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Impact of Digital Marketing in Business Success | L’Oreal Study

629 Downloads1 I Published: 11 Nov ,2019

Introduction

Digital marketing is one of the emerging tools and techniques that has been adopted by many organisations for promoting their product and services in digital form. It is basically the promotion of products or brands through electric media. Moreover, some of the marketing experts are considering this process so that new endeavour can be determined in approaching customers as well as new ways of understanding their needs. In this report organisation chosen is L’Oreal, a French personal care cosmetic brand that deals in hair colour, skin care, sun protection and perfume etc. Now L’Oreal is amplifying themselves in to digital marketplace in order to gain competitive advantage. This report is going to conduct environmental analysis of digital presence, focusing on opportunities and its impact in cosmetic industry. Additionally, examining key digital tools, platforms, channels and comparing its digital presence with physical presence. Moreover, providing a plan for organising digital marketing activities and methods for monitoring as well as measuring digital marketing efficiency.

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Task 1

The digital environment

Digital environment refers to the integrated communication environment where several electronic or digital devices used for communicating and managing the activities within business. Now a days, these digital integration basically used by companies for performing activities related with digital marketing that support them by providing a medium to communicate with large number of customers together.

Digital Marketing

Digital marketing is defined as a process of marketing as well as communicating the product or services to customers using digital technologies which includes internet, display advertising, mobile phones and other digital medium. With the increasing competition as well as approach of customer toward digital channel for purchasing, L'oreal has also stepped for digital transformation. This help a lot in increasing customer base and stepping ahead within competition by adopting a channel to directly integrate with customers and solving issues they are facing to improve brand image.

Difference between online and offline marketing concept

L'oreal is using both online as well as offline marketing concept in order to communicate and sell out its product or services at marketplace. Both the channels have their own advantage but are totally different from one another that can be better understood through following table:

Basis of comparison

Online Marketing Concept

Offline marketing concept

Cost

The cost of online marketing is much affordable as major expenses are required to pay in starting i.e. starting optimised website, posting ads over social media.

The expenses of L'oreal was much higher in context of offline marketing as it has to maintain stock, pay rent, give salaries, payment of bills and update of advertisements.

Exposure

Online marketing support L'oreal in increasing its customer traffic i.e. upto 1 billion visitors over its website that also supported in increasing revenue of company.

In offline marketing the sale of L'oreal is not much higher as stock remains limited and also customer exposure is not regular due to barrier of customer approach.

Convenience

It reduces the barrier of time as well as place by providing an option of anytime purchase to customers hat supported L'oreal in increasing its market base.

Offline marketing is convenient as customers can purchase L'oreal product by trying that but it limit the customer visit i.e. only at the time when stores are open.

Key benefits of digital marketing

After getting into digital transformation, L'oreal get a huge benefit which supported it to achieve a greater position within marketplace. These benefits of L'oreal are explained below:

  • By setting up online website, L'oreal become able to increase its customer base as it get up to 1 billion customer visitors on their website.
  • It also get benefited by performing personalised marketing activities that help in keeping its customer satisfied as they option to directly interact with customers.
  • It also help in improving the internal communication of L'oreal management that support it in enhancing the quality of services by maintaining a proper coordination.
  • L'oreal get benefits with 45% growth of the business after getting digital transformation and by approaching the customers worldwide.

The opportunity of digital marketing

Following are the opportunities that are present in front of L'oreal after getting into a digital transformation:

Understanding of customer insight:- Digital technology has improved the way L'oreal approach and satisfy its customers. As by using online survey as well as data regrading the most viewed product company will be able to have an insight of customer regarding the products which are more in demand.

Rise of online consumer power:- Digital transformation has also supported in increasing the customer base as with the help of internet company is approaching people throughout the world by promoting products through its online website or social media marketing.

Challenges and impact of digital technology

Apart from all the benefit which it provide to L'oreal there are number of challenges which company has faced throughout its journey of digital transformation. These are explained below:

  • Shift from brand:-The competition over digit channel is very higher as customers can get number of alternative brand over internet to opt one among them that provide more benefit in term of cost, quality and image. This has increases a challenge of reduction in customer base due to brand switch.
  • Negative publicity:-In this age of digital technology the demand of customer is increasing very quickly as they want more easier and convenient services that proves to be major challenge in front of L'oreal. In addition to this dis-satisfactory comments from customer also lead to negative publicity which influence customer choice.
  • Multitude of different devices:-Another major challenge faced by L'oreal is that it become very difficult for it to track the devices that usually customer uses in order to make online purchase so that they can perform promotion over that to attract customers.

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Task 2

Digital platform and internet for revenue generation

Digital platform as well as internet has provided several opportunities to L'oreal for keeping its customer satisfied and earn higher revenue from its services. Following are the platform that are used by L'oreal:

Digital platform:- Under this L'oreal usually place their advertisement over Television that are of approx 30 seconds in order to inform customer about product as well as their benefits in order to attract them and increase their sale as well as revenue.

Internet platform:-In this L'oreal generally uses two channels that are official website of company which enlists a detail description about the number of product, its uses and benefits to promote as well as sell them online. Another channel used by L'oreal is social media sites that includes Facebook, Twitter, YouTube etc. where they post review of their product given by customer in form of comments, pictures or videos. This help in attracting customer through the experience of others which in turn also help in increasing its sale.

Task 3

Narrative story:

In today's era L’Orealis one of the leading brand in personal care beauty products. When they were emerging themselves in to digital marketing they have faced many issues and challenges in developing setting up their business operations over digital platform. One of the issues faced by them was Julia Roberts case that the ad campaigns were featuring pretty woman was overly airbrushed. This ad was investigated by Liberal Democrat MP Jo Swinson that ads are misleading negatively to general people as it was overly perfected and unrealistic image. The Advertisement Standard Authority ( ASA) ruled over it that such ads are breaching advertising standards code for exaggeration and misleading local people.

Moreover, Swinson complained that this image of celebrities has been digitally manipulate as L’Oreal was not able to meet up the requirements which they have claimed regarding its products quality. From such instance L’Oreal of United Kingdom have admitted that image has been digitally retouched to lighten up the skin, clean make up, reducing up dark shadows and darken eyebrows. However, it was also claimed that after such digitalisation with the picture their was still signs of ageing as crow's so that image can accurately illustrated so that result can be achieved. Furthermore, on the basis of evidence it has been concluded that ad image accurately illustrated the effect of product that could achieved but the image had not been exaggerated by digital post production techniques. Apart from this Swinson said that pictures of flawless skin and super slim body do not reflect reality. So in order to overcome this issue L'oreal has formulated an marketing campaign plan which support in improving its market image in front of customers.

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Organisation of digital marketing activities and building multi-channel capabilities in an organisation

Multichannel approach refers to the practice adopted by company to build interaction with a wide range of customers by way of a number of channels, i.e., direct as well as indirect, in order to persuade them for buying the products and services delivered by organisation in marketplace. L'oreal is a the largest and leading company within the cosmetics industry. Thus, it is largely essential for enterprise to indulge in digital transformation in order to make sure that they remain at the top position perpetually and continue to retain the loyal base of customers by providing high quality cosmetic products. In this regard, this leading cosmetics brand has now come up with a digital marketing plan to undergo digital transformation within the organisational premises. This plan will assist the enterprise in effectively organising digital marketing activities as well as providing efficient assistance to company in development of multi-channel capabilities for its active and luxury cosmetics division.

In this regard, company has formulated a digital marketing plan which comprises of a number of activities which are described below:-

Background:L'oreal is a leading cosmetics brand which possesses high name and stake in global marketplace owing to which it becomes essential for enterprise to indulge in effective marketing activities to lure the attention of customers towards its product portfolio. In this regard, to build an effective communication with clients, this organisation has been using brick and mortal style stores wherein customers can come up and raise a query related to product before making purchase of any cosmetics item. The company has two segments within cosmetics branch, namely, active and luxury cosmetics segment.

Marketing initiatives:L'oreal has planned to undergo digital transformation wherein company is making efforts to build an optimum interaction with clients so that they are well acquainted with the products being provided by company within cosmetics segment such as lipstick, eyeliner, nail paint, foundation, eye shadow etc. The digital marketing head of this organisation has planned to make use of social media channels such as Baidu, Facebook, Instagram, Snapchat, YouTube and also making the website more attractive by putting digital content on it. At present, the visitor count on the company's website is 1 billion and also organisation has over 1.6 billion cookies. Owing to the adoption of digital marketing strategy, company is targetting at enhancing the existing sales and profitability levels for the cosmetics segment.

Promotion Mix: L'oreal is making use of a promotional mix to make sure that the digital marketing activities planned by the enterprise are being carried out as per the organisation and management decided by the company.

  • Advertising-It is one of the most significant and important elements for L'oreal wherein they create a viable digital marketing campaign program where they will demonstrate the products and product portfolio of entity and also emphasize upon the unique selling point of entity to establish a positive and impactful image in the minds of customers. This will take place by way of a 15 to 30 seconds long advert. Also, here the company is making use of e-mail marketing as well as publishing of digital content on entity's website to grab the attention of people.
  • Public Relations-This is yet another crucial element which is being used by Loreal to build a positive and effective image in market and assists the enterprise in launching new products within cosmetics segment and thereby aiming at enhancing the existing sales and profitability of company in marketplace.
  • Personal Selling-This is being carried out by the organisation within their brick and mortar style stores wherein L'oreal has showcased a wide variety of cosmetics products in order to gain the attention of customers and luring them at first impression. This assists Loreal in building a direct contact with customers and adopting such tactics which can help them to retain the loyal base of consumers for a long duration of time.
  • Sales Promotion-This is an effective tool which is a crucial component of promotional mix and assists a company in stimulating customer purchases and is generally based upon an immediate or short-term goal and objective. In this regard, L'oreal is striving to enhance the existing sales by 25% by next 2 years and profits by 10% by the end of next 1 year. For this, organisation has opted the option of digital campaigns and social media marketing. With this, they will be able to increase the name and stake of company in marketplace.

Conclusion

From the above discussion it has been concluded that digital marketing has been becoming essential component in over all success of many organisation. It help an organisation to understand the different opportunities, challenges and its positive as well as negative impact on today's digital environment. Eventually, it help a respective organisation to know what are issues they can face on online marketing rather than offline marketing of products and services they are offering to its potential customer's. Moreover, they are adopting digital tools such as social media platform like Facebook, Twitter, Instagram and YouTube along with promotion mix techniques in order to achieve sustainability at market place. Additionally, they need to monitor marketplace by measuring the need and requirements of digital marketing tools or techniques effectively so that they can attain sustainability for longer duration of time.

References

  • Glowik, M. and Smyczek, S., 2012. International Marketing Management: strategies, concepts and cases in Europe. Walter de Gruyter.
  • Carr, M. G. and Newell, L. H., 2014. Guide to fashion entrepreneurship: the plan, the product, the process. A&C Black.
  • Camino, J. R. and Rúa, M.D.G.L., 2012. Dirección de Marketing. Fundamentos y aplicaciones. ESIC Editorial.
  • Durand, A., 2019. Marketing and Globalization. Routledge.
  • Aragón, M.E.E., 2014. Marketing en la actividad comercial. Editex.
  • Sheth, J. N., Sinha, M. and Shah, R., 2016. Breakout strategies for emerging markets: Business and marketing tactics for achieving growth. FT Press.
  • Ismail, A., 2018. International Marketing Strategies in the Celebrity Cosmetics Industry: A Dual Case Study: Huda Beauty and Fenty Beauty.
  • Hult, M. and Sjölund, J., 2017. Dynamic Marketing Capabilities: Organizational Renewal Towards Social Media Marketing.
  • Cunha, M.D.C.D.O., 2017. L’Oréal: Ombré hair kit consumer-focused product development to find new market opportunities(Doctoral dissertation).
  • Ahmed, S. H., 2017. Challenges and opportunities of a media planner.
  • HUANG, J., 2014. Plan de negocio para una agencia dedicada a marketing digital, especialmente para el mercado chino (Doctoral dissertation).
  • Ahmed, J. U., Sultana, H. and Ahmed, A., 2018. Patanjali ayurved invades India. DECISION. 45(1). pp.75-91.
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