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L'OCCITANE

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by

Eva Ohayon

on 1 October 2015

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Transcript of L'OCCITANE

International Marketing Case
Difficulties during its internationalization process
Opportunities and threats
of the
economic environment
of the countries
Introduction
PROBLEMS IN ASIA
In Hong-Kong and Tokyo, Reinold Geiger admits: "
it was not working at all
". Asian consumers are very cautious and loyal clients.

In China :
Administrative burden
Counterfeiting : "Durance en Provence", "L'Occitown"...

PROBLEM OF IMAGE
Problem of being a small group
The consumers might not understand the brand.
Cécile Verdelhan
(marketing manager) : people think the brand sells basic products when they want to concentrate on quality face and body care.

2010 : the group becomes the first French company to
launch an initial public offering in Hong-Kong
(second non-chinese)
> Succeeded raising 532 million euros
> Implanted durably the Asian market

Japan represents now 25% of the brand's sales. L'Occitane has a higher turnover than most luxury brands. Tens of shops are opening in China each year.
Opportunities and threats
of the
social cultural environment
of the countries
EMERGING COUNTRIES
In Brazil : benefited from its
long going relationship
with the country (17 years) to open the new brand "L'Occitane au Brésil".
> the clients were already loyal
> taxes were avoided :
L'Occitane au Brésil products are 30% cheaper

A UNIQUE IDENTITY
TAXES
Taxes in Brazil are very low and made the products very expensive. It made it difficult for the brand for it wanted to touch a very large panel of consumers.

COMPETITORS
Décléor, Estaban or The Body Shop are implanted in Europe and the US and have a very natural and healthy image too.

ECONOMIC SLOWDOWN
With the global economic slowdown, L'Occitane feared to be affected.

This was especially the case in its hometown.
It is now 30 to 40% more expansive to produce in France than in the US (even more comparing to China)

L'Occitane always remained the only brand selling the Provence spirit. Therefore, it as able to enter a very competitive market and make its own place

Opportunities and threats
of the
political environment
of the countries
€3.8 million from Geiger’s investments
Period of slow growth after the initial positive trend
Boom of emerging economies since 90s
Internationalize
why
where
BRIC countries from a long run perspective
Demographic segmentation as a key factor
China, Hong Kong, Brazil and Russia currencies grew respectively at 20.1%, 13.1%, 10.6% and 10.4% in 2014
EMERGING COUNTRIES
Growing middle-class and its willing to have same consumption patterns as upper classes.
Concerning about buying green and eco-friendly products and organic and natural cosmetics
RECOMMENDATIONS
Personal recommendation are more reliable than ads. In Brazil there is no L'Occitane ads on TV or outdoor ads, so people will consume its products based on other opinion or past good experience.
It could also be an opportunity
In particular, Brazilian people and their thought that foreign products are better than national ones
Brazilian people are very into body care products and cosmetics
BRAZIL
WOMEN BEHAVIOR
Women is progressively participating more in the labor market and are increasing their income to spend in beauty and cosmetics products
BRAZIL
Reduction of protectionist barriers
Progressively opening of borders, during FHC government, period that L'Ocitanne arrived to the country
REGULATORY ISSUE
Occurs in many countries where the company has its business, once government regulation and rules can suddenly change.
In Brazil, we have ANVISA and the certification process is time-consuming.
Market Entry Modes
Segmentation and Postioning
Process started in 1996
=> Opening in NY, HK and Japan (97)
=> No adaptation needed
Strategy : Subsidiaries in major Markets
Use local Distributors in smaller markets
Early scouting Brazil 95:
- J-V with local distributors
- Developing economy around 05 => acquire total control of their subsidiaries on site (45 stores in 09)
Problems faced in Brazil => creation of Brazilian Brand "L'Occitane au Brésil" (reduction of cost, bigger segment touched) => Adaptation
Strategy: Global Standardization
=> Universal store to be exported

History
1976:
Foundation of the brand
"L'Occitane"
by Olivier Baussan associated to the chemist Yves Millou.

Name refers to The Occitania (South of France & North of Spain and Italy) which has specific cultural identity and lifestyle.

Create a brand that celebrates the Mediterranean well-being and transmits these know-how.

1977:
First store (Manosque) called "Le Relais Occitane.

1981:
First factory (Volx).

1992:
First Parisian store.
1976 - 1992
1994:
Reinold Geiger began to invest in the company step by step before becoming the main shareholder in 1996.

1996:
L'Occitane started to internationalize its business by opening stores in New York, Hong Kong and Tokyo.

1997:
L’Occitane is the first company to use braille labels on its products.

End of 90's:
Change of name brand to "
L'Occitane en Provence
" because the term has more meaning to an international audience.
1994 - 2000
Clear Positioning: First Name was "L'Occitane" now is "L'Occitane en Provence"
=> Focus on authentic Provence spirit
=> Latinity values high quality authentic natural Products

2001:
First L'Occitane SPA in São Paulo.

2006:
Launch of the L'Occitane Foundation
→ Support of the blind
→ Economic emancipation of women

2007:
The brand had 900 stores around the world.

2010:
First French group listed on Hong Kong Stock Exchange, selling 316 million of shares. This decision was motivated by the fact that 49% of the sales come from the Asia-Pacific area.

2012:
New R&D laboratory : 100 researchers and experts.
L'Occitane reached 2 OOO stores all over the world.
2001 - today
Opening of High-End SPA to srenghten quality and focused positioning => Adaptation of the therapies
Customer experience during purchase of products => Dream of France and Provence
Products
Inspiration from aromatherapy and Provençal traditions
Cosmetics products
ASIA
Body and face care for women and men
Bath products
Fragrances
Candles and home perfumes
Asian customers are not curious as American people and are not that open to the new
CHINESE COPIES
Natural components from fair and local trade.
Favor the plant extracts, from the Provençal and Mediterranean region (Protected Designation of Origin) and Bio (with the Ecocert label).
Durance en Provance
Occitown
Types of products
Composition
SPA activity
60 SPAs situated in 23 different countries.

Offer body treatments with L’Occitane products associate with traditional therapies of the host country.
The Group
Cosmetics brand created in 2004 with the opening of a SPA in an old convent in Provence
A bio cosmetics French brand bought in 2008 by L'Occitane Group
French-Korean cosmetics brand bought in 2012 by L’Occitane Group.

The brand associate the Korean know-how to the French luxury.
The Brazilian brand of the Group was launched in 2013.

It offers cosmetics products made with local ingredients.
Thank you for listening!
Any questions?
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