Using the full spectrum of segmentation variables, describe how L’Oreal has segmented the Indianmarket.
L’Oreal has engaged in many forms of Market Segmentation in their venture in India, with differentvariables during different time periods. Firstly we will discuss the segmentation methods when it firstentered the market in 1991, followed by what ensued after their makeover.
When it First Entered the Market
Gender Segmentation: L’Oreal first segmented the population into the different sexes as they thoughttheir products’ “combination of low price and natural ingredients would fit India’s market, where womenuse plants and herbs as part of their beauty culture”. Their product specifically catered to the women of India, though later our group discusses how it should carve a niche market for itself in the Men’s sector aswell.Income Segmentation: L’Oreal segmented the market into 2 main segments: the poorer masses andthe rest. It marketed its product as low in cost to attract the poorer masses, and her efforts in reducingingredients to cut price reveals her aim to minimize costs as much as possible. At this point of time, it wasnot yet targeting the affluent middle class or upper class and thus did not make any distinct segmentation of the richer classes, preferring to regard them as a whole entity.
The “L’Oreal Makeover”
After a poor start, L’Oreal approached the market with a different concept. Presence of home brands posed problems as they had already captured a large proportion of the masses’ market share. They offeredcheaper products to buyers at a price which L’Oreal was unable to match, and their long presence hadestablished a strong sense of loyalty in the buyers, making it difficult to pry them away. With theunderstanding that it needed to capture a different market, it proceeded with a different from of segmentationin order to better identify its target segmentsIncome Segmentation: This time L’Oreal separated a new segment from the original 2 segments: thequickly rising middle class which was gaining in affluence. This was very specific compared to the originaltwo broad segments it identified as they saw that this was the fastest growing income class that represented ahighly untapped market potential due to their radically different mindsets from the masses.Psychographic Segmentation: L’Oreal segmented India into different groups based on their thinkingand behavior from the older, more conservative Indians who held conservative values of thriftiness more
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