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L’Oreal India is adopting a dual pricing strategy for the Indian market. The French multinational has decided to make its hair care range under L’Oreal more affordable, bringing it under the ‘masstige’ segment. At the same time, it has retained its premium positioning in the colour cosmetics and skincare segment.
It has also introduced sachets for its shampoos and conditioners with the hope of taking its distribution into the hinterland.
Mr Satyaki Ghosh, Director, Consumer Products Division, L’Oreal, told Business Line , “We have a dual positioning in India. In hair care, we are changing from super premium to the masstige segment and moving to the centre of the market. However, we will continue a premium positioning in the skin care and cosmetics segment.”
L’Oreal took its first big price drop (25 per cent) for its hair care range after it started manufacturing shampoos in India in 2010. Recently, it took another price cut of four per cent to peg its 100 ml shampoos at Rs 69.
“We have not gone mass with our shampoos but continue to remain in the prestige segment but closer to the mass market,” explains Mr Ghosh.
The MNC believes that it can afford to have a dual positioning strategy with L’Oreal as its other brands such as Garnier and Maybelline (with overlapping categories in hair care, skincare and cosmetics) can fill the gap with their lesser priced offerings while it continues to have premium pricing in certain categories.
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At the same time, L’Oreal does not want to erode its premium image in shampoos at one go and has kept its pricing a tad higher than its nearest competitors. So while L’Oreal Paris shampoos are priced at Rs 69 for 100ml, while Pantene is at Rs 59 and HUL’s Dove at Rs 64. “We are not mass and still at a slight premium than our nearest competitors for L’Oreal Paris shampoos,” adds Mr Ghosh. Currently, L’Oreal is the third largest player in shampoos after HUL and P&G.
The introduction of sachets is also expected to lead to enhanced distribution for its shampoos and conditioners. Currently, L’Oreal reaches out to 2,300 towns and covers seven lakh outlets. “We expect to go deeper into India with our sachets and reach out to an additional 2,000 more towns,’’ says Mr Ghosh. L’Oreal India, the Indian subsidiary, was set up in 1994 and is today growing at a 30 per cent CAGR.
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