ACKNOWLEDGEMENT

My experience of the project has been successful, thanks to the support staff of many friends & colleagues with gratitude. I wish to acknowledge all of them. However, I wish to make special mention of the following.

First of all I am thankful to the Reporting Manager of my organization Mr. Vivek Mathur (Project Manager-Nokia Siemens Networks) whose support made me able to complete this project. I am wholeheartedly thankful to him for giving me his value able ideas & attention for providing me a systematic way for completing my project in time.

I must make special mention of My friend Mr. Arun Singh (Research Scholar-IIIT Allahabad), for his co-operation & assistance in preparing the questionnaire which is a essential part of this project.

Last but not the least, I am also very thankful to the SCDL staff & teachers for providing me the important information through email on how to prepare this report, topics, formats etc. which lead to the final completion of the project.

Jagdish Kumar Sachdeva200753390

PGDBA(Operations Mgmt.)

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY

2. INTRODUCTION

3. CRITICAL REVIEW OF LITERATURE

3.1 OBJECTIVE OF THE STUDY

3.2 HYPOTHESIS

3.3 RESEARCH DESIGN

3.4 SAMPLE DESIGN

4. INDUSTRY PROFILE

5. DATA,FINDING & ANALYSIS

6. RECOMMENDATION & CONCLUSION

7. BIBLIOGRAPHY

8. REFERENCES

About the project

Within a short 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 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.

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 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 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.

“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.

“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.

.

The research is based on:-

Primary Data

1. Questionnaire

Secondary Data

1. Internet

2. Company Reports& Broachers

3. Magazines

4. 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 :-

1. Brand awareness,

2. Price level,

3. Visibility of brand personality.

4. Expectancy of Communication

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.

OBJECTIVES

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 (1) the null

hypothesis and (2) 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

(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

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.

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

1. The sampling procedure used to produce any type of sample

2. Sample size of 100 customers.

Sample centre = Amity Girls hostel

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. 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.

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 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 :

1. local brand of specific relevance to India.

2. Strong R&D capability, well linked with business.

3. Integrated supply chain and well spread manufacturing units.

4. Ability to deliver Cost Savings.

5. Access to Unilever global technology capability and sharing of best practices from

other Unilever

Weaknesses :

1. Price positioning in some categories allows for low price competition.

2. Varying quality range in its products.

3. Falling Quality of Lame salons

Opportunities :

1. Brand growth through increased consumption depth and frequency of usage across

all categories.

2. Upgrading consumers through innovation to new levels of quality and

performance.

3. Building brand image by collaborating with top designers in Lakme Fashion week

Threats :

1. Aggressive price competition from local and multinational players.

2. Spurious/counterfeit products in rural areas and small towns.

3. Non Existence of brand image in long Run

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.

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 -

Sun Protection

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

Hindustan Unilever Limited

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

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

1. Grow ahead of the market by leading market development Activities

2. Leverage positive impact of growing Indian economy on consumer spending

3. Grow a profitable foods and Top end business

4. Grow the bottom-line ahead of top line

5. Strong commitment to sustainable development

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

Direct Coverage 1 Mln outlets

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.

.

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.

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 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

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..

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 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.

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.

 

Q) Do lakme provides Quality Products?

Q) Are You Brand Loyal to Lakme?

Q) For what purpose You use lakme products ?

Q)What do you think about the price level of Lakme products ?

Q) If not Lakme then which Other brand ?

Q) Do celebrity endorsements in advertisements attract you towards Lakme products ?

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

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

Hypothesis Testing using Chi Square

Satisfaction level Observed(O) Expected(E) (Oi-Ei)2 χ2{(Oi-Ei)2/E}

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

χ2=86.1

Table value=9.49

Since the table value is less than the χ2.

So the Ho is rejected.

LoyaltySatisfaction 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=40.96Table value=3.84Since 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=4Table value=3.84Since the table value is less than the χ2.So the Ho is rejected.

Advertising/Communication effect

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

Effected 17 50 1089 21.78Not at all 83 50 1089 21.78

χ2=43.56Table value=3.84Since 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=54.503Table value=5.99Since the table value is less than the χ2.So the Ho is rejected.

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.

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. 

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.

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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 Edition , Business research methods , Donald R. Cooper , Pamela S. Schindler.

www.hindubusinessline.com www.lakmeindia.com www.hll.com www.financialexpress.com www.economictimes.com

Questionnaire

Market Survey For Lakme Products

Name :

Age :

Sex :

Address :

State/Province :

Contact No. :

1. What inspire you to go for Lakme ?

o Color/Shadeso Priceo Packagingo Versatilityo 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 Yeso Noo Can’t Say

4. For Which Purpose you usually use Lakme Products ?

o Eyeso Lip Coloro Faceo Nail Enamel

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 Drawso Free Bonanzao Free sample Distibutionso Discount Couponso Others

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

o Higho Optimumo Low

7. From Where do you purchase your product ?

o Departmental store o Cosmetic storeso Drug/Pharmacyo Supermarketo Beauty Salono Others

8 If not Lakme , then which other brand?

o Revlono Oriflameo Blue Heaveno L’Orealo Lissomeo Others

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

o Yeso No

10. How would you rate the Lakme products ?

o Goodo Very Goodo Pooro Averageo 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 rangeo More shadeso Better packagingo All of the above

13. Will you Recommend Lakme products to Others ?

oYeso No

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. 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.

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 cluding 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 ?

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 Food solutions 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.

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.

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. 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.