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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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Porter’s five force model

SWOT analysis of cosmetic industry

Market competition in terms of 4P’s (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.

SWOT

EXTERNAL

INTERNAL

Opportunity

Weakness

Threats

Strength

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 4P’s (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 4p’s (marketing mix) (Figure 4.2).

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 4P’s 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:

Porters’ five forces

Strategic marketing analysis

4P’s (Marketing mix)

Product

Price

Promotion

Place

SWOT analysis

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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. Porter’s 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 Porter’s five forces (figure 4.3.).

The Porter’s 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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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 giant’s cosmetic companies.

The threat of substitute products

In Porter’s theory threat of substitutes exists when a product’s 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.

Buyer power:

High

Internal Rivalry

High

Threat of entry:

High

Supplier Power:

Low to medium

Substitutes and

Complements

Substitutes: Low

Complements: High

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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

industry

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

following years to come

Industry is more mature

Positive revenue growth

projections

Innovated industry

Contributing to the economic

growth of country

Major cosmetic companies have

global presence

Increased per capita consumption

Robust sales and distribution

network

The sales in the past

year are slow moving

because of downed

consumer spending

Industry is bound to

depression and

declination

Product prices are

invariable

Promotion budget are

getting bigger

Industry dominated by

market leaders

Aging baby-boomers, who have

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

Strategy to grow through M&A

increases global presentation

Specializing in niches,

differentiating the product lines,

and focusing on mass market

segment.

China can be both

opportunity and threat

because it has high

capability to develop

products and compete in

global markets

Consumer concerns on

health, environment

Alternative to animal tests

may raise manufacturing

costs

More intense regulations by

FDA

New launched products are

vulnerable to uncertainty of

regulatory review

Growth in counterfeit goods

Stiff competition and price

war.

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4.4.3. 4P’s: 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, L’Oreal, 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 L’Oreal 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 L’Oreal 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

segments

Company name

P&G J & J L’Oreal Estee Lauder Unilever

Moisturizers 1. Olay Moisturizing

Lotion

1. Neutrogena Oil free

Moisturizer

1. Garnier Light

Moisturizer

1.Estee Lauder Hydrationist

Maximum Moisture Lotion

1. Vaseline Light

Moisturizing Lotion

2. Olay Moisturizing

Cream

2. Clean and Clear Skin

Balancing Moisturizer

Oil-free Lotion

2. Garnier Men Power

Light Oil control fairness

Moisturizer

- 2. Lakme Fruit Moisture

Honey & Avocado Winter

Perfect Day Crème

Anti-acne - 1. Neutrogena Oil free

Acne wash

1.Garnier Pimple control

Pen

- -

2. Clean & Clear

Blackhead Clearing

daily Scrub

3. Clean & Clear Acne

Clearing Moisturizer

Anti –aging 1.Olay Total Effects 1.Neutrogena Age

Shield

1.L'Oreal Solar Expertise

Anti-Ageing Suncare

Collagen Protector SPF30

1. Estee Lauder Time Zone Line &

Wrinkle Reducing Crème SPF 15

1.Ponds Age Miracle cream

2. Olay Age Protect

Cream

2.L’Oreal Paris Revitalift

(day, eye, night cream)

2. Estee Lauder Optimizer Anti-

Wrinkle / Lifting Boosting Lotion

3.Garnier Wrinkle Lift Anti-

ageing Cream

Sun care

1. Olay Natural White

UV Blocker

1.Neutrogena Ultra

Sheer Dry Touch

Sunblock

1.L’Oreal Sun Care - Body

Solar Expertise Sensitive

Lotion SPF30

1. Estee Lauder - Sun Care - Body

Bronze Goddess Golden Perfection

Self-Tanning Spray For Body

1. Lakme Sun Expert SPF

24pa++

2. L’Oreal Solar Expertise

Advanced Sun Protection

Lotion SPF10

3.Estee Lauder - Sun Care - Body

Bronze Goddess Self Tan Golden

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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Skin

Whitening

1.Olay Natural White

Day Cream

1.Neutrogena Fine

Fairness Lotion, SPF 30

1.L'Oreal Pearl Perfect Re-

lighting Whitening Facial

Foam

1. Estee Lauder - Cyber White -

Night Care

Cyber White Extra Intensive Spot

Corrector

1. Ponds White Beauty

Daily Spot-Less

Lightening Cream

2.Olay Natural White

Healthy Fairness Day

Cream

2. Estee Lauder - Cyber White -

Cleanser

Cyber White Extra Intensive

Purifying Treatment

Table 4.4. Indian cosmeceutical brands – Product analysis

Skin care segments

Company name

Himalaya herbal

health care Ayur Zydus Wellness Lotus herbals VLCC

Moisturizers

1. Himalaya Face

Moisturizing Lotion

1.Ayur Moisturizer

1. EverYuth Skin

Essential Moisturizing

Lotion

- -

Anti-acne 1. Himalaya Acne-N-

Pimple Cream

- 1. EverYuth Acne

Control Gel

1. Lotus Herbals Acne Gel -

Anti –aging 1. Himalaya Anti-

wrinkle Cream

1.AyurAnti Wrinkle

Gel

1.EverYuth Age Defense

Anti-aging Cream

- -

Sun care

1. Himalaya Sun screen

Lotion

1. Ayur Sun screen

SPF30

1.EverYuth Daily Sun

block crème SPF30

1.Lotus Herbals SAFE SUN™ Skin

Lightening Anti-Tan Sun block SPF-30

1. VLCC

Hydrophobic Sun

Block Lotion SPF 50

Skin

Whitening

1.Himalaya Fairness

Cream

- - 1. Lotus Herbals White Glow Skin

Whitening & Brightening Micro-Emulsion

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 Skin care segments

Moisturizing

Products Anti-acne Products Anti-aging Product Sun care Products Skin whitening Products

Low Price

(45-200 INR)

1.Olay Moisturizing Lotion

(158 INR/50g) 1.Himalaya Acne-N-

Pimple Cream

(112 INR/50g)

- 1.L’Oreal Solar Expertise

Advanced Sun Protection

Lotion SPF10

(107 INR/ 50ml)

1. 1.L’Oreal Pearl Perfect Re-

lighting Whitening Facial

Foam (162 INR/ 50g)

2.Olay Moisturizing Cream

(199 INR/50g)

2.EverYuth Acne control

gel (75 INR/50g) 2.

3.Clean and Clear skin

balancing moisturizer oil-free

lotion.

3. Lotus Herbals Acne Gel

(90 INR /50g)

4. Clean and Clear skin

balancing moisturizer oil-free

lotion (40 INR/50ml)

4. Neutrogena Oil free acne

wash (98 INR/50ml).

2.Lakme Sun Expert SPF

24pa++

(95 INR/55ml)

2.Ponds White Beauty

Daily Spot-Less Lightening

Cream (144 INR/50g)

5.Vaseline Light Moisturizing

Lotion (70 INR/50ml)

5.Clean & Clear blackhead

clearing daily scrub

(60 INR/50g)

3.Himalaya Sun screen

lotion (95 INR/50ml)

3. Himalaya Fairness cream

(55 INR/50g)

6.Lakme Fruit Moisture

Honey & Avocado Winter

Perfect Day Crème

(60 INR/50ml)

6.Clean & Clear acne

clearing moisturizer

(110 INR/50ml)

4.Ayur Sun screen SPF 30

(55 INR/50ml)

7. Himalaya Face moisturizing

lotion (20 INR/50ml).

5.EverYuth Daily sun block

crème SPF30 (90 INR/50g)

8.Ayur Moisturizer

(25 INR/50ml)

6.Lotus Herbals SAFE SUN

skin lightening anti-tan sun

block SPF 30 (170 INR/50g)

9.EverYuth Skin essential

moisturizing lotion

(42 INR/50g)

7. VLCC Hydrophobic Sun

Block lotion SPF 50

(138 INR/50g).

10. Garnier light moisturizer

(175 INR/50 g)

11.Garnier men power light oil

control fairness moisturizer

(150 INR/ 50g)

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…Continued from previous page

…Continued to next page

Medium Price

(200-800 INR)

1.Neutrogena Oil free

moisturizer

(250 INR/50ml)

1.Garnier pimple

control pen

(490 INR/50g)

1. Neutrogena Age shield

(233 INR/50ml)

1.Olay Natural White UV

Blocker

( 299 INR/50ml)

1.Olay natural white day

Cream (225 INR/50g)

2.L'Oreal Solar Expertise Anti-

Ageing Sun care Collagen

Protector SPF30

(255 INR/50ml)

3.Olay Total Effects

(262 INR/50g)

2.Neutrogena Ultra Sheer

Dry Touch Sunblock

(255 INR/50ml)

2.Olay natural white healthy

fairness day cream

(270 INR/50g)

4. Olay age protect cream

(630INR/50ml)

3.L'oreal Sun Care - Body

Solar Expertise Sensitive

Lotion SPF 30 (255 INR/

50ml)

3.Neutrogena fine fairness

Lotion (250 INR/50ml)

5.Garnier Wrinkle Lift Anti-

ageing Cream

(305 INR /50g)

4.Estee Lauder - Sun Care -

Body Bronze Goddess

Golden Perfection Self-

Tanning Spray For Body

(568 INR/ 50ml)

4.Lotus Herbals

WHITEGLOW™ Skin

Whitening & Brightening

Micro-Emulsion

(225 INR/40ml)

6.Himalaya Anti-wrinkle

cream

(380 INR/50g)

5.Sun Care - Body

Bronze Goddess After-Sun

Decadent Moisture Tan

Enhancer For Body

(538 INR /50ml)

7.Ponds Age Miracle cream

(595 INR/50g)

6.Sun Care - Body

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)

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…Continued from previous page

High End Price

(800-5000 INR)

1.Estee Lauder Hydrationist

Maximum Moisture Lotion

(4,680 INR/50ml)

1.L’Oreal Paris Revitalift (day,

eye, night cream)

(1667 INR/50ml)

1. Sun Care - Body

Bronze Goddess Self Tan

Golden Perfection Self-

Tanning Milk For Body

(1,750 INR/50ml)

1.Estee Lauder -Cyber

White - Night Care

Cyber White Extra Intensive

Spot Corrector

(8,160 INR /50ml)

2. Estee Lauder Time Zone

Line & Wrinkle Reducing

Crème SPF 15

(3433 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

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, L’Oreal, 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. L’Oreal 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 L’Oreal 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.

Cosmetic

companies

Place

P&G J & J L’Oreal Estee

Lauder Unilever

Himalaya

herbal

healthcare

Ayur Zydus

Wellness

Lotus

herbals VLCC

Cosmetic shop ×

Shopping mall ×

Specialty store × × × × × ×

Drug store ×

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4.4.3.4. Promotion mix analysis

Table 4.7. Promotion mix Analysis

Cosmetic companies

Technique

of promotion

P&G J & J L’Oreal Estee

Lauder Unilever

Himalaya

herbal

healthcare

Ayur Zydus

wellness

Lotus

herbals VLCC

Television Advertising

× × × ×

Magazines

Gift

promotions

Sales

promotion × × × × ×

Event

sponsoring Publicity × × × ×

Marketing

team

Personal

selling

Websites Indirect

selling

Funding Social

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, L’Oreal 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. Porter’s 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. India’s 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.