Final answer:
L'Oreal uses price leadership as their positioning strategy by offering high quality products at competitive prices, aided by their established brand reputation and the use of advertising to shape consumer preferences.
Step-by-step explanation:
When L'Oreal promotes the fact that they offer a high quality product for a lower price, they are positioning on the basis of price leadership. Product differentiation is crucial in marketing, and one strategy companies use to differentiate themselves is through price leadership, which emphasizes offering high value at a competitive price point.
Price leadership can include a variety of tactics, such as a well-established reputation for slashing prices, a well-respected brand name built up over many years, and economies of scale that allow for competitive pricing. Moreover, intangible aspects such as a reputation for high quality, promises like guarantees, or superior services can further differentiate a product in the mind of the consumer. Advertising is a powerful tool in shaping these preferences, enhancing the brand's perceived value beyond just the physical product attributes.