Analyze Marketing Mix & their Affect on Profitability

Description
The main objective of this project report is to analyse 4 marketing mix(Product, place, price, promotion) and their profitability for two existing brands(Lakme and Maybelline) in cosmetics industry and hence come up with strategies for new product in the same industry.

4 P’s AND THEIR MANAGEMENT FOR PROFITABILITY
MARKETING RESEARCH PROJECT II

EXECUTIVE SUMMARY:The main objective behind this project is to analyse 4 marketing mix(Product, place, price, promotion) and their profitability for two existing brands(Lakme and Maybelline) in cosmetics industry and hence come up with strategies for new product in the same industry. The research was conducted in various malls in Pune and Symbiosis Infotech Campus, Hinjewadi to determine the psychographics, demographics, mediagraphics, behavioral patterns of consumers buying cosmetics and hence finding out the strategies for launching new product in the same industry.Based on the findings, the new product to be launched will be Naturecare brand using natural colours in cosmetics for sensitive skins. The marketing mix of the new product(brand) is determined in this project.

Contents
Introduction .................................................................................................................................................. 5 Long-Term Marketing Strategies .............................................................................................................. 5 Short-Term Marketing Strategies ............................................................................................................. 5 Blended Marketing Strategies .................................................................................................................. 6 RESEARCH OBJECTIVES:- ............................................................................................................................... 6 PRIMARY RESEARCH OBJECTIVE:- ............................................................................................................. 6 SECONDARY RESEARCH OBJECTIVES:- ..................................................................................................... 6 METHODOLOGY AND LIMITATIONS:- ........................................................................................................... 6 METHODOLOGY ........................................................................................................................................ 6 Limitations: ............................................................................................................................................... 7 RESEARCH FINDINGS:- .................................................................................................................................. 7 Product Mix of Lakme and Maybelline ..................................................................................................... 9 Lakme Product Mix:- ............................................................................................................................. 9 Maybelline Product mix :- ................................................................................................................... 10 Distribution:- ........................................................................................................................................... 12 For Maybelline:- .................................................................................................................................. 12 Distribution of Lakme:......................................................................................................................... 13 For Lakme:- ......................................................................................................................................... 15 PROMOTION:- ......................................................................................................................................... 16 FOR MAYBELLINE:- .............................................................................................................................. 16 Promotion of Lakme: .......................................................................................................................... 20 STRATEGIES FOR NEW PRODUCT BASED ON PRIMARY RESEARCH FINDINGS:- ..................................... 21 NEW PRODUCT:- ..................................................................................................................................... 25 PRICE:- ..................................................................................................................................................... 25 Place:-...................................................................................................................................................... 25 PROMOTION:- ......................................................................................................................................... 28 RECOMMENDATIONS:- ............................................................................................................................... 29 APPENDIX:- .................................................................................................................................................. 30 APPENDIX 1:- ........................................................................................................................................... 30

APPENDIX 2:- ........................................................................................................................................... 34 APPENDIX 3:- ........................................................................................................................................... 36

Introduction
The marketing mix is a combination of promotions, products, places (distribution channels), and prices you choose for products, services, and the overall business. It is important to strike a balance between those four "Ps". By including both short- and long-term marketing strategies of each, you can create an even more profitable marketing mix.

Long-Term Marketing Strategies
Long-term strategies build brand and company awareness, and give sales revenue a gradual, permanent boost. Some of the benefits are indirect and cannot always be directly associated with profit. For this reason, long-term strategies can be difficult to execute when the focus is short-term. Branding activities (Promotion) High profile activities and general-purpose advertising contribute to your company's image by building familiarity and trust. This, in turn, can create customer loyalty. Successful branding can have a large impact on market share, but is a gradual process so cannot always be definitively measured. Industry relationships (Place / Distribution) Building healthy relationships with distributors and others involved in the industry puts you in a position to know about new opportunities and potential problems as they occur. Long term, this improves the flow of product from you to your customers and creates new distribution channels. Giving (Promotion) Donating money, services, and time can build a positive image with customers and employees. Over time, this increases a company's trustworthiness. When they see you consistently giving something back to the community, they are more confident you will take the same care with them. Research and development (Product) A new product pipeline and research are short-term expenses, but represent future sales. Conduct research with customers (or potential target markets) and design products to meet their needs. This ensures future growth.

Short-Term Marketing Strategies
Short-term strategies create immediate revenue. Sales and accounting people often prefer these to long-term approaches because the results are direct and quantifiable. The disadvantage of relying strictly on short-term approaches is the effect is temporary. They tend to be limited-time techniques that do not work well over time. Some examples ...

Reduced price sales. (Price) Sales encourage customers to act. Holding a sale will give customers who have been "meaning to buy" an incentive to do so, resulting in a revenue boost. Frequent sales can erode profit over time as customers become "trained" to wait for a sale instead of buying at full price. Group discounts and offers. This is a good way to introduce your products or services to a new set of customers, or give important groups a permanent discount. Carefully evaluate long-term impact, however. Over time, the gain in sales may not offset the cost of continual price reductions.

Blended Marketing Strategies
Some marketing strategies have both long- and short- term benefits. Pay per click (PPC) advertising, for example, is a way to communicate temporary price reductions or highlight a promotion. PPC can also build long-term brand awareness, however, as you expose more people to a Website. Together, long- and short-term marketing programs help achieve immediate sales goals while building business reputation and goodwill. Implement both and your business will prosper for years to come.

RESEARCH OBJECTIVES:PRIMARY RESEARCH OBJECTIVE:To determine the profitable marketing mix of the new product to be launched in cosmetic industry.

SECONDARY RESEARCH OBJECTIVES:? To determine right product to be launched in the cosmetics industry by analyzing the current product line of Lakme and Maybelline. ? To determine right distribution channels for the product to be launched in the cosmetics industry by analyzing the current distribution channels of Lakme and Maybelline. ? To determine right price for the product to be launched in the cosmetics industry by analyzing the current pricing strategies of Lakme and Maybelline. ? To determine right promotion strategies for the product to be launched in the cosmetics industry by analyzing the current promotion strategies of Lakme and Maybelline.

METHODOLOGY AND LIMITATIONS:METHODOLOGY
? Data Collection Methods:

After collecting secondary data from internet reports and syndicated services, data was collected using
exploratory research and primary data collection methods.

?

Measurement Techniques:

The following measurement techniques were used: 1) Questionnaire - Exploratory Questionnaire - Open ended - Recruitment Questionnaire - Main Questionnaire - Close ended (Multiple choice / Dichotomous)

? Sampling Techniques: The sampling technique which was used is judgemental Sampling with a sample size of 50 respondents. ? Analysis Techniques:

The research was conducted at various malls in Pune and at SIC campus. The sample size was 50 respondents and sample frame consisted of women of age group 18-50. The data was collected

through questionnaire and focussed group discussions. Ladering was also used to find out the psychographics.

Limitations:
1) 2) The data collected and analyzed was only from Pune, India. Hence the research findings may not be applicable everywhere. The data collected is analyzed qualitatively rather than quantitatively. Hence is prone to the biases of the researchers.

RESEARCH FINDINGS:In today’s growing markets there is a huge competition to survive. Producers come up with similar kind of products which are very close substitutes for each other. With the emergence of online stores like ebay, amazon etc..The consumer is more aware of the product and can compare various products and their features in a matter of seconds. Hence the marketer needs to come up with innovative products with novel and useful features, well ahead of the competitors. But this new product can be easily imitated by competitors and they often come up with improved versions of these new products within no time of release of the new product. If we want to differentiate our product and sustain it for a long time, we need to manage our innovation as well. Hence the below formula: Ordinary Product + Added Value = Increased Profits How to add value to your products?

We conducted a Focussed Group Discussion to identify the various methods in which a manufacturer and service provider can add value to the product. At the end of this group discussion, we have come to the following conclusions: 1) Product innovations like Parachute 2) Entirely new product like an i-pod 3) Novel product with a different use like Krack cream 4) New uses of the old product 5) More usages of the product 6) Employee innovations 7) Comparison with competitors. 8) Product warranties and guarantees. After the discussion, we decided to use 7th strategy—comparison with competitors to analyze how the marketing mix of new entrant in cosmetics industry should be vis-à-vis marketing mix of Lakme and Maybelline. We used ladering technique with 50 respondents to find out level of association of cosmetics in their mind and got the following results:First Level of association ? COLOR ? RADIANCE Second Level of Association ? ATTITUDE ? CARE Using these results we defined any product in category cosmetics as follows:-

CORE BENEFITS(look good, feel good) BASIC PRODUCT(good color, radiance) EXPECTED PRODUCT(alluring color,attractive and appreciated) AUGMENTED PRODUCT(styllis h packaging) POTENTIAL PRODUCT(social identity and social esteem)

Product Mix of Lakme and Maybelline:
Lakme Product Mix:-

FACE:- Foundation, concealer, powder, blush LIPS:-Lip color, lip gloss, lip liner EYES:-Mascara, Brow and liner, Eye shadow NAIL COLOR The skin care range of Lakme is divided into the following categories:

1) Sunexpert: The sunexpert range of products are for use to protect the skin from the sun. The SPF ranges are 15,20 and 30. Lakme was the first Indian company to introduce a sunscreen in the Indian market. Hence it has the first mover’s advantage. Added by its brand value Lakme enjoys a high amount of consumer loyalty.

2) Matteffect: This range of products is for people with oily skin. The range has a cleanser, toner and mattefier which is specially for the oily skin.

3) Pure Defence: This is a newly launched range of products. The product is for protection of skin from pollution. 4) Cleansing: Apart from the above ranges, Lakme has a range of cleansers, toners and moisturizers. Various cleanser variants like strawberry and deep pore cleansing milk are for various groups of customers. 5) Toning: Like in cleansers toners also come in different varients. 6) Moisturizing: We have Lakme peach milk moisturizer, winter care moisturizer, strawberry moisturizer and intense care moisturizer varients. Over all Lakme has been using the above strategies that have come out in the focus group discussions. Maybelline Product mix :-

The Beauty Products of Maybelline range from eye makeup to lip colors and skin tone enhancer. The Skincare Products of Maybelline promises to offer a flawless non makeup look.

FACE:- Foundation, concealer, powder, blush LIPS:-Lip color, lip gloss, lip liner EYES:-Mascara, Brow and liner, Eye shadow NAIL COLOR Maybelline’s skin care products can be categorized as given below:Mabelline offer a wide range of products, foundation, concealer, powder, blush, and bronzer. Foundation: So many ways to get even. Choose from liquids, creams, mousse and powder foundations for beautiful skin. Concealer: Send your imperfections under cover with our range of concealers. Powders: Our powders are poised to give you a fresh, natural-looking finish. Blush: Blush beautifully with our silky-soft cheek color. Bronzer: Safer, faster, better than the sun. Sweep on a natural-looking "tan." Research and Development Activities: Lakme and Maybelline, both have sophisticated research and development wings working full time to bring out new products. Both the brands are rated high on innovation. All the above activities add to the product range of Lakme and Maybelline. Thus the product adds to the profitability.

Distribution:For Maybelline:PURCHASING/

SUPPLY
•RAW MATERIALS •PACKAGING •POS/PROMO •FACILITIES AND EQUIPMENTS •INDIRECT PURCHASING •OUTSOURCING PARTNERSHIPS

PRODUCTION OF FINISHED GOODS • 40 L’OREAL FACTORIES e.g. CHAKAN(PUNE) 94% OF THE FINISHED GOODS

DISTRIBUTION •L’OREAL WAREHOUSES(70)

SALES •HYPER/SUPER MARKETS •INDEPENDENT PERFUME SHOPS •DEPARTMENT STORES •SPECIALTY STORES •BEAUTY SALONS •PHARMACIES •LOCAL CONVINIENCE STORES •DISTANCE SELLING

SUB-CONTRACTORS6% OF FINISHED GOODS •L’OREAL DISTRIBUTORS



Loreal has 40 factories all over the world out of which 94% are own factories and rest 6% of the production is done by sub-contractors e.g. there is a factory in Chakan in Pune. These factories take raw materials from purchasers and after making the finished goods send them to Loreal warehouses which are 70 in number all over the world. Then the goods are passed on to Loreal distributors which pass on the products to :HYPER/SUPER MARKETS INDEPENDENT COSMETICS SHOPS DEPARTMENT STORES SPECIALTY STORES BEAUTY SALONS PHARMACIES LOCAL CONVINIENCE STORES

• • • • • • •



DISTANCE SELLING

Distribution of Lakme:
? Distribution system’s focus to enable easy access to their brands, touch consumers with a threeway convergence - of product availability, brand communication, and higher levels of brand experience. ? The most obvious function of providing the logistics support to get the company’s product to the end customer. ? Another established role is that of financing. The channel partners are expected to extend credit to the next level of customers. Some channel members however also receive credit and the net credit extended is minimal. ? The most neglected role of the channel is information flow – ? ? ? 1. outward flow - about the company offerings 2. inward flow about customer’s needs. However most channel members are reluctant to part with information on customers fearing disintermediation. Thereby a very vital input to a company’s responsiveness is lost.

? Value added services that supplemented the company’s effort – such as local sales,repairs, promotion, repacking, minor customisation, etc. ? HUL is using the point of purchase method for much higher level of direct contact, through instore facilitators, sampling, education and experience. ? It has developed customer management and supply chain capabilities for partnering emerging self-service stores and supermarkets. ? 2,000 suppliers and 7,500 distributors serve HLL’s 100 factories which are decentralized across 2 million square miles of territory Distribution at Supermarkets ? HUL has set up a full-scale sales organisation, for this channel to serve modern retailing outlets. ? Product tests and in-store sampling is provided to consumers. Hindustan Unilever is simultaneously creating new channels, designed on the same principle of holistic contact with consumers.

? Project Shakti, HLL's partnership with Self Help Groups of rural women, is becoming an
extended arm of the company's operation in rural hinterlands. Started in 2001, Project Shakti has already been extended to about 50,000 villages in 12 states - Andhra Pradesh, Karnataka,

Gujarat, Madhya Pradesh, Tamil Nadu, Chattisgarh, Uttar Pradesh, Orissa, Punjab, Rajasthan, Maharashtra and West Bengal. The respective state governments and several NGOs are actively involved in the initiative. The SHGs have chosen to partner with HLL as a business venture, armed with training from HLL and support from government agencies concerned and NGOs. Hindustan Lever Network (HLN) is the company's arm in the Direct Selling channel, one of the fastest growing in India today. It already has about 3.5 lakh consultants - all independent entrepreneurs, trained and guided by HLN's expert managers. HLN has already spread to over 1500 towns and cities, covering 80% of the urban population, backed by 42 offices and 240 service centres across the country. It presents a range of customised offerings in Home & Personal Care and Foods. Out-of-Home consumption of products and services is a growing opportunity in India, as elsewhere in the world. Hindustan Lever is already the largest player in the hot beverages outof-home segment, with over 15000 tea and coffee vending points. The company is expanding the network aggressively, in the education, entertainment, leisure and travel segments. HLL's allaince with Pepsi will significantly strengthen this channel. Health & Beauty Services are Hindustan Lever's simultaneous foray to meet the increasing consumer need for such products and services. Lakme Salons provide specialised beauty services and solutions, under the recognised authority of the Lakme brand. The Ayush Therapy Centres provide easy access to authentic Ayurvedic treatments and products.

PRICE:BRAND POSITIONING MATRIX:-

Maybelline’s cosmetics are mass products for youth hence they are positioned for youth and mid-price segment. Lakme’s cosmetics are for both youth and mature women and comes in mass mid price segment.

For Lakme:‘The mass market for lipsticks (price range between Rs 30 to Rs 100) forms 43 per cent of the total lipsticks market. The price range below Rs 30 forms roughly 48 per cent of the market. The mass premium segment (price range Rs 100 plus) is just nine per cent of the total lipsticks market, where Revlon has a market share of 80 per cent, according to ORG, with the balance held by Chambor and Lakme's Orchid.’ Lakme’s product range consists of the Elle range (priced at around Rs 30) and the medium-priced Ultra range (at around Rs 60) to the premium Orchid range of colour cosmetics priced in the range of Rs 120 to Rs 187. LAKME 1. LIPSTICKS 85/2. NAIL ENAMEL 48/3. LIQUID LIP COLORS 145/4. LIP LINERS 32/5. COMPACT 51 & 155/6. FOUNDATIONS 52,55,59/7. REMOVER 27.50/8. EYELINERS 39/9. MASCARA 95/10. FACE POWDER 22/11. KAJAL 24/12. EYE PENCIL 12/13. BLUSHERS 95/14. EYE SHADOWS 95/MAYBELLINE 1. MOISTURE WHIP LIPSTICKS 99/109/2. NON-TRANSFER LIPSTICKS 209/219/3. ULTIMATE WEAR NAIL ENAMEL 59/4. NON-TRANSFER LIP LINERS 179/5. NON-TRANSFER EYE LINERS 179/6. CURL MASCARA 99/7. WONDER CURL MASCARA 159/8.EASY EYE LINING PEN 159/9.EXPRESS MAKE-UP 3 IN 1 STICK 299/10.SHINE-FREE FOUNDATION 169/The impact of the price keeping low and hence sales can be seen on the sales growth for Maybelline as follows:-

PROMOTION:FOR MAYBELLINE:? Promotion1: ? Special promotional events ? Coupons ? Sweepstakes ? Promotion2: ? Online advertising ? Glamourmagazine.com ? Getlippy.com ? Msn.co.uk ? MySpace profile ? Promotion3: ? Co – Marketing :

? Apple ? MTV ? Promotion4: ? Co – Marketing : ? Sponsor for Fashion show ? Wedding Essentials Magazine ? Promotion5: ? Advertising

? Promotion6: ? Advertising ? Fashion Icon as Spokespersons ? Olympic gold medalists

? Slogan & Jingle ? Eyes that glow with enchantment ? Lipstick: The sidewalk is your catwalk ? Maybe she’s born with it. Maybe it’s Maybelline ? Promotion 7: ? Free makeup consulting

? Promotion 8: ? Upgrading the brand image ? Redesign of product Packaging: ? Promotion 9: ? Upgrading the brand image ? social service ? Provide scholarship

? Promotion 10: ? Holding contest and providing scholarship

Because of huge promotion and discounts provided results are as follows which led to increase in profitability.

Promotion of Lakme: Lakme uses the below strategies to promote its brand among its prospective customers Price off Premium (free gift) Discount Coupons / Free Samples Bonus Pack Gift Packs : Lakme has an all in one gift pack which has the following items in it: ? One Lakme Lipstick. ? ? One Lakme Nail Polish. One Lakme Eyeliner.

? One Lakme Kajal. ? One Lakme Strawberry Face Wash 50 gms. ? One Lakme Radient Rose Powder. ? One Lakme Nail Enamel Remover. ? One Lakme Strawberry Silk Cream 50 gms. ? One Lakme Deep Pore Cleansing Milk 120 ml. ? One Lakme Shampoo

These gift packs are good choices for gifting to young women. Apart from the above Lakme organizes a Fashion week to promote its brand. Lakme Fashion Week: Lakme Fashion Week (LFW) is a joint initiative between Lakme, the leading cosmetics brand and a pillar of the fashion industry in India, and IMG, the global leader in fashion weeks and event production. LFW has been conceived and created with an aim to integrate India into the global fashion world. LFW will be organised twice every year. The inaugural Fall/Winter Week was held from March- April 1, 2006 at the National Centre for Performing Arts (NCPA), Mumbai and the Spring/Summer Week in September-October 2006. Earlier Lakme was the Title Sponsor of the India Fashion Week, organised by FDCI (Fashion Design Council of India). In 2006, Lakme's six year contract with FDCI ended, emerging their own fashion week in Mumbai. New initiatives like 'Emerging Designer Category' and 'GenNext' were unveiled for the first time in India at the inaugural Lakme Fashion Week 2006 with an aim to provide a platform for promising young talent to establish themselves across India. Both Lakme and IMG have been pivotal for the success of the Lakme India Fashion Week over the last six years.

STRATEGIES FOR NEW PRODUCT BASED ON PRIMARY RESEARCH FINDINGS:? As large as 62% of the population using cosmetics is single working women,33% of the women using cosmetics were single not working i.e. students and rest are married working women.

Single Married Not Working working 5% 33% Single Working 62%

? 83% of the sample used Lakme products and 52% of them used Maybelline products.

USERS OF LAKME
OTHERS 17%

USERS OF MAYBELLINE

LAKME 83%

Yes 52%

No 48%

? Respondents associated cosmetics with these words :-

Naughty/Fli Innovative rty 5% 13% Sexy 9% Glamorous 13% Cool 13%

Classy/ Sophisticat ed 11% Chic/Urban 16%

Young 20%

? If new brand/product is introduced in cosmetics, in age group<=25, a whopping 53% were willing to try it but in age>25 only 38% respondents were willing to try it.

Can'Age Group <= 25 t say 19% Yes 53% No 28%

Can't say 8%

Age Group > 25
NO 54%

Yes 38%

? Majority of the respondents in our sample said that they use cosmetics once a day.

COSMETICS USAGE FREQUENCY
30 25 20 15 10 5 0

? Majority of the respondents buy cosmetics from malls and exclusive beauty stores.

PLACE OF PURCHASE
DUTY FREE ONLINE DRUGSTORE EXCLUSIVE… MALL ABROAD 0 10 20 30

? Majority of the respondents watched music channels and read fashion magazines.

Choice of Television channels

Choice of magazines
Reader's Digest Women's Magazines Educational Magazines Film Magazines Fashion Magazines Business Magazines
30
0 5 10 15 20

Movie… Hindi soaps English… Music… Educatio… Fashion… News…
0 10 20

? 75% of the respondents said that price matters to them when they buy cosmetics. For 90% of the respondents longevity mattered. For 98% of the respondents sensitivity of skin mattered and for 60% respondents environmental friendly packaging affected their purchasing decision while buying cosmetics. For 53% of the respondents ambience at buying place also mattered.

NEW PRODUCT:Majority of the women using cosmetics are working women and are very particular about the effects of chemicals on their skin. Ladering also found second level of association to be care. Moreover currently no brand in the market offers cosmetics which have natural ingredients and are made specifically for sensitive skin. Hence we proposed either a new product line( brand: Naturecare) in skin care products in cosmetics with natural colors in it for women of the age group 16-30 or high end products with exciters like personal care, customization and counselling. We narrowed these concepts down by conducting a focused group discussion in SIC, Hinjewadi. The group selected natural colors concept. Packaging:-As packaging matters a lot when colour is a key selling point, we will be providing transparent packaging made out of recyclable paper, aluminium, paperboard and glass. Teens have smaller hands so products will be scaled for them to hold packages comfortably. As majority of the respondents are single working women hence products need to be easy to carry. Inside the lid we will keep some famous women’s quotes to accentuate their femininity.

PRICE:As price is a determining factor for women it will be medium priced for masses above the range of Lakme’s and Maybelline’s products.

Place:Our new product would be test marketed in Nature market , such as North America and Europe and then introduced in developing countries. Target Audience :DEMOGRAPHICS Region: Mumbai and Delhi, India Occupation: Students and Professionals Income: 600,000 p.a. + Education: Graduates, Post-graduates, professionals Sex: Female Religion: Insignificant Social class: Middle and Upper Family life cycle: Young, single

PSYCHOGRAPHICS Lifestyle: She’s the new age generation, fashion conscious and takes care of her image. Cosmetics are a feel good factor for her, which she showcases. She keeps up with the trends and has her hand on the pulse of what is in vogue. She’s a conformist looking for a unique twist, with a subtle narcissism about her. BEHAVORIAL Product Occasions: Going out (college, office, party etc.) User status: Regular Readiness Stage: Informed Attitude toward product: Essential part of daily accessories Brand Occasions: Would-be regular user as above Benefits: Enhances beauty, Unique colors, Highest quality ingredients, Environment friendly packaging User status: Current young consumers of medium priced older brands Loyalty status: None Readiness Stage: Inquisitive (may recognise brand from international communications) Attitude toward product: Enthusiastic, positive

· She is the kind of woman who loves life · She is positive in her attitude towards life · She has an individual point of view and will act according to her whims · She is well groomed · She shops with her friends · She shops for pleasure and on impulse · Dressing up is a part of her normal routine · She works hard but parties harder · She is well travelled and is aware of the international brands · She is very quality conscious · She is class conscious · She is looking for variety more than anything else · She needs to be made to feel special & unique · She needs to be flattered and valued · She wants to be seen at all the best places in town · She eats at the best restaurants and parties at the best night clubs · She is a regular party person · She reads magazines like ELLE, COSMOPOLITAN etc · She knows what she wants in life and knows she will get it eventually · She is a fulfilled person

Distribution in India will start with test marketing in some malls in Delhi and Mumbai. Product afterwards will be available in the following places:• • • • • • • • HYPER/SUPER MARKETS INDEPENDENT COSMETICS SHOPS DEPARTMENT STORES SPECIALTY STORES BEAUTY SALONS PHARMACIES LOCAL CONVINIENCE STORES and through DISTANCE SELLING

Each of our salons will have a computerized machine where we can change the color of an existing shade as per the customer’s requirement and show them a sample of the new shade. The improvised product will be delivered to them within 3 days. Creating a positive buying environment sets the stage for the sale. The buying environment affects the customer’s experience in the business. Our outlets will have an environment where customers are not intimidated. It will be a ‘fun’, friendly place that makes customers want to hang out. The buying environment will be deliberate and consistent. The customer’s experience will be much the same from visit to visit. A customer can visit multiple locations and have largely the same experience. Our staff at points of purchase shall all be given product and make-up training, which is of utmost importance as it allows them to understand and promote the product effectively. All the counters of “Naturecare” will have colourful natural background. Our salespeople too shall be dressed in uniforms with a visible touch of nature’s care. They shall of course be wearing the products as it helps to demonstrate the effect the cosmetics can have and validates the cosmetics in the customer’s eyes. For this purpose, we shall also present the other sales staff at our non-exclusive outlets like Shoppers’ Stop with out products as this will generate an enthusiasm within them and also encourage them to promote our brand. We keep a record of what we have done with every client and usually they will end up buying our makeup. Our sales effort will be based on a more personalised approach. In this case, the client may not have made a commitment to buying makeup the first visit, but having makeup applied professionally often turns a prospect into a client. We use suggestive selling without being pushy, helping our clients with what they are looking for. If our staff is not able to close the sale, they inform the prospect of our sampling program that allows the client to sample the products at home before making their purchase. We also ensure that we maintain a comprehensive database of our clients and contact them every now and then with follow-ups and information regarding any product innovations or introductions.

PROMOTION:Communication Objective The promotion has to initially highlight Naturecare as skin-friendly brand. This will generate brand equity and trust in the products, which will serve to initiate trial. Brand recall should be instant when the consumer sees the brand at the outlet. The communication will focus on the positioning of Naturecare as an aspirational brand. Communication Medium and Style We will attempt to bring about endorsee-type status in India through promotional channels, which we will decide upon in consultation with a branding agency. We are currently thinking along the lines of activities like product placement, make-up shows on television or columns in print. Pre launch PR will start a month prior to the launch. We will have articles and press releases educating the consumers about Naturecare and its benefits vis-à-vis other brands. We will also give them an introduction to the services that we are offering. We shall send direct mailers to our potential clients and regular consumers. We will also have a launch party where some celebrity will officially launch the brand in Bombay. Invitees will include a host of people from the fashion industry, the entertainment industry as well as the press. The event itself will be covered apart from fashion magazines in newspapers such as the Bombay Times. This will help in associating the brand with the celebrities that come for the launch. Our advertising is going to be restricted to print and select hoardings. We will advertise in the elite women’s magazines Cosmopolitan, Elle, Gurlz, and Femina. Prospecting for customers will occur outside of the business as well. Fashion shows and beauty events are venues where we will showcase our makeup and attract potential clients. Point of Purchase Our sales force is going to consist of freshly graduated smart young girls keeping in mind our brand image. They will go through a rigorous training program. They will be taught firstly how to groom themselves and then how to groom others. We feel that this is one area where not enough attention is paid. As mentioned above we are going to have free testing for our clients and give free makeovers. We will have a trained staff make house calls and other direct marketing strategies. We will also have a team specialized in doing bridal make up. While we subscribe to the philosophy that ‘salespeople put products on the shelves and advertising takes them off’, we lay strong emphasis to an effectively trained sales force, as elaborated in the place (distribution) mix. Advertising, in the initial period especially, should generate a ‘pull’, but due to fierce

competition in the category and the nature of the purchase process, it is essential that there is a positive sales-force ‘push’. By maintaining a top-notch sales force and placing our employees at point of purchase venues, we also hope to – 1. Increase stock position – Persuasive sales representatives can influence dealers to increase stock or devote more shelf space to the company’s brand. 2. Enthusiasm building – Persuasive sales representatives build dealer enthusiasm for a new product by dramatizing the planned advertising and sales promotion back-up Revlon, for instance, spends most of its promotional money on advertising, while Avon relies more on personal selling. Since our promotion objective is not comprehension but buyer conviction, personal selling is seen as a more effective means of promotion. During the launch period however, heavy advertising will be undertaken to generate brand awareness and familiarity.

RECOMMENDATIONS:Based on the findings of the research, we recommend new entrant in the Indian cosmetics industry should innaugrate products with natural colors, personalized, available at all stores and medium priced. The promotion should be done using celebrity endorsements and fashion magazines.

APPENDIX:APPENDIX 1:-

Final Questionnaire
Age: Marital Status: If married, number of children? Annual household income: Education: Place of residence: Profession: Professional/Self employed/Housewife/Student: If you are earning, how much is your take home salary? Do you stay in a joint Family/ nuclear family:

Questions which can have more than one option are marked by (*)

1. Do you like to shop? -Yes -No 2. How often do you go shopping? -regularly -sometimes -rarely 3. Divide 100 points in accordance to the frequency at which they are bought? Clothes Accessories(shoes,belts,earnings) Books, magazines Cosmetics( lip stick, Lip gloss) Decorative items( crockery, crystals) 4. Do you use cosmetics? -Yes -No

5. What are the kinds of cosmetics that you use?

6. What are the cosmetics brands that you are aware of? 7. Which brands of cosmetics do you use?

8. What are the various products of Maybelline and Lakme that you are aware of?

9. Write down a word which describes cosmetics the best. 10. How often do you use cosmetics? -many times a day -once a day -often -occasionally 11. What are the special occasions on which use of cosmetics is indispensible? (*) -social functions(weddings etc) -professional parties -outing with friends -dinner with boyfriend/husband 12. What attributes do you look for while buying cosmetics? (*) -Radiance -Price -Colour -Brand -Endorsement -longevity -Sensitivity of skin -Environmental friendly packaging -Ambience at buying place

13. Where do you like to buy cosmetics from?(*) -Malls -Exclusive cosmetic store

-Drugstores -Abroad -Online 14. What are the newspapers that you read? (*) -Times of India -Hindu -Hindustan Times 15. What are the channels that you watch?(*) -News channels -Discovery/NatGeo -Star World/Zee Café -Star Movies/ HBO -Zoom/F TV -Star Plus/ Zee TV -MTV/Channel V 16. How often do you listen to radio? -all the time -often -rarely -never 17. What are the magazines that you read?(*) -Business magazines -Nat Geo -Femina/Elle/Vogue/Cosmopolitan -Stardust/Filmfare -Women’s Era -Reader Digest 18. Answer on the following 7 point scale: 1.Strongly agree 2.Moderately agree 3.Mildly Agree 4.Neither agree nor disagree 5.Moderately disagree 6.Mildly disagree 7.Strongly disagree -I use cosmetics because they make me feel good -I use cosmetics as they accentuate my feminism

-I use perfumes because they make me feel confident about myself -I feel that international brands are more classy than Indian brands -I would prefer if an international celebrity would endorse my perfume. -Cosmetics are very arousing and sexy -The choice of cosmetics reflects an individual’s personality. -I like experimenting with brands -I’m not loyal to my brands of cosmetics.

19. If introduced, are you willing to buy a new product(brand) in cosmetics?

20.What add on feature/characteristics would you like to have in the new product?

APPENDIX 2:FOCUSSED GROUP DISCUSSION 1:Focus group discussion on how companies can add value to their product / service. We have conducted a focus group discussion with an eight member panel on how marketers can add value to their products. PROFILE OF THE GROUP:Sex: insignificant Age : 22-27 Education: MBA in marketing Family life cycle: Young singles Religion: insignificant Region: Insignificant

M- Moderator- Amit T – Minutes Documenter- Deepthi Arumalla R1 – Respondent 1 – Hirachna R2 –Respondent 2 – Preeti R3 – Respondent 3 – Pahi R4 – Respondent 4 – Dipti Date R5 – Respondent 5 – Priyanka R6- Respondent 6- Prachitosh R7- Respondent 7 –Vishal R8 – Respondent 8 –Harsh

M- Welcome dear members. We are here today to discuss on how a manufacturer/ service provider can add value to his/ her product in a competitive market with many similar products. Let us start the discussion by asking ourselves the first question

1) What are the ways in which a manufacturer or service providers add value to a product?

R1 : Manufacturers and service providers can add value to their product by INNOVATION. They need to come up with new product ideas which will make the customer buy their product by giving it a preference over the competitor’s product. For example, let us examine Marico which sells coconut oil. The oil is same. Local millers might be able to provide the customers with the same coconut oil at lower prices. Still Marico succeeded because it delivered the value of PURITY to the customers. Parachute coconut oil is pure and the smell of it is very fresh and pure that a customer who buys the product ones would stick to the same product. By innovating on a value called purity, parachute was able to stand its competitors.

R2: Manufacturers can come out with new products. Like Paras has come up with krack cream. Instead of launching another fainess cream and giving direct competition to fair and lovely or other such products, Paras pharmaceuticals had targeted the same customers with a different product. They targeted the cracks of the feet rather than the color of the skin. They have been very successful R3: Coming uo with newer technology: For example, Apple has come up with a i-pod which is an entirely new concept. No one knew about an i-pod before. With its first mover’s advantage, Apple’s i-pods are the most sought after in the market even when there are other i-pods available from its competitors. R4 : By giving employees freedom to think like google, companies can create valued products like orkut. This social networking site is an idea of an employee of google. Google gives its employees the freedom to takeup their own projects. The time of work on these new projects can be till 50% or so of the entire employee work. Hence there have been many new products from google which are a huge success. R5: Companies can add value to their product by coming up new ways of using the same product. For example, Maggi tomato sauce came up with new uses of sauce, used with the general Indian dishes like rotis, idlies etc. This has increased the usage of the product and hence the sales of the sauce has gone up. R6: In that case, encouraging the customers to use more of the product will also help to increase the sales. We need to show the customers the advantage of using the product more. For example, Pepsodent recommends its users to brush teeth twice daily. This will help increase the sales of the product as the consumers use more. R7: Shampoo companies also use a similar strategy. They encourage their customers to use shampoo twice a week to boost their sales. M: Using more of a product can increase the sale of the entire product manufacturers. We need to concentrate on how a specific product from a specific manufacturer can be sold more.

R8: A company needs to critically analyze its products with respect to its competitor’s products. If there are any lacunae in its product, the same need to be addressed. Defect less products and product warranties and guarantees can add value to a product. M: Do you think there are any other ways in which a company can add value to its products? R3: I think we have discussed many possibilities. R5: True, maybe we need to conclude the session. M: ladies and gentlemen, thank you for your cooperation and positive contribution. At the end of this group discussion, we have come to the following conclusions: 1. 2. 3. 4. 5. 6. 7. 8. Product innovations like Parachute Entirely new product like an i-pod Novel product with a different use like Krack cream New uses of the old product More usages of the product Employee innovations Comparison with competitors Product warranties and guarantees.

Thank you all once again for the contribution.

APPENDIX 3:FGD 2:After analyzing the data sheets of the questionnaires distributed amongst respondents, we came up with two product ideas based on their answers. The following are the concepts: Concept 1: Lakme Cosmetics with natural colors Environmental friendly packaging Medium price range (vis-a-vis current offerings) Available in all stores Good ambience Concept 2: Lakme High end cosmetics Price range – above average (vis-a-vis current offerings) Available in select stores Customized Personal attention in stores Counseling for grooming tips and choice of cosmetics

Recruitment Questionnaire: The previous questionnaire was used to select the respondents. Profile of the group: Sex: female Age : 22-27 Family income: 20,000 + per month Education: Graduate / post-graduate professionals Family life cycle: Young singles Religion: insignificant Region: Insignificant These respondents use cosmetics regularly and shop regularly for them. They have variety seeking buying behavior for cosmetics M- Moderator- Dimple Bhat T – Minutes Documenter- Deepthi Arumalla R1 – Respondent 1 – Sonia Sachdeva R2 –Respondent 2 – Shruti Jayaprakash R3 – Respondent 3 – Indira Pandian R4 – Respondent 4 – Pooja Mukherjee R5 – Respondent 5 – Disha Mukherjee R6- Respondent 6- Hazel Gulati R7- Respondent 7 – Michelle George R8 – Respondent 8 – Yosha Misra M- Welcome dear members. We are here today to discuss on what customers like yourself look for in skin products and which factors matter the most to you. Let us start the discussion … Could you please introduce yourself to the team? R1 : I am a graduate with no work experience. R2: I am an engineer with a year of experience. R3: I am an engineer with two years of experience. R4 : I am an engineer with two years of experience. R5: I am an engineer with no work experience. R6: I am an engineer with one year of experience. R7: I am a graduate with three years of work experience. R8: I am a graduate with no work experience. What features do you expect in your cosmetics? R1: I like variety in color R2: I like cosmetics which are suitable to my skin type R3: It should have mild, sexy fragrance R4: it should make me feel good R5: The product should not have side effects

R6: My product will be smooth on skin R7: It should hide imperfections of the face R8: It should have highest quality ingredients and should be fairly priced. M: Do you look at the ingredients while buying the product? R8: I have idea about the quality of ingredients they use. Hene I look for them in the product. M: Do you have any previous experience of cosmetics manufacturing? R8: No. My knowledge is gained purely by experience and I often search online if an ingredient is good or not M: What sites would you look at? R8: I read reviews at random sites, most often ebay and mouthshut.com M: If you were to describe lakme as an individual, how would you describe the person? Will it be a man or a woman, age group, dressing style, attitude in a group, approachability etc.. R1: Lakme is a young woman. May be of the age of 25-35. She can be versatile. She is dressed in western outfit. She will have an attitude but friendly. She is not original M : Do you like to be her friend? R1: Yes. I would like to be her friend R2: Lakme is a middle aged woman in Indianized western outfit R3: She is approachable R4: I would like to be her friend M: We have two product concepts here. Which of these concepts would you buy more? R1: I like the natural colors concept. I think there are no products at present that are available at affordable prices and are natural. R2: The availability of concept 1 is good. The ambience of shopping if good will definitely be preferred over the first concept. R3: I feel the concept 2 is better. I don’t know if natural colors and cosmetics work. Moreover, all shades of colors are not available in natural colors. M: All the general shades of colors are available in the natural colors category. R6: I commonly use only general colors. For other colors I look at expensive brands R7: Moreover for daily usage I think concept 1 is more attractive than concept 2. We can’t spend more for a daily usage cosmetic. It should be within the given price range. R5: I like the concept1 but it would have been better if customization was there in this concept.

M: Ladies, thank you for joining us and giving us your valuable suggestions.



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