The Study of the Retail Chain of a Cosmetic Brand


Indian Cosmetic Industry Overview

Market Overview The Indian Cosmetics Industry is defined as skin care, hair care, color cosmetics, fragrances and oral care segments. In 2012, the cosmetics industry registered sales of INR 356.6 Billion (US$ 7.1 Billion) despite the global economic recession      According “Indian Cosmetic Sector Forecast to 2015” the growth of Indian cosmetic market has registered a CAGR of around 17% during 2011-2015. Low and medium-priced categories account for 90 % of the cosmetics market in terms of volume. Due to innovation, extension of existing range and evolution of herbal and Ayurvedic beauty products there is exponential increase in demand Change in perception, consumption pattern, & increase in purchasing power and fashion consciousness has fuelled the growth of the make-up industry. Robust media promotion and rising western culture’s influence has led to growth of the beauty industry in the rural sector.

Indian cosmetics Industry is driven by factors like   Improved purchasing power Rising fashion consciousness of the Indian population Industry players spending readily on the promotional activities to increase consumer awareness and develop their products.

Major players in India       Lakmé is the Indian brand of cosmetics, owned by Unilever. It started as a 100% subsidiary of Tata Group. The L’Oréal Group is the world’s largest cosmetics and Beauty Company. Revlon is an American cosmetic for skin care, fragrance, and Personal Care Company founded in 1932 Oriflame Cosmetics S.A. is a cosmetics group, founded in 1967 in Sweden Avon Products, Inc. is a US cosmetics, perfume and toy seller with markets in over 140 countries across the world. Make-up Art Cosmetics or MAC Cosmetics is a manufacturer of cosmetics which was founded in Toronto, Canada in 1984.

Introduction:   Makeup Art Cosmetics company Founded by Frank Toskan of Canada in 1984. MAC is present in 53 stores across UK out of which 8 are MAC’s flagship stores

3 V’S for M.A.C 1) Value proposition (What are we offering)   A brand on the market which has colors to match every skin tone and color. It is one of the few companies which has used innovative PR and unconventional marketing to create a niche for itself without spending millions of pounds in advertising  Regular introduction of new trendsetting ranges and colors has kept the excitement alive.

2) Value customer (Who is our customer)     The brand has targeted the premium segments with its pricing. Makeup for All ages, all races, all sexes, its brand values project which is the brand positioning strategy. Profession-student /working professional /self -employed. Someone who spends between Rs.1000-1500/- per purchase.

3) Value delivery for MAC (How is it delivered)     It follows a direct distribution network. Has no Intermediaries or middlemen. Stock replenishment is done on a regular interval of 25 days. All the retail outlets give their stock updates to the head office on a monthly basis. In case of a stock out situation the outlet has to wait for the next shipment to arrive.

Hiring and training of retailers  MAC’s founder says-"I don’t have the luxury of communicating with my clients, so therefore my salespeople are the link between my philosophy and their customers."  This is the reason why MAC assistants on shop counters are trained to advice customers on makeup techniques, formulas, and latest trends.

In-store merchandising    Internal branding is uniform for all the outlets all over the world. Typically uses glass and neutral i.e. Black and White fixtures. Use of visual merchandisers and Booklets to devise the in store branding

Sales promotion    Consumer promotion-uses techniques like “Back to MAC” promotion technique. Focuses on release of a “New look” every week like-Sailor collection, Zoom water fast lashes, Barbie collection for adults etc. Offers free make up sessions with their professionals at retail location

PR strategies used by MAC  Apart from traditional media, MAC regularly gives out new launched products to be reviewed by various beauty websites and beauty blog owners which is one very powerful SEO tool and increase the credibility of the brand.  MAC has started heavy usage of PPC advertising. Search for cosmetics or any beauty related term on the Internet and you can see MAC all over the Internet.


L’Oreal Paris

Introduction     L'Oréal is the world leader in cosmetics. It was founded in the year 1909 by Eugene Schueller and has its headquarters in Paris, France. The L’Oreal group has 23 international brand such as- L’Oreal Paris, Maybeline, Lancome, The Body Shop, Vichy, Matrix etc. Is synonymous with beauty, innovation and scientific excellence in more than 130 countries.

3 V’s for L’Oreal 1) Value proposition (What are we offering)    The L’Oreal provides professional products, consumer products, luxury products and active cosmetics. L’Oreal offers different product different countries in order to give fulfillment to all women. It believes that everyone pursuit of beauty hence their mission is find the hidden beauty and this is the company’s value definition.

2) Value customer (Who is our customer) 

 

There are cosmetic choices for the career woman, the mom-on-the-go and even the pre-teen who receives her first make-up kit from mom. Each has her own makeup needs, and cosmetic companies work to target their brands accordingly. Aged 16-25, teenagers and young women looking for trendy and cool make-up that they can feel identified with. Aged 25-35, women looking for that younger look. They also have to wear make-up constantly, so they find it for a cheaper price

3) Value delivery (How is it delivered)   Channel structure is from manufacturing units to main distribution center of the country to distributing agencies and then stock is dispatched at the retail outlets. L'Oreal has an exceptional website containing the holistic range of products and services the offer.

Hiring and training of retailers     L’Oreal hires only experienced candidates They are given special training for applying make-up to the customer, efficiently selling the product, detailed knowledge about the products etc. The retailer at the store level is known as the beauty advisor who pushes and sells the products. Beauty specialist is the senior beauty advisor in the store having more experience. In-store merchandising    Focuses on light shades hence has light colored counters The positioning of the products on the planograms are revised on a monthly basis. Has testers on display and an in store makeover counter

Sales promotion     It gives complimentary gifts offer to attract customers Gives free consultation, makeovers in the outlets and gives freebies on purchase above certain amount Has various brand ambassador latest being Sonam Kapoor. Sponsors in various fashion events, film festivals like cannes.

L’Oréal is entering its second century of beauty with an even stronger belief in its mission, to offer populations all over the world products attuned to their needs, their cultures and their aspirations


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