INTRODUCTION

For this assignment I had taken all data from a survey of THE HINDU annual
business report magazine. Now in present scenario Indian Cosmetic industry is at an
all time high with totals of $4638.2 billion as in 2008. Hair care is one of the most
the most important categories and is responsible for the fast growth of this industry.

Indian cosmetic Hair colouring market is growing at a very rapid pace. It is a

significant Rs. 130 crore industry, growing at 62 percent per annum.
This industry comprises of a wide range of products. Natural hair colour such as
‘Henna’ is very popular in Indian market. Then there are Synthetic Organic Dyes
and Synthetic Inorganic Dyes such as, metallic dyes, lead dyes, silver dyes etc. Here
we focus on the Synthetic Hair Colour market.

This assignment focuses on analyzing the marketing strategies adopted by the

domestic players in order to face the onslaught of the international players in the
Indian market. To unearth the marketing attributes and distribution strategy
objectives of the players in hair colour market, I have taken a survey data from THE
HINDU’s business special edition 2008. The data collected is used for analysis and
inference.

The study reveals some interesting facts, for instance, market share of top twenty
international players has increased from 73% in 2005 to 82% in 2007.
OBJECTIVES OF STUDY

1. To study the marketing strategies followed by international players in hair colour

segment
2. To study current state of hair colour market in India
3. To study the reasons that influence purchase decision
4. Dealer’s perception regarding marketing strategies.
ANALYSIS AND INFERENCE

Cosmetic Industry has shown tremendous growth over the years in the US market.
All the categories in this industry have been growing steadily. Sun care has 2 percent
market share, whereas baby care and men’s toiletries comprises of 4 percent market
share each. The deodorant and bath& shower have 5 and 7 percent market share
each. Oral hygiene is 11 percent. Fragrance, makeup and skin care are at 15, 16 and
13 percent respectively. Hair colour market enjoys 22 percent market share. This
data is collected from the report and for better understanding of the market scenario,
we have made use of pie chart.

This can be represented as shown below:

4%
3% 1
4%
22% 2
5%
3
7% 4
5
6
13% 11%
7
8
9
16% 15% 10

SERIAL MARKET
NO. CATEGORY SHARE
1 SUN CARE 3%
2 BABY CARE 4%
MEN'S
3 TOILETRIES 4%
4 DEODRANTS 5%
 5 BATH & SHOWER 7%
6 ORAL HYGIENE 11%
7 FRAGRANCE 15%
MAKEUP&COLOU
8 R 16%
9 SKIN CARE 13%
10 HAIR CARE 22%

Further I studied the Cosmetic Industry in India. Here sun-care comprises of 2

percent of the total market share of the cosmetic industry in India. Baby care and
men’s toiletries stand steadily at 4 percent each. The deodorant market is 5 percent
and the bath & shower market enjoys a 12 percent market share. Oral hygiene and
fragrance have a market share of 12 percent each. Make up & colour and skin care
are among the top three components and enjoy 13 and 16 percent respectively. Hair
care leads with a handsome 22 percent market share.

This can be depicted in a more convenient and user friendly manner using a pie
chart as shown below:

1
2%4%
4% 2
22% 5%
3
10% 4
5
6
16% 12% 7
8
13% 12% 9
10
 MARKET
SERIAL NO. CATEGORY SHARE

1 SUN CARE 2%
2 BABY CARE 4%
MEN'S
3 TOILETRIES 4%
4 DEODRANTS 5%
BATH &
5 SHOWER 10%
6 ORAL HYGIENE 12%
7 FRAGRANCE 12%
MAKE UP &
8 COLOUR 13%
9 SKIN CARE 16%
10 HAIR CARE 22%

The resources for this was based upon Delhi’s market data.The following
observation table depicts the response of the dealers.

A B C D E F
RANKING L’OREAL GARNIER REVLON GODREJ BERINA OTHERS
1 26 3 1 0 0 0
2 4 9 3 2 1 4
3 0 0 4 9 2 4

The data shows that out of total seventy two dealers, L’oreal leads followed by
Garnier and Godrej. The above table can also be studied using the probability
matrix as shown below:

A B C D E F

RANKING L’OREAL GARNIER REVLON GODRE BERINA OTHER

J S
1 26 3 1 0 0 0 3
0
2 4 9 3 2 1 4 2
3
3 0 0 4 9 2 4 1
9
30 12 8 11 3 8 7
2

Total number of dealers = 72

Probability that L’oreal is ranked 1, = (26/72)

= 0.3611
Probability that L’oreal is ranked 2, = (4/72)
= 0.0555
Probability that Garnier is ranked 1 = (3/72)
= 0.0416

The brand that shows maximum sales is:

P ( L’oreal ) = (30/72) = 0.4167

P ( Garnier ) = (12/72) = 0.1667

P ( Revlon ) = (8/72) = 0.1111

P ( Godrej ) = (11/72) = 0.1528

Thus it can be inferred that, L’oreal shows maximum sales, followed by Garnier and
Godrej.

The sales of these brands can also be depicted graphically as shown below using the
bar graph chart.
 35
30
25
SALES
20
Series1
15
10
5
0
1 2 3 4 5 6
BRANDS

Here, Y- axis represents the sales (as rated by the dealers)

the X-axis represents the hair colour brands.
1- L’oreal
2- Garnier
3- Revlon
4- Godrej
5- Berina
6- Others

The price of the product also plays a very vital role in determining its market share,
thus companies adopt pricing strategies to maintain competitive and maximize their
market share. As stated in the report, the price per pack influences the purchase
decision of the customers. L’oreal is priced at Rs. 250 per pack, Keune at Rs. 300
per pack and Godrej Colour Soft at Rs. 110 per pack.

Thus, it can be inferred that Godrej Colour Soft has achieved 31 percent market
share to beat L’oreal’s Excellence Hair Colour. L’oreal enjoys a market share of 29
% in this segment.

The market share of top three brands is shown using the pie chart.
 BRAND NAME MARKET SHARE
L’OREAL 29 %
GODREJ 31 %
GARNIER 21 %

FIGURE- market share of top three brands.

21%
29%
1
2
3

31%

There has been a steady growth in market penetration by international brands in the
Indian market. In 1998, market share was just 52 % , but now it has increased to 72
% in 2007. The year-wise growth percent is shown in table below and is further
depicted using the ‘Line graph chart’.

SERIAL NO. YEAR MARKET SHARE

1 1998 52 %
2 2001 68 %
3 2004 72 %
4 2007 77 %
 100%

GROWTH PERCENTAGE
80%
60%
Series1
40%
20%
0%
1 2 3 4
YEARS

The price of product plays a vital role in developing a decent market share, since it
influences the purchase decision of the consumers. Thus it is necessary to determine
the average price per pack of different brands and analyze the extent of deviation
from the mean price. This is an important parameter that lays the underlying criteria
for pricing strategies of different brands.
Thus, we have studied the variation in prices of different brands.

BRAND PRICE/ PACK

L’oreal 250
Keune 300
Godrej 110

Mean price, u = Rs. ( 250 + 300 + 110 )/ 3

= Rs. 220

x ( x-u ) ( x-u)2

250 30 900
300 80 6400
110 -110 12100
 19400

Standard Deviation = 98.488

Another objective was to determine the marketing attributes essential for marketing
distribution channel. There were five marketing attributes—Quality, Product Range,
After sales Service, Price and Finance. The dealers were asked to rank these attributes,
with respect to customer preferences.

The results show that Quality is rated at the top by most of the dealers and finance is
rated the least important parameter among these.

SERIAL NO. ATTRIBUTE RANK

1 QUALITY 1
2 PRODUCT RANGE 2
3 AFTER SALES 3
SERVICE
4 PRICE 4
5 FINANCE 5

100
80
60
40
Series1
20
0
QUALITY AFTER FINANCE
SALES
SERVICES

Price Structure
As, stated in the report, 16.5% dealers suggest price range for hair colour from Rs.330
to Rs.360, whereas other 23% suggest Rs.360 and above.
As determined by the market forces, the suggested price range for hair colour is upto
Rs.360 per pack.

The probability that user will prefer product in this range can be calculated using the Z-
statistics. We assume normal distribution of the prices of different brands.

Mean, u = (290 + 320)/2 = 305

Standard deviation, SD = (320 / 4) = 80

Z = ( x – u )/ SD
Z1 = Z (330) = 0.3125
Z2 = Z (360) = 0.6875
P (Z1) = 0.1212
P (Z2) = 0.2517

Thus, for price greater than Rs.360,

Probability of consumer’s preference = 0.5 – 0.2517 = 0.2483

For price between Rs.330 to Rs.360,

Probability of consumer’s preference = 0.2517 – 0.1212 = 0.1305

Types of showroom owned by dealers:

80.6% of dealers have exclusive showrooms, and 19.4% of dealers have multi brand
showrooms.

Distribution Channel preference for dealers

According to the survey, 63.8% of dealers prefer exclusive showrooms for selling high
value products. 36.2% dealers prefer having outlets in selected areas.
This can be depicted graphically as:
80.00%
60.00%
40.00%
20.00% Series1
0.00%
EXCLUSIVE SELECTED
SHOWROOMS AREA
OUTLET S
ACKNOWLEDGEMENT

I would take this opportunity to thank our course facilitator, Dr. Neeta Gupta, time spent
with whom in this trimester, has been a valuable learning experience. Her inputs in the
form of guidance support and encouragement has been the backbone of the work
undertaken.

Bijeet Kumar
FMG XVII
FORE School of Management, New Delhi