INTRODUCTION

For this assignment I had taken all data from a survey of THE HINDU annual

business report magazine. Now in present scenario Indian Cosmetic industry is at an

all time high with totals of $4638.2 billion as in 2008. Hair care is one of the most the

most important categories and is responsible for the fast growth of this industry.

Indian cosmetic Hair colouring market is growing at a very rapid pace. It is a

significant Rs. 130 crore industry, growing at 62 percent per annum.

This industry comprises of a wide range of products. Natural hair colour such as

‘Henna’ is very popular in Indian market. Then there are Synthetic Organic Dyes and

Synthetic Inorganic Dyes such as, metallic dyes, lead dyes, silver dyes etc. Here we

focus on the Synthetic Hair Colour market.

This assignment focuses on analyzing the marketing strategies adopted by the

domestic players in order to face the onslaught of the international players in the

Indian market. To unearth the marketing attributes and distribution strategy

objectives of the players in hair colour market, I have taken a survey data from THE

HINDU’s business special edition 2008. The data collected is used for analysis and

inference.

The study reveals some interesting facts, for instance, market share of top twenty

international players has increased from 73% in 2005 to 82% in 2007.

OBJECTIVES OF STUDY

1. To study the marketing strategies followed by international players in hair colour

segment

2. To study current state of hair colour market in India

3. To study the reasons that influence purchase decision

4. Dealer’s perception regarding marketing strategies.

ANALYSIS AND INFERENCE

Cosmetic Industry has shown tremendous growth over the years in the US market. All

the categories in this industry have been growing steadily. Sun care has 2 percent

market share, whereas baby care and men’s toiletries comprises of 4 percent market

share each. The deodorant and bath& shower have 5 and 7 percent market share

each. Oral hygiene is 11 percent. Fragrance, makeup and skin care are at 15, 16 and

13 percent respectively. Hair colour market enjoys 22 percent market share. This

data is collected from the report and for better understanding of the market scenario,

we have made use of pie chart.

This can be represented as shown below:

3%4%

4%

5%

7%

11%

15%16%

13%

22%1

2

3

4

5

6

7

8

9

10

SERIAL NO. CATEGORY

MARKET SHARE

1 SUN CARE 3%

2 BABY CARE 4%

3

MEN'S

TOILETRIES 4%

4 DEODRANTS 5%

5 BATH & SHOWER 7%

6 ORAL HYGIENE 11%

7 FRAGRANCE 15%

8MAKEUP&COLOUR 16%

9 SKIN CARE 13%

10 HAIR CARE 22%

Further I studied the Cosmetic Industry in India. Here sun-care comprises of 2

percent of the total market share of the cosmetic industry in India. Baby care and

men’s toiletries stand steadily at 4 percent each. The deodorant market is 5 percent

and the bath & shower market enjoys a 12 percent market share. Oral hygiene and

fragrance have a market share of 12 percent each. Make up & colour and skin care

are among the top three components and enjoy 13 and 16 percent respectively. Hair

care leads with a handsome 22 percent market share.

This can be depicted in a more convenient and user friendly manner using a pie chart

as shown below:

2%4%4%5%

10%

12%

12%13%

16%

22%

1

2

3

4

5

6

7

8

9

10

SERIAL NO. CATEGORYMARKET SHARE

1 SUN CARE 2%2 BABY CARE 4%

3MEN'S TOILETRIES 4%

4 DEODRANTS 5%

5BATH & SHOWER 10%

6 ORAL HYGIENE 12%7 FRAGRANCE 12%

8MAKE UP & COLOUR 13%

9 SKIN CARE 16%10 HAIR CARE 22%

The resources for this was based upon Delhi’s market data.The following observation

table depicts the response of the dealers.

A B C D E F

RANKING L’OREAL GARNIER REVLON GODREJ BERINA OTHERS

1 26 3 1 0 0 0

2 4 9 3 2 1 4

3 0 0 4 9 2 4

The data shows that out of total seventy two dealers, L’oreal leads followed by

Garnier and Godrej. The above table can also be studied using the probability matrix

as shown below:

A B C D E F

RANKING L’OREAL GARNIER REVLON GODREJ BERINA OTHERS1 26 3 1 0 0 0 302 4 9 3 2 1 4 233 0 0 4 9 2 4 19

30 12 8 11 3 8 72

Total number of dealers = 72

Probability that L’oreal is ranked 1, = (26/72)

= 0.3611

Probability that L’oreal is ranked 2, = (4/72)

= 0.0555

Probability that Garnier is ranked 1 = (3/72)

= 0.0416

The brand that shows maximum sales is:

P ( L’oreal ) = (30/72) = 0.4167

P ( Garnier ) = (12/72) = 0.1667

P ( Revlon ) = (8/72) = 0.1111

P ( Godrej ) = (11/72) = 0.1528

Thus it can be inferred that, L’oreal shows maximum sales, followed by Garnier and

Godrej.

The sales of these brands can also be depicted graphically as shown below using the

bar graph chart.

05

10152025

3035

1 2 3 4 5 6

BRANDS

SA

LE

S

Series1

Here, Y- axis represents the sales (as rated by the dealers)

the X-axis represents the hair colour brands.

1- L’oreal

2- Garnier

3- Revlon

4- Godrej

5- Berina

6- Others

The price of the product also plays a very vital role in determining its market share,

thus companies adopt pricing strategies to maintain competitive and maximize their

market share. As stated in the report, the price per pack influences the purchase

decision of the customers. L’oreal is priced at Rs. 250 per pack, Keune at Rs. 300 per

pack and Godrej Colour Soft at Rs. 110 per pack.

Thus, it can be inferred that Godrej Colour Soft has achieved 31 percent market

share to beat L’oreal’s Excellence Hair Colour. L’oreal enjoys a market share of 29

% in this segment.

The market share of top three brands is shown using the pie chart.

BRAND NAME MARKET SHARE

L’OREAL 29 %

GODREJ 31 %

GARNIER 21 %

FIGURE- market share of top three brands.

29%

31%

21%

1

2

3

There has been a steady growth in market penetration by international brands in the

Indian market. In 1998, market share was just 52 % , but now it has increased to 72

% in 2007. The year-wise growth percent is shown in table below and is further

depicted using the ‘Line graph chart’.

SERIAL NO. YEAR MARKET SHARE

1 1998 52 %

2 2001 68 %

3 2004 72 %

4 2007 77 %

0%

20%

40%

60%

80%

100%

1 2 3 4

YEARS

GR

OW

TH

PE

RC

EN

TA

GE

Series1

The price of product plays a vital role in developing a decent market share, since it

influences the purchase decision of the consumers. Thus it is necessary to determine

the average price per pack of different brands and analyze the extent of deviation

from the mean price. This is an important parameter that lays the underlying criteria

for pricing strategies of different brands.

Thus, we have studied the variation in prices of different brands.

BRAND PRICE/ PACK

L’oreal 250

Keune 300

Godrej 110

Mean price, u = Rs. ( 250 + 300 + 110 )/ 3

= Rs. 220

x ( x-u ) ( x-u)2

250 30 900

300 80 6400

110 -110 12100

19400

Standard Deviation = 98.488

Another objective was to determine the marketing attributes essential for marketing

distribution channel. There were five marketing attributes—Quality, Product Range,

After sales Service, Price and Finance. The dealers were asked to rank these attributes,

with respect to customer preferences.

The results show that Quality is rated at the top by most of the dealers and finance is

rated the least important parameter among these.

SERIAL NO. ATTRIBUTE RANK

1 QUALITY 1

2 PRODUCT RANGE 2

3 AFTER SALES SERVICE 3

4 PRICE 4

5 FINANCE 5

0

20

40

60

80

100

QUALITY AFTERSALES

SERVICES

FINANCE

Series1

Price Structure

As, stated in the report, 16.5% dealers suggest price range for hair colour from Rs.330 to

Rs.360, whereas other 23% suggest Rs.360 and above.

As determined by the market forces, the suggested price range for hair colour is upto

Rs.360 per pack.

The probability that user will prefer product in this range can be calculated using the Z-

statistics. We assume normal distribution of the prices of different brands.

Mean, u = (290 + 320)/2 = 305

Standard deviation, SD = (320 / 4) = 80

Z = ( x – u )/ SD

Z1 = Z (330) = 0.3125

Z2 = Z (360) = 0.6875

P (Z1) = 0.1212

P (Z2) = 0.2517

Thus, for price greater than Rs.360,

Probability of consumer’s preference = 0.5 – 0.2517 = 0.2483

For price between Rs.330 to Rs.360,

Probability of consumer’s preference = 0.2517 – 0.1212 = 0.1305

Types of showroom owned by dealers:

80.6% of dealers have exclusive showrooms, and 19.4% of dealers have multi brand

showrooms.

Distribution Channel preference for dealers

According to the survey, 63.8% of dealers prefer exclusive showrooms for selling high

value products. 36.2% dealers prefer having outlets in selected areas.

This can be depicted graphically as:

0.00%

20.00%

40.00%

60.00%

80.00%

EXCLUSIVESHOWROOMS

SELECTEDAREA

OUTLETS

Series1

ACKNOWLEDGEMENT

I would take this opportunity to thank our course facilitator, Dr. Neeta Gupta, time spent

with whom in this trimester, has been a valuable learning experience. Her inputs in the

form of guidance support and encouragement has been the backbone of the work

undertaken.

Bijeet Kumar

FMG XVII

FORE School of Management, New Delhi