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Lakme - PROJECT ON LACKME

BCA (Guru Gobind Singh Indraprastha University)

Studocu is not sponsored or endorsed by any college or university

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Minor Project
On
Marketing strategy Of
LAKME

Submitted in partial fulfilment of the requirements

for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

To
GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

SUBMITTED BY: SUBMITTED TO:

KHUSHI RANI MR. Shailendra kumar

ENROLMENT NO.
125211411554

NEW DELHI INSTITUTE OF MANAGEMENT 61A,

TUGHLAKABAD, NEW DELHI-62
2021-2024

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CERTIFICATE

Hereby certify that this project entitled ''A study of Marketing Strategy of "LAKME'' is based
on an original project study conducted by Khushi Rani under my guidance, This has not formed
basis for the award of any degree/diploma of this institution or any other University

Mr.Shailendra Kumar
(Faculty Guide)

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ACKNOWLEDGMENT
I take this opportunity to express my heartiest gratitude to NEW DELHI INSTITUTE OF
MANAGEMENT for permitting me to undertake this research and supporting me during this
research and otherwise also.

I would like to thank Shailendra kumar who not only played the role of my philosopher and
guide but also mentored me at every stage of my project word. I would like to extend my hearty
thanks to entire facuilty members of BBA department for their consant cooperation and support
to take decision during the course of my reasearch. I would also like to thank my parents for
their support and blessing without which this project could nit have been completed. Inded I
shall remain ever grateful to them.

I am also thankful to college library and computer laboratort management staff for their
constant support.
The experience I gained during this research project is of immense important in the
academically and more on professionally.

KHUSHI RANI
ENROLMENT NO. 125211411554

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Research Report on Lakme (A

Product of Hindustan Unilever Ltd)

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TABLE OF CONTENTS

1. INTRODUCTION
OBJECTIVE OF STUDY
REVIEW OF LITERATURE
RESEARCH METHOLOGY
LIMITATION OF STUDY

2. PROFILE OF THE ORGANISATION

3. ANALYSIS AND INTERPRETATION OF DATA

4. CONCLUSION AND RECOMMENDATION

5. BILIOGRAPHY

6. REFRENCES

7. QUESTIONNAIRE

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CHAPTER-1 INTRODUCTION
` lakme is an Indian cosmetics brand which is owned by Hindustan Unilever. Having
Shraddha Kapoor as the brand ambassador,it ranked at number 1st among the
cosmetics brands in India. Lakme started as a 100% subsidiary of Tata Oil Mills
(Tomco). It was named after the French opera Lakme, which itself is the French from
Lakshmi (the goddess of wealth) who is removed for her beauty. It was started in 1952
famously,because the Prime Minister Jawaharlal Nehru was concerned that Indian
women were spending precious foreign exchange on beauty products and personally
requested JRD Tata to manufacture them in India.

` <Lakme is the Indian women9s Beauty Sutra= – inspiring expression of her unique
beauty and sensuality. Lakme brings expert products and services that are borne out of
true understanding of the needs of the Indian women. They help the Indian women in
expression of herself-sensual, original, expressive, alive and intuitive. Lakme inspires
her to unleash the potency of her femininity, beauty and sensuality.

KEY FACTS

`Lakme was the first major beauty brand in India and takes pride in being the expert
on Indian Beauty for over 50 years. It is complete beauty brand spanning colour,
cosmetics, skin care and hair styling products and extending to beauty services
through the network of Lakme beauty salons. Its bond with beauty and fashion is
manifested through the Lakme fashion week, which is now the largest fashion event of
its kind in the country. Lakme has footprint over 1200 assisted sales outless, which is
the largest spain of outlets with <Beauty Advisers= in the country.

OUR VISION
Unilever products touch the lives of over 2 billion peoples every day – whether that9s
through feeling great because they9ve got shiny hair and brilliant smile, keeping their
homes freash and clean. Or by enjoying a great cup of tea, satisfying meal or healthy
snack.
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
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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
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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.

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HISTORY
In 1995, Lakme Ltd and HLL formed a 50:50 venture Lakme Lever that would market
and distribute Lakme9s products. In 1998, Lakme sold its brands 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 Lakme9s future. A
brand that has over 5 decades talked of beauty is none other than Lakme. Launched in
1952, it offered a range of cosmetics with nail polishes and lipsticks from the early
809s. Lakme9s also understand the importance of maintaining 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 company9s Achilles heel for some time;
<The supply chain hasn9t 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.

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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- Lakme Daily Wear Souffle, Lakme Perfecting liquid Foundation, Lakme
Radiance Compact, Lakme Flawless Matte Complexion Compact.

 Lips- Lakme Enrich Lipcolour – 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
creat the perfect eyes.

1. Lakme Kajal

2. Lakme Insta Eyeliner eyelids

3. Lakme Shimmer Eye Cube

 Nails- True Wear Nail Enamel with lacquer like finish. Contains resins and
silicone with colour lock technology that gives brilliant long lasting shine.

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 Skin -For radiant skin Lakme is there to pamper your skin with sprcialized products
for the diva in you.
 Cleansing- Strawberry Silk Splash Face Wash. Lakme Fundamental Deep Pore
Cleansing Milk.
 Moisturizing-
1. Lakme Fundamental Peach Milk Moisturiser skin. 2.- Lakme
Fundamental Winter care Lotion.
 Sun protection- The range comprises of lotions to keep your skin healthy and younger
looking.
 Skin- For radiant skin Lakme is there to pamper your skin with specialized products
for the diva in you.

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OBJECTIVE OF THE STUDY

 This study uncovers the impact, utility and effectiveness & efficiency of marketing
strategies of Lakme on the success of cosmetic industry. A special emphasis is laid
down on Lakme cosmetics.
 The projects begins with detailed information about marketing strategies and the impact
of measuring customer satisfaction in cosmetic industry Further. It covers topic as data
collection took and research methodology used for the project. Then it gives the
complete analysis of the data collected and it is then used to reach to a conclusion.
 This study is useful for the better understanding of marketing strategies towards the
Lakme cosmetics industry. As this study is confined to Lakme. It covers an analysis of
customer behavior, attitude, perception, marketing strategies and satisfaction with
respect to Lakme as a BRAND in cosmetic industry.
 The study takes into account the customers of Lakme in New Delhi and Gurgaon

Objective

1 Help in building a positive association with people thereby

enhancing brand personality

2 How to break the negative connotation of 89Being fashionable99

3 Why has Lakme missed out on promotional gauge despite roping

in top brand ambassadors.

4 How can the brand retain its lost spot?

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REVIEW AND LITERATURE

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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

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''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.

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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

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.

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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
(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

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 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.

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LIMITATIONS
 Geographical scope of the study was invited to a small area, which may
not represent the whole sector of India.
 Due to limitation of time only few people were selected for the study.
So the sample of consumer was not enough to generalize the finding of
the study.
 There can be many interpretation and explanation to the data collect.
This is empirical study and the research and the research provides the
explanation as understood by the researcher only
 It is a time consuming process to find the data of this topic.
 Increasing competition.
 Low rating of Lakme Salons (not so good customer services)
 No new Strategies to look for improvements.
 May loose its sheen in a long run.

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CHAPTER-2 PROFILE OF THE ORGANISATION

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 it.

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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
809s. Lakmé also understands the importance of maintaining and
accentuating a women9s 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 809s. Lakmé also understands the
importance of maintaining and accentuating a women9s 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:

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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.''

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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.
 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

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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

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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.

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Chapter-3 ANALYSIS AND INTERPRETATION OF

DATA.

Overall Satisfaction
Observed(O) Expected(E) (Oi-Ei)2 χ2 {(Oi-
2
Satisfaction Ei) / }
level
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 4 20 256 12.8
Say

χ2=86.1
Table value=9.49
Since the table value is less than the χ2. So the
Ho is rejected.

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.

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Advocasy

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

level 2
Ei) /E }
Recommend 40 50 100 2
Will Not 60 50 100 2
recommend

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
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.

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

2
level Ei) /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
So the Ho is rejected.

Price Level

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

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CHAPTER-4 CONCLUSION AND RECOMMENDATION

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.

Suggestions
 The supply must be properly fulfilled so the need of the customer satisfies.
 Target selling for the dealer/agent can increase the sales of company.
 The company must concern to the satisfaction of customers demand.
 Fulfill the customer needs.
 The company and dealer should develop its marketing information system up to date information of
competitors policy, price and product target market so the company can know its strengths and
weaknesses.
 Lakme is the market leader in make-up products. Most of the consumers are brand loyal. They should be
treated as intangible assets. Lakme should ever strive to satisfy them.

INDUSTRY PROFILE

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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 India9s 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 company9s 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=.

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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

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

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 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.

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 . 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.

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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

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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

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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

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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.

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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.

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 women9s 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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RECOMMENDATION

 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.

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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.

References

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

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Questionnaire
Q) Do lakme provides Quality Products?

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Q) Are You Brand Loyal to Lakme?

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Q) For what purpose You use lakme

products ?

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

products ?

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Q)If not Lakme then which Other brand ?

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Q) Do celebrity endorsements in advertisements attract you

towards Lakme products ?

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

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

products?

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