L'Oreal BRANDSTORM 2020

L’ORÉAL BRANDSTORM2020
BUILD A PLASTIC-LESS FUTURE
IN THE BEAUTY INDUSTRY
Di Nicola Beatrice
Ferreri Federica
Gilardi Matteo
UNPLASTICABLE

B R AN D AN D M AR K E T S E L E C TI ON
L ’ O R É A L C o n s u m e r P r o d u c t s D i v i s i o n
FRUCTIS NUTRISSE BÍ-O
L’Oréal Consumer Product Division counts more than 1 billion customers and 5 billion products.
It is L’Oréal’s number 1 division worldwide and can brag of a unique brand portfolio.
MARKET SELECTION: BRAZIL is a strong consumer market in the hair care and hair coloration
segments, and the expenditures in these sectors are very high.
In Latin America, there is an increasing tendency to prefer “transparent” companies: the ones
that show all the processes behind the creation of products and therefore have a strong ethical
position. It is not only important that the product itself is natural and organic, but the whole
process must be nature-friendly, and the company should promote good causes.
Another reason why we chose Brazil as our reference market is that 84% of Brazilians consider
relevant the safeguard of the environment and 28% of them assert that the first reason of being
a proud Brazilian is the environment. Moreover, Brazil is extremely sensitive to the environmental
theme because of the disasters in the Amazon forest that occurred recently.
BRAND SELECTION: we selected the brand GARNIER as its mission is “to develop beauty
products that are both good for you and for the planet”, perfectly coherent with the Brandstorm
mission. Moreover one of Garnier’s commitments is about sustainable beauty: “At Garnier we
are committed to sustainable sourcing to reduce the environmental impact of our packaging,
and we continuously seek to improve the biodegradability of our formulas”.
Founded in France in 1904 with Alfred Amour Garnier's launch of his 1st patented plant-based
hair lotion, La Lotion Garnier. Over the decades Garnier expanded into skincare and cemented
its reputation as a beauty expert. In 1965 the brand joined the L’Oréal group.
Since 1904, Garnier has offered efficient and innovative beauty products for healthy looking hair
and skin and it is the first worldwide natural brand on the mass market, according to 2018
Euromonitor ranking.
Garnier is already present in Brazil with haircare - GARNIER FRUCTIS - hair coloration - GARNIER
NUTRISSE - and deodorant - GARNIER BÌ-O - products.
• CADERNODE TENDENCIAS2019-2020 Sebrae Abihpec
• https://it.ripleybelieves.com/top-sugarcane-producing-countries-204

S O C I AL AN D G E O G R AP H I C AL S E G M E N TAT I O N & TAR G E T I N G
Considering the industry of personal hygiene, perfume and cosmetics we highlighted 4
potential segments:
To respect the guidelines given by L’Oréal, we targeted the first 3 segments since they
excellently represent the mass-market composed by the middle-upper class of Brazil.
GREEN GENERATION: 20-28 years male & female, university students or
approaching the working environment coming from a middle-upper class.
They pay much attention on body-care and aesthetic, proud of being
Brazilians and especially about their home country environment, they live in
urban area and they have access to digital world, most of them would pay
more for a sustainable brand.
WEALTHY BRAZILIAN HOUSEWIVES: 41-50 years old with teenager
children belonging to Z generation, usually with higher education, they
want to keep a certain lifestyle and social status, they are usually less
involved in the environmental problem. Their children spend considerable
amount of time on social media and started to develop attention on the
environment.
ENTERPRENEURS OR FREELANCE WORKERS: 35-50 years, usually
married and with family. They represent the Brazilian establishment and
have profitable jobs, they generally have a wide view of the global issue of
the environment, due the high social engagement and their awareness they
are prone to take on green initiatives.
LOW-MIDDLE CLASS BRAZILIANS: housewives, 26-30 years old, with
lower education and children from 6 to 11 years. They spend on average
more than the household income, consuming savings or getting into debt
to get to the end of the month. To continue consuming, they seek
alternatives, such as promotions. This profile looks for cheap items and
private labels from hypermarkets, which are on average 13% cheaper, they
have poor engagement in the environmental problem.
In order to better understand the habits and possible pain points emerging
from a change in the purchasing process we delivered a SURVEY to our
targeted segments. We were able to reach them mostly thorough International
Brazilian students and their families.
SURVEY
1. How old are you?
2. Gender?
3. What do you do for living?
4. Where do you buy your products for personal
hygiene?
5. What do you think about plastic-pollution?
6. How would you feel in helping your country and the
Earth?
7. How frequently do you use social media?
8. Have you ever heard about the reuse model for
packaging?
9. Would you like to use a container for your products
that you could refill when going shopping?
10. Would you be willing to pay more for a sustainable
product?
Where:
1-3: screening questions to identify the segment
4-7: questions to get insights about customer’s feelings and purchasing
behavior
8-10: questions to test the feasibility of our starting idea within our targeted
segments
Survey link:
https://forms.gle/cmNvcA7Z68S3775y8

S U RV E Y R E S U LT S
We received 186 responses of which 140 fall within our target (we mainly got rid of people who, taken in account the answers, were more likely to be part of
the middle-low Brazilian class). Therefore, 76% of response were coherent with our targeting and we judged this sample to be a good starting point on which
developing our idea.
Distribution Channel
SUPERMARKETS
PHARMACIES
COSMETIC
BOUTIQUES
OTHER
4 . W h e r e d o y o u b u y y o u r p r o d u c t s ?
With no surprise we found out that the most used channel in the mass-market are supermarkets (65,08%), this was consistent with
the info in the L’Oréal resource pack. Moreover, the space availability provided by supermarkets is fundamental for the
implementation of a reuse model.
VERY SERIOUS SERIOUS NOT VERY
ALARMING
IT'S NOT A
PROBLEM
5 . W h a t d o y o u t h i n k
a b o u t p l a s t i c p o l l u t i o n ?
6 . H o w w o u l d y o u f e e l i n h e l p i n g y o u r c o u n t r y
a n d t h e p l a n e t ?
We asked this to understand the feelings of the Brazilian customers, most of
them responded that they will feel very satisfied and proud to be helping their
country and its environment, this suggested us that we could deploy this patriotic
feeling in our promotion and branding
7 . H o w o f t e n d o y o u u s e s o c i a l m e d i a ?
73% on the possible answers chose very often, this reflects the consolidated
globalization of Brazil and the possibility to deploy this communication channel
for our Idea
Social Media utilization
VERY OFTEN
FREQUENTLY
SELDOM
BARELY EVER
Q u e s t i o n s 8 - 9 - 1 0 :
While cross-checking results we noticed two main trends:
• People under 35 were extremely prone to adopt a new purchasing system and even pay more for a sustainable items
• A considerable part of over 35-year-old were more reluctant to change their habits → this possible segment will be the most
challenging to engage and acquire
Q u e s t i o n s 1 - 2 - 3 :
The answers to the screening questions revealed us that the answers to the survey were representative of the market we are intentioned to target: indeed, only 2% of
participants laid in the over-51 year old segment, additionally most of the answers were provided by 20-50 year old females who are currently studying or working.

POLITICAL FACTORS
• Brazil is among the parties that signed
the Paris Agreement
• Brazil defined a National Policy on
Solid Waste in 2010, which brings a
hierarchy of treatments towards waste
and defines the Extend Producer
Responsibility for packaging
• Brazilian technical regulations are
mostly based on international standards
and product performance criteria
• Requirement to respect national laws
concerning taxation, labor, quality and
environmental standards
ECONOMIC FACTORS
• Beauty and personal care revenue in
2019: 23,75bln US $
• Expected growth of the sector: + 3,1%
• Brazil represents a 49% share of the
whole cosmetic and personal care sector
in Latin America
• Avg expenditure on personal care
products in 2017: 112€ per capita per
year
• Import volume of haircare products in
Jan 2018:1,1 thousand metric tons
• A Green Economy is considered able to
bring social and economic opportunities
SOCIAL FACTORS
• Brazil improved quality of life thanks
to inclusive growth and poverty
reduction
• Only 49% of adults aged 25-64 have
completed upper secondary education
•Physical appearance holds a
preponderant place in Brazil
• 40% of Brazilian customers state they
prefer haircare product with natural
ingredients
• Brazilians feel strong attachment to
their land and nature
TECHNOLOGICAL FACTORS
• Major companies in the beauty
and personal care industry are
investing in R&D focusing on new
formulas and new packaging
• High usage of social media (avg
3h 34min per day) and attention to
influencers – growing popularity of
eco-friendly influencers
• E-commerce sales in Brazil
represent 3% of retail sales
• Brazil is among the leading
countries in the development of
sustainable plastics
ENVIRONMENTAL FACTORS
• OCSE recognized Brazil as a model for
its progresses in the reduction of
deforestation and greenhouse gases
emissions
•Growing consciousness about
environmental, sustainability and
recycling issues
• Brazil is implementing a more
structured recycling system
• An average of 17.5% of all rigid and film
plastic is recycled each year. 60% of the
recycled plastic comes from industrial
residue and 40% from urban refuse
P E S TE AN ALY S I S
• www.oecdbetterlifeindex.org/countries/brazil/
• www.pagbrasil.com/insights/digital-in-2019-brazil/
• www.en.wikipedia.org/wiki/Recycling_in_Brazil
• www.statista.com/topics/5424/cosmetics-industry-in-brazil/
Whenever a company has to
launch a new product or decide
whether to enter a new market, it
has to take into account all the
factors that may affect its business
but cannot be controlled. We
decided to implement this tool
because it is useful in order to
understand all the external
variables that may influence our
idea; furthermore, such model is
useful to understand potential
threats, opportunities and trends
to pay attention to. Our analysis
pointed out that Brazil represents a
fast-growing economy and is
getting closer to the Western
world and its regulations. Public
institutions and government
bodies are trying to enhance the
public awareness about the
environment emergency and the
fundamental need of recycling and
conscious waste disposal. In Brazil,
the cosmetic and personal care
sector represents a 49% share of
the whole Latin America market,
thanks to the population’s great
attention to physical appearance,
especially regarding haircare and
beauty. Consumers are more and
more influenced by brands
preferring natural ingredients and
environmental-friendly influencers.

R E S O U R C E AN D C O M P E T E N C Y B AS E D V I E W O F G AR N I E R
COMPETITIVE ADVANTAGE
• Brand recognition – key player
• Technologies to extract or reproduce
natural ingredients
• High availability of financial and
technological resources
• Over 100-year long professional
experience
COMPETENCIES
• High performance formulas
• Effective and complete
product lines
• Multi-consumer segments
• Coverage of several distinct
needs
COMPETITIVE CAPABILITIES
• Preservation of the most intense
form of natural raw materials
• Offering innovative, affordable
care solutions at the best prices
• Cutting-edge expertise and
techniques
• Reduction of the ecological
impact
ASSETS
• Focus on proximity to consumers to anticipate
needs an adapt to their local realities
• Careful selection of natural ingredients coming
from sustainable crop – not from animal origin
• Factories are above the effluent control
requirements
• The brand seeks to improve its ecological profile
and biodegradability indices of the formulas
COMPANY RESOURCES
• Vast number of customers worldwide
• Sustainable sourcing and packaging
• Size
• High specialized R&D
• Creation of emotional content for digital
advertising
The Resource and Competency based view is
a managerial framework aimed to define the
strategic resources a company can exploit in
order to gain sustainable competitive
advantage. This model was implemented to
identify the internal resources to be used, as a
starting point, by Garnier to fully exploit
opportunities and hedge risks in the Brazilian
market. We may assert that the firm can count
on some distinctive points of strength:
•The company can brag of a over a century
long experience of quality and innovation in
the beauty and personal care industry, which
allowed it to gain credibility and loyalty by
suppliers, stakeholders and, most of all,
customers.
•A highly specialized R&D team and wide
availability of resources – both financial and
technological – can support the development
of innovative ideas that will keep the brand
among the key players worldwide
•A distinctive feature of Garnier product lines
is the preservation of natural ingredients at
their rawest form, to keep their active
principles
•The firm aims to enhance its ecological
profile exploiting sustainable crops and
improving its formulas and packaging
•The brand is able to cover multiple needs by
different customer segments, offering effective
and affordable solutions
• www.loreal.com.br/marcas/produtos-de-grande-p%C3%BAblico/garnier
• www.loreal.com/brand/consumer-products-division/garnier

S W OT ANALY S I S
S T R E N G T H S WE AK N E S S E S
O P P O R T U N I TI E S T H R E AT S
• Brand recognition
• High performance formulas
• High specialized R&D
• Perceived as a worldwide natural brand
• Careful selection of natural ingredients to preserve
their active principles
• Cutting-edge expertise and techniques in the
extraction and reproduction of natural raw materials
• Commitment to sustainability and environmental
issues
• Availability of new sustainable technologies and
materials that can substitute the usage of traditional
plastic
• Growing market and economy
• Consumers are interested into sustainability matters,
recycling and environmental issues
• Customers attention to physical appearance and
personal care
• The brand seeks to improve its sustainable and
environmental profile
• Customers trust in the brand
• Difficulty to change consumers’
behavior
• Unavailability of a dedicated space in
retailers’ stores
• Current support of high plastic turnover
• Highly competitive market
• Highly complex market
• Growing expectancy of user purchase
experiences and additional services
• Strict compliancy controls
• Very settled market with stable
customers’ behaviors
This model has been used in order to combine
the results given by the tools implemented
before: this will provide us a more
comprehensive view of the market where we
aim to launch our idea, understanding more in
depth its external features – opportunities and
threats – and the internal characteristics of the
firm – strengths and weaknesses.
Our aim is to exploit the brand’s strengths and
the market’s opportunities in order to
overcome the difficulties our idea would face in
the first launching phase. We identified the
most threatening obstacle in the stability and
competitivity of the market: pushing customers
towards a new purchase approach in such a
settled environment will be a significant
challenge. In order to do so, we will exploit the
strengths of our brand itself and features of
already existing circular economies, and we will
apply them to the industry where we operate.
The growing interest of consumers towards
sustainability will represent another
fundamental opportunity for the success of our
idea.
We aim to create a totally new user experience
and purchase approach that will tempt
customers to become more environment-
friendly in their daily life and choices. The
renewed system will be supported by the
introduction of data analysis technologies, in
order to bring the firm closer to consumers’
needs and habits.

P ROBL E M S AND S OL UTI ONS
Strong willingness to change purchase habits from younger
generations and strong attachment to the Brazilian natural
heritage combined with scarce possibilities of committing little
eco-friendly gestures in daily life
Still partial reluctance from older generations in switching
habits
Lack of customization and direct marketing
High plastic turnover and absence of bio-based plastics in
products
Limited customer experience
Introduction of reuse models for certain products and less-plastic
packaging design
Ease initial engagement thorough promotions and trials
Creation of a customer profile thanks to the develop of a smart
refill station
Reducing as much as possible the plastic content in packaging
while maintaining all the features + starting to switch to a bio-
based plastic (reduced environmental impact)
Engagement thorough the reuse model, interactive refill station and
customer-reward system

OUR I DE A: NOS S A TE RRA
Experience and environmental awareness are becoming relevant for consumers’ choices. In order to lead this transaction, we want to launch an eco-friendly project
(starting off as a pilot), called NOSSA TERRA. The plan consists in the implementation of a reuse model for shampoos, conditioners and hair masks product category and
in a significant reduction of plastic usage for the other two: hair-coloring products and deodorants.
BEHIND THE SCENE THE EXPERIENCE EXPANSION
We set a collaboration between internal
Garnier’s designers and external software
engineers to develop an innovative and
interactive dispensing machine
We will set agreements with our main
distributors in Brazilian largest cities by
population (in the initial pilot phase, it will be
expanded later on) to guarantee a reserved
spot to our dispensing machines
We will redesign the shells in which
shampoos and conditioners are transported
along the supply chain with aim to optimize
the volume/surface ratio to reduce the
quantity of material to be used
Packaging design will be radically changed
for most of the product categories, always
with the aim of reducing plastic waste
The newly packed products will be launched
under the new project “Nossa Terra”
Customers will have the possibility of
purchasing a reusable container and refilling
their products through an interactive
dispenser
During the first month after the launch of the
project, some Garnier personnel will be at
the station, where consumers can buy their
containers
Every container will have a QR code and
thanks to it every client can be registered in
the system with its credential (name, last
name, email, etc.) in order to be associated
with the containers, record its purchase
habits and get promotions
Consumers will have the chance to purchase
a product that is eco-friendly, with an
exclusively designed package that recalls the
feeling of natural and sustainable
After the customer completes his/her first
refill, he/she can select whether to receive
customized email or newsletters
Using the interactive screen for the selection,
every customer can choose from previous
choices or suggestions based on the
recorded data about the previous purchases
The interactive screen shows the cumulated
plastic kgs saved at every purchase. Once 5
kgs are reached, the customer will receive a
50% discount on his/her next refill
Shampoos, conditioners and hair masks hair-coloring products and deodorantsKEY LINE:

7 P M OD E L : P R OD U C T
SHAMPOOS, CONDITIONERS AND HAIR MASKS HAIR COLORING AND DEODORANTS
PLASTIC PACKAGING FLOW
BEFORE:
PRODUCTION → LOGISTICS AND DISTRIBUTION → STORAGE → USAGE
LANDFILL
DISPOSAL
AFTER:
IN STORE
DISPENSER
Big size reusable tanks, optimal for transport
THE CONTAINER
Aluminum bottle
Resistent
Easy to clean
QR code
THE DISPENSING MACHINE
Interactive
touchscreen
QR reader
Refillery
Our idea is defined as a service, in fact it involves an interaction between the customers and
the tools we have projected. The level of service is “service with some goods”. The container
and machine are prototyped above.
PACKAGING REVOLUTION
The environmental footprint of the products will be reduced mainly
through two actions:
• Redesigning the products packaging in order to minimize the usage
of plastic, while maintaining the previous features
• Using bio-based plastics (PLA) for all the current plastic
components that cannot be produced in another material (e.g.
internal surfaces, caps, deodorant rolls, etc.), ensuring lower CO2
emissions during the production process and easily compostable
packaging.
Internal PLA coat (green)
External solid carton package (black)
HAIR-COLORING DEODORANTS

7 P M OD E L : P L AC E , P R OM OTI ON , P E OP L E
The marketing mix is structured to be consistent with the nature of the project, as matter of fact this will be launched as a pilot project with the potential to be scaled up.
PLACE PROMOTION PEOPLE
• Accordingly to the results of our survey, supermarkets
represent the major channel; we will exploit selective
distribution for all our product categories
• The launch will take place in the 10 largest cities in
Brazil by population
• For each of the selected cities we chose the 2 major
supermarkets in Brazil: Carrefour Hyper Mercado and
Wal-Mart Brasil Ltda as distributors to launch “Nossa
Terra” product line
Wal-Mart Brasil
Ltda
Carrefour Hyper
Mercado
Sao Paulo 3 3
Rio de Janeiro 2 3
Salvador 3 0
Fortaleza 1 2
Belo Horizonte 2 3
Brasilia 3 3
Curitiba 2 3
Manaus 2 3
Recife 3 2
Belem 1 1
TOTAL 22 23
The first launch of the pilot project will take place in 45
major supermarkets in Brazil, with the aim to be
extended to smaller cities
“Give ’em the bottle, sell them the
product”, we will base our idea on the
Razors Blades model, the innovative
and endearing bottle will be sold at a
low price on which the company will
make no profit. On the other hand, we
will ensure long time loyalty from our
clients and stable profits.
We will reduce customer’s hidden risk
with the possibility of return the bottle
within a certain span of time and receive
a coupon for L’Oréal products
Targeted promotions through social
network one month before the actual
launch and two months after
Put employees in the selected
distributor for the first month to engage
people and explain the features of the
refill station
www.googlemaps.com
Price is not mentioned in detail because, thanks to the Razor Blade effect, the refills will be sold at the same unitary price of the traditional ones, the same for the other
product category.
We considered this “P” in order to understand the size of
the market we are going to target:
• Potential market: the sum of the whole Brazilian
population (209,3 million)
• Qualified market: we only considered people living in
the 10 major cities (29,566 million)
• Available market: from our survey, who is coherent
with our target (76% of the qualified market: 22,47
million)
• Served market: from our survey, who buys hair care
and personal hygiene products in the targeted
supermarkets (65,08% of the available market buys in
supermarkets: 14,62 million; considering that there are
143 supermarkets in the 10 major cities, we will serve
45/143=31,47% of them, assuming an homogeneous
distribution of customers: 4,6 million)
209
mln
29,6
mln
22,5
mln
4,6
mln
www.population.mongabay.com/population/brazil
https://it.supermarketworldguide.com/supermercati-in-brasile/
POTENTIAL
QUALIFIED
AVAILABLE
SERVED

Bon dìa! I’m Juliana from Rio
de Janeiro, and I’m 30. I
started working for a
corporate consultancy firm
two years ago. We are
becoming seriously socially
responsible at work and I try to
do as much as I can to respect
the environment during my
daily routine as well. During
my spare time, I love jogging
and practicing yoga.
• Razor blade effect
• she will buy again
E X P E RI E NCE M AP
OUR PERSONA:
Juliana puts her
bottle in the
shopping bag
Juliana goes to her
weekly grocery to
the supermarket
Juliana
easily cleans
her bottle
Juliana checks her
shopping list and
sees she needs
shampoo
She passes by the
personal hygiene
section and feels
partially guilty in
seeing all the plastic
bottlesJuliana creates
plastic waste
Juliana uses
her products at
home
Juliana has previously bought her
personal container, she scans her QR
code and sees here previous
selections and gives her suggestions
for her hair care
Juliana refills her
cool bottle with
the selected
shampoo
Juliana gets to know the kgs
of plastic she saved and the
dispencing machine tells her
she is getting a discount and
Mother Nature thanks!
• Feeling like someone is taking care of
her
• Easy selection and reduction of the
effort: she doesn’t have to look all over
the shelves
• She feels part of the solution
to the environmental problem
• She is happy to receive a
discount
GARNIER’S PROS:
• The purchase of the
container increases
loyalty
• Big data available
• Customization of
preferences
AS-IS
NOSSA TERRA
EXPERIENCE

I M P L E M EN TATI ON ( 1 )
Now implementation matters will be faced, such as potential costs and revenues. We will start from the COST ANALYSIS. We made a distinction among the different
periods of implementation of the project:
▪ Modification and setting up of the already existing production machines to adapt them to the new packaging: 100.000€
▪ Human resources – project team (2 engineers, 2 software developers and 1 designer): 5
employees*40€/hour*8hours/days*180days=288.000€
▪ Database and hardware: 40.000€
▪ Test: 30hours*40€/hour=1.200€
▪ Computers and tools: 25.000€
▪ Installation of the stations in the supermarkets: 45 supermarkets* 8hours/day*2 days/supermarkets * 40€/hour= 28.800€
▪ Advertising on social networks: 50.000€/month*3 months= 150.000€
▪ Reserved space in the targeted supermarkets= 40.000€/(targeted supermarket chain)*2 targeted supermarket chains = 80.000€
▪ Employees at the stations for the first month=15€/hour*12 hour/day*30 days* 45 supermarkets = 243.000€
1. BEHIND THE SCENE: it includes all the
costs related to the design our idea and its
implementation. So, human resources,
engineering and setting up of the
production machines and the dispensing
machines with their interactive screens have
to be considered.
2. PROMOTION: it incorporates the costs of
the promotions on social networks, for one
month before the launch and two months
after it, the costs for the new space required
for our dispensing machines and the costs
for the personnel at the new Garnier stations
in the supermarkets during the first month
after the launch.
3. THE EXPERIENCE: it comprehends the
costs related to the dispensing machines
and the cost of raw materials to produce the
new packages
4. CONTROL: it includes all the costs of
maintenance, advertising and promotions
that will continue till the end of the project.
▪ Maintenance: 3 times/year* 3 hours/time* 30€/hour*45 supermarkets=12.150€/year
▪ Advertising: 40.000€/year
▪ Discount after 5 kg of plastic are saved: (0,1(kgs of plastic saved)/refill * 30 refill/(year*customer) * 4.600.000 customers * 0,11) /
5kg * 2 €* 0,5= 303.600 €/year (Assumptions: one plastic bottle of shampoo weighs 100 g; the price of one refill is 2 €)
▪ Software update: 2 experts/year*7 days*8hours/day*40€/hour=4.480€/year
▪ Cost of containers: assuming that1 ton of aluminum costs 1700€ and we will get 20.000 containers per each ton, 3
containers/person * 4.600.000 people in the served market * 0,085 €/container *0,11 (Garnier has the 11% market share in Brazil)
= 129.020 €
▪ Dispensing machines: touch screen, scanner and stand in general, we will consider the average price of each piece
• Touch screen: 250€/piece*45pieces=11.250€
• Scanner: 200€/piece*45pieces=9.000€
• Stand:30€/piece*45pieces=1.350€
▪ Raw materials (incremental cost from the old packaging to the new bio-based plastic and solid carton ones)=
0,05€/piece*3.000.000pieces= 150.000€
NON-DIFFERENTIAL AND SUNK COSTS: agreements with supermarkets, space on the shelves for hair coloring and
deodorants, space for make developers work, managers for controlling, IT expertise for app and software updates.
ASSUMPTIONS: L’Oreal can produce containers with the machines used for producing deodorants aluminum packaging.
The costs for producing the PLA tanks to transport shampoos and conditioners are balanced by the dismission of the
production of their plastic bottles: as a matter of fact the needed bio-plastic dispensers are around 20 for each supermarket,
but the huge amount of production of plastic packaging for shampoos and conditioners will be dismissed.
DATA SOURCES FOR COSTS: L’Oreal financials reports, Amazon, Facebook, general websites.
COSTS FOR THE FIRSTYEAR:
1.444.520 €
COSTS FOR THE
FOLLOWING YEARS:
590.230 €

I M P L E M EN TATI ON ( 2 )
REVENUES
Possible scenarios:
• BEST: Garnier will sell to its
whole market share (11%)
• AVERAGE: 1/2 of that market
• LOW: 1/6 of the that market
Hypothesis:
▪ Price of the set of 3 containers: 1,5 €
▪ Average price of a Re-fil: 2 €
▪ Average price of hair coloring and deodorants: 3,50 €
▪ A client will take a Re-fil 30 times/year (15 for the shampoo and 15 for the conditioner) and will take an
average of 6 products (deodorants and hair coloring)
▪ The calculation of the operating margin is taken considering a return on sales of 15,5% (data from Garnier
financial).
BUYERS
[people]
REVENUES [€] OPERATING MARGIN [€]
BEST 506.000,00 41.745.000 6.470.475,00
AVERAGE 253.000,00 20.872.500 3.235.237,50
LOW 84.333,33 6.957.500 1.078.412,50
YEAR CASH OUTFLOW CASE CASH INFLOW CASH
FIRST 1.444.520BEST 6.470.475 5.025.955
AVERAGE 3.235.238 1.790.718
LOW 1.078.413 -366.108
OTHERS 590.230BEST-BEST 6.793.999 6.203.769
BEST-AVERAGE 6.470.475 5.880.245
BEST-LOW 4.529.333 3.939.103
AVERAGE-BEST 3.396.999 2.806.769
AVERAGE-AVERAGE 3.235.238 2.645.008
AVERAGE-LOW 2.264.666 1.674.436
LOW-BEST 1.132.333 542.103
LOW-AVERAGE 1.078.413 488.183
LOW-LOW 754.889 164.659
Hypothesis:
▪ In the next years the scenarios can be
different. From the cases we already
pointed out, there can be other cases:
o BEST: the initial buyers remains
clients and there are new buyers
thanks to the word of mouth,
advertising and increase of care
of the environmental issues.
(+5%)
o AVERAGE: the initial number of
clients remains stable.
o LOW: the initial number of
buyers decreases (-30%)
We call “initial” the buyers of the first
year.
-5.000.000
0
5.000.000
10.000.000
15.000.000
20.000.000
25.000.000
30.000.000
0 1 2 3 4 5
BEST-BEST BEST-AVERAGE BEST-LOW
AVERAGE-BEST AVERAGE-AVERAGE AVERAGE-LOW
LOW-BEST LOW-AVERAGE LOW-LOW
CASH FLOWS
NPV
Hypothesis:
▪ The cost of capital considered is the weighted average cost of capital of Loreal:
2,96%.
Before the launch of the project there are only expenses due to the design
and the development of the idea. Then there are added advertising
expenditure in the wo months around the launch, in which the cash line (we
approximated the logarithmic curve of a supposed product life cycle to a line)
overcome the zero (x axis) in the best and average cases. This happens also
for the low case in the third year.
After 5 five years of implementation, it is shown that the project has positive
impact in all the cases taken in consideration.
LOW-LOW CASE:
239.444 €
BEST-BEST CASE:
27.299.969 €

C ON TR OL
In order to monitor the progress of our project, a SET OF INDICATORS was defined. To measure the results the company is given, we provided the objectives, the
formulas and the targets below.
WHEN: during the first month after the launch
OBJECTIVE: understand if customers are able to easily
use the dispensing machine and the interactive screen
HOW: the employees that will stand at the refilling
stations will ask the consumers to fill a questionnaire
TARGET: intuitive and easy to use
WHEN: during the first six months after the launch,
weekly checked
OBJECTIVE: understand if the algorithm at the basis of
the interactive machine is able to effectively provide
customers with the most appropriate suggestions about
products to be refilled based on their previous choices
HOW: the machine is able to automatically record
whether the selection made by the customer at the
refillery station corresponded to one of the suggestions
provided on the screen.
FORMULA: (number of corresponding choices)/(total
number of refills)
TARGET: higher than 70%
EASINESS OF
USAGE OF THE
DISPENSING
MACHINE
SATISFACTION
WITH THE
SUGGESTIONS
PROVIDED OF
INTERACTIVE
SCREEN
EFFECTIVENESS
WHEN: always, monthly checked
OBJECTIVE: to measure the penetrated market
compared to the served one
HOW: the number of refills will be automatically
registered by the system and represents the penetrated
market
FORMULA: (penetrated market)/(served market)
TARGET: increasing towards 1
OBJECTIVE: to measure the size of the community that
trusts the project and is willing to provide information to
improve it and get benefits
HOW: the system is able to automatically record the
number of registered users
TARGET: we don’t have enough data to provide an actual
number, but the target is to increase
NUMBER OF
REGISTERED
CUSTOMERS
OBJECTIVE: to understand how much the average
customer exploits the reuse model
HOW: the system can record how many QR codes
(containers) are associated to a single user and how many
refills are done per each container.
TARGET: each customer exploits the reuse model utilizing
all the possible typologies of containers (3: shampoo,
conditioner and hair mask) and refills each container 2/3
times per months
AVERAGE
CUSTOMER’S
USAGE
OBJECTIVE: to evaluate customer loyalty
HOW: the system automatically records if the registered
customer is given a promotion and whether he/she
decide to use it or not
FORMULA: (number of used promotions)/(number of
given promotions)
TARGET: 1
USAGE OF
PROMOTIONS

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