INTRODUCTION OF LAKME UNILEVER PRIVATE LTD

“Lakme is the Indian woman’s Beauty Sutra” – inspiring expression of her unique beauty and sensuality.Lakme brings expert products and services that are borne out of true understanding of the needs of the Indian woman. They help the Indian woman in expression of her best self – sensual, original, expressive, alive and intuitive. Lakme inspires her to unleash the potency of her femininity, beauty and sensuality

Key facts

Lakme was the first major beauty brand in India and takes pride in being the expert on Indian Beauty for over 50 years. It is complete beauty brand spanning colour cosmetics, skin care & hair styling products and extending to beauty services through the network of Lakme Beauty Salons. Its bond with beauty and fashion is manifested through the Lakme Fashion Week, which is now the largest fashion event of its kind in the country. Lakme has a foot print of over 1200 assisted sales outlets, which is the largest span of outlets with “Beauty Advisors” in the country.

Our vision

Unilever products touch the lives of over 2 billion people every day – whether that's through feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.

A clear direction

The four pillars of our vision set out the long term direction for the company – where we want to go and how we are going to get there:

We work to create a better future every day We help people feel good, look good and get more out of life with brands

and services that are good for them and good for others. We will inspire people to take small everyday actions that can add up to a

big difference for the world.

We will develop new ways of doing business that will allow us to double the size of our company while reducing our environmental impact.

Purpose & principles

Our corporate purpose states that to succeed requires "the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact."

Always working with integrity

Conducting our operations with integrity and with respect for the many people, organisations and environments our business touches has always been at the heart of our corporate responsibility.

Positive impact 

We aim to make a positive impact in many ways: through our brands, our commercial operations and relationships, through voluntary contributions, and through the various other ways in which we engage with society. 

Continuous commitment

We're also committed to continuously improving the way we manage our environmental impacts and are working towards our longer-term goal of developing a sustainable business.

Setting out our aspirations 

Our corporate purpose sets out our aspirations in running our business. It's underpinned by our code of business Principles which describes the operational standards that everyone at Unilever follows, wherever they are in the world. The code also supports our approach to governance and corporate responsibility.

Working with others

We want to work with suppliers who have values similar to our own and work to the same standards we do. Our Business partner code, aligned to our own Code of business principles, comprises ten principles covering business integrity and responsibilities relating to employees, consumers and the environment.

A vitality mentality

Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life. Our deep roots in local cultures and markets around the world give us our strong relationship with consumers and are the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers – a truly multi-local multinational. Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, and to a willingness to embrace new ideas and learn continuously.

Code of business principles

Standard of Conduct We conduct our operations with honesty, integrity and openness, and with respect for the human rights and interests of our employees.

Obeying the Law Unilever companies and our employees are required to comply with the laws and regulations of the countries in which we operate.

Employees Unilever is committed to diversity in a working environment where there is mutual trust and respect and where everyone feels responsible for the performance and reputation of our company. We will recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed.

Consumers Products and services will be accurately and properly labelled, advertised and communicated.

Shareholders Unilever will conduct its operations in accordance with internationally accepted principles of good corporate governance. We will provide timely, regular and reliable information on our activities, structure, financial situation and performance to all shareholders.

Business Partners Unilever is committed to establishing mutually beneficial relations with our suppliers, customers and business partners.

Community Involvement Unilever strives to be a trusted corporate citizen and, as an integral part of society, to fulfil our responsibilities to the societies and communities in which we operate.

Public Activities Unilever companies are encouraged to promote and defend their legitimate business interests. Unilever will co-operate with governments and other organisations, both directly and through bodies such as trade associations, in the development of proposed legislation and other regulations which may affect legitimate business interests..

The Environment Unilever is committed to making continuous improvements in the management of our environmental impact and to the longer-term goal of developing a sustainable business.

Innovation In our scientific innovation to meet consumer needs we will respect the concerns of our consumers and of society.

Competition Unilever believes in vigorous yet fair competition and supports the development of appropriate competition laws.

Business Integrity Unilever does not give or receive whether directly or indirectly bribes or other improper advantages for business or financial gain. No employee may offer give or receive any gift or payment which is, or may be construed as being, a bribe.

Conflicts of Interests All Unilever employees are expected to avoid personal activities and financial interests which could conflict with their responsibilities to the company. Any breaches of the Code must be reported in accordance with the procedures specified by the Chief Legal Officer.

Business Partner Code We are committed to working with our business partners to achieve high standards and to provide greater transparency on how we work together.

Maintaining high standards together To meet the expectations our consumers have of our brands as high quality, reliable products, we form close working relationships – many of them long-term – with our business partners. In support of this approach, we have developed a Business Partner Code that is compatible with our Code of Business Principles. The Code makes clear the standards to which we expect our business partners to adhere. It contains 10 principles covering business integrity and responsibilities relating to employees, consumers and the environment.

Business partner code There shall be compliance with all applicable laws and regulations of the country where operations are undertaken. There shall be respect for human rights, and no employee shall suffer harassment, physical or mental punishment, or other form of abuse. Wages and working hours will, as a minimum, comply with all applicable wage and hour laws, and rules and regulations, including minimum wage, overtime and maximum hours in the country concerned .There shall be no use of forced or compulsory labour, and employees shall be free to leave employment after reasonable notice .

There shall be no use of child labour, and specifically there will be compliance with relevant ILO standards .There shall be respect for the right of employees to freedom of association* .Safe and healthy working conditions will be provided for all employees .

Corporate Governance We have always aspired to high standards of corporate governance. Transparency and accountability are the two basic tenets of Corporate Governance. We, at Hindustan Unilever, feel proud to belong to a Company whose visionary founders had laid the foundation stone for good governance long back and made it an integral principle of the business, demonstrated in the words above.

Our approach to Corporate Governance To succeed, we believe, requires the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact. This is our road to sustainable, profitable growth and creating long-term value for our shareholders, our people, and our business partners.

LAKME’S POSITIONING IN TERMS OF PERSONALITY AND SELF CONCEPT:

Lakme is a product range that caters to the beautification needs of not only women in their adult age but in today's context teenagers also. It has a brand personality of someone who takes care of you and your beauty needs. It tries to position itself amongst its consumers as a product range that will help them look beautiful as is evident from its catchphrases:

1. On top of the world!

2. Source of radiant beauty1!

Lakme has a range of beauty products to offer to its consumers. Some of the ways in which it

tries to position itself:

1. Lakme Hair Color: magic of colors (collage).

2. Lakme (versatile eye shadow collection): rich, long lasting and healthy make up.

3. Lakme fair perfect: For flawlessly fair skin!

4. Lakme face magic: daily wear soufflé.

5. Lakme (skin vitalizer): radiant skin, now and forever.

6. Lakme (moisturizer): radiant skin, now and forever.

7. Lakme nail polish and lipstick: electric brilliance/sensual brilliance

8. Lakme sun expert (sunscreen): sun safe hamesha! (face the sun with a smile)

9. Lakme pure defense: anti-pollution system.

10. Lakme Tropical Island (cosmetics): defining the future of fashion.

11.Lakme hair care (international): natural hair care

12. Lakme hair next: exclusive range of hairstyle products that give you that salon look

instantly.

On the basis of above mentioned positioning strategies Lakme can have the following characteristics that determine its personality:

· Someone who takes care of your beauty needs.

· A long lasting beautification product range.

· Something that is not harsh on your body or harmful for your beauty.

· A product that provides you with an option of getting beautiful hair.

· A product that helps you get a beautiful skin.

· A cosmetic product that you can wear for the entire day and not a special occasion.

· Someone who tells you right things about looking good.

· It's an Indian cosmetic brand.

· It covers all facets of beauty care for women.

The following factors of Lakme's personality help in differentiation of its products from the

competition:

· It covers all facets of beauty care.

· It helps arm the consumer with products to pamper her from head to toe i.e. a complete

product range.

e Radient Rose Powder.

Lakme Nail Enamel Remover.

Lakme Strawberry Silk Cream

Lakme Deep Pore Cleansing Milk

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 Lakmé, a 19th century opera written by Frenchman Leo Delibes, from which Simone Tata borrowed the name Lakmé (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.

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

''Lakmé is at the forefront of product-innovation. Almost everyone has a Lakmé-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 TO COSMETICS INDUSTRY IN INDIA

India, with a population of nearly a billion people, is a country of contrasts. India's urban population is the main engine that fuels the demand for various cosmetic products. The ‘morphing’ of India is subtle and the changes are not visible for the first time visitor. However, the market liberalization process that began in 1991, along with the crowning of three Indians as Miss World and Miss Universe during the preceding four years, have made Indian women conscious of their appearance. Consequently, the cosmetic consumption patterns of Indian women have changed, and this trend is fuelling growth in the cosmetic sector. The Indian cosmetics and toiletries market grew by 8.7% in current value terms in 2001, with value sales amounting to Rs126 billion.

The market for cosmetics and toiletries in India is characterized by high volume sales of low-end toiletry products, while at the same time the legendary emerging middle-class has generally been fuelling demand for cosmetics and upper-mass toiletries. Products that are too specialized have yet to be successful on the Indian market. Examples include toners, hand care and other value-added skin care products, bath & shower products and aftershave balm. Only the richest

consumers can afford these; indeed, the average consumer may be unaware of their purpose or even existence. This also explains the relatively poor showing of perfumes, especially the premium variety.

This cosmetics and personal care industry has been growing at an average rate of 20 per cent for the last few years. The growing Indian cosmetics market offers promising prospects for international brands. The growth rate in the cosmetics market reflects an increasing demand for beauty care products in India. Perfumes and fragrances, skin care, and hair care products are some of the major segments with promising prospects for U.S. companies. Penetration of most cosmetic and toiletries is very low in India. Current consumption of many products is well below that of many countries in Asia. The low market penetration of many cosmetics and personal care products offers room for growth.

INTRODUCTION TO HINDUSTAN UNILEVER PRIVATE LIMITED

Hindustan Unilever Limited (HUL) (BSE: HUL) is India's largest fast moving consumer goods company, touching the lives of two out of three Indians with over 20 distinct categories in home & personal care products and food & beverages. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of over Rs. 13,000 crores. HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.. It is headquartered in Mumbai, India and has an employee strength of over 15,000 employees and contributes for indirect employment of over 52,000 people. The company was renamed in June 2007 to “Hindustan Unilever Limited”.

In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Businessworld, one of India’s leading business magazines . The rating was based on a compilation of the magazine annual survey of India’s Most Reputed Companies over the past 25 years. HUL is the market leader in Indian consumer products with presence in over 20 consumer

categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. It has over 35 brands. Sixteen of HUL’s brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2008). According to Brand Equity, HUL has the largest number of brands in the Most Trusted Brands List. It’s a company that has consistently had the largest number of brands in the Top 50 and in the Top 10 (with 4 brands).

Hindustan Unilever's distribution covers over 1 million retails outlets across India directly and its products are available in over 6.3 million outlets in India, i.e., nearly 80% of the retail outlets in India. It has 39 factories in the country. Two out of three Indians use the company’s products and HUL products have the largest consumer reach being available in over 80 per cent of consumer homes across India.

The Anglo-Dutch company Unilever owns a majority stake (52%) in Hindustan Unilever Limited. HUL was one of the eight Indian companies to be featured on the Forbes list of World’s Most Reputed companies in 2007.

History – Chronology

In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers". With it, began an era of marketing branded Fast Moving Consumer Goods (FMCG). Soon after followed Lifebuoy soap in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati ghee was launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed among about 360,675 individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India Limited was formed.

Brooke Bond joined the Unilever fold in 1984 through an international acquisition. The erstwhile Lipton's links with India were forged in 1898. Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was incorporated.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1995, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Unilever Limited, to market Lakme's market-leading cosmetics and other appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50% stake in the joint venture to the company.

Some of its brands include Kwality Wall's ice cream, Knorr soups & meal makers, Lifebuoy, Lux, Breeze, Liril, Rexona, Hamam and Moti soaps, Pureit water purifier, Lipton tea, Brooke Bond tea, Bru coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta, Pond’s talcs and creams, Vaseline lotions, Fair and Lovely creams, Lakmé beauty products, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim dishwash, Ala bleach, Domex disinfectant, Rexona, Modern Bread, and Axe deosprays.

COMPETITORS

Procter and Gamble (P&G) India : HUL faces a fierce competition from P&G India in its key segments i.e. Detergents and Personal Care. It operates in India thorugh three subsidiaries: Procter and Gamble Home Products (100% subsidiary of the company), Procter and Gamble Hygiene and Health care Ltd. (PGHH) and Gillette India Ltd. It has in its portfolio some of P&G's Billion dollar brands such as Vicks & Whisper in health care and Ariel and Tide in detergents segments.

Godrej Consumer Products Ltd. (GCPL): It has two segments: Soap (64% of revenues) and Personal Care.GCPL is second largest soap player in India after HUL with a market share of 9.2%. Personal Care includes hair care products, shaving cream and other toiletries.On December 11, 2008, it acquired 100% stake in SCA Hygiene Products which owns the Snuggy brand of baby diapers.

Dabur India Limited - Dabur India Limited is an India-based fast moving consumer goods company which deals in healthcare, personal care and food products.In November 2008, Dabur India Limited announced the acquisition of 72.15% of Fem Care Pharma Ltd which is primarily engaged in the business of export of personal care products.

Colgate-Palmolive (India) Limited : It manufactures a range of products marketed under the Colgate which includes oral care products and Palmolive (skin care and hair care products) brand names.

Marico Limited:Marico has a portfolio on high margin "Beauty and Wellness" platform which includes hair oils, soaps, edible oils, skin care etc. This portfolio has shown a growth of 30% over a period of FY05-08.

OBJECTIVES

Help in building a positive association with people thereby enhancing brand personality

How to break the negative connotation of ‘’Being fashionable’’

To understand the marketing strategy of lakme cosmetics products.

To understand the growth of cosmetics sector in today’s scenario.

To know people perception towards lakme products available in the market.

To understand people’s consumer behavior with reference to cosmetics.

METHODOLOGY

Research methodology is a careful investigation for inquiring in a systematic method and finding solution of a problem. It comprises the defining and redefining of problem formulating hypothesis, collection and evaluating data, making detection and reaching conclusion. This research consists of following element.

SOURCES OF DATA

RESEARCH DESIGN

SAMPLING DESIGN

SOURCES OF DATA

Primary Source of Data

Primary data are those collected by the investigator himself for the first time and thus they are original in character, they are collected for a particular purpose. A wellstructured questionnaire was personally administrated to the selected sample to collect the primary data.

Secondary Source of Data

Secondary data are those, which have already been collected by some other persons for their purpose and published. Secondary data are usually in the shape of finished products. External Data, was generated from magazines, research books and internet (websites).

RESEARCH DESIGN

The study was conducted as an exploratory sampling survey method to collect primary and secondary data.

SAMPLING DESIGN A sample is a representative part of the population. In sampling

technique, information is collected only from a representative part of the universe and the conclusions are drawn on that basis for the entire universe. A random sampling technique was used to collect data from the respondents. A random sample is a sample selected from a population in such a way that every member of the population has a equal chance of being selected and the selection of any individual does not influence the selection of any other. The selection is purely depends on chance. So while conducting the survey, 100 respondents were selected at random.

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 Lakmé history:

In 1995, Lakmé Ltd (a Tata Group company) and HLL formed a 50:50 venture Lakmé Lever that would market and distribute Lakmé's products. In 1998, Lakmé 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 Lakmé's future. A brand that has over 5 decades talked of beauty is none other than Lakmé. Launched in 1952, it offered a range of cosmetics with nail polishes & lipsticks from the early 80’s. Lakmé also understands the importance of maintaining and accentuating a women’s 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 Lakmé. Launched in 1952, it offered a range of cosmetics with nail polishes & lipsticks from the early 80’s. Lakmé also understands the importance of maintaining and accentuating a women’s 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; Lakmé, its aspirational colour cosmetics brand, which also has a presence in skincare.

The 'aspirational' qualification would mean Lakmé would compete at what the company terms the 'upper-mass' (premium) end of the colour cosmetics spectrum

(products priced between Rs 85 and Rs 250) where a slew of competitors, ranging from Revlon (through Modi Revlon) to Chambor, are already slugging it out. Says Meghna Modi, 26, Executive Director, Modi Revlon: ''The numbers say it all. According to ORG-MARG's retail audit, we have an 84 per cent share of the premium end of the colour cosmetics market.'' Chopra is quick to rubbish this claim; he says ORG-MARG does not have a representative sample of the 60,000 outlets through which colour cosmetics are sold in India.

Still, it is conceivable that Lakmé's new-found aspirational strategy could have been brought about by competitors like Revlon and Maybelline, which targeted this segment. Indeed, the company's non-transfer 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, Lakmé 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

Lakmé 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. Lakmé 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

Lakmé Daily Wear Soufflé ,Lakmé Perfecting liquid Foundation -  Lakmé Radiance Compact , Lakmé Flawless Matte Complexion Compact

Lips

Lakmé 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. Lakmé Kajal: 2. Lame Insta Eyeliner eyelids 3. Lakme Lakmé 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 Lakmé is there to pamper your skin with specialized products for the diva in you.

Cleansing

Strawberry Silk Splash Face Wash , Lakmé Fundamental Deep Pore Cleansing Milk - 

Moisturizing

1. Lakmé Fundamental Peach Milk Moisturiser  skin.

2. Lakmé Fundamental Winter Care Lotion -

Sun Protection

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

COMPETITORS

Procter and Gamble (P&G) India : HUL faces a fierce competition from P&G India in its key

segments i.e. Detergents and Personal Care. It operates in India thorugh three subsidiaries: Procter and Gamble Home Products (100% subsidiary of the company), Procter and Gamble Hygiene and Health care Ltd. (PGHH) and Gillette India Ltd. It has in its portfolio some of P&G's Billion dollar brands such as Vicks & Whisper in health care and Ariel and Tide in detergents segments.

Godrej Consumer Products Ltd. (GCPL): It has two segments: Soap (64% of revenues) and Personal Care.GCPL is second largest soap player in India after HUL with a market share of 9.2%. Personal Care includes hair care products, shaving cream and other toiletries.On December 11, 2008, it acquired 100% stake in SCA Hygiene Products which owns the Snuggy brand of baby diapers.

Dabur India Limited - Dabur India Limited is an India-based fast moving consumer goods company which deals in healthcare, personal care and food products.In November 2008, Dabur India Limited announced the acquisition of 72.15% of Fem Care Pharma Ltd which is primarily engaged in the business of export of personal care products.

Colgate-Palmolive (India) Limited : It manufactures a range of products marketed under the Colgate which includes oral care products and Palmolive (skin care and hair care products) brand names.

Marico Limited:Marico has a portfolio on high margin "Beauty and Wellness" platform which includes hair oils, soaps, edible oils, skin care etc. This portfolio has shown a growth of 30% over a period of FY05-08.

DATA PRESENTATION

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.

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Beauty counselors or advisors at retails outlets have been very successful in gaining attention, creating product awareness and overcoming consumers lack of familiarity with, and fears about many cosmetics and personal care products such as home hair permanents and color cosmetics. Some companies such as Lakme have even set up exclusive Lakme beauty parlors at major cities in India through the franchisee route .

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

A strong brand promotional campaign, good distribution network, constant product innovation and quality improvement, and the ability to provide a variety of quality products are some of the major reasons for the success of most companies.

HLL, is currently India's largest cosmetics and personal care products producer and its brands has the dominant share (more than 50 percent) in segments such as personal wash, skin care, shampoos, lipsticks and nail polish.

Sales Prospects

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

The rural market in India for cosmetics and toiletries remains is largely untapped. Major domestic players have also not been able to penetrate this market. The urban market itself for specialized cosmetic products remains to be fully exploited. The Indian skin-care market is not yet

fully tapped and offers promising prospects as a growth area. Penetration of color cosmetics is lower than the penetration prospects of the skin-care segment.

To promote the growth of their products, a dominant player like Lakme 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.

CONCLUSION:

The different information or benefits derived from the in-depth study of the above mentioned information sources are as follows:

1. consumer behavior and perception study; it helped to know that what actually is consumer beahviour and what are the factors that affect the buying behavior of consumers. It also helped us to know that how can perception have a positive and a negative impact on the consumer beahviour.

2. cosmetic industry in india- this section helped in knowing tat cosmetic is not a new concept in india. People have been grooming themselves physically. The only difference is the addition of chemicals and technology to our personal grooming.

3. Competition existing in the present insurance market; there are many other companies posing tough competition to lakme ie Revlon , garnier, loreal, lotus etc.

4. All the marketing information sources has given a significant contribution to the detailed theoretical perspective for the research i.e. about consumer behavior an perception.

5. World Wide Web also worked as a highly important information source as it provides updated information for the research relating to various areas.

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 women’s 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.

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

LIMITATION OF STUDY

An underlying assumption for the entire project is that the details and the feedback received from the population is true.

It was difficult to find respondents as they were busy in their schedule, and collection of data was very difficult. Therefore, the study had to be carried out based on the availability of respondents.

Some of the respondents were not ready to fill the questionnaires and some of them were not ready to come out openly.

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 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.

Affordable cosmetic products must be launched, drawing less than 1000 rupees per month. This will attract mores of youg women towards it and will further increase the market share of the company.

Lakme should also concenterate on the cosmetic products for the mails. As today even boys are becoming more concerned of the way they are looking. More and more boys are turning out to be metro sexual. This category will rise in the future and lakme must concentrate on catching them so that the company can generate more sales from them.

Lakme must not limit itself to serve only the women, as it will be ignoring a large chunk of looks conscious and metro sexual boys.

It would be wise for the company to target young people in the above category and grow along with them as they and the nation prospers.

Many respondents in their answer as to why they did not take lakme product said that lakme does not provide a makeup or sunscreen lotion which is to be put only once as it is not moisture resistant. So lakme should work more in creating a water resistant sunscreen lotion which could stay all through the hard sweaty days.

More of the saloons should be created in order to provide easy accessibility to the consumers of the services and products provided by lakme.

Lakme can start contests for free makeover of women , as it was being started by dove, sunsilk and ponds in collaboration- be beautiful.

Website Changes:

Lakme must advertise more about its website in the mass media so people can gain firsthand knowledge about its products at their convenience in a more detailed manner.

The website is good but instead of having a glossary as a separate entity, link words which are difficult to understand for a first timer (even if it is as simple as ‘spf’) must be marked up (underlined) in the text, which upon clicking must open out to a window giving details.

A page must be devoted on why cosmetic products of lakme must be taken plus real life stories of how people with use of lakme cosmetics improved their looks.

Links to other sites extolling the virtues of cosmetics must be given. A page devoted to Lakme’s beginning as a cosmetic industry must be included

in the website to assure potential customers that this is one company that will stick around for a long time to come. Exciting contests can be launched for those who visit the website.

lakme has tied up with HUL – hence it must advertise in these websites also. It can also advertise in other beauty related sections of websites like vogue.com and feminaindia.com. Youth sites like mtstylecheckvindia.com, facebook.com, orkut.com, twitter.com etc can also be targeted.

According to Abraham Maslow’s hierarchy of needs the 2nd step to self actualization is the fulfillment of the safety needs. Though people feel the need for being presentable and have good looks, a large number live in an ivory tower and they procrastinate to take decisions regarding this aspect. It is this dormant aspect that Lakme should awaken in people and bring about restlessness and unfulfilled feeling regarding their and their family’s overall physical grooming. The next choice then would be cosmetics. This could be brought about by an innovative campaign slogan saying, “The decision is now”.

Lakme must not target people only when they start earning but much before that. To gain the ‘early bird ‘ advantage they must organize sessions in schools and colleges giving explanations on how the medicure, pedicure, facials, massage etc can in general help in their overall development. . It can also bring about a stronger brand commitment in this manner.

Leverage information technology to service large numbers of customers efficiently and bring down overheads. Technology can complement or

supplement distribution channels cost-effectively. It can also help improve customer service levels considerably.

Use data warehousing, management and mining to gauge the profitability and potential of various customer and product segments and ensure effective cross selling.

Understanding the customer better will allow cosmetic companies to design appropriate products, determine pricing correctly and increase profitability.

Ensure high levels of training and development not just for staff but for distribution organizations. Existing organizations will have to train staff for better service and flexibility, while all companies will have to train employees to cope with new products and an intensive use of information technology. The importance of alliances and tie-ups means that companies will have to integrate related but separate providers into their systems to ensure seamless delivery.

Build strong relationships with intermediaries such as agents. The agency force is an important customer interface and companies must partner with this group to reach customers and serve them effectively.

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