de L'OrГ©al 1997-2007:
Solving and Revitalizing
a Classic Manufacturer
This case was written by Nicholas Rowell, Research Relate, under the oversight of Calcul Chandon, Relate Professor of promoting, and Klaus Wertenbroch, Teacher of Marketing, both equally at INSEAD. It is intended to be used while the basis intended for class discussion instead of to demonstrate either effective or inadequate handling associated with an administrative circumstance. We give thanks to Eddie Roschi (INSEAD 99) and Tanker Lapointe (INSEAD 99) to get providing beneficial input based on a report that they wrote although studying at INSEAD. We as well thank Vadim Grigorian (INSEAD 00) for his exploration assistance.
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Think of the partnership between customers and present brands as being a party. People meet within a noisy, congested place. While the room fills, it becomes harder to hear all who have something interesting to say. A number of the regular partygoers eye the crowd of fashionable newbies warily and begin to ask themselves whether they should change their particular look or whether probably their pick-up lines require updating. Others take a quick look at the newbies but handle to stay dedicated to their very own, original home that has worked well in the past. A large number of brands confront a similar obstacle. How can they will appeal to changing consumers and at the same time remain true to their original personality? How can they determine what they will really are a symbol of? How important would it be to remain faithful to that initial identity?
In 1997, Parfums Cacharel, formerly one of the brand leaders inside the perfume industry, was facing a dilemma. The business, whose products AnaГЇs AnaГЇs and Loulou were among the list of world's biggest selling perfumes during the eighties and early 1990s, was suffering a steep decrease in product sales. New products designed to stem the decline got met with overall consumer denial. Worse, after 20 years the Cacharel brand was burning off touch with new consumers as well as with its original id. In short, Cacharel was confronted by the unwelcome experience of a brand maturity crisis.
Just as this is becoming evident, Dimitri Katsachnias, a Ancient greek chemical professional with an INSEAD MASTER OF BUSINESS ADMINISTATION, arrived at Parfums Cacharel to move the company. In 37, he had 13 years' business supervision experience beneath his seatbelt at L'OrГ©al, Cacharel's parent company. Nevertheless, this was a large step. Katsachnias had under no circumstances before had overall responsibility for a manufacturer in a business headquarters. Perhaps more substantially, he had not been included in the brand throughout the crucial imaginative launch phase, and had, when he put it, simply seen Cacharel " from the outsideвЂќ. Faced with a crisis of brand name maturity high were zero prescribed solutions, how could Katsachnias and Cacharel diagnose that which was wrong?
Market and Industry Backdrop
Traces of scents and fragrances have been found in Silk artefacts employed for rituals and embalming via as far back as 3 thousands BC. Throughout the Renaissance fresh commercial paths between Europe and the Orient opened up, rousing perfume development. Eventually, they will settle into two fundamental вЂscent families', the floral and asian (see Demonstrate 1). The first modern perfume organization was founded in France in 1850 by the House of Guerlain. Current industry types вЂ“ affluence de parfum, eau para toilette, and eau de cologne (indicating decreasing attentiveness in perfume) вЂ“ claim that a French flavour has been maintained. Traditionally, perfumes were intended for personal cleanliness, as a deodorant. Today, purchasers are motivated by a more complex...