INDEX

NO PARTICULAR PG
NO
1 INDUSTRY PROFILE 3-5

2 COMPANY PROFILE 6-8

3 HISTORY 9-10

4 RESEARCH METHODOLOGY 10-11

5 RESEARCH DESIGN 12

6 MARKETING MIX 4PS 13-15

7 PROMOTION STRATEGY 16-20

8 PRICING STRATEGY 21-22

9 MARKETING STRATEGY 23-28

10 BRAND IDENTITY PRISM 29-34

11 SALE PROSPECT & QUESTIONARY OF LAKME PRODUCT 35-46

12 RECOMMENDAION 45

13 CONCLUSION 46

14 BIBLIOGRAPHY 47
 Executive summary

About the project

Within a short span of the last five-six years, the use of cosmetics by Indian
consumers has increased significantly with more and more women and men
taking greater interest in personal grooming, increasing disposable incomes,
changing life styles, influence of satellite television and greater product choice
and availability.

This cosmetics and personal care industry has been growing at an average
rate of 20 per cent for the last few years. The growing Indian cosmetics
market offers promising prospects for international brands. The growth rate in
the cosmetics market reflects an increasing demand for beauty care products
in India. Perfumes and fragrances, skin care, and hair care products are some
of the major segments with promising prospects for U.S. companies.

Penetration of most cosmetic and toiletries is very low in India. Current

consumption of many products is well below that of many countries in Asia.
The low market penetration of many cosmetics and personal care products
offers room for growth.

The urban population with increasing purchasing power is the major force
driving demand for cosmetics and toiletries. India is a very price-sensitive
market and mass-market products constitute the major part of the cosmetics
and toiletries market. Indias import of cosmetics and toiletries and
intermediate raw materials is around US$ 120 million, of which the U.S.
has a share of approximately 10 percent.
Plan of the project
Beauty is skin deep and sure enough Lakme understand it like no one does
.Today brand lakme stand strong as one of the 100 most powerful brands and
right fully so ,for its the brand that lights up the face of million girls ,everyday.
Its a brand that inspire, motivate and infuses confidence Colors, shades,
brushes and tones to beautify, have been the core attribute of the products.
The challenge which the cosmetic industry has to break was the negative
connotation of being fashionable. Though the brand missed out on during
the past year despite having roped top brand ambassadors is that it scored
low on promotional gauge. In the following project we basically seeks to
provide experiential marketing solutions to a brand (Lakme) .We also gauge
into reasons that why Lakmes position as market leader was threatened when
international majors like Revlon and Maybelline entered the fray in the mid-
90s.The research process was entailed by visiting lakme outlets in Noida,
which includes the response received from target audiences (Min age 19yrs-
Max -45yrs) via through questionnaire for deeper insights.

INDUSTRY PROFILE

Hindustan Unilever Limited

 Chairman: Harish Manwani
CEO and Managing Director: Douglas (Doug) Baillie
Director, Finance and IT: D. Sundaram

Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan

Lever Limited, is Indias largest consumer products company and was
formed in 1933 as Lever Brothers India Limited. It is currently
headquartered in Mumbai India and its 41,000 employees are headed by
Harish Manwani, the non-executive chairman of the board. It is Fast-Moving
Consumer Goods (FMCG) Industry that includes detergents, soap, shampoo
deodorant, toothpaste, and other personal care items, and cosmetics HUL's
personal care brands include soap brands such as Lux, Lifebuoy, Liril, Breeze,
Dove, Pear's, and Rexona; shampoos and hair coloring brands including
Sunsilk Naturals and Clinic; skin care brands Fair & Lovely and Pond's; and
oral care brands Pepsodent and Close-Up. The company's cosmetic line is led
by the Lakme brand. HUL also produces a line of Ayurvedic personal and
healthcare items under the Ayush brand. In addition to the FMCG segment,
HUL has developed a line of food items, primarily under the Kissan and Knorr
Annapurna brands, as well as the ice cream brand Quality Wall's.

VISION

To earn the love and respect of India, by making a real difference to every
Indian.. HLL follows its parent companys mission to add vitality to life. They
strive to meet everyday needs of nutrition, hygiene, and personal care
products that help people feel good, look good, and get more out of life.
 STRATEGY
Grow ahead of the market by leading market development
Activities.
Leverage positive impact of growing Indian economy on
Consumer spending.
Grow a profitable foods and Top end business.
Grow the bottom-line ahead of top line.
Strong commitment to sustainable development.

DISTRIBUTION

With respect to distribution related activities like sales and marketing, HLL is
second to none in pushing the boundaries of what is possible financially,
structurally, and logistically. Beyond its pioneering work FMCG distribution,
the company has sought to instill in its customers an elevate sense of brand
experience while simultaneously providing greater and more varied access to
its products as well as improved clarity to its communications. New initiatives
include raising brand visibility through in-store promotions, store-based
product facilitators, and self-service. HLL has enabled an even further level of
personalization and brand experience in the direct sales arena with its ground-
breaking Hindustan UniLever Network, having amassed an army of
consultants 250,000 strong with access to 80 % of city dwelling Indians.
Hindustan Unilever Present Scenario

15,000 employees
1,200 managers
2,000 suppliers & associates
75 Manufacturing Locations
Total Coverage 6.3 Mln Outlets
Direct Coverage 1 Mln outlets

COMPANY PROFILE

INTRODUCTION

High priestess of sacred Indian temple meets English army officer who's
unwittingly strayed into holy ground. They fall in love. Her orthodox father
vows vengeance... That's the story of Lakm, a 19th century opera written by
Frenchman Leo Delibes, from which Simone Tata borrowed the name Lakm
(French for Lakshmi, the name of the priestess).
The current size of the Indian cosmetic market is approximately US$ 600
million. Of this, the fastest growing segment is color cosmetics, accounting for
around US$ 60 million of the market. Industry sources estimate a rapid growth
rate of 20 percent per annum across different segments of the cosmetics
industry reflecting an increasing demand for all kinds of beauty and personal
care product. Growth has come mainly from the low and medium-priced
categories that account for 90 percent of the cosmetics market in terms of
volume.

Even with a 20 percent average growth rate, the per capita consumption of
cosmetics is very low in India. Current per capita expenditure on cosmetics is
approximately US$ 0.68 cents as compared to US$ 36.65 in other Asian
countries. However, with changing lifestyles, higher disposable incomes,
increasing advertising, penetration of satellite television, awareness of
the western world and growing importance of beauty pageants, there
have been significant changes and use of cosmetics is on the rise.

Lakme, a brand originally introduced by the Tata group of India, now bought
over by Hindustan Unilever (HUL) of the Unilever group, Tips & Toes, another
domestic player, and Revlon dominate the US$ 60 million color cosmetics
market. Multinationals, Revlon of the U.S. and L'Oreal's Maybelline has a
dominant share of the small premium lipsticks and nail enamels market. Mass-
market products account for a major share, while the premium segment
accounts only for a mere 9 per cent in lipsticks and 5 per cent in nail enamels.
Lipsticks account for nearly a third of the market at US$ 21 million, while the
market for nail enamels is estimated at around US$ 23 million. The color
cosmetics segment is very competitive and has a high penetration level of 80
percent.

The skin care market in India is estimated at US$ 180 million. Within the last
decade, this segment has seen many consumers slowly shift from the mass to
the premium end of the market. The penetration rate is high in the skin-
care segment as compared to color cosmetics. In the skin-care segment,
price and volume played an equal role in value growth. Moisturizing lotions,
fairness creams and face cleansers are the popular categories in the skin-care
segment and account for approximately 60 percent of the Skin-care segment.

The major players in these segments are Lakme, Ponds, and Fair & Lovely of
the HUL group with a 50 percent market share, followed by players such as
J.L. Morison that markets the Nivea range of products in India, Godrej and
Revlon. currently constitute only 20 percent of the market. A major reason for
low penetration of international brands can be attributed to high pricing. These
companies initially gained sales on their international brand image, however,
repeat purchases were not forthcoming and to retain their sales growth,
several foreign companies reformulated price strategies to tap the large Indian
middle class. Urban women in the middle and upper income groups in the age
range of 23-50 is the target group for international brands, as this group looks
for better products and is willing to pay a premium for international quality
products. Industry estimates suggest that there are close to 10 million such
women in India.

Lakme is the Indian Womans Beauty Sutra-inspiring expression of her

unique beauty and sensuality.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 self sensual, original,
expressive, alive and initiative.Lakme inspires her to unleash the potency of
her femininity, beauty and sensuality.

KEY FACTS

Lakme was the first major beauty brand in India and takes pride in being the
expert on Indian Beauty for over 50 years. It is complete beauty brand
spanning color cosmetics, skin care and 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.
OUR VISION

Unilever products touch the lives of over 2 billion people every day-whether
thats through feeling great because theyve got shiny hair and a brilliant smile,
keeping their homes fresh and clean, or by enjoying a great cup of tea ,
satisfying meal or healthy snack

BUSINESS HEAD OF LAKME LEVER

Below the line initiatives are extremely important in the cosmetic segment
since the buying experience is as important as brand image and advertising.
Significant focus is on sales counters, beauty advisors and dealer aids. We
constantly integrate a lot of the above the line campaigns like 'Whose
watching your lips' with below the line initiatives
Anil Chopra, Business Head, Lakme Lever
''Lakm is at the forefront of product-innovation. Almost everyone has a
Lakm-something in their (cosmetics) collection,'' said Mumbai-based fashion
choreographer Lubna Adams.

The Indian cosmetics industry is in churn. Even as the premium segment is

getting crowded, the rural market is turning out to be the stronghold of smaller,
regional players. Although stiff competition has emerged for Lakme Lever
within the Rs 250-crore color cosmetics market, it continues to lead. In the
skincare market, estimated at Rs 700 crore, Lakme's market share averages
7-8 per cent. Catalyst spoke to Anil Chopra, Lakme Lever's Business Head

HISTORY

Half a century ago, as India took her steps into freedom, lakme, Indias first
beauty brand was born. At a time when the beauty industry in India was at a
nascent stage, lakme tapped into what would grow to be amongst the leading,
high consumer interest segments in the Indian 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 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.

A little bit of Lakm history:

In 1995, Lakm Ltd (a Tata Group company) and HLL formed a 50:50 venture
Lakm Lever that would market and distribute Lakm's products. In 1998,
Lakm sold its brands (and the 50 per cent it owned in the JV) to HLL,
renamed itself Trent and entered a different business (retail). Only, the years
between 1995 and 2000 saw HLL wrestling with several issues with a bearing
on Lakm's future. A brand that has over 5 decades talked of beauty is none
other than Lakm. Launched in 1952, it offered a range of cosmetics with nail
polishes & lipsticks from the early 80s. Lakm also understands the
importance of maintaining and accentuating a womens natural beauty, for this
it has introduced a range of skincare products from 1987. These ranges have
been constantly innovated to bring specialized beauty care and complete the
range for the definitive women.

A brand that has over 5 decades talked of beauty is none other than Lakm.
Launched in 1952, it offered a range of cosmetics with nail polishes & lipsticks
from the early 80s. Lakm also understands the importance of maintaining
and accentuating a womens natural beauty, for this it has introduced a range
of skincare products from 1987. These ranges have been constantly
innovated to bring specialized beauty care and complete the range for the
definitive women.

Chopra accepts that distribution has been the company's Achilles heel for
some time: ''The supply-chain hasn't been as robust as it should have been,
but that has been the result of our efforts to reposition and reintroduce the
brand.'' The positioning bit, although complex, is clear: Ponds is Lever's
primary skincare brand; Lakm, its aspiration color cosmetics brand, which
also has a presence in skincare.
The 'inspirational' qualification would mean Lakm would compete at what the
company terms the 'upper-mass' (premium) end of the color cosmetics
spectrum (products priced between Rs 85 and Rs 250) where a slew of
competitors, ranging from Revlon (through Modi Revlon) to Chamber, are
already slugging it out. Says Meghna Modi, 26, Executive Director, Modi
Revlon: ''The numbers say it all. According to ORG-MARG's retail audit, we
have an 84 per cent share of the premium end of the color cosmetics market.''
Chopra is quick to rubbish this claim; he says ORG-MARG does not have a
representative sample of the 60,000 outlets through which color cosmetics are
sold in India.

Still, it is conceivable that Lakm's new-found inspirational strategy could have

been brought about by competitors like Revlon and Maybelline, which targeted
this segment. Indeed, the company's non-transfer lip-color range follows in the
wake of Maybelline's launch of a similar range, and its new nail-enamel colors
come soon after Maybelline and Revlon launched their nail-enamel range. The
company's defense is that it takes at least 15 months from the
conceptualization to the actual launch of products.

And fashion consultants like Meher Castelino believe the brand commands an
edge at the high-end: ''By appropriating the fashion platform for itself, Lakm
has entrenched itself at the glamour-end.''
 RESEARCH METHODOLOGY

The research is based on:-

Primary Data
1) Questionnaire

Secondary Data
Internet
Company Reports& Broachers
Magazines
Newspapers Articles &journals

Data is also gathered by talking to the respondents (Target Audience,

understanding their beauty needs, what inspire them to go for the (lakme)
brand.
Also the level of:-

Brand awareness,
Price level,
Visibility of brand personality.
Expectancy of Communication

All these factors were the prime criterion for selecting (Which brand??), Short
listing and ranking (level of trustworthiness? or most favored) which had
helped us for identifying the winner in cosmetics industry.
 OBJECTIVE

1 Help in building a positive association with people thereby enhancing

brand personality

2 How to break the negative connotation of Being fashionable

3 Why has Lakme missed out on promotional gauge despite roping in top
brand ambassadors.

4 How can the brand retain its lost spot?

HYPOTHESIS

In the classical tests of significance, two kinds of hypothesis are used the null
hypothesis and the alternate hypothesis. Null hypothesis (Ho) is used for
testing. It is the statement that no difference exists between the parameter
and the statistic being compared. Second is Alternative hypothesis
(HA) is alternative hypothesis is alternative hypothesis which holds that there
has been a change.
Hypothetical testing can be viewed as a six steps procedure;
Establish a null hypothesis

Choose the statistical test on the basis of assumption about the

population distribution and measurement level

select the desired level of significance

Parametric and non parametric tests are applicable under various

conditions like parametric operates with the interval and ratio data and
are preferred when their assumptions can be met. Non parametric tests
do not require stringent assumptions about the population distribution
and are less useful with less nominal and ordinal values.

In this report our null hypothesis and alternative hypothesis are stated
below:

Ho: Respondents are satisfied with the quality of Lakme products.

HA: Respondents are not satisfied with the quality

Ho: Respondents are brand Loyal

HA: Respondents are not brand Loyal
 Ho: Respondents prefer lakme
HA: Respondents do not prefer lakme

HO: Respondent are satisfied nor aware of new product range

HA: Respondent are not aware of new range.

HO: Respondent do believe that endorsement by celebrity play any role

in the decision making

HA: Respondent does not believe that endorsement by celebrity play an

important role in the decision making.
RESEARCH DESIGN
Our research is based on the Exploratory Study.

Research is exploratory when you use no earlier model as a basis of your

study. The most usual reason for using this approach is that you have no
other choice. Normally you would like to take an earlier theory as a support,
but there perhaps is none, or all available models come from wrong contexts.

Exploratory research means that hardly anything is known about the matter at
the outset of the project. You then have to begin with a rather vague
impression of what you should study, and it is also impossible to make a
detailed work plan in advance.

The gradual process of accumulating intelligence about the object of study

means also that it will be impossible to start by defining the concepts of study.
You have to start with a preliminary notion of your object of study, and of its
context. During the exploratory research project, these provisional concepts
then gradually gain precision.

We have collected our data by drafting a questionnaire and thereby

interpreted or analyzed or result by using the Microsoft excel.

SAMPLE DESIGN

The sampling procedure used to produce any type of sample

Sample size of 100 customers.

Sample centre = Amity Girls hostel

 MARKETING MIX -4ps
PRODUCT:

Lakme provides a wide range of beauty products.

Nail enamel should dry within particular time of period.

By introducing some kind of fragrance in nail enamel and making nail
enamel very quickly dry.
Introducing something in Elle 18 nail enamel like, which changing color
according to environment changes and to protect nails and high shine
finish at all time.
Everything a girl wants

Lakm has a wide range of products in color cosmetics that bring visible
results. To add to this vast repertoire is a range of specialized skin care
products for the discerning women. Keeping skin looking healthy and glowing
is also a part of looking great. Lakm provide the complete package with the
skin care range and the wide range of colors to spice up the look

Lakme products

Colors

From the spicy shades to the flattering look, Lakme offers a range of products
in the face, lips, eyes and nail segment for the beauty aficionados.

Face

Lakm Daily Wear Souffl, Lakm perfecting liquid Foundation - Lakm

Radiance Compact, Lakm Flawless Matte Complexion Compact

Lips

Lakm Enrich Lip color - Perfecting Definition Lip Pencil - Star shine Lip-gloss
- Glosses in lustrous shades available in 14 shades.
Eyes

From dramatic to natural look- a wide range of products are on offer to create
the perfect eyes.

1. Lakm Kajal
2. Lakme Instant Eyeliner eyelids
3. Lakme Lakm Shimmer Eye Cube

Nails

True Wear Nail Enamel -Nail Enamel with Lacquer-like finish. Contains resins
and silicone with color lock technology that gives brilliant long lasting shine

Skin

For radiant skin Lakm is there to pamper your skin with specialized products
for the diva in you.

Cleansing

Strawberry Silk Splash Face Wash, Lakm Fundamental Deep Pore

Cleansing Milk.

Moisturizing

1. Lakm Fundamental Peach Milk Moisturizer skin.

2. Lakm Fundamental Winter Care Lotion.

Sun Protection

The range comprises of lotions to keep your skin healthy and younger looking.

PROMOTION

Internet as medium.
Company has its own website to advertise their products.

Website: http://www.lakmeindia.com.

Sales promotion

Lakme Elle 18 offers sales promotion to increases the sales for particular time
of period.

Company offers rebates and discounts on specific products which products

are in low sales.

Brand Ambassadors.

Lakme have bollywood Actress as a brand ambassadors like Katrina kaif and
Raima Sen.

Presently now the brand ambassador is Kareena Kapoor.

PROMOTIONAL STRATEGIES

Department stores, specialty stores and chain department stores, such

as Macys, Neiman-Marcus and J.C. Penney (internationally) and
Shoppers stop, VAMA, Westside, Bombay Stores etc (nationally).
 Direct Sales Direct Mail /TV / Print Free Standing Stores
Health Food Stores Salons Drugs Stores, food stores, cosmetic
discounters, warehouse clubs, and mass merchandisers Fashion Week
Banners.

ELECTRONIC MEDIA

MEDIA TOTAL COST

Television 10,00,000
Radio 70,50,000
Internet 98,00,000
TOTAL 1,78,50,000

FINANCIAL PROJECTIONS

PARTICULARS TOTAL COST

Brand Ambassadors 40,00,000
Print media 1,00,tio00,000
Electronic media 3,00,00,000
Promotional visit 25,00,000
Production expenses 3,00,00,000
TOTAL 4,90,00,000

PRINT MEDIA

MEDIA TOTAL COST

Newspaper 1,00,00,000
Broachers 75,00,000
Hoardings 50,00,000
Magazines 86,00,000
TOTAL 3,11,00,000

ELECTRONIC MEDIA

MEDIA TOTAL COST

Television 10,00,000
Radio 70,50,000
Internet 98,00,000
TOTAL 1,78,50,000
BREAK EVEN ANALYSIS

Total expenses / price per unit

4, 90, 00,000 / 150 = 326666.667 units

Break even point = 326666.67 units on selling

PARTICULARS NO.OF UNITS PRICE REVENUE

ESTIMATED
SALES 30,00,000 150 45,00,00,000

RETURNS ON INVESTMENT

45, 00, 00, 000 - 4, 90, 00, 000

= 40, 10, 00,000

PLACE

There is a significant change in market distributional channel of cosmetics

products.

Distribution places are:

Hyper markets

Super markets

Departmental stores
Other distribution places are:
Food stores

Cosmetic discounters

Warehouse clubs

Beauty salons

Lakme distribution merged with HUL.

HUL is having 3000 distributors around the country and lakme have 1000
distributors.

PRICE

Promotional pricing:

Elle 18 nail Enamel Company can give price at special event pricing,
because Elle 18 nail enamel targeted students to sell their products.

Responding to competitors pricing:

Elle 18 nail enamels major competitor is Revlon, if the competitors (Revlon)

change the price means, company have to analyze the market situation and
then change the price accordingly

Differentiated price:
 Elle 18 nail Enamel Company can offer time pricing and image pricing
.They can set the price according to quality and quantity of the product

PRICING STRATEGY

With a pricing that is almost one-third that of Lakme, Elle 18, of late, has

also unleashed a campaign based on its products.

"There was a change in our strategy in the past. While Lakme has been

high on innovation, Elle 18 has been on maintenance mode. The brand has

been growing at a lower rate than Lakme. But now we are now relooking at

Elle 18 as there is still no brand that is so sharply positioned on the youth

platform," said Mr Chopra.

 There was a conscious price differential between the brands to attract

the first generation users of cosmetics. So, while a Lakme Lipstick would have

an MRP of Rs 165, an Elle 18 Lipstick was pegged at Rs 55.

Meanwhile, Lakme Lever continues to innovate for its existing range of

skincare and color cosmetics under the Lakme brand.

It recently relaunched its skincare range under the name of Lakme

Fundamentals.

"While there is no new product, we will be upgrading the existing skin

care range with new formulation and packaging," Mr Chopra said.

In color cosmetics it has roped in designer Sabyasachi Mukerjee to

unleash the `Free Spirit' range as part of its winter collection.

"The overall beauty market has been growing between 15-20 per cent

but we have been growing higher than the market."

However, it is the salon business that has been registering the highest

growth rates for Lakme Lever.

"With a small base, our salon business has been growing the fastest,"

Mr. Chopra said.

There are plans to have 100 Lakme salons by the end of the year from

the existing 92 salons across the country.

 Besides, Lakme Lever intends consolidating its hair care

portfolio launched last year under the Lakme Hair Next brand.

"We do not want to add to existing hair care products in the

market. The brand has been launched in the hair styling category

and we want to create awareness and educate our consumers

without confusing them with more products," said Mr Chopra.

MARKETING STRATEGY

LAKME RESTAGES ITS OPERA

Its turnaround sketch has got just a few strokes - grab the fashion

platform, spruce up the supply-chain, and test the rural waters.

High priestess of sacred Indian temple meets English army officer who's

unwittingly strayed into holy ground. They fall in love. Her orthodox father

vows vengeance... That's the story of Lakme, a 19th century opera written by

Frenchman Leo Delibes, from which Simone Tata borrowed the name Lakme

(French for Lakshmi, the name of the priestess).

By 1999, the world looked set for a revised version of the work. Simone

Tata was no longer on the scene. And a home-grown fashion brand-often

personified as the high priestess of fashion in the country-had been sold to a

multinational company whose provenance was English, well, Anglo-Dutch,

actually-Hindustan Lever Ltd (HLL).

Worse, with HLL not appearing too keen about the brand-the company,

predictably, denies this-Lakm, the brand looked all set to follow the spirit of

Lakm the opera (a tragedy).

Lever was right. The aria, as is now evident, wasn't quite over. Standing

amidst the jamboree of what is, arguably, India's first fashion summit, the

Lakm India Fashion Week (LIFW for short), Anil Chopra, 51, the affable

Director who heads Lakm Lever Ltd is bullish about the brand's new

positioning: ''By taking on the fashion and glamour platform, we have, in a

way, not just taken a lead (over others), but also got a virtual ownership of this

plank. It will be very difficult for any other brand to adopt a similar approach.''

And reactions to the born-again Lakm at the LIFW did suggest that Chopra

and the brand were on to a good thing. ''Lakm is at the forefront of product-

innovation. Almost everyone has a Lakm-something in their (cosmetics)

collection,'' gushes Mumbai-based fashion choreographer Lubna Adams. So,

is Lakm back?

GETTING THE FOCUS RIGHT

A little bit of Lakm history: in 1995, Lakm Ltd (a Tata Group company)

and HLL formed a 50:50 venture Lakm Lever that would market and

distribute Lakm's products. In 1998, Lakm sold its brands (and the 50 per
cent it owned in the JV) to HLL, renamed itself Trent and entered a different

business (retail). Only, the years between 1995 and 2000 saw HLL wrestling

with several issues with a bearing on Lakm's future.

The FAQs: With Ponds becoming part of HLL, what happens to Lakm's

skincare business? What does Lever's launch of Aviance mean for Lakm?

And why is it so difficult to find Lakm products?

Chopra accepts that distribution has been the company's Achilles heel

for some time: ''The supply-chain hasn't been as robust as it should have

been, but that has been the result of our efforts to reposition and reintroduce

the brand.'' The positioning bit, although complex, is clear: Ponds is Lever's

primary skincare brand; Lakm, its apparitional colour cosmetics brand, which

also has a presence in skincare.

The 'inspirational' qualification would mean Lakm would compete at

what the company terms the 'upper-mass' (premium) end of the colour

cosmetics spectrum (products priced between Rs 85 and Rs 250) where a

slew of competitors, ranging from Revlon (through Modi Revlon) to Chambor,

are already slugging it out. Says Meghna Modi, 26, Executive Director, Modi

Revlon: ''The numbers say it all. According to ORG-MARG's retail audit, we

have an 84 per cent share of the premium end of the colour cosmetics

market.'' Chopra is quick to rubbish this claim; he says ORG-MARG does not

have a representative sample of the 60,000 outlets through which colour

cosmetics are sold in India.

LIKELY OUTCOME BY THE STRATEGY

The premium segment, however, is just a slice of the Indian market for colour

cosmetics (estimated size: Rs 275 crore). Today, the company has three

brands: Lakm itself, which will be positioned as a fashion-brand; Elle 18,

which has enjoyed success as a college-girl brand; and Orchid, a super-

premium brand that hasn't really seen much excitement since its 1999-

relaunch.

The company plans to re-re-launch Orchid by end-2000, and is test-

marketing Elka, a brand targeted at the lowest-end of the color cosmetics

market. The brand, Chopra claims, could also catalyses Lakm's entry into the

hinterland, but only if tests show there is a rural market for color cosmetics.

Says Nikhil Vora, 28, Portfolio Advisor, Sharekhan.com: ''Though rural

markets are big potential, a company has to think of segments carefully. Any

expansion into new areas should be justified by returns.''

Lakm will remain a loner in the Lever stable: Unilever does not have a
presence
in the colour cosmetics segment. That means Lakm Lever will have to
depend on its own kitchen garden. But a focused-most of its skincare
business and all of its exports business have been taken on by HLL-Lakm
does seem to be on a come-back trail. It's still the second act, but this opera
could well have a happy ending

SEGMENTATION

women in the age group of 18 to 45

Focused on urban areas

Concentrates on women who puts high focus on style , fashion and beauty

TARGETING

Most of the lakme products are meant for the upper and the middle class

Products like orchid and advance are meant for the affluent

Products like eye artist and radiance target the middle income group

The brand does not actually target the lower segment. But Elle -18 as it is
cheap can be termed as the only product for this segment
 SERVICES

Lakme beauty salons were established in Hyderabad, Delhi, Mumbai

and Chennai 30 years ago.

The beauty parlor has beauticians who have been trained by Lakme.

The staff is required to attend classes conducted by doctors and

cosmetologists.

Every six months their skills are polished further.

Proper attention towards each and every customer.

Using branded products.

Maintaining morning freshness throughout the day.

Proper assistance at the time of taking appointments.

Hospitality of premium standards.

POSITIONING

The target segment for the brand is young women and

the positioning of the brand is trendy and stylish complete range of

products for skin and beauty care
 BRAND IDENTITY PRISM

PHYSICAL FACET

Trendy and stylish complete range of products for skin and beauty care
dedicated to all women

RELATIONSHIP

Women strongly trust lakme and consider it as their beauty partner

REFLECTION

A brand which is trusted by Indian women due to its effectiveness

BRAND PERSONALITY
Innovative

Freedom

Beauty

Confidence and in depend

BRAND CULTURE

Innovation

Expertise

excellence
 SWOT ANALYSIS OF LAKME

STRENGTHS:

Local brand of specific relevance to India.

Strong R&D capability well linked with business.

Integrated supply chain and well spread manufacturing units.

Ability to deliver Cost Savings.

Access to Unilever global technology capability and sharing of best

practices from other Unilever

WEAKNESSES:

Price positioning in some categories allows for low price competition.

Varying quality range in its products.

Falling Quality of Lame salons

OPPORTUNITIES:
 Brand growth through increased consumption depth and frequency of
usage across all categories.

Upgrading consumers through innovation to new levels of quality and

performance.

Building brand image by collaborating with top designers in Lakme

Fashion week

THREATS:

Aggressive price competition from local and multinational players.

Spurious/counterfeit products in rural areas and small towns.

Non Existence of brand image in long Run

MARKET OVERVIEW
The current size of the Indian cosmetic market is approximately US$ 600
million. Of this, the fastest growing segment is color cosmetics, accounting for
around US$ 60 million of the market. Industry sources estimate a rapid growth
rate of 20 percent per annum across different segments of the cosmetics
industry reflecting an increasing demand for all kinds of beauty and personal
care product. Growth has come mainly from the low and medium-priced
categories that account for 90 percent of the cosmetics market in terms of
volume.

The Shahnaz and the Boutiques brands dominate the premium herbal
cosmetics segment in India, estimated at USD 100 million.

. Since liberalization, many international brands like Avon, Burberrys, Calvin

Klein, Cartier, Christian Dior, Estee Lauder, Elizabeth Arden, Lancme,
Chambor, Coty, L'Oreal, Oriflammes, Revlon, L'Oreal, Yardley, Walla,
Schwarzkopf, Escada, Nina Ricci, Rochas, Yves St. Laurent and Japanese
cosmetics company, Shiseido have entered the Indian market. The prices of
most foreign brands have been fairly high, which has deterred average
Indian consumers. International brands cater to a segment that can
broadly be classified as the urban higher income group.

MARKET TRENDS

Cosmetics and toiletries are not just the domain of women any longer and
Indian men too are increasingly taking to the use of more and more body
sprays, perfumes and other cosmetics and toiletries. With rising demand from
men, the Indian market is getting enlarged and many players are coming out
with cosmetic products especially skin care products for men. The market size
of men's personal care segment is estimated at approximately US$ 165million,
with Gillette having the largest market share. Other major players in this
segment include Godrej, J.L. Morison and HLL. The growing demand for
men's cosmetics have made many direct selling companies such as
Medicare and Amway to launch new products for men.

In the last five/six years, there has been a renewed craze for herbal cosmetic
and personal care products, especially in the skin care segment with the
growing belief that chemical-based cosmetics are harmful. Shehnaz Husain
Boutique, and Lotus Herbals are the major players in this segment. Many
companies also expanded their range to include herbal variants..

The urban population in the major cities with increasing purchasing power is
the main force that drives demand for various cosmetic products in India. The
advent of satellite television and awareness of the western beauty and fashion
world, advertisements and promotions, increasing number of women joining
the work force is changing preferences, customs and cultures in India

IMPORT MARKET

Costs for importing products are much higher than producing it in the country.
India allows entry of imported cosmetics without any restrictions but the
average import tariff on cosmetics products is currently very high at 39.2
percent. This makes imported products very expensive for most consumers.
Most foreign cosmetics companies selling premium brands have had a difficult
time developing the low volume premium market in India. Many had to re-work
price strategies towards the mass segment. Price is not the only reason
responsible for their problems. Poor assessment of the size of the upper
middle and high-income groups, and price sensitivity even within these
groups, had added to their problems.
According to estimates of industry experts and trade publications,
India's annual import of cosmetics and toiletries and intermediate raw
materials is approximately US$ 120 million.

Countries like US, Europe, mainly France, Germany, Italy, Netherlands, and
Spain account for the major share; and Australia, China, and Japan account
for rest of the share.

COMPETITION

The Indian cosmetic market, which has been traditionally a stronghold of a few
major Indian 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 and toiletries 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.
Stiff competition in the cosmetics and toiletries 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 a upgrade to value-added products such as
under-eye wrinkle removing creams, dark circle removing creams toners,
sunscreen lotions, fairness creams, and many more.
.
Beauty counselors or advisors at retails outlets have been very successful in
gaining attention, creating product awareness and overcoming consumers
lack of familiarity with, and fears about many cosmetics and personal care
products such as home hair permanents and color cosmetics. Some
companies such as Lakme have even set up exclusive Lakme beauty
parlors at major cities in India through the franchisee route.

L'Oreal markets its range of specialized hair care products exclusively

through salons and beauty parlors. L'Oreal currently is the only company in
the market that has a hair color range tailored exclusively for parlors...

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.
SALES PROSPECTS

The growing Indian cosmetics market offers promising opportunities for

international brands. The growth rate in the cosmetics market reflects an
increasing demand for beauty care products in India. The most promising
segments for international companies to pursue are perfumes and
fragrances, and specialized/professional skin care and hair care
products. The fastest growing market is however color cosmetics, which
account for US$ 60 million of the total market.

The rural market in India for cosmetics and toiletries remains is largely
untapped. Major domestic players have also not been able to penetrate this
market. The urban market itself for specialized cosmetic products remains to
be fully exploited. The Indian skin-care market is not yet fully tapped and
offers promising prospects as a growth area. Penetration of color cosmetics is
lower than the penetration prospects of the skin-care segment.
To promote the growth of their products, a dominant player like Lakme has
embarked upon a business plan to establish their exclusive franchised beauty
salons across major metros in the country.

Imported cosmetics have had a major impact on the Indian market. Foreign
products have enhanced growth of the Indian market by attracting inspirational
consumers and increasing acceptance of color cosmetics, previously
perceived by many as harmful to skin. Indians generally perceive foreign
brands as being of superior quality.

Other key issues regarding sales prospects are product variety and
retailing strategies as well. There is a marked shift among consumers
from functional common-fits-all products to more specialized
formulations. This is one of the reasons why an increasing number of
cosmetic companies are dealing with consumers directly through
special exclusive counters in major departmental stores and malls
featuring their own beauty consultants.
L'Oreal India has established a consumer advisory unit and Ponds, as
mentioned earlier offers skin care advise through touch-screen kiosks, and
telephone help-lines.

MARKET ACCESS

Prior to March 31, 1999, India had cosmetics and toiletries on its restricted list
of imports and a special import license was required for import of cosmetics
and toiletries into the country. This regulation has now been done away
with and, India today, permits import of cosmetics and toiletries without
any restrictions. This has made the Indian market more attractive to
foreign cosmetic companies. Imports have been made easier, but not
necessarily cheaper.

The total import duty rate on cosmetics and toiletries classified under
HS Code 33.03 to 33.07 is 39.20 percent, which even though has been
scaled down over the past few years is still very much on the higher side. The
high duties cause imports to be price uncompetitive. Certain high - end
products just do not sell in India because the final price to bring it into India is
too high for consumers to pay.
 QUESTIONNAIRE

Q) Do lakme provides Quality Products ?

 Quality Yes
40%

No 60
%

Q) Are You Brand Loyal to Lakme?

Brand Loyalty

No 82%
Yes 18%
Q) For what purpose you use lakme products?

50

20 20
10
Usage
Eyes Lip Nail Face
Color Enamel

Q) What do you think about the price level of Lakme products?

Price Level

High 30 %
Low 5%
Optimun 65%

Q) If not Lakme then which other brand?

 Competitors Revlon 22%

Oriflame 18%

Blue heaven
8%
L'Oreal 39%

Lissome 7%

Others 6%

Q) Do celebrity endorsements in advertisements attract you towards

Lakme products?

Celebrity Endorsement effect

No 83%
Yes 17%

Q) What inspire you to go for any cosmetic product?

 Color/ shades
30%
Quality 36%

Packaging 14%

Versatility 14%

Others 6%

Q) What changes you would like to see in the Lakme products?

Expectations
More Product Range More Shades
Better Packaging All the above
1%

17%

47%

35%
 Observed(O) Expected(E) (Oi-Ei)2 2 {(Oi-
2
Satisfaction Ei) / }
level
Excellent 16 20 16 0.8
Good 20 20 0 0

FINDING & ANALYSIS

Hypothesis Testing using Chi Square

Overall Satisfaction
Average 55 20 1225 61.25
Poor 5 20 225 11.25 2=8
Neutral/Cant 4 20 256 12.8 6.1
Say Tabl
e
value=9.49
Since the table value is less than the 2.
So the Ho is rejected.

Loyalty

Satisfaction level Observed(O) Expected(E) (Oi-Ei)2 2 {(Oi-

Ei)2 /E }
Loyal 18 50 1024 20.48
Not a loyal 82 50 1024 20.48

2=40.96
Table value=3.84
Since the table value is less than the 2.
So the Ho is rejected
Advocasy

Satisfaction Observed(O) Expected(E) (Oi-Ei)2 2 {(Oi-

level Ei)2 /E }
Recommend 40 50 100 2
Will Not 60 50 100 2
recommend

2=4
Table value=3.84
Since the table value is less than the 2.
So the Ho is rejected.

Advertising/Communication effect
Communication Observed(O) Expected(E) (Oi-Ei)2 2 {(Oi-Ei)2
level /E }
Effected 17 50 1089 21.78
Not at all 83 50 1089 21.78
2=43.56
Table value=3.84
Satisfaction Observed(O) Expected(E) (Oi-Ei)2 2 {(Oi-
2
level Ei) /E }
High 30 33.33 11.0889 0.333
Low 5 33.33 802.5889 24.08
Optimum 65 33.33 1002.9889 30.09
Since the table value is less than the 2.
So the Ho is rejected.

Price Level

2=54.503
Table value=5.99
Since the table value is less than the 2.
So the Ho is rejected.
 RECOMMENDATIONS

Promotions beyond fashion week

The brand should not lose its focus away from cosmetics. It can
prove 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.
 CONCLUSION

Since the Null hypothesis is rejected therefore it states that the customers
are not satisfied well with the lakme products . This would be the major
cause of lose of market share in the country. Another reason is the
upcoming of Regional brands in the country that is making lakme loose its
sheen. Therefore the company should take in strategic steps and planning
to revive its brand image accordingly.

The local cosmetics and toiletries market is valued at approximately RM3

billion or about US$800 million, with a growth rate of 13% annually. It is
estimated that there are more than 60,000 types of cosmetic products in the
local market. Imported products from Thailand, the United States, France,
Singapore and Japan dominate the market.

The local cosmetics and toiletries industry generally involves mixing and
formulation processes, using imported ingredients. Many of these
companies are contract manufacturers, mainly for products such as
shampoo and conditioners, other hair care products, perfumes, and
cosmetics.

Advertising and promotion is crucial for cosmetics and toiletries

products, in order to create an awareness of new products and build
brand loyalty among consumers. Advertisements in TV and the print
media such as newspaper and magazines, especially womens magazines,
are very common. Samples of toiletries products are distributed to
individual households and products in sachet form are attached to
magazines. Free gifts are given during promotion periods and are
advertised in the local major newspapers and on the web.

According to the industry, the market is saturated with many different

types of products, and in the long run, established brands that emphasize
quality and service will have the edge.

BIBLIOGRAPHY
Kotler Philip , Keller Lane Kevin marketing , prentice hall
of India , 2005
S.P Gupta , Business Statistics, 14th edition , 2005
Business Statistics , J. K Sharma , edition 2005
Tata Mc graw-Hill Editions, Business research methods,
Donald R.Cooper, Pamela S. Schindler.

REFERENCES

www.hindubusinessline.com
www.lakmeindia.com
www.hll.com
www.economictimes.com
 www.financialexpress.com

Kareena Kapoor is brand

ambassador of Lakme Absolute
MUMBAI: Kareena Kapoor has been chosen as the face of Lakm Absolute. She fits the brand
as she embodies the essence of beauty, which the brand represents. As the face of Lakm
Absolute, Kapoor will be part of the brands campaign and unveil the Absolute looks at the
Lakm Grand Finale by Manish Malhotra at Lakm Fashion Week Winter/ Festive 2011, which
will be held from 16-21 August.

Lakm Absolute is the brands long-wear makeup line with products that last up to 16 hours
designed by Lakm make-up experts.

Kapoor said, "Im very proud to be associated with a brand that introduced the concept of make-
up to the Indian woman and Im excited to undertake this journey with them. Lakm Absolute
keeps my skin radiant and makes me look beautiful the whole day without any touch-ups. Its long
wear and high-performance products are just what I need."

Lakm general manager Farida Kaliyadan says, "We are delighted to have Kareena as the face
of Lakm Absolute and launch its exciting range of products. Lakm Absolute has been specially
designed keeping in mind the Indian skin tone, texture and weather conditions. Kareenas
confident persona and beauty makes her the perfect choice for Lakm Absolute."