Performance of Mythic Oil Le Parfum and for it - Coursework Example

Select A Real-Life Company Of Your Choice. Choose One Of Its New (Hi-Tech Or Non-Hi-Tech) Products Launched Within The Last Three Years. Evaluate Its Performance And Put Forward Reasons For This Performance. Table of Contents Introduction 2 Description of the New Product 3 Performance of the Product since its Launch 4 Launch Strategies by L’Oreal 6 Ansoff Matrix 7 4Ps Framework 8 Product Innovation Process 11 Conclusions 13 References 15 Introduction For companies to sustain in the current global scenario, it has become necessary to focus on aggressive innovation strategies, as it would permit constant extension to the product lines and help preserve brand image to retain competitive advantages. As Porter & Kramer (2011) notes, in today’s capitalist market, producing shared values for stakeholders through innovation strategies is too necessary for organisations to ensure their long-term success. This particular trend has already influenced many organisations around the world, including Unilever, Nestle, Johnson & Johnson and many others (Porter & Kramer, 2011). As a matter of fact indeed, product innovation is quite easily associable with the brand name of The L'Oréal Group. Almost every year, the company launches new products as per the review of the market changes, which reflects the current consumer demands and preferences. It is thus that the company obtains competitive advantages by serving to the customers’ needs through continuous product innovation. It was in the year 2013 that the company launched a new range of products for its global customers, targeting both men and women. Among the new launched products, one was the Mythic Oil Le Parfum, which has gained much appreciation since its launch in 2013 (L’Oreal Professional, 2013). In the discussion henceforth, emphasis will be laid on the performance of the product selected, i.e. Mythic Oil Le Parfum since its launch. Special emphasis will also be delivered to identify the drivers’ responsibilities to trigger such performance of product along with its challenges applying theories relevant to the context. The objective of the discussion is thus to evaluate the performance of the product chosen and identify the reasons to its success in the global market after its launch. Description of the New Product There is a wide-ranging product line introduced by L’Oreal in the global market targeting its male and female customers. Every year the brand intends to extend its product line with the introduction of new products as per the market preferences, needs and trends. Therefore, it can be stated that the company emphasizes continuous innovation in its product line to enhance its competitive position (Machek & Machek, 2001). With the same objective, the company launched its Mythic Oil Le Parfum in the year 2013. The product was suitable for all types of hair and thus, had a wide marketability among the global customers. The perfume is produced from argan and sunflower oil. Besides, the product also offers a wide range of options to its application at the convenience and comfort of the users (L’Oreal Professional, 2015). The product comes in a size of 75ml in an attractive outlook, making it a favourable choice for the consumers. The product was launched worldwide in the season of Christmas, just at the beginning of November 2013, which attracted the attention of its targeted customers as immediately as it was launched (L’Oreal Professional, 2013). The Mythic Oil Le Parfum (Estetica Magazine, 2013) To be noted in this regard, the product was launched targeting the young customers of the brand, including both men and women. However, when concentrating on the market segregation strategies of L’Oreal, the focus group of this particular product was concentrated on brand conscious customers who preferred luxury products as a signature to their social status. The product can also be observed to have a strong impression on the loyal customers of the brand, as it focused much on advertising the products through its defined channels of distribution rather than delivering significance to new customer group developments that would have mandated the company to opt for aggressive marketing strategies. Notably, it was the first hair perfume launched by a beauty company and became the best selling product for L’Oreal that year, selling approximately one unit in every 17 secs around the world (Estetica Magazine, 2013). Performance of the Product since its Launch The product selected for this study, i.e. The Mythic Oil Le Parfum was a part of the Mythic Oil range launched by the L’Oreal, under its sub-brand L’Oreal Professional in the year 2011. As already mentioned in the above section, the product became a best seller of the company within a few months of its launch. Since its launch in the worldwide market, the product received considerable appreciation amid its customers. It must also be noted in this regard that the product belonged to a successful range overall that boosted its marketability to a considerable degree. With various characteristics to differentiate the brand from its existing limited number of competitors in the luxury beauty products market, the demand for this particular product increased rapidly throughout its global consumer sector (Atthebeautydesk, 2013). As L’Oreal offered its consumption through online shopping as well, demand for the product became outbound within a short tenure of its launch. Perhaps to hold back its demand the company decided to produce only limited edition of the product allowing it to be sold within the niche market at a considerably high price. Therefore, the product easily became the first choice for consumers who intended to use it as a signature of their social status. Another key quality of the product that proved as a Unique Selling Proposition (USP) for the same was its natural green ingredients, which indicated towards the responsible attitude of L’Oreal concerning the use of green technology in their products. In addition, the low degree of side effects likely to be generated with the repeated use of the product also made it preferable among the targeted consumers. It has been owing to these qualities the product gave a benchmark performance for its brand and sold at a frequency of almost 1 unit in every 17 sec (Estetica Magazine, 2013). Concerning the performance of the product, when considered on the basis of feedbacks obtained from the customers, the product gained much appreciation on the basis of its quality to lure a wide range of customers. Notably, the product was designed in a manner that would suit the preferences of many but not limited and hence, it soon became a favourite in the market. Positively, it addressed the need of its targeted group well that further accelerated its performance in the market after its launch. As per the consumer feedbacks, people seldom used to care for their hair fragrance and the product added to the luxuriousness the brand offered to its loyal consumers. In addition, owing to its natural ingredients, the perfume also enhanced the quality of hair on regular use, which accelerated its demand further as a product more than a mere hair perfume. To be considered on the whole, the product performed as one of the best sellers of L’Oreal, reassuring the brand a success in the market (Minnebelle, 2013). Launch Strategies by L’Oreal Launching a product in the most successful manner often proves to be the worst dreams of marketers in the current era (Bucherer & et. al., 2012; Dougherty, 1998). Not only does the industry specific requirements force that the new product must be according to the customers’ needs, but also that it must be easily differentiated from the products offered by its competitors (Evanschitzky & et. al., 2012; Lederman, 2009). As argued by Slater & et. al. (2013), product innovation and its successful launch in the market today ensures the renewal of brand image and continuing success of an organisation. Thus, it is no secondary to the competitive needs of a company. However, the effectiveness of a product launch strategy depends largely on many variables. Some of these variables include, the ‘schedule of technology releases’ by the firm as well as by its competitors, which further determines the readiness of the market to accept the change, that another variable responsible for the success potentials of the launch strategy (Lobel & et. al., 2015). As can be apparently observed even in the case of L’Oreal’s Mythic Oil Le Parfum, the company has been attentive in taking worthy advantage from its product launching schedule, which has in turn contributed to its success in the market. A better understanding to the company’s launching strategy can be obtained with the application of Ansoff Matrix and 4Ps framework. Ansoff Matrix The Ansoff Matrix emphasises four qualities and dimensions of a product launching strategy, which tend to elaborate on the objective of the company to launch a new product in the market and its further success potentials. These four paradigms of the matrix include, market penetration, product development, market development and diversification (refer to the figure below) (Kotler & et. al, 2010). Ansoff Matrix Components (Kotler & et. al, 2010) The above presented diagram, illustrates the different qualities of the four paradigms included in the Ansoff Matrix. When relating to the launching strategies of L’Oreal, the objective of introducing Mythic Oil Le Parfum can be associated with the dimension of product development through innovation. Although the product line of the Mythic Oil range was already existing in the market since 2011, the company attempted to launch a new product to renew its brand image amid the targeted customers. Focusing on the stated paradigm, the company targeted its existing market for luxury beauty products. This rewarded a scope to the company to make better utilisation of its present loyal customers and further increase the volume of such potential buyers for the brand. Likewise, the company made use of its existing value chain and extended it to another dimension of hair perfumes, which apparently obtained a cheering feedback from the market. Another driving factor to the success of L’Oreal’s Mythic Oil Le Parfum was the minimization of risks that the company focused by launching a new product for its existing customer sector. Its product centric launching strategies can also be examined with the application of the 4Ps framework. 4Ps Framework Besides determining a clear objective for the product launch, it is also necessary to make use of the marketing elements by mixing those variables in the most productive manner. The most commonly referred and traditionally noted components of a market, according to the 4Ps framework, include price, place, product and promotion. It is with respect to these variables that an organisation attempts to develop, innovate and launch new products within the targeted market to retain competitive advantages and obtain greater productivity (Kotler, 2011). An application of these components with relation to the launching strategies applied by L’Oreal will help to better assess the performance of Mythic Oil Le Parfum since its launch and identify the drivers to its success. Price: The pricing strategy applied by L’Oreal in presenting the product emphasised more on its luxurious value and quality rather than on the affordability of the customers. As was observed with the application of Ansoff Matrix, the company had its product launched in its existing market, which comprises of customers who decipher quality centric purchase behaviour than being concerned about the price of the product. In other words, the company focused on its existing branch of niche customers from the luxury beauty products market. Hence, price was not a mandatory object for the launching strategy. In addition, the product was supposed to have only a limited number of competitors in the global marketplace, which also indicated that competitive pricing was not necessary for the company, as the targeted product segment presented negligible risk factors concerning the pricing of the product. Place: Through the launch of the product, L’Oreal targeted its existing branch of loyal customers around the globe. The distributions channels used by the company were the same for its other products. However, in addition to the traditional or conventional channels of marketing that the company uses, Mythic Oil Le Parfum was also presented through its online channels. To be noted in this regard, the online channels were focused with greater significance by the company in launching the product. This further widened its reachability in the worldwide market for luxury goods consumers. Hence, the product attained considerable significance and a strong positive feedback from its targeted segment presenting huge possibilities of demand. In accordance to this fact, it must also be noted that the company was much aware of the huge demand the product was likely to attain from its target market and thus decided to launch its product in limited edition that offered a competitive advantage of high profitability within a short span. Product: As already mentioned in the above-discussion, L’Oreal used only natural ingredients to manufacture the product. As a trusted brand, the company was also emphasised to develop the product under the strict observation of beauty experts to make it suitable for the use of every hair types. Therefore, rather than segmenting its market into smaller sections, the product was targeted to a wider range of suitable consumers, involving both males and females. Its product features also sufficed the demands of quality concerned customers, as it was rich with natural ingredients using green technology, which is also likely to decrease the risks to any harmful side-effects for the users. Hence, it can be affirmed that the product strategies of the company was aligned with its objective to product launch and helped in renewing its brand image. Promotion: Being focused on the luxury customer range, L’Oreal emphasised promoting Mythic Oil Le Parfum through the defined channel of its distribution, rather than opting for aggressive commercial promotion. To be noted in this regard, it is often observed that such commercial promotion suits the launching strategy of the company when focusing on a precise consumer population (Kotler, 2011). On the contrary, L’Oreal’s product launch strategy, concerning Mythic Oil Le Parfum was focused on a wide range of customers from around the world. Hence, it was likely that the necessity to opt for aggressive promotional strategies was minimal in this context. However, the product was promoted online through company websites, in blogs and social media as well to increase its reachability to the targeted consumers. In addition, the product was promoted more frequently through online means during the early season of Christmas, not only as an option for a better style statement but also as a suitable gift item. This particular launching strategy further helped the company to boost its success potentials almost immediately on its launch. Product Innovation Process In addition to considering the above-discussed factors as responsible for the success of L’Oreal’s Mythic Oil Le Parfum, the strategies implemented by the company in the various stages of product innovation must also be taken into consideration when assessing the causes to its successful performance since it was launched. However, to be mentioned in this context, a degree of conflict persists among theorists with regard to the phases of product innovation. Thus, for the comprehensibility and precision of the assessment in this paper, three key phases of innovating a non-Hi Tech product has been considered. These three phases constitute (1) idea generation phase, (2) idea screening phase and (3) idea realization phase (Pfeffermann & et. al., 2014). (1) Idea Generation Phase: In this phase, the ideas for the new product begin developing, which is commonly based on the inferences drawn by the companies with respect to the market trends, consumer behavioural traits and competitor analysis (Pfeffermann & et. al., 2014). Observably, the concerns related to these factors when launching L’Oreal’s Mythic Oil Le Parfum can be found with reference to the then industry context, i.e. the industry trends of 2013 and since. As per the facts obtained, the industry trends were much positive during the fiscal year of 2013-2014, showing clear depiction of economies reviving from the stress of financial downturn. Focusing on the global trends of luxury beauty product market, which was the target market segment for L’Oreal, consumers were observed to show a higher inclination towards experimenting new products and hence, presented a virtuous scope of product innovation for L’Oreal. In addition, preference for herbal products, i.e. products based on green and natural ingredients also grew during this period that further helped cultivating the idea for L’Oreal’s Mythic Oil Le Parfum (EY, 2014). (2) Idea Screening Phase: In the idea screening phase, companies mainly target identifying the consumers’ needs and narrowing down the options to precision in order to develop the product with substantial minimisation of associated risk factors (Pfeffermann & et. al., 2014). Hence, obtaining the feedbacks from customers becomes crucial in this phase. However, with regard to L’Oreal’s Mythic Oil Le Parfum no such data was obtained that would have reflected consumers’ demand precisely for a hair perfume. Nonetheless, if the product innovation trends of the luxury cosmetics industry are to be studied for the period 2013 to 2014, it becomes apparent that the existing product ranges in the market were facing challenges owing to homogeneity in their innovation qualities and hence, suited for a new addition in the product lines (EY, 2014). In addition, the fact that the company produced its product in limited edition, which proves the concern regarding its acceptability by the customers and regarded as a screening test for the product (Euromonitor International, 2014). (3) Idea Realization Phase: In this phase, the idea developed with regard to the market analysis conducted by the company is finally implemented in the market. However, it is assumed that this particular phase does not mark the conclusion of the product innovation process, but simply shifts towards product development, wherein the existing products are continually enhanced in terms of their quality and other characteristics to meet with the customers’ preferences and demands (Pfeffermann & et. al., 2014). In relation to the performance of L’Oreal’s Mythic Oil Le Parfum, it further becomes apparent that the company has remained much emphasised in extending its product line of Mythic Oil since the launch of its hair perfume product in 2013. To be precise, the success of L’Oreal’s Mythic Oil Le Parfum encouraged further development in the product line that resulted in the innovation of many new products such as Mythic Oil Masque, a new range of Mythic Oil conditioners and shampoos among many others (L’Oreal Professional, 2015). This also indicates the success rate of the product since its launch. Conclusions The objective of this paper was to assess the market performance of L’Oreal’s Mythic Oil Le Parfum, which was launched in the year 2013 as an addition to the existing product line of the company for Mythic Oil under its sub brand L’Oreal Professional. Correspondingly, the report aimed at identifying the key causes for the success of the product since its launch. The findings thus obtained indicated that there were many drivers to the success of the product chosen. At the onset, a strong linkage was observed within the organisational objectives and the market needs, which augmented demand for such products and minimised the risk factors associated with the innovation of the same accordingly. Concerning competitive exposure of the launched product, propensity of homogeneity was minimal in the luxury cosmetics market. In addition, the product was manufactured with the use of natural ingredients that upraised its quality as suitable to attract quality concerned market end of the targeted segment. Furthermore, to retain greater profit margin and simultaneously, renew the brand among its loyal customers, or perhaps, in order to test the market, the product was launched in limited edition by the company. This in turn facilitated the products’ acceptance as a status signature among its consumers around the world. Owing to these facilitators, requirement for aggressive promotion was reduced that also proved effective in increasing profit margin for L’Oreal. From an overall perspective, it can be concluded that the strong and effective alignment between organisational objectives behind launching the product and the market trends, signifying the then persistent opportunities and scopes, which were the key reasons for the success of L’Oreal’s Mythic Oil Le Parfum. References Atthebeautydesk, 2013. 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