Research Report on Lakme (A

Product of Hindustan Unilever Ltd)

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
 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
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.
CHAPTER 2- CRITICAL REVIEW OF
LITERATURE
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.
.
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
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.
 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
 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
 (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

 The sampling procedure used to produce any type of sample

 Sample size of 100 customers.
Sample centre = Amity Girls hostel

CHAPTER 4
COMPANY PROFILE
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 :
 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
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.

CHAPTER 5
INDUSTRY PROFILE

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

 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

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.

 
 Chapter 6

Questionnaire

Q) Do lakme provides Quality Products?

 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 ?
 50

20 20
10

Column2
Eyes Lip Color Nail Face
Enamel

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 ?

 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 ?

 Celebrity Endorsement effect

No 83%
Yes 17%

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

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

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

products?

Expectations
More Product Range More Shades
Better Packaging All the above
1%

17%

47%

35%
 CHAPTER 7-
FINDING & ANALYSIS
 Observed(O) Expected(E) (Oi-Ei)2 χ2 {(Oi-
Satisfaction Ei)2 / }
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

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

level Ei)2 /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.
So the Ho is rejected.

Price Level

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

level 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.
 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.
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. 

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.

.
 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
 Annexure Questionnnaire
Market Survey For Lakme Products

Name :

Age :

Sex :

Address :

State/Province:

Contact No. :
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
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 ?

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
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
 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.
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 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 ?

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.
At that point of time, Elle 18's main competitor in the youth-based
cosmetics market was Tips & Toes, a brand that is almost no n-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.