Term Paper

OnLAUNCHING OF LUX FACE WASH

(With reference to course, MARKETING MANAGEMENT, MGT 514)

Submitted to: Submitted by:

Dr. GIRISH TANEJA RAJIV GUPTA

ROLL NO: B34

SEC: RR1902

REG NO: 10901946

ACKNOWLEGEMENT

First of all we would like to thank Lovely Professional University

and take the opportunity to do this project as a part of the M.B.A.

Many people have influenced the shape and content of this project,

and many supported me through it. I express my sincere gratitude

Dr .GIRISH TANEJA sir for assigning me a project on LAUNCHING

OF LUX FACE WASH which is an interesting and exhaustive subject.

He has been an inspirational and role model for this topic. His

guidance and active support has made it possible to complete the

assignment.

I would also like to thank my friends who have helped and

encouraged me throughout the working of this project.

Last but not the least I would like to thank the Almighty for always

helping me

RAJIV GUPTA

Index

Company profileBusiness MissionMarket ObjectiveSituation Analysis

SWOT AnalysisMarketing StrategyMarketing MixImplementation, Evaluation and ControlConclusion

LUX

Company Profile

Since 1929, Lux in step with the changing trends and evolving beauty needs of the consumers, offers an exciting range of soaps and Body Washes with unique elements to make bathing time more pleasurable. One can choose from a range of skincare benefits like firming, fairness and moisturising.

Lux stands for the promise of beauty and glamour as one of India's most trusted personal care brands. Lux Believes in passion for beauty .It continues to be a favourite with generations of users for the experience of a sensuous and luxurious bath. Lux believes that femininity shouldn’t be denied. Since its launch in India in the year 1929, Lux has offered a range of soaps in different sensuous colours and world class fragrances. Lux is a beauty soap of film stars; Lux recognized the need for a compelling message about beauty that would resonate with women of today.

How it all started 

Lux was first introduced as toilet soap in 1925. Produced by Lever Brothers, it arrived in the UK in 1928, offering people a chance to pamper themselves for a modest price.

From the 1930s right through to the 1970s, Lux soap colours and packaging were altered several times to reflect fashion trends. In 1958 five colours made up the range: pink, white, blue, green and yellow. People enjoyed matching their soap with their bathroom colours.

In the early 1990s, Lux responded to the growing trend away from traditional soap bars by launching its own range of shower gels, liquid soaps and moisturising bars. Lux beauty facial wash, Lux beauty bath and Lux beauty shower were launched in 1992.

The name Lux means ‘light’ in Latin; however the name was chosen for its play on the word ‘luxury’.

Business Mission

Lux is a leading toiletry brand of Unilever round the globe. With its un matched quality and affordable price, the company is able to maintain its top position in cosmetic industry. Lux is committed towards providing a good experience to its customers with its long lasting fragrance and freshness. Now the company’s mission is to launch a new product under its brand name i.e. LUX FACE WASH for its urban and semi- urban female customers of age group 15-35. Primarily the company will focus only on the female customers rather than for both the genders.

1. The company will launch the face wash in three categories:

For normal skin

For oily skin and

For dry skin

2. The company will also launch the face wash with different ingredients like with lemon extracts with aloe vera extracts and honey extracts etc.

Lux mission is to capture the Indian face wash market share by more than 18% in the next 3 years by using its quality and pricing strategy. As the company is coming up with a new product, it can become a brand leader in that product category in the years to come.

The company’s ultimate mission is to provide a good quality face wash to its target customers with a fairly competitive price than its competitors. The company is already famous for its soaps, shampoos, shower gels and other cosmetic items. These products are purchased by the people of almost all income class. So if the company is charging high price for its face wash then it will dilute its previous strategy of providing quality product at an affordable price besides it will not be affordable by lower income class people. But in the market, face wash are available from the price range of Rs. 60-300 which is for both low income class people and high income class people. Lux’s mission is to come up with a price that can satisfy the need of both types of customers with maintaining its brand value.

Besides the company also aims at making the face wash easily available to its target customers by its efficient distribution channel.

MARKETING OBJECTIVE

1. The company’s marketing objective is to capture the 18% of the face wash market in coming 3 years.

2. The company aims at establishing itself as a brand leader in the product category.

3. The company would also like in creating a brand positioning in the mind of the customers.

In order to accomplish these objectives the company has to provide the additional benefit than that of its competitors.

Lux is already a reliable brand among the people but that does not guarantee the success of the new launch face wash. It has to be up to the mark and must be competent with the products of the competitors in both the terms i.e. quality and price.

Objective Metric: Capture 18% of the face wash market share in three years

Lux is having a good brand positioning in the mind of customers as its product like soaps, shampoos, shower gels etc have already created a strong brand image in the mind of customers and it also have a good market share in these product category but in order to capture the market by its new launch face wash, Lux has to come up with new ideas.

Objective Metric: Enter the rural market post three years of the launch.

The company after analysing the situation of its face wash in the urban and semi urban market in the three years from its launch, it will enter in the rural market creating the value of its product among the rural market.

Situation analysis

Trends

In a market where social acceptance and self-denial were the biggest barriers to acceptance of cosmetics in India, Lux was the first brand that took the onus of educating the Indian woman and breaking her myths about beauty and beauty products. In 1981, Lux launched an ad campaign to help the Indian woman discover not just the fine art of makeup but also the beauty that she possessed.

They use fair degree of all the communication vehicles across the board be it print, television or radio, along with fashion events like Lux India Fashion Week where the communication strategy is quite aggressive.

Industry Analysis

Our country India, with a people of more than billion, is a country of dissimilarity. Our country’s urban or metropolitan populace is the major source for demand of several beauty products. The more cosmetic utilization by Indian women brought more competitors to Indian beauty sector. Despite market crash, India remains one of the rapidly developing cosmetic markets around the world, growing rate at 13% per year and worth at $6.3 billion. As the middle-class customer base, the market is touching closely four times sooner than the $52 billion worth of established cosmetic markets and two times as fast as the $270 billion worldwide market, according to new report by marketing research organization Kline & Co. Presently, the market is bringing in cosmetics in addition to toiletries and transitional raw resources value of $120 million. The beautification market currently having $60 million of the total market, at the same time as skin care market having around $180 millions.

The Indian beautification sector has witnessed fast development in the recent two years, increasing at a Compound Annual Growth Rate(CAGR) of about 7.5% between 2006 to 2008,with recovering buying ability and growing fashion realization, the market is expected to continue the growth drive (with addition of subsidiary slowdown due to financial slowdown) during our prediction era (2009-2012). It is planned to develop at a CAGR of about 7% during the estimated era, says "Indian Cosmetic Sector Analysis (2009-2012)", a new research details by RNCOS, In future Indian cosmetic market segments are expected to record CAGR of just about 13% and 20% correspondingly till 2012.

According to growth rate, the market provides wide opportunities to local and global players. Even with two times growth rate, the market penetration of beautification products and toiletries products in our country is low. This low market penetration for beautification and personal care commodities in India gives an opportunity for additional important growth down the road in India of

1.2 billion populations.

Competitors

Competitors of Lux like Ponds, L’Oreal, Garnier and Lakme etc are competing at the upper (premium) segment while Ayur, Clean and Clear, Himalaya etc are competing at the lower segment. Besides these there are also other small players dominating the rural market where these big players are not able to reach.

The companies like L’Oreal, Garnier, Ponds, Lakme have very strong brand positioning. It will not be that easy for Lux to enter the target market of these companies.

But since Lux is already a established brand so, it will not be that difficult for the company to create its dominance in the lower market segment. The company can also use its wide distribution channel to reach the market where the other players lack.

Customer Profile

Lux will basically focus on the urban and semi- urban women of age group15-35. This will include all the females from students to house wives to working women. The company will primarily focus only on the female customer rather than the male customers in its initial years. Since the students and house wives cannot afford the premium segment product, Lux will target them as it main customer in the initial year of its launch.

SWOT Analysis

The Strength, Weakness, Opportunity and Threat (SWOT) analysis provides a snapshot of Lux’s internal strength and weakness and external opportunities and threats.

Strengths

Strong market research (Door to door sampling – once in a year – Rural and Urban area.)

Many variants (Almond oil, Orchid extracts, Milk cream, Fruit extracts, Saffron sandalwood oil and Honey)

Strong sales and distribution network backed by HUL

Strong brand image

Dynamically continuous innovations – New variants and innovative promotions (22 carat gold coin promotion – “Chance Hai”)

Strong brand promotion but relatively lower prices – Winning combination.

Mass appeal/Market presence across all segments ( 15% of soap market)

Weakness

Mainly positioned as beauty soap targeted towards women, lack unisex appeal

Some variation like the sunscreen, international variant did not do well in the market

Not much popular in rural areas

Opportunities

Soap industry is growing by 10% in India Beauty segments compounded annual growth rate (CAGR) is very high

Liquid body wash is currently in growth stage – Lux should come out with more variants in this segment

Large market share – Strong hold over the market

Threats

High internal competition (Pears – Beauty segment) New entrants

Maturity stage – threat of slipping down to decline stage – if constant reinvention is not carried out

Marketing Strategy

Target Market Strategy

Lux Company’s sales plan is based on the company’s understanding of the market place and how it will influence the already occupied customers. The company will primarily focus on the urban and semi-urban female customer during the initial stage of its launch. Gradually it will also reach the rural market through its effective distribution channel.

POSITIONING STATEMENT

We all like to look gorgeous and enjoy that confidence which makes us feel like anything’s possible. And that's just what the Lux range offers you on a daily basis – at a price you can afford. This is the positioning statement of Lux which is based on the quality and affordability.

SEGMENTATION

Geographic

Area: Metropolitan cities and town

Company will target metropolitan cities and town because of population, consumer knowledge about the product is considerable and towns are upcoming business places.

Behavioral

Occasions: Going out regularly (schools, college and job holders) User status: Regular usage Attitude towards the product: Necessary part of everyday make up.

Benefits: Maintains freshness, develops beauty, increase confidence, good quality ingredients, atmosphere friendly packaging.

Demographics

Age: 15 to 35

They targeted age 15 to 35, because they are the all time customers the cosmetic industry

Education: Students or graduates.

Students and graduates have more knowledge about the product.

Sex: female.

Product was launched only for female.

Occupation: students and working women

Company has targeted students and working women, because basically Lux Company basically wants to cover students and working women.

Life cycle: young, single and married.

When it comes to Life Cycle Stage Company targeted to young, single and married, because they have more influence to buy the products.

Social class: Middle and lower class people

People have enough money to afford the product.

Marketing Mix

Product

Product Category:

Core benefit: Core benefit of LUX FACE WASH is easy to use, feel fresh for the longer time, improves the confidence.

Expected product: The longer lasting experience

Augmented product: By introducing some kind of fragrance in the face wash and making the skin glow and shine which when compared with competitor’s product, definitely it will exceed customer expectations.

Potential product: Introducing the face wash for different skin types, like for dry skin, oily skin and for rough skin.

Product Classification

According to durability and tangibility products, Lux face wash can be classified into nondurable goods, because women will purchase face wash frequently and use it through few uses.

When we classify according to consumer – good classification, Lux face wash comes under convenience goods, because people buy the face wash with minimum effort. And we can say that Lux face wash is staple goods, because consumer buys face wash on a regular basis.

Product Differentiation

Form: By offering the Lux face wash in various size and shape to attract customers and giving more choices for customer. Give products in more variety like face wash with honey extracts, lemon extracts, aloe vera etc.

Features: We can differentiate the product through features of the product by giving more features to customers like fragrance, long lasting experience, shine on the skin etc.

Product- Line Length

Upper Market Stretch: Lux face wash is initially launched for the middle income class customers. The company can come up with some other face wash product to cover the upper class of market.

Price

Setting the Price

Selecting the prices: Company’s pricing strategy should be according to the strategy of its competitors.

Promotional Pricing: Lux can use promotional pricing strategy like discounted price at special events like women day, valentine day for college students.

Responding to Customer’s Pricing: The major competitors are Lakme, Ayur, Ponds etc. if the competitors changes the price means the company has to analyze the market situation and why the competitor changed the price according to competitor’s price to sell the product.

Differentiated Price: Lux company can offer time pricing like special discounts on occasions and image pricing. They can set the price according to the quality and quantity of the product.

Promotion

Advertising and Sales Promotion

Advertising

Lux uses various medium to sell the products. Mediums are television, magazines, events and internet. Lux organizes fashion event in that event, company advertise their products. In television media, lux advertise as commercial for lux in that, company advertises their products. Lux also releases magazines there also they are promoting their products.

Lux sponsors the event film fare award, fashion week. Hence in those event film stars and models are participating and from that company easily gets promotion of their products.

Internet medium

The company has its own website for the promotion of its product in the global market.

Sales Promotion

Lux offers sales promotion to increase the sales for particular time period. Company offers rebates and discounts on the specific products which have low sales volume.

Brand Ambassador

Lux has bollywood actress as a brand ambassador like Aishwarya Rai at present. Earlier they were Hema Malini, Rekha etc.

Place

There is a significant change in market distributional channel of cosmetic products.

Distribution places are:

Super market Shopping malls Departmental stores

These stores are opening their shops in smaller towns and cities and these shops offer extensive range of products and frequently promotional offers.

Other places for distribution are:

Drug stores Cosmetic soaps Beauty saloons Retail stores

Lux is an important toiletry brand of HUL. HUL having 3000 distributors around the country is a very strong distribution channel in India.

Implementation, Evaluation and Control

Marketing Research

The company will identify the specific features and benefits the target market segment value. The company will also take feedback from the market, conduct surveys and focus groups which will help the company to come up with further innovative product.

Lux Company will also measure and analyze the customer’s attitude towards competing brand and products.

With Brand awareness Lux will determine the effectiveness and efficiency of the message and media.

Finally Lux will use customer satisfaction studies to gauge market reaction.

Organizing Structure and Plan:

The organization structure of the Lux will be like this-

There is a Chairman in the upper part of the organization who will take decision and pass them to the lower part of the organization.

There is a Chief Marketing Officer who will handle overall responsibility for all of the company marketing activities.

There are Board of Directors in the company that will handle the problems of their clients and pass the problem to the chairman of the company.

There is a Financial Manager who will handle all the problems related with the money. He will give the details of all the expenditures, revenue and losses to the upper part of the organization.

Financial Projections

Objective Metric: Sales of Rs. 200, 00000 be the end of first year and sales of Rs. 400, 00000 by the end of the second year. The gross will be margin higher than 60% and positive cash flow yearly.

The five year financial projection of the company is as follows:

Rs. In Crore

Revenues 1st year 2nd year 3rd year 4th year 5th yearFace wash 2 4 5 5 5.5

Implementation Timetable

First year

The company will take over the urban and semi-urban market.

Second year

The company will enter the rural market.

Third year

The company will enter the premium market segment.

Summary

The face wash is the product of Lux which is well known brand in the cosmetic market. The product is designed to enhance the beauty of the teenage and career oriented females. As such it is created clear position in the market, this shows that Lux has clearly understand its customers and has delivered differentiated product range to meet consumer needs and wants. To introduce the new range to market, Lux face wash put well plan marketing mix, with the scope of changing according to consumer behavior and market scenario. The marketing mix is the balanced combination of 4p’s. Lux face wash has a lot of scope to change and transform their product for better result, to face the challenge.