ASSIGNMENT

ON

SUBMITTED TO: SUBMITTED BY:

MR.AVINASH GARG RUPINDER KAUR ( 252 )

SNEHA DUDEJA

Vandana Luthra’s Curls and Curves (VLCC) was founded in 1989 by

Vandana Luthra – a pioneer in the slimming and beauty industry in India. VLCC is the leader

in the slimming and beauty industry in India, The Company derives half of its turnover from

slimming and the other half from the beauty and cosmetology lines of businesses. VLCC

Health Care Ltd was earn a turnover of Rs 1,000 crore by 2010 from its domestic and

international healthcare and personal care products business. Wellness and beauty company

VLCC is bullish on expansion in all its verticals and is aiming to become up to Rs 1,400

crore firm in the next two years.

Expansion plan :

VLCC, Healthcare, Managing Director Sandeep Ahuja said they have 160 slimming and

beauty centres in 102 cities across the country, is planning to open 20 new company-owned

outlets this fiscal. They are also planning for significant franchise expansion and target to

triple them in 12-18 months. At present they have about 30 franchise outlets.

VLCC is also planning to increase its overseas footprint with plans to foray into new

countries like Singapore, Malaysia, Egypt and South Africa. The wellness company, which

has 50 training institutes in the country, is planning to double it in two year

Tier-II, III towns:

"VLCC is looking at tier-II and tier-III towns to put up fitness centers as well as training

institutes," Mr. Ahuja said, adding that company-owned as well as franchisee route would

be adopted. With the western and northern regions being the traditional strongholds for its

business, VLCC will focus on the southern region in the coming months, and also add centers

in Siliguri, and some towns in Assam. Another noticeable phenomenon has been the shift

towards smaller cities from the metros.

Ahuja said that about 35-40 per cent of the company’s revenue comes from the tier II and III

cities and the growth rate in these non-metros is at par with the tier I cities.

The International locations contribute about 25 per cent to our overall revenue and hence they

are now focusing on these foreign , the ratios would be realigned and all three units would

generate equal revenues in the coming years.

Positioning :

The company uses a positioning strategy of 'Scientific Body Solutions' and not just one of a

slimming center.

Segmentation & Targeting :

The management at VLCC has segmented the market as:

Needy Customers: Those who come to clinics on seeing the advertisements in the print

and non-print media. The company gets about 10% of its revenues from this segment.

Smart Customers: People who rely more on word of mouth referrals and would normally

visit many clinics before deciding on which clinic to join.

Professionals :(such as doctors) who could refer potential clients to VLCC.

The management of VLCC feels that the first segment is saturated and has decided to focus

on professionals to get referrals.

7 P’s of VLCC

Product :

VLCC uses the latest German technology of cellotherm treatment for providing a guaranteed

weight loss program. Different gadgets are used for target area reduction, body firming and

figure shaping and body curving. The two major areas in which VLCC operates are:

1. Weight Loss Program

Weight loss program of VLCC is highly scientific that helps the client achieve a gradual and

study weight lost Application & Challenges at the rate of 4-5 kgs a month. Besides making

the client attractive, it offers a scientific solution to overcome health problems. Some features

of this program are:

No Appetite Suppressants: There are no non-physiological measures like appetite

suppressant drugs and anti-obesity drugs used to control food intake. The effectiveness of

Weight loss because of anorectics appears to be quite high, but since, safety has always been

a matter of discussion, their use is completely avoided in VLCC. The food intake is modified

to achieve healthy caloric deficit in a natural way.

No Crash Dieting: This is completely out from the VLCC‟s weight loss program. Here

there are two phases in the management of obesity. The first phase involves weight reduction

and the second prevention of weight gain through weight maintenance program. Substantial

reduction in body fat as well as lean body mass results in decreased energy expenditure.

Hence there is a tendency in weight loss to reach a plateau. To avoid it, VLCC has very

strong monitoring and counseling sessions to achieve permanent change in dietary habits to

change the energy balance

Scientific Monitoring through Clinical Investigations: A representative sample of clients

is put through various clinical investigations like lipid profile, urine analysis, other blood

investigations etc. It has often been observed that there has been a direct relationship between

weight loss and improvement in lipid profile. Such investigations also help in providing a

„double check on the functioning of the slimming program‟.

Diet Modification: VLCC has very strong monitoring and counseling sessions to achieve

permanent change in dietary habits to change the energy balance. Besides the quantitative

Support, complete care is taken to provide right percentage and quality of calories from

carbohydrates, proteins and fats. Foods providing empty calories are cut down and low

calorie foods are encouraged to provide not only less calories but also enhance the intake of

fiber, vitamins, minerals and antioxidant nutrients protect against oxidative damage and

improve defense mechanisms. All kinds of artificial foods, even the foods rich in

preservatives are completely discouraged in VLCC‟s weight loss programs.

2. The Weight Loss Food Guide Pyramid (A Guide to Daily Food

Choices)

The Weight Loss food guide Pyramid is an outline of what to eat each day based on the

Dietary Guidelines. It's not a rigid prescription but a general guide that lets the customer

choose a healthful diet that's right for him. The Pyramid calls for eating a variety of foods to

get the nutrients you need and at the same time the right amount of calories to maintain

healthy weight.

Lifestyle Counseling: A behavior modification program involves the identification of

factors that cause the maladaptive eating behavior.

The program dairy is very useful in keeping a track of a client‟s behavior regarding food. In

any self-change program, a dairy is an essential ingredient because it helps in

Keeping a daily record of your food intake.

The degree of hunger & emotional state.

Time taken to eat a meal/food.

The place where it was taken.

The simultaneous activity association with it & the quantity of food consumed.

Some problem areas can be

Eating left over to avoid wastage

Snacking while watching the TV

Eating very rapidly.

Another method could be by asking a few questions, whereby a counselor can determine

the behavior/habit, which contributes to overeating the wrong kind of food. Once the problem

areas are identified, the subject & counselor together initiate changes. VLCC offers a

guaranteed weight-loss program, without using any 'crash diet' weight loss technique.

3. Beauty Treatment

It also has a compact variety for beauty treatment, such as:

Laser Superior with Scanner: For the treatment of fine wrinkles, scar tissue, pimples, falling

hair, skin tags, warts and other skin imperfections.

Mel fade: Revolutionary skin-lightening treatment that dissolves pigmentation permanently in

chlosma, acne scars, etc.

Skin Freezer: Advanced treatment for acne, acne nodules and hard pigmentation.

Ionos: Useful for skin detoxification to remove dirt and grime, skin toning and removal of fat

tissues from the face.

Microbiolifter with Frimator: Rotatory machine used in combination with dermabrasive

creams for refining scar tissue, smoothening skin, etc.

Oxygenated steamer: Incorporates medicated serums/liquids into the skin for various

treatments like acne, oily skin, dry skin, etc.; is also used for toning and firming the skin.

Facial vacuum suction: Useful for transferring fat from one area of the face to the other, i.e.,

double chins.

Skin stimulator: Emits warm steam to open pores to stimulate blood circulation in combination

with various herbs to soften comedowns.

Enzyme therapy: For lifting and toning of skin. Used in combination with microbiolifter to

speed up the end result.

Thermodyn: Incorporates medicated creams into deeper tissue for skin detoxification, skin

tightening, pore refining, etc.

Depitron: Permanent hair removal from the body. Painless & scar-less procedure that

effectively helps Hirsutism problems arising out of any thyroid or genetic disorders.

High Frequency Treatment: Effective for hair problems like falling hair, rough and dry

hair, dandruff, etc.

The beauty/cosmetology service acts as a complement to the slimming service being offered

at the clinics.

Pricing :

VLCC charges Rs.1200 per kg of weight lost. Pricing is generally premium as compared to

the competition in the market. But it is not exclusivist in the sense that even middle class

people can afford the services with their rising disposable incomes; but it is targeted mainly

at the upper & upper-middle class. But, the basic premise on which VLCC‟s pricing is based

can be put forward best in their own words as – “Quality comes at a price”. The prices

charged are program specific rather than session specific – thus the customer knows

specifically how much she has to pay for the whole program.

Place : Most of the clinics are situated in and around Delhi. There are 14 clinics in the NCR

region. VLCC also has a presence in Mumbai, Chandigarh, Calcutta, Chennai and Ludhiana. All

VLCC centers are open from 10am to 7pm all 7 days a week. VLCC does not have a franchisee

system but does have Joint Ventures with parties who make a monetary contribution but are not

involved in day-to-day running of the business The collaborator recoups his money in about 3

years.

.

Promotion :

VLCC advertises very regularly in the print media such as newspapers. The company has an

advertising budget of 12% of sales and has allocated approximately Rs. 108 cr. for this

purpose.

Besides VLCC has more recently started conducting seminars on obesity and other related

health issues? Prominent doctors are invited here and this helps in getting clients as referrals

from the doctors. The winter months are considered as lean seasons for this industry and

discounts are offered to clients during these months. Though the company does not believe in

giving member-

get-schemes, as the feeling is that a satisfied customer is the most important patron for the

company. As the main target comprises women for any slimming center, VLCC has entered

into a tie-up with Smartbahu.com – a women‟s portal owned by Dabur. To be a little

different from the competition, VLCC has decided to change its advertising and has received

presentations from O&M, HTA and Lintas for the current year. The conventional “Before

and after” form of advertising does have an impact in new markets but not so much in

saturated markets. The slimming and beauty divisions of VLCC complement each other. A

customer who completes a slimming session is given a free trial offer on some beauty

products and these acts as an inducement for the customer to buy the other gamut of beauty

products offered by the company. In fact there is a 50-60% conversion rate of customers from

slimming to the

VLCC has appointed Ogilvy & Mather (O&M) as the creative agency for all its business

verticals in India, including the slimming & beauty services, day spas, beauty & nutrition

training institutes, VLCC Nutri-Diet Clinics as well as the VLCC Personal Care line of skin-

care, body-care and hair-care products. For the Middle East, including UAE, Bahrain and

Oman, VLCC‟s creative duties are being handled by Dubai-based Bates Pan Gulf, the

region‟s leading marketing communications group.

In addition, VLCC has also appointed Media Contacts, the global interactive media network

of Havas Digital to deliver strategic and actionable marketing insights across digital media.

CRM initiatives will be managed by 141 Sercon, a WPP group company & one of the largest

specialized “below-the-line” marketing services agencies.

VLCC has also engaged one of the largest BPO companies, Aegis Communication, an Essar

Group Enterprise to manage its domestic call center operations. Commenting on the new

appointments, Mr. Sandeep Ahuja, Managing Director, VLCC Health Care Ltd. said, “VLCC

is a very special brand with tremendous momentum and we are committed to strengthening

its leadership position in the wellness domain. The appointment of O&M and top specialists

in the areas of CRM and internet market is in keeping with the VLCC Group‟s target of

achieving superlative growth in the next two years both in India and overseas through a finely

tuned focus on R&D, customer and double chin correction, Detoxifying facial, special beauty

packs, Thermophorosis and Iontophoresis.

Process :

There is a certain degree of standardization across all clinics. But each customer also gets a

customized package. The body composition analysis is done for every individual, which gives

basic metabolic rate, lean weight, fat weight, water composition and also the target weight

depending on the activity of the person. With knowledge of above inputs, the complete program

for weight loss is planned and executed. VLCC has programs for spot reduction, giving weight

loss only on specific areas like stomach, hips and thighs. After specific weight loss there is a

special package, which helps in firming and toning the loose skin and muscles.

All clinics of VLCC are treated as SBUs and a sufficient degree of empowerment is given to

employees at each of these clinics. There is no interference in the day-to-day affairs of clinics by

the head office. The clinic managers have been empowered to offer discounts on their various

schemes and do not need to seek sanction from the head office for the same.

VLCC also offers a unique cellotherm program for weight loss, as mentioned before – this

program has been used successfully in Germany before for harmless weight-loss treatment

without any side effects or inconvenience.

They are the only licensee in India for this treatment – thus providing them some sort of

technology patent. Also, no special diets or artificial food packets are used. For inducing fat loss,

VLCC relies on the following modification procedures:

Dietary Modification: Calories lost 500 k Cal per day.

Behavior Modification: Calories lost 100 k Cal per day.

Activity Modification: Calories lost 150 k Cal per day.

Fat Disintegration System: Calories lost 400 k Cal per day.

This implies just about 30% of fat loss is affected through machines and the other 70% does not

involve machines.

Here is a summary of the general outcome of weight loss achieved through the weight loss

program:

Total calories lost per day = 1400.

Thus, Total calories lost per week = 1400x7 = 9800

According to the law of nutrition, for every 7700 calories lost a person loses 1 kg.

So, a person loses approximately 1.28 kgs. per week

This amounts to approximately 5.12 kgs. In a month because of the program.

To measure post-purchase satisfaction customer satisfaction surveys are conducted to get

feedback from customers on the quality of service being provided.

People :

Each clinic has 2 in-house doctors, 2 panelists, a nutritionist and a nurse. Beauticians and hair

experts are engaged in active research to offer the latest in cosmetology to their clients.

VLCC academy of beauty & health offers intensive courses in beauty, health & nutrition.

To motivate employees, performance based incentives are offered.

Physical Evidence :

VLCC has clinics in all regions of Delhi and NCR (National Capital Region) and is rapidly

expanding operations in other cities also. The ambience of all clinics is standardized according to

company policies and designed to appeal to clients – both present and prospective – so that a

consistent brand image so portrayed to the customers of VLCC.

What do VLCC’s customers really value?

Understanding that customers value is critical, because a business wins when it addresses

customer needs better than its competition. It can also enable a business to adjust each customer‟s

service to the appropriate level. one customer may value a sales representative visit while another

prefers to place orders by phone. without direct feedback from their customers, many companies

rely on internal biases or outdated practices in serving customers, such as a ”one size fits all”

approach or a simple customer segmentation using internal measures such as revenue and growth

to determine service levels. This can lead to under- or over-serving customers. Under-serving can

cause customers to feel neglected and migrate to the competition. The costs of over-serving hit

your bottom line and can prevent your sales force from going after new business.

How effectively do VLCC’s channels meet customer needs?

Without a well-defined view of channel capabilities, a company cannot fully understand how well

their channels satisfy customer needs. Channels can provide value to customers in many forms,

such as:

Product information

Informal consultative advice

Technical support access

Transactional support

Within these areas, each channel will likely have different levels of capability. The challenge is

defining what these capabilities are, when services should be provided, and to which customers.

Effectively meeting your customer needs should lead to a higher level of customer satisfaction

and better use each channel‟s core competencies.

What does it really cost to serve customers?

Companies measure their overall business performance on revenue and profit margin.

Unfortunately, a company can show an overall increase in profitability, yet still be leaking

margins in serving certain customers. This is because they probably do not understand the true

cost of serving their individual customers. While financial systems typically capture the sales

Revnew and gross margin for each customer. They offen don’t capture other costs such as:

Cost of sales visits (e.g., sales resource time and expenses)

Freight costs

Product testing

Payment terms

Poor understanding and management of the true cost to serve a customer can keep them from

being a profitable customer