project on itc new product Fiama Di Wills

Contents

Particulars Page number

Executive Summary 1

Company Profile 2

List of Products and Brands 4

ITC’s Personal Care Range 6

About Fiama Di Wills 7

An Overview of the Salon Industry in

India

9

Objectives of the Project 15

Product Portfolio for Salons 16

Recommended Product Portfolio

For Shampoos

For Conditioners

19

20

Market Segmentation 21

Distribution 25

Training 30

Conclusion 32

Annexure 33

1Salon Strategy for I.T.C. Hair Care Products

Executive Summary

The Primary Objective of the Project is :

To arrive at a Recommended Product Portfolio for ITC Hair Care Products. To understand the profile segmentation of salons in Kolkata. To understand the Distribution Channel of the Referent Brands. To have a brief idea of the process of training for Salon Professionals.

Referent Brands :

L’oreal Professionnal, Wella, Schwarzkopf & Kerastase.

Product Portfolio for Salons:

Firstly an analysis of the benefits and attributes of the products of Referent Brands was carried out. On the basis of the results obtained a Benefit Mapping of the primary categories,i.e., Shampoos and Conditioners, were arrived at based on which a Recommended Product Portfolio for ITC Hair Care Products in salons was arrived at.(on page 8)

Profile Segmentation of Salons

Salons in different areas of the city were visited and on the basis of Brands used in these salons a Sample representative of the Market Segmentation in Kolkata was identified. On the basis of this a matrix was formed to differentiate between the various categories of salons on two parameters, i.e., Location and Starting price range of Basic Services and observations were formed. (On page 10)

Distribution Channel

The distributors of the Referent Brands were contacted to get a brief idea of the Distribution Channel and the key points were identified. (On pages 11& 12)

Training of salon Professionals

An understanding of the Training Process undertaken in Training Institutes of Salon Professionals was formed. Its importance in today’s scenario and how it can be used to create a positive word of mouth for the brand was also identified. ( On page 13)

Company Profile

[Type the company name]


ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 19 billion* and a turnover of over US $ 5.1 Billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by BusinessWorld and among India's Most Valuable Companies by Business Today. ITC ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week.

ITC India Limited

Type Public (BSE:ITC)

Founded 24 August 1910,

Radha Bazar Lane, Kolkata, India

Headquarters Kolkata, India

Key people Yogesh Chander Deveshwar, Chairman,

K. Vaidyanath, Director, Partho Chatterjee, CFO

Industry Tobacco, foods, hotels, stationery, greeting cards ,Products Cigarettes, packaged food, hotels, apparel

Revenue ▲ $4.75 billion USD (2006)

Employees 21,000 (2007)

Website www.itcportal.com


http://www.itcportal.com/


ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty

Papers, Packaging, Agri-Business, Packaged Foods & Confectionery,

Information Technology, Branded Apparel, Personal Care, Stationery, Safety

Matches and other FMCG products. While ITC is an outstanding market

leader in its traditional businesses of Cigarettes, Hotels, Paperboards,

Packaging and Agri-Exports, it is rapidly gaining market share even in its

nascent businesses of Packaged Foods & Confectionery, Branded Apparel,

Personal Care and Stationery.

As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly

nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the

market". In his own words: "ITC believes that its aspiration to create enduring value for the nation

provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only

driving each of its businesses towards international competitiveness but by also consciously contributing

to enhancing the competitiveness of the larger value chain of which it is a part."

ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of

growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-

building capabilities, effective supply chain management and acknowledged service skills in hoteliering.

Over time, the strategic forays into new businesses are expected to garner a significant share of these

emerging high-growth markets in India.

ITC's Agri-Business is one of India's largest exporters of agricultural products.

ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion

in the last decade). The Company's 'e-Choupal' initiative is enabling Indian

agriculture significantly enhance its competitiveness by empowering Indian

farmers through the power of the Internet. This transformational strategy,

which has already become the subject matter of a case study at Harvard

Business School, is expected to progressively create for ITC a huge rural



distribution infrastructure, significantly enhancing the Company's marketing

reach.

ITC's wholly owned Information Technology subsidiary, ITC Infotech India

Limited, is aggressively pursuing emerging opportunities in providing end-to-

end IT solutions, including e-enabled services and business process

outsourcing.

ITC's production facilities and hotels have won numerous national and

international awards for quality, productivity, safety and environment

management systems. ITC was the first company in India to voluntarily seek

a corporate governance rating.

ITC employs over 25,000 people at more than 60 locations across India. The

Company continuously endeavors to enhance its wealth generating

capabilities in a globalising environment to consistently reward more than

3,72,000 shareholders, fulfill the aspirations of its stakeholders and meet

societal expectations. This over-arching vision of the company is

expressively captured in its corporate positioning statement: "Enduring

Value. For the nation. For the Shareholder."



List of Products and Brands

ITC has a diversified presence in :

Cigarettes: W. D. & H. O. Wills, Classic Verve, Insignia, India Kings, Classic, Gold Flake, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake

Hotels: ITC_Welcomgroup_Hotels,_Palaces_and_Resorts is India's second largest hotel chain with over 80 hotels. Based out of Hotels Division Headquarters at the ITC Green Centre in Gurgaon, ITC Welcomgroup is also the exclusive franchisee of The Luxury Collection brand of Starwood Hotels and Resorts in India .

Paperboards & Specialty Papers:ITC Bhadrachalam Paperboards Limited"ITC Tribeni Tissues Division" Now there are four units under one name --> Paper Boards and Specialty Papers Division, Unit - Bhadrachalam, Tribeni, Bollarum and Kovai.



Agricultural Industry: Agri-Business, Leaf Tobacco, Gold Ribbon, Blue Ribbon, Aqua Kings, Aqua Bay, Aqua Feast and Peninsular Packaged Foods & Confectionery: Kitchens of India, Aashirvaad, Sunfeast, Mint-O, Candyman, Bingo Snacks .

Branded Apparel: Wills Lifestyle, John Players, Miss Players

Toiletries: Essenza Di Wills, Fiama Di Wills, Superia, Vivel Di Wills, Vivel

Greeting Card: Expressions

Information Technology: ITC Infotech

Safety Matches: iKno, Mangal Deep(Discontinued), VaxLit(Discontinued), Delite(Discontinued) and Aim Brands acquired from Wimco (Western India Match Company) (Swedish Matches)

Incense Sticks: Mangaldeep, Spriha

Stationery: Classmate, Paperkraft, Saathi



While ITC continues in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is gaining market share in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel and Greeting Cards.

ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing.

I.T.C.’S PERSONAL CARE RANGE

In line with ITC's aspiration to be India's premier FMCG company, recognised

for its world-class quality and enduring consumer trust, ITC forayed into the

Personal Care business in July 2005. In the short period since its entry, ITC

has already launched an array of brands, each of which offers a unique and

superior value proposition to discerning consumers. Anchored on extensive

consumer research and product development, ITC's personal care portfolio



brings world-class products with clearly differentiated benefits to quality-

seeking consumers.

ITC's Personal Care portfolio under the 'Essenza Di Wills', 'Fiama Di

Wills', 'Vivel Di Wills' 'Vivel UltraPro', 'Vivel' and 'Superia' brands has

received encouraging consumer response and is being progressively

extended nationally.

ITC's state-of-the-art manufacturing facility meets stringent requirements of

hygiene and benchmarked manufacturing practices. Contemporary

technology and the latest manufacturing processes have combined to

produce distinctly superior products which rank high on quality and

consumer appeal.

Extensive insights gained by ITC through its numerous consumer

engagements have provided the platform for its R&D and Product

Development teams to develop superior, differentiated products that meet

the consumer's stated and innate needs. The product formulations use

internationally recognised safe ingredients, subjected to the highest

standards of safety and performance.

About Fiama Di Wills



In September 2007, ITC launched Fiama Di Wills, a premium range of

personal care products comprising shampoos, conditioner, shower gels

and soap. This premium range is a unique blend of nature and science

that promises gentle effective care. It is an outcome of 4 years of

extensive research and development by experts at ITC R&D Centre. The

packaging for all Fiama Di Wills products has been developed by a leading

European design firm and the fragrances have been developed by an

international fragrance house in France.

Fiama Di Wills Shampoos developed in

collaboration with Cosmetech Labs Inc., USA, offers a

range of five variants. Each of these is designed to

deliver a specific hair benefit to the consumer :

Everyday Mild (with extracts of Thyme &

Juniper) is a gentle caring shampoo suitable for daily use.

Aqua Balance (with extracts of Magnolia Blossoms & Watercress) is a

gentle moisturizing shampoo ideal for dry, dull hair.

Volume Boost (with extracts of Rosemary & Sage) is a gentle

volumizing shampoo ideal for thin, limp hair.

Silky Strong (with oils of Macadamia Nut and Babassu) helps make

hair smooth, silky and strong and is ideal for weak, damaged hair.

Shine in Style (with extracts of Chamomile and Green Tea) makes

hair shiny and manageable, easy to style and is ideal for dull to normal

hair.



Each of these shampoos can be complemented with Fiama Di Wills

Polishing Drops conditioner. This gentle conditioner enriched with

Avocado Oil and Burdock extract promises to make hair shiny, soft and

smooth. It also gives the additional benefits of UV protection as it contains

Sunflower Seed extract, which is a natural UV absorber.

The Fiama Di Wills product line also consists of a 3-variant range of

transparent shower gels which are unique as they come with suspended

beads:

•Mild Dew (enriched with soft beads, peach and avocado

extracts) is for soft, moisturized skin.

•Clear Springs (enriched with jojoba beads, sea weed and

lemongrass extracts) is for clear healthy skin.

•

The Fiama Di Wills range of soaps has been launched

under the sub - brand SkinSense. The first variant to be introduced in this

range is Soft Green. This is a gentle caring soap, which helps enhance

retention of skin proteins making skin look beautiful and youthful.

Between February and June 2008, ITC expanded its personal care portfolio

with the launch of Vivel Di Wills and Vivel brands. Vivel Di Wills, a range of

soaps, and Vivel, a range of soaps and shampoos, cater to the specific needs

of a wide range of consumers.

Backed by consumer insights, these ranges offer the unique value

proposition of providing the multiple benefits of Nourishment, Protection and

Hydration in every single product. Thus providing, the ever-discerning

consumer, complete care.


Exotic Dream (enriched with glitter beads, bearberry leaves

and black currant extracts) is for stimulating freshness.


An Overview of theSalon Industry in India

Market Size

The beauty salon market in India has been growing steadily over the past

few years. As

of end FY03, there were an estimated 61,000 beauty salons in towns with

over 1 million

population.

For the purpose of analysing the beauty salon industry, Value Notes has used

the

following classification of the beauty salon market in India –



Source : Value Notes

Category No. Of Employees

Typical Characteristic

s

Large>8 Large parlours

providing a varied range of services

and/orspecialization,

premium price range

Medium5-8 Medium parlours,

medium price range

Small3-4 Small parlours, limited

service range

Home1-3 Individuals operating

from home/giving home service

Exhibit 1 :

Population-wise estimate of salons by category (FY 2003)

Some observations:

· Interestingly, half of these parlours are in the ‘home’ category. The large

salons (with

more than 6 employees, providing a wider range of services) constitute only

4% of

the total number of beauty salons in the country. The medium size salons

(with 3-5



employees, medium price range) are less than 10 percent.

· More than half of the beauty salons are in the major metros - Mumbai, Delhi

and

Kolkata (population more than 10 million). The others are balanced almost

equally

between the mini-metros (population size 3 to 10 million) and the smaller

towns

(population between 1 and 3 million).

· Also, there are a high number of small and home based beauty salons in

the metros.

B. Turnover Estimates

The estimated total turnover of the beauty salon market is between Rs. 1493

crores and Rs. 1805 crores (FY03) in cities with more than 1 million population.



Exhibit 2: Turnover Estimates (FY 2003)

Across the town classes, the large beauty salons took up 27% of the revenue

inspite of

being substantially lower in numbers as compared to the other categories.

Also, of the

total, the metros account for about 60% of the total turnover.

Interestingly, it is the small beauty salons (1-2 employees, offering limited

services) that

take up about 42% of the revenues in the metros. Adding the home category

(those who

work out of homes/garages etc.), the total revenue generated is over 65% of

the total.

In other towns of 1 million + also, they take up a sizeable portion of the

revenue.



The home segment, on the other hand, despite being the largest in numbers,

takes up

between 15-24% of the total revenue estimated in this market.

So what services are the money grossers for this industry?

Across the categories of beauty salons, haircuts are the most revenue

generating

service, accounting for between 25-30% of the total revenues. Hair styling

(hair

colouring, perming, streaking etc.) contribute to about 27% of the revenues

for the

larger salons, but are very insignificant revenue earners for the other

categories. This is

especially true of high-end speciality parlours.

In the medium size parlours, hairstyles lose out as the revenue generators

since the skill

sets are generally perceived to be lower in this category. However, facials,

being

comparatively price inelastic, make up for 31% of the revenue generation in

this

category. This trend also follows to the smaller and home parlours as this is a

function

of price rather than volumes.

Exhibit 3 : Revenue from various services across categories



Share of revenue by service (FY03)

Segment Large Medium Small& Home

Haircut 23% 26% 30%Hairstyle 18% 8% 1%Wax 17% 19% 16%Manicure 7% 7% 5%Pedicure 9% 8% 5%Facial 20% 31% 35%Others 7% 1% 7%

Therefore, it is easy to say that haircut is the most popular as well as the

most revenue

earning service in this business. Interestingly, for the medium and small

beauty salons,

facials form about 30-35% of the earnings.

Price:

Quite obviously, the price differences are highly significant between the town

classes,

with prices in the metros being considerably higher than the smaller towns,

the

difference being upto Rs. 500 for haircuts. Price differences are the highest

in haircuts

and facials, followed by hairstyles. Among the other services, the price

differences do not

appear to be so dramatic.



The main drivers for price variations are quality of the services offered and

the retention

of good employees. These are also important factors which drive customer

loyalty. Also

the locality in which the parlour is located drives the price. In case of large

parlours, a

certain niche or speciality determines the price points for the services

offered.

Product Sales:

Product sales constitute a very low part of the revenues. In fact, it is only the

large

parlours that engaged in product sales. But this too contributed to only about

10% of the

revenues.But this is one aspect of the business that is seeing a gradual rise

because of people becoming more aware and conscious of their appearance

and are willing to spend more money for them.

Only L’Oreal appears to have has managed to successfully push its product

line,

especially the hair treatment products through the beauty salons. Some of

the reasons

for this being – exclusive sales of L’Oreal products in the salons, regular

training for the

salon staff and sale of certain L’Oreal products not available at any other

outlets.



Growth Estimates

According to Value Notes, the overall estimated growth rate for this industry

(in FY

2008-09) in terms of number of parlours would be between 30-33%, but

revenue growth

would be only about 9-10%. It is also estimated that the growth rate would

be higher

among the metros and the smaller towns.

Also, growth rates would be better among the large parlours rather than the

medium

and small parlours. This is because the smaller players are being threatened

by the

burgeoning home segment.

Growth Drivers:

An overall increased awareness of beauty

Improvement of technical skills, a growing demand for something new

Veering of beauty salons towards ‘treatment’ and ‘therapy’

Aggressive efforts by companies like L’Oreal and Wella for their

products.



Inhibitors to growth are mainly the stiff competition due to the

establishment of small

and home size parlours. This is also due to the emergence of a lot of

training institutes

offering inexpensive short duration courses.

Also, problems faced by the parlour owners include the service tax, felt

by mostly the

large beauty salon owners. Undercutting by smaller parlour owners

was also another

problem faced by this industry.

Some highlights:

The size of the beauty salon industry is estimated at between Rs. 1493

and Rs. 1805

crores. This is attributed to the advent of foreign TV channels,

changing lifestyles,

higher purchasing power and greater awareness and need for ‘beauty’.

However, the growth rates in number and revenue are contrasting.

While the

increase in numbers is dramatic, the revenue growth is pegged at only

9-10%.



The barriers to entry in this business are low and therefore it makes

the business

very competitive. This is more significant in the smaller and home

based parlour

segment.

The higher end market is growing at a considerably slower rate, but is

grossing the

highest revenues. This is evident from the fact that a number of major

national and

international names in the beauty and personal care segment are

making forays into

this industry.

Typically, the speciality skills and branding, therefore appear to make

the customer

loyal, especially in terms of the high-end large parlours.

Specialised services and niche products are the buzzwords. This is

quite evident for

greater demand for aromatherapy, herbal treatments etc. Creating a

niche seems to

the demand of the hour rather than a ‘jack of all’ business.

‘Health’ and ‘beauty’ are being converged. This also proves to be good

news for the

industry as a wider range of services could be included in their

offerings to

customers.



Also, a lot of salons (especially in the large metro segment) appear to

be attracting

men as clientele. There seems to be a movement from traditional

barber shops to

speciality salons for men offering a whole range of services.

Objectives of the Project

The objective of the project will be to design an entry strategy for Hair

Care Products of ITC in Beauty Salons. The objectives of the project can be

sub divided into four heads:

Product Portfolio for Salons :

The product portfolio of the Referent Brands needs to be analysed. An

analysis of the benefits, attributes, advertisement and MRP needs to be

done to arrive at the Benefit Mapping of the Products.

Profile Segmentation for Salons :

An Ideal Representative Sample needs to be arrived at to understand

how the market has been segmented and which Referent Brand

occupies a stronger foothold in the Kolkata Market.

Distribution Process & Distribution Channel for Salons :

To understand the Distribution Process and Distribution Channel of

Referent Brands L’orealProfessionnel, Wella, Kerastase,& Schwarzkopf.



Process of Training for Salon workers for creating a positive

word of mouth for the Brand :

To understand the process of training of salon workers and how does it

help.

Category:

The project covers all Hair Care Category Products.

Market Area:

The area of operation is restricted to the city limits of Kolkata.

Product Portfolio for Salons

Objectives

The product Portfolio of the various Salon Brands needs to be

analysed. The Referent Brands include:

L’oreal Professionnel, Wella, Schwarzkopf, & Kerastase

The product portfolio of the Referent Brands needs to be analysed. An

analysis of the benefits, attributes, advertisement and MRP needs to be

done to arrive at the Benefit Mapping of the Products.

A Profile Segmentation Definition for the salons needs to be arrived at.



The Brands & Portfolio of Products of a brand which is available in a

Salon on the basis of the Profile needs to be mapped.

A Recommended Product Portfolio for ITC needs to be arrived at on the

basis of all the above analysis.

Recommended Product Portfolio

For Shampoos:



For Conditioners



Market Segmentation



Objective:

A Profile Segmentation definition for the salons needs to be arrived at.

The Brands & Portfolio of Products of a brand which is available in a

Salon on the basis of the Profile needs to be mapped.

An Ideal Representative Sample needs to be arrived at to understand

how the market has been segmented and which Referent Brand

occupies a stronger foothold in the Kolkata Market.

Methodology:

Various salons across the city were visited.

The brands used in the various salons were identified.

Various Parameters to differentiate between the salons were identified.

The parameters included :

Location( whether Commercial or Residential)

Starting Price range of Basic Services

Number of Salon Chairs

Whether it is a Ladies Salon or a Unisex Salon

Customer Profile

Out of the above mentioned parameters, Location and stranding price

range of basic services were identified to be the most important criteria

for classification of Salons.

On the basis of information gathered a matrix was formed with the

parameters of Location (whether Commercial or Residential) on one hand

and starting price range of Basic Services on the other.

Salons visited:





Sample Matrix

Observations[Type the company name]


1. The most premium salons have either Shcwarzkopf or Kerastase

Products.

2. L’oreal is found in all types of Salon Profiles and it occupies the highest

Market Share. Even though it is found in Salon Profiles it differentiates

itself by keeping a larger range of L’oreal Products in the Higher Profile

Salons. For example, a salon in the 150-250 range will usually always

have Serie Expert Products, but salons in the 350 range and above will

have, apart from Serie Expert , Tecni Art & Matrix products also.

3. Schwarzkopf is quite a premium Brand and can be found only in the

350+ and 500+ profile of Salons.

4. Kerastase is extremely premium and is not found much in Kolkata.

5. Wella can be primarily found in the first 2 Profiles only, i.e.,150+ and

350+.

6. L’oreal and Wella occupy a strong foothold in the 350-450 range in

Residential as well as Commercial Area.

7. Wella & Schwarzkopf are found in posh residential areas mainly as well

as some can be found in commercial areas.

Based on the above analysis it can be said that L’oreal

occupies a foothold of around 70-72%. The rest comprise

Schwarzkopf and Wella, whereas Kerastase has only 2-3 salons

in Kolkata.



Distribution

Objective:

To understand the Distribution Process and Distribution Channel of Referent

Brands L’oreal Professionnel, Wella, Kerastase,& Schwarzkopf.

Methodology :

Various salons across the city were visited to understand the process

of Distribution.

The Distributors of the various Referent Brands were also contacted to

get a detailed understanding of how the Distribution Process is spread

out from the company to the ultimate consumer.



An idea of the various Sales and Trade Promotion techniques used by

the Companies is also taken note of.

Apart from the above mentioned a note is also taken of the most

popular selling products.

Wella :

CompanyCNF(Carrying and Forwarding

Agent)DistributorSalon

These CNF’s are located in various zones in the country and they then

forward the products to the distributors in the various cities.

The order capture is done in a way such that salons in a particular area

are allotted days in a week. The salons call up the distributor with the

order they require and on the day of the week which is allotted to them

the order is delivered to them.

The order capture is done in a way such that salons in a particular area

are allotted days in a week. The salons call up the distributor with the

order they require and on the day of the week which is allotted to them

the order is delivered to them.



Offers- Various Trade Promotion schemes are on offer. There are

mainly two types of offers- Quantity Based Scheme and Price Based

Scheme.

Quantity Based scheme is such that on purchase of a particular

quantity of products discounts are offered to the salons. It may also

be in the form of commission,etc.

Price Based Scheme is such that on purchase of products worth a

certain amount discounts or price cuts are offered to salons.

Top Selling Products :

Wella is the world leader in straightening and rebonded hair products.

L’oreal Professionnel and Kerastase

CompanyCFA(Depot)DistributorSalon

These CFA’s are located in various parts of the country. The products

are forwarded from these areas to the distributors in the cities.



There are various distributors in Kolkata to cater to the many L’oreal

Salons in different areas.

Order capture is done in such a way that the salons call up the

distributor and place an order on the basis of their requirement.



Scheme.






Top Selling Products: Volume Hair Shampoo and L’Oreal Hair Spa

Treatment are very popular.

Schwarzkopf

CompanyCFN’sDistributorSalons

The distribution channel works in much the same way as in the case of

the above two companies.



The distributors are allotted certain areas and their market is thus the

salons in these areas.

The salons call up the distributors or the company to place an order

with them. The order is then transferred on to the distributor.



Scheme.






On a Kolkata basis there are around 35 Schwarzkopf salons .

Top selling Products- Client Specific.

Recommended Distribution

Channel



Keeping in mind ITC’s infrastructure and reach the following Recommended Distribution Channel diagram was designed to reach all the major markets of the city in the most appropriate and timely manner :

Suggested Sales Promotion techniques :

Quantity Based scheme :

o Contests for reaching Target Saleso Commission for sale of Products beyond a specific quantity.o Discounts on purchase in Bulks.

Price Based Scheme :

o Gifts and Gifts Vouchers for High Performing Salon Clientso Attractive Discounts for consumers in the beginning Phase to

attract consumers.

TRAINING



Objective:

To understand the process of training of salon workers and how

does it help.

Observations:

All the main players in the Salon Business, L’oreal, Wella, Schwarzkopf

have set up their own Training Institutes where they train people to be

Beauticians, Hair Dressers and Salon Managers. They then work for

their respective salons. However, these Training Institutes provide

training not only to people who will work in their salons but also to

those who want to start a salon of their own, or who want to be placed

in other salons.

Training has become a very crucial aspect in the Salon Business as it is

getting very competitive. There is a need for trained professionals to

keep up with changes in the technical and service standards. It is

important also to keep up the reputation of the salon and the salon

brand used.

The training courses offered are sometimes a 6 month course with

internship or an 8 month course with internship. There are options for

both freshers and practicing beauticians and there are short-term and

long-term courses that cover the entire gamut of beauty: skincare,



makeup and hair and range and with all the aspects of salon services

and client care.

Training is given through practical demos with the help of modern

salon machines and equipment. It is conducted in a Professional

environment where live demos are also shown.

Regular workshops and seminars are also conducted on a monthly

basis or so where the salon professionals are trained by renowned hair

dressers.

These seminars are also conducted when the company is launching

new trends hair styles and also new hair colors. In these workshops the

salon professionals are brought up to date with the trends and

introduced to the new products that the company is coming up with.

Jawed Habib, for instance, has institutes in Mumbai, Kolkata,

Hyderabad, Bangalore, Ahmedabad, Delhi and Kathmandu (Nepal).

Shahnaz Husain, in contrast, has some six schools in Delhi and 56

branches across the country. Lakme has an institute in Mumbai, where

training is imparted to its personnel from time to time. The institute

also provides beauty education to external candidates, something that

Jawed Habib and Shahnaz Husain do too.

L’Oreal, has an academy in Mumbai, Christine Valmy, a school based in

New York that began imparting beauty education in India some two

years ago, and Wella, has a tie-up with popular hair stylist Nalini (of

Nalini & Yasmin fame).



Conclusion

The Recommended Product Portfolio (Shampoo, Conditioners, and other Hair Care products) will be used by ITC when they venture in the Salon Business.

After understanding the Market Segmentation and Distribution Procedure used by the Referent Brands I reached the following recommendations:

Keeping in mind ITC’s brand value in the market and its ability to procure prime

locations in the city I recommend a Low Penetration and High Priced Strategy. The main

reason behind this strategy is to present the range as a Premium Range with high utility.

Exclusivity and adequate national promotional will help to raise the buzz about the

products.

In the initial stages the salons must be opened in central locations in the city and also in

the Wills Lifestyle stores to reach the target audience.

Salons can also be opened in I.T.C. Hotels. As most of ITC’s hotels are in the 5-star

category and the Wills Lifestyle Stores targeted at the higher income group the Salons

would be strategically placed to attract the end consumer.

The main idea is to promote the Salon chain as a high-end lifestyle product.



Proper training must be provided to the Salon Staff and High end beauticians and Hair

Stylists must be hired. Adequate training must be provided to the staff to ensure the

highest service level.

Training is an important aspect, as it helps the staff to keep in touch with the new trends

in the Industry, as the Industry itself is dynamic.

It is also important to come up with various Sales Promotion techniques targeting both

the Distributors and the consumers .

AnnexureOBSERVATIONS

Referent Brands- L’Oreal Professionnel, Wella, Schwarzkopf and Kerastase

Customer Profile

The customer profile differs in various salons across the city . The determinant in most cases is Location. For a residential location :50% Housewives20-30% School and College Children20 % Working Women

Commercial Location60% Working Women15% School and College Children25% HousewivesSalons near or in malls and marketplaces have a mixed customer base and have more footfall.

Classification of salons can be done on the basis of price of a regular haircut. Price of services in salons in dependent on location and then on brand name.

In residential areas : 200-250In Commercial areas:350-400For extremely premium salons like Habib’s and Bridget Jones the prices are higher: 500+



Distribution:

For most salons whether L’Oreal, Wella , Schwarzkopf there is an agent or middle man involved who is the link with the company. He ensures regular availability of products.In other cases the saloons call up the company to order the products they require.

Training:

The professionals working in the salons of L’oreal, Wella , Schwarzkopf are regularly trained in the form of workshops and seminars on a monthly basis. They are trained in terms of new trends and are informed about the new products launched and their uses and benefit

References

1. L’oreal Professionnel Distributor:Mr. Mobashir – 9903397028

2. Wella Distributor:Ambika Enterprises: 033 24656335

3. Schwarzkopf Distributor:9830819660

4. Glitz and Glamour Training Institute:Mrs. Kakuli-9836381831




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