PROJECT REPORTOn
COMPARATIVE STUDY BETWEEN MARKETING STRATEGIES OF LAKME AND REVLON
VS
Submitted by: AMANPREET KAUR
AKNOWLEDGEMENT
I HAVE GREAT PLEASURE IN PRESENTING MY PROJECT ENTITLED
LAKME AND REVLON. I TAKE THIS AN OPPORTUNITY TO EXPRESS MY
DEEPEST GRATITUDE & INEPTNESS TO ALL THOSE WHO
CONTRIBUTED INDIRECTLY THEIR VALUABLE TIME & ASSISTED ME IN
MY PROJECT.
I WOULD LIKE TO THANK MY PROJECT GUIDES, ALL THE
FACULTY MEMBERS. FOR THIS APPROVAL & ALSO FOR HER
VALUABLE GUIDANCE & SUPPORT IN COMPLETING MY PROJECT OF
COMPARATIVE STUDIES BETWEEN MARKETING STRATEGIES OF
LAKME AND REVLON.
LAST BUT NOT THE LEAST I WOULD LIKE TO EXPRESS MY
SINCERE THANKS TO THOSE WHO DIRECTLY & INDIRECTLY HELPED IN
THIS PROJECT.
CONTENTS
Introduction
Brief overview of marketing strategies.
Company Profile of Lakme
Company Profile of Revlon
Various Marketing strategies adopted by the two
Company along with product profile
Objectives of the Study
Suggestions and Recommendations
Summary & Conclusion
Appendix
Bibliography
INTRODUCTION
Within a short span of the last five-six years, the use of cosmetics by
Indian consumers has increased significantly with more and more women
and men taking greater interest in personal grooming, increasing
disposable incomes, changing life styles, influence of satellite television
and greater product choice and availability. With the demand for
cosmetics on the rise and the opening up of the market to foreign
companies, many of the world’s popular cosmetics brands entered the
Indian market in the early and mid-nineties and some more have set their
sights on India.
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. The Indian toiletries
market is well developed and dominated by major multinational
companies and a few large Indian players.
The urban population with increasing purchasing power is the major
force driving demand for cosmetics and toiletries. India is a very price-
sensitive market and mass-market products constitute the major part of
the cosmetics and toiletries market. India’s import of cosmetics and
toiletries and intermediate raw materials is around US$ 120 million, of
which the U.S. has a share of approximately 10 percent. The objective of
the study report is to analyze the consumer satisfaction level of different
brands, particularly focused on the Lakme and Revlon products
Market Overview
The current size of the Indian cosmetic market is approximately US$
600 million. Of this, the fastest growing segment is 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. Also, with the boom in the Indian fashion world
and the growth in the television industry, there has been a rise in demand
for professional beauty care products. Cosmetic companies in India are
placing increasing emphasis on market research and targeting new
market segments such as teenagers, men and young women. Cosmetics
constitute the high growth segments. Nail enamels and lipsticks account
for around 65 percent of total color cosmetic sales in India. Lakme, a
brand originally introduced by the Tata group of India, now bought over by
Hindustan Lever (HLL) 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. Most other cosmetic products are
estimated to be used by less than 40 percent of the consumers.
Market Trends
Cosmetics 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. 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.
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.
Competition
The Indian cosmetic market, which has been traditionally a
stronghold of a few major Indian players like Lakme has seen a lot of
foreign entrants like Revlon 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
companies launched their products in smaller pack sizes to make them
more affordable. Lakme 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.
THE MARKETING CONCEPT
The Marketing Concept was born out of the awareness that
marketing starts with the determination of consumers wants and needs
with the satisfaction of those wants.
The concept puts the consumer both at the beginning and the end
of the business cycle .It stipulates that any business should be organized
around the marketing function, anticipating, stimulating and meeting
customer’s requirements. The customer, not the corporation has to be the
centre of the business universe.
A business cannot succeed by supplying products and services that
are not properly designed to serve the needs of the customers. Only the
Marketing Concept is capable of keeping the organization free from
marketing myopia.
MARKETING STRATEGY
Lakme: To Strongly Position The Brand On The Youth Platform.
Lakme Lever is planning to revive its youth-oriented brand, Elle 18.
Having put the brand on `maintenance' mode, this division of HLL was
focusing on Lakme.
Speaking to Business Line, Mr. Anil Chopra, Vice-President, said:
"We are relooking at the Elle 18 brand."
Launched in 1998, Elle 18 targeted the first-time cosmetic user and
currently sports two product lines comprising lipsticks and nail enamel.
"In the first three years, Elle 18 registered sharp growth rates and
the purpose was to create a new segment of consumers," said Mr Chopra.
At that point of time, Elle 18's main competitor in the youth-based
cosmetics market was Tips & Toes, a brand that is almost non-existent
today.
Pricing strategy
With a pricing that is almost one-third that of Lakme, Elle 18, of late,
has also unleashed a campaign based on its products.
"There was a change in our strategy in the past. While Lakme has
been high on innovation, Elle 18 has been on maintenance mode. The
brand has been growing at a lower rate than Lakme. But now we are now
relooking at Elle 18 as there is still no brand that is so sharply positioned
on the youth platform," said Mr Chopra.
There was a conscious price differential between the brands to
attract the first generation users of cosmetics. So, while a Lakme Lipstick
would have an MRP of Rs 165, an Elle 18 Lipstick was pegged at Rs 55.
Meanwhile, Lakme Lever continues to innovate for its existing range
of skincare and color cosmetics under the Lakme brand.
It recently relaunched its skincare range under the name of Lakme
Fundamentals.
"While there is no new product, we will be upgrading the existing
skin care range with new formulation and packaging," Mr Chopra said.
In color cosmetics it has roped in designer Sabyasachi Mukerjee to
unleash the `Free Spirit' range as part of its winter collection.
"The overall beauty market has been growing between 15-20 per
cent but we have been growing higher than the market."
However, it is the salon business that has been registering the
highest growth rates for Lakme Lever.
"With a small base, our salon business has been growing the
fastest," Mr. Chopra said.
There are plans to have 100 Lakme salons by the end of the year
from the existing 92 salons across the country.
Besides, Lakme Lever intends consolidating its hair care portfolio
launched last year under the Lakme Hair Next brand.
"We do not want to add to existing hair care products in the market.
The brand has been launched in the hair styling category and we want to
create awareness and educate our consumers without confusing them
with more products," said Mr Chopra.
Lakme Restages Its Opera
Its turnaround sketch has got just a few strokes - grab the fashion
platform, spruce up the supply-chain, and test the rural waters.
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 Lakme, a 19th century opera
written by Frenchman Leo Delibes, from which Simone Tata borrowed the
name Lakme (French for Lakshmi, the name of the priestess).
By 1999, the world looked set for a revised version of the work.
Simone Tata was no longer on the scene. And a home-grown fashion
brand-often personified as the high priestess of fashion in the country-had
been sold to a multinational company whose provenance was English,
well, Anglo-Dutch, actually-Hindustan Lever Ltd (HLL).
Worse, with HLL not appearing too keen about the brand-the
company, predictably, denies this-Lakmé, the brand looked all set to
follow the spirit of Lakmé the opera (a tragedy).
Lever was right. The aria, as is now evident, wasn't quite over.
Standing amidst the jamboree of what is, arguably, India's first fashion
summit, the Lakmé India Fashion Week (LIFW for short), Anil Chopra, 51,
the affable Director who heads Lakmé Lever Ltd is bullish about the
brand's new positioning: ''By taking on the fashion and glamour platform,
we have, in a way, not just taken a lead (over others), but also got a
virtual ownership of this plank. It will be very difficult for any other brand
to adopt a similar approach.'' And reactions to the born-again Lakmé at
the LIFW did suggest that Chopra and the brand were on to a good thing.
''Lakmé is at the forefront of product-innovation. Almost everyone has a
Lakmé-something in their (cosmetics) collection,'' gushes Mumbai-based
fashion choreographer Lubna Adams. So, is Lakmé back?
Getting the focus right
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.
The FAQs: With Ponds becoming part of HLL, what happens to
Lakmé's skincare business? What does Lever's launch of Aviance mean for
Lakmé? And why is it so difficult to find Lakmé products?
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 apparitional 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.
Likely outcome by the strategy
The premium segment, however, is just a slice of the Indian market
for colour cosmetics (estimated size: Rs 275 crore). Today, the company
has three brands: Lakmé itself, which will be positioned as a fashion-
brand; Elle 18, which has enjoyed success as a college-girl brand; and
Orchid, a super-premium brand that hasn't really seen much excitement
since its 1999-relaunch.
The company plans to re-re-launch Orchid by end-2000, and is test-
marketing Elka, a brand targeted at the lowest-end of the colour
cosmetics market. The brand, Chopra claims, could also catalyse Lakmé's
entry into the hinterland, but only if tests show there is a rural market for
colour cosmetics. Says Nikhil Vora, 28, Portfolio Advisor, Sharekhan.com:
''Though rural markets are big potential, a company has to think of
segments carefully. Any expansion into new areas should be justified by
returns.''
Lakmé will remain a loner in the Lever stable: Unilever does not
have a presence in the colour cosmetics segment. That means Lakmé
Lever will have to depend on its own kitchen garden. But a focused-most
of its skincare business and all of its exports business have been taken on
by HLL-Lakmé does seem to be on a come-back trail. It's still the second
act, but this opera could well have a happy ending.
Lakme's Profile
Lakmé is an Indian brand of cosmetics, owned by Unilever. Lakme
started as a 100% subsidiary of Tata Group (Tomco), it was named after
the French opera Lakmé. At the time of its establishment, Indian cosmetic
industry was rather nacent, and there was a very small market base.
Simone Tata joined the company as director, and went on to become its
chairman. When Tata's saw a bigger growth potential in the retail market,
and greater competition from global companies in cosmetics, they
enetered into a 50-50 joint venture with Hindustan Lever Limited (the
Indian subsidiary of Unilever) in 1995 to form Lakme Lever. In 1998 Tata
sold of there stakes in Lakmé Lever to to HLL, for Rs 200 Crore (45 million
US$), and went on to create Trent and Westside. 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
About LAKMÉ
The Carreras family established LAKMÉ Cosmetics in 1997 and is
independent, self-financed and family owned. The family has over 40
years of manufacturing experience in salon products. Lakmé East a
regional distributor of Lakmé Cosmetics with its main office in Colchester
is conveniently placed to provide you with all the guidance back up and
support you’ll ever need.
The Products
LAKMÉ leading hair care products are developed exclusively for
distribution to hair and beauty salons. Branding and packaging of the
product range is first class and they are tested and manufactured solely
for this brand name and no other. The very best raw materials are used in
manufacture using the latest technology and adopting the highest levels
of hygiene. All product formulation is in accordance with the health
standards of the European Union and the United States Food & Drug
Administration and is subject to ISO 9002 certification.
The Promotion
Powerful ‘point-of-sale’ displays are supplied FREE OF CHARGE for
customer sales and your own use, with freestanding display units
highlighting the unique quality and variety of your products and
enhancing the quality of your sales and service. Combine this with FREE
ongoing in-salon education and you have the perfect basis to grow your
business for yourself, but not by yourself.
Lakme expands skin care products
Lakme, the Indian cosmetics giant has expanded the range of skin
care products it markets in Sri Lanka, and unveiled the company's new
international logo and image, Lakme's local distributor Hemas Marketing
(Pte) Ltd., has announced.
Launched in Colombo earlier this month, the addition to the Lakme
skin care range are the Lakme Nourishing Cold Cream, Nourishing Body
Lotion, pH-Balanced Face Wash, Calamine Lotion, Sun Screen Lotion and
Hair Remover.
Prior to the launch of these products, Hemas Marketing was
responsible for the distribution of Lakme Maximum Moisturiser and Lakme
Deep Pore Cleansing Milk, which the company will continue to market in
new packaging.
Revlon Profile
Revlon is a world leader in cosmetics, skin care, fragrance and
personal care and is a leading mass market cosmetics brand. Our vision is
to provide glamour, excitement and innovation through quality products
at affordable prices. To pursue this vision, Revlon's management team
combines the creativity of a cosmetics and fashion company with the
marketing, sales and operating system of a consumer packaged goods
company. Our global brand name recognition, product quality and
marketing experience have enabled us to create one of the strongest
consumer brand franchises in the world, with our products sold in
approximately 175 countries and territories. Revlon's brands include
Revlon®, ColorStay®, New Complexion®, Revlon Age Defying®, Almay®,
Ultima II® and Flex® and Charlie®.
Revlon was founded in 1932, by Charles Revson and his brother
Joseph, along with a chemist, Charles Lachman, who contributed the "L" in
the REVLON name.
Starting with a single product - a nail enamel unlike any before it -
the three founders pooled their meager resources and developed a unique
manufacturing process. Using pigments instead of dyes, Revlon was able
to offer to woman a rich-looking, opaque nail enamel in a wide variety of
shades never before available.
Revlon's first beauty item was nail enamel. Opaque and long-lasting,
it was an improvement over the more transparent, dye-based products of
other manufacturers. Revlon's nail polish owed its superiority to the use of
pigments, which also allowed a wider color range than the light red,
medium red, and dark red then available. Initially, the revolutionary
"cream enamel" came from the tiny Elka company, in Newark, New Jersey,
a polish supplier to beauty salons for whom Charles Revson began to work
as a sales representative in 1931. Charles Revson and his older brother
Joseph distributed Elka nail polish as Revson Brothers. Within a year,
however, Charles Revson decided to open his own nail polish company,
going into partnership with his brother and a nail polish supplier named
Charles R. Lachman, who contributed the "l" to the Revlon name. Revlon
was formed on March 1, 1932.
Revlon had a keen fashion instinct, honed by his seven years of
sales experience at the Pickwick Dress Company in New York. Coupling
this with his experience at Elka, he noted that the permanent wave boom
was making beauty salons more popular and that demand for manicures
was rising in tandem. He therefore targeted beauty salons as a market
niche--a fortunate choice whose importance would grow.
Within its first nine months, the company boasted sales of $4,055.
There was a sharp rise in sales to $11,246 in 1933, the year the company
incorporated as Revlon Products Corporation. At the end of 1934, the
company had grossed $68,000. By 1937, sales multiplied more than 40
times. In that year, Revson decided to enlarge his market by retailing his
nail polish through department stores and selected drugstores. This gave
him access to more affluent customers as well as those with a moderate
amount of money to spend on beauty products. Formulating a maxim he
followed for the rest of his life, Revson steered clear of cut-rate stores,
selling his product only at premium prices.
Marketing strategy
Postwar sales strategy, too, was influenced by increases in spending
and department store credit sales. Returning interest in dress sparked the
company's twice-yearly nail enamel and lipstick promotions, which were
crafted in anticipation of the season's clothing fashions. Each promotion
featured a descriptive color name to tempt the buyer, full-color spreads in
fashion magazines, color cards showing the range of colors in the
promotion, and display cards reproducing or enlarging consumer ads.
Packaging was designed specifically for each line.
The Fire and Ice promotion for fall 1952 was one of the most successful.
Its features included the cooperation of Vogue magazine, which planned
its November issue around the lipstick and nail enamel, "push" money
given to demonstrators in stores without Revlon sales staff to insure full
retail coverage, and radio endorsements written into scripts for
performers such as Bob Hope and Red Skelton. These efforts produced
excellent publicity and helped to raise 1952 net sales to almost $25.5
million.
The company received its next boost from its 1955 sole sponsorship
of the CBS television show The $64,000 Question. Though initially
reluctant to go ahead with this project, Revson was persuaded by the
success of rival Hazel Bishop, whose sponsorship of This is Your Life was
providing serious competition for Revlon's lipsticks. Attracting a weekly
audience of 55 million people, The $64,000 Question topped the ratings
within four weeks of its debut. Revlon's advertising budget for the year,
$7.5 million, proved Charles Revson's adage that publicity had to be
heavy to sell cosmetics; as a result of the television show, sales of some
products increased 500 percent, and net sales for 1955 grew to $51.6
million, from $33.6 million one year previously.
Takeover strategy
The 1970s began with annual sales of about $314 million. The
Cosmetics and Fragrances division, its six lines separately aimed,
advertised, and marketed, was the industry leader in all franchised retail
outlets. Revlon fragrances, such as Norell and Intimate for women and
Braggi and Pub for men, had also become familiar to U.S. consumers.
Revlon also had a new line of wig-maintenance products called Wig
Wonder.
An important 1970 acquisition was the Mitchum Company of Tennessee,
makers of antiperspirants and other toiletries. Mitchum joined the Thayer
Laboratories subsidiary, formerly Knomark. Mitchum-Thayer division's
widely publicized products required a 1971 advertising budget of $4
million.
In 1973, Revlon introduced Charlie, a fragrance designed for the
working woman's budget. Geared to the under-30 market, Charlie models
in Ralph Lauren clothes personified the independent woman of the 1970s.
Charlie was an instant success, helping to raise Revlon's net sales figures
to $506 million for 1973 and to almost $606 million the following year.
Strategy formulation framework
Revlon Lakme
CRITICAL SUCCSES FACTOR
WEIGHT
RATING
WEIGHTED SCORE
RATING
WEIGHTED SCORE
PRICE 0.15 3 0.45 4 0.60
FINANCIAL POSITION
0.10 3 0.43 4 0.40
CONSUMER LOYALTY
0.10 4 0.40 4 0.40
ADVERTISING
0.10 3 0.30 3 0.30
PRODUCT QUALITY
0.10 4 0.40 3 0.30
INNOVATION
0.15 3 0.45 3 0.45
MARKET SHARE
0.10 4 0.40 2 0.20
MANAGEMENT
0.06 3 0.18 3 0.18
GLOBAL EXPANSION
0.15 3 0.45 4 0.60
TOTAL 1 3.33 3.43
OBJECTIVES OF STUDY
To find out the impact of Lakme and Revlon informative
Cosmetics Products on the brand switching behavior of the
consumer.
To study the effect of Consumer Satisfaction on the
marketability of Cosmetic products.
To know the impact of various striking features on buyers
behavior.
To know the media access by consumers to know about
Cosmetics Products.
To know various cosmetics product range in the market level
for Cosmetic Products (Nail Enamels, Lotions, Shampoo).
STRENGTH
Marketing & Sales
A commitment to innovate, Expand and excel:-
All India network of sales and distribution with service reaching to
two hundred thousand outlets via a network of twelve hundred
distributors.
Twenty- One Depots spread across the country integrated through a
single IT network.
A 300 plus professional field force serving the distributors and the
main retail stores on a regular basis.
Marketing Department comprising of seasoned professionals ever
adaptive to market dynamics.
Association with top of the line advertising agencies to
communicate and connect its brands to the consumers.
Technology Center
Providing and maintaining the international quality that the
consumer deserves-
Qualified team of technologists and scientists endeavoring to adapt
formulations, develop new products & packaging.
Well equipped laboratory to control and meet the international
quality standards of our products.
Consumer Preferences of Cosmetics
Toplines
Buying Preferences
Among cosmetics, more than half the consumers want
Lipsticks the most. Nail Polish is a distant second.
Mid and Premium price range are the most preferred.
Advertising Recall
Only Lakme ads recalled significantly by consumers at the
unaided level.
When prompted for cosmetics, Lakme ads dominate the top of
mind ad recall among consumers. Revlon ads also recalled
noticeably.
Brand Preferences
Lakme is the only cosmetic brand getting significant brand
recall at the unaided level. Revlon and L’Oreal recalled
noticeably.
When prompted for cosmetics, Lakme dominates the category
in consumer minds in a big way, be it for brand recall or for
intention to buy. Revlon a distant second on both counts.
Promotional schemes offered by Lakme and
Revlon
Promotions have emerged as the most economical and effective
way to establish a personal rapport with your customers. They have
always been a part of the consumers product s game, but nowadays, it’s
almost like one can’t buy a tooth brush without having to tote a detergent
bar home as well. A gift on a festive occasion or free with the purchase of
a certain product goes miles in leaving a favourable mark on the minds of
your customers.
Marketing heads are exploring the effectiveness of each and every
product as a gift to boost sales. This frenzy has led to a deluge in the
range of innovative products entering this market. Infact, the type of
products entering the gifting and promotional category is simply mind-
boggling and differ from product to product. The type of products offered
as a promotional item range from a small ball pen to expensive electronic
items. Infact, the meaning of the term gift seems to have attained a wider
meaning. People tend to offer just about any thing under the label “Free
Gift Inside”.
Value Perception could be one reason why this freebie strategy is
more effective. Five rupees off means five rupees less to the
manufacturer, but a gift item which sells for five rupees might be sourced
for just Rs. 1- 2, making the offer far more cost effective.
Large MNCs like the Levers, Godrej, Philips,revlon etc. have resorted to
giving their own lesser known brands free with their popular brands and
vice-versa. This automatically tends to reflect a better sales volume as far
as both the brands are concerned. The companies tend to save their
promotional expenses and utilise the same to generate better sales in the
respective brands.
This trend is extensively practiced by the electronic industry. The
companies like AIWA and Videocon have been known to offer irresistible
freebies like: a walkman or a small sound system free on the purchase of
a colour television, over 10 CDs free with a purchase of a sound system
etc. Such moves by these companies forced better-established brands like
Onida etc. think on their feet.
This trend has come in as a zephyr to the lesser popular brands
striving to establish themselves in the market. Companies that cannot
invest a heavy sum in promotion or cannot afford to engage in a massive
sampling exercise simply tie up with better-known brands for their
products to be offered as free gifts. This acts as a mutual benefit for both
the parties, as one achieves better sales while the other achieves better
exposure at a very nominal expense.
There tends to be a small amount of exploitation of a few lesser-
known brands in such exercises, but every thing The latest trend as a
promotional strategy that has set the marketing arena abuzz is contests.
Every second brand seems to be running a contest to actively involve the
buyer in his brand. The prizes given out by companies in contests range
from gold, diamonds to cars, homes and free trips abroad. The companies
are tying up big celebs and running contests where the customer gets to
dine with his favourite star on winning the contest. Recently Axe for it’s
brand of deodorant ‘Vodoo’ actually booked a far away island in Kerela
and held the longest dance party. Customers had to correctly answer the
questions in the form placed in its pack to qualify for this party. Another
womens wear store ‘Scullers’ actually ran a competition for the women in
Bangalore where one could actually design a garment of their choice –
tops, trousers, capris, skirts and shorts - and have it hit the Scullers
Womens wear shelves. Infact a leading cosmetic company Lakme also ran
a similar promotion where customers could create a shade and give it the
name of their choice.
It is not only the customer who is being lured by such marketing
gimmicks. The companies are running extensive schemes for the dealers
too. Bell ceramics had recently organised a largest party in the ceramics
industry for their dealers at ‘Tikujini’s Wadi’, Thane. The dealers along
with their whole family were invited to this party. Apart from luscious
snacks there was a whole lot of entertainment activities like games,
competitions etc. for children.
But at the end of the day what emanates as the greatest question is, the
companies may have no doubt charged a premium for their products and
services earlier but how safe are they by indulging in such practices? Are
the companies really benefiting by sacrificing on their profit margins? Or is
it as one of a customer puts it “ They have been charging exorbitant
premiums earlier, its time they returned some”.-No one would know
except the horse himself
SUGGESTIONS
I would like to suggest few points over which a thought can be given
to overcome that drawback due to which some of the problems are faced
by the products of Lakme and Revelon Products.
1. Company should encourage solving the customer’s complaint.
Customer satisfaction should be the ultimate aim so that customer
complaints should be removal.
2. Promotion by local advertisement can also help in promoting Sales
of the products.
3. More promotional schemes should be introduced for customers.
4. Timely feedback should be taken so that all the problems can be
easily removed.
5. The company should provide good margin for distributorship.
FINDINGS
The products of Revlon Groups of Companies are the leading choice
in New Mumbai and it is far ahead from its competitors in terms of
customers. The products of Revlon Groups of Companies are preferred
because of its low price and easily available. While other branded
companies product are not preferred due to high price and brand loyalty.
The advantages which the products of Lakme Groups of Companies shares
over other branded companies products are as follows.
1. The products of Revlon Groups of Companies are preferred
because of its low price and easily available. While other branded
products are not preferred due to high price and brand loyalty.
2. The products of Lakme Groups of Companies are easily available
at easy payments and had a very good after sales retailer
services.
3. People who are more conscious about their health are more
aware about products and therefore prefer the products of
Revlon Groups of Companies.
4. Users of personnel & Health care products also generally prefer
for buying the products of Revlon Groups of Companies.
CONCLUSION
The overall average sales of Revlon Products are 54.9% in all
markets and Lakme Products are 45.1% in all markets.
The average sales in different markets are as follows :-
The average Sales Across East Mumbai markets are 50.2%
respectively.
The average Sales across West Mumbai markets are 48.9%
respectively.
The average sales across North Mumbai markets is 42.1%
respectively.
The average sales of Lakme & Revlon across South Mumbai markets
is 37.2 % respectively.
The figure reveal that Lakme & Revlon has good market penetration
in all most all the market covered in the survey where compared to
its competitions, Like HLL, NIVEA and Others.
Still there is a need to Promote Lakme to reach at the level of
product like ponds, pears etc.
“Monthly survey should be conducted to improve its brand image
and increase customer loyalty”.
BIBLIOGRAPHY
The essence of the report, are inspired and collected by these sources,
listed in this chapter, not fully but partially as advisory notes.
WEBSITES
www.lakmeindia.com
www.revlon.co.in