Oriflame is a cosmetics company, founded in Sweden in the year of 1967 by two brothers Jonas af Jochnick and Robert af Jochnick. The company’s main products are personal care, accessories and nutritional products with over approximately 1000 cosmetics products. The products are priced in higher range and promise higher value to customers through a more customized and personalized approach for product and service offerings, distribution processes tailored to meet the needs of customers, and the opportunity to build customer loyalty. The logo of the company ‘Oriflame Sweden’ gives a feel of expensive Swedish cosmetics.
ORIFLAME’S MARKETING STRATEGY
The marketing strategy adopted by Oriflame is Direct Marketing or Network Marketing. It is one of the largest companies to sell through direct marketing through an independent sales force of over 3.6 million sales consultants in more than 60 countries worldwide with annual sales exceeding some €1.5 billion. Network Marketing or Multi-Level Marketing (MLM) is a strategy which allows the parent multi-level company to market and distribute their products or/and service, directly to the consumer by direct selling in a non-permanent retail location and grow the network through relationship referrals. These sales are done through independent, unsalaried Sales Consultants (full time or part time) who represent the company and make commission based on the volume of sales.
The sales consultants often build their own organisation by recruiting a down-line of other independent distributors, who perform the same job; and as a result the entire organisation expands. As a consultant they earn commission not only based on their own sales, but also on the entire sales of the down-line group. This strategy has a very low distribution cost and also offers a leading business opportunity to people. This unique business concept – ‘Make Money Today and Fulfil Your Dreams Tomorrow’ goes with the brand promise of the company ‘Your Dreams, Our Inspiration’
Oriflame implements this strategy with frequent regular catalogues along with frequent, short-term price promotions and cross-sell campaigns. The details of the strategy are as follows 1) Independent sales consultants team who directly get in touch with end consumers with hard copy of catalogue 2) Marketing through owners of beauty parlours to increase customer reach 3) Face-to-face interaction with live demos about usage and benefits of the products 4) Samples at low prices or free samples with some purchase to try the product first and then purchase as buying expensive cosmetic products is a high involvement decision. 5) Direct mails to consumers which includes catalogues, offers 6) Online catalogue and offer details on company website.
A typical online catalogue is as below
7) Promoting existing consultants to add more consultants and grow the sales network. This also helps Oriflame in increasing loyal customer base as consultants buy Oriflame products for their personal use and for their family. The process of becoming an Oriflame Consultant is an easy process. It includes following steps
8) Oriflame also promotes its consultants to increase the sales by giving different incentives like international travel, gifts and other promotional tactics. For example, this year’s major attraction is Gold Conference in London in 2015
9) Offline and online makeup tutorials and guidance about health and health & beauty care