This article takex green marketing and green brands into consideration and how companies can use green marketing and green brands for their own good by using the example of L’oreal.
Just like all the other companies in all the markets, L’oreal have been facing some environmental concerns in the hair care and cosmetics industry. L’oreal focuses on decreasing the negative impacts of the environmental concerns on the company and they try to deal with these impacts. According to the head of the Turkish Consumers’ Federation, Bülent Deniz, “L’Oreal has been selling in Turkey since 1989, and has increased its sales volume across the country 45% in the past 5 years” (Hürriyet, 2006). While L’oreal increases its market share in Turkey, some environmental concerns arise more and more for which L’oreal needs to come up with solutions. The solutions of L’oreal consist of green marketing and green brands.
L’oreal carries on different activities in order to come over the negative impression on their Brand. The political issues give an impression to the customers that L’oreal is a brand of people who are a kind of enemies of Turkey. L’oreal deals with these impression by carrying social responsibility projects in Turkey in order to give the thought that L’oreal cares about Turkish people. One of the social responsibility projects of L’oreal in Turkey is giving scholarship to scientist women in order to finance their studies.
The Project is carried under the title of “For Scientist Women” and by this Project the company gives the impression that they are caring about Turkey and Turkey’s growth in areas of science. Also, they attract attention by using commercials and according to Neilsen, L’oreal became the brand that was advertised the most in magazines with 193,25 pages in the first quarter of 2015 in Turkey.
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The second environmental problem in the market for L’oreal is the governmental issues in Turkey. L’oreal’s operations are hugely affected by these problems and L’oreal has to come up with solutions to them. The governmental problems include rules, regulations, laws and etc. One of the main problems that arise as a result of regulations is the taxes. The government puts a huge amount of Taxes in cosmetics products. Since L’oreal produces cosmetics products, they get affected by the taxes.
The special consumption tax is stated in (Turkey Revenue Administration, 2016) as cosmetics products are listed in special consumption tax. Government puts both VAT and special consumption tax on cosmetics products. The VAT is 18% and the special consumption tax is 20%, which increases the price of a product that is actually 100TL to 141,60 TL. The taxes put by government increases the price of the products that the customers receive and this way the customers tend to buy cheaper products insead of the products of L’oreal. As a result, the taxes put by the government become a potential threat to the sales of L’oreal.
In addition to governmental issues and boycott problems as a result of political affairs of the countries, supply chain management is another environmental concern for L’oreal. L’oreal competes with various big cosmetic companies and one of the main areas that these companies compete with each other is the suppliers. Everyone is aware of how the supply chain management is important for companies in today’s World. From now on, the companies are competing for supply chains and this competition will continue in the future as well. So, L’oreal has to manage the supply chain of the company in a well structured way in order to get the big part of the pie in the cosmetics market in Turkey.
Benefits of Green Marketing
Lastly, another environmental concern for L’oreal and the whole cosmetic market is the financial situation of the citizens, who are the potential customers of L’oreal Turkey, so the financial situation of Turkey. Even the economical conditions of a country is a potential threat for all the markets in any country, L’oreal is likely to get affected by this problem as they are a cosmetics producer and one of the first things that people are going to give away is the cosmetics products as they may be considered as a luxury product.
The former CEO of L’oreal Turkey, Malek Sarmini states that “Our domestic rivals are Kopaş and Evyap. But, these companies are in the cheaper segmentation of the market. In addition, I can not say that they produced new formulas. Last year, because of the economic crisis, they did a better job and increased their sales espacially in shampoo area compared to the past years. Since they were domestic, they had an advantage in rivalry” (Capital, 2002). The statement of Malek Sarmini clearly states how dangerous financial problems and economical crisis in Turkey can become for L’oreal. So, that is an important environmental factor for L’oreal Turkey and the company has to find ways to deal with that problem.
In addition to everything else, The political problems between the triangle of France, Israel and Turkey decreases the sales of L’oreal by a respectable amount and more importantly these problems affect the impression of customers on the brands that are under L’oreal label which are Biotherm, Cacherel, Garnier, Giorgio Armani, Inneov, Kerastase, Lancome, Matrix, Maybelline, Ralph Lauren, and Vichy (L’oreal, 2016).
The negative impression of customers on these brands under L’orel label is more important than the periodic decreases in sales because they have a potential of becoming a negative effect on the sales in the future as well (Branding Strategy Insider, 2016). As L’oreal has such a big problem with their sales and brand reputation, they eventually need to find a way to get over those problems.