lakme (hitesh)

90
Research Report on Lakme (A Product of Hindustan Unilever Ltd)

Upload: niraniya

Post on 10-Apr-2015

1.821 views

Category:

Documents


7 download

TRANSCRIPT

Page 1: Lakme (hitesh)

Research Report on Lakme (A

Product of Hindustan Unilever Ltd)

Page 2: Lakme (hitesh)

CONTENTS

EXECUTIVE SUMMARY

1. INTRODUCTION

2. CRITICAL REVIEW OF LITERATURE

3. RESEARCH METHODOLOGY

3.1 OBJECTIVE OF THE STUDY

3.3HYPOTHESIS

3.3 RESEARCH DESIGN

3.4 SAMPLE DESIGN

4. INDUSTRY PROFILE

5. DATA,FINDING & ANALYSIS

6. RECOMMENDATION & CONCLUSION

7. BILIOGRAPHY

8. REFRENCES

Page 3: Lakme (hitesh)

Executive summary

About the project

Within a short span of the last five-six years, the use of cosmetics by

Indian consumers has increased significantly with more and more

women and men taking greater interest in personal grooming,

increasing disposable incomes, changing life styles, influence of

satellite television and greater product choice and availability.

This cosmetics and personal care industry has been growing at an

average rate of 20 per cent for the last few years. The growing

Indian cosmetics market offers promising prospects for international

brands. The growth rate in the cosmetics market reflects an increasing

demand for beauty care products in India. Perfumes and fragrances,

skin care, and hair care products are some of the major segments with

promising prospects for U.S. companies.

Penetration of most cosmetic and toiletries is very low in India.

Current consumption of many products is well below that of many

countries in Asia. The low market penetration of many cosmetics and

personal care products offers room for growth.

The urban population with increasing purchasing power is the major

force driving demand for cosmetics and toiletries. India is a very

Page 4: Lakme (hitesh)

price-sensitive market and mass-market products constitute the major

part of the cosmetics and toiletries market. India’s import of

cosmetics and toiletries and intermediate raw materials is around

US$ 120 million, of which the U.S. has a share of approximately

10 percent.

Plan of the project

Beauty is skin deep… and sure enough Lakme understand it like no

one does .Today brand lakme stand strong as one of the 100 most

powerful brands and right fully so ,for it’s ‘the’ brand that lights up

the face of million girls ,everyday. It’s a brand that inspire, motivate

and infuses confidence Colours , shades, brushes and tones to

beautify , have been the core attribute of the products. The challenge

which the cosmetic industry has to break was the negative

connotation of “being fashionable’’.Though the brand missed out on

during the past year despite having roped top brand ambassadors is

that it scored low on promotional gauge. In the following project we

basically seeks to provide experiential marketing solutions to a brand

(Lakme) .We also gauge into reasons that why Lakme’s position as

market leader was threatened when international majors like Revlon

and Maybelline entered the fray in the mid-90s.The research process

was entailed by visiting lakme outlets in noida ,which includes the

response received from target audiences(Min age 19yrs- Max -45yrs)

via through questionnaire for deeper insights.

Page 5: Lakme (hitesh)

CHAPTER 2- CRITICAL REVIEW OF LITERATURE

Page 6: Lakme (hitesh)

Below the line initiatives are extremely important in the cosmetic

segment since the buying experience is as important as brand image

and advertising. Significant focus is on sales counters, beauty

advisors and dealer aids. We constantly integrate a lot of the above

the line campaigns like 'Whose watching your lips' with below the line

initiatives Anil Chopra, Business Head, Lakme Lever

''Lakmé is at the forefront of product-innovation. Almost everyone has

a Lakmé-something in their (cosmetics) collection,'' said Mumbai-

based fashion choreographer Lubna Adams.

Page 7: Lakme (hitesh)

The Indian cosmetics industry is in churn. Even as the premium

segment is getting crowded, the rural market is turning out to be the

stronghold of smaller, regional players. Although stiff competition

has emerged for Lakme Lever within the Rs 250-crore colour

cosmetics market, it continues to lead. In the skincare market,

estimated at Rs 700 crore, Lakme's market share averages 7-8 per

cent. Catalyst spoke to Anil Chopra, Lakme Lever's Business Head.

Page 8: Lakme (hitesh)

.

Page 9: Lakme (hitesh)
Page 10: Lakme (hitesh)
Page 11: Lakme (hitesh)

INTRODUCTION

High priestess of sacred Indian temple meets English army officer

who's unwittingly strayed into holy ground. They fall in love. Her

orthodox father vows vengeance... That's the story of Lakmé, a 19th

century opera written by Frenchman Leo Delibes, from which Simone

Tata borrowed the name Lakmé (French for Lakshmi, the name of the

priestess).

The current size of the Indian cosmetic market is approximately US$

600 million. Of this, the fastest growing segment is color cosmetics,

accounting for around US$ 60 million of the market. Industry sources

estimate a rapid growth rate of 20 percent per annum across different

segments of the cosmetics industry reflecting an increasing demand

for all kinds of beauty and personal care product. Growth has come

mainly from the low and medium-priced categories that account for

90 percent of the cosmetics market in terms of volume.

Even with a 20 percent average growth rate, the per capita

consumption of cosmetics is very low in India. Current per capita

expenditure on cosmetics is approximately US$ 0.68 cents as

compared to US$ 36.65 in other Asian countries. However, with

changing lifestyles, higher disposable incomes, increasing

advertising, penetration of satellite television, awareness of the

Page 12: Lakme (hitesh)

western world and growing importance of beauty pageants, there

have been significant changes and use of cosmetics is on the rise.

Lakme, a brand originally introduced by the Tata group of India, now

bought over by Hindustan Unilever (HUL) of the Unilever group,

Tips & Toes, another domestic player, and Revlon dominate the US$

60 million color cosmetics market. Multinationals, Revlon of the U.S.

and L'Oreal's Maybelline has a dominant share of the small premium

lipsticks and nail enamels market. Mass-market products account for

a major share, while the premium segment accounts only for a mere 9

per cent in lipsticks and 5 per cent in nail enamels. Lipsticks account

for nearly a third of the market at US$ 21 million, while the market

for nail enamels is estimated at around US$ 23 million. The color

cosmetics segment is very competitive and has a high penetration

level of 80 percent.

The skin care market in India is estimated at US$ 180 million. Within

the last decade, this segment has seen many consumers slowly shift

from the mass to the premium end of the market. The penetration

rate is high in the skin-care segment as compared to color

cosmetics. In the skin-care segment, price and volume played an

equal role in value growth. Moisturizing lotions, fairness creams and

face cleansers are the popular categories in the skin-care segment and

account for approximately 60 percent of the skin-care segment. The

major players in this segments are Lakme, Ponds, Fair & Lovely of

Page 13: Lakme (hitesh)

the HUL group with a 50 percent market share, followed by players

such as J.L. Morison that markets the Nivea range of products in

India, Godrej and Revlon. Penetration levels of international

cosmetics brands in India are still low. Foreign brands currently

constitute only 20 percent of the market. A major reason for low

penetration of international brands can be attributed to high pricing.

These companies initially gained sales on their international brand

image, however, repeat purchases were not forthcoming and to retain

their sales growth, several foreign companies reformulated price

strategies to tap the large Indian middle class. Urban women in the

middle and upper income groups in the age range of 23-50 is the

target group for international brands, as this group looks for better

products and is willing to pay a premium for international quality

products. Industry estimates suggest that there are close to 10 million

such women in India.

Page 14: Lakme (hitesh)

Chapter 3

RESEARCH METHODOLOGY

The research is based on:-

Primary Data

1) Questionnaire

Secondary Data

Internet

Company Reports& Broachers

Magazines

Newspapers Articles &journals

Data is also gathered by talking to the respondents (Target Audience,

understanding their beauty needs,what aspire them to go for the

(lakme)brand. Also the level of :-

Brand awareness,

Price level,

Visibility of brand personality.

Expectancy of Communication

Page 15: Lakme (hitesh)

All these factors were the prime criterion for selecting (Which

brand??), Short listing and ranking (level of trustworthiness? or most

favoured ) which had helped us for identifying the winner in

cosmetics industry.

Objective

1 Help in building a positive association with people thereby enhancing

brand personality

2 How to break the negative connotation of ‘’Being fashionable’’

3 Why has Lakme missed out on promotional gauge despite roping in

top brand ambassadors.

4 How can the brand retain its lost spot?

HYPOTHESIS

In the classical tests of significance, two kinds of hypothesis are used

the null hypothesis and the alternate hypothesis. Null hypothesis ( Ho)

is used for testing. It is the statement that no difference exists between

the parameter and the statistic being compared. Second is Alternative

hypothesis

Page 16: Lakme (hitesh)

(HA) is alternative hypothesis is alternative hypothesis which holds

that there has been a change.

Hypothetical testing can be viewed as a six steps procedure;

Establish a null hypothesis

Choose the statistical test on the basis of assumption about the

population distribution and measurement level

select the desired level of significance

Parametric and non parametric tests are applicable under various

conditions like parametric operates with the interval and ratio data and

are preferred when their assumptions can be met. Non parametric tests

do not require stringent assumptions about the population distribution

and are less useful with less nominal and ordinal values.

In this report our null hypothesis and alternative hypothesis are stated

below:

Ho: Respondents are satisfied with the quality of Lakme products.

Ha: Respondents are not satisfied with the quality

Ho: Respondents are brand Loyal

Ha: Respondents are not brand Loyal

Page 17: Lakme (hitesh)

Ho: Respondents prefer lakme

Ha: Respondents do not prefer lakme

HO: Respondent are satisfied nor aware of new product range

H: Respondent are not aware of new range.

HO: Respondent do believe that endorsement by celebrity play any

role in the decision making

HA: Respondent do not believe that endorsement by celebrity play an

important role in the decision making

RESEARCH DESIGN

Our research is based on the Exploratory Study.

Research is exploratory when you use no earlier model as a basis of

your study. The most usual reason for using this approach is that you

have no other choice. Normally you would like to take an earlier

theory as a support, but there perhaps is none, or all available models

come from wrong contexts.

Exploratory research means that hardly anything is known about the

matter at the outset of the project. You then have to begin with a

rather vague impression of what you should study, and it is also

impossible to make a detailed work plan in advance.

Page 18: Lakme (hitesh)

The gradual process of accumulating intelligence about the object of

study means also that it will be impossible to start by defining the

concepts of study. You have to start with a preliminary notion of your

object of study, and of its context. During the exploratory research

project, these provisional concepts then gradually gain precision.

We have collected our data by drafting a questionnaire and

thereby interpreted or analyzed or result by using the Microsoft

excel.

Sample design

The sampling procedure used to produce any type of sample

Sample size of 100 customers.

Sample centre = Amity Girls hostel

CHAPTER 4

COMPANY PROFILE

Page 19: Lakme (hitesh)

Half a century ago, as India took her steps into freedom, Lakme,

India's first beauty brand was born. At a time when the beauty

industry in India was at a nascent stage, Lakme tapped into what

would grow to be amongst the leading, high consumer interest

segments in the Indian Industry - that of skincare and cosmetic

products. Armed with a potent combination of foresight, research and

constant innovation, Lakme has grown to be the market leader in the

Page 20: Lakme (hitesh)

cosmetics industry. Lakme today has grown to have a wide variety of

products and services that cover all facets of beauty care, and arm the

consumer with products to pamper herself from head to toe. These

include products for the lips, nails, eyes, face and skin, and services

like the Lakme Beauty Salons.

A little bit of Lakmé history:

In 1995, Lakmé Ltd (a Tata Group company) and HLL formed a

50:50 venture Lakmé Lever that would market and distribute Lakmé's

products. In 1998, Lakmé sold its brands (and the 50 per cent it

owned in the JV) to HLL, renamed itself Trent and entered a different

business (retail). Only, the years between 1995 and 2000 saw HLL

wrestling with several issues with a bearing on Lakmé's future. A

brand that has over 5 decades talked of beauty is none other than

Lakmé. Launched in 1952, it offered a range of cosmetics with nail

polishes & lipsticks from the early 80’s. Lakmé also understands the

importance of maintaining and accentuating a women’s natural

beauty, for this it has introduced a range of skincare products from

1987. These ranges have been constantly innovated to bring

specialized beauty care and complete the range for the definitive

women.

A brand that has over 5 decades talked of beauty is none other than

Lakmé. Launched in 1952, it offered a range of cosmetics with nail

Page 21: Lakme (hitesh)

polishes & lipsticks from the early 80’s. Lakmé also understands the

importance of maintaining and accentuating a women’s natural

beauty, for this it has introduced a range of skincare products from

1987. These ranges have been constantly innovated to bring

specialized beauty care and complete the range for the definitive

women.

Chopra accepts that distribution has been the company's Achilles heel

for some time: ''The supply-chain hasn't been as robust as it should

have been, but that has been the result of our efforts to reposition and

reintroduce the brand.'' The positioning bit, although complex, is

clear: Ponds is Lever's primary skincare brand; Lakmé, its aspirational

colour cosmetics brand, which also has a presence in skincare.

The 'aspirational' qualification would mean Lakmé would compete at

what the company terms the 'upper-mass' (premium) end of the colour

cosmetics spectrum (products priced between Rs 85 and Rs 250)

where a slew of competitors, ranging from Revlon (through Modi

Revlon) to Chambor, are already slugging it out. Says Meghna Modi,

26, Executive Director, Modi Revlon: ''The numbers say it all.

According to ORG-MARG's retail audit, we have an 84 per cent share

of the premium end of the colour cosmetics market.'' Chopra is quick

to rubbish this claim; he says ORG-MARG does not have a

representative sample of the 60,000 outlets through which colour

cosmetics are sold in India.

Still, it is conceivable that Lakmé's new-found aspirational strategy

could have been brought about by competitors like Revlon and

Page 22: Lakme (hitesh)

Maybelline, which targeted this segment. Indeed, the company's non-

transfer lip-colour range follows in the wake of Maybelline's launch

of a similar range, and its new nail-enamel colours come soon after

Maybelline and Revlon launched their nail-enamel range. The

company's defense is that it takes at least 15 months from the

conceptualization to the actual launch of products.

And fashion consultants like Meher Castelino believe the brand

commands an edge at the high-end: ''By appropriating the fashion

platform for itself, Lakmé has entrenched itself at the glamour-end.''

SWOT ANALYSIS Of LAKME

Strengths :

local brand of specific relevance to India.

Strong R&D capability, well linked with business.

Integrated supply chain and well spread manufacturing units.

Ability to deliver Cost Savings.

Page 23: Lakme (hitesh)

Access to Unilever global technology capability and sharing of best

practices from other Unilever

Weaknesses :

Price positioning in some categories allows for low price competition.

Varying quality range in its products.

Falling Quality of Lame salons

Opportunities :

Brand growth through increased consumption depth and frequency of

usage across all categories.

Upgrading consumers through innovation to new levels of quality and

performance.

Building brand image by collaborating with top designers in Lakme

Fashion week

Threats :

Aggressive price competition from local and multinational players.

Spurious/counterfeit products in rural areas and small towns.

Non Existence of brand image in long Run

Page 24: Lakme (hitesh)

Everything a girl wants

Lakmé has a wide range of products in color cosmetics that bring

visible results. To add to this vast repertoire is a range of specialized

skin care products for the discerning women. Keeping skin looking

healthy and glowing is also a part of looking great. Lakmé provide the

complete package with the skin care range and the wide range of

colors to spice up the look.

Lakme products

Colours 

From the spicy shades to the flattering look, Lakme offers a range of

products in the face, lips, eyes and nail segment for the beauty

aficionados. 

Face

Lakmé Daily Wear Soufflé ,Lakmé Perfecting liquid Foundation - 

Lakmé Radiance Compact , Lakmé Flawless Matte Complexion

Compact

Lips

Lakmé Enrich Lipcolor - . Perfecting Definition Lip Pencil - Starshine

Lipgloss - Glosses in lustrous shades available in 14 shades.

Page 25: Lakme (hitesh)

Eyes

From dramatic to natural look- a wide range of products are on offer

to create the perfect eyes.

1. Lakmé Kajal:

2. Lame Insta Eyeliner eyelids

3. Lakme Lakmé Shimmer Eye Cube:

Nails

True Wear Nail Enamel -Nail Enamel with Lacquer-like finish.

Contains resins and silicone with colour lock technology that gives

brilliant long lasting shine

Skin

For radiant skin Lakmé is there to pamper your skin with specialized

products for the diva in you.

Cleansing

Strawberry Silk Splash Face Wash , Lakmé Fundamental Deep Pore

Cleansing Milk - 

Moisturizing

1. Lakmé Fundamental Peach Milk Moisturiser  skin.

2. Lakmé Fundamental Winter Care Lotion -

Page 26: Lakme (hitesh)

Sun Protection

The range comprises of lotions to keep your skin healthy and younger

looking.

CHAPTER 5

INDUSTRY PROFILE

Hindustan Unilever Limited

Page 27: Lakme (hitesh)

Chairman: Harish Manwani

CEO and Managing Director: Douglas (Doug)

Baillie

Director, Finance and IT: D. Sundaram

Hindustan Unilever Limited (abbreviated to HUL), formerly

Hindustan Lever Limited , is India’s largest consumer products

company and was formed in 1933 as Lever Brothers India Limited.

It is currently headquartered in Mumbai India and its 41,000

employees are headed by Harish Manwani, the non-executive

chairman of the board. It is Fast-Moving Consumer Goods (FMCG)

Industry that includes detergents, soap, shampoo deodorant,

toothpaste, and other personal care items, and cosmetics HUL's

personal care brands include soap brands such as Lux, Lifebuoy, Liril,

Breeze, Dove, Pear's, and Rexona; shampoos and hair coloring brands

including Sunsilk Naturals and Clinic; skin care brands Fair & Lovely

and Pond's; and oral care brands Pepsodent and Close-Up. The

Page 28: Lakme (hitesh)

company's cosmetic line is led by the Lakme brand. HUL also

produces a line of Ayurvedic personal and healthcare items under the

Ayush brand. In addition to the FMCG segment, HUL has developed

a line of food items, primarily under the Kissan and Knorr Annapurna

brands, as well as the ice cream brand Kwality Wall's.

VISION

To earn the love and respect of India, by making a real difference to

every Indian.. HLL follows its parent company’s mission to “add

vitality to life”. They strive to meet everyday needs of nutrition,

hygiene, and personal care products that help people “feel good, look

good, and get more out of life”.

STRATEGY

Grow ahead of the market by leading market

development Activities

Leverage positive impact of growing Indian economy

on consumer spending

Grow a profitable foods and Top end business

Grow the bottom-line ahead of top line

Strong commitment to sustainable development

Page 29: Lakme (hitesh)

DISTRIBUTION

With respect to distribution related activities like sales

and marketing, HLL is second to none in pushing the

boundaries of what is possible financially, structurally,

and logistically. Beyond its pioneering work FMCG

distribution, the company has sought to instill in its

customers an elevate sense of brand experience while

simultaneously providing greater and more varied

access to its products as well as improved clarity to its

communications. New initiatives include raising brand

visibility through in-store promotions, store-based

product facilitators, and self-service. HLL has enabled

an even further level of personalization and brand

experience in the direct sales arena with its ground-

breaking Hindustan UniLever Network, having amassed

an army of consultants 250,000 strong with access to

80 % of city dwelling Indians.

Hindustan Unilever – Present Scenario

15,000 employees

1,200 managers

2,000 suppliers & associates

75 Manufacturing Locations

Total Coverage 6.3 Mln Outlets

Page 30: Lakme (hitesh)

Direct Coverage 1 Mln outlets

Page 31: Lakme (hitesh)

Market Overview

The current size of the Indian cosmetic market is approximately US$

600 million. Of this, the fastest growing segment is color cosmetics,

accounting for around US$ 60 million of the market. Industry sources

estimate a rapid growth rate of 20 percent per annum across different

segments of the cosmetics industry reflecting an increasing demand

for all kinds of beauty and personal care product. Growth has come

mainly from the low and medium-priced categories that account for

90 percent of the cosmetics market in terms of volume.

The Shahnaz and the Biotique brands dominate the premium herbal

cosmetics segment in India, estimated at USD 100 million.

Page 32: Lakme (hitesh)

. Since liberalization, many international brands like Avon, Burberrys,

Calvin Klein, Cartier, Christian Dior, Estee Lauder, Elizabeth Arden,

Lancome, Chambor, Coty, L'Oreal, Oriflame, Revlon, L'Oreal,

Yardley, Wella, Schwarzkopf, Escada, Nina Ricci, Rochas, Yves St.

Laurent and Japanese cosmetics company, Shiseido have entered the

Indian market. The prices of most foreign brands have been fairly

high, which has deterred average Indian consumers. International

brands cater to a segment that can broadly be classified as the

urban higher income group.

Market Trends

Cosmetics and toiletries are not just the domain of women any longer

and Indian men too are increasingly taking to the use of more and

more body sprays, perfumes and other cosmetics and toiletries. With

rising demand from men, the Indian market is getting enlarged and

many players are coming out with cosmetic products especially skin

care products for men. The market size of men's personal care

segment is estimated at approximately US$ 165million, with Gillette

having the largest market share. Other major players in this segment

include Godrej, J.L. Morison and HLL. The growing demand for

men's cosmetics have made many direct selling companies such as

Modicare and Amway to launch new products for men.

Page 33: Lakme (hitesh)

In the last five/six years, there has been a renewed craze for herbal

cosmetic and personal care products, especially in the skin care

segment with the growing belief that chemical-based cosmetics are

harmful. Shehnaz Hussain, Biotique, and Lotus Herbals are the major

players in this segment. Many companies also expanded their range to

include herbal variants..

The urban population in the major cities with increasing purchasing

power is the main force that drives demand for various cosmetic

products in India. The advent of satellite television and awareness of

the western beauty and fashion world, advertisements and

promotions, increasing number of women joining the work force is

changing preferences, customs and cultures in India

Import Market

Costs for importing products are much higher than producing it in the

country. India allows entry of imported cosmetics without any

restrictions but the average import tariff on cosmetics products is

currently very high at 39.2 percent. This makes imported products

very expensive for most consumers. Most foreign cosmetics

companies selling premium brands have had a difficult time

developing the low volume premium market in India. Many had to re-

work price strategies towards the mass segment. Price is not the only

reason responsible for their problems. Poor assessment of the size of

Page 34: Lakme (hitesh)

the upper middle and high-income groups, and price sensitivity even

within these groups, had added to their problems.

According to estimates of industry experts and trade publications,

India's annual imports of cosmetics and toiletries and

intermediate raw materials is approximately US$ 120 million.

Countries like US, Europe, mainly France, Germany, Italy,

Netherlands, and Spain account for the major share; and Australia,

China, and Japan account for rest of the share.

Competition

The Indian cosmetic market, which has been traditionally a

stronghold of a few major Indian players like Lakme, and Ponds has

seen a lot of foreign entrants to the market within the last decade.

India is a very price sensitive market and the cosmetics and personal

care product companies, especially the new entrants have had to work

out new innovative strategies to suit Indian preferences and budgets to

establish a hold on the market and establish a niche market for

themselves.

Given the price-sensitivity of the Indian consumer who do not

normally prefer to fork out a large sum at one time, many cosmetic

and toiletries companies launched their products in smaller pack sizes

to make them more affordable. HLL and Revlon were the first to

Page 35: Lakme (hitesh)

introduce small pack sizes. Revlon introduced its small-range of 8 ml

nail polishes and lipsticks, and was soon followed it its strategy by

major Indian companies as well.

Stiff competition in the cosmetics and toiletries market also saw an

increase in the range of new products being introduced for newer

application concepts in the last few years. In the skin-care segment,

from just creams and moisturizers, there has been a upgrade to value-

added products such as under-eye wrinkle removing creams, dark

circle removing creams toners, sunscreen lotions, fairness creams, and

many more.

.

Beauty counselors or advisors at retails outlets have been very

successful in gaining attention, creating product awareness and

overcoming consumers lack of familiarity with, and fears about many

cosmetics and personal care products such as home hair permanents

and color cosmetics. Some companies such as Lakme have even set

up exclusive Lakme beauty parlors at major cities in India

through the franchisee route .

L'Oreal markets its range of specialized hair care products

exclusively through salons and beauty parlors. L'Oreal currently is

the only company in the market that has a hair color range

tailored exclusively for parlors..

Page 36: Lakme (hitesh)

A strong brand promotional campaign, good distribution

network, constant product innovation and quality improvement,

and the ability to provide a variety of quality products are some

of the major reasons for the success of most companies.

HLL, is currently India's largest cosmetics and personal care products

producer and its brands has the dominant share (more than 50 percent)

in segments such as personal wash, skin care, shampoos, lipsticks and

nail polish.

Sales Prospects

The growing Indian cosmetics market offers promising opportunities

for international brands. The growth rate in the cosmetics market

reflects an increasing demand for beauty care products in India. The

most promising segments for international companies to pursue

are perfumes and fragrances, and specialized/professional skin

care and hair care products. The fastest growing market is

however color cosmetics, which account for US$ 60 million of the

total market.

The rural market in India for cosmetics and toiletries remains is

largely untapped. Major domestic players have also not been able to

penetrate this market. The urban market itself for specialized cosmetic

products remains to be fully exploited. The Indian skin-care market is

Page 37: Lakme (hitesh)

not yet fully tapped and offers promising prospects as a growth area.

Penetration of color cosmetics is lower than the penetration prospects

of the skin-care segment.

To promote the growth of their products, a dominant player like

Lakme have embarked upon a business plan to establish their

exclusive franchised beauty salons across major metros in the

country.

Imported cosmetics have had a major impact on the Indian market.

Foreign products have enhanced growth of the Indian market by

attracting aspirational consumers and increasing acceptance of color

cosmetics, previously perceived by many as harmful to skin. Indians

generally perceive foreign brands as being of superior quality.

Other key issues regarding sales prospects are product variety

and retailing strategies as well. There is a marked shift among

consumers from functional common-fits-all products to more

specialized formulations. This is one of the reasons why an

increasing number of cosmetic companies are dealing with

consumers directly through special exclusive counters in major

departmental stores and malls featuring their own beauty

consultants. L'Oreal India has established a consumer advisory unit

and Ponds, as mentioned earlier offers skin care advise through touch-

screen kiosks, and telephone help-lines.

Page 38: Lakme (hitesh)

Market Access

Prior to March 31, 1999, India had cosmetics and toiletries on its

restricted list of imports and a special import license was required for

import of cosmetics and toiletries into the country. This regulation

has now been done away with and, India today, permits import of

cosmetics and toiletries without any restrictions. This has made

the Indian market more attractive to foreign cosmetic companies.

Imports have been made easier, but not necessarily cheaper.

The total import duty rate on cosmetics and toiletries classified

under HS Code 33.03 to 33.07 is 39.20 percent, which even though

has been scaled down over the past few years is still very much on the

higher side. The high duties cause imports to be price uncompetitive.

Certain high - end products just do not sell in India because the final

price to bring it into India is too high for consumers to pay.

 

Page 39: Lakme (hitesh)

Chapter 6

Questionnaire

Q) Do lakme provides Quality Products?

Page 40: Lakme (hitesh)

Quality Yes 40%

No 60 %

Q) Are You Brand Loyal to Lakme?

Brand Loyalty

No 82%Yes 18%

Q) For what purpose You use lakme

products ?

Page 41: Lakme (hitesh)

Eyes Lip Color Nail Enamel

Face

20

10

20

50

Usage

Q)What do you think about the price level of

Lakme products ?

Price Level

High 30 %Low 5%Optimun 65%

Q)If not Lakme then which Other brand ?

Page 42: Lakme (hitesh)

Competitors

Revlon 22%Oriflame 18%Blue heaven 8%L'Oreal 39%Lissome 7%Others 6%

Q) Do celebrity endorsements in advertisements attract

you towards Lakme products ?

Page 43: Lakme (hitesh)

Celebrity Endorsement effect

No 83%Yes 17%

Q)What inspire you to go for any cosmetic product?

Page 44: Lakme (hitesh)

Color/ shades 30%Quality 36%Packaging 14% Versatility 14%Others 6%

Q)What changes you would like to see in the Lakme

products?

47%

35%

17%

1%

Expectations

More Product Range More ShadesBetter Packaging All the above

Page 45: Lakme (hitesh)

CHAPTER 7-

FINDING & ANALYSIS

Page 46: Lakme (hitesh)

Hypothesis Testing using Chi Square

Overall Satisfaction

χ2=86.1

Table value=9.49

Since the table value is less than the χ2.

So the Ho is rejected.

Satisfaction

level

Observed(O) Expected(E) (Oi-Ei)2 χ2 {(Oi-

Ei)2 / }

Excellent 16 20 16 0.8

Good 20 20 0 0

Average 55 20 1225 61.25

Poor 5 20 225 11.25

Neutral/Cant

Say

4 20 256 12.8

Page 47: Lakme (hitesh)

Loyalty

Satisfaction level Observed(O) Expected(E

)

(Oi-Ei)2 χ2 {(Oi-

Ei)2 /E }

Loyal 18 50 1024 20.48

Not a loyal 82 50 1024 20.48

χ2=40.96

Table value=3.84

Since the table value is less than the χ2.

So the Ho is rejected.

Advocasy

Satisfaction

level

Observed(O) Expected(E) (Oi-Ei)2 χ2 {(Oi-

Ei)2 /E }

Recommend 40 50 100 2

Will Not

recommend

60 50 100 2

χ2=4

Table value=3.84

Since the table value is less than the χ2.

So the Ho is rejected.

Advertising/Communication effect

Communication Observed(O) Expected(E) (Oi-Ei)2 χ2 {(Oi-Ei)2

Page 48: Lakme (hitesh)

level /E }

Effected 17 50 1089 21.78

Not at all 83 50 1089 21.78

χ2=43.56

Table value=3.84

Since the table value is less than the χ2.

So the Ho is rejected.

Price Level

Satisfaction

level

Observed(O) Expected(E) (Oi-Ei)2 χ2 {(Oi-

Ei)2 /E }

High 30 33.33 11.0889 0.333

Low 5 33.33 802.5889 24.08

Optimum 65 33.33 1002.9889 30.09

χ2=54.503

Table value=5.99

Since the table value is less than the χ2.

So the Ho is rejected.

Page 49: Lakme (hitesh)

CHAPTER 8

RECOMMENDATIONS

Promotions beyond fashion week

The brand should not lose its focus away from cosmetics. It can

proved to very detrimental.

For vast reach unlikely, in the short-term. “Some sort of an alliance

or co-branding with the salons that already exist may, perhaps, have

been a better strategy.

The general perception is that company-owned salons are expensive.

Though Lakme beauty salons are reasonably priced, it has not been

communicated well enough.

Page 50: Lakme (hitesh)

CHAPTER 9 –CONCLUSION

Since the Null hypothesis is rejected therefore it states that the customers

are not satisfied well with the lakme products . This would be the major

cause of lose of market share in the country. Another reason is the

upcoming of Regional brands in the country that is making lakme loose its

sheen. Therefore the company should take in strategic steps and planning

to revive its brand image accordingly.

The local cosmetics and toiletries market is valued at approximately RM3

billion or about US$800 million, with a growth rate of 13% annually. It is

estimated that there are more than 60,000 types of cosmetic products in the

local market.  Imported products from Thailand, the United States, France,

Singapore and Japan dominate the market.

The local cosmetics and toiletries industry generally involves mixing and

formulation processes, using imported ingredients.  Many of these

companies are contract manufacturers, mainly for products such as

shampoo and conditioners, other hair care products, perfumes, and

cosmetics. 

Page 51: Lakme (hitesh)

Advertising and promotion is crucial for cosmetics and toiletries

products, in order to create an awareness of new products and build

brand loyalty among consumers.  Advertisements in TV and the print

media such as newspaper and magazines, especially women’s magazines,

are very common.  Samples of toiletries products are distributed to

individual households and products in sachet form are attached to

magazines.  Free gifts are given during promotion periods and are

advertised in the local major newspapers and on the web.

According to the industry, the market is saturated with many different

types of products, and in the long run, established brands that emphasize

quality and service will have the edge.

.

Page 52: Lakme (hitesh)

BIBLIOGRAPHY

Kotler Philip , Keller Lane Kevin marketing , prentice hall of

India , 2005

S.P Gupta , Business Statistics, 14th edition , 2005

Business Statistics , J. K Sharma , edition 2005

Tata Mc graw-Hill Edtion , Business research methods , Donald

R.Cooper , Pamela S. Schindler.

Page 53: Lakme (hitesh)

References

www.hindubusinessline.com

www.lakmeindia.com

www.hll.com

www.economictimes.com

www.financialexpress.com

Page 54: Lakme (hitesh)

Annexure Questionnnaire

Market Survey For Lakme Products

Name :

Age :

Sex :

Address :

State/Province:

Contact No. :

Page 55: Lakme (hitesh)

1. What inspire you to go for Lakme ?

o Colour/Shades

o Price

o Packaging

o Versatility

o Others

2. Are You Brand Loyal to Lakme or you Switch To others too.?

o Yes

o No

3. Do you Think Lakme provides quality Products to its customers?

o Yes

o No

o Can,t Say

4. For Which Purpose you usually use Lakme Products ?

o Eyes

o Lip Colour

o Face

o Nail Enamel

Page 56: Lakme (hitesh)

5. According to you what kind of promotional activities can make

Lakme reach customers in a better way which can increase there

market share ?

o Lucky Draws

o Free Bonanza

o Free sample Distibutions

o Discount Coupons

o Others

6. What do you think about the price level Of Lakme products?

o High

o Optimum

o Low

7. From Where do you purchase your product ?

Page 57: Lakme (hitesh)

o Departmental store

o Cosmetic stores

o Drug/Pharmacy

o Supermarket

o Beauty Salon

o Others

8 If not Lakme , then which other brand?

o Revlon

o Oriflame

o Blue Heaven

o L’Oreal

o Lissome

o Others

9. Are you aware of the new range of Lakme Products?

o Yes

o No

10. How would you rate the Lakme products ?

o Good

o Very Good

o Poor

Page 58: Lakme (hitesh)

o Average

o Can’t Say

11. Do the Celebrity Endorsements in the Advertisements attract you

towards the product ?

o Yes

o No

12. What changes you would like to see in the Lakme products?

o More product range

o More shades

o Better packaging

o All of the above

13. Will you Recommend Lakme products to Others ?

o Yes

o No

Page 59: Lakme (hitesh)

Case Study

Lakme (A Brand of Hindustan Unilever Ltd.)

Half a century ago, as India took her steps into freedom, Lakme, India's

first beauty brand was born. At a time when the beauty industry in India

was at a nascent stage, Lakme tapped into what would grow to be amongst

the leading, high consumer interest segments in the Indian Industry - that

of skincare and cosmetic products. Armed with a potent combination of

foresight, research and constant innovation, Lakme has grown to be the

market leader in the cosmetics industry. Lakme today has grown to have a

wide variety of products and services that cover all facets of beauty care,

and arm the consumer with products to pamper herself from head to toe.

These include products for the lips, nails, eyes, face and skin, and services

like the Lakme Beauty Salons.

A little bit of Lakmé history:

In 1995, Lakmé Ltd (a Tata Group company) and HLL formed a 50:50

venture Lakmé Lever that would market and distribute Lakmé's products.

Page 60: Lakme (hitesh)

In 1998, Lakmé sold its brands (and the 50 per cent it owned in the JV) to

HLL, renamed itself Trent and entered a different business (retail). Only,

the years between 1995 and 2000 saw HLL wrestling with several issues

with a bearing on Lakmé's future. A brand that has over 5 decades talked of

beauty is none other than Lakmé. Launched in 1952, it offered a range of

cosmetics with nail polishes & lipsticks from the early 80’s. Lakmé also

understands the importance of maintaining and accentuating a women’s

natural beauty, for this it has introduced a range of skincare products from

1987. These ranges have been constantly innovated to bring specialized

beauty care and complete the range for the definitive women.

A brand that has over 5 decades talked of beauty is none other than

Lakmé. Launched in 1952, it offered a range of cosmetics with nail

polishes & lipsticks from the early 80’s. Lakmé also understands the

importance of maintaining and accentuating a women’s natural

beauty, for this it has introduced a range of skincare products from

1987. These ranges have been constantly innovated to bring

specialized beauty care and complete the range for the definitive

women.

With a unique blend of understanding of women of all ages,  today,

Lakmé is all about setting trends and dominating the fashion arena.

Page 61: Lakme (hitesh)

Hindustan Lever’s Lakme Lever

Lakme is the brand of Hindustan Unilever Limited (abbreviated to

HUL), formerly Hindustan Lever Limited , is India’s largest

consumer products company and was formed in 1933 as Lever

Brothers India Limited. It is currently headquartered in Mumbai

India and its 41,000 employees are headed by Harish Manwani, the

non-executive chairman of the board. It is Fast-Moving Consumer

Goods (FMCG) Industry that includes detergents, soap, shampoo

deodorant, toothpaste, and other personal care items, and cosmetics

HUL's personal care brands include soap brands such as Lux,

Lifebuoy, Liril, Breeze, Dove, Pear's, and Rexona; shampoos and hair

coloring brands including Sunsilk Naturals and Clinic; skin care

brands Fair & Lovely and Pond's; and oral care brands Pepsodent and

Close-Up. The company's cosmetic line is led by the Lakme brand.

HUL also produces a line of Ayurvedic personal and healthcare items

under the Ayush brand. In addition to the FMCG segment, HUL has

developed a line of food items, primarily under the Kissan and Knorr

Annapurna brands, as well as the ice cream brand Kwality Wall's.

Lakme Going Global ?

Page 62: Lakme (hitesh)

If the company manages to scale up the brand and increase its

consumption within India, there are strong indications that Lakme

could leverage Unilever’s global reach on the back of the Anglo-

Dutch major’s priorities on personal care and D&E (developing and

emerging markets)

Given Lakme’s service sector lineage, the business model could

benefit from what is perceived to be Unilever’s proposed area of

interest for the future - services.

The company has Unilever Foodsolutions which works with

customers including caterers, restaurateurs and major hotel and fast-

food chains to create food solutions that help grow their business.

Reviving Of Lakme’s Brand

Lakme Lever had revived its youth-oriented brand, Elle 18. Having

put the brand on `maintenance' mode, this division of HLL was

focusing on Lakme.

Launched in 1998, Elle 18 targeted the first-time cosmetic user and

currently sports two product lines comprising lipsticks and nail

enamel.

"In the first three years, Elle 18 registered sharp growth rates and the

purpose was to create a new segment of consumers," said Mr Chopra.

Page 63: Lakme (hitesh)

At that point of time, Elle 18's main competitor in the youth-based

cosmetics market was Tips & Toes, a brand that is almost non-existent

today.

Pricing

With a pricing that is almost one-third that of Lakme, Elle 18, of late,

has also unleashed a campaign based on its products.

"There was a change in our strategy in the past. While Lakme has

been high on innovation, Elle 18 has been on maintenance mode. The

brand has been growing at a lower rate than Lakme. But now we are

now relooking at Elle 18 as there is still no brand that is so sharply

positioned on the youth platform," said Mr Chopra.

There was a conscious price differential between the brands to attract

the first generation users of cosmetics. So, while a Lakme Lipstick

would have an MRP of Rs 165, an Elle 18 Lipstick was pegged at Rs

55.

Meanwhile, Lakme Lever continues to innovate for its existing range

of skincare and colour cosmetics under the Lakme brand. It recently

relaunched its skincare range under the name of Lakme

Fundamentals.

"While there is no new product, we will be upgrading the existing

skin care range with new formulation and packaging," Mr Chopra

said.

Page 64: Lakme (hitesh)

In colour cosmetics it has roped in designer Sabyasachi Mukerjee to

unleash the `Free Spirit' range as part of its winter collection.

"The overall beauty market has been growing between 15-20 per cent

but we have been growing higher than the market."

However, it is the salon business that has been registering the highest

growth rates for Lakme Lever. "With a small base, our salon business

has been growing the fastest," Mr Chopra said.

There are plans to have 100 Lakme salons by the end of the year from

the existing 92 salons across the country.

Besides, Lakme Lever intends consolidating its hair care portfolio

launched last year under the Lakme Hair Next brand.

Problems

Increasing Competition

Low Rating of lame Salons (not so good customer services)

No new Strategies to look for improvements.

May loose its Sheen in a long run.

Recommendations

Promotions beyond fashion week

The brand should not lose its focus away from cosmetics. It can proved to

very detrimental.

Page 65: Lakme (hitesh)

For vast reach unlikely, in the short-term. “Some sort of an alliance or co-

branding with the salons that already exist may, perhaps, have been a

better strategy.

The general perception is that company-owned salons are expensive.

Though Lakme beauty salons are reasonably priced, it has not been

communicated well enough.