THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT NEW DELHI

THESIS ON
COSMETIC INDUSTRY OF INDIA- ENTRY STRATEGIES FOR A FOREIGN BRAND

SUBMITTED TO: PROF. SUMANTA SHARMA PROF. VIJAY KUMAR BODDU

UNDER THE GUIDANCE OF:

SUBMITTED BY: SHWETA GAUTAM ALUMNI ID NUMBER: BATCH: FW/06-08

ABSTRACT
This is a thesis based on the market research on the cosmetic industry of India. The size of India's cosmetics market is USD 1 billion. Out of this, size of skin care segment is USD !! million, color cosmetics is USD "# million, fragrances is USD $# million, men%s care is USD 1&# million and hair care is USD $!! million. 'hile li(sticks account for nearly a third of the color cosmetics market at USD $# million, the market for nail enamels is estimated at around USD )illion. The remainder, i.e. USD 1" million consists of (roducts such as mascara, eye*liners etc. +osmetics can be broadly di,ided into $ categories - +hemical +osmetics and .erbal +osmetics. /akme, /%Oreal and 0e,lon are ma1or (layers in the chemical cosmetic market 2hereas Shahnaz .ussain, 3ioti4ue and /otus are (rominent in the herbal segment. The market share of chemical cosmetics is 5!6 2hereas for herbal cosmetics, it is 1!6. 7,en though herbal cosmetics segment has ,ery lo2 market share, this segment is gaining (o(ularity ,ery fast, and consumers% demand for herbal cosmetics is on a stee( rise. )arket (enetration le,els of international cosmetics brands in India are lo2. 8oreign brands currently constitute only $! (ercent of the market, due largely to the higher (ricing these brands carry. This is a thesis based on the market research on the cosmetic industry of India. India, 2ith a (o(ulation of 1.19 billion (eo(le is a country of contrast. 'ith an u((er and middle class (o(ulation of nearly 9!! million (eo(le, 2hich is more than that of US: and 7uro(ean +ountries, India has become a huge base of (otential customers. .ence 8oreign +om(anies find India as an attracti,e location to setu( their o(erations and e;(and their business. India's urban (o(ulation is the main engine that fuels the demand for ,arious cosmetic (roducts. :lthough Indians are strongly attached and committed to their traditions, and culture, the ad,ent of tele,ision and the a2areness of the 2estern 2orld are changing the tastes and customs of India. The <mor(hing% of India is subtle and the changes are not ,isible for the first time ,isitor.
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.o2e,er, the market liberalization (rocess that began in 1551, along 2ith the cro2ning of three Indians as )iss 'orld and )iss Uni,erse, ha,e made Indian 2omen conscious of their a((earance. +onse4uently, the cosmetic consum(tion (atterns of Indian 2omen ha,e changed, and this trend is fuelling gro2th in the cosmetic sector. The size of India's cosmetics market is USD 1 billion. Out of this, size of skin care segment is USD !! million, color cosmetics is USD "# million, fragrances is USD $# million, men%s care is USD 1&# million and hair care is USD $!! million. 'hile li(sticks account for nearly a third of the color cosmetics market at USD $# million, the market for nail enamels is estimated at around USD ! )illion. The remainder, i.e. USD $! million consists of (roducts such as mascara, eye*liners etc. The market for cosmetics in India is characterized by high ,olume sales of lo2*end (roducts, 2hile at the same time the legendary emerging middle* class has generally been fuelling demand for cosmetics and u((er*mass toiletries. =roducts that are too s(ecialized ha,e yet to be successful on the Indian market. 7;am(les include toners, hand care and other ,alue*added skin care (roducts, bath ? sho2er (roducts and aftersha,e balm. Only the richest consumers can afford these@ indeed, the a,erage consumer may be una2are of their (ur(ose or e,en e;istence. This also e;(lains the relati,ely (oor sho2ing of (erfumes, es(ecially the (remium ,ariety. )ost ma1or cosmetic com(anies (rofess the need to ta( the u((er market segment and create e;clusi,e (roducts, but market studies re,eal that most cosmetic users are un2illing to cough u( more to buy these e;clusi,e (roducts. Indeed a more recent feature across all sectors, 2hether basic toiletries or more lu;ury (roducts, such as color cosmetics, has been for manufacturers to concentrate on the mass market. 8or toiletries, this is a result of many consumers trading do2n, forcing manufacturers to res(ond. In skin care and colour cosmetics, it is more a result of trying to increase demand in the gro2ing market for mass (roducts, es(ecially among teenagers.
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3rand image and high degree of consumer acce(tability need to be established in the (ersonal (roducts sector, and call for hea,y (romotional in,estments in a2areness building, besides tie*u(s 2ith good 8)+A com(anies to le,erage their distribution strengths. The gro2th of direct marketing as an alternati,e channel 2ithout incurring high (romotional and de,elo(mental costs needs to be e,aluated by ne2 entrants in the sector, in order to formulate the most a((ro(riate market de,elo(ment strategy for their (roducts.

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SIGNATORY PAGE

TO WHOMESOEVER IT MAY CONCERN

This is to confirm that Sh2eta Aautam, student of II=), B7' D7/.I, is doing a li,e (ro1ectCThesisD on the to(ic C!"#$%&' I()*"%+, !- I()&. / E(%+, S%+.%$0&$" -!+ . F!+$&0( B+.()1 under my guidance and that the 2ork being done by the candidate is original and is of the standard e;(ected by an )3: student. )ay god bless her 2ith all success in her career. 'arm regards

23333333333333333334

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TOPIC APPROVAL LETTER

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ACKN OWLEDGEMENT

It is 2ell*established fact that behind e,ery achie,ement lies an unfathomable sea of gratitude to those 2ho ha,e e;tended their su((ort and 2ithout 2hom the (ro1ect 2ould ne,er ha,e come into e;istence. I e;(ress my gratitude to II=), Be2 Delhi for (ro,iding me an o((ortunity to 2ork on this thesis as a (art of the curriculum. :lso, I e;(ress my gratitude to =rof. Sumanta Sharma ? =rof. Ei1ay 3oddu for their kind coo(eration.

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CONTENT

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APPROVED THESIS SYNOPSIS

THESIS SYNOPSIS
CANDIDATURE DETAILS FOR THESIS

DESIRED AREA FOR RESEARCH COSMETIC INDUSTRY

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 T&%5$ !- %6$ %6$"&": +osmetic Industry of India* 7ntry Strategies for a 8oreign 3rand

R$"$.+'6 O78$'%&9$: 1. To carry out a com(rehensi,e research on the current scenario of cosmetic industry in India. $. To re,ie2 the (osition of the e;isting cosmetic brands in India. . To understand the marketing mi; of e;isting brands. 9. To formulate strategies of a ne2 com(any to enter the Indian cosmetic market.

I(%+!)*'%&!( %! %6$ A+$. !- +$"$.+'6: This is a thesis based on the market research on the cosmetic industry of India. The size of India's cosmetics market is USD 1 billion. Out of this, size of skin care segment is USD !! million, color cosmetics is USD "# million, fragrances is USD $# million, men%s care is USD 1&# million and hair care is USD $!! million. 'hile li(sticks account for nearly a third of the color cosmetics market at USD $# million, the market for nail enamels is estimated at around USD )illion. The remainder, i.e. USD 1" million consists of (roducts such as mascara, eye*liners etc. +osmetics can be broadly di,ided into $ categories - +hemical +osmetics and .erbal +osmetics. /akme, /%Oreal and 0e,lon are ma1or (layers in the chemical cosmetic market 2hereas Shahnaz .ussain, 3ioti4ue and /otus are (rominent in the herbal segment. The market share of chemical cosmetics is 5!6 2hereas for herbal cosmetics, it is 1!6. 7,en though herbal cosmetics segment has ,ery lo2 market share, this segment is gaining (o(ularity ,ery fast, and consumers% demand for herbal cosmetics is on a stee( rise.

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)arket (enetration le,els of international cosmetics brands in India are lo2. 8oreign brands currently constitute only $! (ercent of the market, due largely to the higher (ricing these brands carry.

S'!:$ !- ,!*+ %6$"&" ;!+<

In the (ast fe2 years, the cosmetic industry in India has seen a ma1or boost. )any foreign com(anies see this as a ma1or o((ortunity to enter the Indian market. India's urban (o(ulation is the main engine that fuels the demand for ,arious cosmetic (roducts. :lthough Indians are strongly attached and committed to their traditions, and culture, the ad,ent of tele,ision and the a2areness of the 2estern 2orld are changing the tastes and customs of India. The <mor(hing% of India is subtle and the changes are not ,isible for the first time ,isitor. .o2e,er, the market liberalization (rocess that began in 1551, along 2ith the cro2ning of three Indians as )iss 'orld and )iss Uni,erse, ha,e made Indian 2omen conscious of their a((earance. +onse4uently, the cosmetic consum(tion (atterns of Indian 2omen ha,e changed, and this trend is fuelling gro2th in the cosmetic sector. )y research 2ill thro2 light on the current scenario of the cosmetic industry in India. It 2ill also suggest ,arious strategies of a ne2 foreign cosmetic brand to enter the Indian market and to com(ete 2ith other establish (layer.

R$"$.+'6 M$%6!)!5!0,
=rimary 0esearch Secondary 0esearch :.+%&'*5.+ +$"$.+'6 :+!:!".5

J*"%&-&'.%&!( -!+ '6!!"&(0 .

I ha,e taken this to(ic because I ha,e dee( interest in the field of marketing and es(ecially in those areas 2hich are co,ered under the (ersonal care (roduct segment. I also find this to(ic as a ,ery challenging to(ic and I find it (ractical too 2hich 2ill definitely hel( me in my career do2n the line. I am doing this research for my client =alladio, 2hich is an :merican based cosmetic com(any. I belie,e that this research 2ill gi,e me ,ery useful
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kno2ledge about a segment of the industry that is booming in India and it 2ill take ahead in my career.

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INTRODUCTION
O9$+9&$; India, 2ith a (o(ulation of 1.19 billion (eo(le is a country of contrast. 'ith an u((er and middle class (o(ulation of nearly 9!! million (eo(le, 2hich is more than that of US: and 7uro(ean +ountries, India has become a huge base of (otential customers. .ence 8oreign +om(anies find India as an attracti,e location to setu( their o(erations and e;(and their business. India's urban (o(ulation is the main engine that fuels the demand for ,arious cosmetic (roducts. :lthough Indians are strongly attached and committed to their traditions, and culture, the ad,ent of tele,ision and the a2areness of the 2estern 2orld are changing the tastes and customs of India. The <mor(hing% of India is subtle and the changes are not ,isible for the first time ,isitor. .o2e,er, the market liberalization (rocess that began in 1551, along 2ith the cro2ning of three Indians as )iss 'orld and )iss Uni,erse, ha,e made Indian 2omen conscious of their a((earance. +onse4uently, the cosmetic consum(tion (atterns of Indian 2omen ha,e changed, and this trend is fuelling gro2th in the cosmetic sector. M.+<$% C!#:!"&%&!( The size of India's cosmetics market is USD 1 billion. Out of this, size of skin care segment is USD !! million, color cosmetics is USD "# million, fragrances is USD $# million, men%s care is USD 1&# million and hair care is USD $!! million. 'hile li(sticks account for nearly a third of the color cosmetics market at USD $# million, the market for nail enamels is estimated at around USD ! )illion. The remainder, i.e. USD $! million consists of (roducts such as mascara, eye*liners etc. The t2o figures belo2 sho2 the +om(osition of the =ersonal care market and the +om(osition of the +olor +osmetic )arket res(ecti,ely.

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M.+<$% T+$()"

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The market for cosmetics in India is characterized by high ,olume sales of lo2*end (roducts, 2hile at the same time the legendary emerging middle* class has generally been fuelling demand for cosmetics and u((er*mass toiletries.

=roducts that are too s(ecialized ha,e yet to be successful on the Indian market. 7;am(les include toners, hand care and other ,alue*added skin care (roducts, bath ? sho2er (roducts and aftersha,e balm. Only the richest consumers can afford these@ indeed, the a,erage consumer may be una2are of their (ur(ose or e,en e;istence. This also e;(lains the relati,ely (oor sho2ing of (erfumes, es(ecially the (remium ,ariety. )ost ma1or cosmetic com(anies (rofess the need to ta( the u((er market segment and create e;clusi,e (roducts, but market studies re,eal that most cosmetic users are un2illing to cough u( more to buy these e;clusi,e (roducts. Indeed a more recent feature across all sectors, 2hether basic toiletries or more lu;ury (roducts, such as color cosmetics, has been for manufacturers to concentrate on the mass market. 8or toiletries, this is a result of many consumers trading do2n, forcing manufacturers to res(ond. In skin care and colour cosmetics, it is more a result of trying to increase demand in the gro2ing market for mass (roducts, es(ecially among teenagers. 3rand image and high degree of consumer acce(tability need to be established in the (ersonal (roducts sector, and call for hea,y (romotional in,estments in a2areness building, besides tie*u(s 2ith good 8)+A com(anies to le,erage their distribution strengths. The gro2th of direct marketing as an alternati,e channel 2ithout incurring high (romotional and de,elo(mental costs needs to be e,aluated by ne2 entrants in the sector, in order to formulate the most a((ro(riate market de,elo(ment strategy for their (roducts. I#:!+% M.+<$%

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+osts for im(orting (roducts are much higher than (roducing it in the country. India allo2s entry of im(orted cosmetics 2ithout any restrictions but the a,erage im(ort tariff on cosmetics (roducts is ,ery high. This makes im(orted (roducts ,ery e;(ensi,e for most consumers. )ost foreign cosmetics com(anies selling (remium brands ha,e had a difficult time de,elo(ing the lo2 ,olume (remium market in India. )any had to re*2ork (rice strategies to2ards the mass segment. =rice is not the only reason res(onsible for their (roblems. =oor assessment of the size of the u((er middle and high*income grou(s, and (rice sensiti,ity e,en 2ithin these grou(s, had added to their (roblems. :ccording to industry e;(erts and trade (ublications, India's annual im(ort of cosmetics and toiletries and intermediate are from countries like US, 7uro(e, mainly 8rance, Aermany, Italy, Betherlands, and S(ain account for the ma1or share@ and :ustralia, +hina, and Ha(an account for rest of the share. So(histicated (roducts such as fragrances, non*transfer long*stay li(sticks, li4uid li( color, eye make*u(s, anti ageingLanti 2rinkle creams, (rofessional hair*care (roducts, (re(arations for sha,ing creams, are some of the ma1or items of im(ort. MARKET COMPETITION Since market liberalization, se,eral multinational com(anies, such as 0e,lon, +oty, Oriflame, +hambor, :,on, Fardley, Bina 0icci, Aarnier /aboratories, and /%Oreal, ha,e entered the Indian market. These com(anies initially cashed in on their international brand image@ ho2e,er, re(eat (urchases 2ere not forthcoming because the (roducts 2ere not (riced com(etiti,ely. +onse4uently, these com(anies became (rice*sensiti,e and most of the international brands are no2 (riced com(etiti,ely in the Indian market. In the color cosmetic, Indian brands like /akme, Ti(s and Toes, Shahnaz .ussain, and multinational com(anies like 0e,lon, /%Oreal, and :,on offer the highest com(etition. Domestic (layers like /akme, Ti(s and Toes, Shahnaz .ussain mainly dominate the market. .o2e,er brands such as /%Oreal, 0e,lon are 4uickly catching the (ace of the domestic (layers. /akme is the
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o,erall market leader in the color cosmetics segment, (ro,iding a 2ide ,ariety of (roducts and (rices. /akme is closely follo2ed by 0e,lon. In the last fe2 years, there has been a ne2 craze for herbal cosmetic and (ersonal care (roducts, es(ecially in the skin care segment 2ith the gro2ing belief that chemical*based cosmetics are harmful. /eading domestic com(anies, including Shahnaz, /otus .erbals, and the 3ioti4ue brands dominate the (remium herbal cosmetics segment in India, estimated at USD 1!! million. )any com(anies ha,e e;(anded their (roduct range into herbal ,ariants, including com(anies 2ith a (rimary focus on health care (roducts. )any of the International brands feel that their Indian counter(arts ha,e not yet identified the changing needs of the Indian men and 2omen. It is therefore, that foreign com(anies like +hambor, Oriframe, :,on, FS/, 7scada, etc are ambitiously fishing in the Indian 2aters. This feeling is not com(letely untrue. Indians are becoming more and more a2are of the 2estern 2orld. They are becoming more and more conscious of their a((earance. .ere lies the o((ortunity of cosmetic brands to cash in and take ad,antage of the changing mindset of the Indian mass. Secondly, Indian men are also becoming conscious about ,arious as(ects of their looks and com(le;ion. Some com(anies like /%Oreal, +hambor, and Bi,ea ha,e (roducts s(ecially targeting men. .o2e,er, this segment is still largely unta((ed. Thirdly, there is an increasing (reference for herbal (roducts among the Indian consumer, but there is a lack of (roducts in this segment. +om(anies ha,e realized this o((ortunity and are no2 coming u( 2ith (roducts 2hich are herbal in nature. The table belo2 sho2s the ,arious color cosmetic (roducts that ma1ors brands ha,e launched in India> * C1 im(lies the (roduct is a,ailable, ! im(lies the (roduct is not a,ailableD B+.() 7lizabeth :rden /%Oreal )aybelline
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L&:"%&'< 1 1 1

L&: G5!"" 1 1 1

L&: P$('&5 1 1 1

F!*().%&!( 1 1 1

C!('$.5$+ B+!(=$+ 1 1 ! 1 1 1

&

0e,lon /akme +hambor Shahnaz .ussain 3ioti4ue /otus 3rand 7lizabeth :rden /%Oreal )aybelline 0e,lon /akme +hambor Shahnaz .ussain 3ioti4ue /otus 7ye

1 1 1 1 1 1 Shado2 1 1 1 1 1 1 ! 1 1

1 1 1 1 1 1 /iner 3ro2s 1 1 1 1 1 1 1 1 1 ?

1 1 1 1 ! 1 Ga1al 1 1 1 1 1 1 1 1 1

1 1 1 1 1 1 3rushes ! 1 ! ! ! ! ! ! ! 3lushers 1 1 1 1 1 1 ! 1 1

1 ! 1 1 1 1 )ascara 1 1 1 1 1 1 1 1 1

1 1 1 ! ! ! +om(act 1 1 1 1 1 1 ! 1 1

MARKETING STRATEGY

.. P+&'&(0
+osmetic com(anies in India ha,e ado(ted ,arious (ricing strategies to attract the Indian consumers. =rice range ,aries from com(any to com(any, (roduct to (roduct to suit the target customers.

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/akme%s (roduct range consists of the 7lle range C(riced at around 0s #!D and the medium*(riced Ultra range Cat around 0s I!D to the (remium Orchid range of colour cosmetics (riced in the range of 0s 1&# to 0s 5#. 0e,lon has (riced its (roducts, a little higher than /akme. Its (rices range from 0s $1! to 0s &$#. /%Oreal has managed to (osition its image as a glamour (roduct in the minds of the consumer. Its (roducts are (riced higher than 0e,lon and /akme, 2hich is, 0s 5! to 0s I!!. To target the more (rice sensiti,e customers, /%Oreal introduced a ne2 cosmetic brand, )aybelline. The (rice of )aybelline%s (roducts ranges from 0s 55 to 0s I!. .erbal cosmetic (roducts are generally (riced lesser than the chemical cosmetics. The herbal cosmetic com(anies carry out their (rice 2ars, generally at this lo2er (rice le,el. Shahnaz .ussain, the market leader in herbal cosmetics has a (rice range of 0s 1 # to 0s 99#. .o2e,er, most of its (roducts are (riced at 0s $1! - 0s $$!. 3ioti4ue has a standard (ricing system of 0s $$5 for most of its (roducts barring /i( Aloss and Ga1al 2hich is (riced at 0s $"5 and 0s 55 res(ecti,ely. 3rands ,is*M*,is its (roduct (rices 3rand 7lizabeth :rden /%Oreal )aybelline 0e,lon /akme +hambor Shahnaz .ussain
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/i(stick I!!* 1!#! #&!* "!! 155* I! I!* &$# 1&#* 5# 9#*#1# $1!

/i( Aloss "#! #&!* &9! 195* $I5 $1!* ##! 1 #* 5# 5#* 95# $1!

/i( =encil 8oundation "!! ? 1 &!* 1I$! "I! 9&!* #!! &&!* 5#! 1"5* $#! $!#* I! 1 !* 15# 15#* $5# $$! $#!* 9I! 1&#* &$# 5#* 5# #5#* I5# 1"#* 99#

+oncealer &9! &$! B: 99! ? #$# B: 95# 1 #

3ronzer 11&! I!! 1"# ##!* I#! 15#* $5# &5# B:

3ioti4ue /otus

$$5 $95* $5

$"5 155

B: 115

$$5 1I5 ? $!5

B: $95

B: B:

3rand 7lizabeth :rden /%Oreal )aybelline 0e,lon /akme

7ye Shado2 5#! 9#! #!! 55* $55 91!* #$# 1&#* $#! ?

/iner 3ro2s "I! 9"# 155 $1#* 9$# &!* 15# 1I!*

Ga1al "I! 5! 1#5 $!#* I! 9!* $#!

3rushes B: I!! B: B: B:

3lushers 1!1! &$! 155 9!!* "#! 1#!

)ascara +om(act II! #!!* &#! $$#* $I! !* 95# 1"#* $# $I!* 5# 19!! "!! 1$5 1!* &$# 1I#* 5#

+hambor

9$#

I!C(encilD 1I!* $#* "#Cli4uidD I!

B:

9$#

&$#

Shahnaz .ussain 3ioti4ue /otus

B: $$5 $5

$$!Cli4uidD

1$#

B: B: B:

B: $$5 $5

$$! $$5 155

B: $$5 95

$$5Cli4uidD 55 11!C(encilD 11# 1&#Cli4uidD

7. D&"%+&7*%&!(
There are three broad categories of distribution channel that are generally used by cosmetic com(anies. 1. Distributor or Dealer net2ork. $. 8ranchisee. . Stand alone stores. : diagrammatic re(resentation of the distribution channel is as sho2n belo2> *

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Dealer or distributor net2ork channel is the most 2idely used distribution channel used by the cosmetic com(anies. In this distribution channel, the manufacturer a((oints a distributor 2ho is gi,en a certain area in 2hich he 2ill o(erate. The distributor (urchases goods from the manufacturer. .e then dis(atches his salesmen to ,arious retail outlets like malls, de(artmental stores, groceries, etc to take order and su((ly the goods to the outlets. +om(anies like /akme, 0e,lon, /%Oreal, Shahnaz .ussain, /otus, and 3ioti4ue use this distribution channel. The common trends used in the industry regarding the setu( of a distribution channel are as follo2s> *

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T+$()" !- %6$ &()*"%+, +hemical +osmetics Distributor )argin 0etailer )argin +ash Discount +redit =eriod 8ranchisee Status 0e(lacement &6 1#6 1*$6 1# Days =erformance based 1!!6 re(lacement is done .erbal +osmetics I6 $!6 BO 1# Days =erformance based 1!!6 re(lacement is done

Standalone stores are another ty(e of distribution channel that is used by ,arious organizations. In this ty(e, com(anies o(en u( a retail s(ace 2here the entire store is dedicated to their o2n (roducts. /akme, 0e,lon, Shahnaz .ussain, 3ioti4ue and The 3ody Sho( ha,e standalone stores.

PROMOTION STRATEGY

.. P!"&%&!(&(0
The ma1or challenge faced by the ,arious color cosmetic brands is to make its (roducts uni4ue and to differentiate itself from its com(etitors. +osmetic (roducts generally ha,e similar features and 4ualities. So, to establish themsel,es in the market, com(anies need to ha,e a strong US= to sell their (roducts. US= of a cosmetic (roduct could be brand image, lo2est (rice, attracti,e (ackaging, catchy 1ingles or (unch*lines, (roduct features Csuch as herbal (roductsD, etc. The second challenge faced by com(anies is to dis(el the fears that colour cosmetics are harmful for the skin. :d,ertising is the main medium used by com(anies in this industry to carry out their (ositioning cam(aign. /akme has al2ays ad,ertised in the ,arious mass media a,ailable. To (osition them strongly amongst the youth section /akme came u( 2ith 7lle1I in early 155&. It 2as ad,ertised for the NFoung girl 2ho breaks the rules and lo,es to ha,e funN. These ads sho2ed young,

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college and high school going girls 2ho (ro1ected the image of trying to be different and NcoolN. :nother strategy that is 2idely used for (ositioning is dis(atching beauty ad,isors in ,arious stores and retail outlets. Their 1ob is to (romote their res(ecti,e brands and also to make their customers conscious of their looks. +om(anies also use dis(lays, banners, cabinets and other =O= material to (osition their brands

7. C!##*(&'.%&!( M$)&*#
The medium of communication can be classified and sub*classified into the follo2ing> * 7lectronic )edia>* o TE :ds

=rint )edia>* o )agazines o =osters o Be2s(a(ers o =am(hlets o 3anners

S(onsorshi(s>* o 8ashion Sho2s o +elebrity =arties o +lub 7,ents

Others o Dis(lay Eans o Internet :ds

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1$

o S)S 7lectronic and (rint media are the most (o(ular medium used for communication to customers. TE ads are ,ery costly but ha,e the ma;imum reach. :ds in magazines and ne2s(a(ers are relati,ely chea(er, but they ha,e lesser reach com(ared to TE ads. S(onsoring e,ents like 8ashion Sho2s and +lub (arties are also ,ery costly e;ercises but they hel( in increasing the (restige and image of the brands. Other form of communication like dis(lay ,ans and internet ads are less (o(ular modes of communication but can be ,ery effecti,e sometimes if it is used in the (ro(er manner. FUTURE PROSPECTS The gro2ing Indian cosmetics market offers (romising o((ortunities for international brands. The gro2th rate in the cosmetics market reflects an increasing demand for beauty care (roducts in India. The most (romising segments for international com(anies to (ursue are (erfumes and fragrances, and s(ecializedL(rofessional skin care and hair care (roducts. The fastest gro2ing market is ho2e,er color cosmetics, 2hich account for USO &! million of the total market. The rural market in India for cosmetics and toiletries remains is largely unta((ed. )a1or domestic (layers ha,e also not been able to (enetrate this market. The urban market itself, for s(ecialized cosmetic (roducts remains to be fully e;(loited. The Indian skin*care market is not yet fully ta((ed and offers (romising (ros(ects as a gro2th area. =enetration of color cosmetics is lo2er than the (enetration (ros(ects of the skin*care segment. To (romote the gro2th of their (roducts, a dominant (layer like /akme has embarked u(on a business (lan to establish their e;clusi,e franchised beauty salons across ma1or metros in the country. Im(orted cosmetics ha,e had a ma1or im(act on the Indian market. 8oreign (roducts ha,e enhanced gro2th of the Indian market by attracting as(iration consumers and increasing acce(tance of color cosmetics, (re,iously (ercei,ed by many as harmful to skin. Indians generally (ercei,e foreign brands as being of su(erior 4uality.
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Other key issues regarding sales (ros(ects are (roduct ,ariety and retailing strategies as 2ell. There is a marked shift among consumers from functional common*fits*all (roducts to more s(ecialized formulations. This is one of the reasons 2hy an increasing number of cosmetic com(anies are dealing 2ith consumers directly through s(ecial e;clusi,e counters in ma1or de(artmental stores and malls featuring their o2n beauty consultants. /'Oreal India has established a consumer ad,isory unit and =onds, as mentioned earlier offers skin care ad,ice through touch*screen kiosks, and tele(hone hel(*lines. 3eauti4ue * an e;clusi,e one*sto( sho( for only im(orted cosmetic brands set u( recently in Be2 Delhi has 4ualified beauty consultants to (ro,ide free ad,ice and makeo,ers to consumers. The Indian cosmetics and toiletries market 2ill continue to gro2 due to the increasing incomes and (urchasing (o2er of the gro2ing Indian middle*class and urban consumers. Demand from the rural areas and smaller to2ns are also fast increasing. Industry sources e;(ect significant gro2th in both the mass and (remium segments of the Indian cosmetics market. The market base ho2e,er in the (remium segment is ,ery small. It is a niche market and the sco(e for rising ,olumes is slo2er. The gro2th in the (remium segment is usually seen to be because of (eo(le u(grading from the mass to the (remium rather than an increase in consum(tion as such by itself. =ros(ects for increasing ,olumes on the other hand is higher in the mass segment mainly because the market base for this segment is higher, and because of the lo2er (ricing, it is easier to (ersuade end*users to try out the (roducts. BRAND RECALL In any industry, com(anies look for brand recall in their customers. 3rand recall indicates customer loyalty. It is a kno2n fact that it is less costly for an organization to maintain the loyalty of old customers than to gain ne2 customers. In an industry such as the cosmetic industry in India, 2here customers are generally reluctant to s2itch brands, it is im(erati,e to a com(any that they

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19

gain the trust and loyalty of the customers because it is unlikely that the customers are going to s2itch brands. +ustomers% (reference to2ards a (articular brand ,aries due to ,arious factors. These factors can be classified as> * a. =rice of the (roduct b. 3rand name or brand image c. Ty(e of cosmetic (roduct, i.e. chemical or herbal d. :,ailability and ,isibility e. :2areness due to TE commercials and other (romotional acti,ities. f. 'ord of mouth 1!! 2omen of ,arious age grou(s 2ere inter,ie2ed in ,arious malls of B+0 and the follo2ing results 2ere recorded. 1. The first table sho2s the (ercentage of 2omen the (referred a (articular brand. 3rand /%Oreal )aybelline 0e,lon /akme Shahnaz .ussain /otus .erbals 3ioti4ue Others 6 of 2omen (referring the brand 1$6 1&6 $!6 $96 1$6 #6 "6 96

$. The ne;t chart sho2s the 6 of 2omen 2ho use chemical cosmetics ,is*M* ,is the 6 of 2omen 2ho use color cosmetics.

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1#

. The ne;t table sho2s the (ercentage of 2omen that (refer de(ending u(on the abo,e mentioned factors.

8actors =rice 3rand nameL 3rand Image Ty(e of (roduct :,ailability or Eisibility )edia 'ord of mouth

6 of 2omen &#6 &!6 $#6 $!6 9!6 #6

Note: - Women are influenced by more than one factor while the buy a cosmetic product. :s 2e can see from the abo,e table that (rice is the most influencing factor that 2omen consider 2hile buying a cosmetic (roduct. The ne;t most influencing factor to be considered is the brand name or the brand image.
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1&

Then comes media influence, follo2ed by 2ord of mouth, ty(e of (roduct and lastly, a,ailability or ,isibility of the (roduct. 9. :ge of a 2oman also determines the brand of cosmetic (roducts she (refers. The follo2ing table sho2s the (reference of a cosmetic brand ,is* M*,is age of a 2oman. Shahna z .ussai n $6 #6 #6

:ge /%Orea )aybellin grou(Cin l e FrsD 1!*$# $&*9! 91*## 6 96 #6 1!6 96 $6

0e,lo n #6 I6 "6

/akme

/otus .erbal s * $6 6

3ioti4u e $6 $6 6

Others

#6 1$6 "6

* 16 *

So 2e can see a (attern from the abo,e table 2hich suggests that )aybelline is the most (o(ular brand among the youth. 'omen in this age grou( are generally, school or college students and so (rice of (roduct (lays a huge factor in their decision to buy a (articular cosmetic brand. )iddle aged 2omen (refer (roducts like /akme and 0e,lon because the go by the 2ord of mouth. =rice also (lays an im(ortant factor in their decision to buy a (roduct. 'omen in their 9!s and #!s ha,e the same (reference as the middle age 2oman grou(. This is because they are reluctant to s2itch brands and tend to continue 2ith the brand of cosmetics that they 2ere using before. .erbal cosmetics are generally (o(ular 2ith 2omen abo,e $& years of age. M.+<$% S$0#$(% )any of the 2orld%s (o(ular cosmetics brands entered the Indian market in the 155!s as the Indian market o(ened u( to foreign com(anies. The cosmetics and (ersonal care industry has been gro2ing at an a,erage rate of 1#*$! (ercent for the last fe2 years. Aro2th has come mainly from the lo2 and medium*(riced categories, 2hich account for 5! (ercent of the cosmetics market in terms of ,olume. 7,en though mass*market (roducts still constitute the ma1or (ortion of the India cosmetics and toiletries market, increased dis(osable income has led to gro2th in demand for (remium (roducts.
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The

1"

urban (o(ulation in (articular, 2ith its rising (urchasing (o2er, is the main force that dri,es the demand for ,arious cosmetic (roducts in India. The reasons for the gro2ing demand for cosmetic (roducts in India are threefold> first, a greater access to tele,ision, 2hich has created a gro2ing a2areness of the 2estern 2orld. Second is, increased ad,ertising in general and third, greater (roduct choice and a,ailability. The success of contestants from India in se,eral international beauty (ageants in the last fe2 years has also contributed to making Indian 2omen more conscious of their a((earance and more a2are of 2estern cosmetic (roducts and brands. :lso, a boom in the Indian fashion 2orld has contributed to the rise in demand for (rofessional beauty care (roducts. 7,en 2ith double*digit gro2th rates, the market (enetration of cosmetics and toiletries (roducts in India is ,ery lo2. +urrent (er ca(ita e;(enditure on cosmetics is a((ro;imately O1.!!, as com(ared to O &.&# in other :sian countries. This lo2 market (enetration for cosmetics and (ersonal care (roducts in India can be ,ie2ed as an o((ortunity for more significant gro2th do2n the road in this country of 1 billion (eo(le. The current size of India%s cosmetic and toiletries market is about O5#! million. The fastest gro2ing segment is color cosmetics, accounting for around O&! million of the total market. Bail enamels and li(stick account for about round &# (ercent of the color cosmetic segment. 0e,lon and /%Oreal dominate the small (remium li(sticks and nail enamels niches. /i(stick sales account for nearly a third of the market at O$1 million, 2hile the market for nail enamels is about O$ million. /akme, a brand originally introduced by the Tata Arou( of India, but no2 o2ned by .industan /e,er C.//D of the Unile,er grou(, Ti(s ? Toes, and 0e,lon dominate the color cosmetics market. The color cosmetics segment is ,ery com(etiti,e and has a high (enetration le,el, com(ared to other market segments. )arket (enetration le,els of international cosmetics brands in India are lo2. 8oreign brands currently constitute only $! (ercent of the market, due largely to the higher (ricing these brands carry. 8oreign brands initially garnered sales in the market based on their international brand image, but re(eat (urchases 2ere not forthcoming.
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To hit their sales gro2th targets, se,eral

1I

foreign com(anies ha,e had to reformulate their (ricing strategies to ta( the most (romising market segment**urban 2omen in the middle and u((er income grou(s in the age range of $ *#!. India%s annual im(ort of cosmetics and toiletries and intermediate ra2 materials is around O1$1 million, of 2hich the U.S. has a share of a((ro;imately 1! (ercent. 8rance, Aermany, Italy, Betherlands, and S(ain account for the lion%s share of im(orts, 2ith :ustralia, +hina, and Ha(an accounting for the rest. Skin care - The skin care market in India is about O1I! million. The market for s(ecialized skin care (roducts such as sunscreens, toners, cleansers, astringents, dark circle remo,ing creams, anti*2rinkle creams and day and night creams has gro2n steadily in recent years. )ost consumers, ho2e,er, are still are using only facial cream and moisturizers, 2ith moisturizing lotions, fairness creams and facial cleansers being the most (o(ular (roducts. These (roducts account for a((ro;imately &! (ercent of the skin*care segment. The ma1or (layers in this segment are /akme, =onds, 8air ? /o,ely, H./. )orison and 0e,lon. Hair Care - The size of the hair care market in India is about O$!! million. International com(anies, including Unile,er, through its subsidiary, .//, and =rocter ? Aamble dominate the sham(oo market in India. The hair coloring and stylingLgel market segment is at a nascent stage and there are not many local brands a,ailable. 8oreign brands such as /%Oreal and 'ella ha,e started to make inroads into this segment by (ositioning hair colors as a fashion accessory. The market (enetration of these (roducts is ,ery lo2, ho2e,er, and limited to a small section of the urban market. The market for hair creams, mainly used for hair grooming by men, is also ,ery small. .air oiling, an age*old Indian tradition mainly used as a (re*2ash nourishment treatment, is a ma1or niche in this sector. Herbal Trend - In the last fe2 years, there has been a rene2ed craze for herbal cosmetic and (ersonal care (roducts, es(ecially in the skin care segment 2ith the gro2ing belief that chemical*based cosmetics are harmful. /eading domestic com(anies, including Shahnaz, /otus .erbals, and the
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15

3ioti4ue brands dominate the (remium herbal cosmetics segment in India, estimated at O1!! million. )any com(anies ha,e e;(anded their (roduct range into herbal ,ariants, including com(anies 2ith a (rimary focus on health care (roducts. Toiletries - The toiletries market segment in India is 2ell de,elo(ed and dominated by multinational com(anies and a fe2 large Indian com(anies. This segment is also characterized by high entry barriers, a high rate of ne2 (roduct launches, and high ad,ertising e;(enditures. 3ath and sho2er (roducts account for the largest share of the toiletries market segment. The toiletries segment can be di,ided into t2o categories> the less (rice sensiti,e niche and highly brand conscious, (remium niche. The (rice sensiti,e niche caters to the middle and lo2er middle class and the (remium niche caters to the urban and higher class. Products for Men - Bo2adays, cosmetics and toiletries are not 1ust of interest to 2omen consumers. Indian men are increasingly using body s(rays, colognes and other cosmetics and toiletries. 'ith a rising demand from men, many (layers are coming out 2ith men%s cosmetic (roducts, es(ecially in the skin care niche. O,erall, the market size of the men's (ersonal care segment is about O1&# million, 2ith Aillette ha,ing 2on the largest market share to date. Other ma1or (layers in this segment include Aodre1, H./. )orison and .//. F.'%!+" -*$55&(0 0+!;%6 !- C!"#$%&' P+!)*'%" &( I()&. Since liberalization in 1551 along 2ith the cro2ning of many Indian 2omen at international beauty (ageants, the cosmetic industry has come into the limelight. +onse4uently there has been a change in the cosmetic consum(tion and this trend is fueling gro2th in the cosmetic sector. The success of contestants from India at ,arious 2ell kno2n international beauty (ageants in the last fe2 years has also contributed to making Indian 2omen more conscious of their a((earance and more a2are of 2estern cosmetic (roducts and brands. 'ith changing lifestyles, higher dis(osable incomes, increasing ad,ertising, (enetration of satellite tele,ision, a2areness of the 2estern 2orld and gro2ing
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$!

im(ortance of beauty (ageants, there ha,e been significant changes and use of cosmetics is on the rise. :lso, 2ith the boom in the Indian fashion 2orld and the gro2th in the tele,ision industry, there has been a rise in demand for (rofessional beauty care (roducts. The reasons for the gro2ing demand for cosmetic (roducts in India also include> greater access to tele,ision, 2hich has created a gro2ing a2areness of the 2estern 2orld@ increased ad,ertising in general@ and greater (roduct choice and a,ailability. :lso, a boom in the Indian fashion 2orld has contributed to the rise in demand for (rofessional beauty care (roducts The urban (o(ulation in the ma1or cities 2ith increasing (urchasing (o2er is the main force that dri,es demand for ,arious cosmetic (roducts in India. The ad,ent of satellite tele,ision and a2areness of the 2estern beauty and fashion 2orld, ad,ertisements and (romotions, increasing number of 2omen 1oining the 2ork force is changing (references, customs and cultures in India. The success of contestants from India at ,arious 2ell kno2n international beauty (ageants in the last fe2 years ha,e also contributed to2ards making the Indian 2omen more conscious about looks, beauty, grooming and a2are of 2estern cosmetic (roductsLbrands. :ll this changed the needs and consum(tion (attern of the Indian 2omen, thus leading to increased gro2th in the cosmetic sector. )ore Indian consumers started using cosmetics and a small segment are also seen 2illing to (ay a little more to look good. Increasing dis(osable income and (urchasing (o2er ha,e led to a constant u(*gradation from mass to (remium (roducts e,en though mass*market (roducts still constitute the ma1or (ortion of the India cosmetics and toiletries market. The cosmetics and (ersonal care industry has been gro2ing at an a,erage rate of 1#*$! (ercent for the last fe2 years. 7,en 2ith double*digit gro2th rates, the market (enetration of cosmetics and toiletries (roducts in India is ,ery lo2. +urrent (er ca(ita e;(enditure on cosmetics is a((ro;imately O!.&I cents, as com(ared to O &.&# in other :sian countries. This lo2 market (enetration for cosmetics and (ersonal care (roducts in India can be ,ie2ed as an o((ortunity for more significant gro2th do2n the road in this country of 1 billion (eo(le.
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$1

This cosmetics and (ersonal care industry has been gro2ing at an a,erage rate of $! (er cent for the last fe2 years. The gro2ing Indian cosmetics market offers (romising (ros(ects for international brands. The gro2th rate in the cosmetics market reflects an increasing demand for beauty care (roducts in India. =erfumes and fragrances, skin care, and hair care (roducts are some of the ma1or segments 2ith (romising (ros(ects for U.S. com(anies. Industry sources estimate a ra(id gro2th rate of $! (ercent (er annum across different segments of the cosmetics industry reflecting an increasing demand for all kinds of beauty and (ersonal care (roduct. Aro2th has come mainly from the lo2 and medium*(riced categories that account for 5! (ercent of the cosmetics market in terms of ,olume.

C*++$(% S&=$ !- I()&.( M.+<$% +urrent size of India%s cosmetic and toiletries market is about O5#! million. C!5!+ C!"#$%&'" The fastest gro2ing segment is color cosmetics, accounting for around O&! million of the total market. Bail enamels and li(stick account for about round &# (ercent of the color cosmetic segment. 0e,lon and /%Oreal dominate the small (remium li(sticks and nail enamels niches. /i(stick sales account for nearly a third of the market at O$1 million, 2hile the market for nail enamels is about O$ million. /akme, a brand originally introduced by the Tata Arou( of India, but no2 o2ned by .industan /e,er C.//D of the Unile,er grou(, Ti(s ? Toes, and 0e,lon dominate the color cosmetics market. The color cosmetics segment is ,ery com(etiti,e and has a high (enetration le,el, com(ared to other market segments. S<&( C.+$ P+!)*'%" The skin care market in India is about O1I! million. The market for

s(ecialized skin care (roducts such as sunscreens, toners, cleansers, astringents, dark circle remo,ing creams, anti*2rinkle creams and day and night creams has gro2n steadily in recent years. )ost consumers, ho2e,er, are still are using only facial cream and moisturizers, 2ith moisturizing lotions,
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$$

fairness creams and facial cleansers being the most (o(ular (roducts. These (roducts account for a((ro;imately &! (ercent of the skin*care segment. The ma1or (layers in this segment are /akme, =onds, 8air ? /o,ely, H./. )orison and 0e,lon. H.&+ C.+$ P+!)*'%" The size of the hair care market in India is about O$!! million. International com(anies, including Unile,er, through its subsidiary, .//, and =rocter ? Aamble dominate the sham(oo market in India. The hair coloring and stylingLgel market segment is at a nascent stage and there are not many local brands a,ailable. 8oreign brands such as /%Oreal and 'ella ha,e started to make inroads into this segment by (ositioning hair colors as a fashion accessory. The market (enetration of these (roducts is ,ery lo2, ho2e,er, and limited to a small section of the urban market. The market for hair creams, mainly used for hair grooming by men, is also ,ery small. .air oiling, an age*old Indian tradition mainly used as a (re*2ash nourishment treatment, is a ma1or niche in this sector. 8ragrances and color cosmetics constitute the high gro2th segments. Bail enamels and li(sticks account for around &# (ercent of total color cosmetic sales in India. /akme, a brand originally introduced by the Tata grou( of India, no2 bought o,er by .industan /e,er C.//D of the Unile,er grou(, Ti(s ? Toes, another domestic (layer, and 0e,lon dominate the USO &! million color cosmetics market. )ultinationals, 0e,lon of the U.S. and /'Oreal's )aybelline has a dominant share of the small (remium li(sticks and nail enamels market. )ass*market (roducts account for a ma1or share, 2hile the (remium segment accounts only for a mere 5 (er cent in li(sticks and # (er cent in nail enamels. /i(sticks account for nearly a third of the market at USO $1 million, 2hile the market for nail enamels is estimated at around USO $ million. The color cosmetics segment is ,ery com(etiti,e and has a high (enetration le,el of I! (ercent. )ost other cosmetic (roducts are estimated to be used by less than 9! (ercent of the consumers. The (restige fragrance market, 2hich has seen a steady influ; of foreign brands, is currently estimated at USO $! million and is mainly bought by the
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affluent sections. :n a,erage annual gro2th rate of 1# (ercent has been estimated for this segment for the ne;t fe2 years. The body s(ray category is the fastest gro2ing segment 2ithin the fragrance category. The body s(ray market is estimated at a((ro;imately $! million cans (er annum and it is estimated to increase to 1!! million cans by $!!". The skin care market in India is estimated at USO 1I! million. 'ithin the last decade, this segment has seen many consumers slo2ly shift from the mass to the (remium end of the market. The (enetration rate is high in the skin*care segment as com(ared to color cosmetics. In the skin*care segment, (rice and ,olume (layed an e4ual role in ,alue gro2th. 8rom a ,ery basic le,el of most consumers using only face cream and moisturizers, the market for more s(ecialized skin care (roducts such as sun screens, toners, cleansers, and astringents, dark circle remo,ing creams, anti*2rinkle creams and day and night creams seems to ha,e gro2n steadily in recent years. )oisturizing lotions, fairness creams and face cleansers are the (o(ular categories in the skin*care segment and account for a((ro;imately &! (ercent of the skin*care segment. The ma1or (layers in this segment are /akme, =onds, and 8air ? /o,ely of the .// grou( 2ith a #! (ercent market share, follo2ed by (layers such as H./. )orison that markets the Bi,ea range of (roducts in India, Aodre1 and 0e,lon. The size of the hair care market in India is estimated at more than USO $!! million, #! (ercent of 2hich interestingly comes from sales of sham(oo. International com(anies like Unile,er through its subsidiary, .industan /e,er CSunsilk, Organics, +linic, and /u;D@ and =rocter ? Aamble C2ith brands such as =antene, .ead ? ShouldersD dominate the sham(oo market in India 2ith a((ro;imately #I and $! (ercent market share res(ecti,ely. The hair coloring and stylingLgel market segment is at a nascent stage in India. There are not many local brands a,ailable in this segment but in recent months, many foreign brands such as /'Oreal and 'ella ha,e started making inroads into this segment by (ositioning hair colors as a fashion accessory. =enetration of these (roducts is ,ery lo2 and limited to certain sections of the urban market. The market for hair creams, mainly used for hair grooming by men is also ,ery small. .air oiling, an age old tradition of Indians and mainly used as a (re*2ash nourishment is a ma1or segment in
IIPM Alumni ID:

$9

this sector and has giants like .// and local Dabur and )arico Industries fighting for market share in the hair oil segment. 8ragrances and color cosmetics constitute the high gro2th segments. Bail enamels and li(sticks account for around &# (ercent of total color cosmetic sales in India. /akme, a brand originally introduced by the Tata grou( of India, no2 bought o,er by .industan /e,er C.//D of the Unile,er grou(, Ti(s ? Toes, another domestic (layer, and 0e,lon dominate the USO &! million color cosmetics market. )ultinationals, 0e,lon of the U.S. and /'Oreal's )aybelline has a dominant share of the small (remium li(sticks and nail enamels market. )ass*market (roducts account for a ma1or share, 2hile the (remium segment accounts only for a mere 5 (er cent in li(sticks and # (er cent in nail enamels. /i(sticks account for nearly a third of the market at USO $1 million, 2hile the market for nail enamels is estimated at around USO $ million. The color cosmetics segment is ,ery com(etiti,e and has a high (enetration le,el of I! (ercent. )ost other cosmetic (roducts are estimated to be used by less than 9! (ercent of the consumers. The (restige fragrance market, 2hich has seen a steady influ; of foreign brands, is currently estimated at USO $! million and is mainly bought by the affluent sections. :n a,erage annual gro2th rate of 1# (ercent has been estimated for this segment for the ne;t fe2 years. The body s(ray category is the fastest gro2ing segment 2ithin the fragrance category. The body s(ray market is estimated at a((ro;imately $! million cans (er annum and it is estimated to increase to 1!! million cans by $!!". The skin care market in India is estimated at USO 1I! million. 'ithin the last decade, this segment has seen many consumers slo2ly shift from the mass to the (remium end of the market. The (enetration rate is high in the skin*care segment as com(ared to color cosmetics. In the skin*care segment, (rice and ,olume (layed an e4ual role in ,alue gro2th. 8rom a ,ery basic le,el of most consumers using only face cream and moisturizers, the market for more s(ecialized skin care (roducts such as sun screens, toners, cleansers, astringents, dark circle remo,ing creams, anti*2rinkle creams and day and night creams seems to ha,e gro2n steadily in recent years. )oisturizing lotions, fairness creams and face cleansers are the (o(ular categories in the
IIPM Alumni ID:

$#

skin*care segment and account for a((ro;imately &! (ercent of the skin*care segment. The ma1or (layers in this segments are /akme, =onds, 8air ? /o,ely of the .// grou( 2ith a #! (ercent market share, follo2ed by (layers such as H./. )orison that markets the Bi,ea range of (roducts in India, Aodre1 and 0e,lon. The size of the hair care market in India is estimated at more than USO $!! million, #! (ercent of 2hich interestingly comes from sales of sham(oo. International com(anies like Unile,er through its subsidiary, .industan /e,er CSunsilk, Organics, +linic, and /u;D@ and =rocter ? Aamble C2ith brands such as =antene, .ead ? ShouldersD dominate the sham(oo market in India 2ith a((ro;imately #I and $! (ercent market share res(ecti,ely. The hair coloring and stylingLgel market segment is at a nascent stage in India. There are not many local brands a,ailable in this segment but in recent months, many foreign brands such as /'Oreal and 'ella ha,e started making inroads into this segment by (ositioning hair colors as a fashion accessory. =enetration of these (roducts is ,ery lo2 and limited to certain sections of the urban market. The market for hair creams, mainly used for hair grooming by men is also ,ery small. .air oiling, an age old tradition of Indians and mainly used as a (re*2ash nourishment is a ma1or segment in this sector and has giants like .// and local Dabur and )arico Industries fighting for market share in the hair oil segment. C*++$(% P!"&%&!( !- I(%$+(.%&!(.5 C!"#$%&' B+.()" &( I()&. 'hile other (arts of the 2orld are taking to the traditional Indian herbal 2ay of beauty, Indian consumers are increasingly looking to international brands as life style enhancement (roducts. )ore and more shel,es in sho(s and bouti4ues are stocked 2ith cosmetics from around the 2orld. Since liberalization, many international brands like :,on, 3urberrys, +al,in Glein, +artier, +hristian Dior, 7stee /auder, 7lizabeth :rden, /ancome, +hambor, +oty, /'Oreal, Oriflame, 0e,lon, /'Oreal, Fardley, 'ella, Sch2arzko(f, 7scada, Bina 0icci, 0ochas, F,es St. /aurent and Ha(anese cosmetics com(any, Shiseido ha,e entered the Indian market. The (rices of most foreign brands ha,e been fairly high, 2hich has deterred a,erage Indian consumers. International brands cater to a segment that can broadly be classified as the urban higher income grou(.
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$&

)arket (enetration le,els of international cosmetics brands in India are lo2. 8oreign brands currently constitute only $! (ercent of the market, due largely to the higher (ricing these brands carry. 8oreign brands initially garnered sales in the market based on their international brand image, but re(eat (urchases 2ere not forthcoming. To hit their sales gro2th targets, se,eral foreign com(anies ha,e had to reformulate their (ricing strategies to ta( the most (romising market segment**urban 2omen in the middle and u((er income grou(s in the age range of $ *#!. +osts for im(orting (roducts are much higher than (roducing it in the country. India allo2s entry of im(orted cosmetics 2ithout any restrictions but the a,erage im(ort tariff on cosmetics (roducts is currently ,ery high at 5.$ (ercent. This makes im(orted (roducts ,ery e;(ensi,e for most consumers. )ost foreign cosmetics com(anies selling (remium brands ha,e had a difficult time de,elo(ing the lo2 ,olume (remium market in India. )any had to re* 2ork (rice strategies to2ards the mass segment. =rice is not the only reason res(onsible for their (roblems. =oor assessment of the size of the u((er middle and high*income grou(s, and (rice sensiti,ity e,en 2ithin these grou(s, had added to their (roblems. :ccording to estimates of industry e;(erts and trade (ublications, India's annual im(orts of cosmetics and toiletries and intermediate ra2 materials are a((ro;imately USO 1$! million. +ountries like US, 7uro(e, mainly 8rance, Aermany, Italy, Betherlands, and S(ain account for the ma1or share@ and :ustralia, +hina, and Ha(an account for rest of the share. So(histicated (roducts such as fragrances, non*transfer long*stay li(sticks, li4uid li( color, eye make*u(s, anti ageingLanti 2rinkle creams, (rofessional hair*care (roducts, (re(arations for sha,ing creams, are some of the ma1or items of im(ort. =enetration le,els of international cosmetics brands in India are still lo2. 8oreign brands currently constitute only $! (ercent of the market. : ma1or reason for lo2 (enetration of international brands can be attributed to high (ricing. These com(anies initially gained sales on their international brand image, ho2e,er, re(eat (urchases 2ere not forthcoming and to retain their
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sales gro2th, se,eral foreign com(anies reformulated (rice strategies to ta( the large Indian middle class. Urban 2omen in the middle and u((er income grou(s in the age range of $ *#! is the target grou( for international brands, as this grou( looks for better (roducts and is 2illing to (ay a (remium for international 4uality (roducts. Industry estimates suggest that there are close to 1! million such 2omen in India. India%s annual im(ort of cosmetics and toiletries and intermediate ra2 materials is around O1$! million, of 2hich the U.S. has a share of a((ro;imately 1! (ercent. 8rance, Aermany, Italy, Betherlands, and S(ain account for the lion%s share of im(orts, 2ith :ustralia, +hina, and Ha(an accounting for the rest.

T!&5$%+&$" M.+<$% &( I()&. The toiletries market segment in India is 2ell de,elo(ed and dominated by multinational com(anies and a fe2 large Indian com(anies. This segment is also characterized by high entry barriers, a high rate of ne2 (roduct launches, and high ad,ertising e;(enditures. 3ath and sho2er (roducts account for the largest share of the toiletries market segment. The toiletries segment can be di,ided into t2o categories> the less (rice sensiti,e niche and highly brand conscious, (remium niche. The (rice sensiti,e niche caters to the middle and lo2er middle class and the (remium niche caters to the urban and higher class. The toiletries market in India is 2ell de,elo(ed and dominated by multinational com(anies and a fe2 large Indian com(anies. : fe2 ma1or (layers, high entry barriers, fairly high rate of ne2 (roduct launches, and high ad,ertisement s(endings characterize this segment. )a1or (layers in this market are .//, =rocter ? Aamble C=?AD, +olgate =almoli,e, 0eckitt 3enckiser, Aodre1 +onsumer =roducts and Birma. .// is the market leader in ma1ority of the toiletries and (ersonal care segment such as soa(sL(ersonal 2ash, oral care, fabric 2ash and talcum (o2der. In oral care, +olgate =almoli,e is a

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$I

household name and until a fe2 years back 2as almost a generic name for tooth(aste in India. 3ath and sho2er (roducts account for the largest share of the market. The market size of soa(s alone is more than US O #! million. Use of li4uid soa(s is also gaining (o(ularity in India. Oral, and hair care (roducts tailored s(ecially for Indians such as hair oils also ha,e a ma1or share. The toiletries segment is clearly di,ided into t2o categories * the less (rice sensiti,e and highly brand conscious (remium segment catering to the urban higher middle class and the general segment that caters to the middle and lo2er middle class. In terms of ,olume, the Indian toilet soa(s market has been estimated to be gro2ing at a((ro;imately # (ercent and currently stand at o,er #,#!,!!! tones.

G+!;&(0 D$#.() !- C!"#$%&'" -!+ M$( Bo2adays, cosmetics and toiletries are not 1ust of interest to 2omen consumers. Indian men are increasingly using body s(rays, colognes and other cosmetics and toiletries. 'ith a rising demand from men, many (layers are coming out 2ith men%s cosmetic (roducts, es(ecially in the skin care niche. O,erall, the market size of the men's (ersonal care segment is about O1&# million, 2ith Aillette ha,ing 2on the largest market share to date. Other ma1or (layers in this segment include Aodre1, H./. )orison and .//. +osmetics and toiletries are not 1ust the domain of 2omen any longer and Indian men too are increasingly taking to the use of more and more body s(rays, (erfumes and other cosmetics and toiletries. 'ith rising demand from men, the Indian market is getting enlarged and many (layers are coming out 2ith cosmetic (roducts es(ecially skin care (roducts for men. The market size of men's (ersonal care segment is estimated at a((ro;imately USO 1&#million, 2ith Aillette ha,ing the largest market share. Other ma1or (layers in this segment include Aodre1, H./. )orison and .//. The gro2ing demand for men's cosmetics ha,e made many direct selling com(anies such as )odicare and :m2ay to launch ne2 (roducts for men.
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$5

/o2 )arket =enetration * :n O((ortunity for tremendous gro2th 7,en 2ith double*digit gro2th rates, the market (enetration of cosmetics and toiletries (roducts in India is ,ery lo2. +urrent (er ca(ita e;(enditure on cosmetics is a((ro;imately O!.&I cents, as com(ared to O &.&# in other :sian countries. This lo2 market (enetration for cosmetics and (ersonal care (roducts in India can be ,ie2ed as an o((ortunity for more significant gro2th do2n the road in this country of 1 billion (eo(le. =enetration of most cosmetic and toiletries is ,ery lo2 in India. +urrent consum(tion of many (roducts is 2ell belo2 that of many countries in :sia. The lo2 market (enetration of many cosmetics and (ersonal care (roducts offers room for gro2th. The Indian toiletries market is 2ell de,elo(ed and dominated by ma1or multinational com(anies and a fe2 large Indian (layers.

.erbal =roducts In the last fe2 years, there has been a rene2ed craze for herbal cosmetic and (ersonal care (roducts, es(ecially in the skin care segment 2ith the gro2ing belief that chemical*based cosmetics are harmful. /ocal ma1ors, including Shahnaz, /otus .erbals, and the 3ioti4ue brands dominate the (remium herbal cosmetics segment in India, estimated at O1!! million. )any com(anies ha,e e;(anded their (roduct range into herbal ,ariants, including com(anies 2ith a (rimary focus on health care (roducts. In the last fi,eLsi; years, there has been a rene2ed craze for herbal cosmetic and (ersonal care (roducts, es(ecially in the skin care segment 2ith the gro2ing belief that chemical*based cosmetics are harmful. Shahnaz .ussain, 3ioti4ue, and /otus .erbals are the ma1or (layers in this segment. )any com(anies also e;(anded their range to include herbal ,ariants. The gro2ing (o(ularity for natural (roducts also attracted many (rimarily health*care com(anies such as .imalaya Drugs C2ith its :yur,edic +once(ts rangeD, and Dabur to launch natural*based cosmetic (roducts.

D&"%+&7*%&!( '6.(($5"
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:n increasing number of cosmetics com(anies are no2 dealing 2ith consumers directly through s(ecial e;clusi,e counters in ma1or de(artmental stores and malls featuring their o2n beauty consultants. Ser,ice marketing strategies, such as (oint*of*sale ad,ice and beauty counseling, ha,e (ro,en to be effecti,e methods to increase sales of cosmetics and (ersonal care (roducts. 3eauty counselors or ad,isors at retails outlets ha,e been ,ery successful in gaining attention, creating (roduct a2areness and o,ercoming consumers fears about many cosmetics and (ersonal care (roducts such as home hair (ermanents and color cosmetics. /%Oreal India has established a consumer ad,isory unit and =onds offers skin care ad,ise through touch*screen kiosks and tele(hone hel( lines for skin care. /%Oreal also markets its range of s(ecialized hair care (roducts e;clusi,ely through salons and beauty (arlors and is currently is the only com(any in the market that has a hair color range tailored e;clusi,ely for (arlors. To (romote the gro2th of their (roducts, a number of Indian com(anies ha,e established e;clusi,e franchised beauty salons in ma1or metros that offer s(ecialized training courses to customers. 3eauti4ue, an e;clusi,e one*sto( sho( for im(orted cosmetic brands set u( recently in Be2 Delhi, offers 4ualified beauty consultants to (ro,ide free ad,ice and makeo,ers to consumers. +om(anies also continue to inno,ate their selling methods. 8or e;am(le, 3accarose, o2ners of the +hambor brand, organizes tea (arty make*u( sessions at ma1or Indian cities. R$0*5.%!+, R$0&#$ =rior to )arch Prestricted listQ. 1, 1555, cosmetics and toiletries 2ere on India%s im(ort This meant that a s(ecial im(ort license 2as re4uired to Today, India (ermits the

im(ort cosmetics and toiletries into the country.

im(ortation of cosmetics and toiletries 2ithout any restrictions. :lthough the im(ortation (rocess has been made easier and India has been reducing im(ort tariffs substantially, the current 9!. I (ercent total im(ort tariff on cosmetics (roducts is still on the high side. .o2e,er, the ne2 rate is a huge im(ro,ement o,er last year%s rate of #" (ercent im(ort tariff a,erage on cosmetics (roducts.

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3eginning in Hanuary, $!!1, the Indian go,ernment made it mandatory for all (re*(ackaged goods Cintended for direct retail saleD im(orted into India to bear the follo2ing labeling declarations> iD name and address of the im(orter@ iiD generic or common name of the commodity (acked@ iiiD net 4uantity in terms of standard unit of 2eights and measures@ i,D month and year of (acking in 2hich the commodity is manufactured or (acked or im(orted@ and ,D ma;imum retail sales (rice C)0=D at 2hich the commodity in (ackaged form may be sold to the end consumer. The )0= includes all ta;es, freight +om(liance of the trans(ort charges, commission (ayable to dealers, and all charges to2ards ad,ertising, deli,ery, (acking, for2arding and the like. abo,e*stated re4uirements has to be ensured before the im(ort consignments are cleared by customs in India. The im(ort of (re*(ackaged commodities such as ra2 materials, bulk im(orts, etc., that need to undergo further (rocessing before they are sold to end consumers are not included under this labeling re4uirement. The term NcosmeceuticalsN is not recognized in India. Doctors in India are not allo2ed to sell (roducts and 2ould not (rescribe anything im(orted that does not ha,e 8D: a((ro,al. If a cosmeceutical (roduct cannot be sold as an o,er*the*counter item and is classified as a (harmaceutical item, the (roduct 2ould re4uire a((ro,al from the office of the Drug +ontroller of India in the )inistry of .ealth. The im(ort of such (roducts 2ill only be allo2ed if the generic (roduct category is registered 2ith the Drug +ontroller's Office. P+&'$ S$("&%&9$ M.+<$% In general, India is a ,ery (rice sensiti,e market. +osmetics and (ersonal care (roduct com(anies, es(ecially the ne2 entrants, ha,e had to 2ork out inno,ati,e strategies to satisfy Indian (references and budgets in order to establish a hold in the market. 8or e;am(le, gi,en the (rice*sensiti,ity of Indian consumers, many cosmetic and toiletries com(anies launched their (roducts in smaller (ack sizes to make them more affordable. Small (ack sizes ha,e (ro,ed to be ,ery (o(ular in the Indian market as the conce(t offers consumers lo2er (urchase costs and the o((ortunity to try ne2 (roducts.

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: strong brand (romotional cam(aign, good distribution net2ork, constant (roduct inno,ation and 4uality im(ro,ement, and the ability to (ro,ide a ,ariety of 4uality (roducts are some of the ma1or reasons for the success in the market. Understanding the attitudes, (references and as(irations of the different segments of India's consumers is crucial to achie,ing success in the Indian market. C!#:$%&%&!( Indian cosmetic market, 2hich has been traditionally a stronghold of a fe2 ma1or Indian (layers like /akme, and =onds has seen a lot of foreign entrants to the market 2ithin the last decade. India is a ,ery (rice sensiti,e market and the cosmetics and (ersonal care (roduct com(anies, es(ecially the ne2 entrants ha,e had to 2ork out ne2 inno,ati,e strategies to suit Indian (references and budgets to establish a hold on the market and establish a niche market for themsel,es. Ai,en the (rice*sensiti,ity of the Indian consumer 2ho do not normally (refer to fork out a large sum at one time, many cosmetic and toiletries com(anies launched their (roducts in smaller (ack sizes to make them more affordable. .// and 0e,lon 2ere the first to introduce small (ack sizes. 0e,lon introduced its small*range of I ml nail (olishes and li(sticks, and 2as soon follo2ed it its strategy by ma1or Indian com(anies as 2ell. Small (ack sizes ha,e (ro,ed to be ,ery (o(ular in the Indian market as it offers a consumer lo2er (urchase cost and the o((ortunity to try ne2 (roducts. Stiff com(etition in the cosmetics and toiletries market also sa2 an increase in the range of ne2 (roducts being introduced for ne2er a((lication conce(ts in the last fe2 years. In the skin*care segment, from 1ust creams and moisturizers, there has been a u(grade to ,alue*added (roducts such as under*eye 2rinkle remo,ing creams, dark circle remo,ing creams toners, sunscreen lotions, fairness creams, and many more. The color cosmetics market sa2 ne2 (roducts such as smudge*(roof li(sticks and mascaras, li4uid li( color, and long*stay li(sticks being introduced. These s(ecialized a((lications led to gro2th in ,olumes and also enabled com(anies to (rice the (roducts at a (remium, dri,ing u( ,alue gro2th.
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Ser,ice marketing strategies, such as (oint*of*sale ad,ice and beauty counseling ha,e sho2n to boosts sales of cosmetics and (ersonal care (roducts and dri,en gro2th in the Indian market. 3eauty counselors or ad,isors at retails outlets ha,e been ,ery successful in gaining attention, creating (roduct a2areness and o,ercoming consumers lack of familiarity 2ith, and fears about many cosmetics and (ersonal care (roducts such as home hair (ermanents and color cosmetics. Some com(anies such as /akme ha,e e,en set u( e;clusi,e /akme beauty (arlors at ma1or cities in India through the franchisee route. )a1or herbal cosmetics brands such as Shahnaz .ussain and 3ioti4ue also o(erates chains of salons through franchisees and offer s(ecialized training courses to customers. +om(anies continue to inno,ate on selling methods. =o(ular Indian brand, =onds established consumer ad,isory cells and through touch screen counters and tele(hone hel(*lines offers ad,ice on skin care. :nother com(any, 3accarose, o2ners of the +hambor brand organizes tea (arty make*u( sessions at ma1or Indian cities. /'Oreal markets its range of s(ecialized hair care (roducts e;clusi,ely through salons and beauty (arlors. /'Oreal currently is the only com(any in the market that has a hair color range tailored e;clusi,ely for (arlors. The com(any 2as also the first to introduce modern hair color and sham(oos for colored hair in the Indian market. : strong brand (romotional cam(aign, good distribution net2ork, constant (roduct inno,ation and 4uality im(ro,ement, and the ability to (ro,ide a ,ariety of 4uality (roducts are some of the ma1or reasons for the success of most com(anies. .//, is currently India's largest cosmetics and (ersonal care (roducts (roducer and its brands has the dominant share Cmore than #! (ercentD in segments such as (ersonal 2ash, skin care, sham(oos, li(sticks and nail (olish. M.+<$% A''$"" =rior to )arch 1, 1555, India had cosmetics and toiletries on its restricted list of im(orts and a s(ecial im(ort license 2as re4uired for im(ort of cosmetics
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and toiletries into the country. This regulation has no2 been done a2ay 2ith and, India today, (ermits im(ort of cosmetics and toiletries 2ithout any restrictions. This has made the Indian market more attracti,e to foreign cosmetic com(anies. Im(orts ha,e been made easier, but not necessarily chea(er. The total im(ort duty rate on cosmetics and toiletries classified under .S +ode .! to .!" is 5.$! (ercent, 2hich e,en though has been scaled do2n o,er the (ast fe2 years is still ,ery much on the higher side. The high duties cause im(orts to be (rice uncom(etiti,e. +ertain high * end (roducts 1ust do not sell in India because the final (rice to bring it into India is too high for consumers to (ay. The com(onents of the total im(ort duty include a basic duty of $! (ercent Ca((lied on the cost insurance freight C+I8D ,alue of goodsD, an additional duty C(o(ularly called counter,ailing dutyD of 1& (ercent, and a s(ecial additional customs duty of 9 (ercent introduced in the 155I*55 Indian budget le,ied on the aggregate of the basic, counter,ailing and additional duties. This im(ort tariff com(onent is le,ied to (ro,ide local manufacturers some (rotection against im(orts. The s(ecial additional customs duty of 9 (ercent is intended to re(resent the incidence of sales ta; and similar le,ies a((licable on domestic goods. The counter,ailing duty is e4ui,alent to the local e;cise ta; on similar articles manufactured 2ithin the country. Since Hanuary, $!!1, the Indian go,ernment made it mandatory for all (re* (ackaged goods Cintended for direct retail saleD im(orted into India to bear the follo2ing labeling declarations> iD name and address of the im(orter, iiD generic or common name of the commodity (acked, iiiD net 4uantity in terms of standard unit of 2eights and measures, i,D month and year of (acking in 2hich the commodity is manufactured or (acked or im(orted, and ,D ma;imum retail sales (rice C)0=D at 2hich the commodity in (ackaged form may be sold to the end consumer. The )0= includes all ta;es, freight trans(ort charges, commission (ayable to dealers, and all charges to2ards ad,ertising, deli,ery, (acking, for2arding and the like.
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+om(liance of the abo,e*stated re4uirements has to be ensured before the im(ort consignments are cleared by customs in India. Im(ort of (re*(ackaged commodities such as ra2 materials, com(onents, bulk im(ort etc., that need to undergo further (rocessing before they are sold to end consumers are not included under this labeling re4uirement. S.5$" P+!":$'%" The gro2ing Indian cosmetics market offers (romising o((ortunities for international brands. The gro2th rate in the cosmetics market reflects an increasing demand for beauty care (roducts in India. The most (romising segments for international com(anies to (ursue are (erfumes and fragrances, and s(ecializedL(rofessional skin care and hair care (roducts. The fastest gro2ing market is ho2e,er color cosmetics, 2hich account for USO &! million of the total market. The rural market in India for cosmetics and toiletries remains is largely unta((ed. )a1or domestic (layers ha,e also not been able to (enetrate this market. The urban market itself for s(ecialized cosmetic (roducts remains to be fully e;(loited. The Indian skin*care market is not yet fully ta((ed and offers (romising (ros(ects as a gro2th area. =enetration of color cosmetics is lo2er than the (enetration (ros(ects of the skin*care segment. To (romote the gro2th of their (roducts, a dominant (layer like /akme ha,e embarked u(on a business (lan to establish their e;clusi,e franchised beauty salons across ma1or metros in the country. Im(orted cosmetics ha,e had a ma1or im(act on the Indian market. 8oreign (roducts ha,e enhanced gro2th of the Indian market by attracting as(irational consumers and increasing acce(tance of color cosmetics, (re,iously (ercei,ed by many as harmful to skin. Indians generally (ercei,e foreign brands as being of su(erior 4uality. Other key issues regarding sales (ros(ects are (roduct ,ariety and retailing strategies as 2ell. There is a marked shift among consumers from functional common*fits*all (roducts to more s(ecialized formulations. This is one of the reasons 2hy an increasing number of cosmetic com(anies are dealing 2ith consumers directly through s(ecial e;clusi,e counters in ma1or de(artmental
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&

stores and malls featuring their o2n beauty consultants. /'Oreal India has established a consumer ad,isory unit and =onds, as mentioned earlier offers skin care ad,ise through touch*screen kiosks, and tele(hone hel(*lines. 3eauti4ue * an e;clusi,e one*sto( sho( for only im(orted cosmetic brands set u( recently in Be2 Delhi has 4ualified beauty consultants to (ro,ide free ad,ice and make o,ers to consumers. The Indian cosmetics and toiletries market 2ill continue to gro2 due to the increasing incomes and (urchasing (o2er of the gro2ing Indian middle*class and urban consumers. Demand from the rural areas and smaller to2ns are also fast increasing. Industry sources e;(ect significant gro2th in both the mass and (remium segments of the Indian cosmetics market. The market base ho2e,er in the (remium segment is ,ery small. It is a niche market and the sco(e for rising ,olumes is slo2er. The gro2th in the (remium segment is usually seen to be because of (eo(le u(grading from the mass to the (remium rather than an increase in consum(tion as such by itself. =ros(ects for increasing ,olumes on the other hand is higher in the mass segment mainly because the market base for this segment is higher, and because of the lo2er (ricing, it is easier to (ersuade end*users to try out the (roducts.

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"

LITERATURE REVIEW
S(.:"6!% !- %6$ C!"#$%&' I()*"%+, &( I()&. India, 2ith a (o(ulation of 1.19 billion (eo(le is a country of contrast. 'ith an u((er and middle class (o(ulation of nearly 9!! million (eo(le, 2hich is more than that of US: and 7uro(ean +ountries, India has become a huge base of (otential customers. .ence 8oreign +om(anies find India as an attracti,e location to setu( their o(erations and e;(and their business. India's urban (o(ulation is the main engine that fuels the demand for ,arious cosmetic (roducts. :lthough Indians are strongly attached and committed to their traditions, and culture, the ad,ent of tele,ision and the a2areness of the 2estern 2orld are changing the tastes and customs of India. The <mor(hing% of India is subtle and the changes are not ,isible for the first time ,isitor. .o2e,er, the market liberalization (rocess that began in 1551, along 2ith the cro2ning of three Indians as )iss 'orld and )iss Uni,erse, ha,e made Indian 2omen conscious of their a((earance. +onse4uently, the cosmetic consum(tion (atterns of Indian 2omen ha,e changed, and this trend is fuelling gro2th in the cosmetic sector. M.+<$% C!#:!"&%&!( The size of India's cosmetics market is USD 1 billion. Out of this, size of skin care segment is USD !! million, color cosmetics is USD "# million, fragrances is USD $# million, men%s care is USD 1&# million and hair care is USD $!! million. 'hile li(sticks account for nearly a third of the color cosmetics market at USD $# million, the market for nail enamels is estimated at around USD ! )illion. The remainder, i.e. USD $! million consists of (roducts such as mascara, eye*liners etc. The t2o figures belo2 sho2 the +om(osition of the =ersonal care market and the +om(osition of the +olor +osmetic )arket res(ecti,ely.

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BCG MATRI>

Stars> 8or cosmetic industry /i(stick and eye color 2ould be the star category. +ash +o2s> 8or )en cosmetic 2ould be the +ash co2s. Kuestion marks> .air color 2ould be 4uestion mark for the cosmetic industry due to (eo(le ha,e some other source to (ermanent color of the hair. Dogs> )ascara (roduct 2hich used only in marriage or once in a long (eriod 2ould be the dog for the cosmetic com(any. +ash co2s are units 2ith high market share in a slo2*gro2ing industry. These units ty(ically generate cash in e;cess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a NmatureN
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9!

market, and e,ery +osmetic com(any 2ould be thrilled to o2n as many as (ossible. They are to be NmilkedN continuously 2ith as little in,estment as (ossible, since such in,estment 2ould be 2asted in an industry 2ith lo2 gro2th. Dogs, or more charitably called (ets, are units 2ith lo2 market share in a mature, slo2*gro2ing industry. These units ty(ically Nbreak e,enN, generating barely enough cash to maintain the business's market share. Though o2ning a break*e,en unit (ro,ides the social benefit of (ro,iding 1obs and (ossible synergies that assist other business units, from an accounting (oint of ,ie2 such a unit is 2orthless, not generating cash for the +osmetic com(any. They de(ress a (rofitable +osmetic com(any's return on assets ratio, used by many in,estors to 1udge ho2 2ell a +osmetic com(any is being managed. Dogs, it is thought, should be sold off. Kuestion marks Calso kno2n as (roblem childD are gro2ing ra(idly and thus consume large amounts of cash, but because they ha,e lo2 market shares they do not generate much cash. The result is a large net cash consum(tion. : 4uestion mark has the (otential to gain market share and become a star, and e,entually a cash co2 2hen the market gro2th slo2s. If the 4uestion mark does not succeed in becoming the market leader, then after (erha(s years of cash consum(tion it 2ill degenerate into a dog 2hen the market gro2th declines. Kuestion marks must be analyzed carefully in order to determine 2hether they are 2orth the in,estment re4uired to gro2 market share. Stars are units 2ith a high market share in a fast*gro2ing industry. The ho(e is that stars become the ne;t cash co2s. Sustaining the business unit's market leadershi( may re4uire e;tra cash, but this is 2orth2hile if that's 2hat it takes for the unit to remain a leader. 'hen gro2th slo2s, stars become cash co2s if they ha,e been able to maintain their category leadershi(, or they mo,e from brief stardom to dog dom. :s a (articular industry matures and its gro2th slo2s, all business units become either cash co2s or dogs. The natural cycle for most business units is that they start as 4uestion marks, then turn into stars. 7,entually the market
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91

sto(s gro2ing thus the business unit becomes a cash co2. :t the end of the cycle the cash co2 turns into a dog. The o,erall goal of this ranking 2as to hel( cor(orate analysts decide 2hich of their business units to fund, and ho2 much@ and 2hich units to sell. )anagers 2ere su((osed to gain (ers(ecti,e from this analysis that allo2ed them to (lan 2ith confidence to use money generated by the cash co2s to fund the stars and, (ossibly, the 4uestion marks. :s the 3+A stated in 15"!> Only a di,ersified +osmetic com(any 2ith a balanced (ortfolio can use its strengths to truly ca(italize on its gro2th o((ortunities. The balanced (ortfolio has> stars 2hose high share and high gro2th assure the future@ cash co2s that su((ly cosmetic (roduct for that future gro2th@ and 4uestion marks to be con,erted into stars 2ith the added Be2 (roduct

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PRODUCT LIFE CYCLE OF COSMETIC INDUSTRY =rofit Introduction Aro2th )aturity Decline

Cosmetic Industry

Time

0etail

marketing

has

e,ol,ed,

the

consumer

has

become

more

kno2ledgeable and demanding, and cosmetics themsel,es ha,e become more so(histicated and inno,ati,e. :bout the only thing that has remained constant in the cosmetics industry o,er the years is 2omen%s lo,e of cosmetics. In the U.S., most 2omen begin 2earing cosmetics before age 1$ and, by age 1 , almost 5! (ercent are using them. Technological ad,ances ha,e allo2ed for the creation of multifunctional (roducts R (roducts that (erform more than their basic role. 8or e;am(le, cosmetics that contain ceramides and ,itamins, as 2ell as UE (rotection are (o(ular. Today, foundations (rotect from ultra,iolet rays, li(sticks moisturize and mascaras thicken and condition. )ultifunctional (roducts ha,e en1oyed much success, thanks to more discerning consumers 2ho are demanding ,alue for money in their colour cosmetics (urchases.

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S The biggest (erformance de,elo(ment in colour cosmetics has been the creation of Pstay*onQ (roducts. S +onsumers ha,e also been attracted by (roducts that are easier to a((ly and con,enient to use, such as (en li(sticks and fast*drying nail (olishes S 'omen buy the ma1ority of their cosmetics from mass, drug or food stores 2here selecting (roducts yourself is the norm. S 7stee /auder%s research in the U.S. market sho2ed that sales doubled 2hen self*ser,ice 2as offered. Ai,ing (eo(le the choice attracted ne2 customers. S Inno,ati,e technologies ha,e allo2ed manufacturers to create dramatically im(ro,ed cosmetic sam(les and to distribute sam(les beyond the (oint*of* sale, e,en into the home. Sam(ling e;(erts agree that the most effecti,e sam(ling ,ehicles are those designed to reach consumers at home. S Areater (roduct (enetration in suburban and rural areas, fre4uent (roduct launches and greater interest in (ersonal grooming, es(ecially among the younger (o(ulation, dro,e gro2th. .igher le,els of dis(osable income and lo2er (roduct (rices through smaller (ackaging sizes made cosmetic and toiletries affordable to more consumers. S SGUs - Selling Git Unit sizes and (ackaging can be effecti,ely used to generate trial and initiate demand for a (roduct, 2ithout com(romising on (rice. )aybelline Be2 Fork, for instance, globally has 5!! SGUs in colour cosmetics.

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RESEARCH METHODOLOGY

R$"$.+'6 O78$'%&9$ 1. To carry out a com(rehensi,e research on the current scenario of cosmetic industry in India. $. To re,ie2 the (osition of the e;isting cosmetic brands in India. . To understand the marketing mi; of e;isting brands. To formulate strategies of a ne2 com(any to enter the Indian cosmetic market

R$"$.+'6 M$%6!)!5!0, =rimary 0esearch Secondary 0esearch

The first and second ob1ecti,e of this research 2ill be attained through conducting secondary research on the 'orld 'ide 'eb, magazines, ne2s(a(ers, articles, etc. There are ,arious articles, re(orts and ne2sletter on the internet about the current scenario and the com(osition of the Indian cosmetic market. The third ob1ecti,e 2as achie,ed by conducting (rimary research. Earious retail outlets like Sho((er%s Sto(, =antaloons, etc 2ere ,isited. Stand*alone stores of ,arious brands like 0e,lon, Shahnaz .ussain, 3ioti4ue, etc 2ere also ,isited. :n a((ro(riate 4uestionnaire 2as designed and 4uestions 2ere asked to the on*floor e;ecuti,es and information about the (roducts and (rices of ,arious brands 2ere e;tracted. Earious distributors and marketing (ersonnel of ma1or cosmetic brands 2ere also inter,ie2ed for the (lacement and (romotion strategies of these brands. The fourth ob1ecti,e 2as achie,ed by analyzing the information gathered from the (rimary and secondary data source and formulating an a((ro(riate marketing strategy for a ne2 international brand to enter into the Indian
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market. Earious (lus (oints in the marketing strategies of the e;isting brands 2ere ke(t in consideration and loo( holes in their strategy 2ere a,oided to formulate the marketing strategy for the ne2 brand.

FINDING AND ANALYSIS

PRIMARY DATA ANALYSIS 1. 'hat kind of store do you deal inT 0etail Outlet Stand :lone Store 3outi4ue Others $& $& &I !

To understand the marketing mi; of e;isting brand in the current scenario I took a 4uestionnaire based method to gather (rimary data for this I ,isited ,arious retail outlets like Sho((er%s Sto(, =antaloons, etc 2ere ,isited. Stand* alone stores of ,arious brands like 0e,lon, Shahnaz .ussain, 3outi4ue, etc 2ere also ,isited. :n a((ro(riate 4uestionnaire 2as designed and 4uestions
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2ere asked to the on*floor e;ecuti,es and information about the (roducts and (rices of ,arious brands 2ere e;tracted. Earious distributors and marketing (ersonnel of ma1or cosmetic brands 2ere also inter,ie2ed for the (lacement and (romotion strategies of these brands. :s =ie chart also de(icted I chosen 1#! as a sam(le size 2hich is random basis and in my sur,ey 9&6 store is targeted as bouti4ue because 2here most of female are come for their beauty needs. :lso retail outlet and stand alone outlet is 1"6 contributed in my sur,ey result, this segment gi,e us 2ide e;(erience to analyze the marketing mi; of the cosmetic markets in India. Others is contributed $!6 out of my sam(le size of 1#! (eo(le that is contributed ,arious distributors and marketing (ersonnel of ma1or cosmetic brands 2ere also inter,ie2ed for the (lacement and (romotion strategies of these brands.

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$. 'hat brand (eo(le (refer to buy for cosmetic uses in your store, =lease chose only one o(tion out of theseT /'Oreal 0e,lon +hambor /akme +hanel +al,in Glein Da,idoff )aybelline /ancome FS/ 7lizabeth :rden Shisheido 0al(h /auren )arks and S(encer The 3ody Sho( Bi,ea Aarnier Set'et IT+ Sunsilk Do,e 7,eryouth Easeline Eatika .imalaya =onds =antene =arachute =ark :,enue 3rylcream Aodre1
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19 1$ $ 1 I 5 " 9 ! ! " 1 1 9 1 1 1$ $ 1! 9 & 1 1

$ 1 1 $ 1

9I

/i,on 7mami

1 1

Through this 4uestion I try to analyze the ,endor (reference for selling the cosmetic (roduct in their res(ecti,e store. This 2ill hel( me to find out different marketing mi; for the brand that has a (resence in the Indian market. :ccording to our sur,ey result /%oreal has more market share than others out of 1#! retailers I chosen for sur,ey and 19 retailers suggest that /oreal has a number one brand in their res(ecti,e store category of cosmetic brand. Bo2 for /oreal the com(etition get increased in coming days because 2e can easily look at 0e,lon , /akme and Aarnier also coming 2ith the same 2ay 2here they also contributed significant amount of (roduct (ortfolio in cosmetic market of India.

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95

. .o2 many different brands contributed this follo2ing segment of cosmetic IndustryT Different +osmetic Segment .air +are Skin +are +olor +osmetics 8ragrances )en's +are Toiletries Bo of 3rands 1& 15 11 19 " $

These data I gathered from the different distributors and marketing (ersonnel of ma1or cosmetic brands 2ere also inter,ie2ed for the (lacement and (romotion strategies of these brands. :s =ie chart de(icted that 1I6 com(any contributed to the .air care segment 2here start from /oreal , to godre1 e,ery com(any target this segment aggressi,ely. )o,e to the other cosmetic segment 2here $16 com(any targeted to the skin care one of the lucrati,e business area for the any 8)+A com(any no2 a days you found also. The most cro2ded are of the cosmetic segment is Toiletries 2here as $&6 com(any targeted this area due of huge

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(otential of gro2th. In our sur,ey I chosen 5! brands from the different com(anies 2hich is targeting Indian cosmetic industry in big 2ay. 9. 'hich com(any brand is most fa,orable in /i(stick C/i( Aloss, /i( =encilD SegmentT B+.() 7lizabeth :rden /oreal )aybelline 0e,lon /akme +hambor Shahnaz .ussain 3ioti4ue /otus L&:"%&'< 1" 1 1 $ $$ # 1" 9 5

/i(stick is the one segment 2here e,ery cosmetic com(any try to find one of the biggest s(ace to indulge 2ith it. Out of 1#! retailers as a sam(le size /oreal has $16 market share same 2ith 0e,lon 2hich is 4uite com(etiti,e can easily find out . also /akme has a 1#6 market share follo2ed by /oreal and 0e,lon. Some other /i(stick brand like Shahnaz .ussain has a 116 market share 2hich contributed herbal and nice
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kind of segment here. 8or making sim(ler to data analysis /i(stick segment co,ered /i( Aloss, /i( =encil. #. 'hich of the follo2ing brand is most fa,orable to the customer for 7ye segment C7ye Shodo2, /iner ? 3ro2s , Ga1al ,3lushers, )ascara,+om(actD T B+.() 7lizabeth :rden /oreal )aybelline 0e,lon /akme +hambor Shahnaz .ussain 3ioti4ue /otus 19 9 11 E,$ '!5!+ 5 9 19 ! 1

/i(stick and 7ye +olor is the one segment 2here e,ery cosmetic com(any try to find one of the biggest s(ace to indulge 2ith it. Out of 1#! retailers as a sam(le size /oreal has $ 6 market share same and 0e,lon contributed $!6 to the market also /akme has s also ,aluable (resence in this segment 2here this com(any has $16 market share 2hich is 4uite com(etiti,e can easily find out. some other eye color brand like Shahnaz .ussain has a 56 market share 2hich contributed herbal and nice kind of

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segment here. 8or making sim(ler to data analysis /i(stick segment co,ered 7ye Shodo2, /iner ? 3ro2s , Ga1al ,3lushers, )ascara,+om(act. &. 'hat is the (rice range for /i(stick segment for the ,arious brands in the marketT P+&'$ R.(0$ -!+ L&:S%&' S$0#$(% A''$:%.7&5&%, I!!* 1!#! #&!* "!! 155* I! I!* &$# 1&#* 5# 9#*#1# $1! $$5 $95* $5 1 $$ $# 1" 1I 15 19 1$ 1!

B+.() 7lizabeth :rden /oreal )aybelline 0e,lon /akme +hambor Shahnaz .ussain 3ioti4ue /otus

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=rice range for /i(stick segment for the ,arious brands in the market sho2s the (rice and a,ailability of the (roduct and the brand that caters to Indian cosmetic market. 'e chosen 1#! retailers for the sur,ey and 2ould get the result abo,e sho2n in gra(h and the /ist. )aybelline is the brand for 2hich is leader in this segment 2here got $# retailers choice due to of (rice range 155* I!. 'hereas /oreal is 4uite e;(ensi,e there (rice range is #&!*"!! but due to margin is ,ery good on this (roduct retailers are lo,e to sell $$ retailers chosen /oreal is a (referred brand to sell through their outlet. 0e,lon 2hich is again (rice range of I!*&$# 2ould ha,e 1" retailers choice in their basket. Bo2 mo,e to some less (rice segment 2here as /akme has 1I retailers choice out of 1#! retailers as our sam(le size.

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". 'hat margin you a,ail in the follo2ing brandT +om(any Bame Distributor )argin 0etailer )argin +ash Discount 0e,lon &6 1#6 $6 /%Oreal &6 1#6 BO BO /akme &6 1#6 BO 1# days /otus I6 $!6 3ioti4ue I6 $!6 Shahnaz .ussain I6 $!6 BO BO

de(ends on BO State 1# days BO

+redit =eriod 1# days )in. sales of 0s #!,!!!L* for months

8ranchisee Status

(otential )in. sales sales of 0s of 0s 3ased on 3ased on 3ased on 9#,!!!L* to 1,#!,!!!L* (erformance (erformance (erformance #!,!!!L* (.m. (.m. 1!!6 re(lacement is done 1!!6 re(lacemen t is done 1!!6 re(lacement is done 1!!6 re(lacement is done

1.#6 of 1!!6 0e(lacement in,oice re(lacemen ,alue t is done

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This gra(h de(ict the 0etailers margin and the Distributor margin they 2ill get 2hen they sell one (roduct in there outlet. This section 2ill gi,e us insight of the 0etailers choice for selling one (roduct. 'hich is e4ually ,aluable then the marketing and other marketing mi; because some time buying beha,ior influenced by the retailers to the great e;tent. 3ut sur(risingly 0e,elon , /oreal and /akme these are three to( brand in the cosmetic market 2hich gi,e &6 margin to the distributor and 1#6 flat margin to the retailers no2 the discussion (oint is 2hen one brand established in the market com(any also use the com(etiti,e ad,antage on that front. +oming to the second o(tion 2here three brand 2hich is less kno2 in com(arison to the 0e,elon , /oreal and /akme 2hich is /outus, 3ioti4ue, Shahnaz hussain they ga,e I6 margin 2hich is more than $6 from the established brand and 0etailer 2ould got $!6 margin 2hich is more than #6 of the established brand. +learly for the ne2 com(any 2ho try to established there o(eration in India take care of these (oint because it is 2ell kno2n fact Indian consumers are ,ery (rice sensiti,e either distributor or retailers or end consumers.

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I. 0ate your satisfaction le,el to selling cosmetic brandT

'e try to gauge 2ith this 4uestion about the customer satisfaction le,el in this follo2ing four ,ertical form our sur,ey sam(le size of 1#!. $I6 res(ondent out of 1#! (eo(le is gi,ing us good signal that there satisfaction le,el is lo2er than e;cellent and ,ery good 2hile $$6 res(ondent think there satisfaction le,el 2ere e;cellent for to sell the cosmetic brand through outlets also 1I6 res(ondent are chooses ,ery good to sell cosmetic (roduct through the com(any. /o2 area is 1I6 2here (eo(le are not satisfied 2ith the cosmetic (roduct because they think they don%t ha,e any re4uirement of that, com(any need to 2ork to2ards this filling u( this ga( also try to turn 196 res(ondent are saying a,erage le,el satisfaction le,el to2ards selling the cosmetic brand.

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5. Do you satisfy 2ith the kind of marketing (romotion (lan cosmetic com(any is doing in current market scenario

Fes Bo

$& $#

Out of 1#! (eo(le from our sur,ey suggested that #16 (eo(le are suggested that this outdoor marketing acti,ity or direct marketing and other 2ay of marketing acti,ity doing by the cosmetic com(any like /oreal, or 0e,lon is (erfectly fine. Bo2 also along 2ith #16 ,ery com(etiti,e ans2er 2e recei,ed that 956 (eo(le are actually not liked the current marketing and (romotion scheme o(ted by the com(any no2 from the ne;t 4uestion 2e 2ould ask to the retailers 2hat are the (ossible 2ay to do ad,ertisement to reach out more masses.

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1!. 8rom 2here you get to kno2 about cosmetic (roduct most.

+osmetic (roduct Through +am(aigned Through Sales re(resentati,e :d,ertisement 'ord of mouth (ublicity Internet

Bo of 0es(ondent 1# 19 $! 19 1$

Through this 4uestion 2e try to analyze the a2areness about the cosmetic (roduct com(any and ho2 2ell they communicate to the customer or retailer and ho2 they 2ill communicate. 8rom our finding it is comes that 6 (eo(le out of 1#! as a sam(le size is

res(onded that they are got to kno2 about the cosmetic (roduct through :d,ertisement so the ad,ertisement is the best 2ay to communicate their (roduct to the end users. $16 res(ondent said they got to kno2 about cosmetic (roduct through cam(aigned by the res(ecti,e com(any. :lso 1#6 retailers got to kno2 about these (roduct through sales re(resentati,e. :nd

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1" 6 res(ondent out of 1#! (eo(le said they got to kno2 if the customer demanded same (roduct form the res(ecti,e com(any 0ecommendation about the any cosmetic (roduct com(any for the (romotion best medium is ad,ertisement in that (rint media, electronic media also cam(aigned and 2ord of mouth (ublicity is e4ually im(ortant in the medical de,ices com(any

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CONCLUSION

The market for cosmetics in India is characterized by high ,olume sales of lo2*end (roducts, 2hile at the same time the legendary emerging middle* class has generally been fuelling demand for cosmetics and u((er*mass toiletries. =roducts that are too s(ecialized ha,e yet to be successful on the Indian market. 7;am(les include toners, hand care and other ,alue*added skin care (roducts, bath ? sho2er (roducts and aftersha,e balm. Only the richest consumers can afford these@ indeed, the a,erage consumer may be una2are of their (ur(ose or e,en e;istence. This also e;(lains the relati,ely (oor sho2ing of (erfumes, es(ecially the (remium ,ariety. )ost ma1or cosmetic com(anies (rofess the need to ta( the u((er market segment and create e;clusi,e (roducts, but market studies re,eal that most cosmetic users are un2illing to cough u( more to buy these e;clusi,e (roducts. Indeed a more recent feature across all sectors, 2hether basic toiletries or more lu;ury (roducts, such as color cosmetics, has been for manufacturers to concentrate on the mass market. 8or toiletries, this is a result of many consumers trading do2n, forcing manufacturers to res(ond. In skin care and colour cosmetics, it is more a result of trying to increase demand in the gro2ing market for mass (roducts, es(ecially among teenagers. 3rand image and high degree of consumer acce(tability need to be established in the (ersonal (roducts sector, and call for hea,y (romotional in,estments in a2areness building, besides tie*u(s 2ith good 8)+A com(anies to le,erage their distribution strengths. The gro2th of direct marketing as an alternati,e channel 2ithout incurring high (romotional and de,elo(mental costs needs to be e,aluated by ne2 entrants in the sector, in order to formulate the most a((ro(riate market de,elo(ment strategy for their (roducts.

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This is a thesis based on the market research on the cosmetic industry of India. The size of India's cosmetics market is USD 1 billion. Out of this, size of skin care segment is USD !! million, color cosmetics is USD "# million, fragrances is USD $# million, men%s care is USD 1&# million and hair care is USD $!! million. 'hile li(sticks account for nearly a third of the color cosmetics market at USD $# million, the market for nail enamels is estimated at around USD )illion. The remainder, i.e. USD 1" million consists of (roducts such as mascara, eye*liners etc. +osmetics can be broadly di,ided into $ categories - +hemical +osmetics and .erbal +osmetics. /akme, /%Oreal and 0e,lon are ma1or (layers in the chemical cosmetic market 2hereas Shahnaz .ussain, 3ioti4ue and /otus are (rominent in the herbal segment. The market share of chemical cosmetics is 5!6 2hereas for herbal cosmetics, it is 1!6. 7,en though herbal cosmetics segment has ,ery lo2 market share, this segment is gaining (o(ularity ,ery fast, and consumers% demand for herbal cosmetics is on a stee( rise. )arket (enetration le,els of international cosmetics brands in India are lo2. 8oreign brands currently constitute only $! (ercent of the market, due largely to the higher (ricing these brands carry.

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RECOMMENDATION

The size of India's colour cosmetics market is 0s $#! crore. That of fragrances is 0s I# crore 2hile the skincare market size is larger at 0s 9!! crore. 'hile li(sticks account for nearly a third of the colour cosmetics market at 0s 5!*1!! crore, the market for nail enamels is estimated at around 0s 11! crore. The remainder consists of (roducts such as mascara, eye*liners etc. The market for cosmetics and toiletries in India is characterized by high ,olume sales of lo2*end toiletry (roducts, 2hile at the same time the legendary emerging middle*class has generally been fuelling demand for cosmetics and u((er*mass toiletries. =roducts that are too s(ecialized ha,e yet to be successful on the Indian market. 7;am(les include toners, hand care and other ,alue*added skin care (roducts, bath ? sho2er (roducts and aftersha,e balm. Only the richest consumers can afford these@ indeed, the a,erage consumer may be una2are of their (ur(ose or e,en e;istence. This also e;(lains the relati,ely (oor sho2ing of (erfumes, es(ecially the (remium ,ariety. )ost ma1or cosmetic com(anies (rofess the need to ta( the u((er market segment and create e;clusi,e (roducts, but market studies re,eal that most cosmetic users are un2illing to cough u( more to buy these e;clusi,e (roducts. Only 9! (er cent of /akme's customers e;(ressed their 2illingness to (ay more in antici(ation of su(erior 4uality. 'hen the domestic (layers ha,e looked at the (remium segment they ha,e ado(ted a ,ery cautious a((roach. 8or instance /akme has no2 introduced its e;(ort range U'ild Orchid' into the domestic market and also recently launched Uultra (remium' range. 3ut these are limited (roduct ranges mainly in the (erfumes and colour cosmetics segment. Indeed a more recent feature across all sectors, 2hether basic toiletries or more lu;ury (roducts, such as colour cosmetics, has been for manufacturers to concentrate on the mass market. 8or toiletries, this is a result of many consumers trading do2n, forcing manufacturers to res(ond. In skin care and
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colour cosmetics, it is more a result of trying to increase demand in the gro2ing market for mass (roducts, es(ecially among teenagers. The first challenge that the colour cosmetics industry had to face 2as to undo the negati,e connotations attached 2ith N3eing fashionableN. 8urther they also had to dis(el the fears that colour cosmetics are harmful for the skin. They had to hel( the (eo(le to learn to ado(t cosmetics as an essential (art of daily grooming. In this industry (ositioning is carried out mainly by ad,ertisements. /akme has al2ays ad,ertised in the ,arious mass media a,ailable. It also has a ,ery good distribution net2ork. 8or instance, its (remium brand Orchids has follo2ed the (ath of +hambor, and is (laced only in large and re(uted retail stores To (osition them strongly amongst the & million youth section /akme came u( 2ith 7lle1I in early 155&. It 2as ad,ertised for the NFoung girl 2ho breaks the rules and lo,es to ha,e funN. These ads sho2ed young, college and high school going girls 2ho (ro1ected the image of trying to be different and NcoolN. In the (remium segment /akme has introduced another (layer, :,iance, 2hich has been (osition as Ncustomized beauty solutionsN. The distribution is handled by net2ork marketing, 2hich consists of a number of beauty consultants, mainly belonging to the u((er*middle class, 2ho ha,e been 2ell trained and are 2ell groomed to s(read the :,iance beauty gos(el

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BIBLIOGRAPHY

0eed, Sandra I. US De(artment of .ealth and .uman Ser,ices. N+osmetics and Four .ealth.N $!!9. )ay 19, $!!". V1W /e2is, +arol. 8D:. N+learing u( +osmetic +onfusion.N $!!!. )ay 19, $!!". =allingston, H C155ID. /i(stick> : +elebration of the 'orld's 8a,orite +osmetic. St. )artin's =ress. IS3B ! 1$15519". :gner T C1551D. NSusce(tibility of ato(ic dermatitis (atients to irritant dermatitis caused by sodium lauryl sul(hateN. :cta Derm. Eenereol. "1 C9D> $5&- !!. =)ID 1&I1&99. Bassif :, +han S+, Storrs 8H, .anifin H) CBo, 1559D. N:bnormal skin irritancy in ato(ic dermatitis and in ato(y 2ithout dermatitisN. :rch Dermatol 1 ! C11D> 19!$-". =)ID "5"5991. )arrakchi S, )aibach .I C$!!&D. NSodium lauryl sulfate*induced irritation in the human face> regional and age*related differencesN. Skin =harmacol =hysiol 15 C D> 1""-I!. doi>1!.11#5L!!!!5 11$. =)ID 1&&"5I15. +I0 (ublication. 8inal 0e(ort on the Safety :ssessment of Sodium /auryl Sulfate and :mmonium /auryl Sulfate. Hournal of the :merican +ollege of To;icology. 15I Eol. $ CBo. "D (ages 1$"*1I1. /Xffler ., 7ffendy I C)ay 1555D. NSkin susce(tibility of ato(ic indi,idualsN. +ontact Derm. 9! C#D> $ 5-9$. =)ID 1! 999"".

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ANNE>URES

.. A(($?*+$ @: -

/ist of Indian cities 2ith their (o(ulation R.(< 1 $ C&%, )umbai C3ombayD Delhi Golkata C+alcuttaD 9 # & " I 5 1! 11 1$ 1 19 1# 1& 1" 1I +hennai C)adrasD 3engaluru C3angaloreD .yderabad :hmedabad =une Gan(ur Surat Hai(ur /uckno2 Bag(ur =atna Indore )eerut 3ho(al Eadodara C3arodaD S%.%$ )aharashtra Delhi 'est 3engal Tamil Badu Garnataka :ndhra =radesh Au1arat )aharashtra Uttar =radesh Au1arat 0a1asthan Uttar =radesh )aharashtra 3ihar )adhya =radesh Uttar =radesh )adhya =radesh Au1arat P!:*5.%&!( $!,I"!,"&9 1I, &$,&$# 1#,1I#,&"! ",15&,### &, "!,1 ! &,15&,5 5 #,$##,!! #,!&5,!&1 ,9!I,59# ,195,$&5 $,55",119 $,51#,"#& $,# 1,#&" $,#1&, 9& 1,559,5!5 1,I 1,!"I 1,"1 , I 1,&"1,"1

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15 $! $1 $$ $ $9 $# $& $" $I $5 ! 1 $

/udhiana Bashik 3hubanesh2ar :gra +oimbatore Gochi C+ochinD Eisakha(atnam CEizagD Earanasi C3enaresD 0a1kot )adurai :sansol Habal(ur :llahabad Hamshed(ur Dhanbad

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'. A(($?*+$ E: FUESTIONNAIRE 1. 'hat kind of store do you deal inT CaD 0etail CbD Stand alone store CcD 3outi4ue CdD Others C=lease mention,ZZZZZZZZZZZD 'hat brand (eo(le (refer to buy for cosmetic uses in your store, =lease chose only one o(tion out of theseT CaD /'Oreal CbD 0e,lon CcD +hambor CdD /akme CeD +hanel CfD +al,in Glein CgD Da,idoff ChD )aybelline CiD /ancome C1D FS/ CkD 7lizabeth :rden ClD Shisheido CmD 0al(h /auren CnD )arks and S(encer CoD The 3ody Sho( C(D Bi,ea C4D Aarnier CrD Set'et CsD IT+ CtD Sunsilk CuD Do,e C,D 7,eryouth C2D Easeline C;D Eatika CyD .imalaya CzD =onds CaaD =antene CbbD =arachute CccD =ark :,enue CddD 3rylcream CeeD Aodre1 CffD /i,on CggD 7mami .o2 many different brands contributed this follo2ing segment of cosmetic IndustryT CaD .air +are CbD Skin +are CcD +olor +osmetics CdD 8ragrances CeD )en's +are CfD Toiletries 'hich com(any brand is most fa,orable in /i(stick C/i( Aloss, /i( =encilD Segment T CaD 7lizabeth :rden CbD /oreal CcD )aybelline CdD 0e,lon CeD /akme CfD +hambor CgD Shahnaz .ussain ChD 3ioti4ue CiD /otus 'hich of the follo2ing brand is most fa,orable to the customer for 7ye segment C7ye Shodo2, /iner ? 3ro2s , Ga1al ,3lushers, )ascara,+om(actD T CaD 7lizabeth :rden CbD /oreal CcD )aybelline CdD 0e,lon CeD /akme CfD +hambor CgD Shahnaz .ussain ChD 3ioti4ue CiD /otus 'hat is the (rice range for /i(stick segment the marketT CaD 7lizabeth :rden CbD /oreal CdD 0e,lon CeD /akme CgD Shahnaz .ussain ChD 3ioti4ue for the ,arious brands in CcD )aybelline CfD +hambor CiD /otus

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". 'hat margin you a,ail in the follo2ing brandT +om(any Bame Distributor )argin 0etailer )argin +ash Discount +redit =eriod 8ranchisee Status 0e(lacement I. 0ate your satisfaction le,el to selling cosmetic brand T 7;cellent Eery good. Aood. :,erage. /o2 Do you satisfy 2ith the kind of marketing (romotion (lan cosmetic com(any is doing in current market scenario Fes BO 8rom 2here you get to kno2 about cosmetic (roduct most. Through +am(aigned organized by the com(any.th Through res(ecti,e sales re(resentati,e. Through ad,ertisement. 'ord of mouth (ublicity. Internet. 0e,lon /%Oreal /akme /otus 3ioti4ue Shahnaz .ussain

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