Professional Documents
Culture Documents
INTRODUCTION
2
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 Lakm, a 19th century opera
written by Frenchman Leo Delibes, from which Simone Tata borrowed
the name Lakm (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
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CHAPTER 3 RESEARCH
METHODOLOGY
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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.
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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
6
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.
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Sample design
The sampling procedure used to produce any type of sample
Sample size of 100 customers.
Sample centre = Amity Girls hostel
Half a century ago, as India took her steps into freedom, Lakme, India's
first beauty brand was born. At a time when the beauty industry in India
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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; Lakm, its aspirational colour
cosmetics brand, which also has a presence in skincare.
The 'aspirational' qualification would mean Lakm 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 ORGMARG'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 Lakm's new-found aspirational strategy
could have been brought about by competitors like Revlon and
Maybelline, which targeted this segment. Indeed, the company's nontransfer 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, Lakm has entrenched itself at the glamour-end.''
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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Eyes
From dramatic to natural look- a wide range of products are on offer to
create the perfect eyes.
1. Lakm Kajal:
2. Lame Insta Eyeliner eyelids
13
14
VISION
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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
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
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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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18
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,
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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
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24
Chapter 6 Questionnaire
Q) Do lakme provides Quality Products?
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27
28
29
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2=86.1
Table value=9.49
Since the table value is less than the 2.
So the Ho is rejected.
Satisfaction
level
Excellent
Good
Average
Poor
Neutral/Cant
Say
20
20
20
20
20
16
0
1225
225
256
2 {(OiEi)2 / }
0.8
0
61.25
11.25
12.8
Loyalty
Satisfaction level
Loyal
Not a loyal
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82
50
50
2 {(OiEi)2 /E }
20.48
20.48
1024
1024
2=40.96
Table value=3.84
Since the table value is less than the 2.
So the Ho is rejected.
Advocasy
Satisfaction
level
Recommend
Will Not
recommend
Observed(O)
Expected(E)
(Oi-Ei)2
2 {(Oi-
Ei)2 /E }
40
60
50
50
100
100
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2
2
2=4
Table value=3.84
Since the table value is less than the 2.
So the Ho is rejected.
Advertising/Communication effect
Communication Observed(O)
level
Effected
17
Not at all
83
Expected(E)
(Oi-Ei)2
2 {(Oi-Ei)2
/E }
50
50
1089
1089
2=43.56
Table value=3.84
Since the table value is less than the 2.
So the Ho is rejected.
Price Level
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21.78
21.78
2=54.503
Satisfaction
Observed(O) Expected(E)
level
High
30
33.33
Low
5
33.33
Optimum
65
33.33
Table value=5.99
Since the table value is less than the 2.
So the Ho is rejected.
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(Oi-Ei)2
11.0889
802.5889
1002.9889
2 {(OiEi)2 /E }
0.333
24.08
30.09
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.
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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 womens 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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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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Annexure
Questionnnaire
Market Survey for Lakme Products
Name:
Address:
Contact No.
Age:
:
1.
2.
3.
4.
5.
6.
Sex:
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reach
Low
7.
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 brand that has over 5 decades talked of beauty is none other than
Lakm. Launched in 1952, it offered a range of cosmetics with nail
polishes & lipsticks from the early 80s. Lakm also understands the
importance of maintaining and accentuating a womens natural beauty,
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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,
Lakm is all about setting trends and dominating the fashion arena.
Hindustan Levers Lakme Lever
Lakme is the brand of Hindustan Unilever Limited (abbreviated to
HUL), formerly Hindustan Lever Limited , is Indias 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 nonexecutive 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.
Given Lakmes service sector lineage, the business model could benefit
from what is perceived to be Unilevers 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.
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
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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)
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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 cobranding 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.
43