2012

MASS MARKETS COSMETIC LEADER LAKME

Submitted by : Pooja: PG-12-033 Nidhi: PG-12-043

Mayuri: PG-12-053 Submitted To: Prof. Trupti .K. 12/22/2012 1

Sr. No. 1. Introduction

TOPIC

PAGE No. 3

2.

The Cosmetic industry

3.

General overview about the company

4. 4.1

Brands In Cosmetic Industry Customer Segments and Major players

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5. 5.1 5.2 5.3

Market Share And Competitor Analysis Competitive Advantage Key Differentiator For Success of The Brand Price Related Differentiation 16

6. 7. 7.1 7.2

SWOT Analysis of LAKME Competition And Challenges In Cosmetic Industry

18

19 Competition Challenges In Cosmetic Industry Reason For LAKMES Survival In this cut throat competitive Cosmetic Industry

8.

21

9.

Conclusion

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1. COSMETICS
1.1 INTRODUCTION The word cosmetics comes from the Greek word kosmetikos meaning skilled in adornment. The evolution of cosmetics has truly changed through the centuries. The way people wear makeup and the reasons why they wear it have changed dramatically over time. The Roman philosopher, Plautus, once wrote, A women without paint is like food without salt. The attraction of a beautiful face did not appear yesterday; painted ladies and even gentlemen have been known through time in artwork and illustrations. The art of cosmetics has definitely changed over time and through different cultures including: Egyptians, Greeks, Romans, French, Italians, and Americans. The U.S. FDA defines cosmetics as: "Intended to be applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance without affecting the body's structure or functions." This broad definition includes any material intended for use as a component of a cosmetic product. The earliest known cosmetics were in use in Egypt in the 4th millennium BC. In simple words cosmetics would mean, A preparation, such as powder or a skin cream, designed to beautify the body by direct application or Something superficial that is used to cover a deficiency or defect, Serving to beautify the body, especially the face and hair or Serving to modify or improve the appearance of a physical feature, defect, or irregularity. Modern cosmetics include skin-care preparations; foundation, face powder and rouge (blusher); eye makeup; lipstick; shampoo; hair curling and straightening preparations; hair colours, dyes, and bleaches; and nail polish. Related products include antiperspirants, mouthwashes, depilatories, astringents, and bath crystals. Thus the benefits of cosmetics would be: someone who takes care of your beauty needs A long lasting beautification product range It helps you to get a beautiful skin Someone who tells you right thing about looking good.

2. THE COSMETIC INDUSTRY

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. Although Indians are strongly attached and committed to their traditions, and culture, the advent of television and the awareness of the western world are changing the tastes and customs of India. 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. Indian cosmetics market is valued at $950 million. The key growth drivers for the cosmetics market in India are rapid urbanization, increase in disposable incomes, and changes in peoples taste.

The Indian cosmetic Industry has witnessed rapid growth over the last couple of decades. The Indian cosmetics industry is growing in terms of product development and marketing. The preference of Indian consumers is changing from the merely functional products to more advanced and specialized cosmetic items. In 2005, sales of cosmetics rose by 6% in current value terms in India. It is also predicted that there is a huge potential for cosmetics in India. Comparatively the range of cosmetic and beauty products in India has widened tremendously. Beauty products manufacturers in India mostly cater to the great demand for cosmetics that fall into the low or medium-price categories as the greatest demand in India have always been for these economically priced products. India in cosmetics, which saw its value share rising from 27% in 1999 to 31% in 2005 and are likely to continue to surge ahead over the forecast period. The entry of many multinationals into the Indian cosmetics industry in 2005 has made it an extremely challenging and dynamic market. Foreign players have focused more on Product innovation; re-launches and brand extensions spread across multiple price points, and enhanced product penetration by extending their distribution networks. The leading players have streamlined their ad spend to effect savings that has allowed them revamp their pricing strategies as well as offer free gifts to retain consumers. An interesting trend among Indian cosmetic consumers is, while other global countries are taking to the traditional Indian herbal and
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ayurvedic applications for beauty solutions, Indian consumers are increasingly looking to international personal care brands as lifestyle enhancement products, in the belief that the association with and use of an international brand confers one with a sophisticated and upper class image. The projected sales in 2010 at constant 2005 prices is Rs. 195.6 billion, the main reasons being a greater ability to purchase personal grooming products among a larger base of financially independent women, frequent relevant product launches and growing beauty consciousness and awareness, especially among the younger population. Despite the huge nascent potential in India, cosmetics grew at relatively slow pace in constant value terms over the 2005-2010 as was expected for this forecast period. However, in recent years in the cosmetics market India competitors have begun to manufacture products to cater to an International need. For instance, herbal cosmetics from India have a great demand in the overseas market and many cosmetic products that are manufactured in India today are supplied to international suppliers of branded cosmetics products like The Body Shop for example. New facts that have been unveiled by a series of cosmetics business market analysis India reveal that many International companies are now outsourcing cosmetics to India and that the industry of cosmetic products in India is growing at an average rate of almost twenty percent annually. This increase is attributed to two main factors. The first being the increase for the demand in Indian cost-effective products and the second being the increased purchasing power of the average Indian. There are also many reasons for the increased demand for cosmetic products in particular. With the introduction of satellite television, The emergence of a young urban elite section with increasing disposable income in cities, increase in the number of working women, changing lifestyles, increased affordability of lifestyle-oriented and luxury products, mounting aspirations, penetration of satellite TV, increasing appetite for western goods, a wide array of television channels as well as the Internet, the average Indian consumer is constantly bombarded with advertisements and information on new cosmetic products which often translates into the desire to purchase them. A boom in the Indian fashion industry has also been linked to the increased awareness of Indian people about their appearances and consequently contributed to an increase in the demand for cosmetic products. However, even with the massive surge in the popularity of cosmetic products, statistics have shown that the average Indian consumer spends much less on cosmetic products than consumers from every

other part of the world. This means that the Indian cosmetic industry has an even greater potential for growth than it is presently experiencing. However, the penetration level of cosmetics and toiletries product is still very low in India. The per capita expenditure on cosmetic products in India is approximately $0.68 cents compared to $36.65 in other Asian countries. The penetration level of international cosmetics brand in India is also low. International brands account for only 20% of the cosmetics market. This low level of market penetration can be perceived as an opportunity for major players. In the entire range of products that fall within the territory of the Indian cosmetic market, the most popular items are colour cosmetics, of which nail varnish, lipsticks and lip glosses account for the most sales. In this area, popular local brand names include Lakme and Revlon. Skin-care cosmetics have experienced a slower growth and products such as anti-wrinkle creams, cleansers and toners, for instance are not as popular as facial creams, moisturizers and fairness creams in this genre. Companies like Ponds and Fair and Lovely rule the roost in this segment. Unilever and Procter & Gamble are major players in the Indian cosmetic sector of shampoos and hair products. However, the Indian hair-care cosmetic sector now has a few foreign brands to compete with these giants as well. Thus the total size of the Indian retail beauty and cosmetics market is currently estimated at $950 million [Colour cosmetics account for 14%, Fragrances - 21%, Hair care - 19%, Skin care - 17%, Beauty services - 13%, Herbal products - 9%, others - 7%]. The overall beauty and wellness market, which includes beauty services, is $2.68 billion. Thus The cosmetics industry, which started glowing in the early 1990s, is expanding exponentially. With more women and men becoming conscious of their and willing to spend on their grooming, this industry has been growing at 20-25 percent the last few years. The enormous growth in this segment has not only attracted many MNCs but also provided space for many Indian companies to foray or expand their product range.

3. GENERAL OVERVIEW ABOUT THE COMPANY

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 is 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 her from head to toe. These include products for the lips, nails, eyes, face and skin, and services like the Lakme Beauty Salons.

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. 2. On top of the world! Source of radiant beauty!

Lakme also started its new business in the beauty industry by setting up Lakme Beauty Salons all over India. Now HUL (Hindustan Unilever Limited) has about 88 salons all over India providing beauty services.

Product range of Lakme:

TYPE PRODUCTS

Lakm Hair Care

Lakme Hair Next

GEL MOUSSE SPRAY SERUM

Lakm Eyes

9 to 5 Intense Volume Mascara Quick Dry Eye Liner Defining Eye Liner Perfect Definition Eye Pencil Lakme Thicklash Mascara Lakme Eye Pot Nine to Five Satin Glide Eye Shadow Intense Shine Eyeliner Kajal Shimmer Eye Cube High definition
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Eyeliner Eye Color Quartet Flawless Makeup Lakm Face Creme Compact Matte Compact Radiant Compact Liquid Foundation Face Magic Rose Powder Face Highlighter

Lakm Lipsticks

Enrich Lip Colour Lipgloss Lipliner Aqua Shine Lip Color Enrich 9 to 5 Lip Color Enrich 9 to 5 Lip Duo Enrich Metallic Lip Color Tarun Tahiliani

Lakm Nails

True Wear Nail Enamel Free Spirit Nail Color Glamour True Wear Nail Color Winter 2009 Fruit Facial Scrub Deep Hydrating Mask Creme Face Wash

Lakm Cleansers

 Matt effect Morning Fresh Set Strawberry Silk Splash Face Wash Deep Pore Cleanser Matteffect Purifying Face Wash Matteffect Refreshing Astringent Matteffect Icy Fresh Gel Peach Milk Moisturiser Winter Care Moisturiser

Lakm Moisturisers

Lakme Pure Defence Anti-Pollution System

Pure Defense Detoxifying Facial Wash Pure Defense Protective Day Lotion Pure Defense Detoxifying Serum Pure Defense Restorative Night Creme

Lakme Sun Expert Ultra

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Lakme Sun Expert

matte SPF 20 & 30 Lakme Sun Expert Cream SPF 30 Lakme Sun Expert Sunscreen Lotion SPF 15

Lakme Matte Effect Lakme Matteffect Purifying Face Wash Lakme Matteffect Refreshing Astringent Lakme Matteffect Morning Fresh Set Lakme Matteffect Icy Fresh Gel

Lakme Bridal Sutra collection Bridal Jewel Eyeliner Bridal True Wear Nail Colour Lip Chrome Glide on Eye Colour Jewel Sindoor Enrich Metallics Lipcolor
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 Silk Naturelle Daily Foundation Pure Rouge Blusher Just Kissed Cheek and Lip Tint Enrich Matte Lip Color Glide On Lip Color Eye Artist

Lakme Spa Line

Shea Nut Hand Butter Nail Beauty Oil Honey Cuticle Cleaner Protective Base Coat Nail Color Remover Oil Hard Wear Top Coat

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4. BRANDS IN COSMETIC INDUSTRY

Since market liberalization, several multinational companies have entered the Indian market such as: Revlon, Coty, Oriflame, Chambor, Avon, Yardley, Garnier Laboratories, LOreal, These companies initially cashed in on their international brand image; however, repeat purchases were not forthcoming because the products were not priced competitively. Consequently, these companies became price-sensitive and most of the international brands are now priced competitively in the Indian market. The colour cosmetic segment which has Indian players and multinational company players which offers the highest competition such as: Lakme Lever Shenaz Hussain Ponds, Unilever Colgate Palmolive Domestic players like Lakme, mainly dominate this market. Revlon has a market share of 80% in the premium market. Lakme is the overall market leader in the colour cosmetic segment (lip care and nail enamel) with a wide range of products and prices, both. The organised colour cosmetics market is estimated at Rs 340 crore currently. Revlon's sales account for Rs 60 crore of that. Lakme leads the market with sales of Rs 100 crore. Other international brands in the sector with a major part of the rest, some of them engaged in the multi-level-marketing model for their products are: L'Oreal, Revlon,
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 Maybelline, Avon. The most important global players are already in India (except perhaps Estee Lauder, Mary Ann Kay, Kao and Body Shop) and are in an advanced stage of market development. They are already exploiting prospects based on imports of active ingredients, packaging and completely built products. In that regard, new entrants have to contend with serious competition in India from local as well as global players. Multinationals feel that Indian companies - Lakme, Pond's, Nivea-makers have not identified the changing needs of the new Indian woman. The international brands that are ambitiously fishing in the Indian waters are: Switzerland's Torstone's Chambor, Sweden's Oriflame, USA's Avon Cosmetics, Revlon, Benckiser (Coty Vitacare), Paris-based Escada group, Laboratories Garnier. It is not coincidence that many of these MNCs entered the Indian market in the mid-Nineties. Fired with the zeal of changing the complexion of the cosmetics market, they are fuelling the change using satellite television, women's magazines and beauty pageants but we cannot avoid the fact that Lakme too has the largest reach in the Indian market, it specially dominates the mass market segment and also in on the way to acquire the premium market with its innovative marketing mix. Maybelline competes with Revlon and Lakme in the colour cosmetics market in India. Revlon too has grown 65 per cent to strengthen its share to 13 per cent during the period. As per the data, Lakme's share stands at 34 per cent, and that of Elle 18 is 25 per cent. The lip and nail colour market, at Rs 107 crore, has registered a growth of 11 per cent. Mass market products account for a major share, around 70 per cent, while the premium segment accounts only for a mere 9 per cent in lipsticks and 5 per cent in nail enamels.

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4.1CUSTOMER SEGMENTS AND MAJOR PLAYERS Customer segments i.e. the target audience of this industry would be both women and men both. Women today are more conscious about their beauty other than anything. As per findings every women even the poor ones would definitely spend some amount of their income on basic cosmetic products such as lipstick, kajal and nail polish depending upon their affordability. Every part of cosmetics plays its particular role in making a women's image. So women of every age would form 70% of customer segment of cosmetic industry. But nowadays men too are getting more conscious about their looks and making themselves presentable. Thus today cosmetics play major part in both women and mens life and the industry generates several billion dollars in products and income. It has become an everyday tool to make men and women more presentable.

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5. MARKET SHARE AND COMPETITOR ANALYSIS

Lakme is the overall market leader in the color cosmetic with a wide range of products and prices, both. It was the first cosmetic brand in India that captured the imagination of consumers. Lakme enjoyed a market share of 52% at one time as the consumers didn't have many choices but as the foreign brands like Revlon and Maybelline came in; it lost its position initially. This was primarily due to the fact that consumers now had easy access to high quality products and with rising disposable income and size of the Indian middle class consumers shifted their attention to foreign players. But however Lakme still, managed to gain its position back. The major reason they attributed to this was that it was the first cosmetic brand in India which was particularly catering to the need of Indian women and thus set a trend for the foreign players to tap the Indian market. Today also it is said that it is a trendsetter in cosmetics as it keeps on coming out with novel colours, shades and products from time to time. Lakme now however leads with sales of Rs 100 crores in market and can be considered as a best preferred and sold product in the overall cosmetic market due to the advantage it has over its competitors.

5.1 COMPETITIVE ADVANTAGE Lakme is a brand that epitomizes the feminity of Indian women. Lakme has over the years built a brand that has got a special place in the hearts of Indian women. This was attributed to the length and depth of its product mix. Lakme is economical as compared to its competitor foreign brands. This particular aspect has never been harped upon by Lakme in its advertisements. Lakme products are priced in such a way that mass market can buy it. Accordingly if Lakme increases its price it may lose its customers and thus its pricing is the main competitive advantage it has over other brands which are highly priced. Lakmes advertising is its another important benefit. Lakme advertises every new product it launches carefully so as to ensure that it is noticed by the mass. Lakmes promotion like speciality counters in departmental stores, malls, television advertisements by the companys brand ambassadors, most importantly Lakme salons whereby all Lakme products are available has helped it to increase its market share. The various advertisements of Lakme try to tell their consumers that they provide them with a complete solution for their beauty enhancement. Thus its customers feel that Lakme is a healthy choice in order to keep a healthy and beautiful skin. Another strong point of Lakme,
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experts say, is its reach. With a retail reach of close to 1000 counters and an overall direct reach of 40,000 stores, Lakme is one of the most widely available brands. This large presence gives the brand volumes and makes it the largest cosmetics brand in India.

5.2 KEY DIFFERENTIATOR FOR SUCCESS OF THE BRAND Lakmes key differentiator is that they provide the best of Unilever technology on skincare range and their partnership with Milan-based Intercos Italia, the leading creator of new cosmetics technology and fashion trendsetter for global beauty brands. This enables Lakme to combine the best available International cosmetics technology with an in-depth understanding of the Indian woman's needs to create relevant and innovative beauty products and services. This is truly, the best of both worlds. 5.3 PRICE RELAED DIFFERENTIATION
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COMPETITIVE PRICE: LOREAL LOREAL HAIR CARE LOREAL CLEANSER LOREAL TONER SUNSCREEN LOTION MOISTURIZER

LAKME

LAKME HAIR CARE LAKME CLEANSER LAKME TONER SUNSCREEN LOTION MOISTURIZER

= 120-195 = 45-75 = 85 = 80-150 = 90-160

= 175-210 = 480 = 370 = 830 = 590

1 2

http://corallista.com/2011/11/25/lakme-absolute-range-now-in-stores-price-range-update/ http://www.urbantouch.com/loreal/

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6. SWOT ANALYSIS OF LAKME

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STRENGTHS

High quality man power Brand name Vast range of products and services Distribution channel Unilever capability. global technology

WEAKNESS

High service costs Use of hard chemicals

OPPORTUNITIES

Brand

growth

through

increased

consumption depth Growth in business of beauty salons, Lakme beauty training academy in Mumbai, Chennai and new Delhi. THREATS

Aggressive price competition from local and multinational players Availability products Reports regarding presence of Lead in lipstick of cheap beauty

http://www.mbaskool.com/brandguide/fmcg/913-lakme.html

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7. COMPETITION AND CHALLENGES IN COSMETIC INDUSTRY

7.1 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 them. Given the price-sensitivity of the Indian consumer who do not normally prefer to fork out a large sum at one time, many cosmetic 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. Small pack sizes have proved to be very popular in the Indian market as it offers a consumer lower purchase cost and the opportunity to try new products. Stiff competition in the cosmetics and 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 an upgrade to value-added products such as : Under-eye wrinkle removing creams, Dark circle removing creams toners, Sunscreen lotions, Fairness creams. The colour cosmetics market saw new products such as smudge-proof lipsticks and mascaras, liquid lip colour, and long-stay lipsticks being introduced. These specialized applications led to growth in volumes and also enabled companies to price the products at a premium, driving up value growth.

Service marketing strategies, such as point-of-sale advice and beauty counselling have shown to boosts sales of cosmetics and personal care products and driven growth in the Indian market. Beauty counsellors or advisors at retails outlets have been very successful in gaining attention, creating product awareness and overcoming consumers lack of familiarity with, and
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fears about many cosmetics and personal care products such as home hair permanents and colour cosmetics. Some companies such as Lakme have even set up exclusive Lakme beauty salons at major cities in India through the franchisee route. Major herbal cosmetics brands such as Shahnaz Hussain and Biotique also operate chains of salons through franchisees and offer specialized training courses to customers. Companies continue to innovate on selling methods. Popular Indian brand, Ponds established consumer advisory cells and through touch screen counters and telephone help-lines offers advice on skin care. Another company, Baccarose, owners of the Chambor brand organizes tea party make-up sessions at major Indian cities. L'Oreal markets its range of specialized hair care products exclusively through salons and beauty parlours. L'Oreal currently is the only company in the market that has a hair colour range tailored exclusively for parlours. The company was also the first to introduce modern hair colour and shampoos for coloured hair in the Indian market.

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. 7.2 CHALLENGES IN COSMETIC INDUSTRY While the market seems impressive, there are hurdles that impede growth. The Indian duty structure on imported products can pose a major deterrent to multinational vendors. Despite the new value added taxation regime, where the duty has been reduced to 12.5%, the overall duty on the product still comes to about 40%. This in turn reflects in the pricing of the products. Most vendors add the duty to the product pricing to generate the right revenue. However, there is no organized cosmetic industry body that can take up the issue with the government. In fact this leads to the biggest threat the unorganized or grey channel. There are small retailers in the market who directly import from markets such as Dubai, where pricing can vary from 3070% from Indian product pricing. Thus today the grey channel makes up about 60% of the Indian cosmetics market.

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8. REASON FOR LAKMES SURVIVAL IN THIS CUT THROAT COMPETITIVE COSMETIC INDUSTRY
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Lakme is the Indian womans 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. 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. One of the reasons for its survival would also be the way in which it influences its existing and potential customers. Lakme influences its customers through the concept of Ego, concept of personality groups and the concept of perpetual selection. CONCEPT OF EGO Lakme tries to position itself on the basis of its appeal to the consumers which have an ego. This means that the consumers of Lakme have an impulsive drive for which they seek immediate satisfaction without concern for means of satisfaction. Women all over the world are always expected to look good and Indian women are no exception; More so because of the fact that Indian women in general do not have a fair skin like that of their western counterparts. Thus it becomes but natural for Indian women to try and look good and use beauty products that help

http://cosmetics.indianetzone.com/1/rise_indian_beauty_market.htm

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enhance their looks and style. With globalization and liberalization of Indian economy and the changing demographics and income levels there is more and more concern to look good as today's Indian woman is no longer confined to her home but is a big contributor to the growth of Indian economy. CONCEPT OF PERSONALITY GROUPS: Lakme tries to woo the compliant consumers i.e. they try to target people those who have desire to be loved, wanted and appreciated. As is earlier stated women are supposed to look good not only in western countries but also in India. Women always appreciate if someone calls them beautiful and it has become the custom of the society to see women in such a context. So it would be prudent to say that according to the societal norms a women has to look good at all times and which has a bearing on the psychology of female consumers towards cosmetic products which help them achieve that desired look. Needless to say that Lakme plays on the concept of women wanting themselves to be appreciated for their beauty and being loved for that. CONCEPT OF PERPETUAL SELECTION: On the basis of perceptual selection Lakme has tried to position itself among its consumers in the following way: Lakme has tried to gain the attention of its consumers by line extension and having more and more product depth, packaging and attractive print advertisements. If we look at the line extensions of Lakme than we would observe that it is in almost all the segments of cosmetic care ranging from hair care to skin care to beauty salons! Looking at the product depth it is pretty evident that Lakme has actually tried to fill in all areas that it can, particularly the nail paint and the lip colour segment is a big hit among Indian women as it offers them a wide variety of products in terms of colours as well as various styles that they can choose from. The major reason for its survival is its journey from leading mass market brand to the leading premium market brand. Some call it the Air Deccan of the cosmetics industry, but Indias biggest beauty brand has tried hard to go the premium way. The Fashion Week has been a part of Indias biggest cosmetics brands strategy to go in for an image makeover from a brand of the masses to the preferred brand of the classes as well. Lakme association with the
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Lakme India fashion week started 10 years ago when a survey by Hindustan Unilever, which had then acquired the brand from the Tatas, showed that the youth perceived Lakme to be their mothers brand. The major reason for this association was a thought that Fashion and cosmetics go well together. Lakme has since graduated to become the co-host of the Fashion Week along with IMG, a sports and fashion events management company. The association with Fashion Week has helped Lakme to traverse the entire spectrum from the mass-end to the premium, unlike other cosmetic brands. The Fashion Week, the 88 Lakme Beauty Salons, which offer consumers a Beauty Sutra experience, and now the recently-launched Lakme Studio, were all part of those efforts to become a premium brand and get an international look. The encouragement to go the premium way increased when the Lakmes high end products started contributing a considerable amount to Lakmes overall revenue. But not everyone was convinced whether these efforts have been enough for the brand to make a lasting impression in the premium space. Experts say what went against Lakme in its bid to take on the likes of LOreal and Revlon is its image. Lakme still was the Air Deccan of the Indian cosmetics industry. Its image of a budget brand for the masses was difficult to shed. All what was needed was to create two distinct brands and formulate separate strategies for the masses and the classes which Lakme did with the brands like Elle 18 and Orchid. The journey to become a leading premium cosmetics brand in the Rs 500-700 crore modern retail market is proving to be a long haul. With the increasing number of new brands now available in the Indian market, Lakme over the last five years has been losing market share in the modern trade format. Consumers who enter the market for the first time usually choose among Lakme, LOreal, Chambor and Maybelline. And here LOreal has the largest market share. Further, regular cosmetics users are moving from the masstige to the premium and prestige brands. The prestige and premium categories have higher growth as compared to th e masstige segment. Cosmetic is an Rs 2000 crore market, out of which the mid-premium is a Rs 1000 crore category where LOreal is the market leader. The premium is a Rs 300 crore category with players like Estee Lauder, Shisiedo and Lancome and the mass segment is a Rs 700 crore market where Lakme is the market leader.

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9. CONCLUSION

Lakmes bid for the premium segment got a major push when Lakme Salon launched a first-of-its-kind Lakme Studio in Delhi which offered ultra-premium beauty services. Lakme Studio has tied up with Nail Spa that uses the latest nail technology from the US to bring a bouquet of services like nail extensions and nail art. The strong point of Lakme, experts say, is its reach. With a retail reach of close to 1000 counters and an overall direct reach of 40,000 stores, Lakme is one of the most widely available brands. This large presence gives the brand volumes and makes it the largest cosmetics brand in India. Thus Lakme being a mass market brand has almost on a verge to also become a prestige market brand. It has almost survived the competition from the market leaders in that category. Lakmes wide range of products for entire market segment, its right brand positioning, its economical pricing strategy, availability in the local kirana and the drug stores to the departmental stores and now also on the internet is an example of its wide distribution network and its massive promotion mix acts as its success factor in becoming Indias largest cosmetic brand. Lakmes focuses only on Indian markets and they are the market leader in this sector and will continue to sustain leadership only in Indian markets rather taking the brand in the global markets. And even today, when most multinational beauty products are available in India, Lakme still occupies a special place in the hearts of Indian women

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