Oriflame Marketing Strategy

OBJECTIVES
1. To briefly study the marketing strategies of Oriflame
2. To study how the consultants market the products worldwide
3. To study about the products of the company
4. To know more about the company Oriflame
5. To understand the marketing skills of Jonas af Jochnick and his brother Robert af
Jochnick.
6. To analyze the social commitments of the company.

EXCECUTIVE SUMMARY
Oriflame is founded in 1967 by two brothers Jonas and Robert and their friend, Oriflame
is now an international beauty company selling direct in more than 60 countries worldwide.
Its wide portfolio of Swedish, nature-inspired, innovative beauty products are marketed
through a sales force of approximately 3.6 million independent Oriflame Consultants, who
together create annual sales of around 1.5 billion Euros.
Oriflame offers the leading business opportunity for people who want to start making
money on day one and work towards fulfilling their personal dreams and ambitions through
its unique business opportunity concept – Make Money Today and Fulfill Your Dreams
Tomorrow.
Respect for people and nature underlies the company’s operating principles and is
reflected in its social and environmental policies.
Oriflame supports numerous charities worldwide and is a Co-founder of the World
Childhood Foundation.
Oriflame is a Luxembourg company group with corporate offices in Luxembourg and
Switzerland. Oriflame Cosmetics is listed on the Nasdaq OMX Nordic Exchange.
Oriflame has five own production unit in Sweden, Russia, Poland, China and India. They
have global R&D centre with more than 100 scientists.

TABLE OF CONTENT
01 Introduction 01
02 History 07
03 Oriflame Core values 10
04 Global responsibility 11
05 Social causes 13
06 Marketing strategy of Oriflame 18
07 Oriflame’s products 36
08 Customer Service 44
09 Market and supply chain 49
10 Financial overview 55
11 Comparative Study 60
12 Case study: IBM 63
13 Recommendations and Suggestions 69
14 Conclusion 70
15 Bibliography 71

Introduction
Oriflame is the Swedish cosmetic company founded by two brothers. The company
produces and sells the beauty products like skin care, make-up, fragrances, accessories etc.
The company was founded by the two brothers Jonas af Jochnick and Robert af
Jochnick in the year 1967in Sweden. Now Oriflame is an international beauty company
which sells its products over more than 60 countries through direct selling. The company
sells its product by its independent sales force of approx. 3.6 millions of consultants.
Boards of Directors (key people):
 Jonas af Jochnick (Co-founder of Oriflame)
 Robert af Jochnick (Co-founder of Oriflame)
 Christian Salamon (member of audit committee)
 Bodil Eriksson (Senior Vice President of Oriflame)
 Helle Nielsen ( Member Of audit committee)
 Kim Wahl ( Member of Nominating and Remuneration Committee)
 Niklas Frisk (Head of South Asia Oriflame)

Jonas af Jochnick
Robert af Jochnick

Niklas Frisk (head of South Asia Oriflame) and Sharmili Rajput (marketing director- India)
with Sonali Bendre and Jonas Warmell in Delhi (2012)
Products offered by Oriflame:
 Skin care
 Make-up
 Fragrance
 Body care
 Hair care
 Accessories
 Very me

Best selling products in India:
 Diamond cellular Anti-ageing cream.
 Oriflame beauty Kajal eye liner.
 Optimals white foaming cleanser.
 Oriflame pure colour nail polish.
 Tender care.
 Essentials fairness lotion and cream.
 Milk & honey gold creamy soap bar.
 Hippo soap.

Vision: To be the No.1 Beauty Company Selling Direct.
Mission: To Fulfill Dreams.
History

Oriflame has been founded in 1967 as a result of Jonas and Robert af Jochnick with a
mission to give people the means to benefit from good natural skin care and attractive
cosmetics. Oriflame offers products in connection with skin care, colour makeup, fragrances,
hair products, accessories, and wellness solutions to name a few.
Their concept was by no means an obvious contender for success. Not in the 1960s and
especially not in Sweden, where the anti-Vietnam War movement, the greens and the student
activists were at their height. “Care” was an important word at that time, but it was not
particularly associated with one’s own body and wellbeing.
At the start the office was plain and uninspiring. In the middle there table on which they
packed their products for delivery to their sales consultants. They were an important part of
their business concept. Rather than investing in a chain of shops, which would have taken
time and been very costly, they decided to move their retail operations into the homes of
Swedish consumers.
They had sales consultants all over the country, and each and every one of them had
the heart and ambition of an entrepreneur. They wanted to be part of a revolutionary new
business and earn money from natural skin care. The products were distributed to their
homes, and from day one they had a network of potential customers in their friends,
colleagues and neighbors.
Oriflame has remained true to its original concept of natural Swedish cosmetics and an
entrepreneurial culture. Being part of that revolution in cosmetics has been immensely
rewarding to the af Jochnick family. Not merely in terms of financial compensation, but in
the belief they placed in people and the belief they had.

The people behind Oriflame are the reason for much of the company’s success. But how
does one run a company with more than two million entrepreneurs all over the world who
speak different languages and hold different values, religious beliefs and political
convictions?
The secret here was – culture. A common culture was an invisible bond. It had the power
to unite, enthuse and lead people over borders and boundaries that might otherwise separate
them. The Oriflame culture gave each person the freedom to set their own targets, income
and working hours. It was a culture that was based on respect for and belief in others.
They had given millions of people the opportunity to change their lives for the better –
an opportunity that many have taken to achieve their dreams. They had given people in
Russia, Europe, Asia, South America and Africa the opportunity to start their own business,
often in countries where the freedom to do business was discouraged or restricted to a self-
appointed elite. They built the first cosmetics factory in Warsaw after the fall of the Berlin
Wall.
They had no plans to change the formula of success. On the contrary, current trends
confirm that our 40-yearold business concept is even more appropriate now than it was then.
They are active in those parts of the world with the fastest growth rates, and they are active in
the market segment with the greatest growth of all – direct sales.
It is with a mixture of satisfaction and caution that they look forward to the years ahead.
The goal is clear – Oriflame’s target is to become the world’s leading direct sales cosmetics
company.

Oriflame Core values
Togetherness, Spirit and Passion are the three fundamental values of Oriflame. Trusting
these values we feel confident that we can succeed in a competitive business while at the
same time help make the world a better place.
Togetherness:
People who work together and share the same goals achieve greater results. They motivate
each other and know that pulling together is more rewarding than going it alone.
Spirit:
People with a can-do spirit have a winning attitude and never give up. They are committed to
do what it takes to succeed.
Passion:
Passionate people have the power to change the world. They love what they do, they believe
in it. They know deep down that they can make a difference.

Global responsibility
When formulating products Oriflame strive to use natural ingredients that are in line
with strong environmental policies and are not harmful to the environment.
They are one of the first companies to utilize plant extracts in skin care products and
they have always tried to optimize the use of ingredients from renewable plant sources.
Scientific reports on safety and environmental issues are continuously monitored to
ensure that action can be taken to replace any ingredients that may have a negative impact on
consumer health and the environment. In addition, Oriflame’s product packaging is
recyclable and minimized to reduce waste.
Oriflame has a strong ethical ethos which is evident through all facets of its operations.
Oriflame products are formulated and manufactured in line with high industry standards and
ethical guidelines.
They currently operate five cosmetic manufacturing plants - in Poland, Sweden, India,
China and Russia. All Oriflame manufacturing facilities and sub-contractors comply with the
relevant local and national laws and regulations. Such laws include those relating to labour
standards, environmental manufacturing and health and safety practices.
Water conservation is a key priority in Oriflame’s environmental management plan. In
line with their proactive approach towards responsible environmental management they apply
design techniques at all of our manufacturing facilities, aimed at reducing water consumption
and minimizing pollution.
Oriflame takes a strong stance on important social and ethical issues such as child
labour, ethnic beliefs and culture. They are also committed to helping children at risk and to
providing education for young women through our Social Cause Programs.

Social causes
 World Childhood Foundation
 Livslust Dzivesprieks
 Local charities (in India)

World Childhood Foundation:
Every child has a right to a childhood, to security, joy, playfulness and curiosity about
life. Every child has a right to grow up and develop socially and intellectually. But many
children are devoid of these, their most fundamental rights.
That's why Oriflame co-founded the World Childhood Foundation. Through them they
reach out to the world's most vulnerable children: street children, sexually abused children
and children in institutions. Together, they promote projects for girls and young mothers -
since few others do.
Oriflame supports the World Childhood Foundation in many ways. Apart from the co-
founder contribution, they also sponsor a variety of Childhood’s project in the markets where
they are active. Currently Oriflame gives extra support to projects benefiting children in
Estonia, Lithuania, Latvia, Russia and Poland.

Livslust - Giving hope where there is none:
Livslust (Dzivesprieks) is a very special school. It gives hope for the future and provides
vocational education and social rehabilitation for struggling teenagers in Latvia. Most of
these teenagers have spent their whole lives in orphanages and educational institutions.
Before arriving at the school, they have little hope and few, if any, of the skills needed to
build a good life.
Livslust was founded in 1994. The students combine general subjects like English,
mathematics and social skills with practical training in building construction, sewing,
agriculture, computer skills, cooking or carpentry. By learning a trade, they create the
foundation for a better future for themselves.
The Livslust School is financed by donations from sponsors, and Oriflame has been an
active contributor from the very start.

Local charities (Deepalaya):
Oriflame believes that any investments made in the education of a girl, translates directly
and quickly into better health care, poverty reduction and better overall economic
performance of the family. Girl Child education has a wide-ranging impact on many aspects
of human survival and development. Thus, ‘Oriflame Girl Child’ project is an endeavor to
spread the message that a community’s development is incomplete without the education of
girls.
Under this project Oriflame has sponsored education of 1,000 girls for a period of four
years from Deepalaya, the largest operational NGO in Delhi. A grant of approximate 4 cores
was given to Deepalaya for the ‘Oriflame Girl Child’ project. The contribution has facilitated
education of selected girls in the age bracket of 4 to 17 years. Through this project Oriflame
aims to lead these girls towards the path of education and bring out their latent talents.
Magnus Brannstrom, Oriflame CEO visited Deepalaya on 12th June 2006. During his
visit, he interacted with ‘Oriflame Girls' and actively discussed their progress with teachers
and school authorities.

Local charities (Hand in Hand):
Entrepreneurial ship has always been a focus for Oriflame and that’s the reason in
November 2006, a grant of 30 crores was given from af Jochnick Foundation to Hand in
Hand - an NGO operational since 1988 in Tamil Nadu. The grant is used by Hand in Hand
for running Self Help Groups (SHG) and Microfinance Projects in specific areas of general
training for SHG members, women´s literacy programme and medium-sized enterprises. The
goal is to empower poor rural women who are members of SHGs to ultimately become
entrepreneurs and set-up enterprises in order to bring in more income to the families.
The focus of Hand in Hand’s Self Help Groups and Microfinance Projects are to
alleviate rural poverty and empower women. This is done by forming women into Self Help
Groups, training them in capacity building and skills development and helping them to build
sustainable livelihoods for themselves and their families. Most of them are first of all taught
basic reading, writing and arithmetic through a 100-day literacy course.
Oriflame India continuously supports Hand in Hand with, for example, hosting fund
raising events in our Support Office facilities in New Delhi

Marketing strategy of Oriflame
Oriﬂame launched its direct sales method in 1967 – when the Company was founded as
a vital part of its innovative business concept. Since then, Oriflame has given millions of
people in Russia, Europe, Asia, South America and Africa the opportunity to start their own
business, often in countries where the freedom to do business was discouraged or restricted to
a self-appointed elite. In that sense, Oriflame has helped tear down walls. Oriflame built the
first cosmetics factory in Warsaw after the fall of the Berlin wall, was early to enter countries
such as India and one of the first companies to be given a direct sales licence in China
Since the company Oriflame has been established, the company marketed their products
through their force of consultants. These consultants try to convince as much as people they
can to buy the Oriflame products.
The people who wish to buy the products are made members of the company under the
particular consultant. Then these members enjoy the offers given by the company to them.
The members are given offers such as make specific number of more members and get
discount on specific product of Oriflame, thus this chain goes on. This increases the number
of members as well as consumer of the company. The example is shown below:

The consultants working for Oriflame should know the art of communication and to
convince the consumers. The senior managers of the company try to enhance the quality of
communication in consultants. The following are some tips which senior managers give to
the consultants:
 Motivate fans to buy Oriflame products
 Give tips on make-over, make-up, fashion, correct usage of products etc. through
different campaigns
 Promote the brand with the Brand Ambassador
 Excite fans with buzz content.
 Change the lifestyle and the way people think about it
 Promote popular products, discounted products, products in high demand.
Oriflame also sell their products online. The catalogue which plays the important role in
the selling of the products is uploaded on the official site of the company. The visitor of the
site place their orders on the site by creating their account there. Thus by providing the
ultimate shopping experience to consumers, the Oriflame catalogue supports the business
opportunity to its consultants. The stronger the consumer offer, the greater the potential to
sell and grow the business.

Alongside the catalogue, online social networks are becoming significant grounds for
sales and recruitment activities, supported by PR, events, leaﬂets, posters in service centres
and, for major launches in key markets – TV, print and billboards. Around 50 percent of the
sales force uses the online services and more than half of all orders are placed through the
online ordering system. As demand for online availability increases the sales force is
provided with new tools that allow them to continue their business activities in this
environment, such as phone and I pad applications, virtual stores on Facebook and a channel
on YouTube.
Sales consultants are offered a number of tools to help them succeed, coordinated in
SARPIO – Sales and Recruitment Processes in Oriflame. SARPIO is the global platform for
processes, training and communication. It has been developed in order to offer consultants
support in developing and managing themselves and their businesses, while ensuring that
they convey the Oriflame brand in a consistent way. In 2009, Oriflame launched a new
management tool for the sales force in most markets. This tool helps sales consultants to track
performance of their network and identify action areas that can improve business
effectiveness. It also improves communication with the sales force

Oriflame’s business model has proven its resilience, sustainability and validity for more
than 40 years – in emerging, as well as mature, markets. The key drivers, such as being your
own boss, setting your own goals, the low barriers of entry and exit, the lack of
discrimination regardless of one’s sex, ethnicity, age, education, physical condition or
financial resources, are all in line with a growing population of entrepreneurs that is less
dependent on secure employments.
Although the reasons for joining may vary among the many sales consultants in the more
than 60 countries where Oriflame is represented, most of them agree that Oriflame offers
attractive financial rewards as well as social benefits, i.e. the possibility to look great, make
money and have fun. Some join as a way of supporting their family, while building a business
and fulfilling a career dream. Others see it as a way to achieve a more flexible life or make
extra money while studying, being in between jobs or simply extending one’s social life.
Consultants also join in order to save money through discounted purchases of cosmetics and
personal care, by enjoying a discount valid for themselves and their families. The flexibility
of the system means that consultants decide for themselves what they want to achieve by
joining Oriflame.

Staying true to the original business concept:
For more than 40 years, Oriflame has remained true to its original concept of natural
Swedish cosmetics and an entrepreneurial culture. Today, Oriflame is one of the fastest
growing international beauty companies, selling direct in more than 60 countries worldwide.

Continuously improving the offering:
Through its unique business concept – Make Money Today and Fulfill Your Dreams
TomorrowTM
, Oriflame offers the leading business opportunity for people who want to start
making money the same day they join and work towards fulfilling their personal dreams and
ambitions.
A sales force of approximately 3.5 million independent consultants has seized this
opportunity and is successfully marketing Oriflame’s broad portfolio of Swedish beauty
products, together creating annual sales exceeding €1.5 billion. The Oriflame “Business
Opportunity Concept” is built on four Strategic Cornerstones; Brands & Products, Network
Marketing, World Class Service and People & Culture. By continuously improving the
earning opportunity and consumer offering, Oriflame will attract an increasing number of
consultants. By consistently evaluating and prioritizing with the consultants in focus,
management shall ensure that the allocation of resources is optimized.
Direct selling – a modern sales method:

Direct selling may seem as traditional sales method best suited for emerging markets
without a developed retail market. However, lately new consumer behavior has been putting
traditional retail to the test, for instance the growing demand for home deliveries, personal
shoppers and, in particular, online-shopping, which is now the most customised, routine and
predictable way to shop. The retail industry is forced to find new methods, services and
market channels in order to survive. Direct selling is meeting new market conditions in a
rather progressive manner; adjusting the shopping experience to the consumer regarding
timing, place, entertainment and personal approach.
Moreover, the key source of consumer information is becoming word of mouth, spread
in internet forums, blogs, fan clubs or during informal gatherings with friends, particularly
when it comes to shopping for cosmetics. Consumers prefer advice based on personal
experience, confirmed by a broad and well-known network of references. The direct seller is
a familiar and trustworthy source of information about the product, brand, company, industry
and supplier. As the competition for consumers’ attention and confidence increases, direct
selling offers a unique way of gaining loyal customers.

Well-positioned in a growing industry:
The beauty and direct selling industry is well-positioned for future growth and Oriflame
is one of the leaders in the industry, growing faster than most of its competitors.
Globalisation has opened up extensive potential markets around the world where Oriflame’s
business model has a very good fit. The Company has a sales force of approximately 3.5
million independent consultants and over 8,000 employees in countries worldwide, managing
everything from research, manufacturing and logistics to distribution of catalogues and
marketing. The global platform keeps Oriflame close to fashion trends and customer
preferences in different markets.
In total, the global market for cosmetics, personal and hair care increased by 5.2 percent
in 2010 amounting to €288.8 billion. During the same period Oriflame’s total sales increased
by 8 percent in local currency. For the next five-year period, the global market for cosmetics
and toiletries is forecasted to grow by an annual average of 2.7 percent at constant prices,
reaching €330.0 billion in 2015, according to Euro monitor. Skin Care is expected to be the
fastest growing product category with a 6.1 percent annual increase on average between
2010–2015 in the markets where Oriflame is present.

Usage of Bonus Points:
Oriflame has introduced the idea of Bonus Points (BP). These points are based on sales
of products. Every product has their own BP, Ex: Tender Care has 2 points and if the
customer purchases 5 such Tender care creams he or she would gain 10 BP for those
products. The more BP the customer gains the more offers he or she gets. Due to this BP
system maximum people try to buy more and more products to increase their BP’s. Thus the
company gains maximum profit due the idea of Bonus Point System.
Advantages Of BP.
Efficiency in Operations:

Increasing the sustainability profile of Oriflame’s own facilities and operations is a key
priority. During 2011, a new greenhouse gas reduction target was set. This target aims to
reduce Oriflame’s greenhouse gas emissions by 50 percent by 2020 relative to turnover, and
applies to all our own production sites, offices and logistics operations, as well as business
travel. During 2012, an implementation strategy was developed focusing on how to further
reduce emissions within the Company’s three main emission areas; building energy
(representing 42 percent of measured greenhouse gas emissions), global distribution of
products (26 percent) and travel (26 percent). The implementation plans will continue to be
rolled out during 2013. Oriflame reports its emissions to the Carbon Disclosure Project.
Carbon intensity 2010 2011 2012
GHG emissions
(tones per M €
sales)
51.3 50.4 –2%

Production Sites and Offices:
In 2012, roll-out of a new audit program started at internal production sites, warehouses
and offices, focusing on energy efficiency and reducing greenhouse gas emissions. At all
Oriflame’s production sites, there are detailed programs with the aims to reduce not only
energy and greenhouse gas emissions but also waste and water consumption. Each of these
areas is the subject of targets to be met by 2015. A proportion of the Company’s electricity
demand has been moved to certified renewable sources. At the Swedish and Polish
production sites, 100 percent of the electrical energy will be sourced from renewable sources
by 2013. In addition, significant technical improvements have been implemented, such as
retrofitting building management systems and introducing reduced or low energy
manufacturing processes.
The new distribution and production facilities under construction in Moscow are being
LEED™ Green Building certified prior to completion, with the aim of making them among
the very few industrial projects in Russia to gain such an independent certification. Oriflame
is also implementing a strategy for improving the environmental profile of all its offices
worldwide. This is seen as a way to engage employees and Oriflame Consultants in the
Company’s sustainability work. It includes the provision of manuals for all office managers
and guidelines for employees regarding energy use, recycling and other sustainability tips.
The office initiative has successfully been rolled out in all regions, and has seen a high degree
of employee engagement. Implemented actions range from smaller items such as starting
recycling initiatives and installing motion sensors, to larger investments in energy efficiency
or renewable materials when refurbishing or moving offices.
During 2012, an internal guide aimed at reducing the impacts of Oriflame conferences
was developed and implemented for a first time during the Stockholm Gold conference.

Environmental data
ORIFLAME
PRODUCTION SITES
2010 2011 2012
Energy (MWh) 35,900 34,600 32,700
GHG emissions (tones
CO2e)
10,100 9,700 9,300
Water (m3) 170,600 155,100 142,400
Waste (tones) 4,900 3,700 3,400
Logistics:
Oriflame’s overall supply strategy is to move the sourcing of products and printing of
catalogues closer to the current and future Group Distribution Centre facilities and major
markets. The aim is to improve transportation routes and thereby reduce greenhouse gas
emissions and energy consumption. Regional sourcing activities in the CIS region have
during 2012 helped reduce the distances shipped by almost one third for these markets.
Oriflame works to limit air shipments to the greatest extent possible and products
shipped by air decreased by 30 percent during 2012. The vast majority of the Company’s
shipments are conducted by sea and truck freight. The packaging and loading routines for
ship containers and trucks are continuously being reviewed to optimize space usage, thereby
reducing energy consumption. During 2012, utilization was further improved by 11 percent in
ship containers and 16 percent in trucks compared to 2011. Compared with our 2010
baseline, the figures represent a total improvement of 36 percent for ship containers, and 28
percent for trucks.

Oriflame’s products
The wisdom of nature with the best of science:
Oriflame presents a wide product portfolio with eternal favourites and a flow of exciting
news, affordable for many. Customers are offered over 900 cosmetic products, more than a
third of which were launched during the past year.
Oriflame’s products are developed using cutting-edge technology and are manufactured
according to the highest quality standards. No Oriflame cosmetic product has ever been tested
on animals.
Over the years, Oriflame has launched thousands of products within Skin Care, Colour
Cosmetics, Fragrances, Personal & Hair Care, Accessories and Wellness. The eternal
favourite Tender Care Protecting Balm, as well as other best-sellers such as Wonder Lash
Mascara or Diamond Cellular Cream, all conveys the Swedish aspects of the Oriflame brand,
symbolised by the key attributes of natural, progressive and ethical. This is the firm
foundation of the brand and also the key to continued success.
The Oriflame catalogue is how the brands and products come to life for our consultants
and consumers. The catalogues are literally shops without walls, offering each customer a
unique shopping experience at a preferred time and place. Each edition has its own theme and
includes a display of selected Oriflame products as well as new offers and seasonal
promotions, altogether presenting around 500 products. A new Oriflame catalogue is
distributed every three to four weeks and each edition is published in four regional versions
in 40 different languages. Great efforts are made to differentiate the catalogues to make sure
that each time they offer new and exciting shopping experiences.

A wide range portfolio:
Oriflame’s product offer is a result of more than 40 years of skin care and cosmetics
expertise – combining the wisdom of nature with the best of science. The Company provides
a wide assortment of distinct brands, at affordable prices. The products are made from high
purity ingredients according to strict manufacturing and high ethical standards as well as
stringent environmental policies.
The portfolio covers a wide range of cosmetic products; skin care solutions for every
need, exclusive and qualitative fragrances, a wide and sophisticated range of colour
cosmetics, extensive hair and body care, innovative wellness products and various fashion
accessories.
During the year Oriflame launched a new concept, Dare to Be, targeting a younger
audience with fun new products, inspired by a youthful lifestyle and the latest beauty trends.
The concept, with a special targeted communication plan, is presented in a separate section
and supported by online channels. For the launch of Dare to Be, four inspirational young
women were chosen to embark on an adventure of a lifetime and a path of “love, self-
discovery and achievement”. Their experiences are shown in online video episodes and
catalogues include a Dare to Be section in which the girls bring the latest looks to life.
Another major event was the successful launch of the fragrance Glacier Ice, promoted by
the Russian figure skating star Evgeni Plushenko, Midnight Pearl EDP endorsed by
supermodel Natalia Vodianova, as well as the South American launch of new Wellness
products promoted by local sports celebrities. Within the product categories Colour
Cosmetics and Fragrance Oriflame collaborated with Ukrainian singer Annie Lorak, while
Swedish illustrator Liselotte Watkins was chosen to illustrate a new accessory range.
Moreover Oriflame launched children’s accessories from Disney in the CIS and EMEA
regions and Matell in Latin America.

Oriflame categories:
 Skin Care: The Skin Care category experienced a challenging year, with a shift in
consumer demand towards lower and mid-priced brands. Tender Care is still Skin
Care’s top selling product, supported by new flavours launched during the year. The
category accounted for 22 percent of total sales in 2010. This year’s hand cream
launches were particularly successful. Lower priced brands such as Essentials also
experienced enormous sales growth, while upper mass brands faced a difficult
climate. The middle mass segment exhibited the largest growth, mainly due to the
successful performance of Optimals, which is among the top three brands. Men’s Skin
Care segment had healthy growth, boosted by large sales of the North For Men brand.
The youth segment also grew strongly, thanks to the Pure Skin relaunch during the
year.

 Personal and hair care: The Personal and Hair Care category accounted for 20 percent
of Oriflame’s total sales in 2010. The year resulted in unprecedented success of
Feminelle products – three out of the top four best sellers in the category were
intimate care products. The success of Discover Bath & Shower brand continues and
it is now one of the best brands of the category, along with Nature Bath & Shower.
The Bath & Shower category also experienced a growth in the upper mass segment
thanks to the successful relaunch of Swedish Spa. Last year’s Hair X launch
strengthened Oriflame’s credibility in the important hair care segment and the brand is
now a solid performer. The 2010 relaunch of Foot Care under the new brand name
Feet Up further boosted sales of the brand continuing to make it one of the strongest
performers in its category.
 Wellness: The Wellness category continued to grow in 2010 and constituted 3 percent
of sales during the year. Two Wellness core products are among the top ten best
selling products for Oriflame globally – Wellness Pack Woman and Natural Balance
Shake Strawberry. In 2010, two new products were launched – Natural Balance Shake
Single Servings and Natural Balance Shake Chocolate. The key focus going forward
is to develop tools to help consultants sell Wellness, and also to launch several new
attractive products.
 Accessories: The Accessories category, accounting for 10 percent of sales 2010,
continued its strong growth by offering a large assortment of products focusing on
cosmetic items such as make-up brushes and manicure sets, fashion collections
including handbags and jewellery as well as seasonal items including gifts for men
and kids. Accessories further enhanced its position through a number of very
successful regional collaborations with strong brands such as Puma and Disney,
global cooperation with illustrator Liselotte Watkins and celebrity endorsements with,
for example singer Ani Lorak. Focus on trends was increased by offering additional
cross category collections.
 Fragrances: The Fragrance category generated 21 percent of total sales, has recorded
another year of strong sales growth and remains the fastest growing category within

Oriflame. Both male and female segments have registered strong growth, thanks to
core brands’ strong performance combined with successful introduction of new
brands. The celebrity endorsement strategy once again showed a huge impact on sales
with examples of local stars such as Russian Evgeni Plushenko for Glacier Ice EDT or
global top model Natalia Vodianova for Midnight Pearl EDP. All price segments were
dynamic with key launches in the low mass segment, such as the Sun-Moon-Eclipse
trilogy, in the middle mass segment with Volume male EDT endorsed by DJ Paul Van
Dyk, and in the upper mass segment with Precious Moments EDP for female and
Giordani Man Dolce Vita EDT for the male audience.
Colour: In 2010, Colour Cosmetics grew more and experienced a double-digit growth during
the second half of the year. The category represented 24 percent of sales during the year. It
was particularly driven by Triple Core Lipstick with a break-through technology exclusive to
Oriflame, attracting customers in all regions, as well as the launch of Very Me, targeted at a
young audience, and Pure Colour, an entry-level range of products. Oriflame has focused
specifically on repositioning and distinguishing the three brands within Colour Cosmetics to
target specific consumers and attract new customers in the “impulse purchase” category.
Dare to be – An inspiring launch for young people:

The new concept Dare to Be targets Oriflame’s younger audience through fun new
products inspired by a youth-ful lifestyle and the latest beauty trends. The Dare to Be concept
was developed in close dialogue with customers and consultants and launched through a
special website and social networking sites such as Facebook and YouTube.
The marketing story features four inspirational young women on a path of love, self-
discovery and achievement. Their experiences were shown in video episodes, where a global
audience of young women joined their journey. The girls also star in the separate Dare to Be
catalogue section – created especially to support the new youth philosophy.
Hundreds of sales consultants from the target group were involved in the development of
products and specific marketing strategies prior to the launch, resulting in word of mouth
through online communities and more than 50,000 orders per day since the launch. The
Polish singer Eva Farna also featured in the launch.
The Dare to Be offer includes the Very Me make-up range, Babes fragrances inspired by
Japanese style, and the Pure Skin range. Dare to Be was rolled out to all Oriflame markets
worldwide.
Creating a catalogue – a long journey:

Creating a catalogue is about much more than filling blank pages with glossy product
offers. The outline of a new catalogue begins more than one year prior to publication. The
regional planning teams create a catalogue plan that includes ideas for the themes, what
products will be shown in each catalogue, what page they will appear on and what the offers
will be. The process involves a lot of analysis of current and historic results together with
market trends, but also creativity in developing new exciting ideas and promotions. The
regional plans are communicated and discussed with local markets to optimise the
combination of product and price in every catalogue. The completed plan is then formally
briefed to the region’s catalogue production team. There are constant updates and changes
along the way in response to consumer needs and local market conditions, so it is crucial for
both planning and catalogue production teams to be flexible and responsive.
About six months prior to launch, the production process begins. The regional catalogue
production teams finish about 75 percent of the pages in the catalogue. These pages are filled
with existing products and brands that are put in a context, all according to the brief from the
planning team, covering theme as well as seasonal offers and discounts. The rest of the
catalogue, about 20–25 percent is dedicated to product launches. These layouts follow a
separate process that starts much earlier and is closely linked to the new product development
process. The regional catalogue production team works on the catalogue for four months.
During the process, they meet with the regional planning team every third week to review
layouts and co-ordinate further work.
Customer Service
Money back guarantee:

Oriflame specializes in natural high-quality beauty products and offers the best of
science combined with the best of nature. If you are not satisfied for any reason within two
months of purchase, Oriflame will exchange the product, or provide a full refund on
presentation of proof of purchase. This is the main reason why people trust the company. The
company also looks after the consultants, whether they provide the service to their customers.
The oriflame members works on the principle “YOUR DREAM- OUR INSPIRATION”.

Order and Delivery of the products:
In every kind of business placing order and its delivery plays an important role. It is very
important for the company to satisfy the customer through it service of delivery. The perfect
management is vital part of this process. Oriflame has got the perfect management in placing
as well as taking their orders.
 How to order products:
Oriflame products are sold exclusively through a global network of independent
Consultants. The products can be ordered by two ways:
1. Become a Consultant:
Whether you only want to order Oriflame products for yourself and your family or start
selling them to others, you can register to become a Consultant and get a discount on the
catalogue prices.
2. Become a Customer:
You can place your order through one of the Oriflame Consultants.
They will be able to give you advice, show product samples and answer your questions about
our products and how to use them.

Oriflame Consultant selling her products in India.

Way the customer can order the product:
1. Immediate: The customers can place the order in any nearby branch of Oriflame
office. In this type of order the customer may receive the product at the same time if the
product is available in that month.
2. Via Internet: The Company has provided the service to place order through internet.
The only thing the customer has to do is to create their account on the official site of the
oriflame and within the few clicks they can place their orders.
3. By Phone and by Fax: The customer can call or fax to the company authorized
service. They may also place order through their specific consultants.
Oriflame online catalogue in India for the month of August.
 Delivery of products:
Oriflame Company is very concerned regarding the delivery of the products. They
choose the best courier service country wise or specific area wise. The following are the ways
how the customer can receive the order:
1. Oriflame Express Delivery: Oriflame has its own express delivery offers. This offers
states that f the customer had ordered for more than rupees 3000 (in India) then the customer
need not pay the delivery charges. In case if the customer wishes to buy a single product
worth rupees 1700 (in India) even then the delivery is free of cost.

2. Oriflame Courier Delivery: Here the oriflame customer can decide which courier
service he wishes to use. The only thing the customer has to do is provide the service name
where he/she has placed the order. And in within the given time the customer will receive his
order.
3. Handling Service: For immediate order and delivery the delivery cost is not charged.
Here the customer can pick up the product from the branch office or any Oriflame outlet
nearby. If customer receives his product after sometime of order they charge the fees. But in
case the customer has gained more than 100 BP (bonus points) than even that service is free
for customers.
Oriflame consultant and customers. Oriflame Express Delivery

Market and supply chain
Own manufacturing:
Oriflame produces 60 percent of its cosmetic product volumes in its internal facilities. A
new factory is under construction in Noginsk 45 km east of Moscow in Russia for production
of body care and toiletries.
Warsaw, Poland
 Skin Care
 Body care/toiletries
 Colour Cosmetics (colour emulsions)
Ekerö, Sweden
 Toiletries
 Fragrance
Moscow, Russia
 Lipsticks
 Lip glosses
Noida, India
 Skin Care
 Colour Cosmetics

Kunshan and Beijing, China
 Skin Care
 Colour Cosmetics
 Wellness
External manufacturing
Oriflame buys 40 percent of the annual sales of cosmetics prod-ucts from external
suppliers, mostly products that require specific techno-logy, such as some Colour Cosmetics
(eye pencils), Skin Care (capsules), Wellness products, Personal & Hair Care (bar soaps) as
well as some specific fragrance products.
The third party suppliers are mainly located in Europe. Every year, a few new suppliers
are added and some are removed. In 2010 and 2011, there has been a specific focus on adding
more suppliers in the CIS region in order to cut lead-time and reduce total landed cost.
Accessories products are purchased exclusively from third party suppliers, primarily in
China.
Group distribution centers (GDCs)
The Group Distribution Centers (GDCs) are logistics hubs that include pick & pack,
serving individual customers and end consumers in certain markets. Today Oriflame has such
Group Distribution Centers in Warsaw, Poland, in Kiev, Ukraine and in Budapest, Hungary.
Oriflame intends to establish more Group Distribution Centers to further improve the supply
chain.

Catalogues
The catalogues come in four regional versions and 40 languages. The art work is done in
Stockholm, Sweden,Bangkok, Thailand and Santiago, Chile. Most catalogues are printed in
Kiev,Ukraine, Warsaw, Poland and Santiago, Chile.
CIS
 Russia (printed in Finland)
 All other CIS markets (printed in Ukraine)
EMEA
 Romania (printed in Romania)
 Egypt (printed in Egypt)
 Turkey (printed in Turkey)
 All other EMEA markets (printed in Poland)
Latin America
 Latin America (produced and printed in Chile)
Asia
 Printed locally in all the different markets

CIS & Baltics: CIS & Baltics – including the former Soviet republics and the Baltic
countries – is Oriflame’s largest region and accounts for 57 percent of Oriflame’s total sales.
In 2010, sales grew by 11 percent in local currency. The average sales force amounted to 2.1
million sales consultants. Sales growth was particularly strong in Ukraine, Kyrgyzstan,
Belarus and Mongolia. Russia, which is the largest market in the region, increased sales by 6
percent in local currency. The market environment was more unpredictable during the second
half of the year, when also temporary product registration issues in Russia affected sales
negatively. However, campaigns, well received product introductions and gradually improved
service levels during the year positively impacted sales growth.
Asia: The Asia region represents 10 percent of Oriflame’s sales, with operations in eight
countries. In 2010, sales grew by 15 percent in local currency while the average sales force
increased by 10 percent to more than 450,000 sales consultants. Sales momentum was
particularly strong in India, Indonesia and China. The Iranian operations closed down in
August. Like-for-like, excluding Iran, sales growth were 16 percent in local currency.
Latin America: With five markets – Chile, Colombia, Ecuador, Mexico and Peru – Latin
America is the smallest of Oriflame’s regions and fast-growing. Latin America constituted 6
percent of total sales for the year. All markets in the region showed strong growth during
2010 and sales grew by 18 percent in local currency over the year. The average number of
sales consultants increased by 12 percent to around 150,000. Oriflame continues to invest in
better infrastructure and implemented a three-week catalogue cycle in the region in June.
EMEA: The EMEA region – Europe, Middle East and Africa – accounts for 27 percent of
Oriflame’s total sales. In 2010, sales in local currency were unchanged compared to last year,
while the average number of sales consultants increased by 4 percent to approximately
800,000. The best performing markets during the year were Turkey, Hungary and Morocco.
The macro conditions in the central and southern part of Europe were difficult during 2010.

Financial overview
Long-term financial targets:
 Oriflame Cosmetics aims to achieve local currency sales growth of approximately 10
percent per annum and an operating margin of 15 percent.
 Over the next five years, the Group will continue to invest in growth both organically,
with capital expenditure on existing and new manufacturing facilities, and through
expansion into new markets.
Financial achievements 12 months 2010:
 Local currency sales increased by 8 percent and Euro sales increased by 15 percent
to €1,513.6 million (1,316.6).
 Adjusted operating margins amounted to 11.1 percent (11.1), resulting in an adjusted
operating profit of €168.1 million (146.8).
 Adjusted net profit amounted to €128.3 million (101.7).
 Adjusted EPS after dilution amounted to €2.25 (1.78).
 Cash flow from operating activities amounted to €90.3 million (131.7).
Where stated, profits are adjusted for restructuring costs in the EMEA region and Iran
impairment.

Outlook 2011
 Operating margins are expected to improve compared with 2010, while sales growth
for 2011 is expected to be 5–10 percent in local currency.
Outlook 2012

The share:
 Oriflame Cosmetics was introduced on the NASDAQ OMX Nordic Exchange on 24
March 2004.
 On 31 December 2010, the number of shareholders and SDR holders was 8,483. Each
SDR represents one share.
 During 2010, an average of 270,819 shares were traded per day on the NASDAQ
OMX Nordic Exchange.
 The last price paid on 31 December 2010 was SEK 354.00 giving Oriflame a total
market capitalisation of SEK 20.2 billion.

Dividend proposal:
 Oriflame’s Board of Directors will propose to the 2011 AGM, a dividend of €1.50
(€1.25) per share, amounting to €85.5 million, corresponding to 67 percent of adjusted
net profit.

Comparative Study
Being a cosmetics company selling direct means that Oriflame competes both with major
cosmetics manufacturers for end customers as well as with other direct sellers for consultants.
In Eastern Europe, direct sales as a channel is estimated to have more than 20 percent of the
total cosmetics and toiletry market, compared with the global average of approximately 11
percent. The two largest cosmetics companies in Eastern Europe selling direct are by a wide
margin Oriflame and Avon, but there are many other direct sellers competing for consultants,
such as Russian Faberlic, American Mary Kay and Amway. Amway and Mary Kay are the
largest direct sellers in China, while Amway and Oriflame have the largest market shares
among direct sellers in Indonesia and India.

Case study: IBM
Overview:
In order to keep this complex business on the right track and maintain its rapid rate of
growth, the management of Oriflame Cosmetics was in need of a complete, integrated
management platform.
Business need:
To keep its complex business on track and maintain its rapid rate of growth, Oriflame
Cosmetics needed a complete, integrated management platform. The investment had to
benefit business performance over the long term, so the company decided to implement a
total package for performance management.
Solution:
 IBM® Cognos® 8 BI
 IBM Cognos 8 Planning
 IBM Cognos 8 Controller
Benefits:
 A single set of figures producing the same bottom line.
 An integrated financial plan, aligned with all local plans.

 Higher forecasting accuracy.
 Integrated business management.
 Ability to adapt processes and strategies at short notice in response to market
conditions.
Oriflame Cosmetics
Oriflame Cosmetics is one of the world’s fastest-growing cosmetics companies, selling
high-quality natural skincare and cosmetics products through an independent sales force
outside the traditional retail environment. Oriflame Cosmetics has a presence in 59 countries
and is one of the market leaders in over 30 countries. A direct sales force of 2.2 million
independent sales consultants markets a complete range of high-quality skincare products,
fragrances, and cosmetics.
Challenges faced
A product catalogue represents the only shop-front and sales vehicle of the originally
Swedish cosmetics supplier, Oriflame. This catalogue is distributed in the form of a printed
sales brochure which can also be accessed online. In the majority of markets in which the
group is active, the catalogue is updated every three to four weeks. “Every year, we print
around 100 million copies of the sales brochure, which is distributed in some 30 languages
around the world,” explains Gabriel Bennet, Chief Financial Officer at Oriflame Cosmetics.
“The brochure presents just a selection of our range, which totals almost 1000 products.
Because 30 to 40 percent of those are updated every year, we are able to offer our customers
a completely new range of cosmetics products every three years.”
In addition, prices and promotional offers of Oriflame Cosmetics’ products are in some
cases adjusted on a daily basis, in order to capitalize on new trends or opportunities in the
market. “We certainly haven’t made it easy on ourselves. But despite the complexity of our

business, we are now one of the fastest growing companies in the cosmetics industry,” says
Bennett. Indeed, sales of Oriflame Cosmetics have grown an average 17 percent each year
between 1990 and 2005. Today, Oriflame Cosmetics is not only incredibly strong in Central,
Eastern, and Southern Europe, but is also experiencing rapid organic growth in Asia and
Latin America.
In order to keep this complex business on the right track and maintain its rapid rate of
growth, the management of Oriflame Cosmetics was in need of a complete, integrated
management platform. “In the first place, we needed to support our existing business
processes and strategy,” says Bennett. “But we also felt that our new solution should enable
us to adapt those processes and strategies, where necessary, at very short notice. Moreover,
our investment had to benefit business performances over the long term. That is why we
decided to implement a total package for performance management.”
Strategy followed
According to Gabriel Bennet, the implementation of such a performance management
system was also an important criterion for the successful introduction of the concept of
integrated business management. “That concept implies that you already have a single set of
figures, or in other words, permit only one version of the truth with regard to your business
performance,” Bennett explains. “By ensuring that all countries and departments within our
group worked with the same correct, unambiguous data, we were hoping to boost both the
quality and speed of our communication.”
For that reason, Oriflame Cosmetics had already invested in the construction of an
Oracle data warehouse and in acquiring IBM Cognos financial consolidation software. “In
this sense, we had already begun the first phase of our project, says Bennett. “To completely
finalize that phase, all we had to do was further roll out IBM Cognos 8 Controller, throughout
our organization. That is how we were able to lay the foundations for an all-encompassing,
completely integrated management platform.”

“When we were to go in search of a supplier who could offer us a total package for
performance management, we were quick to return to IBM Cognos,” says Christian Jönsson,
Group IT Director at Oriflame Cosmetics. “On closer inspection, the majority of the other
suppliers appeared to offer only parts of the required solution. IBM Cognos was one of the
few who could compile all the necessary elements for us in order to develop a complete
performance management system—software for financial consolidation, analysis and
reporting, and planning and forecasting.”
So Oriflame turned to IBM Cognos again for the second and third phases of its project,
and in addition to IBM Cognos 8 Controller, decided to roll out IBM Cognos 8 BI and IBM
Cognos 8 Planning as well.
“The real reason we decided to go with IBM Cognos was the rich pallet of
functionalities afforded by the technology, along with its user-friendliness. The average user
with basic knowledge of Excel and the internet can start using IBM Cognos 8 BI in just half
an hour.”
Christian Jönsson

Benefits realized
Oriflame implemented IBM Cognos 8 Controller worldwide to allow better management
of its financial performance, and enable every level of the group to work with a single,
identical set of figures. “With this deployment, we have actually achieved the complete
standardization and integration of all financial reporting within the group. Coming from a
Microsoft® Excel® based, non-aligned environment, we now finds ourselves working with
one fully integrated financial management system. This is improving the quality of our data
and the speed with which it is processed immensely,” explains Jönsson.
“As a result of that improved level of control, we are now able to adjust our business
processes where necessary,” adds Gabriel Bennet. “And thanks to the implementation of IBM
Cognos 8 BI, we can now also generate better analyses and reports, giving us a much keener
insight into the performances of our marketing, sales, and distribution networks.”
Best of all, the implementation of the performance management system also lead to
significant changes at the level of strategic management and the introduction of integrated
business management in Oriflame. “We now conduct a monthly product management review,
followed by a demand review and a supplier review to support and improve our sales and
operations planning,” concludes Bennet. “Finally, a management business review reconciles
all of these review processes, so that the information derived from them can be used at a more
strategic management level.”
The next level of improvement for Oriflame is in planning and forecasting. Bennett says,
“We expect to get the most benefits from the third and final phase of our project, which is
designed to help improve our planning and forecasting. That is one of the most difficult
processes in our business and yet one of the most important and we’re deploying IBM
Cognos 8 Planning to handle this phase.”

About IBM Cognos BI and Performance Management
IBM Cognos business intelligence (BI) and performance management solutions deliver
world-leading enterprise planning, consolidation and BI software, support and services to
help companies plan, understand and manage financial and operational performance. IBM
Cognos solutions bring together technology, analytical applications, best practices, and a
broad network of partners to give customers an open, adaptive and complete performance
solution. Over 23,000 customers in more than 135 countries around the world choose IBM
Cognos solutions.

Recommendations and Suggestions
Recommendations:
 To focus more over make-up.
 It is recommended that during selling products in the particular country the
company should target the celebrities of that country
Suggestions:
 The company should pay more attention towards the young generations.
 They should try to attract more and more youngsters.
 The way to enter in the business should be made little less complicated.
 The consultants should be trained enough to explain their members regarding the
products and the schemes introduced.
 The advertisement through T.V and other means should be increased along with
online advertisement.

Conclusion
The company Oriflame is unique in itself. It has succeeded in achieving their goals at
very great extend. The plus point of the company is the direct means of selling. This way of
selling has created the feeling of trust among the consumers of Oriflame.
The natural Swedish products are proved to be efficient in covering most of the market
share. The company has defeated its most the competitors in most of the parts of the world.
The company is now looking forwards for active participations of youngsters. Thus. The
managers are targeting colleges to get young costumers.
Oriflame has made incredible profit in the recent years. And the managers of the
companies are expecting still more profits and fans all over the world
It is worth saying that the company has proved right is Mission and Vision by the
managing the company in proper manner.

Bibliography
1. The official site of Oriflame company (www.oriflame.com)
2. Manager, Oriflame company, Andheri east
3. Gold Director, Oriflame Service Point Office, Borivali east.
4. Mansi Vedak Consultant, Oriflame.
5. Oriflame - Natural Swedish Cosmetics Factsheets
6. Oriflame Sweden catalogue.
7. Oriflame Flyer.
8. Oriflame India | Facebook
9. @Oriflame_India| Twitter
10. YouTube official videos of Oriflame.
11. Google+ sites

Oriflame Marketing Strategy

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Oriflame Marketing Strategy

Similar to Oriflame Marketing Strategy (20)

Recently uploaded

Recently uploaded (20)

Oriflame Marketing Strategy