Shelley Ann Asks…If L’Oreal ownes Lancome, why the heck is the price difference SO high? I recently received a foundation sample from Lancome and absolutely loved it. I went to the Lancome counter at Macys. . . the 0.85 oz full size product was $35.00. Yikes! The sales gal told me in France L’Oreal was at the department stores behind the counters and Lancome products were sold at France’s Walmarts, Target’s, and Walgreen stores. So what is up with this?
The Right Brain responds:
We can think of at least four different reasons why two different brands by the same company would be priced differently.
Reason 1: Higher quality = more expensive
In some cases there really is a difference in quality between brands that just justifies a different price.F or example, the Alberto Culver company used to make both VO5 shampoo and Tresemme shampoo. Tresemme shampoo was more expensive because it used richer surfactants and it more contained conditioning agents. The difference in performance justified a price difference.
On the other hand, we also know for a fact that large companies share formulations across different brands. In that case there may be low and high cost products using the exact same formula. When that happens the difference is based on pure marketing because the parent company wants one of the brands to be more prestige. The marketing position may vary across different regions like your example of L’Oreal being sold at Walmart in France. (By the way is it just me or is the idea of Walmart in France really funny? Also we’re pretty sure that if there was a Target store in France it would be pronounced “Tar-zhay.”
Reason 2: More fashionable color choices = more expensive
Even though the basic chemistry may be the same, companies do charge more for brands with more fashionable colors. (At least in the case of color cosmetics.) For example we’ve heard that the color choices between L’Oreal and Lancome are different and that may be driving the difference in price.
Reason 3: More elaborate packaging = more expensive
A large part of the expense of any cosmetic product is the package. So, if Lancome uses more colors of ink, more expensive dispensing mechanisms, or even higher-priced design elements (like metallic accents) that could drive its price higher than the comparable L’Oreal product.
Reason 4: More marketing = more expensive
Of course it could be all these things combined with marketing that accounts for price differences between the ads. More advertising, promotions, celebrity spokespersons all add into the selling price a brand.
The Beauty Brains bottom line
What’s in the formula is only one small factor in determining the selling prices of a beauty product. The magical manipulations of marketers has a much greater effect.