1b. Evaluate an organisations capability for planning its future marketing activity.

There are many theories about how to evaluate an organisations capability for planning its future marketing activity.In my opinion, the capability of the company belongs to its own strength and weakness which can be call the internal environment. In this case of Loreal

Nederland, its capability is resources which the company owns and controls. They are: 1. Tangible resoures Financial: from the time its establised in 1992, Loreal Group was considered the largest cosmetics manufacturer in the world with subsidiaries in over 100 countries. The huge sales of $6.8 billion and net profits were 417 million dollars was recorded in the year 1992. Dutch was considered the minor country subsidiaries of Loreal. Therefore, the company has a strong financial launching pad for marketing campaign in the Dutch. Distribution channel: Loreal Company has established a strong distribution channel with subsidiaries all over the world. The main distributor is retailers who can offer their own private-label products. The company wants to distribute in as many types of retailers and outlets as possible. This proves to be effective for Loreal and in Dutch; it creates a positive image for retailers. 2. Intangible resourses Technology: the company always invests heavily in research and development. As shown in the case study, all the research was centered in France, the headquater of the company and also the main manufacturers. Reputation: In the Dutch market, people have little knowledge about the Loreal Products in comparision with other coutries. The line named Plenitude line was segmented in the mass market, the middle- market with high quality. The Belle Couleur a line of permanent hair coloring products had a high reputation in France for the past 2 decades. It created a strong image in coloring products in France. In Dutch, after market research was carried out with trial test and using, the number of certainly buyer increases from 18% (price unaware) to

26% (price aware) and to 29% after using product. We can assume that Belle Couleur can get high reputation in the future. For each product line, Synergie skin care and Bell Couleur have their own image: Synergie skin care line was known as The alliance of science and nature to prolong the youth of your skin, this slogan naturally matches with the aging population in Dutch (from 25 and older groups). Bell Couleur was advertised natural colors, cover all gray go with the traditional use of Dutch to cover gray hair.

3. Human resources The thorough researches were carried out in Dutch market: The market for Skin care market for the Synergie skin care line was placed and the market for Hair Coloring, all about the competition and the customer behavior was recorded by specific number. 2c. Examine techniques for organizational auditing and for analyzing external factors that affect marketing planning. According to Philip Kotler, marketing audit was defined as a systematic, periodic and a comprehensive procedure of checking out the marketing activities of a concern. In other words, marketing audit is a process in which internal and external factors were taken into account for making the marketing plan and reviewing the plan itself. Thus, there are some techniques used in marketing audit. They are SWOT analysis often used to analyze the organizational capability and the external factors, the PEST and Five forces analysis used for analyzing the external factors only. In this case of Loreal Company marketing campaign in Dutch market, three tools can be used as follow: 1. SWOT analysis: Swot analysis considered the strength, weakness, opportunities and threats in Loreal Company case.

Strength and weakness are internal capability, which we had considered above. In the case given, they show the company background, the product concept, and the distribution channels of the Loreal in Dutch.

About the opportunities and the threats, they give us report about the current market for 2 product lines: the Skin care market and the hair coloring market, the research on the Dutch market, consumer behavior for both product lines.

2. PEST PEST stands for Political, Environmental, Social and Technological analysis In this case, Loreal Group is a multinational company with subsidiaries all over the world for a long time. Dutch is one among them. Political was not mentioned in the report. Environmental factors: they are understanding about the climate in Dutch and the habits for using skin care and hair coloring there. The environment factors also include the analysis of competitors. In the skin care market in Dutch, Synergie has numerous competitors. There are three segmentations: lower end, middle and Upper end. In each segmentation, there are some competitors such as Ponds, Nivea Visage, Oil of Olaz (Procter and Gamble).ect. All the competitors are divided by price range and positioning in the market. In the hair coloring market, the hair salon was taken as indirect competitors. The different distribution channels also affect the buying intension. Social factors: they are the consumer behavior, health consciousness, age distribution, income In this case, we can see the statistics: almost 50% of the 5 million Dutch women between age of 15 and 65 used traditional skin care products. The Dutch tend to be loyal to their current brands and the Dutch women show their interest in products with natural ingredients. These are some examples in which the social factors are considered. Technological factor: they include the R&D activity, the innovation, and the lifecycle of a product. As shown in the case study, LOreal Group spends much on research and development and strengthens its product life cycle by introducing

them to a new subsidiary. Belle Couleur has been successfully marketed in France for two decades, and now, it is cosiderer to enter a new market: Dutch. 3. Five Forces analysis According to the Five forces analysis theory, there are 5 threats from the external environment. They are: Threats of substitute products: through the research on Dutch market and Competitors, they can evaluate the threat of substitute products in both skin care market and hair coloring market and the trends in the consumer behavior. Threats of new entrants: Synergie and Belle Couleur have been successful launched in France. However, in Dutch market, they are the new products. So the analysis of new entrants in skin care market about a product that targeted at skin types such as sensitive, greasy, or dry can be the new entrants in the market. Rivalry among competitors: there are many competitors in the Dutch market, and the two product lines Synery and Belle Couleur were shown in rank with current competitors. The bargaining power of customers: the change in the buying habits The bargaining power of suppliers: Loreal Group is also the manufacturer so we neednt to worry about the power of suppliers in this case. 2d. Carry out organizational auditing and analysis of external factors that affect marketing planning in a given situation: In this case of Loreal Group, I will use the SWOT analysis to build up the marketing plan for the two line product in Dutch: 1. Strength: Strong financial support from the Loreal group Wide range of distribution channels from manufacturers to retailers. Reputation in market place Products are naturally suitable for customer needs

2. Weakness The skin care market is positioned in Middle class. There are no products in the high market class.

The hair coloring market: undefined market with other competitors. For Belle Couleur, buying intentions increased after the price was given but decreased after actual use. So there is a problem in the relation between the price and the quality of product.

The product line Belle Couleur has not adaptable to the change of the customer behavior: while the customers trend is semi permanent hair coloring, Belle Couleur is the line of permanent hair coloring. The remain market share is left for the other competitors.

3. Opportunities In the Dutch market, the increasing number of Dutch women working outside of the home. And as a result, women have more disposal income and the spendings for cosmetics and toiletries increase. 4. Threats In the late 1980s, 40% of the Dutch poplulation was under 23 year olds and this age group is the main user of cosmetics and toiletries. However, the population was aging and the older groups are increasing. This can be threats to the cosmetics and toiletries in future. Threats of the new entrants to the market in Dutch. There are many market segmentations in both product lines that can be entranced by other competitors. They may be the product from natural ingredients which is totally satisfied the mass market consumers and the Skin care line was replaced. From the SWOT analysis above, the auditor can decide what strategy should be considered. That maybe use the strength to take the opportunity by launching totally new products that best match with the Dutch market or company can minimize the weaknesses and avoid threats by focusing on one line product and make a strong marketing campaign.