Cosmetics Industry

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Research Report on Lakme (A Product

of Hindustan Unilever Ltd)
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CONTENTS
EXECUTIVE SUMMARY
1. INTRODUCTION
2. CRITICAL REVIEW OF LITERATURE
3. RESEARCH METHODOLOGY
3.1 OBJECTIVE OF THE STUDY
3.2 HYPOTHESIS
3.3 RESEARCH DESIGN
3.4SAMPLE DESIGN
4. INDUSTRY PROFILE
5. DATA,FINDING & ANALYSIS
6. RECOMMENDATION & CONCLUSION
7. BILIOGRAPHY
8. REFRENCES
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.
Frost & Sullivans new study finds that the Indian surfactants market earned revenues of
$ 2,278 million in 2013 and estimates this to grow at 13% annually to reach $3,748
million in 2017, approximately. 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 pricewww.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/
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 Colours , 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, I have basically tried 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,which includes the responses received from
target audiences(Min age 19yrs- Max -40yrs) via questionnaire for
deeper insights.
CHAPTER 2- CRITICAL
REVIEW OF LITERATURE
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 colour 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.
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
this segments are Lakme, Ponds, 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.
Penetration levels of international cosmetics brands in India are still low.
Foreign brands 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.
Chapter 3
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 aspire 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 favoured )
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
H: Respondent are not aware of new range.
HO: Respondent do believe that endorsement by celebrity play any
role in the decision making
HA: Respondent do 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
CHAPTER 4
COMPANY PROFILE
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 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
herself 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 aspirational colour

cosmetics brand, which also has a presence in skincare.
The 'aspirational' 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 ORGMARG'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.
Still, it is conceivable that Lakm's new-found aspirational strategy
could have been brought about by competitors like Revlon and
Maybelline, which targeted this segment. Indeed, the company's nontransfer lip-colour range follows in the wake of Maybelline's launch of a
similar range, and its new nail-enamel colours 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.''
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
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
Colours
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 Lipcolor - . Perfecting Definition Lip Pencil - Starshine
Lipgloss - 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. Lame Insta Eyeliner eyelids
3. Lakme Lakm Shimmer Eye Cube:
Nails
True Wear Nail Enamel -Nail Enamel with Lacquer-like finish. Contains
resins and silicone with colour 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 Moisturiser skin.
2. Lakm Fundamental Winter Care Lotion Sun Protection
The range comprises of lotions to keep your skin healthy and younger
looking.
CHAPTER 5
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
Kwality 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
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 Biotique 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,
Lancome, Chambor, Coty, L'Oreal, Oriflame, Revlon, L'Oreal, Yardley,
Wella, 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
Modicare 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 Hussain, Biotique, 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 imports 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 themselves.
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 skincare segment.
To promote the growth of their products, a dominant player like Lakme
have 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 aspirational 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.
Chapter 6
Questionnaire
Q) Do lakme provides Quality Products?
Q) Are You Brand Loyal to Lakme?
Q) For what purpose You use lakme products

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

products ?
Q)If not Lakme then which Other brand ?
Q) Do celebrity endorsements in advertisements attract you

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

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

products?
CHAPTER 7FINDING & ANALYSIS
Hypothesis Testing using Chi Square

Overall Satisfaction
Satisfaction
level
Excellent
Good
Average
Poor
Neutral/Cant
Say
Observed(O) Expected(E) (Oi-Ei)2
2 {(OiEi)2 / }
16
20
55
5
4
0.8
0
61.25
11.25
12.8
20
20
20
20
20
16
0
1225
225
256
2=86.1
Table value=9.49
Since the table value is less than the 2.
So the Ho is rejected.
Loyalty
Satisfaction level
Loyal
Not a loyal
18
82
50
50
1024
1024
2=40.96
Table value=3.84
2 {(OiEi)2 /E }
20.48
20.48
Advocasy
Satisfaction
level
Recommend
Will Not
recommend
Observed(O)
Expected(E)
(Oi-Ei)2
2 {(Oi-
Ei)2 /E }
40
60
50
50
100
100
2
2
2=4
Table value=3.84
Advertising/Communication effect
Communication Observed(O)
level
Effected
17
Not at all
83
Expected(E)
(Oi-Ei)2
2 {(Oi-Ei)2
/E }
50
50
1089
1089
2=43.56
Table value=3.84
21.78
21.78
Satisfaction
level
High
Low
Optimum

30
5
65
33.33
33.33
33.33
11.0889
802.5889
1002.9889
Price Level
2=54.503
Table value=5.99
2 {(OiEi)2 /E }
0.333
24.08
30.09
CHAPTER 8
RECOMMENDATIONS
Promotions beyond fashion week

The brand should not lose its focus away from cosmetics. It can prove
to be 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.
CHAPTER 9 -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 Edtion , 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
Annexure
Questionnnaire
Market Survey For Lakme Products
Name
Age
Sex
Address
State/Province :
Contact No.
1. What inspire you to go for Lakme ?

o Colour/Shades
o
o
o
o
Price
Packaging
Versatility
Others
2. Are You Brand Loyal to Lakme or you Switch To others too.?

o Yes
No
3. Do you Think Lakme provides quality Products to its customers?
o
o Yes
o No
o Can,t Say
4. For Which Purpose you usually use Lakme Products ?
o Eyes
o Lip Colour
o Face
o Nail Enamel
5. According to you what kind of promotional activities can make

Lakme reach customers in a better way which can increase there
market share ?
o Lucky Draws
o Free Bonanza
o Free sample Distibutions
o Discount Coupons
o Others
6. What do you think about the price level Of Lakme products?
o High
o Optimum
o Low
7.
From Where do you purchase your product ?

o Departmental store
o Cosmetic stores
o Drug/Pharmacy
o Supermarket
o Beauty Salon
o Others
8
If not Lakme , then which other brand?

o Revlon
o Oriflame
o Blue Heaven
o LOreal
o Lissome
o Others
9. Are you aware of the new range of Lakme Products?
o Yes
o No
10. How would you rate the Lakme products ?
o Good
o Very Good
o Poor
o Average
o Cant Say
11. Do the Celebrity Endorsements in the Advertisements attract

you towards the product ?
o
Yes
o No
12. What changes you would like to see in the Lakme products?
o More product range
o More shades
o Better packaging
o All of the above
13. Will you Recommend Lakme products to Others ?
o Yes
o No
Case Study
Lakme (A Brand of Hindustan Unilever Ltd.)
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 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 herself 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
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
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.
With a unique blend of understanding of women of all ages, today,
Lakm is all about setting trends and dominating the fashion arena.
Hindustan Levers Lakme Lever
Lakme is the brand of 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 nonexecutive 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 Kwality Wall's.
Lakme Going Global ?

If the company manages to scale up the brand and increase its
consumption within India, there are strong indications that Lakme could
leverage Unilevers global reach on the back of the Anglo-Dutch majors
priorities on personal care and D&E (developing and emerging markets).
Given Lakmes service sector lineage, the business model could benefit
from what is perceived to be Unilevers proposed area of interest for the
future - services.
The company has Unilever Foodsolutions which works with customers
including caterers, restaurateurs and major hotel and fast-food chains to

create food solutions that help grow their business.
Reviving Of Lakmes Brand

Lakme Lever had revived its youth-oriented brand, Elle 18. Having put
the brand on `maintenance' mode, this division of HLL was focusing on
Lakme.
Launched in 1998, Elle 18 targeted the first-time cosmetic user and
currently sports two product lines comprising lipsticks and nail enamel.
"In the first three years, Elle 18 registered sharp growth rates and the
purpose was to create a new segment of consumers," said Mr Chopra.
At that point of time, Elle 18's main competitor in the youth-based
cosmetics market was Tips & Toes, a brand that is almost non-existent
today.
Pricing
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 colour 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 colour 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.
Problems
Increasing Competition
Low Rating of lame Salons (not so good customer services)
No new Strategies to look for improvements.
May loose its Sheen in a long run.
Recommendations
Promotions beyond fashion week
The brand should not lose its focus away from cosmetics. It can proved to
very detrimental.
For vast reach unlikely, in the short-term. Some sort of an alliance or cobranding 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.

Cosmetics Industry

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Research Report on Lakme (A Product

promising prospects for international brands. The growth rate in the

sensitive market and mass-market products constitute the major part of

Plan of the project

Below the line initiatives are extremely important in the cosmetic

''Lakm is at the forefront of product-innovation. Almost everyone has a

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

The research is based on:Primary Data

select the desired level of significance

A little bit of Lakm history:

Ponds is Lever's primary skincare brand; Lakm, its aspirational colour

SWOT ANALYSIS Of LAKME

Access to Unilever global technology capability and sharing of

Everything a girl wants

Hindustan Unilever Limited

Chairman: Harish Manwani

With respect to distribution related activities like sales

Hindustan Unilever Present Scenario

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

products in India. The advent of satellite television and awareness of the

A strong brand promotional campaign, good distribution network,

attracting aspirational consumers and increasing acceptance of color

Q) Do lakme provides Quality Products?

Q) Are You Brand Loyal to Lakme?

Q) For what purpose You use lakme products

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

Q)If not Lakme then which Other brand ?

Q) Do celebrity endorsements in advertisements attract you

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

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

CHAPTER 7FINDING & ANALYSIS

Hypothesis Testing using Chi Square

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

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

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

Promotions beyond fashion week

Kotler Philip , Keller Lane Kevin marketing , prentice hall of

1. What inspire you to go for Lakme ?

2. Are You Brand Loyal to Lakme or you Switch To others too.?

5. According to you what kind of promotional activities can make

From Where do you purchase your product ?

If not Lakme , then which other brand?

11. Do the Celebrity Endorsements in the Advertisements attract

13. Will you Recommend Lakme products to Others ?

Lakme (A Brand of Hindustan Unilever Ltd.)

A little bit of Lakm history:

Lakme is the brand of Hindustan Unilever Limited (abbreviated to

Lakme Going Global ?

including caterers, restaurateurs and major hotel and fast-food chains to

Reviving Of Lakmes Brand

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