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