Nursing Mininurse back to Health

The Team: 馬立歐 陳奕光 伊詩卉 MA1N0225 M9970112 MA1N0246

The beauty industry in China is exploding From $ 7.25 billion (2004) to $ 9.6 billion (2009) 10% urban women spend at least 10% of their income on beauty good Sales revenues in 2004 was 305 million (increased over 50% than the previous year)

Mininurse Company Establish in 1992, China One of China's best-known skincare brand With 90 percent brand recognition Recognition was even higher among its' target group of younger women: 96 % One of top three skincare brands with 5% market share in China It has built up a solid distribution network of 280,000 outlets

Mininurse Company (cont.) Factories were located in Hubei Province It is the first Chinese local brand that L'Oréal acquired

L'Oréal Company Founded in 1909, Paris It is the world largest cosmetics and beauty company 66,620 employees worldwide Owns 29 brands, include Giorgio Armani, Diesel, L'Oréal Paris, Maybellin, and so on

L'Oréal Company (cont.) Focus on innovation and development, spend € 4.8 billion in 2004 Product sell into 130 countries It has been operating on the Chinese market since 1997 It sales amounted to € 113 million in 2002 Its Chinese group achieved 66% growth in sale

1. Was the Mininurse acquisition really worth the wait and the effort for L'Or'eal?

Yes, the reasons are: The brand has an excellent image, based on the quality and affordability of its products Mininurse’s developed sales networks, especially connections in second- and third-tier cities Mininurse is a mass-market brand, is distributed through 280,000 outlets The acquisition also includes a manufacturing facility. Enable an increase in a production capacities to keep it with rapid growth of brands.

more reasons are: Its manufacturing base in Central China’s Hubei Province= help it penetrate deeper market areas in addition to the highly competitive Eastern coastal areas Thus, this acquisition is an outstanding opportunity to speed up its growth in China Targeting young woman with a natural style Mininurse complements its brand portfolio perfectly, which enable L’Oréal to move quickly the skincare market in China

2.What might have been the drivers behind Mininurse‘s market share drop? Was the Mininurse-Garnier co-branding a strategic mistake?

The mistake of the relaunch and co-branding: Before the acquisition of Mininurse by L’Oréal, the company had been very successful Since the company was founded in China, the Chinese people might have had more trust in the products. After the re-launch with Garnier people might have loosen the trust in the quality of the product, since L‘Oréal was founded in Europe Furthermore, by that time Garnier was just present in the hair care segment which is a totally different segment than skincare

The mistake of the relaunch and co-branding: Since the skin of Asian people differs from European people, the consumers might have thought that L‘Oréal might have changed the formula with in turn might have not the same effect as Mininurse had before Scientists have discovered structural differences between black, white and Asian skin in terms of its: thickness water content lipids (fat and fat soluble vitamins)

3. What is your prescription to revitalize Mininurse 3. What is your prescription to revitalize Mininurse? Should L'Oreal discard the Garnier endorsement? Should the brand be repositioned ?

Strengthen the path Effective management of the dealer Enter the forth or fifth-tier cities Tried in open-frame store shelves, enter the second and third tier cities Integration of its brand in the first-tier city, the development of new pathways (L'OREAL store)

Brand management No need Garnier detachment, should deepen products technology and its high-quality impression. Restore the original product identification, to enhance product characteristics (to deepen Chinese style) Positioning of goods back to the pre-merger New products for the development of niche products (sunscreen, cleanser, etc.)

Brand management The company should make clear that nothing really has changed. They should make clear that technology used for testing is still the same or even better. Should support and advertise the good quality