By  on June 1, 2009

The consumer products division of L’Oréal USA continues to meet the global downturn head-on.

For one, advertising spending by the U.S. division was increased 10.9 percent for the fourth quarter — and the spigot remains open. Joseph Campinell, president of the Consumer Products Division, says ad spending for the first half has been increased by 2 or 3 percent, since it comes on top of a hefty outlay last year. He predicts that advertising spending for all of 2009 will probably be 5 percent above the level of last year. In terms of sales, as measured in retail sell-through, he expects the division’s volume to be up by 4 to 5 percent for the year.

“We’re off to a good start,” Campinell says. “We’ve got some new things that are working well,” he adds, his confidence bolstered by the division’s fourth-quarter performance.

As the global beauty market began to turn grim in July, L’Oréal executives realized they had to boost ad spending. While some critics contend that the move was an admission the company had erred in earlier cutting back on marketing support for the brands, Campinell steadfastly maintains that the move came straight out of L’Oréal’s long-standing playbook. “In bad times you spend against the categories — you grow your market share — and when things turn, your market share is higher and you’ll be in a better position,” he says.

For the fourth quarter, the division’s main brands — Maybelline New York, L’Oréal Paris, Garnier and SoftSheen - Carson—had a 2.3 percent rise in retail sales, according to Campinell, who also calculates that his main competitors dropped a cumulative 2.2 percent in the quarter.

L’Oréal does not break out advertising budgets or sales totals. But industry sources estimate that L’Oréal USA’s mass market division spent around $600 million in advertising, promotion and marketing for 2008. In terms of sales, the division’s brands command a cumulative market share of 20 percent, according to Campinell, who was quoting data compiled by Information Resources Inc. That figure does not include Wal-Mart, which comprises 30 percent of the market, where Campinell says his brands are selling well. The division generates a combined sales volume that adds up to around $3 billion a year. L’Oréal’s share of the hair coloring market is estimated at more than 50 percent and color cosmetics is said to exceed 30 percent. For the fourth quarter, L’Oréal’s market share was up better than half a point, Campinell noted.

He maintains that L’Oréal usually shoots for a market share gain of a full point every year. Despite the bearishness of the financial climate this year, he still expects his market share to increase between a half point and a full point for 2009.

L’Oréal’s quest to gain momentum against the recessionary tide got some traction with the January launch of Lash Stiletto, which reinforced Maybelline’s dominant position in the mascara category.

Following an initial burst of TV advertising, the new mascara grabbed a 7 percent share, Campinell says. “I’d say we’ll end up between a 6 and an 8 percent share for the year,” Campinell notes.


He also has high hopes for the new home hair coloring kit from L’Oréal Paris called Excellence to Go, as well as Ultra-Lift Pro, a $15 high-tech product designed to ease deep wrinkles.

The Garnier brand scored big in the hotly contested skin care category two years ago with the launch of Nutritioniste. Its sales had registered “as high as a 9 percent market share” in the moisturizing category, Campinell notes.

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