atlast beep lakme
TRANSCRIPT
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2012
Submitted To:
Prof. Trupti .K.
12/22/2012
MASS MARKETS COSMETIC LEADER
LAKMESubmitted by :
Pooja: PG-12-033
Nidhi: PG-12-043
Mayuri: PG-12-053
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Sr. No. TOPIC PAGE No.
1.Introduction 3
2. The Cosmetic industry 4
3. General overview about the company 7
4.4.1
Brands In Cosmetic IndustryCustomer Segments and Major players
1315
5.
5.15.25.3
Market Share And Competitor Analysis
Competitive AdvantageKey Differentiator For Success of The BrandPrice Related Differentiation
16
6. SWOT Analysis of LAKME 18
7.
7.17.2
Competition And Challenges In Cosmetic Industry
CompetitionChallenges In Cosmetic Industry
19
8. Reason For LAKMES Survival In this cut throat
competitive Cosmetic Industry
21
9. Conclusion 24
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1. COSMETICS
1.1 INTRODUCTION
The word cosmetics comes from the Greek word kosmetikos meaning skilled in
adornment. The evolution of cosmetics has truly changed through the centuries. The way people
wear makeup and the reasons why they wear it have changed dramatically over time. The Roman
philosopher, Plautus, once wrote, A women without paint is like food without salt. The
attraction of a beautiful face did not appear yesterday; painted ladies and even gentlemen have
been known through time in artwork and illustrations. The art of cosmetics has definitely
changed over time and through different cultures including: Egyptians, Greeks, Romans, French,
Italians, and Americans.
The U.S. FDA defines cosmetics as: "Intended to be applied to the human body for
cleansing, beautifying, promoting attractiveness, or altering the appearance without affecting the
body's structure or functions." This broad definition includes any material intended for use as a
component of a cosmetic product. The earliest known cosmetics were in use in Egypt in the 4th
millennium BC. In simple words cosmetics would mean, A preparation, such as powder or a
skin cream, designed to beautify the body by direct application or Something superficial that is
used to cover a deficiency or defect, Serving to beautify the body, especially the face and hair or
Serving to modify or improve the appearance of a physical feature, defect, or irregularity.
Modern cosmetics include skin-care preparations; foundation, face powder and rouge
(blusher); eye makeup; lipstick; shampoo; hair curling and straightening preparations; hair
colours, dyes, and bleaches; and nail polish. Related products include antiperspirants,
mouthwashes, depilatories, astringents, and bath crystals.
Thus the benefits of cosmetics would be:
someone who takes care of your beauty needs A long lasting beautification product range It helps you to get a beautiful skin Someone who tells you right thing about looking good.
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2. THE COSMETIC INDUSTRY
India, with a population of nearly a billion people, is a country of contrasts. India's urban
population is the main engine that fuels the demand for various cosmetic products. Although
Indians are strongly attached and committed to their traditions, and culture, the advent of
television and the awareness of the western world are changing the tastes and customs of India.
The morphing of India is subtle and the changes are not visible for the first time visitor.
However, the market liberalization process that began in 1991, along with the crowning of three
Indians as Miss World and Miss Universe during the preceding four years, have made Indian
women conscious of their appearance. Consequently, the cosmetic consumption patterns of
Indian women have changed, and this trend is fuelling growth in the cosmetic sector. Indian
cosmetics market is valued at $950 million. The key growth drivers for the cosmetics market in
India are rapid urbanization, increase in disposable incomes, and changes in peoples taste.
The Indian cosmetic Industry has witnessed rapid growth over the last couple of decades.
The Indian cosmetics industry is growing in terms of product development and marketing. The
preference of Indian consumers is changing from the merely functional products to more
advanced and specialized cosmetic items. In 2005, sales of cosmetics rose by 6% in current
value terms in India. It is also predicted that there is a huge potential for cosmetics in India.
Comparatively the range of cosmetic and beauty products in India has widened tremendously.
Beauty products manufacturers in India mostly cater to the great demand for cosmetics that fall
into the low or medium-price categories as the greatest demand in India have always been for
these economically priced products. India in cosmetics, which saw its value share rising from
27% in 1999 to 31% in 2005 and are likely to continue to surge ahead over the forecast period.
The entry of many multinationals into the Indian cosmetics industry in 2005 has made it an
extremely challenging and dynamic market. Foreign players have focused more on Product
innovation; re-launches and brand extensions spread across multiple price points, and enhanced
product penetration by extending their distribution networks. The leading players have
streamlined their ad spend to effect savings that has allowed them revamp their pricing strategies
as well as offer free gifts to retain consumers. An interesting trend among Indian cosmetic
consumers is, while other global countries are taking to the traditional Indian herbal and
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ayurvedic applications for beauty solutions, Indian consumers are increasingly looking to
international personal care brands as lifestyle enhancement products, in the belief that the
association with and use of an international brand confers one with a sophisticated and upper
class image. The projected sales in 2010 at constant 2005 prices is Rs. 195.6 billion, the main
reasons being a greater ability to purchase personal grooming products among a larger base of
financially independent women, frequent relevant product launches and growing beauty
consciousness and awareness, especially among the younger population. Despite the huge
nascent potential in India, cosmetics grew at relatively slow pace in constant value terms over the
2005-2010 as was expected for this forecast period.
However, in recent years in the cosmetics market India competitors have begun to
manufacture products to cater to an International need. For instance, herbal cosmetics from Indiahave a great demand in the overseas market and many cosmetic products that are manufactured
in India today are supplied to international suppliers of branded cosmetics products like The
Body Shop for example. New facts that have been unveiled by a series of cosmetics business
market analysis India reveal that many International companies are now outsourcing cosmetics to
India and that the industry of cosmetic products in India is growing at an average rate of almost
twenty percent annually. This increase is attributed to two main factors. The first being the
increase for the demand in Indian cost-effective products and the second being the increased
purchasing power of the average Indian. There are also many reasons for the increased demand
for cosmetic products in particular. With the introduction of satellite television, The emergence
of a young urban elite section with increasing disposable income in cities, increase in the number
of working women, changing lifestyles, increased affordability of lifestyle-oriented and luxury
products, mounting aspirations, penetration of satellite TV, increasing appetite for western
goods, a wide array of television channels as well as the Internet, the average Indian consumer is
constantly bombarded with advertisements and information on new cosmetic products which
often translates into the desire to purchase them. A boom in the Indian fashion industry has also
been linked to the increased awareness of Indian people about their appearances and
consequently contributed to an increase in the demand for cosmetic products. However, even
with the massive surge in the popularity of cosmetic products, statistics have shown that the
average Indian consumer spends much less on cosmetic products than consumers from every
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other part of the world. This means that the Indian cosmetic industry has an even greater
potential for growth than it is presently experiencing. However, the penetration level of
cosmetics and toiletries product is still very low in India. The per capita expenditure on cosmetic
products in India is approximately $0.68 cents compared to $36.65 in other Asian countries. The
penetration level of international cosmetics brand in India is also low. International brands
account for only 20% of the cosmetics market. This low level of market penetration can be
perceived as an opportunity for major players.
In the entire range of products that fall within the territory of the Indian cosmetic market,
the most popular items are colour cosmetics, of which nail varnish, lipsticks and lip glosses
account for the most sales. In this area, popular local brand names include Lakme and Revlon.
Skin-care cosmetics have experienced a slower growth and products such as anti-wrinkle creams,cleansers and toners, for instance are not as popular as facial creams, moisturizers and fairness
creams in this genre. Companies like Ponds and Fair and Lovely rule the roost in this segment.
Unilever and Procter & Gamble are major players in the Indian cosmetic sector of shampoos and
hair products. However, the Indian hair-care cosmetic sector now has a few foreign brands to
compete with these giants as well.
Thus the total size of the Indian retail beauty and cosmetics market is currently estimated
at $950 million [Colour cosmetics account for 14%, Fragrances - 21%, Hair care - 19%, Skin
care - 17%, Beauty services - 13%, Herbal products - 9%, others - 7%]. The overall beauty and
wellness market, which includes beauty services, is $2.68 billion. Thus The cosmetics industry,
which started glowing in the early 1990s, is expanding exponentially. With more women and
men becoming conscious of their and willing to spend on their grooming, this industry has been
growing at 20-25 percent the last few years. The enormous growth in this segment has not only
attracted many MNCs but also provided space for many Indian companies to foray or expand
their product range.
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3. GENERAL OVERVIEW ABOUT THE COMPANY
Half a century ago, as India took her steps into freedom, Lakme, India's first beauty
brand was born. At a time when the beauty industry in Indiawas at a nascent stage, Lakme
tapped into what would grow to be amongst the leading, high consumer interest segments in the
Indian Industrythat is ofskincare 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 tohave a wide variety of products and services that
cover all facets of beautycare, and arm the consumer with products to pamper her from head to
toe. These include products for the lips, nails, eyes, face and skin, and services like the Lakme
Beauty Salons.
Lakme is a product range that caters to the beautification needs of not only women in their
adult age but in today's context teenagers also. It has a brand personality of someone who takes
care of you and your beauty needs. It tries to position itself amongst its consumers as a product
range that will help them look beautiful as is evident from its catchphrases:
1. On top of the world!2. Source of radiant beauty!
Lakme also started its new business in the beauty industry by setting up Lakme Beauty
Salons all over India. Now HUL (Hindustan Unilever Limited) has about 88 salons all over India
providing beauty services.
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Product range of Lakme:
TYPE PRODUCTS
Lakm Hair Care Lakme Hair Next GEL MOUSSE SPRAY SERUM
Lakm Eyes 9 to 5 IntenseVolume Mascara
Quick Dry EyeLiner
Defining EyeLiner
Perfect DefinitionEye Pencil
Lakme ThicklashMascara
Lakme Eye PotNine to Five
Satin Glide EyeShadow
Intense Shine Eyeliner Kajal Shimmer Eye
Cube
High definition
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Eyeliner
Eye Color Quartet
Lakm Face
Flawless Makeup
Creme Compact
Matte Compact
Radiant Compact
Liquid Foundation
Face Magic
Rose Powder
Face Highlighter
Lakm Lipsticks Enrich Lip Colour
Lipgloss
Lipliner
Aqua Shine Lip Color
Enrich 9 to 5 Lip Color
Enrich 9 to 5 Lip Duo
Enrich Metallic LipColor
Lakm Nails
Tarun Tahiliani
True Wear Nail Enamel
Free Spirit Nail Color
Glamour True Wear Nail
Color Winter 2009
Lakm Cleansers Fruit Facial Scrub
Deep Hydrating Mask
Creme Face Wash
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Matt effect Morning
Fresh Set
Strawberry Silk Splash
Face Wash
Deep Pore Cleanser
Matteffect Purifying
Face Wash
Matteffect Refreshing
Astringent
Lakm Moisturisers Matteffect Icy Fresh GelPeach Milk Moisturiser
Winter Care Moisturiser
Lakme Pure Defence
Anti-Pollution System
Pure Defense
Detoxifying Facial Wash
Pure Defense Protective
Day Lotion
Pure Defense
Detoxifying Serum
Pure Defense Restorative
Night Creme
Lakme Sun Expert Ultra
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Lakme Sun Expert matte SPF 20 & 30
Lakme Sun Expert
Cream SPF 30
Lakme Sun Expert
Sunscreen Lotion SPF 15
Lakme Matte Effect
Lakme Matteffect
Purifying Face Wash
Lakme Matteffect
Refreshing Astringent
Lakme Matteffect
Morning Fresh Set
Lakme Matteffect Icy
Fresh Gel
Lakme Bridal Sutra
collectionBridal Jewel Eyeliner
Bridal True Wear Nail
ColourLip Chrome
Glide on Eye Colour
Jewel Sindoor
Enrich Metallics
Lipcolor
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Silk Naturelle Daily
Foundation
Pure Rouge Blusher
Just Kissed Cheek and
Lip Tint
Enrich Matte Lip Color
Glide On Lip Color
Eye Artist
Lakme Spa LineShea Nut Hand Butter
Nail Beauty OilHoney Cuticle Cleaner
Protective Base Coat
Nail Color Remover Oil
Hard Wear Top Coat
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4. BRANDS IN COSMETIC INDUSTRY
Since market liberalization, several multinational companies have entered the Indian market such
as:
Revlon, Coty, Oriflame, Chambor, Avon, Yardley, Garnier Laboratories, LOreal,
These companies initially cashed in on their international brand image; however, repeat
purchases were not forthcoming because the products were not priced competitively.
Consequently, these companies became price-sensitive and most of the international brands are
now priced competitively in the Indian market. The colour cosmetic segment which has Indian
players and multinational company players which offers the highest competition such as:
Lakme Lever
Shenaz Hussain Ponds, Unilever Colgate Palmolive
Domestic players like Lakme, mainly dominate this market.
Revlon has a market share of 80% in the premium market. Lakme is the overall market leader in
the colour cosmetic segment (lip care and nail enamel) with a wide range of products and prices,
both. The organised colour cosmetics market is estimated at Rs 340 crore currently. Revlon's
sales account for Rs 60 crore of that. Lakme leads the market with sales of Rs 100 crore. Other
international brands in the sector with a major part of the rest, some of them engaged in the
multi-level-marketing model for their products are:
L'Oreal, Revlon,
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Maybelline, Avon.
The most important global players are already in India (except perhaps Estee Lauder, Mary Ann
Kay, Kao and Body Shop) and are in an advanced stage of market development. They are
already exploiting prospects based on imports of active ingredients, packaging and completely
built products. In that regard, new entrants have to contend with serious competition in India
from local as well as global players. Multinationals feel that Indian companies - Lakme, Pond's,
Nivea-makers have not identified the changing needs of the new Indian woman. The
international brands that are ambitiously fishing in the Indian waters are:
Switzerland's Torstone's Chambor, Sweden's Oriflame, USA's Avon Cosmetics, Revlon, Benckiser (Coty Vitacare), Paris-based Escada group, Laboratories Garnier.
It is not coincidence that many of these MNCs entered the Indian market in the mid-Nineties.
Fired with the zeal of changing the complexion of the cosmetics market, they are fuelling the
change using satellite television, women's magazines and beauty pageants but we cannot avoid
the fact that Lakme too has the largest reach in the Indian market, it specially dominates the mass
market segment and also in on the way to acquire the premium market with its innovative
marketing mix. Maybelline competes with Revlon and Lakme in the colour cosmetics market in
India. Revlon too has grown 65 per cent to strengthen its share to 13 per cent during the period.
As per the data, Lakme's share stands at 34 per cent, and that of Elle 18 is 25 per cent. The lip
and nail colour market, at Rs 107 crore, has registered a growth of 11 per cent. Mass market
products account for a major share, around 70 per cent, while the premium segment accounts
only for a mere 9 per cent in lipsticks and 5 per cent in nail enamels.
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5. MARKET SHARE AND COMPETITOR ANALYSIS
Lakme is the overall market leader in the color cosmetic with a wide range of products
and prices, both. It was the first cosmetic brand in India that captured the imagination of
consumers. Lakme enjoyed a market share of 52% at one time as the consumers didn't have
many choices but as the foreign brands like Revlon and Maybelline came in; it lost its position
initially. This was primarily due to the fact that consumers now had easy access to high quality
products and with rising disposable income and size of the Indian middle class consumers shifted
their attention to foreign players. But however Lakme still, managed to gain its position back.
The major reason they attributed to this was that it was the first cosmetic brand in India which
was particularly catering to the need of Indian women and thus set a trend for the foreign players
to tap the Indian market. Today also it is said that it is a trendsetter in cosmetics as it keeps on
coming out with novel colours, shades and products from time to time. Lakme now however
leads with sales of Rs 100 crores in market and can be considered as a best preferred and sold
product in the overall cosmetic market due to the advantage it has over its competitors.
5.1 COMPETITIVE ADVANTAGE
Lakme is a brand that epitomizes the feminity of Indian women. Lakme has over the
years built a brand that has got a special place in the hearts of Indian women. This was attributed
to the length and depth of its product mix. Lakme is economical as compared to its competitor
foreign brands. This particular aspect has never been harped upon by Lakme in its
advertisements. Lakme products are priced in such a way that mass market can buy it.
Accordingly if Lakme increases its price it may lose its customers and thus its pricing is the main
competitive advantage it has over other brands which are highly priced. Lakmes advertising is
its another important benefit. Lakme advertises every new product it launches carefully so as to
ensure that it is noticed by the mass. Lakmes promotion like speciality counters in departmental
stores, malls, television advertisements by the companys brand ambassadors, most importantly
Lakme salons whereby all Lakme products are available has helped it to increase its market
share. The various advertisements of Lakme try to tell their consumers that they provide them
with a complete solution for their beauty enhancement. Thus its customers feel that Lakme is a
healthy choice in order to keep a healthy and beautiful skin. Another strong point of Lakme,
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experts say, is its reach. With a retail reach of close to 1000 counters and an overall direct reach
of 40,000 stores, Lakme is one of the most widely available brands. This large presence gives the
brand volumes and makes it the largest cosmetics brand in India.
5.2 KEY DIFFERENTIATOR FOR SUCCESS OF THE BRAND
Lakmes key differentiator is that they provide the best of Unilever technology on
skincare range and their partnership with Milan-based Intercos Italia, the leading creator of new
cosmetics technology and fashion trendsetter for global beauty brands. This enables Lakme to
combine the best available International cosmetics technology with an in-depth understanding of
the Indian woman's needs to create relevant and innovative beauty products and services. This is
truly, the best of both worlds.
5.3 PRICE RELAED DIFFERENTIATION
12COMPETITIVE PRICE:
LAKME LOREAL
LAKME HAIR CARE = 120-195 LAKME CLEANSER = 45-75 LAKME TONER = 85 SUNSCREEN LOTION = 80-150 MOISTURIZER = 90-160
LOREAL HAIR CARE = 175-210 LOREAL CLEANSER = 480 LOREAL TONER = 370 SUNSCREEN LOTION = 830 MOISTURIZER = 590
1http://corallista.com/2011/11/25/lakme-absolute-range-now-in-stores-price-range-update/
2http://www.urbantouch.com/loreal/
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6. SWOT ANALYSIS OF LAKME
3
STRENGTHS
High quality man power Brand name Vast range of products and services Distribution channel Unilever global technology
capability.
WEAKNESS High service costs Use of hard chemicals
OPPORTUNITIES Brand growth through increasedconsumption depth
Growth in business of beauty salons,Lakme beauty training academy in
Mumbai, Chennai and new Delhi.
THREATS
Aggressive price competition fromlocal and multinational players
Availability of cheap beautyproducts
Reports regarding presence of Leadin lipstick
3http://www.mbaskool.com/brandguide/fmcg/913-lakme.html
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7. COMPETITION AND CHALLENGES IN COSMETIC INDUSTRY
7.1 COMPETITION
The Indian cosmetic market, which has been traditionally a stronghold of a few majorIndian players like Lakme, and Ponds has seen a lot of foreign entrants to the market within the
last decade. India is a very price sensitive market and the cosmetics and personal care product
companies, especially the new entrants have had to work out new innovative strategies to suit
Indian preferences and budgets to establish a hold on the market and establish a niche market for
them. Given the price-sensitivity of the Indian consumer who do not normally prefer to fork out
a large sum at one time, many cosmetic companies launched their products in smaller pack sizes
to make them more affordable. HLL and Revlon were the first to introduce small pack sizes.
Revlon introduced its small-range of 8 ml nail polishes and lipsticks, and was soon followed it its
strategy by major Indian companies as well. Small pack sizes have proved to be very popular in
the Indian market as it offers a consumer lower purchase cost and the opportunity to try new
products. Stiff competition in the cosmetics and market also saw an increase in the range of new
products being introduced for newer application concepts in the last few years. In the skin-care
segment, from just creams and moisturizers, there has been an upgrade to value-added products
such as :
Under-eye wrinkle removing creams, Dark circle removing creams toners, Sunscreen lotions, Fairness creams.
The colour cosmetics market saw new products such as smudge-proof lipsticks and mascaras,
liquid lip colour, and long-stay lipsticks being introduced. These specialized applications led to
growth in volumes and also enabled companies to price the products at a premium, driving up
value growth.
Service marketing strategies, such as point-of-sale advice and beauty counselling have
shown to boosts sales of cosmetics and personal care products and driven growth in the Indian
market. Beauty counsellors or advisors at retails outlets have been very successful in gaining
attention, creating product awareness and overcoming consumers lack of familiarity with, and
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fears about many cosmetics and personal care products such as home hair permanents and colour
cosmetics. Some companies such as Lakme have even set up exclusive Lakme beauty salons at
major cities in India through the franchisee route. Major herbal cosmetics brands such as
Shahnaz Hussain and Biotique also operate chains of salons through franchisees and offer
specialized training courses to customers. Companies continue to innovate on selling methods.
Popular Indian brand, Ponds established consumer advisory cells and through touch screen
counters and telephone help-lines offers advice on skin care. Another company, Baccarose,
owners of the Chambor brand organizes tea party make-up sessions at major Indian
cities. L'Oreal markets its range of specialized hair care products exclusively through salons and
beauty parlours. L'Oreal currently is the only company in the market that has a hair colour range
tailored exclusively for parlours. The company was also the first to introduce modern hair colour
and shampoos for coloured hair in the Indian market.
A strong brand promotional campaign, good distribution network, constant product
innovation and quality improvement, and the ability to provide a variety of quality products are
some of the major reasons for the success of most companies. HLL, is currently India's largest
cosmetics and personal care products producer and its brands has the dominant share (more than
50 percent) in segments such as personal wash, skin care, shampoos, lipsticks and nail polish.
7.2 CHALLENGES IN COSMETIC INDUSTRY
While the market seems impressive, there are hurdles that impede growth. The Indian
duty structure on imported products can pose a major deterrent to multinational vendors. Despite
the new value added taxation regime, where the duty has been reduced to 12.5%, the overall duty
on the product still comes to about 40%. This in turn reflects in the pricing of the products. Most
vendors add the duty to the product pricing to generate the right revenue. However, there is no
organized cosmetic industry body that can take up the issue with the government. In fact this
leads to the biggest threat the unorganized or grey channel. There are small retailers in the
market who directly import from markets such as Dubai, where pricing can vary from 3070%
from Indian product pricing. Thus today the grey channel makes up about 60% of the Indian
cosmetics market.
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8. REASON FOR LAKMES SURVIVAL IN THIS CUT THROAT
COMPETITIVE COSMETIC INDUSTRY
4
Lakme is the Indian womans Beauty Sutra inspiring expression of her unique beauty andsensuality.
Lakme brings expert products and services that are borne out of true understanding of the
needs of the Indian woman. They help the Indian woman in expression of her best selfsensual,
original, expressive, alive and intuitive. Lakme inspires her to unleash the potency of her
femininity, beauty and sensuality.
Lakme was the first major beauty brand in India and takes pride in being the expert onIndian Beauty for over 50 years. It is complete beauty brand spanning colour cosmetics, skin
care & hair styling products and extending to beauty services through the network of Lakme
Beauty Salons. Its bond with beauty and fashion is manifested through the Lakme Fashion Week,
which is now the largest fashion event of its kind in the country. Lakme has a foot print of over
1200 assisted sales outlets, which is the largest span of outlets with Beauty Advisors in the
country.
One of the reasons for its survival would also be the way in which it influences its
existing and potential customers. Lakme influences its customers through the concept of Ego,
concept of personality groups and the concept of perpetual selection.
CONCEPT OF EGO
Lakme tries to position itself on the basis of its appeal to the consumers which have an
ego. This means that the consumers of Lakme have an impulsive drive for which they seek
immediate satisfaction without concern for means of satisfaction. Women all over the world arealways expected to look good and Indian women are no exception; More so because of the fact
that Indian women in general do not have a fair skin like that of their western counterparts. Thus
it becomes but natural for Indian women to try and look good and use beauty products that help
4http://cosmetics.indianetzone.com/1/rise_indian_beauty_market.htm
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enhance their looks and style. With globalization and liberalization of Indian economy and the
changing demographics and income levels there is more and more concern to look good as
today's Indian woman is no longer confined to her home but is a big contributor to the growth of
Indian economy.
CONCEPT OF PERSONALITY GROUPS:
Lakme tries to woo the compliant consumers i.e. they try to target people those who have
desire to be loved, wanted and appreciated. As is earlier stated women are supposed to look good
not only in western countries but also in India. Women always appreciate if someone calls them
beautiful and it has become the custom of the society to see women in such a context. So it
would be prudent to say that according to the societal norms a women has to look good at all
times and which has a bearing on the psychology of female consumers towards cosmetic
products which help them achieve that desired look. Needless to say that Lakme plays on the
concept of women wanting themselves to be appreciated for their beauty and being loved for
that.
CONCEPT OF PERPETUAL SELECTION:
On the basis of perceptual selection Lakme has tried to position itself among its
consumers in the following way: Lakme has tried to gain the attention of its consumers by line
extension and having more and more product depth, packaging and attractive print
advertisements. If we look at the line extensions of Lakme than we would observe that it is in
almost all the segments of cosmetic care ranging from hair care to skin care to beauty salons!
Looking at the product depth it is pretty evident that Lakme has actually tried to fill in all areas
that it can, particularly the nail paint and the lip colour segment is a big hit among Indian women
as it offers them a wide variety of products in terms of colours as well as various styles that they
can choose from.
The major reason for its survival is its journey from leading mass market brand to the
leading premium market brand. Some call it the Air Deccan of the cosmetics industry, but
Indias biggest beauty brand has tried hard to go the premium way. The Fashion Week has been
a part of Indias biggest cosmetics brands strategy to go in for an image makeover from a
brand of the masses to the preferred brand of the classes as well. Lakme association with the
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Lakme India fashion week started 10 years ago when a survey by Hindustan Unilever, which had
then acquired the brand from the Tatas, showed that the youth perceived Lakme to be their
mothers brand. The major reason for this association was a thought that Fashion and cosmetics
go well together. Lakme has since graduated to become the co-host of the Fashion Week along
with IMG, a sports and fashion events management company. The association with Fashion
Week has helped Lakme to traverse the entire spectrum from the mass-end to the premium,
unlike other cosmetic brands.
The Fashion Week, the 88 Lakme Beauty Salons, which offer consumers a Beauty
Sutra experience, and now the recently-launched Lakme Studio, were all part of those efforts to
become a premium brand and get an international look. The encouragement to go the premium
way increased when the Lakmes high end products started contributing a considerable amountto Lakmes overall revenue. But not everyone was convinced whether these efforts have been
enough for the brand to make a lasting impression in the premium space. Experts say what went
against Lakme in its bid to take on the likes of LOreal and Revlon is its image. Lakme still was
the Air Deccan of the Indian cosmetics industry. Its image of a budget brand for the masses was
difficult to shed. All what was needed was to create two distinct brands and formulate separate
strategies for the masses and the classes which Lakme did with the brands like Elle 18 and
Orchid.
The journey to become a leading premium cosmetics brand in the Rs 500-700 crore
modern retail market is proving to be a long haul. With the increasing number of new brands
now available in the Indian market, Lakme over the last five years has been losing market share
in the modern trade format. Consumers who enter the market for the first time usually choose
among Lakme, LOreal, Chambor and Maybelline. And here LOreal has the largest market
share. Further, regular cosmetics users are moving from the masstige to the premium and
prestige brands. The prestige and premium categories have higher growth as compared to the
masstige segment. Cosmetic is an Rs 2000 crore market, out of which the mid-premium is a Rs
1000 crore category where LOreal is the market leader. The premium is a Rs 300 crore category
with players like Estee Lauder, Shisiedo and Lancome and the mass segment is a Rs 700 crore
market where Lakme is the market leader.
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9. CONCLUSION
Lakmes bid for the premium segment got a major push when Lakme Salon launched a
first-of-its-kind Lakme Studio in Delhi which offered ultra-premium beauty services. Lakme
Studio has tied up with Nail Spa that uses the latest nail technology from the US to bring a
bouquet of services like nail extensions and nail art. The strong point of Lakme, experts say, is
its reach. With a retail reach of close to 1000 counters and an overall direct reach of 40,000
stores, Lakme is one of the most widely available brands. This large presence gives the brand
volumes and makes it the largest cosmetics brand in India.
Thus Lakme being a mass market brand has almost on a verge to also become a prestige
market brand. It has almost survived the competition from the market leaders in that category.
Lakmes wide range of products for entire market segment, its right brand positioning, its
economical pricing strategy, availability in the local kirana and the drug stores to the
departmental stores and now also on the internet is an example of its wide distribution network
and its massive promotion mix acts as its success factor in becoming Indias largest cosmet ic
brand. Lakmes focuses only on Indian markets and they are the market leader in this sector andwill continue to sustain leadership only in Indian markets rather taking the brand in the global
markets. And even today, when most multinational beauty products are available in India, Lakme
still occupies a special place in the hearts of Indian women