Chapter IV

4.1. Introduction
The Indian cosmetic industry is characterized by highly competitive marketing strategies. It
depends on ability to introduce rapidly innovative products into the market without endless
delays. A strategic marketing plan helps a company to decide proper segmentation,
targeting and positioning of the products. Developing a concise strategic marketing plan
includes a clear vision of business, its goal and unique selling proposition [1].

4.1.1. Designing strategic marketing plan

This chapter discusses strategic marketing analysis for cosmetic companies which may
be helpful for entry, survival and growth for companies interested to enter into Indian
cosmeceutical market. The chapter covers information about selected cosmeceutical
brands in India. The information includes various aspects of marketing mix.
The marketing strategy analysis may help

The marketing department of cosmetic companies that are planning to enter the Indian
cosmeceutical market. It may help to understand the Indian cosmeceutical market with
respect to existing competitors for their products.

The researchers who are interested in the Indian cosmeceutical market.

The outcome of this chapter will give a foundation to build a constructive suggestion to
the cosmetic companies in their marketing strategies.
4.1.2. International cosmeceutical brands in Indian market
International cosmeceutical brands in India constitute about 20% of the market. Thus
penetration levels of international brands are still low, which may be due to high pricing of
these brands. Women living in urban areas and falling in age range of 23-50 years is the
target market for quality brands. Industry estimates suggest that there are close to ten
million such women population in India which are target consumers for International
cosmeceutical brands [2].

4.1.3. Domestic cosmeceutical brands in Indian market

Cosmeceutical brands manufactured and marketed by Indian companies offer an economic
alternative to multinational brands to a large section of population. Most Indian cosmetic
companies launch their products in smaller pack sizes to make them more affordable to the
consumers. Most of the domestic cosmetic companies are giving tough competition to
multinational cosmetic companies.
This chapter includes following aspects to understand Indian cosmeceutical market.

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Porters five force model

SWOT analysis of cosmetic industry

Market competition in terms of 4Ps (Product, Price, Place and Promotion) of selected
cosmeceutical brands.
4.1.4. Significance of porter five force model
The Porter's five force method is a simple but powerful tool for understanding where power
lies in a business condition. Porter explains that there are five forces that determine industry
attractiveness and long run industry profitability. Five force analyses help to decide the long
run business activity. This is useful, because it helps company to comprehend both the
strength of current competitive situation, and the strength of a position considering moving
into. With a clear understanding of where power lies, company can take fair advantage of a
situation of strength, improve a situation of weakness, and avoid taking wrong steps.
Conventionally, the tool is used to find whether new products, services or businesses have
the potential to be profitable [3].

4.1.5. Significance of SWOT Analysis

SWOT analysis (Fig. 4.1) stands for strengths, weakness, opportunities and threats which
are method of analysis for auditing an organization and its environment. SWOT analysis
applies to all corporate level, all business which simplify in marketing plans. The SWOT
analysis allows analyzing a company, their goals, business plans and decisions. It also
simplifies reviewing the positives and negatives of the industry and the company itself.

INTERNAL
Strength Weakness

SWOT

Opportunity Threats
EXTERNAL

Figure 4.1. SWOT analysis. (Source: hrmadvice.com)

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Strengths and weakness are internal factors that create value or destroy value. They can
include assets and human skills compared to its competitors. They can be measured using
internal assessments or external benchmarks.
Opportunities and threats are external factors that create value or destroy value. A company
cannot control them. It includes demographic, economic, political, technical, social, legal
factors. Any organization must try to create a fit with its external environment [4].
4.1.6. Significance of 4Ps (marketing mix)

While marketing the products, firm need to create a successful marketing mix [5].

The right product

Sold at the right price
In the right place and
Using the most suitable promotion.
To create the right marketing mix, businesses have to meet the following conditions:
Product: The product has to have the right features with broader choice and should
satisfy consumer needs- such as; it must look well and work well.
Price: The price must be right. The price of an item is clearly an important cause of the
value of sales made. Price decides success of product in market.
Place: The goods must be in the right place at the right time. Making sure that the goods
arrive when and where, as they are wanted is an important operation.
Promotion: Promotion is the business of communicating with customers. It will provide
information that will help company in making a decision to buy a product or service.
However, successful promotion increases sales, so that advertising and other costs are
spread over a larger output.

4.2. Objective
To analyze marketing strategy for cosmetic companies in India.
To describe and analyze the Indian cosmeceutical brands and International cosmeceutical
brands with focus on skin care products in terms of market competition (Product, Price,
Promotion and Place)
The high growth rate versus the tough competition in Indian cosmetic market leads to
problem statement which is How can cosmetic companies successfully plan a marketing
strategy in India for its cosmeceutical skin care product line? The skin care product

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category is chosen for marketing strategy analysis, since it has the highest volume in
cosmetic and toiletries category.

4.3. Research methodology

The strategic marketing was analyzed by applying three variables i.e. SWOT analysis,
Porters five forces and 4ps (marketing mix) (Figure 4.2).

Strategic marketing analysis

SWOT analysis Porters five forces

4Ps
(Marketing mix)
Product
Price
Promotion
Place

Figure 4.2. Strategic marketing analysis.

The information that was used for the strategic marketing analysis is from both primary and
secondary sources.
To study Porters five force model and SWOT analysis of cosmetic industry, secondary data
were obtained from authentic websites, published literature in online, print journals, opinion
articles, management articles and news items from the internet.
To study 4Ps the information that was used in the competition analysis is from both
primary and secondary sources. The primary data was collected from the field study. The
field study provides information about the available products, price, promotion, and
distribution channels of the existing competitors. The field study was carried out in the main
supermarkets and trading malls of Manipal city-like Manipal stores, Supermarket, cosmetic
shop, specialty store and various drug stores and from Udupi city- like More, Big Bazaar,
Nilgiris, cosmetic shop, specialty store and various supermarkets.
The information collected for the study was:

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The type of skin care products like moisturizing, anti-acne, anti-aging, sun care and skin
whitening.

The skin care products being sold in the supermarkets, shopping malls, cosmetic shop,
specialty store and various drug stores

The price of the selected skin care products

The quantity of selected skin care product; and

The promotional method of the selected skin care products

4.3.1. Detail of the conducted field study
The primary data was collected from field study. The secondary data was collected from the
competitors websites and other reliable websites like Global Cosmetic Industry, Journal of
Consumer Marketing, Wall Street Journal, Euromonitor, and Datamonitor. The collected
information was analyzed in comparison.
Table 4.1. Detail of the conducted field study
Data How to collect How to analyze
List of existing competitors Internet and market research paper Comparison
Product Field Study and official company website Comparison
Place Field Study and official company website Comparison
Price Field Study and official company website Comparison
Promotion Field Study and official company website Comparison

4.4 Result and Discussion

4.4.1. Porters five forces
There are five forces that influence the level of competition within a particular market.
These forces were studied with the help of Michael E Porter theory. Michael E Porter a
professor of Harvard Business School in 1979 developed a framework for the industry
analysis and business. The theory determines the competitive intensity and attractiveness of
a market called as Porters five forces (figure 4.3.).
The Porters five forces include
The threat of substitute products
The threat of established rivals
The threat of new entrants
The bargaining power of suppliers
Bargaining powers of customers

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Buyer power:
High

Substitutes and
Complements Threat of entry:
Internal Rivalry
Substitutes: Low
High High
Complements: High

Supplier Power:
Low to medium

Figure 4.3 Porters five forces. [6]

The threat of established rivals
The internal rivalry in cosmetic industry is very high. There is a presence of domestic
players and International players in the market. The Indian cosmetic industry is marked by
presence of few companies with global presence, which has the larger share of cosmetic
market.
The threat of new entrants
A new entry into this industry is not an easy trade. New entrants have to compete with large
giant cosmetic companies. Most of the multinational companies invest good amount of
capital for research and development and marketing expenditures. For new entrant a capital
required for business is huge. The funds are required for investment in R&D, production,
distribution and marketing which covers advertising cost which is crucial in this competitive
industry. A major challenge for new entrants are advertising and positioning of product in
the minds of consumers, as market is flooded with many national and international brands.
Another issue is price sensitive market. The new entrants have had to work out innovative
strategies to satisfy Indian preferences and budgets to establish a hold in the market. Many
cosmetic companies launch their products in smaller pack sizes to make them more
affordable. An opportunity for new entrant is to build a product under a synergy and
collaboration with giants cosmetic companies.
The threat of substitute products
In Porters theory threat of substitutes exists when a products demand is affected by the
price change of substitute product. The consumers have a lot of brand choice as cosmetic
market is flooded with many brands. Due to this demand, product becomes more elastic. So
the treat of substitute is low.

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Buyer power
Consumer buying power is very high. To retain consumers is very challenging task. In
cosmetic industry consumers do not always stick to one brand of skincare or hair care
because the switching costs are very low. This means that buyer power is high and demand
for favorable prices. Brand awareness is more in urban India, but brand loyalty is less
towards the products, whereas brand awareness is less in rural India and brand loyality is
more.
Bargaining supplier power
Buyer supplier power is moderate. Suppliers in cosmetic industries are fragmented.
Suppliers in cosmetic industry are interlinked together. Suppliers are often are insignificant
in scale compared to major cosmetic manufacturers. Chemical producers have wide variety
of sources to earn revenues; they are not completely dependent on cosmetic manufacturers.
Overall the role supplier in cosmetic industry is adequate.
4.4.2. SWOT analysis of overall cosmetic and toiletries industry [7]
The overall SWOT analysis of cosmetic and toiletries industry is shown in (Table 4.2).
Strength
Cosmetic industry has emerged as one industry holding huge potential for further growth. It
is contributing to the economic growth of country. If we look around we find that what
existed 20 or 30 years ago in cosmetic industry has totally changed. Cosmetic industry is
more mature. During three to four decades, from 1970 to 2010, the industry has gained a
momentum. Its extensive development trend is expected to continue well into the coming
years. Average time for breakthrough technology is 3-5 years and cost of creating and
developing a breakthrough cosmetic technology is around US $2-3 million. Fast innovation
and new retail concepts are keys to this booming industry. Most of the market leaders have
the presence in major markets. Consumer spending has climbed up to 75% and expected to
rise. Rising salaries and increasing disposable incomes will fuel market growth in future as
well.
Weakness
Cosmetic Industry is bound to depression and declination. Product prices are invariable;
prices of products keep on changing according to market trends. Indian consumers are price
conscious and demand value for costly products. Promotion budget are getting bigger due to
stiff competition. Moreover, industry is dominated by market leaders. Due to lack of
distribution network, some international brands have less presence in the rural market.

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Opportunities
Aging baby-boomers, who have the high spending power, tend to spend more on beauty
products. Emerging markets that have high economic growths i.e., Europe, Latin America,
and Asia are replacing the matured and developed western markets. Future growth will
depend on strategy to grow through Merger& Acquisition to increase global presence. Many
reputed local brands in the market have their pulse on the local consumers.

Threats
China can be both opportunity and threat because it has the high ability to develop products
and compete in global markets. The regulatory system is complex and not stringent
compared to drugs most of the time new launched products are vulnerable to uncertainty of
regulatory review. Some products face recall from the market. European union has already
banned animal tested product so, alternative to animal tests would raise manufacturing costs
in future. Recently there is growth in counterfeit goods in market. Due to intense
competition companies has to make up on price. Market leaders dominate the cosmetic
industry, so lot of pressure exit on smaller companies in terms of quality and price of
products.

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Table 4.2. SWOT analysis of cosmetic and toiletries industry
Company Strengths Weaknesses Opportunities Threats
Overall During three to four decades, from The sales in the past Aging baby-boomers, who have China can be both
industry 1970 to 2010, the industry has year are slow moving high spending power, tend to opportunity and threat
gained a momentum because of downed spend more on beauty products because it has high
Its extensive development trend is consumer spending Emerging markets, that have capability to develop
expected to continue well into the Industry is bound to high economic growths i.e. products and compete in
following years to come depression and Europe, Latin America, and global markets
Industry is more mature declination Asia are replacing the matured Consumer concerns on
Positive revenue growth Product prices are and developed western markets health, environment
projections invariable Strategy to grow through M&A Alternative to animal tests
Innovated industry Promotion budget are increases global presentation may raise manufacturing
Contributing to the economic getting bigger Specializing in niches, costs
growth of country Industry dominated by differentiating the product lines, More intense regulations by
Major cosmetic companies have market leaders and focusing on mass market FDA
global presence segment. New launched products are
Increased per capita consumption vulnerable to uncertainty of
Robust sales and distribution regulatory review

network Growth in counterfeit goods

Stiff competition and price
war.

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4.4.3. 4Ps: Product, Price, Place, Promotion (Marketing mix analysis)

To understand the competition in the Indian cosmeceutical market for various brands, the
product of main competitors were examined.
4.4.3.1. Product
The international cosmeceutical brands of the main competitors of Procter & Gamble,
Johnson and Johnson, LOreal, Estee Lauder and Unilever are listed in (Table 4.3). The
Indian cosmeceutical brands of the main competitors of Himalaya herbal healthcare Ayur,
Zydus Wellness, Lotus herbals and VLCC are listed in (Table 4.4).
The high growth in cosmeceuticals market is mainly because of various companies trying to
incorporate same attributes and features in their product. Further we noted that competitions
in the skin care products are high. Product analysis of cosmeceutical brands are discussed
below

Among International cosmeceutical brands

Less to moderate competition is observed in
i. Anti -acne products
Moderate to high competition is seen in
i. Moisturizing products
ii. Anti-aging products
iii. Sun care products
iv. Skin whitening products
Among Indian cosmeceutical brands
Less to moderate competition is for
i. Skin whitening products
ii. Anti-aging products
Moderate to high competition is evident in
i. Moisturizing products
ii. Sun care products
iii. Anti-acne products
Analysis of International and Indian cosmeceutical brands indicated that low competition is
observed in anti-acne product category and high competition is among sun care and
moisturizing products. The remaining product comes under moderate competition. Cosmetic

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companies can focus on untapped anti-acne category which is having less competition to
cover larger market share.

4.4.3.2. Price
The price analysis is tabulated in (Table 4.5). The more similarity in pricing strategy,
cosmetic companies has the higher market competitiveness. Skin care products are
categorized for analysis as

Low price segment (45 to 200 INR)

Numbers of available products are more in moisturizing, sun care and whitening categories,
so intense competition observed in these categories. In anti-acne category only few products
are available, so less competition is observed. No company is offering anti-aging products
in low price range. Except Estee Lauder all major companies are following mass marketing.
Moderate price segment (200 to 800 INR)
More products are available in sun care and anti-aging categories but not as that of low
price segment, so somewhat more competition in this category. In moisturizing, anti-acne
and skin whitening categories very few products are available, so less competition in this
category.

High end price segment (800-5000 INR)

Only two cosmetic companies are focused on this segment. They are LOreal and Estee
Lauder, that too not in all categories. No product is available in anti-acne category, so less
competition in this category. Where as in other categories products are available but not as
that of low price segment, so moderate to low competition is seen in this category.
Overall price analysis
In India most of the cosmetic companies launch their products at low price. Some
companies like LOreal are not only focusing on low price market but also focused on
premium market and companies like Estee Lauder are mainly focusing on premium market.
As India is price sensitive market, so companies should price their products accordingly.

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Table 4.3. International cosmeceutical brands Product analysis
Skin care Company name
segments P&G J&J LOreal Estee Lauder Unilever
Moisturizers 1. Olay Moisturizing 1. Neutrogena Oil free 1. Garnier Light 1.Estee Lauder Hydrationist 1. Vaseline Light
Lotion Moisturizer Moisturizer Maximum Moisture Lotion Moisturizing Lotion
2. Olay Moisturizing 2. Clean and Clear Skin 2. Garnier Men Power - 2. Lakme Fruit Moisture
Cream Balancing Moisturizer Light Oil control fairness Honey & Avocado Winter
Oil-free Lotion Moisturizer Perfect Day Crme
Anti-acne - 1. Neutrogena Oil free 1.Garnier Pimple control - -
Acne wash Pen
2. Clean & Clear
Blackhead Clearing
daily Scrub
3. Clean & Clear Acne
Clearing Moisturizer
Anti aging 1.Olay Total Effects 1.Neutrogena Age 1.L'Oreal Solar Expertise 1. Estee Lauder Time Zone Line & 1.Ponds Age Miracle cream
Shield Anti-Ageing Suncare Wrinkle Reducing Crme SPF 15
Collagen Protector SPF30
2. Olay Age Protect 2.LOreal Paris Revitalift 2. Estee Lauder Optimizer Anti-
Cream (day, eye, night cream) Wrinkle / Lifting Boosting Lotion
3.Garnier Wrinkle Lift Anti-
ageing Cream
1. Olay Natural White 1.Neutrogena Ultra 1.LOreal Sun Care - Body 1. Estee Lauder - Sun Care - Body 1. Lakme Sun Expert SPF
Sun care UV Blocker Sheer Dry Touch Solar Expertise Sensitive Bronze Goddess Golden Perfection 24pa++
Sunblock Lotion SPF30 Self-Tanning Spray For Body
2. LOreal Solar Expertise 3.Estee Lauder - Sun Care - Body
Advanced Sun Protection Bronze Goddess Self Tan Golden
Lotion SPF10 Perfection Self-Tanning Milk For
Body
4. Estee Lauder - Sun Care - Body
Bronze Goddess Golden
Perfection Tinted Self-Tanning
Gel For Body

Continued to next page

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Continued from previous page

Skin 1.Olay Natural White 1.Neutrogena Fine 1. Estee Lauder - Cyber White - 1. Ponds White Beauty
Whitening Day Cream Fairness Lotion, SPF 30 1.L'Oreal Pearl Perfect Re- Night Care Daily Spot-Less
lighting Whitening Facial Cyber White Extra Intensive Spot Lightening Cream
Foam Corrector

2.Olay Natural White 2. Estee Lauder - Cyber White -

Healthy Fairness Day Cleanser
Cream Cyber White Extra Intensive
Purifying Treatment

Table 4.4. Indian cosmeceutical brands Product analysis

Company name
Skin care segments Himalaya herbal
Ayur Zydus Wellness Lotus herbals VLCC
health care
1. Himalaya Face 1.Ayur Moisturizer 1. EverYuth Skin
Moisturizers
Moisturizing Lotion Essential Moisturizing - -
Lotion
1. Himalaya Acne-N- - 1. EverYuth Acne 1. Lotus Herbals Acne Gel -
Anti-acne
Pimple Cream Control Gel
1. Himalaya Anti- 1.AyurAnti Wrinkle 1.EverYuth Age Defense - -
Anti aging
wrinkle Cream Gel Anti-aging Cream
1. Himalaya Sun screen 1. Ayur Sun screen 1.EverYuth Daily Sun 1.Lotus Herbals SAFE SUN Skin 1. VLCC
Sun care Lotion SPF30 block crme SPF30 Lightening Anti-Tan Sun block SPF-30 Hydrophobic Sun
Block Lotion SPF 50
1.Himalaya Fairness - - 1. Lotus Herbals White Glow Skin -
Skin
Cream Whitening & Brightening Micro-Emulsion
Whitening
SPF-25

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Table 4.5. Price Analysis: The price of each product is calculated for 50gm and 50ml respectively. [8] [9]
Price Range
Moisturizing
Products
1.Olay Moisturizing Lotion
(158 INR/50g)
2.Olay Moisturizing Cream
(199 INR/50g)
3.Clean and Clear skin
balancing moisturizer oil-free
lotion.
4. Clean and Clear skin
balancing moisturizer oil-free
lotion (40 INR/50ml)
5.Vaseline Light Moisturizing
Lotion (70 INR/50ml)
Low Price
(45-200 INR) 6.Lakme Fruit Moisture
Honey & Avocado Winter
Perfect Day Crme
(60 INR/50ml)
7. Himalaya Face moisturizing
lotion (20 INR/50ml).
8.Ayur Moisturizer
(25 INR/50ml)
9.EverYuth Skin essential
moisturizing lotion
(42 INR/50g)
10. Garnier light moisturizer
(175 INR/50 g)
11.Garnier men power light oil
control fairness moisturizer
(150 INR/ 50g)
Anti-acne Products
1.Himalaya Acne-N-
Pimple Cream
(112 INR/50g)
2.EverYuth Acne control
gel (75 INR/50g)
3. Lotus Herbals Acne Gel
(90 INR /50g)
4. Neutrogena Oil free acne
wash (98 INR/50ml).
5.Clean & Clear blackhead
clearing daily scrub
(60 INR/50g)
6.Clean & Clear acne
clearing moisturizer
(110 INR/50ml)
Chapter IV
Skin care segments
Anti-aging Product Sun care Products Skin whitening Products
- 1.LOreal Solar Expertise
1. 1.LOreal Pearl Perfect Re-
Advanced Sun Protection lighting Whitening Facial
Lotion SPF10 Foam (162 INR/ 50g)
(107 INR/ 50ml)
2.
2.Lakme Sun Expert SPF 2.Ponds White Beauty
24pa++ Daily Spot-Less Lightening
(95 INR/55ml) Cream (144 INR/50g)
3.Himalaya Sun screen 3. Himalaya Fairness cream
lotion (95 INR/50ml) (55 INR/50g)
4.Ayur Sun screen SPF 30
(55 INR/50ml)
5.EverYuth Daily sun block
crme SPF30 (90 INR/50g)
6.Lotus Herbals SAFE SUN
skin lightening anti-tan sun
block SPF 30 (170 INR/50g)
7. VLCC Hydrophobic Sun
Block lotion SPF 50
(138 INR/50g).
Continued to next page
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Continued from previous page
1.Neutrogena Oil free 1.Garnier pimple 1. Neutrogena Age shield 1.Olay Natural White UV 1.Olay natural white day
moisturizer control pen (233 INR/50ml) Blocker Cream (225 INR/50g)
(250 INR/50ml) (490 INR/50g) 2.L'Oreal Solar Expertise Anti- ( 299 INR/50ml)
Ageing Sun care Collagen
Protector SPF30
(255 INR/50ml)
3.Olay Total Effects 2.Neutrogena Ultra Sheer 2.Olay natural white healthy
(262 INR/50g) Dry Touch Sunblock fairness day cream
(255 INR/50ml) (270 INR/50g)
4. Olay age protect cream 3.L'oreal Sun Care - Body 3.Neutrogena fine fairness
(630INR/50ml) Solar Expertise Sensitive Lotion (250 INR/50ml)
Lotion SPF 30 (255 INR/
50ml)
5.Garnier Wrinkle Lift Anti- 4.Estee Lauder - Sun Care - 4.Lotus Herbals
ageing Cream Body Bronze Goddess WHITEGLOW Skin
(305 INR /50g) Golden Perfection Self- Whitening & Brightening
Tanning Spray For Body Micro-Emulsion
Medium Price
(568 INR/ 50ml) (225 INR/40ml)
(200-800 INR)
6.Himalaya Anti-wrinkle 5.Sun Care - Body
cream Bronze Goddess After-Sun
(380 INR/50g) Decadent Moisture Tan
Enhancer For Body
(538 INR /50ml)
7.Ponds Age Miracle cream 6.Sun Care - Body
(595 INR/50g) Bronze Goddess Golden
Perfection Tinted Self-
Tanning Gel For Body
(568 INR/ 50ml)
8. Estee Lauder Optimizer
Anti-Wrinkle / Lifting Boosting
Lotion (633 INR/50ml)
9.Ayur Anti-wrinkle gel
(668 INR/50ml)
10.EverYuth Age defense anti-
aging cream (672 INR/50 g)
Continued to next page

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High End Price 1.Estee Lauder Hydrationist
(800-5000 INR) Maximum Moisture Lotion
(4,680 INR/50ml)
1.LOreal Paris Revitalift (day,
eye, night cream)
(1667 INR/50ml)
2. Estee Lauder Time Zone
Line & Wrinkle Reducing
Crme SPF 15
(3433 INR/ 50ml)
Chapter IV
Continued from previous page
1. Sun Care - Body 1.Estee Lauder -Cyber
Bronze Goddess Self Tan White - Night Care
Golden Perfection Self- Cyber White Extra Intensive
Tanning Milk For Body Spot Corrector
(1,750 INR/50ml) (8,160 INR /50ml)
2.Estee Lauder -Cyber
White - Cleanser
Cyber White Extra Intensive
Purifying Treatment
(1650 INR/50ml).
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4.4.3.3. Place (Distribution) analysis

Table 4.6. Place (Distribution) analysis

Cosmetic
Himalaya
companies Estee Zydus Lotus
P&G J&J LOreal Unilever herbal Ayur VLCC
Lauder Wellness herbals
healthcare
Place

Cosmetic shop

Shopping mall

Specialty store

Drug store

Available None
Distribution channels adapted by cosmetic companies are illustrated in (Table 4.6). More
the cosmetic companies use the same distribution channel, the higher the competition in the
market. The competition between Unilever, P&G, Johnson & Johnson, LOreal, Himalaya
herbal healthcare, Ayur , Zydus Wellness, Lotus herbals and VLCC is high because they
adapt the same distribution channels. Their products are available in cosmetic shops,
shopping malls and drug stores. LOreal and Estee Lauder sell most of their products only
through specialty stores. Low price skin care products from Unilever, P&G, Johnson &
Johnson, Lotus herbals, Himalaya healthcare, Ayur, Zydus Wellness and VLCC use the
same distribution channels. The higher range skin care products from LOreal and Estee
Lauder are sold through specialty store. As a result, the competition in case of distribution is
high in all skin care products with all price range. Indian cosmetic firms such as Himalaya
herbal healthcare and Ayur are competent enough with all multinational cosmetic firms
because they have adapted all sorts of distribution channels.

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4.4.3.4. Promotion mix analysis

Table 4.7. Promotion mix Analysis
Cosmetic companies Himalaya
Estee Zydus Lotus
Technique P&G J & J LOreal Unilever herbal Ayur VLCC
Lauder wellness herbals
of promotion healthcare
Television
Advertising
Magazines

Gift Sales
promotions promotion
Event
sponsoring
Publicity
Marketing Personal
team selling
Indirect
Websites
selling
Social
Funding
responsibility
Apply None
Various methods of product promotion adapted by cosmetic companies are illustrated in
(Table 4.7). All cosmetic companies promote or advertise their products through special
magazines and through websites. For magazine advertisement, Unilever, P&G and Johnson
& Johnson advertise widely. For television advertisement, Unilever leads whereas P&G
comes next. Companies like Ayur, Lotus herbals and VLCC prefer special magazines
compared to television advertisement. However, Estee Lauder advertises to a lesser extent
on the television and through magazines, so as to retain the exclusive image of the product
since they are high-end brands.
Other cosmetic companies like Johnson & Johnson, Zydus Wellness, VLCC, Lotus herbals,
and Estee Lauder promote their products by giving special discounts or complementary
product on special occasions, to encourage the customers to buy more products. To create a
good reputation in the society companies like Unilever, P&G, J&J, LOreal and Himalaya
herbal healthcare organizes social events and provide financial assistance for research work.
The companies selling low price skin care product uses similar promotional channel such as
television, magazines, gift, event sponsoring and website, while medium to high price skin
care products are advertised through magazines, gifts and websites. The competition is
considered high due to similarity in promotion strategy in low price and high price products.

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Both Indian cosmetic companies and multinational cosmetic companies use similar
promotion strategy to promote their cosmeceutical brands.

4.5. Conclusion
The usage of skin care cosmeceutical product has increased over time in India. The high
growth of cosmetic industry is lucrative. Nevertheless, due to the high growth in cosmetic
industry of India, many cosmetic companies have already invested a huge sum of money to
promote their products. As a result, companies interested to enter cosmeceutical market may
face a high competition. A strong brand promotional campaign, constant product innovation
and quality improvement, and the ability to provide a variety of quality and economical
products are some of the major reasons for the success in the Indian cosmeceutical market.

4.6. Recommendations
As far as skin care cosmeceutical market is concerned it is very competitive and enjoys the
existence of many large domestic as well as international brands. The market research and
analysis conducted on cosmeceutical skin care brands have drawn attention to various
aspects like
As mentioned in the analysis part, the segments worth entering are
i. Low price anti-acne products, skin whitening products and anti-aging products.
ii. Medium price skin whitening and moisturizing products.
iii. High price anti-acne products.
The strategic marketing plan for a cosmetic company desiring to enter Indian cosmeceutical
market is discussed below. This plan focuses on marketing mix (product, price, place,
promotion)

Product
The key to success is to find the product that really matter to consumers. From the findings,
the desired benefits are anti-acne, skin whitening and anti-aging products. Therefore, the
cosmetic companies should emphasize on these categories.
The Indian market is becoming increasingly sophisticated, with increasing consumer interest
in skin whitening formulations. This segment accounts for 60% total skin care market.
Another important potential segment is anti-aging products, according to market analysts;
the anti-ageing market in India is estimated at Rs 3,000 crore. The cosmetic company can
trap these potential segments in future. Furthermore, to differentiate product from the
competitors, the company should find the special ingredients or technology that is unique.

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According to market trend natural ingredients are preferred more among Indian consumer
since it is believed to have low side effect.

Price
Most cosmeceuticals are highly priced and hence the tag of exotic commodity remains
despite of awareness. The target customers still remain the urban elite for cosmeceutical
products in India. More products are available in sun care and anti-aging categories but not
as that of low price segment, so somewhat more competition in this category, where as in
moisturizing, anti- acne and skin whitening categories very few numbers of products are
available, so less competition in this category, the company should target the young
consumers since they prefer low price products. Low competition is seen in anti acne
products and high competition is seen in sun care products and moisturizing products. And
remaining categories comes under moderate competition. So the companies can focus on
anti-acne category in all price segments and on anti-aging products in low price segment
which is having less competition.
Moreover, India is a very price sensitive market. Cosmetics and personal care product
companies, especially the new entrants, have to create innovative strategies to satisfy Indian
preferences and budgets to establish a hold in the market. For example, given the price-
sensitivity of Indian consumers, many cosmetic and toiletries companies launched their
products in smaller pack sizes to make them more affordable. Small pack sizes have proved
to be very popular in the Indian market as the concept offers lower purchase costs and the
opportunity to try new products.
Place
The place to sell cosmeceutical products should be easily reached by the consumers. The
companies should have the good distribution network. The low price and medium price
products should be easily available and distributed through mass retail channels, shopping
malls and supermarket.
Moreover, high-price skin care product should be distributed through luxurious professional
stores. It is because the consumers would associate the image of the cosmetic store to
quality and safety of the products available.
Promotion
To establish a long lasting potential of brand, companies have to spread awareness through
aggressive marketing strategies with focus on continuous product promotion. Frequency of
the advertisements should be increased in the television and print media so as to increase the

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advertisement recall. The cosmetic companies should emphasize on gift promotion since it
is one best way to introduce new cosmeceutical product in the market. Trial packs and free
samples of all the products of the complete range should be introduced so as to facilitate the
first-time users.
Moreover, cosmetic companies with high priced cosmeceutical products should focus more
on marketing and sales team to persuade the consumers about product benefits. Tie-ups with
beauty parlors to organize exhibition and competitions for the target audience could be a
pleasing promotional scheme.
Hence, cosmetic companies can successfully enter Indian cosmeceutical market by applying
the competitor-oriented marketing strategy that suits Indian consumers taste and fashion.

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4.7. References

1. When to Develop a strategic marketing plan.[cited 2011 June 5]. Available from:
http://www.ehow.com/way_5831241_develop-strategic-marketing-plan_.html
2. Status of International cosmeceutical brands in Indian cosmetic market. [cited 2011June
5].Available from: http://www.naukrihub.com/india/fmcg/overview/cosmetics-toiletries/
3. Porters five forces assessing the Balance of Power in a Business Situation. [cited 2010
December 15]. Available from: http://www.mindtools.com/pages/article/newTMC_08.htm
4. What is SWOT analysis? Description.[cited 2011 June 5]. Available from:
http://www.12manage.com/methods_swot_analysis.html
5. Marketing mix. Product, Price, Place, Promotion. The 4ps of Marketing. [cited 2011
June 6]. Available from: http://drypen.in/marketing/marketing-mix-productprice-place-
promotion-the-4ps-of-marketing.html
6. Cosmetic industry. [cited 2010 October 25]. Available from: http://www.bignerds.com/
papers/15575/Cosmetics-Industry-5-Forces/Cosmetics Industry
7. Cosmetics SWOT Analysis.[cited 2011 September 15].Available from:
http://www.wikiswot.com/SWOT/4_User_Generated/cosmetics.html
8. Indias Cosmetic Market Ready for Big Leap. [cited 2011 June 15]. Available from:
http://www.gcimagazine.com/marketstrends/regions/bric/30806969.html?page=2 price
range
9. Nguyen HM, Serene S. Cosmetic market in Vietnam [dissertation] Malardalen
University; 2008.

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