PRESENTED BY:oANUM IRFANoSYEDA AREEBA TARIQoHASSAN AZIZoNASHMIA NAJEEBoFAHAD UR REHMAN

“CASESTUDY”SUBJECT:MARKETING MANAGEMENT

OVERVIEW

• Founded in Sweden in 1967 by Robert af Jochnick and Jonas af Jochnick

• Use Direct Selling• 1.3 billion Euros in annual sales • approximately 3.1 million Consultants • 7 500 employees • 900 products annually • Global R&D centre with more than 100 scientists • 5 own production units Operations in 61 countries of

which 13 franchisees

CONT…

• No. 1 position in Europe and on 2nd all over the world.• Considered as Avon of Europe due to success.• It is also listed in Nasdaq OMX Exchange since 2004.• Came to Pakistan in 2009 with headquarters in Lahore.• Growing market in Pakistan.• Concept of Network marketing uncommon in Pakistan.• Word of mouth publicity.

MARKETING STRATEGYSEGMENTATION

GEOGRAPHIC

World Region More than 60 countries

Density Sub urban to Urban

DEMOGRAPHIC

Age 15 to 50

Gender Male, Female

Income Strivers and Above

PSYCHOGRAPHIC

Social Class Middle to Upper

Lifestyle Achievers

BEHAVIORAL

Benefit Quality

Attitude Positive

User Type: skin care, makeup, fragrance, body care and hair use

TARGETTING

• Age group of 15 to 50 users who want to look good and fulfill their dreams

• Young students• Professionals • Adults

DIFFERENTIATION

• Network Marketing (Direct Channel)• Quality• Natural herbs

POSITIONING

• European products from natural herbs at affordable prices

• A complete fashionable cosmetic brand• Premium Quality

MARKETING MIX

PRODUCTORIFMLAME has a wide variety of product lines and product ranges

which are:

• Skin care: Nourishing hand cream, optimal white day fluids SPF 15, Diamonds cellular anti ageing cream, Optimal nutri calm night creams, optimal nutri calm day cream.

• Make up: Renewing hand scrub, Lip spa therapy, Matte control pressed powder light and medium, Matte control foundation, Oriflame beauty studio artist (lipsticks), kohl pencil (eye pencil)

• Fragrances: Ascendant deodorant spray,sun eau de toilette, Mid-night pearl eau de perfume,

• personal care: Oriflame hippo soap, tear-free hair and body wash, fairness soap, Hair X care protect shampoo.

• Accessories: Oriflame beauty mirror, Hair X cushion brush, Foot file, Anti cellulite massage.

PRICE

• ORIFLAME does premium pricing for its few products which are for the upper class.

• There are products at various prices which is affordable by students and professionals.

• Whereas, they have a complete range of products for middle class easily affordable.

PLACE

• Oriflame does direct selling. The products of oriflame are available on the oriflame shops or outlets only. There are no retail outlets of oriflame. Like in Pakistan oriflame shop is located 14-A Ground Floor Ali Block New Garden Town Lahore and BC-11 Schon Circle Block-9 Karachi

• Oriflame even sells its products online. They sell either through Facebook or through its official site www.oriflame.com.

• Oriflame even appoints its customers to sell its products that is through it scheme "Make Money Today and Fulfill Your Dreams Tomorrow."

PROMOTION

ORIFLAME has done many promotional activities to promote the company and its products:

• ORIFLAME has never done any promotion through media. All the promotion of ORIFLAME is done by “ WORD OF MOUTH” promotion. They have not created any adds for the products . But in 3 to 4 months they make their new catalogues in which they tell the customers how they have upgraded their products and if any new flavors or a new product itself has been created.

• One promotional strategy is that at Oriflame you have the opportunity to become a Consultant and, on the same day, show the catalogue to friends, neighbors and colleagues, take an order and earn money immediately. Tomorrow you can invite people you know to also become Consultants, start building your team and enjoy unlimited earnings.

CONT…• Then oriflame even sells its products in deals and give

discounts like around 20% discounts are given. And all the hair, skin products are available in those deals together. This was named as Oriflame bazaar as there were several deals for the customers.

• Then this December oriflame will visit the whole Asia to promote its products more, to increase sales and to bring many people together. A historic event is about to take place and you will get to experience it first-hand! This December get ready for the biggest prospecting tour in the history of Oriflame Asia coming to your neighborhood. This extraordinary tour aims to changing the lives of many people through Oriflame’s “Make Money Today and Fulfill Your Dreams Tomorrow” business opportunity. We will be visiting 1,000 cities across Asia where you will get the unique chance to participate and explore our Oriflame Opportunity Meetings.

COMPETITION:

Mr. Saad the Area Sales Manager of Oriflame in Pakistan said, “To be the market leader is difficult within a pace of 3 years but I see the company in growth face of the product life cycle.”

• ORIFLAME competitors are AVON, AMWAY, Faberlic and others.

• AVON has always been the biggest competitor of ORIFLAME.

• ORIFLAME has indirect competitors too- such as LOREAL, MAYBELLINE, MADONNA.

SALES FORCE

• Oriflamme calls its consultants their BUSINESS PARTNERS

• The consultants get 20% discount on every product he/she buys and this way they keep 20% in their pockets by selling product to others on actual price.

• If any target achieved they get pins which are beautiful, attractive recognitions like some badge.

EMPLOYEES

• Oriflame believes employees are an important investment for success

• All employees regardless of gender, ethnic belonging, nationality, age, sexual orientation, political or religious affiliation or physical capacity should be evaluated based on the same basic principles; performance, experience and potential.

• The company offers competitive compensation and benefits packages to attract and retain the very best people and let them share in the success that they build.

CONT’D

• some of the benefits they offer are competitive salary, staff bonus schemes, on job training and development opportunities, insurances and healthcare (medical).

CSR

• To help them identify the right projects to support, the majority of Oriflame markets are working with NGO partners like;

• World Childhood Foundation • SOS Children’s Villages • Bethel• Christian Children’s Fund Foundation • The Foundation of Goodness

SALESRegional sales 2007 2008 2009 2010 2011

Euro million

CIS & Baltics 613.1 759.1 725.0 861.0 826.1

Europe, Middle East & Africa (EMEA)

358.3 390.3 395.4 407.9 420.6

Latin America 49.1 58.5 62.5 84.1 87.3

Asia 62.2 82.4 112.9 143.6 146.0

Other 26.7 29.4 20.7 17.0 13.7

Group 1,109.4 1,319.7 1,316.6 1,513.6 1,493.8

PROFITSRegional operating profit (adj.)

2007 2008 2009 2010 2011

Euro million

CIS & Baltics 119.8 147.5 106.8 135.0 133.7

Europe, Middle East & Africa (EMEA)

65.1 71.4 59.1 54.0 61.1

Latin America 4.4 5.2 1.3 3.0 4.6

Asia 2.3 3.3 9.1 10 10.1

Group overhead and others

(36.2) (40.1) (29.5) (33.9) (45.5)

Group 155.4 187.3 146.8 168.1 164.1

CHALLENGES FACED BY THE COMPANY

• Unavailability of few major products mentioned on catalogue.

Mr. Saad said, “This would have increased frustration among the consumers due to which they might shift to other brands.”

CONT…

• Recruiting and retaining employees/sales force.

“Attracting the sales force was not an easy task but was more like selling an opportunity to them. Still we are facing this problem but the company is working its level best to recruit sales force that are literate and provide them attractive packages to retain them.”

CONT…

• Lack of awareness among the people in Pakistan about the brand and its operations.

Mr. Saad the Area Sales Manager of Oriflame in Pakistan said,

o “To be the market leader is difficult within a pace of 3 years but I see the company in growth face of the product life cycle.”

o “There is a need to create awareness rapidly. It’s impossible over night but to achieve the aim to be the market leader; people associated with the company have to work day and night.”

QUESTIONS:

1. Other than the discounts and commission, what should Oriflame do to attract and retain its sales force?

2. Should the company invest in advertising campaigns to increase awareness? How important is advertising for a direct selling company?

3. What should company do to increase the availability of its products? Should the company enlarge its product range with non-cosmetic products to increase sales?

THANK YOU….