Industry Background

Indian cosmetics industry came into limelight after 1991.When many Indian women made their crowning presence at international level. The Indian Cosmetics Industry is defined as skin care, hair care, colour cosmetics, fragrances and oral care segments.

Market capitalization The total Indian beauty and cosmetic market size currently stands at US$950 million and showing growth between 15-20% per annum. The overall beauty and wellness market that includes beauty services stands at about US$2,680 million, according to CII estimates.

Size of the industry The size of Indian Cosmetics Industry globally is $ 274 billion. Among these fastest growing segment is color cosmetics, accounting for around US$ 60 million of the market. The low and medium-priced categories that account for 90 % of the cosmetics market in terms of volume. Domestic and Export Share Costs for importing other products are much higher than producing it in the country. the average import tariff on cosmetics products is currently very high at 39.2%.

COMPANY HISTORY
INTRODUCTION Half a century ago, as lakme took her steps into freedom,its first beauty brand was born. At a time when the beauty industry was at a nascent Stage, Lakme tapped into what would grow to be amongst the leading,high consumer interest segments in the Industry that of skincare and cosmetic products. Armed with a potent combination of foresight, research and constant innovation. Lakme has grown to be the market leader in the cosmetics industry . Lakme today has grown to have a wide variety of products and services that cover all facets of beauty care, and arm the consumer with products.

 A brand that has over 5 decades talked of beauty is none other than Lakm. Lakme founded in 1973 is an Indian brand of cosmetics, owned by Hindustan Unilever. Lakme started as a 100%subsidiary of Tata Group. Tatas entered into a 50-50 joint venture with Hindustan Lever Limited in 1995. In 1998 Tata sold off their stakes in Lakme Lever to HLL ,for Rs 200 Crore. With a unique blend of understanding of women of all ages, today, Lakm is all setting trends and dominating the fashion arena.

Competitors of lakme
Several Multinational companies such as : REVLON,YARDLY,GARNIER,LOREAL entered in the market .These companies initially cashed on their international brand . Revlon, ponds & Avon with the major part of the rest .

Other international brand in the sector include LOreal some , of them engaged in the level if marketing model for their products

ENVIRONMENT
Environment refers to the competitors. They are a very important part of the market. Lets have a look at some of themLOREAL It is the worlds largest cosmetics and beauty company. Loreal currently markets over 500 brands and thousands of individual products in sector of beauty business. REVLON It is an American cosmetics, skincare, fragrances and personal care company. It has redefined the concept of beauty care in India. It brings to Indian women an exciting range of international cosmetics, and fragrances. M.A.C 1- Companys products initially specifically designed for professional make-up artists but now it is available to customers worldwide. It produces skin care , hair care, beauty products and cosmetics. They do not use any fancy business scheme and is truly concerned with its customers.

PRODUCT
Lakm has a wide range of products in color cosmetics that bring visible results. Lakm provide the complete package with the skin care range and the wide range of colors to spice up the look. Product Category Basic Product Expected product Augmented product Potential product PRODUCT DIFFERENTIATIONS Form Features Performance and quality

Strategies Under Product Mix

Latest Products Range of Lakme

Introduce Different brands at different prices Improved packaging Better Display of products Lakme offers : Haircolour Nailpaint Fair perfect Face magic moisturizer

WHATS NEW ??? LAKME PERFECT RADIANCE LAKME SUN PERFECT LAKME ABSOLUTE

PRICE
In present market scenario companies are required to effectively plan their pricing strategies to not only retain current customers but also to expand customers base. Lakme believes that by introducing more stock keeping units(SKUs) it will be able to tide over the steep pricing of its products. Different types of pricing adopted by lakme: Promotional pricing Responding to competitors pricing: Differentiated price:

DISTRIBUTION NETWORK (PLACE)

Channels of distribution are categorized as follows Broad - Cosmetic discounters, Supermarkets, and mass merchandisers. Examples are D-Mart, Big Bazaar etc. Alternative - is identified by five different marketing methods: Direct Sales Direct Mail/TV/Print Free Standing Stores Health Food Stores Salons Lakme's Retail marketing These Lakme Multifunctional products have enjoyed much success, thanks to more discerning consumers who are demanding value for money in their colour cosmetics purchases.

Products were made available in mass, drug or food stores. Research shows that sales doubles when self-service is offered. Giving people the choice attracted new customers to Lakme. Innovative technologies were used to distribute samples beyond the point-of-sale, even into the home Greater product penetration in suburban and rural areas, frequent product launches and greater interest in personal grooming, especially among the younger population, drives growth of Lakme.. SKUs - Selling Kit Unit sizes and packaging can be effectively used to generate trial and initiate demand for a product, without compromising on price Lakme is also emphasising on making the brand prominently visible in the crowded stores. Greater interaction is key to touching consumers and they are using the point-of-purchase for a much higher level of direct contact in-store sampling, education and experience. Use of CRM. It set updozens of beauty salons across the country. This helps in knowing customer preferences.

PROMOTION
Advertising: advertising strategies: 1. In-store sampling 2. Brand placement & Event sponsorship 3. Internet promotions 4. Line Branding They have adopted the education strategythey educate their customer about the use of the products

SWOT ANALYSIS
Strengths
Weakness

High quality manpower resources Brand Name Vast range of products and services Distribution Channel Unilever global technology capability

High Services costs Use of Hard Chemicals

OPPORTUNITIES

Threats

Brand growth through Aggressive price competition from increased local and consumption depth . multinational players Growth in Business of . beauty saloons . Availability of cheap Lakme Beauty beauty products . Training academy in Reports regarding Mumbai, Chennai and presence of LEAD in lipsticks. New Delhi.

Customer survey analysis

Brand Loyal to Lakme?
lakme provides Quality Products
Brand Loyalty Quality

No 40 % Yes 60 %

Yes 82% No 18%

purpose You use lakme products ?

50

the price level of Lakme products ?

Price Level

20 10

20

High 30 %
Usage

Low 5% Optimun 65%

If not Lakme then which Other brand ?

Competitors

celebrity endorsements in advertisements attract you towards Lakme products ?

Celebrity Endorsement effect

Revlon 22% Oriflame 18% Blue heaven 8% L'Oreal 39% Lissome 7%

No 83% Yes 17%

What inspire you to go for any cosmetic product?

changes you would like to see in the Lakme products?

Expectations

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

More Product Range Better Packaging

1% 17%

More Shades All the above

47%

35%

SUGGESTIONS
Lakme should start a new product line of Herbal or Ayurvedic based. If we look at a broader picture women today are changing their attitude towards more healthier and natural cosmetic products as a whole and are reluctant to use chemical based cosmetics if they have better options. Promotions beyond fashion week. The brand should not lose its focus away from cosmetics. It can proved to very detrimental. For vast reach unlikely, in the short-term. Some sort of an alliance or co-branding with the salons that already exist may, perhaps, have been a better strategy. The general perception is that company-owned salons are expensive. Though Lakme beauty salons are reasonably priced, it has not been communicated well enough. The colors of the product, the logo design,the shape of the package all say cool. Packaging should feature many clear caps and lids that show off the bright shades of lipstick and eyeshadow within, as transparent packaging plays a major role in brands where colour is a key selling point. Always having new formulas in fresh packaging keeps customers coming back for more.