L’Oréal in China: Marketing Strategies for Turning Around Chinese Luxury Cosmetic Brand Yue Sai

Yue Sai is L’Oreal’s troubled Chinese luxury brand. Alexis Perakis-Valat, the new CEO of L’Oréal China, has made it a point of honor to turn the brand around. He has asked Stéphane Wilmet, the brand’s new general manager, to come up with a turnaround plan that will restore L’Oréal’s reputation in China as the world’s best cosmetic marketer. Stéphane Wilmet and Ronnie Liang, Yue Sai’s marketing director, must reconsider everything from Yue Sai’s value proposition down to its media, price, product, and distribution strategies.

The case shows the challenges that even very successful multinational firms experience when doing business in China. Specific topics discussed include: 1. Functional vs. emotional branding. Can all brands become “passion” brands? Should they? 2. Effects of country of origin, national pride, traditions and cultural beliefs in today’s China. 3. Marketing “masstige” (affordable luxury) brands. How to leverage brand heritage while staying current and relevant in a fast-moving market.