• Market Development Index
• Current Market Demand
• Maximum Market Demand
• 1.01 x 100 77.6
• 1.3

x 100
Current market demand 1.01billion is the total
sales for the year 2004 of hair color products in
US Maximum. Market Demand 1.32billion is
calculated based on the assumption of 5 growth
rate over the years from 2002 to 2004
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Market
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Market
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Porters Five Forces Model
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Hair Coloring Market Media Expenditure by
Advertisers

• Investments totaling to 24.8 million in measured
  media during 2001.
• Television 63.1
• Magazines - 24.5
• Out of home 12.2
• Newspaper edged in with 0.3. 

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Dominant Brands
403 million (sales)
60 245 million
(sales)
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TOP 10 MARKET LEADERS

• Preference 11.2
• Excellence 8.7
• Feria 7.8
• Nice n Easy 7.3
• Just for Men 6.7

• Coulear Experts 4.6
• Natural Instincts
• Garnier Nutrisse with 4.4
• Hydrience with 3.4
• Colorsilk with 3.2.

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FACTS FIGURES

• World's largest cosmetics company, with
  consolidated sales of 10.7 billion euros
• Operating in more than 150 countries and
  employing more than 52,080 people
• LOreal consists of 17 global brands, marketed in
  more than 130 countries
• LOreal consists of three product divisions such
  as
• Professional products division
• Consumer products division
• Luxury products division

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Challenges

• A large number of LOreal consumers cannot
  recognize LOreal Products 38 for Preference
  and 54 for Excellence
• Consumers confuse LOreal Brands with competitors
  brands
• Only 14 of LOreal consumers are brand loyal-
  Low switching costs
• Product differentiation is low
• Intense Competition

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Opportunities

• Drugstores are the most common place for hair
  colour purchase
• Increase in hair colour demand
• LOreal is hair colour leader for both males and
  females
• Increased reliance on internet for information
  source

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Objectives

• To determine the factors consumers consider when
  purchasing hair color products ( who, when,
  where, why and how)
• To understand and analyze the differences in
  gender on attributes when choosing hair color
• To determine consumer perceptions and attitudes
  towards LOreal
• To evaluate brand loyalty and frequent users of
  LOreal
• To provide recommendations for marketing
  communications based on the results of our survey
  and analysis done by the team

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METHODOLOGY

• Sample 82
• Included both women and men
• Results from survey placed into SBSS program
• Cross tabulations
• Frequency
• Correlation
• Chi-square test
• The Mean test t-test for equality of means

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PRIMARY RESEARCH RESULTS
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Kano Method
Potential for customer satisfaction and for
customer dissatisfaction.

• Features
• Price
• Packaging
• Color
• Quality
• Coupons or Specials
• New Products Features
• Value-Added Package

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Kano Method
CUSTOMER SATISFACTION / DISSATISFACTION
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LOreal Brand
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LOreal Brand
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LOreal Brand
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ALTERNATIVES

• Alternative 1 Develop more products to male
  frequent hair color product users
• Alternative 2 Opening LOreal salon
• Alternative 3 Converting LOreal infrequent
  users to frequent users

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Alternative 1Develop more products to male
frequent hair color product users
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Alternative 2Opening LOreal Salon
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Alternative 2Opening LOreal Salon
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Alternative 3Switch LOreal infrequent buyers to
LOreal frequent buyers
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Alternative 3Switch LOreal infrequent buyers to
LOreal frequent buyers
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Recommendation- Convert Infrequent Buyers of
LOreal to Frequent Buyers

• Television Commercials- Americas Next Top Model,
  Canadian Idol, The Bachelor
• Target Universities Business challenge
  competition
• Co-branding- Pantene
• Tokens on hair colour packaging
• LOreal representatives at drugstores to provide
  free samples
• Implement Internet Strategy

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• Merci beaucoup
• LOréal, parce que je le vaux bien.
• 'Because you're worth it'