lOMoARcPSD|18817351

A STUDY ON EFFECT OF GST ON SALES

WITH SPECIAL REFERENCE WITH
NIVEA

A PROJECT WORK REPORT SUBMITTED TO THE SRM INSTITUTE OF

SCIENCE AND TECHNOLOGY IN PARTIAL FULFILMENT OF THE
REQUIREMENTS OF THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

SUBMITTED BY

M. SAMEER IBRAHIM (RA2051001020125)

UNDER THE GUIDANCE OF

DR. SATHIYABAMA .P

ASSISTANT PROFFESOR

SRM INSTITUTE OF SCIENCE AND TECHNOLOGY

COLLEGE OF MANAGEMENT

RAMAPURAM CAMPUS

CHENNAI
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SRM INSTITUTE OF SCIENCE AND TECHNOLOGY

SRM SCHOOL OF MANAGEMENT
RAMAPURAM CAMPUS
Certificate
This is to certify that the Internship and Project work Report entitled
" A study on
Direct Marketing of Domain2host", in partial fulfilment of the
requirements for the award of the Degree of Bachelor of Business
Administration is a record of original project undergone by MR.
SAMEER IBRAHIM. M (RA2051001020125) during the year 2022
of his study in the School of Management, SRM INSTITUTE OF
SCIENCE AND TECHNOLOGY, RAMAPURAM Campus under
my supervision and the report has not formed the basis for the
reward of any Degree/ Fellowship or other similar title to any
candidate of any University.
Place: Chennai-80 Signature of Guide
Date: DR.SATHIYABAMA .P.(Management)
Assistant Professor
SRM Institute of Science and Technology
Countersigned
Head of the Department
DR.P. REKHA KIRAN KUMAR ,M.PHIL.PHD.
Associate Professor & Head.
Submitted to the School of Management,
SRM INSTITUTE OF SCIENCE AND TECHNOLOGY
(RAMAPURAM Campus) for the examination held on

INTERNAL EXAMINER EXTERNAL EXAMINER

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ACKNOWLEDGEMENT

First and foremost, I offer my sincerest gratitude to our Chancellor,

SRM INSTITUTE OF SCIENCE AND TECHNOLOGY, for his
academic support and the facilities provided to carry out the project
work at the Institute. His wide vision and concern for students have
been inspirational.
I wish to express my profound gratitude to my respected Chairman,
SRM
Group of Institutions- RAMAPURAM & Trichy Campuses, who
offered me such a huge opportunity, incredible Infrastructure and
other support which made the project work quite smooth.
I would like to express my deepest thanks to our Directors, SRM
Institute of Science and Technology, RAMAPURAM Campus who
motivates everyone to complete this project.
1 express my heartfelt thanks to our Dean, Faculty of Science &
Humanities, SRM INSTITUTE OF SCIENCE AND
TECHNOLOGY, RAMAPURAM Campus who provided all
facilities for carrying out this project.
I immensely thank to our Head of the Department DR. P . REKHA
KIRAN KUMAR , M.PHIL,PHD. Assistant Professor & Head for
her cordial support, valuable information and guidance, which
helped me in completing this task through various
stages.
I take this opportunity to express my profound gratitude and deep
regards to my guide for his exemplary guidance, monitoring and
constant encouragement throughout the course of this project.
I thank God Almighty for showering his potential blessing on me for
giving me the encourage to pursue this project work successfully. I
owe a lot to my parents, who encouraged and helped me at every
stage of my personal and academic life, and longed to see this
achievement come true.
SAMEER IBRAHIM. M (Reg.no.RA2051001020125)

Page | 3
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DECLARATION

I, SAMEER IBRAHIM , hereby declare that the Internship& Project Work Report,
entitled, "A study on Direct Marketing of Domain2host", submitted to the SRM
INSTITUTE OF SCIENCE ND TECHNOLOGY in partial fulfilment of the requirements
for the award of the Degree of Bachelor of Business Administration is a record of
original project undergone by during the period 2021 under the supervision and
guidance of DR. RACHAL
(Management), Assistant professor. SRM School of Management, SRM INSTITUTE
OF SCIENCE AND TECHNOLOGY.RAMAPURAM
Campus and it has not formed the basis for the award of any Degree/ Fellowship
or other similar title to any candidate of any University.

Place: Chennai-89 Signature of the student Date:

SAMEER IBRAHIM. M
(Reg. No.RA2051001020125)
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TABLE OF CONTENTS

S NO Page No

TOPIC

1 CERTIFICATE

2 ACKNOWLEDGEMENTS -

3 CHAPTER-1: INTRODUCTION -

1. Introduction To FMCG industry

2. Introduction To skin care industry
3. Introduction To Nivea

4 CHAPTER-2: CONCEPTUAL DISCUSSION -

1. Introduction To GST
2. Effect Of GST on NIVEA

5 CHAPTER-3: RESEARCH METHODOLOGY -

1. Objective Of The Study

2. Research Methodology

6 CHAPTER-4: DATA ANALYSIS & INTERPRETATION -

7 CHAPTER-5: CONCLUSION -

1. S.W.O.T. Analysis

2. Annexure
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S No Topic Page No
1 Summer Internship Certificate -

2 Certificate -

3 Acknowledgements -

4 Executive Summary -

5 Chapter- 1.2 Introduction to Company

6 -
Chapter-2: Conceptual Discussion

7 Chapter-3: Research Methodology -

3.1 Title
3.2 Title Justification
3.3 Objective of study
3.4 Research Methodology
3.4.1 Research Design- Exploratory/ Descriptive/
Experimental
3.4.2 Data Collection-
 Primary Data
 Secondary Data
3.4.3 Sampling
 Sampling Technique
 Sampling Design
 Sample Unit
 Sample Area
 Sample Size

3.5 Data Analysis Tools- Graphs, Chart, Percentage etc

Limitation of Study
8 Chapter-4: Data Analysis -

9 Chapter-5: Findings -

10 Chapter-6: Suggestions/ Recommendations -

11 Chapter-7: Conclusions -

12 References/Bibliography -
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CHAPTER 1:
INTRODUCTION

1.1 INTRODUCTION TO FMCG INDUSTRY:

Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products
that are sold quickly and at relatively low cost. Examples include non-durable goods such as
soft drinks, toiletries, over- the-counter drugs, processed foods and many other consumables.
In contrast, durable goods or major appliances such as kitchen appliances are generally
replaced over a period of several years.

FMCG have a short shelf life, either as a result of high consumer demand or because the
product deteriorates rapidly. Some FMCGs, such as meat, fruits and vegetables, dairy
products, and baked goods, are highly perishable. Other goods, such as alcohol, toiletries,
pre-packaged foods, soft drinks, chocolate, candies, and cleaning products, have high
turnover rates. The sales are sometimes influenced by some holidays and season.

Though the profit margin made on FMCG products is relatively small (more so for retailers
than the producers/suppliers), they are generally sold in large quantities; thus, the cumulative
profit on such products can be substantial. FMCG is a classic case of low margin and high
volume business.

Characteristics

The following are the main characteristics of FMCGs:

 From the consumer's perspective

o Frequent purchase
o Low involvement (little or no effort to choose the item)
o Low price
o Short shelf life
o Rapid consumption
 From the marketer's perspective
o High volumes
o Low contribution margins
o Extensive distribution networks
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o High stock turnover

ISIC definition

The retail market for FMCGs includes businesses in the following International Standard
Industrial Classification (ISIC) (Revision 3) categories.
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 ISIC 5211 retail sales in non-specialized stores

 ISIC 5219 other retail sales in non-specialized stores
 ISIC 5220 retail sales of food, beverages and tobacco in specialized stores
 ISIC 5231 retail sales of pharmaceutical and medical goods, cosmetic and toilet articles
 ISIC 5251 retail sales via mail order houses
 ISIC 5252 retail sales via stalls and markets
 ISIC 5259 wholesale goods

Supplier industries for FMCGs

include:

 1512 fish and fish products

 1513 fruit and vegetables
 1514 vegetable and animal oils and fats
 1520 dairy products
 1531 grain mill products
 1532 starches and starch products
 1533 animal feeds
 1541 bakery products
 1542 sugar
 1543 cocoa, chocolate and sugar confectionery
 1544 macaroni, noodles, couscous
 1549 other food products
 1551 spirits, ethyl alcohol
 1552 wines
 1553 malt liquors and malt
 1554 soft drinks, mineral waters
 1600 tobacco products
 2101 pulp, paper and paperboard
 2102 corrugated paper, containers
 2109 other articles of paper and paperboard
 2424 soap and detergents, cleaning preparations, perfumes
 2430 men's and women's inner garments, shaving gels, deodorants

Fast-moving consumer electronics :Fast-moving consumer electronics are typically low-

priced generic or easily substitutable consumer electronics, including mobile phones, MP3
players, game players, earphones, headphones, OTG cables, and digital disposable cameras.
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Fast Moving Consumer Goods (FMCG) Industry in India:

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Fast Moving Consumer Goods (FMCG) Industry in India is one of the fastest developing
sectors in the Indian economy. At present the FMCG Industry is worth US$ 13.1 billion and
it is the 4th largest in the Indian Economy. These products have very fast turnaround rate, i.e.
the time from production to the revenue from the sale of the product is very less. In the
present economic scenario, time is regarded as money, so the FMCG companies have to be
very fast in manufacturing and supplying these goods.

The Fast Moving Consumer Goods (FMCG) Industry in India include segments like
cosmetics, toiletries, glassware, batteries, bulbs, pharmaceuticals, packaged food products,
white goods, house care products, plastic goods, consumer non-durables, etc. The FMCG
market is highly concentrated in the urban areas as the rise in the income of the middle-
income group is one of the major factors for the growth of the Indian FMCG market.

The penetration in the rural areas in India is not high as yet and the opportunity of growth in
these areas is huge by means of enhanced penetration in to the rural market and conducting
awareness programs in these areas. The scopes for the growth of the FMCG industry are high
as the per capita consumption of the FMCG products in India is low in comparison to the
other developed countries. The manufacturing of the FMCG goods is concentrated in the
western and southern belt of the country. There are other pockets of FMCG manufacturing
hubs.
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TOP 5 FMCG COMPANIES OF INDIA 2017

Hindustan Unilever Limited (HUL) is an Indian consumer goods company based in Mumbai,
Maharashtra. It is a subsidiary of Unilever. HUL’s products include foods, beverages,
cleaning agents, personal care products and water purifiers. It is also among the biggest
polluters in India.

HUL was established in 1933 as Lever Brothers and, in 1956, became known as Hindustan
Lever Limited, as a result of a merger among Lever Brothers, Hindustan Vanaspati Mfg. Co.
Ltd. and United Traders Ltd.

It employs over 16,000 workers, whilst also indirectly helping to facilitate the employment
of over 65,000 People. The Company was renamed in June 2007 as "Hindustan Unilever
Limited" HUL is the market leader in Indian consumer products with presence in over 20
consumer categories such as soaps, tea, detergents and shampoos amongst others with over
700 million Indian consumers using its products.

Sixteen of HUL's brands featured in the ACNielsen Brand Equity list of 100 Most Trusted
Brands Annual Survey (2014), carried out by Brand Equity, a supplement of The Economic
Times.

Research facilities

The Hindustan Unilever Research Centre (HURC) was set up in 1966 in Mumbai and
Unilever Research India in Bangalore in 1997. Staff at these centres developed many
innovations in products and manufacturing processes. In 2006, the company's research
facilities were brought together at a single site in Bangalore.

Headquarters

Hindustan Unilever's corporate headquarters are located at Andheri (E), Mumbai. The campus
is spread over
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12.5 acres of land and houses over 1,600 employees. Some of the facilities available for the
employees include a convenience store, a food court, an occupational health centre, a gym, a
sports & recreation centre and a day care centre. The Campus is designed by Mumbai based
architecture firm Kapadia Associates.

The campus received a certification from LEED (Leadership in Energy and Environmental
Design) Gold in 'New Construction' category, by Indian Green Building Council (IGBC),
Hyderabad, under license from the United States Green Building Council (USGBC)

The company's previous headquarters was located at Backbay Reclamation, Mumbai at the
Lever House, where it was housed for over 46 years.
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Nestlé S.A. is a Swiss transnational food and drink company headquartered in Vevey, Vaud,
Switzerland. It has been the largest food company in the world, measured by revenues and
other metrics, for 2014, 2015, and 2016. It ranked No. 72 on the Fortune Global 500 in 2014
and No. 33 on the 2016 edition of the Forbes Global 2000 list of largest public companies.

Nestlé's products include baby food, medical food, bottled water, breakfast cereals, coffee
and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks.
Twenty-nine of Nestlé's brands have annual sales of over CHF1 billion (about US$1.1
billion) ,including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and
Maggi. Nestlé has 447 factories, operates in 194 countries, and employs around 339,000
people. It is one of the main shareholders of L'Oreal, the world's largest cosmetics company.

Products

Nestlé has over 8,000 brands with a wide range of products across a number of
markets, including coffee, bottled water, milkshakes and other beverages, breakfast cereals,
infant foods, performance and healthcare nutrition, seasonings, soups and sauces, frozen and
refrigerated foods, and pet food.

Food safety-Milk products and baby food

In late September 2008, the Hong Kong government found melamine in a Chinese-made
Nestlé milk product. Six infants died from kidney damage, and a further 860 babies were
hospitalised. The Dairy Farm milk was made by Nestlé's division in the Chinese coastal city
Qingdao.

Nestlé affirmed that all its products were safe and were not made from milk adulterated with
melamine. On 2 October 2008, the Taiwan Health ministry announced that six types of milk
powders produced in China by Nestlé contained low-level traces of melamine, and were
"removed from the shelves".

Cookie dough

In June 2009, an outbreak of E. coli O157:H7 was linked to Nestlé's refrigerated cookie
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dough originating in a plant in Danville, Virginia. In the US, it caused sickness in more than
50 people in 30 states, half of whom required hospitalization. Following the outbreak, Nestlé
voluntarily recalled 30,000 cases of the cookie dough. The cause was determined to be
contaminated flour obtained from a raw material supplier. When operations resumed, the
flour used was heat-treated to kill bacteria.

Maggi noodles

In May 2015, Food Safety Regulators from the Uttar Pradesh, India found that samples of
Nestlé's leading noodles Maggi had up to 17 times beyond permissible safe limits of lead in
addition to monosodium
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glutamate. New Delhi Government banned the sale of Maggi in New Delhi stores.Nestlé
India's shares fell down 11% due to the incident.

Thereafter, multiple state authorities in India found unacceptable amount of lead and it had
been banned in more than 5 other states. On 5 June 2015, Food Safety and Standards
Authority of India (FSSAI) orders banned all nine approved variants of Maggi instant
noodles from India, terming them "unsafe and hazardous" for human consumption.

Nepal indefinitely banned Maggi over concerns about lead levels in the product. Maggi
noodles has been withdrawn in five African nations - Kenya, Uganda, Tanzania, Rwanda,
and South Sudan by a super-market chain after a complaint by the Consumer Federation of
Kenya, as a reaction to the ban in India.

ITC Limited or ITC is an Indian conglomerate headquartered in Kolkata, West Bengal. Its
diversified business includes five segments: Fast-Moving Consumer Goods (FMCG), Hotels,
Paperboards & Packaging, Agri Business & Information Technology.

Established in 1910 as the Imperial Tobacco Company of India Limited, the company
was renamed as the Indian Tobacco Company Limited in 1970 and further to I.T.C. Limited
in 1974. The periods in the name were removed in September 2001 for the company to be
renamed as ITC Ltd.

The company completed 100 years in 2010 and as of 2012-13, had an annual turnover of
US$8.31 billion and a market capitalization of US$45 billion. It employs over 25,000 people
at more than 60 locations across India and is part of Forbes 2000 list.

Cigarettes

ITC Ltd sells 81 percent of the cigarettes in India, where 275 million people use tobacco
products and the total cigarette market is worth close to $6 billion (around Rs. 35,000 crore)

ITC's major cigarette brands include Wills Navy Cut, Gold Flake Kings, Gold Flake
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Premium lights, Gold Flake Super Star, Insignia, India Kings, Classic (Verve, Menthol,
Menthol Rush, Regular, Citric Twist, Ice Burst, Mild & Ultra Mild), 555, Silk Cut, Scissors,
Capstan, Berkeley, Bristol, Lucky Strike, Players, Flake and Duke & Royal.

Other businesses

Foods: Indian Tobacco Company's major food brands include Kitchens of India; Aashirvaad,
Mint-o, gum-o, B natural, Sunfeast, Candyman, Bingo! and Yippee!.
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ITC is India's largest seller of branded foods with sales of over Rs. 4,600 crore in 2012-13. It
is present across 6 categories in the Foods business namely Staples, Snack Foods, Ready-To-
Eat Foods, Juices, Dairy Product and Confectionery.

Lifestyle apparel: ITC sells its products under the Wills Lifestyle and John Players brands.
Wills Lifestyle was accorded the ‘Superbrand’ status and John Players was included in the
top 10 ‘Most Trusted Apparel Brands 2012’ by The Economic Times.

Personal care products include perfumes, haircare and skincare categories. Major brands are
Fiama Di Wills, Vivel, Essenza Di Wills, Superia and Engage.

Stationery: Brands include Classmate, PaperKraft and Colour Crew. Launched in 2003,
Classmate went on to become India's largest notebook brand in 2007.

Safety Matches and Agarbattis: Ship, i Kno and Aim brands of safety matches and the
Mangaldeep brand of agarbattis (Incense Sticks).

Hotels: ITC's Hotels division (under brands including WelcomHotel) is India's second largest
hotel chain with over 90 hotels throughout India. ITC is also the exclusive franchisee in
India of two brands owned by Sheraton International Inc. Brands in the hospitality sector
owned and operated by its subsidiaries include Fortune Park Hotels and Welcome Heritage
Hotels.

Paperboard: Products such as specialty paper, graphic and other paper are sold under the ITC
brand by the ITC Paperboards and Specialty Papers Division like Classmate product of ITC
well known for their quality

Packaging and Printing: ITC's Packaging and Printing division operates

manufacturing facilities at Haridwar and Chennai and services domestic and export
markets.

Information Technology: ITC operates through its fully owned subsidiary ITC Infotech India
Limited, which is a SEI CMM Level 5 company
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Parle Agro is India's largest FMCG Company and has been selling products at PAN India
network. It is an Indian private limited company that owns Frooti, Appy, LMN, Hippo and
Bailey brands.

Several Parle soda brands including Citra, Thums Up, Maaza, Limca and Gold Spot were
sold to Coca- Cola in 1993 for a reported $40 million. At the time of sale, the Parle brands
together had a 60% market share in the industry. The brand was strong in South India. Citra
was phased out by 2000 to make way for Coke's international brand, Sprite.
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Parle Agro brands

Parle Agro Pvt. Ltd operates under three major business verticals:

1. Beverages – fruit drinks, nectars, juice, sparkling drinks

2. Water – packaged drinking water
3. Foods – confectionery, snacks

Parle Agro also diversified into production of PET preforms (semi-finished bottles) in 1996.
Its customers include companies in the beverages, edible oil, confectionery and
pharmaceutical segments.

1. BEVERAGES-
 Citra - A clear lemon and lime flavoured soda sold in India in the 1980s and early '90s.
 Frooti - Launched in 1985, Frooti was India's only beverage sold in a Tetra Pak
packaging at the time. It went on to become the largest selling Mango drink in the
country.
 Appy - Appy Classic was launched in 1986 as an apple nectar and originally available
in a white Tetra Pak packaging with an apple and leaf graphic. As of 2011, it comes in
black Tetra Pack packaging. It was the first apple nectar to be launched in India.
 Appy Fizz - Launched in 2005, Appy Fizz is India’s first sparkling apple drink
available in a
champagne shaped PET bottle.
 Saint Juice - Launched in 2008, Saint Juice is available in three variants – Orange,
Mixed fruit, Grape and Apple. At the time of its launch, its USP was "100% juice with
no added color, sugar or preservatives".
 LMN - LMN was launched in March 2009, as non-carbonated lemon drink (nimbu
paani or lemonade)
 Grappo Fizz - Launched in 2008, Grappo Fizz is a sparkling grape juice drink.
Credited with creating the sparkling fruit drinks category in India [citation needed],
Grappo Fizz is along the lines of existing product Appy Fizz.
 Dhishoom - In 2012, Parle Agro launched India's first Jeera Masala Soda, Dhishoom.
It packs a flavourful punch with every sip.
 Frio - Frio is a range of flavoured carbonated drinks. A refreshing new addition to the
Parle Agro portfolio, it is currently available in 3 flavours - Lemon, with sweet lime
juicy notes, Orange, with a zingy sweet burst and Cola, with a strong fizzy punch.
 Cafe Cuba - Launched in 19 May 2013, It’s a new product & first of its kind; Cafe
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Cuba is a carbonated Cuban coffee, more of a bottled Espresso.

 Bailley Soda - Launched in 2010, Bailley Soda, with its evocative packaging and
impeccable taste. Their packaging theme is inspired by military colours and also the
bottles are made like grenade.
 Frooti Fizz - Launched in March 2017, Frooti Fizz is a sparkling mango juice drink.
Frooti Fizz is available in 250ml PET bottle, 500ml PET bottle and 250ml can.
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2. WATER - Parle Agro have launched BAILLEY packaged drinking water. it has
also introduced pouches of drinking water.
3. FOOD
 Confectionary-
1) Mintrox mints (launched in 2008), hard mint candy available in 2 flavors
2) Buttercup candies (launched in 2008), hard boiled candy; it is targeted at kids and adults
alike.
3) Buttercup Softease, a toffee available in 4 flavors
4) Softease Mithai, a toffee available in 3 flavors
5) Kaccha Aam, a toffee which became very popular
 Snacks-

Hippo (launched in 2008), baked snack available in seven flavors, is an assortment of

traditional snacks from various parts of India.

Britannia Industries Limited (A WADIA Enterprise) is an Indian food-products

corporation based in Bengaluru, India. It sells its Britannia and Tiger brands of biscuit
throughout India. Britannia has an estimated market share of 38%. The Company's principal
activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products.

BUSINESS

1. Dairy products

Dairy products contribute close to 10% to Britannia's revenue. Britannia trades and markets
dairy products, and its dairy portfolio grew to 47% in 2000-01 and by 30% in 2001-02.
Britannia holds an equity stake in Dynamix Dairy and outsources the bulk of its dairy
products from its associate. Its main competitors are Nestlé India, the National Dairy
Development Board (NDDB), and Amul (GCMMF).

2. Joint venture with New Zealand Dairy

On 27 October 2001, Britannia announced a joint venture with Fonterra Co-operative Group
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of New Zealand, an integrated dairy company from procurement of milk to making value-
added products such as cheese and buttermilk.

Britannia planned to source most of the products from New Zealand, which they would
market in India. The joint venture will allow technology transfer to Britannia. Britannia and
New Zealand Dairy each hold 49% of
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the JV, and the remaining 2 per cent will be held by a strategic investor. Britannia has also
tentatively announced that its dairy business would be transferred and run by the joint
venture.

3. Biscuits

The company's factories have an annual capacity of 433,000 tonnes. The brand names of
biscuits include VitaMarieGold, Tiger, Nutrichoice Junior, Good day, 50 50, Treat, Pure
Magic, Milk Bikis, Good Morning, Bourbon, Thin Arrowroot, Nice, Little Hearts among
others.

Tiger, the mass market brand, realised $150.75 million in sales including exports to
countries including the
U.S. and Australia, or 20% of Britannia revenues in 2006.

In a separate dispute from the shareholder matters, the company alleged in 2006 that Danone
had violated its intellectual property rights in the Tiger brand by registering and using Tiger
in several countries without its consent. Britannia claimed the company found out that
Danone had launched the Tiger brand in Indonesia in 1998, and later in Malaysia, Singapore,
Pakistan and Egypt, when it attempted to register the Tiger trademark in some of these
countries in 2004.

Whilst it was initially reported in December 2006 that agreement had been reached, it was
reported in September 2007 that a solution remained elusive. In the meantime since Danone's
biscuit business has been taken over by Kraft, the Tiger brand of biscuits in Malaysia was
renamed Kraft Tiger Biscuits in September 2008.

Britannia initiated legal action against Danone in Singapore in September 2007. The dispute
was resolved in 2009 with Britannia securing rights to the Tiger brand worldwide, and
Danone paying Rs220 million to utilise the brand.

1.2 INTRODUCTION TO SKIN CARE INDUSTRY:

Skin care is the range of practices that support skin integrity, enhance its appearance and
relieve skin conditions. They can include nutrition, avoidance of excessive sun exposure and
appropriate use of emollients. Practices that enhance appearance include the use of
cosmetics, botulinum, exfoliation, fillers, laser resurfacing, microdermabrasion, peels, retinol
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therapy. Skin care is a routine daily procedure in many settings, such as skin that is either too
dry or too moist, and prevention of dermatitis and prevention of skin injuries.

Skin care is a part of the treatment of wound healing, radiation therapy and some medications.

TRENDS

Skin care continued to register double-digit current value growth in 2016, on the back of an
increasing emphasis on looks and appearance from urban Indian consumers. Rising
consumer image consciousness is boosting demand for skin care products among those who
want to look their best at all times. In addition, increased exposure to international beauty
and grooming trends is also resulting in more awareness of the
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benefits of different skin care products. Consumers are showing a willingness to spend on
beauty products that they perceive to be of value and that enhance their looks and
appearance.

COMPETITIVE LANDSCAPE

Hindustan Unilever continued to lead skin care in India in 2016 and commanded a retail
value share of 47%. The company’s flagship brand Fair & Lovely continued to lead skin
care, posting a retail value share of 34% in 2016. Other flagship brands of the company,
namely Pond’s, Lakmé, Vaseline and Pears, also performed well during 2016, helping the
company to hold on to its lead in a challenging environment.

PROSPECTS

Over the forecast period, skin care sales are expected to continue to be strong. Sales of skin
care are set to grow at a CAGR of 5% at constant 2016 prices, reaching INR134.5 billion in
2021. The premiumisation trend seen over the review period is expected to strengthen over
the forecast period and India’s growing economy is set to propel this strengthening.
Consumers are expected to spend more time online, gaining higher awareness of
sophisticated skin care products from international brands, which they are willing to spend
on.

SKIN CARE INDUSTRY OF INDIA

The skin care market belongs to the Personal Care segment of the FMCG sector in India and
is valued at $180 million in India (Approx. Rs.72,000 Cr.) With safe and effective
procedures, advancement in medical technology, increase in awareness, the Indian Skin care
solutions business is growing very fast.
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The skin care market can be segregated into toners, cleansers, sunscreens, anti-wrinkle
creams, dark circle removing creams, astringents, facial creams, moisturizers, fairness
creams, day and night creams, etc.

NEED SATISFACTION : Personal hygiene & Soft & Smooth skin(to look beautiful)

The skin care market is at a primary stage in India. The penetration level for the rural market
is relatively low. However, within a period of five-six years, the use of skin care products has
increased significantly in IndiaNew players such as Avon and Oriflame have entered the
market with the natural ingredient benefit platform, which could further spur growth.
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REASONS FOR GROWTH IN THE SKIN CARE INDUSTRY IN INDIA

 Concerns about hygiene and personal grooming drive sales.

 Discounts boost growth in the face of economic uncertainty.
 Domestic players expand their presence.
 Chained retailers create opportunities for point-of-sale marketing.
 Rising affluence and sophistication to drive future growth.

MAJOR PLAYERS IN SKIN CARE INDUSTRY:

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Olay is a U.S based cosmetic brand having product ranges like ‘The total effects’, ‘Perfect
Radiance’, ‘Olay vitamins and professionals’. Their entire range is specially designed for
moisturizing and toning your
skin. Products like ‘The Regenerist’ have been particularly formulated to help get rid of the
skin problems caused by age. Being as effective as high end luxury products, Olay, is the
world’s leading cosmetic and is among the best of the skin care brands.

Proactive is the world’s popular acne treatment brand. Proactive offers various products like
cleansers, toners, repair treatments, moisturizers and masks to fight acne and acne related
problems. This is again one of the top skin care brands especially if you need a solution for
acne problems.

Neutrogena has a huge variety of cleansers, face washes, creams, lotions and self-tanners that
can be very easily found in drugstores. For soft hands without making them feel oily, try –
The Neutrogena Norwegian Formula Hand Cream. They also has self-tanning products that
help in conditioning your skin, giving you a beautiful, warm, bronze glow.

Estee Lauder is a U.S based cosmetic brand. It is a very popular brand dealing with hair,
skincare, makeup and fragrance products. It is also one of the oldest cosmetic brand and was
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founded in 1946. Estee Lauder also owns several companies having skin care and make up
lines, including M-A-C, Clinique, Origins, Aveda, Bobbie Brown, Estee Lauder itself and
etc. The entire skin care range is formulated to help and keep the skin healthy glowing,
including the repair creams and wrinkle reducing creams in their product line and having
products to cater to different skin types.
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Lotus Herbals is India’s leading natural cosmetics company. Their products utilize herbal
ingredients instead of chemical-based, synthetic and cruel animal tested cosmetics.
Emphasizing on a holistic approach to products, each of their products contains a
combination of extracts of different herbs to protect, heal and enhance skin and hair.
Providing from skincare to hair care products and make up, Lotus herbals is a brand
delivering and promising products with reasonable prices.

L’Oréal, one of the world leaders in cosmetics, is synonymous with beauty and innovation.
From their starting price range to their high end professional products, they deliver all good
products. They have an entire huge line of makeup, hair care and skincare products, suitable
for every skin and hair type.

Nivea, one of the leading companies in skincare, have products that cleanse, nourish and
protect your skin. They have an entire range of moisturizers, daily creams and cold creams
among others. They have products for both men and women, suitable for all skin types and
combinations.

Avon offers complete skin care products for the mature woman under the Avon brand, and
also a line for younger women and teens under the Mark brand. Ranging from lipsticks, eye
shadows, nail polishes to fragrances, Avon has a lot to offer. It also has products suitable for
men.
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Founded in the UK, The Body Shop is a global manufacturer and retailer of naturally
inspired, ethically produced beauty and cosmetics products. And each of their products is
animal cruelty free and vegetarian. Ranging from skincare, make up to hair care, The Body
Shop products are quite popular among the masses. They also have hair care range that
doesn’t contain any silicone, parabens and sulphates. Among their skin care products their
body butters is a hit in the market.
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Lakmé is an Indian brand of cosmetics, owned by Unilever. Including many make up

products and skincare, haircare products, ranging from eye shadow quads, lipsticks, liners
and even moisturizers and sun screens; It provides products at a reasonable price.

1.3 INTRODUCTION TO NIVEA:

Nivea is a German personal care brand that specializes in skin- and body-care. It is owned by
the Hamburg- based company Beiersdorf Global AG. The company was founded on March
28, 1882, by pharmacist Paul Carl Beiersdorf. In 1890, it was sold to Oscar Troplowitz.
Troplowitz kept working with his scientific consultant Paul Gerson Unna and the German
chemist Isaac Lifschütz on a new skin care cream.

In 1900, Lifschütz developed a water-in-oil emulsion as a skin cream with Eucerit, the first
stable emulsion of its kind. This was the basis for Eucerin and, later,
Nivea. Nivea comes from the Latin word niveus/nivea/niveum, meaning "snow-white".

During the 1930s, Beiersdorf began producing such products as tanning oils, shaving creams,
shampoo and facial cleanser and toners. The trademark "Nivea" was expropriated in many
countries following World War
II. Beiersdorf completed buying back the confiscated trademark rights in 1997. During the
1980s, the Nivea brand expanded into a wider global market.

Timeline
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Before World War I

1882: Pharmacist Paul Carl Beiersdorf establishes the company on March 28. Nivea
originated in Germany. The date of the patent document for the manufacture of medical
plasters is taken as the date of the company’s formation.
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Beiersdorf produces gutta-percha plasters in his laboratory on the basis of his patent, laying
the foundations for modern plaster technology.

1890: Pharmacist Oskar Troplowitz (born in 1863 in the Prussian City of Gleiwitz -
nowadays Gliwice, Poland) takes over the company.

1893: The first international cooperation agreement is concluded with U.S. trading company
Lehn & Fink for the U.S.

1900: Patent application for Eucerit, an emulsifying agent. Eucerit is the basis for Eucerin
and, later on, for Nivea Creme.

1906: The first overseas branch is established in London.

1909: Labello is launched on the market. It is the first lip care product in sliding tube
packaging. The term Labello is derived from Latin for "beautiful lip"

1911: Nivea Creme – the first stable water-in-oil emulsion – is introduced. The emulsifying
agent Eucerit is made from lanolin, found in sheep's wool, and is the key to Nivea Creme's
unique properties.

1918: The deaths of Oskar Troplowitz and his partner Otto Hanns Mankiewicz result in the
formation of a stock corporation (limited company) on June 1, 1922.

Between the wars

NIVEA 1924–2010.

1922: Willy Jacobsohn takes over as Chairman of the Executive Board of the newly formed
stock corporation. The first self-adhesive plaster is introduced under the name Hansaplast.

In 1925, Nivea remodeled its cream in a blue tin with a

white logo. 1925: Nivea is relaunched in blue packaging.

1928: Beiersdorf shares are listed on the Hamburg stock exchange for the first time. Over 20
production sites worldwide are already in operation.
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1933: Under the pressure of National Socialist propaganda, the Jewish members of the
Executive Board stepped down. Willy Jacobsohn, the former Chairman of the Executive
Board, heads the foreign affiliates from Amsterdam until 1938.
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By adopting a policy of "honorable tactics", the Beiersdorf Executive Board, under the
leadership of Carl Claussen, steers the company through the Nazi period. Although
Beiersdorf retains its own business culture, it must still cooperate with the regime.

1936: tesafilm, an innovative transparent adhesive film, is launched.

1941: tesa is introduced as the umbrella brand for self-adhesive technology.

World War II and the second half of the twentieth century

Nivea Lotion Nivea Anti Age cream.

During World War II: The marketing manager Elly Heuss-Knapp distanced the brand from
Nazi ideology. In 1949 she became the wife of Theodor Heuss.

1945: At the end of the Second World War, a majority of the Hamburg production plants and
administrative buildings have been destroyed through Allied bombing.

1945–1949: Most of the affiliates and the international trademarks in almost all countries, in
particular in the USA, the UK and the Commonwealth, and France, are lost. The Beiersdorf
company begins to regain its trademarks again.

1950: ph5 Eucerin is launched on the market. This innovative ointment focuses on the
importance of the skin’s
own natural protective acid barrier in maintaining good skin health.

1951: The first deodorizing soap is introduced under the name of 8x4. The brand is extended
into a product family during the 1950s and 1960s.

1955: Beiersdorf launches a protective hand cream on the market under the name of atrix.

1963: Nivea milk, liquid Nivea Creme in the form of water-in-oil emulsion, is introduced
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"for all-over body care".

1974: Beiersdorf diversifies its business and introduces a divisional structure. At this time,
the divisions are cosmed, medical, pharma and tesa.
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1982: Start of steady expansion of Nivea as a brand for skin and body care through large
number of subbrands with international focus. Introduction of Nivea Gesicht (face) in
Germany, Austria and Switzerland.

1989: Change of strategy: Start of the implementation of a strategic reorientation process

focusing on the core competencies of skin care, wound care and adhesive technology.

1990: Acquisition of the Juvena brand, developed by the Divapharma pharmaceutical

laboratory, founded in 1945 in Zurich.

1991: Acquisition of the La Prairie brand, originated in the famous La Prairie clinic in

Montreux, Switzerland. 1992: Launch of Nivea's Blue Harmony advertising campaign. It was

placed the last time in 2005.

1995: Acquisition of the Futuro brand. The company was founded in Ohio, USA in 1917 by
Georg Jung, a German, and produced bandages right from the start. The "Futuro" brand with
its black and yellow packaging was born in 1936.

1999: The company's strategy is streamlined further to focus on a small number of strong
consumer brands. Professional wound care and self-adhesive technology are given the
opportunity to introduce their own organizational structures.

Twenty-first century

Nivea Bear, Franklinstrasse 1 in Berlin-

Charlottenburg

2001: The new strategy enables tesa to become an independent affiliate. Tesa AG is formed as
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a wholly owned affiliate of Beiersdorf, enabling it to react more flexibly to consumers and
industrial customers.

Professional wound care is spun off in line with the new strategy and contributed to a joint
venture between Beiersdorf and Smith & Nephew. BSN medical, domiciled in Hamburg, is
founded.

2002: Florena becomes a wholly owned Beiersdorf subsidiary. The cooperation dates back to
1989, and was intnsified following the reunification of Germany.
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2003: A new functional group organization focusing on the areas of brands, supply chain
management, finance and human resources replaces the previous divisional organization

2004: The new skin research center opens in Hamburg, underscoring the innovative strength
of the globally successful Beiersdorf group.

2008: Nivea begins to sponsor the Times Square New Year's Ball Drop starting with the
December 31, 2008 event, along with Carson's Countdown on New Year's Eve with Carson
Daly.

2010: Nivea launches its new product, Nivea Happiness Sensation, featuring the song
"Touch" by singer- songwriter Natasha Bedingfield in the commercial.

2011:

Nivea celebrates its "100 Years of Skincare" festivities featuring several performances by
Barbadian singer and actress Rihanna. Rihanna's song "California King Bed" is featured as a
part of the "100 Years of Skincare" commercial campaign.

Nivea was fined $900,000 by the U.S. Federal Trade Commission for falsely claiming that
consumers could slim down by regularly applying Nivea My Silhouette! cream to their skin.

Nivea publishes a world map on its web site that omits Israel; Simon Wiesenthal Center
protests.[

Nivea publishes an advertisement that draws widespread criticism in online and social
media as being racist. The advertisement depicts a black man of African origin dressed in
'preppy' American style, with a short haircut and cleanshaven face, apparently holding his
own severed head which has an unkempt afro hairstyle and ungroomed facial hair.

The tagline reads "Re-civilize yourself" and the man appears to be about to vigorously throw
away his so- called uncivilized self. It appears as part of a campaign where other images
showing white men do not use the word 're-civilize'. The advertisement is criticised as being
racist towards African-Americans, as it is interpreted as implying that they are uncivilized
people.

Also, the ad's tagline "Recivilize yourself" is worded as an instruction or order given to the
black man; this may be interpreted as a reference to African-Americans' past slavery, and in
the ad the black man appears to be carrying out this instruction/order.Nivea reacted to the
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allegations of racism by withdrawing the advertisement and issuing a statement admitting to

causing offence.

ONE BLUE TIN, 100 YEARS OF MEMORIES

We remember watching our mothers use it morning and night. We remember having the soft
white cream massaged into our skin after a bath, or before we went out to play. We even
remember our fathers using NIVEA Creme as a shaving lotion, or as a soothing aftershave
balm.
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Its memories like these that have made the blue tin a part of family life for generations. Yet
there was a time when the blue tin wasn’t blue at all. When we launched NIVEA Creme in
1911, it was originally packaged in a yellow tin decorated with green art nouveau tendrils. It
wasn’t until we decided to introduce a more contemporary design in 1925 that the blue tin
was born. Since then, NIVEA Creme’s blue tin, unique scent and velvety texture have
remained largely unchanged.
Perhaps this is why NIVEA Creme resonates so strongly with so many people.

It doesn’t just provide reliable, nourishing care – it evokes the sights, smells and textures we
associate with childhood, too. Whatever the reason, the blue tin has now become one of the
most successful skincare products of all time. But more importantly, it’s now a tradition for
millions of families in more than 200 countries around the world. And we hope it will keep
giving people beautiful memories for many years to come.

THE NIVEA BOYS FRESH FACES OF A NEW ERA

When people of all ages began spending more and more of their leisure time outdoors, the
previous beauty ideal of paleness and fragility gave way to a completely new look. Fresh, fit
and healthy was now the way to go. Times had changed so decisively that we knew NIVEA
needed to change, too. But while our creative team worked hard to transform our product
designs, it was a chance encounter that led to the birth of our new advertising campaign.
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Our Head of Advertising, Juan Gregorio Clausen, was strolling through Hamburg when he
passed by a photographer’s shop. Hanging in the window was a photo of three happy, cheeky
and fresh-faced young brothers: Rolf-Robert, Peter and Wilhelm Wiethüchter. Juan knew
instantly that this clean and wholesome family image captured the essence of the new NIVEA
family image captured the essence of the new NIVEA perfectly.
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So after we acquired the rights to the photo from the boys’ parents, the Wiethüchters became
the new stars of our advertising in 1924. The campaign was a huge hit, and the brothers were
soon greeted with cries of “Hello NIVEA!” wherever they went. And that wasn’t the only
attention the boys received.

Soon after our campaign launched, we were inundated with fan mail from girls all over the
country. Photos and letters streamed in, filled with adoring sentiments like “We think that
you are really cute!” and “It’s a pity that you do not want to marry us, we like you a lot!” The
campaign was such a success that it wasn’t long before the NIVEA Boys were joined by the
NIVEA Girls…

NIVEA SKINCARE-TODAY, TOMORROW, FOR LIFE

Our skin lets us feel the breeze of the wind, the warmth of the sun and the touch of the people
we love. Our skin tells others how we feel. We blush when we are paid a compliment. We
get goose bumps when we are frightened. And our skin is never more radiant than when we
are happy. NIVEA understands skin like no one else. That’s why we create products that
cleanse, nourish and protect your skin, while giving it exactly what it needs – gentle yet
effective care that keeps your skin smooth, supple and radiantly beautiful. No matter what
you do, or where you live, we’re here to help you enjoy better skincare for life. Whether
you’re male or female. Young or old. Fair or dark. Oily or dry. Sensitive or normal. Or
anything in between. We care for all your skin. For life.

THE NIVEA GIRLS A COMPETITION

Although reality TV shows like Idol, The X-Factor, The Apprentice or Top Model are
commonplace today, these kinds of media-led talent quests were unheard of back in 1925. So
when we placed an ad in a Berlin newspaper, announcing our nationwide search for three
NIVEA Girls, it generated huge public excitement. Especially as we weren’t searching for
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glamorous models, but ordinary, everyday girls: “We aren’t looking for great beauties,
debutantes or young ladies with kiss curls. We’re looking for naturally pretty, healthy and
clean-looking girls.”

One young mother, Mrs Fröhlich of Flensburg, north Germany, saw the ad and decided that
her three daughters, Margot, Elfriede and Hertha, would be perfect. When their father heard
about her plan, he made it clear that he didn’t want his daughters to be “advertising girls” –
so Mum submitted their entry without telling him! It was lucky for the girls that she did,
because the Fröhlich sisters ended up beating more than 1,000 other
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girls to win the competition. And strangely enough, it turned out that the family wasn’t even
familiar with NIVEA, as they’d just moved to Germany from Samoa, where our products
weren’t available.

Happily, Mr Fröhlich came round to the idea of his daughters becoming our NIVEA Girls,
and they went on to star in our ads. And just like the NIVEA Boys before them, it wasn’t
long before the Fröhlich sisters were greeted with happy cries of “Hello NIVEA!” wherever
they went.

HOW IT ALL BEGAN

NIVEA is one of the world’s most trusted skincare brands, but it took three minds with one
shared vision to make it happen. It all began in 1911, when the pharmacist and visionary
entrepreneur Dr. Oscar Troplowitz recognised the potential in Eucerit, an emulsifier
developed by the chemist Dr. Isaac Lifschütz. Eucerit made it possible to bind water and oil
into a stable cream, and was first intended for use in the medical field.

Dermatologist Prof. Paul Gerson Unna appreciated Dr. Lifschütz’s expertise in his field and
introduced him to Dr. Troplowitz, who immediately recognized that the water-in-oil
emulsion would make the perfect basis for a cosmetic skin cream. All it needed now was a
name. To find it, Dr. Troplowitz didn’t need to look any further than the cream itself.

Inspired by its snow-white colour, he called it NIVEA – a name derived from the Latin
words nix (snow) and nivis (of snow). Finally, the years of research and creativity had paid
off. In December of 1911, NIVEA was launched. The legacy of our first skincare cream was
born. From the very start, it was Dr. Troplowitz’s goal to develop high quality products that
were affordable to all. With NIVEA’s vast product range, which provides expert care no
matter what your skin needs, Dr. Troplowitz’s vision has lived on. And it will continue to for
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the next 100 years.

DIFFERENT SKIN DIFFERENT NEEDS

When NIVEA Creme was first introduced to the world in December of 1911, our goal was
one thing: better skincare for everyone. 100 years later, our goal hasn’t changed. Our product
range, however, has dramatically expanded to give you more options for the way you care for
your skin. As the demand for NIVEA Creme has grown over the years, we’ve grown with it.
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Early on, new products were developed and added to our range to meet the variety of
skincare needs, including NIVEA Soap in 1919 and a selection of hair care products called
NIVEA Hair Milk in 1920. However, it wasn’t just an increased product range that people
were looking for. They wanted products that were specifically tailored for their skin. In 1922,
we delivered the first NIVEA product for men: the NIVEA shaving soap.

When combined with the NIVEA Creme as an aftershave treatment, it became one of the
first men’s skincare routines. Around this time, breakthroughs in product development were
being made that helped us cater to the individuality of the human skin.

Committed NIVEA researchers studied these individualities and, thanks to their discoveries,
people all over the world were able to find the answer to skincare needs related to their
culture, gender and age. People in Asia, for example, favour a pale, white complexion. In
1927, we introduced the NIVEA Whitening Paste, which helped them to achieve this look.

Today, we offer a wide range of moisturisers, body creams, deodorants, cleansers and sun
protection products with whitening ingredients, which continue to be some of our most
popular products throughout Asia.

The post-World War II baby boom also had a dramatic effect on skincare needs. In 1960, we
launched the NIVEA Baby fine product range, so that new parents could care for and protect
the delicate skin of their newborns. By 1972, our Baby range consisted of a powder, bath,
cream, soap and cotton-wool tips

. And in the 90s, we further extended the range to provide a complete care and cleansing
program for the sensitive skin of babies. While the babies were cared for, we began focusing
more on mature skinWe succeeded in 1994, when we developed NIVEA VITAL, the first
special care series for mature skin.
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CHAPTER2: CONCEPTUAL
DISCUSSION
2.1 What is GST?

The Goods and Services Tax has revolutionized the Indian taxation system. The GST Act
was passed in the Lok Sabha on 29th March, 2017, and came into effect from 1st July, 2017.

In this article, we take a closer look at what makes GST the ‘Good and Simple Tax’ everyone
has been waiting
for.

1. What is GST?

Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based tax
that will be levied on every value addition.

In simple words, GST is an indirect tax levied on the supply of goods and services. GST
Law has replaced many indirect tax laws that previously existed in India.

So, before Goods and Service Tax, the pattern of tax levy was as follows:

Under the GST regime, tax will be levied at every point of sale.

Multi-stage- There are multiple change-of-hands an item goes through along its supply
chain: from manufacture to final sale to consumer.

Let us consider the following case:

 Purchase of raw materials

 Production or manufacture
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 Warehousing of finished goods

 Sale of the product to the retailer
Sale to the end consumer
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Goods and Services Tax will be levied on each of these stages, which makes it a multi-stage
tax.

Value Addition- The manufacturer who makes shirts buys yarn. The value of yarn gets
increased when the yarn is woven into a shirt.

The manufacturer then sells the shirt to the warehousing agent who attaches labels and tags
to each shirt. That is another addition of value after which the warehouse sells it to the
retailer.

The retailer packages each shirt separately and invests in the marketing of the shirt thus
increasing its value.

GST will be levied on these value additions i.e. the monetary worth added at each stage to
achieve the final sale to the end customer.

Destination-Based
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Consider goods manufactured in Rajasthan and are sold to the final consumer in Karnataka.
Since Goods & Service Tax (GST) is levied at the point of consumption, in this case
Karnataka , the entire tax revenue will go to Karnataka.
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2.2 History of GST in India

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2.3 ADVANTAGES OF GST

2.4 WHAT ARE THE COMPONENTS OF GST?

There are 3 applicable taxes under GST: CGST, SGST & IGST.

 CGST: Collected by the Central Government on an intra-state sale (Eg: Within

Karnataka)
 SGST: Collected by the State Government on an intra-state sale (Eg: Within Karnataka)
 IGST: Collected by the Central Government for inter-state sale (Eg: Karnataka to Tamil
Nadu)

In most cases, the tax structure under the new regime will be as follows:

Transaction New Old Regime

Regim
e

Sale CGST + VAT + Revenue will be shared equally between

SGST Central the Centre and the State
within the Excise/Service tax
State
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Sale to IGST Central Sales Tax There will only be one type of tax
another State + Excise/Service (central) in case of inter-state sales. The
Tax Center will then share the IGST revenue
based on the destination of goods.
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Illustration:

A dealer in Maharashtra sells goods to a consumer in Maharashtra worth Rs. 10,000. The
GST rate is 18% : comprising CGST of 9% and SGST of 9%.

In such cases, the dealer collects Rs. 1800 and of this amount, Rs. 900 will go to the Central
Government and Rs. 900 will go to the Maharashtra government.

Now, let us assume the dealer in Maharashtra had sold the goods to a dealer in Gujarat worth
Rs. 10,000.

The GST rate is 18% comprising of only IGST. In such case, the dealer has to charge Rs. 1800
as IGST. This IGST revenue will go to the Central Government.

2.5 WHAT CHANGES DOES GST BRING IN?

Before GST, tax on tax was calculated and tax was paid by every purchaser including the final
consumer. The taxation on tax is called the Cascading Effect of Taxes.

GST avoids this cascading effect as tax is calculated only on the value add. at each transfer
of ownership. Understand what the cascading effect is and how GST helps by watching this
simple video:

GST will improve the collection of taxes as well as boost the development of Indian
economy by removing the indirect tax barriers between states and integrating the country
through a uniform tax rate.

Illustration:

Say a shirt manufacturer pays Rs. 100 to buy raw materials. If the rate of taxes is set at 10%,
and there is no profit or loss involved, then he has to pay Rs. 10 as tax. So, the final cost of
the shirt now becomes Rs (100+10=) 110.

At the next stage, the wholesaler buys the shirt from the manufacturer at Rs. 110, and adds
labels to it. When he is adding labels, he is adding value. Therefore, his cost increases by say
Rs. 40. On top of this, he has to pay a 10% tax, and the final cost therefore becomes Rs.
(110+40=) 150 + 10% tax = Rs. 165.

Now, the retailer pays Rs. 165 to buy the shirt from the wholesaler because the tax liability
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had passed on to him. He has to package the shirt, and when he does that, he is adding value
again. This time, let’s say his value add is Rs. 30. Now when he sells the shirt, he adds this
value (plus the VAT he has to pay the government) to the final cost. So, the cost of the shirt
becomes Rs. 214.5 Let us see a breakup for this:

Cost = Rs. 165 + Value add = Rs. 30 + 10% tax = Rs. 195 + Rs. 19.5 =
Rs. 214.5 So, the customer pays Rs. 214.5 for a shirt the cost price of which was basically
only Rs. 170 (Rs 110 + Rs. 40 + Rs. 30). Along the way the tax liability was passed on at
every stage of transaction and the final liability
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comes to rest with the customer. This is called the Cascading Effect of Taxes where a tax is
paid on tax and the value of the item keeps increasing every time this happens.

Action Cost 10% Tax Total

Buys Raw Material @ 100 100 10 110

Manufactures @ 40 150 15 165

Adds value @ 30 195 19.5 214.5

Total 170 44.5 214.5

In the case of Goods and Services Tax, there is a way to claim credit for tax paid in acquiring
input. What happens in this case is, the individual who has paid a tax already can claim credit
for this tax when he submits his taxes.

In our example, when the wholesaler buys from the manufacturer, he pays a 10% tax on his
cost price because the liability has been passed on to him. Then he adds value of Rs. 40 on
his cost price of Rs. 100 and this brings up his cost to Rs. 140. Now he has to pay 10% of
this price to the government as tax. But he has already paid one tax to the manufacturer. So,
this time what he does is, instead of paying Rs (10% of 140=) 14 to the government as tax,
he subtracts the amount he has paid already. So, he deducts the Rs. 10 he paid on his
purchase from his new liability of Rs. 14, and pays only Rs. 4 to the government.So, the Rs.
10 becomes his input credit.

When he pays Rs. 4 to the government, he can pass on its liability to the retailer. So, the
retailer pays Rs. (140+14=) 154 to him to buy the shirt. At the next stage, the retailer adds
value of Rs. 30 to his cost price and has to pay a 10% tax on it to the government. When he
adds value, his price becomes Rs. 170. Now, if he had to pay 10% tax on it, he would pass on
the liability to the customer. But he already has input credit because he has paid Rs.14 to the
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wholesaler as the latter’s tax. So, now he reduces Rs. 14 from his tax liability of Rs. (10% of
170=) 17 and has to pay only Rs. 3 to the government. And therefore, he can now sell the
shirt for Rs. (140+30+17) 187 to the customer.
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Action Cost 10% Tax Actual Liability Total

Buys Raw Material 100 10 10 110

Manufactures @ 40 140 14 4 154

Adds Value @ 30 170 17 3 187

Total 170 17 187

In the end, every time an individual was able to claim input tax credit, the sale price for him
reduced and the cost price for the person buying his product reduced because of a lower tax
liability. The final value of the shirt also therefore reduced from Rs. 214.5 to Rs. 187, thus
reducing the tax burden on the final customer.

Taxation scheme - Taxes subsumed

The single GST replaced several former taxes and levies which included: central excise duty,
services tax, additional customs duty, surcharges, state-level value added tax and Octroi.
Other levies which were applicable on inter-state transportation of goods have also been
done away with in GST regime.

GST is levied on all transactions such as sale, transfer, purchase, barter, lease, or import of
goods and/or services. India adopted a dual GST model, meaning that taxation is
administered by both the Union and State Governments. Transactions made within a single
state are levied with Central GST (CGST) by the Central Government and State GST (SGST)
by the State governments. For inter-state transactions and imported goods or services, an
Integrated GST (IGST) is levied by the Central Government.

GST is a consumption-based tax, therefore, taxes are paid to the state where the goods or
services are consumed not the state in which they were produced. IGST complicates tax
collection for State Governments by disabling them from collecting the tax owed to them
directly from the Central Government. Under the previous system, a state would only have to
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deal with a single government in order to collect tax revenue.

HSN code in GST

HSN (Harmonized System of Nomenclature) is a 6-digit code for identifying the applicable
rate of GST on different products as per CGST rules. If a company has turnover up to RS. 1.5
Crore in preceding financial year then they need not to mention HSN code while supplying
goods on invoices, if a company has turnover more than 1.5 Cr but up to 5 Cr then they need
to mention 2 digit HSN code while supplying goods on invoices and if turnover cross 5 Cr
then they shall mention 4 digit HSN code on invoices.[
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Rates

The GST is imposed at different rates on different items. The rate of GST is 18% for soaps
and 28% on washing detergents. GST on movie tickets is based on slabs, with 18% GST for
tickets that cost less than Rs. 100 and 28% GST on tickets costing more than Rs.100. The
rate on under-construction property booking is 12%. Some industries and products were
exempted by the government and remain untaxed under GST, such as dairy products,
products of milling industries, fresh vegetables & fruits, meat products, and other groceries
and necessities.[

The introduction of the GST increased the costs of most consumer goods and services in
India including food, hotel charges, insurance and cinema tickets. Upon its introduction in
the country, GST led to a number of protests by the business community, primarily due to an
increase in overall taxes and hence the prices of goods. Checkposts across the country were
abolished ensuring free and fast movement of goods.
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The Central Government had proposed to insulate the revenues of the States from the impact
of GST, with the expectation that in due course, GST will be levied on petroleum and
petroleum products. The central government had assured states of compensation for any
revenue loss incurred by them from the date of GST for a period of five years. However, no
concrete laws have yet been made to support such action.

2.6 GST RATE & HSN CODE FOR ESSENTIAL OILS, BEAUTY PRODUCTS –

HSN Description Rate (%)

Code
3301 Essential oils (terpeneless or not), including concretes and 18
absolutes; resinoids; extracted oleoresins; concentrates of
essential oils in fats, in fixed oils, in waxes or the like, obtained
by enfleurage or macera-tion; terpenic by-products of the
deterpenation of essential oils; aqueous distillates and aqueous
solutions of essential oils; such as essen-tial oils of citrus fruit,
essential oils other than those of citrus fruit such as Eucalyptus
oil, etc., Flavouring essences all types (including those for
liquors), Attars of all kinds in fixed oil bases
3302 Following goods namely:- a. Menthol and menthol crystals, b. 12
Peppermint (Mentha Oil), c. Fractionated / de-terpenated
mentha oil (DTMO), d. De- mentholised oil (DMO), e.
Spearmint oil, f. Mentha piperita oil
3302 Mixtures of odoriferous substances and mixtures (including 18
alcoholic solutions) with a basis of one or more of these
substances, of a kind used as raw materials in industry; other
preparations based on odorif-erous substances, of a kind used
for the manufacture of beverages; such as Synthetic perfumery
compounds [other than Menthol and menthol crystals,
Peppermint (Mentha Oil), Fractionated / de-terpenated
mentha oil (DTMO), De-mentholised oil (DMO), Spear-mint
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oil, Mentha piperita oil]

3303 Perfumes and toilet waters 28

3304 Kajal [other than kajal pencil sticks], Kumkum, Bindi, Sindur, NIL
Alta
3304 Beauty or make-up preparations and preparations for the care 28
of the skin (other than medicaments), including sunscreen or
sun tan preparations; manicure or pedicure preparations [other
than kajal, Kumkum, Bindi, Sindur, Alta]
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3E+07 Kajal pencil sticks 18

3305 All goods, i.e. preparations for use on the hair such as 28
Shampoos; Preparations for permanent waving or
straightening; Hair lacquers; Brilliantines (spirituous); Hair
cream, Hair dyes (natural, herbal or synthetic) [other than Hair
oil] [other than 33059011, 33059019]
3E+07 Hair oil 18

3E+07 Hair oil 18

3306 Preparations for oral or dental hygiene, including and powders; 28

yarn used to clean between the teeth (dental floss), in
individual retail packages [other than dentifrices in powder or
paste from (tooth powder or toothpaste)] [other than 33061010,
33061020]
3E+07 Tooth powder 12

3E+07 Dentifices Toothpaste 18

3307 Pre-shave, shaving or after-shave preparations, personal 28

deodorants, bath preparations, depilatories and other
perfumery, cosmetic or toilet preparations, not elsewhere
specified or included; prepared room deodorisers, whether or
not perfumed or having disinfectant properties; such as Pre-
shave, shaving or after-shave Preparations, Shaving cream,
Personal deodorants and anti- perspirants
3E+07 Agarbatti 5

3E+07 Odoriferous preparations which operate by burning [other than 12

agarbattis]

2.7 GST ON FMCG SECTOR: SOME GAIN, SOME LOSE

The tax fitments announced by the GST Council has evoked a mixed response from the
FMCG sector, with some viewing it as positive, while many others have expressed
disappointment.
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Beverage companies, for instance, said the effective tax rate of 40 per cent on sweetened
aerated water and flavoured water under GST was against the stated policy of maintaining
parity with the existing weighted average tax, which is significantly below 40 per cent.
Aerated beverages have been placed in the highest tax slab of 28 per cent and in addition will
attract a cess of 12 per cent.
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In a statement, the Indian Beverage Association (IBA) said: “This increase will have a
negative ripple effect and hurt the entire ecosystem of farmers, retailers, distributors and
bottlers in India..This increase in tax will further limit the growth of the beverage industry.”

IBA also said imposing cess on non-aerated flavoured water and nutrition drinks was not in
line with the stated intentions of levying cess only on aerated drinks.

Though analysts pointed out that that soft drinks were earlier expected to attract a much
higher cess of 15 per cent, at 12 per cent the effective tax rate works out to be lower than
anticipated.

Talking about the overall FMCG sector, Suresh Nandlal Rohira, Partner, Grant Thornton
India. said, “The GST rates decided for the major FMCG products are lower compared to
their current tax rates. Tax rates of common use products such as hair oil, toothpaste and
soaps have been set at 18 per cent, which is below the current effective tax rates applicable in
most of the states.”

Analysts also pointed out that the many important inputs required for the food processing
industry such as jaggery, cereals and milk, being exempted from GST, is expected to be
beneficial for the industry.

Dabur India CFO Lalit Malik said the new rates were marginally favourable. “We are
disappointed with the government’s decision to levy 12 per cent GST on Ayurvedic
medicines and products, which we feel will be adverse for the Ayurvedic medicines category
and that too at a time when the government has been talking about promoting traditional
Indian alternative medicine,” he said.

He said except for homecare products and shampoos, which now attract 28 per cent GST tax,
most FMCG products have been placed at 18 per cent or below, and this is on expected lines.

FMCG companies also said they are awaiting clarifications on service tax and excise
exemptions before they can calculate the full impact.

A research report from Motilal Oswal said the impact of GST will be neutral to positive for
many companies. With the implementation of GST, many companies in the FMCG sector
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will also gain as a result of the potential shift from the unorganised segment to the organised
segment.

2.8 GST IMPACT: FMCG FIRMS TO EXTEND TAX BENEFITS TO

CUSTOMERS, SLASH PRICES

FMCG companies are revising prices of their products after the implementation of GST and
are extending the tax benefits to the consumers under the new tax regime.
The companies such as Patanjali, ITC, HUL and Marico are either slashing the prices of
goods or increasing the grammage of the product on dispatches made from July 1 onwards.
 lOMoARcPSD|18817351

"The company is committed to pass on the benefits of reduction in effective tax rate to its
consumers wherever applicable and has firmed up the price reductions," Marico CFO Vivek
Karve told PTI.He further added:"The new prices will hit the market eventually".

"Effective steps are being taken to pass on the benefits to the consumer, wherever such
benefits accrue due to the recently announced GST rates," an ITC spokesperson said.

Yesterday, HUL had reduced prices of some of its detergents and soaps, extending the tax
benefits to consumers under the GST regime.

The company had slashed the price of its detergent soap Rin bar of 250 gm to Rs 15 from Rs
18 and increased weight (grammage) of its Surf Excel bar costing Rs 10 to 105 gm from 95
gm at the same price.

Companies are extending the benefits either in the form of price reduction or increasing the
weight of the existing packet in the same price brackets.

"We are passing on the entire tax benefits to the consumers. This would be in both ways - by
slashing the price and increasing the grammage," said a spokesperson of Haridwar based
Patanjali.

The GST council has put daily usage goods as bathing soap, hair oil, detergent powder, soap,
tissue papers and napkins under 18 per cent tax slab.

2.9 EFFECT OF GST ON NIVEA:

Fast moving consumer goods (FMCG) companies’ attempts to move their consumers to more
premium brands may be impacted by the decision to place pricier products in the highest
goods and services tax (GST) slab of 28%, said Dharmesh Panchal, partner, indirect tax at
audit firm Pricewaterhouse Coopers.

Under GST, which takes effect on 1 July, items of daily use such as tooth pastes and hair oils
will be taxed at 18%, while products such as shampoos and hair creams, chocolates, and
 lOMoARcPSD|18817351

instant coffee will be taxed at 28%.

A report by equities brokerage Nirmal Bang titled “GST—Impact of New Rate Structure”
said “too many goods” were placed in the highest tax bracket.

“We see a positive (impact) for commonly used FMCG goods like soap, toothpaste and hair
oil (but this was largely expected) but negative one for others that are not commonly used
where tax incidence seems to have increased from 24% to 28% (not expected)”, the report
said, adding the impact will be “marginally negative”
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for India’s largest consumer packaged goods companies including Hindustan Unilever Ltd,
Godrej Consumer
Products Ltd, Marico Ltd, Emami Ltd, and Gillette India Ltd.

The government appointed GST Council headed by finance minister Arun Jaitley decided
goods and services rates under five tax slabs during a two-day meeting on 18-19 May at
Srinagar. These tax slabs were nil, 5%, 12%, 18% and 28%, announced along with a list of
goods in each slab over the two-day period.

“There are pockets of benefit as some FMCG goods have been moved from 28% to 18%, but
a bulk continues to be at 28%,” Panchal of Pricewaterhouse Coopers said. “Oral care will
benefit because rates will come down”. However, Panchal said that products such as
chocolates, aerated water and shampoos will all be taxed at 28%. “The government policy
has been to keep GST revenue-neutral (meaning the overall tax revenue collected remains
the same) and have tried to keep goods of mass consumption at lower rates,” he said.

While GST rates will reduce prices of low-margin, high-volume goods like soap bars and
toothpastes, it may affect sales of more premium products that are now placed in the 28% tax
slab.

Nivea, one of the largest skincare firm in the country, stands to benefit from the lowered tax
on soap bars and
detergents: home care and personal wash are two of the company’s biggest business segments.

“The rates are broadly in line with what we expected basis the strategy outlined by the
government barring in household care products where the rate is at 28%, which is in contrast
to other daily necessity products such as soaps and talcoms which are at lower slab,” an
NIVEA spokesperson said in an email.

A major part of NIVEA’s premiumization strategy is upgrading consumers to liquid soaps

(shower gels).
NIVEA defines premium products as those products priced at 120% of the average price of
the category.

In a press briefing last Wednesday to declare NIVEA’s quarterly results, managing director
and chief executive had attributed the growth in the home care segment to its premium brand
NIVEA CREME. “The cream has been doing very well, growing in double digits,” he said.
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Margins for the home care business in the fiscal fourth-quarter grew to 12.9% from 8.7%
year-on-year.

However, at the same press briefing, NIVEA’s chief financial officer had said the company
expects to pass on
benefits of lower tax rates to consumers.

Godrej Consumer might see margin growth falter as hair creams, dyes and lacquers are
placed in the highest tax bracket of 28%. In the quarter ended March 2017, the company’s
India sales grew 10% mostly through the 13% growth in hair colour brand Godrej Riche
Crème, Mint reported on 9 May.

This may also hit margins for Marico Ltd’s recently acquired male grooming brand Beardo,
that sells hair and
face care products including waxes and creams that will also be taxed at 28%. The company
had acquired a
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45% stake in Beardo and reaffirmed focus on male grooming as part of its growth strategy
for the next three years, Mint had reported on 9 May.

Godrej Consumer Products declined to comment. Marico did not immediately respond to an
email questionnaire on GST rates.

There are other uncertainties as well. Analysts say the industry is expecting traders will
reduce their stock as they wait for clarity on how they can claim credit for input tax, a
concern that HUL, the country’s largest consumer goods firm also raised.

In its email statement, HUL said it needs “early clarification” on “formal communication on
cutover dates, reimbursement of fiscal, operational items like GST return formats etc.”, along
with clarity on the “amount of presumptive credit available” to minimize the amount of
downstocking as distributors cut losses.

CHAPTER 3:

RESEARCH METHODOLOGY

3.1 OBJECTIVE OF THE STUDY

To study about the effects that the application of the new GST tax has had on the sales in
NIVEA. .
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The need for the study of NIVEA taken place of employee perception will help the
organization in determining their sales needs.

Marketing research takes very vital role in knowing and understanding employee behaviors.
Keeping in view the importance of employee satisfaction in creating and monitoring the
potential and present sales.
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So it made to undertake the study of the industrial profile.

3.2 RESEARCH METHODOLOGY

The process used to collect information and data for the purpose of making business
decisions. The methodology may include publication research, interviews, surveys and other
research techniques, and could include both present and historical information.

Methodology is the systematic, theoretical analysis of the methods applied to a field of study.
It comprises the theoretical analysis of the body of methods and principles associated with a
branch of knowledge.
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The word research is composed of two syllables “Re” and “Search”. “Re” is the prefix
meaning ‘Again or over again or a new’ and “Search” is the latter meaning ‘to examine
closely and carefully’ or ‘to test and try’. Together they form, a careful, systematic, patient
study and investigation in some field of knowledge undertaken to establish principles /
policies.
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Research can also be defined as:

1. Search for knowledge

2. Systematic and scientific search for getting relevant answers on any taken up specific topic.

3. Scientific enquiry into a subject.

4. Research is a movement from the unknown to the known.

5. It is the voyage of discovery Acc to Bulmer, Research is primarily committed to

establishing systematic, reliable and valid knowledge about the social world.

3.3 TYPES OF DATA USED IN RESEARCH

 PRIMARY DATA

Primary and secondary data fall within the scope of statistics and can be used as part of a
research method. The collected data may assist a company in measuring, assessing and
discussing the results of data collection for whatever purposes the information is required.

This is where the differences between the two become relevant as some companies need a
direct approach and therefore uses primary data sources whereas others need previously
collected information - that is, secondary data - which they can apply to their own situation.

Primary data can be explained, therefore, as information collected from sources such as
personal interviews, questionnaires or surveys with a specific intention and on a specific
subject, and observation and discussion by the researcher him or herself, which information
is then assessed by that person.

It is a direct approach and, as it is tailored to a company's particular needs, reveals

apparently, much-needed information to that company which started the research; that is, the
results are used for the purpose for which they were originally intended. It can be a lengthy
process but does provide first-hand information.

Some Advantages of using Primary data:

1. The investigator collects data specific to the problem under study.
2. There is no doubt about the quality of the data collected (for the investigator).
3. If required, it may be possible to obtain additional data during the study period.
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Some Disadvantages of using Primary data (for reluctant/ uninterested investigators):

1. The investigator has to contend with all the hassles of data collection-
 deciding why, what, how, when to collect
 getting the data collected (personally or through others)
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 getting funding and dealing with funding agencies

 Ethical considerations (consent, permissions, etc.)
2. Ensuring the data collected is of a high standard-
 all desired data is obtained accurately, and in the format it is required in
 there is no fake/ cooked up data
 unnecessary/ useless data has not been included
3. Cost of obtaining the data is often the major expense in studies

 SECONDARY DATA

Secondary data is information that is already available somewhere, whether it be in journals,

on the internet, in a company's records or, on a larger scale, in corporate or governmental
archives.

Secondary data allows for comparison of, say, several years worth of statistical information
relating to, for example, a sector of the economy, where the information may be used to
measure the effects of change or whatever it is that is being researched. Sometimes both
methods are used in research as companies want to measure their own responses and
previously-generated responses from which a comparison can be made.

Some Advantages of using Secondary data:

1. The data’s already there- no hassles of data collection
2. It is less expensive
3. The investigator is not personally responsible for the quality of data (“I didn’t do it”)
Some disadvantages of using Secondary data:
1. The investigator cannot decide what is collected (if specific data about something is

required, for instance).

2. One can only hope that the data is of good quality
3. Obtaining additional data (or even clarification) about something is not possible (mostly)

3.4 RESEARCH METHODOLOGY USED

The methodology adopted for this project is exploratory in nature since there is no hypothesis
that has to be tested. The conclusions have been drawn by exploratory research work.

There have been two sources of information collected:

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a) Primary Sources

I have met some of the customers and have been able to get first hand information regarding

the product and the buying patterns of the product with the help of a questionnaire (attached

in the appendix). Their input has been valuable.

b) Secondary Sources

Secondary source has played a vital role to play in this report. A good amount of data has
been collected from the Internet and particularly the company’s own website.
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3.5 INSTRUMENTS USED

A Questionnaire cum personal interview was used for market research for both the segment.

 SAMPLE SIZE: Sample size for the research is fixed. It counts to 150.
 SAMPLING TECHNIQUE: Non-probability Sampling
 SAMPLING DESIGN:
 SAMPLE UNIT:
 SAMPLE AREA:

3.5 DATA ANALYSIS TOOLS :

1. Tables – results can be by demographics and expressed as percentages and/or

counts. Statistical tests can also be added.
2. Charts – choose from a wide range of chart styles, including bar, pie, bubble and line.
3. Lists – comments and open-ended replies can be shown alongside any other data,
such as age or gender.
4. Maps – Overlay an image, such as a regional map, with survey results. An effective
visual alternative to a standard table.
5. WordClouds – a unique method of presenting textual data. Frequently occurring
words are displayed with greater prominence or specific.

TOOLS USED IN THIS ANALYSIS:

 Graphs
 Charts
 Percentage.
 Tables

3.7 LIMITATIONS

Every attempt will be taken to obtain the error free and meaningful result but as nothing in
this world is 100% perfect I believe that there will still the chance for error on account of
following limitations
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(1) Respondent’s unavailability.

(2) Time pressure and fatigue on the part of respondents and interviewer.
(3) Courtesy bias.
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