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“The idea is to adapt to the great markets,” he says. “So one, for example, is greater China, another one will be India and probably all Southeast Asian countries. Another one will be Latin America. It’s not country-by-country. It is continent-by-continent.”
A secondary aspect to universalization is the often-mentioned “reverse innovation,” in which a product is developed locally for a far-flung market and eventually finds traction in other markets in the world. Such was the case with L’Oréal’s Brazilian Total Solution 5 hair product. “Sometimes we take advantage of an innovation that has been created in a country and we realize that this [product] could be a huge innovation for the world,” Agon says. This is a departure from what has become known in the industry as the “L’Oréal model,” under which products are developed by pooling market requirements from the major continents, then creating a product in France that fulfi lls all those diverse needs. Under reverse innovation, the creative process happens in the outlying markets.
The marketing linkage between these two concepts is social networking, which plugs the consumer into the process. “With digital techniques today you are closer to the consumers. You can have really direct contact with millions or billions of consumers, and you can share with them the complete universe of a brand . . . which is the dream of any brand,” says Agon.
This is all part of a tectonic movement, he asserts, noting that “the first one is the big shift of the world and this universalization move, and the second one is this digital world that changed completely the way we can market our brands.” While L’Oréal has been spending more and more on digital, as a percentage of the total it is still only between 3 percent and 5 percent, Agon estimates. As proof that these concepts work, Agon points to “the fantastic success” of Men’s Expert, the male skin care wing of L’Oréal Paris. Its appeal did not develop so much in Europe, the market it was intended for, but on the other side of the world, in China. Agon says the reception in Europe “has been good but not extraordinary because, to be honest, European men are quite conservative.”
However, in Asia, especially China, the brand has been “absolutely rocketing,” as L’Oréal shifted gears to remake the brand for Chinese consumers in terms of the range, the products, the visual displays and advertising.
“It was, in a way, reinvented for the Chinese market,” Agon says. “For Asian men, looking good—or looking great—is as important as for women. For Asian men— Chinese, Korean, Indian also—having great skin is as important as being well dressed. There is absolutely no taboo on this kind of thing. Unfortunately, it’s not yet the case for Caucasian men in Western Europe or North America.
“The universalization of Men’s Expert is completely changing the destiny and the scope of the brand,” Agon continues, adding that “the future of men’s skin care or hair care is going to probably come from Asia.”
Agon also points to Garnier in India, where the brand has been dramatically adapted. “The brand equity is still the same but the products, the formula, the innovations, the advertising, even the formats of the product, everything has been made for India.”
World Wide Watch: Jean-Paul Agon’s Game Plan
Reach for the Stars Agon’s doctrine of universalization posits the idea of beauty for all, manifested by global brands that market localized products. In the Middle of It All To achieve his goal of adding 1 billion consumers to L’Oréal’s user base, Agon is squarely focused on the emerging middle classes.
Localize Innovation With R&D centers on almost every major continent, product development is no longer the sole purview of HQ in France.
Invest, Invest, Invest Spending increases in R&D and advertising have allowed the company to gain market share despite the worldwide recession.
Social Studies L’Oréal is aggressively using social networking to improve its communications with consumers around the world.