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DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

SABBAVARAM, VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE
Economic Analysis of Cosmetics

SUBJECT
Economics -I

NAME OF THE FACULTY

Prof. Abhishek Sinha

Name of the Candidate : R.Sowmya Reddy

Roll No : 2018LLB119
Semester: 2nd Semester
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ACKNOWLEDGEMENT

I would like to sincerely like to put forward my heartful appreciation to our respected
Economics Professor Abhishek Sinha for giving me this golden opportunity to take up this
project regarding “Cosmetics”. I have tried my best to collect information about the above
mentioned topic in various possible ways to depict a clear picture about the given topic project.
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TABLE OF CONTENTS
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INTRODUCTION

In 21st century, the winds of changes in the society are blowing forcefully in all parts of world
for application of cosmetic. Cosmetic word is originated from Greek word “Kosmeticos”
means adorn and preparation, which is used for this purpose, is known as cosmetic. We can
define the cosmetic as “Cosmetic are external preparation meant for to apply on external part
of the body i.e., nails, skin, hair for colouring, covering, softening, cleaning, nourishing,
waving, setting, mollification, preservation, removal and protection” etc. We can also define it
as “A cosmetic is an item intended to be rubbed, poured, sprinkled or sprayed on, introduced
in to or otherwise applied to the human body or any part thereof for cleansing, beautifying,
promoting attractiveness or altering the appearance”. All cosmetic preparation has their
application for long or short periods to beautify the body as well as to keep the body healthy
up to some extent and has psychological impact to other. The “active life” of any cosmetic
preparation begins the moment it is brought in contact with the skin/hair/teeth/or nails and ends
when it is removed or has evaporated. During it is active life; it has intimate reciprocal
relationship, which results, cosmetic changes on the body. The cosmetic product prevents its
outmost layer from drying out, penetrate below the external layer and introduce active
substances in to deep lying strata or adhere only superficially to change color or luster of areas.
The cosmetic which are used for decorative purposes, i.e., eye lines, rouges, mascara, face
masking preparations etc and also carries the inherent risk of desirable side effects. It may
inhibit important physiological process, chemically modify certain skin constituents (e.g., in
case of bleaching and colouring preparations), and contribute towards their removal or even
give rise to certain allergic reactions.

The world cosmetics:

The convergence in consumer habits when it comes to beauty products around world has
contributed to the growing demand of cosmetics. Cosmetics and perfume industry currently
generate an estimated turnover of US$ 250 billion. In order to consistently combine safety
requirements and client demand, this industry relies on continuous innovation and R&D
investment both for product manufacturing and for marketing. After Real estate, cars and
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tourism the beauty and cosmetic industry known as the 'beauty economy', has become the
fourth consumption zone. The world cosmetics and toiletries market recorded a strong growth,
passing fi-om 170 billion euros in 2001 to more than 250 billion euros in 2010, increasing at
an average of 5.5 per cent per year. This market has grown at an expected average rate of 3 per
cent per year.

The Indian cosmetics:

The Indian cosmetic market has outperformed world's leading cosmetic markets in terms of
growth in the recent past, it comprises of skin care, hair care, colour cosmetics, fragrances and
oral care categories. It has outperformed world's leading cosmetic markets in terms of growth
in the recent past. Today Indian colour cosmetics market stands at $113.4 million and skin care
at $346.9 million. The factors like influence of western culture and higher disposable income
have majorly conduced to the growth, and compensated the impact of economic slowdown.

Reasons for the growth of cosmetics industry in India

Taste and tradition of the middle class and higher strata of the society have changed due to
increasing awareness of the western world and beauty trends and higher paying jobs. As a result
woman from such social strata are now more conscious of their appearance and is willing to
spend extra money on enhancing it further. The change in cosmetic and skin care product
consumption is witnessed today due to rise in number of women, especially from the middle-
class population, having more disposable income. This actually has filled a growth in certain
product categories in the market that hardly was seen earlier. The colour cosmetics and sun
care products that have shown growth rates of 46% and 13% respectively over the past two
years. The main engine that fuels the demand for various cosmetics products in India is its
urban population. The crowning of three Indians as miss world and miss universe along with
the market liberalization process that began in 1991 have made Indian women conscious of
their appearance. Consequently, the cosmetic consumption patterns of Indian women have
changed and this trend is effecting growth in the cosmetic sector. The range of cosmetic and
beauty products in India has widened tremendously, with every passing year. Beauty product
manufacturers in India have mostly been catering to the great demand for cosmetics and
toiletries that fall into the low- or medium-priced categories as the greatest demand in India
always revolve around economically priced products. The sector has mainly been driven by
improved purchasing power and rising fashion consciousness of the Indian population.
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Furthermore, to increase consumer awareness the industry players are readily spending on the
promotional activities. The demand for cosmetics in India is increasing due to many reasons
like, growing awareness among Indian consumers, increased advertising in general and
increased organised retail outlets which provide opportunity for greater product choice and
availability. In addition, the winning of Indian contestants in several internal beauty pageants
in the last few years has made the Indian woman more conscious of their appearance and aware
of western cosmetic products and brands. The demand for professional beauty care products is
increasing due to the emerging Indian fashion industry and has also contributed to the rise in
demand for professional beauty care products. The Indian cosmetic market, which comprises
of skin care, hair care, colour cosmetics, fragrances and oral care categories, has outperformed
world's leading cosmetic markets in terms of growth in the recent past, although this industry
registered double-digit growth rate in recent past, the current penetration of cosmetics and
toiletry products still proves to be inadequate.

The willingness to spend more on personal care, consciousness about looks, promotions
targeting various consumer segments, increased media exposure and advertisements are some
reasons for trends in consumption and penetration of cosmetic products in India. The growth
trends of cosmetics industry is sending positive signals about the industry prospects.
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HERBAL COSMETICS

There is an extensive variety of the herbal cosmetics that are produced and commonly
used for daily purposes. Herbal cosmetics like herbal conditioner, herbal soaps, herbal face
wash, herbal shampoo, and many more are exceptionally acclaimed by the masses. The best
thing of the herbal cosmetics is that it is purely made by the herbs and shrubs. The natural
content in the herbs does not have any reactions on the human body; rather enhance the body
with, supplements and other helpful minerals. Herbal cosmetics are comprised of floras like
saffron (kesar), ashwagandha, sandal (chandan) and numerous increasingly that is expanded
with healthy nutrients and all the various essential components. It is evaluated that roughly 400
flavours are utilized far and wide, although only about 70 spices are officially recognized.
Herbs have variety of function such as food flavourings, cosmetics and medicine in the forms
of tea, tablet, capsule, tincture, cream, syrup and liquid. The worldwide herbal industry is
currently evaluated to be more than US$10 billion dollars and expanding at a rate of three to
four percent annually for reasons of increased consumption in processed foods and demand for
ethnic foods, natural fragrances, and innovation in beverage products. The biggest markets,
regarding of manufacturing and consumption are in Europe, followed by Asia.
Herbal medicines include herbs, herbal materials, herbal preparations and finished herbal
products. In some countries herbal medicines may contain, by tradition, natural organic or
inorganic active ingredients that are not of plant origin (e.g. animal and mineral materials).
Herbs include crude plant material, such as leaves, flowers, fruit, seeds, stems, wood, bark,
roots, rhizomes or other plant parts, which may be entire, fragmented or powdered. Herbal
materials include, in addition to herbs, fresh juices, gums, fixed oils, essential oils, resins and
dry powders of herbs. In some countries, these materials may be processed by various local
procedures, such as steaming, roasting or stir-baking with honey, alcoholic beverages or other
materials.
Herbal preparations are the basis for finished herbal, products and may include comminute
or powdered herbal materials, or extracts, tinctures and fatty oils of herbal materials. They are
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produced by extraction, fractionation, purification, concentration, or other physical or

biological processes. They also include preparations made by steeping or heating herbal
materials in alcoholic beverages and/or honey, or in other materials. Finished herbal products
consist of herbal preparations made from one or more herbs. If more than one herb is used, the
term “mixture herbal product” can also be used. Finished herbal products and mixture herbal
products may contain excipients in addition to the active ingredients. However, finished
products or mixture herbal products to which chemically defined active substances have been
added, including synthetic compounds and/or isolated constituents from herbal materials, are
not considered to be herbal.

ADVANTAGES OF HERBAL COSMETICS

Herbal cosmetics are the modern trend in the field of beauty and fashion. These agents are
gaining popularity as nowadays most women prefer natural products over chemicals for their
personal care to enhance their beauty as these products supply the body with nutrients and
enhance health and provide satisfaction as these are free from synthetic chemicals and have
relatively less side-effects compared to the synthetic cosmetics

Following are some of the advantages of using natural cosmetics which make them a better
choice over the synthetic ones:

Natural Products: The name itself suggests that herbal cosmetics are natural and free from all
the harmful synthetic chemicals which otherwise may prove to be toxic to the skin. Instead of
traditional synthetic products different plant parts and plant extracts are used in these
products, e.g. Aloe vera gel and coconut oil. They also consist of natural nutrients like Vitamin
E that keeps skin healthy, glowing and beautiful. For example, Aloe vera is a herbal plant
species belonging to Liliaceae family and is naturally and easily available. There are a rising
number of consumers concerned about ingredients such as synthetic chemicals, mineral oils
who demand more natural products with traceable and more natural ingredients, free from
harmful chemicals and with an emphasis on the properties of botanicals.
Safe to Use: Compared to other beauty products, natural cosmetics are safe to use. They are
hypo-allergenic and tested and proven by dermatologists to be safe to use anytime, anywhere.
Since they are made of natural ingredients, people don’t have to worry about getting skin rashes
or experience skin itchiness. Example - BHA (Butylated Hydroxy-anisole) and BHT (Butylated
Hydroxytoluene) are closely related synthetic antioxidants and are used as preservatives in
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lipsticks and moisturizers NBHA and BHT can induce allergic reactions in the skin. The
international Agency for Research on Cancer classifies BHA as a possible human carcinogen.
Herbal cosmetics contain natural antioxidants like Vitamin C.

Compatible with All Skin Types: Natural cosmetics are suitable for all skin types. No matter
if you are dark or fair, you will find natural cosmetics like foundation, eye shadow, and lipstick
which are appropriate irrespective of your skin tone. Women with oily or sensitive skin can
also use them and never have to worry about degrading their skin condition.
Coal tar derived colours are used extensively in cosmetics; coal tar is recognized as a human
carcinogen and the main concern with individual coal tar a colour (whether produced from coal
tar or synthetically) is they can cause cancer. But natural colours that are obtained from herbs
are safer.

Wide Selection to choose from: Natural cosmetics may still be a new type in the beauty
industry but they already offer a variety of beauty products for all make up crazy people out
there to choose from. One will find a variety of foundation, eye shadow, lipstick, blush,
mascara, concealer and many more which are all naturally formulated. Furthermore, one will
find locally made natural cosmetics or those made by famous designers worldwide. There exist
a large variety of herbal extracts, to name a few Andrographis
paniculata (Kalmegh), Asparagus racemosus (Shatawari), Boswellia serrata (Salai Guggal),
Asphalt (Shilajit) etc.

Fits Your Budget: Natural cosmetics are not that expensive. In fact, some of these products
are more affordable than synthetic ones. They are offered at discounted prices and are sold for
a cheap price during sales. Just need to survey enough to look for great deals. An estimate of
WHO demonstrates about 80 % of world population depends on natural products for their
health care, because of side effects inflicted and rising cost of modern medicine. World Health
Organization currently recommends and encourages traditional herbal cures in natural health
care programs as these drugs are easily available at low cost and are comparatively safe.

Not Tested on Animals: Some cosmetics are initially tested on animals to ensure that they are
safe and effective to use for human. However, natural cosmetics need not be tested on animals.
These natural formulations are tested by experts in laboratories using state of the art equipment
with no animals involved.
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No Side Effects: The synthetic beauty products can irritate your skin, and cause pimples. They
might block your pores and make your skin dry or oily. With natural cosmetics, one need not
worry about these. The natural ingredients used assure no side effects; one can apply them
anytime, anywhere. For example herbal cosmetics are free from parabens that are the most
widely used preservative in cosmetics and can penetrate the skin. And are suspected of
interfering with hormone function (endocrine disruption).

Regulatory Status: The legal difference between a cosmetic and a drug is determined by a
products intended use. Under present concept, the boundary at which a cosmetic product
becomes drug is not well-defined and different laws and regulations apply to each type of
product.
The drugs and cosmetic Act 1940 defines a drug and a cosmetic as; Drug- “All medicines for
internal or external use of human beings or animals and all substances intended to be used for;
or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in humans or
animals”.
Cosmetic- “Any article intended to be rubbed, poured, sprinkled or sprayed on or introduced
into or applied to any part of the human body for cleansing, beautifying, promoting
attractiveness or altering the appearance and includes any article intended for use as a
component of cosmetic”.
Some products meet the definitions of both cosmetics and drugs. This may happen when a
product has more than one intended uses. For example, a shampoo is a cosmetic because its
intended use is to clean the hair. An anti-dandruff shampoo is a drug because its intended use
is to treat dandruff. Among the cosmetic/drug combinations are toothpastes that contain
fluoride, deodorants that are antiperspirants and moisturizers with sun-protection claims. The
claims made about drugs are subject to detailed analysis by the Food and Drug Administration
(FDA) review and approval process, but cosmetics are not subject to mandatory FDA review.
Although there is no legal category called cosmeceuticals, the term has found application to
designate the products at the border line between cosmetics and pharmaceuticals.
Federal Food, Drug and Cosmetic Act do not recognize the term itself. It is also often difficult
for consumers to determine whether ‘claims’ about the actions or efficiency of cosmeceuticals
are valid unless the product has been approved by the FDA or equivalent agency. Some
countries have the classes of products that fall between the two categories of cosmetics and
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drugs: for example, Japan has ‘Quasi-drugs’; Thailand has ‘controlled cosmetics’ and Hong
Kong has ‘cosmetic-type drugs’. The regulations of cosmeceuticals have not been harmonized
between the USA, European, Asian and other countries.

DISADVANTAGES OF HERBAL COSMETICS

As herbal cosmetics are natural, the disadvantages will be less when compared to the
advantages of herbal cosmetics. But, Herbal cosmetics are not without disadvantages. These
are a few of the disadvantages to consider:

 Medication interactions: Herbal treatments can interact with medications. Nearly all
herbs come with some warning, and many, like the herbs used for anxiety such as
Valerian and St. John's Wort, can interact with prescription medication like
antidepressants. It's important to discuss your medications and herbal supplements with
your doctor to avoid dangerous interactions.
 Lack of regulation: Because herbal products are not tightly regulated, consumers also
run the risk of buying inferior quality herbs. The quality of herbal products may vary
among batches, brands or manufacturers. This can make it much more difficult to
prescribe the proper dose of an herb.
 Herbal drugs have slower effects when compared to allopathic dosage form. Also it
requires long term therapy.
 They are difficult to hide taste and odour.
 Manufacturing process are time consuming and complicated.
 No pharmacopoeia defines any specific procedure or ingredients to be used in any of
the herbal cosmetics.
 Herbal cosmetics can be harmful if consumed improperly or in excessive amounts.
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Product types

Cosmetics include skin-care creams, lotions, powder, perfumes, lipsticks, fingernail

and toe nail polish, eye and facial makeup, towelettes, permanent waves, coloured contact
lenses, hair colours, hair sprays and gels, deodorants, hand sanitizer, baby products, bath
oils, bubble baths, bath salts, butters and many other types of products. A subset of cosmetics
is called " make-up," which refers primarily to coloured products intended to alter
the user’s appearance. Many manufacturers distinguish between decorative cosmetics and care
cosmetics.

Most cosmetics are distinguished by the area of the body intended for application.

• Face Primer, Come in various formulas to suit individual skin concerns. Most are meant to
reduce the appearance of pore size, prolong the wear of makeup, and allow for a smoother
application of makeup. Applied before foundation.

• Eye Primer, Used to prolong the wear of eye shadows on the eye as well as intensify color
payoff from shadows.

• Lip gloss, is a sheer form of lipstick that is in a liquid form.

• Lipstick, lip gloss, lip liner, lip plumper, lip balm, lip conditioner, lip primer, and lip
boosters. Lip stains have a water or gel base and may contain alcohol to help the product stay
on the lips. The idea behind lip stains is to temporarily saturate the lips with a dye, rather than
covering them with a colored wax. Usually designed to be waterproof, the product may come
with an applicator brush or be applied with a finger.

• Concealer, makeup used to cover any imperfections of the skin. Concealer is often used for
any extra coverage needed to cover blemishes, or any other marks. Concealer is often thicker
and more solid than foundation, and provides longer lasting, and more detailed coverage. Some
formulations are meant only for the eye or only for the face.

• Foundation, used to smooth out the face and cover spots or uneven skin coloration. Usually a
liquid, cream, or powder, as well as most recently, a light and fluffy mousse, which provides
excellent coverage as well. Foundation primer can be applied before or after to get a smoother
finish. Some primers come in powder or liquid form to be applied before foundation as a base,
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while other primers come as a spray to be applied after you are finished to help make-up last
longer.

• Face powder, used to set the foundation, giving a matte finish, and also to conceal

small flaws or blemishes.

• Rouge, blush or blusher, cheek colouring used to bring out the colour in the cheeks and make
the cheekbones appear more defined. This comes in powder, cream, and liquid forms.

• Contour powder/creams, used to define the face. It can be used to give the illusion of a
slimmer face or to even modify a person’s face shape as desired. Usually a few shades darker
than one’s own skin tone and matte in finish to create the illusion of depth. A darker toned
foundation/concealer can be used instead to contour to create a more natural look.

• Highlight, used to draw attention to the high points of the face as well as to add glow to the
face. It comes in liquid, cream, and powder form. Often contains shimmer, but sometimes does
not. A lighter toned foundation/concealer can be used instead to highlight create a more natural
look.

• Bronzer, used to give skin a bit of colour by adding a golden or bronze glow. Can come in
either matte, semi matte/satin, or shimmer finishes. Mascara is used to darken, lengthen, and
thicken the eyelashes. It is available in natural colours such as brown and black, but also comes
in bolder colours such as blue, pink, or purple. There are many different formulas,
including waterproof for those prone to allergies or sudden tears. Often used after an eyelash
curler and mascara primer. There are now also many mascaras with certain components to help
lashes to grow longer and thicker. There are specific minerals and proteins that are combined
with the mascara that can benefit, as well as beautify.

For more than a century, Lakme has devoted itself solely to one business: beauty. It is a
business rich in meaning as it enables all individuals to express their personality gain self-
confidence itself and open up to others.

Reasons for the growth of cosmetics industry in India

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SWOT ANALYSIS OF LAKME

Strengths in the SWOT analysis of Lakme

1. High Brand awareness: Lakme is a well-known brand in the cosmetic & beauty
industry. High visibility through targeting high end beauty parlours/salons & also
through sponsoring fashion events and strong promotions has helped the company in making
top of mind awareness.

2. Fantastic product line: Lakme contributes to the beauty of women through a fantastic
product line, which has amazing depth of products. Lakme is also known to launch a variety
of cosmetics which are innovative and are known to solve the problem of cosmetics for
women.

3. Extensive distribution system of the parent company: HLL is the parent company who
purchased it from TATA group. Since HLL is already an established FMCG brand so it uses
extensive distribution channel to make the Lakme products available in the market. Also in
addition to traditional channel, it also uses unconventional distribution system to make the
products available at pharmacist, beauty parlors & salons.

4. Celebrity endorsement: Lakme positioned perfectly in the mind of prospective consumers

by targeting apt celebrities to represent their brand.

5. Strong parent company: HLL the parent company is the well-known company in the
FMCG industry has stable financial position which is good for its group brands.

Weeknesses in the SWOT analysis of Lakme

1. Limited presence in the premium market: Lakme have presence in the VFM (Value for
money) segment in which it is leader. Lakme is the overall market leader in the colour
cosmetic segment (lip care and nail enamel) with a wide range of products and prices but
when it comes to premium market which is growing at the rate of 30% Revlon is the market
leader.
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2. Problem of differentiation: Its broad portfolio sometimes creates confusion in the mind of
the consumers. Such that, some products are known to be very good but others are ignored
because no differentiation is present for them.

3. Quality of Lakme salons: Falling quality of Lakme salons will result in the negative word
of mouth which can affect sales & growth of the company in future.

Oppurtunities in the SWOT Analysis of Lakme

Changing Lifestyle: Migrating population & with the saturation of developed economics,
changing tastes & preferences, education & changing lifestyle of the developing economics
has resulted into growth in the grooming segment. People now want to look sharp, smart &
confident.

Growing premium segment : There is a growth in the demand of premium segment goods
of which grooming industry is not an exception. So with growing demand if Lakme extend its
presence in this segment then it will help it in becoming leader in grooming industry.

Co-creating the growth strategies: Creating more collaborative & participative community
focused activities will help the company in building brand image and co-operating growth
oppurtunities.

Threats in the SWOT Analysis of Lakme :

Intense rivalry: Intensive competition from the local, national and International players on
price & availability factors is the major threat for the players in the segment which is
affecting the industry as a whole.

Counterfeit product : Fake products are directly affecting the brand image of the company
in the rural market & small towns.

International brands extending into other market : International brands like Revlon which
have centuries of expertise in the Personal care industry can affect the business of Lakme in
the selected markets or can limit their growth rate.

Increasing allergies cases: Due to change in lifestyle skin is becoming more sensitive due to
which companies in the personal care industry face risk of losing sales on allergic grounds.
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In a recent interview, Alton Adams, a lead for customer strategy and growth with KPMG,
outlined five customer-based factors that are having an impact.

The Online Factor: “The Internet has put tremendous pressure on every category of
business,” Adams says. Whether it’s shaving products or deodorant, customers often want
products that can be sent directly to them, which means that personal care companies have to
make sure they can compete with prices online.

Environmental Impact: More and more shoppers are reading labels and thinking about the
environmental effect of the products they’re using. Which means that buzzwords like
“sustainable” and “organic” are growing in popularity.

The Ethical Component: Customers are also looking to make sure that products they use
were not tested on animals. “There is an awareness of that,” Adams says. “So a number of
manufacturers have already taken steps to change how they do business.”

Effectiveness: “Whether it’s a fragrance or skincare, it has to do what it’s advertised to do,”
Adams says. If not, customers can taint the brand with a bad review online.

Wellness: Customers are asking themselves: How are the products being manufactured?
What’s in the packaging? How will that impact them? From concerns about BPA to
phthalates, customers are looking to make sure products won’t adversely affect their health.
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COSMETICS PRODUCT MARKET

The global cosmetic market was valued at USD 532.43 billion in 2017, and is expected to reach
a market value of USD 805.61 billion by 2023, registering a CAGR of 7.14% during 2018-
2023. The scope of the report is limited to various products, like hair care, skin care, oral care,
colour cosmetic, fragrances, soaps and shower gels, and sun care products. The study also
emphasizes on various distribution channels, such as direct selling, supermarkets, specialty
stores, pharmacies, and salons. The cosmetics or beauty products industry, globally, is one
sector which remains impervious to the ups and downs. Overall sales are affected in the event
of an economic downturn. However, one can count on the sales of cosmetics to maintain a
certain volume overall. This is because of continuing and growing usage of products by
women, and increasingly by men across the world. Over the past two decades, declining
fertility and mortality rates have resulted in a rise in the aging population, globally. Strong
desire among men and women to retain youthful appearances has groomed and nurtured the
cosmetics industry, worldwide. Rapidly aging demographics has led to a robust demand for
anti-aging products in order to prevent wrinkles, age spots, dry skin, uneven skin tone, and
even hair damages, creating room for new innovations in cosmetics, thus boosting the industry
growth. By 2050, the population over 60 years of age is expected to reach 2.09 billion. The life
expectancy for women is predicted to rise from 82.8 years in 2005 to 86.3 years in 2050.
Whereas for men, the expected increase for men in the corresponding period is from 78.4 to
83.6 years. Notably, the share of elderly people for cosmetic products is on rise.

Key developments in the Cosmetic products market

 January 2018 - L’Oreal Paris unveiled a new hair care line to revive damaged hair,
Elvive. The collections within the Elvive hair care line are expected to be designed to
directly address a women's biggest hair care concerns: damaged, dry, and colour-treated
hair. The brand was launched as ‘Comeback,’ which was an integrated campaign that
celebrated the fact that hair can make a comeback from damage.
 September 2017 - Unilever acquired the Asian cosmetics firm Carver Korea. The
Anglo-Dutch company bought the entire business from Bain Capital Private Equity,
Goldman Sachs, and the firm’s founder, strengthening its foothold in the Asian beauty
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market. This acquisition is expected to strengthen the position of Unilever in South

Korea, which is fourth-largest cosmetics market.
 September 2017 - Procter & Gamble unveiled a USD 3 million quality control
laboratory, Pines External Lab located in Berkeley Springs, launched in joint
partnership with Morgan County and Blue Ridge Community & Technical College.
This center is said to be used to evaluate raw materials using resources, such as gas and
liquid chromatography, as well as in-process and end product samples. These tests are
expected to ensure P&G products contain no foreign micro-organisms.

Reasons to purchase Cosmetics product market report

 To know how the aging population acts as a driver for the global market scenario
 Analyzing various perspectives of the market with the help of Porter’s five forces
analysis
 The solutions and type of security that are expected to dominate the market
 Regions that are expected to witness fastest growth during the forecast period
 Identify the latest developments, market shares, and strategies employed by the major
market players.
 3 months analyst support, along with the Market Estimate sheet (in excel).

BENEFITS OF BECOMING LAKME FRANCHISE

There are various benefits to becoming a Lakme Franchise are as follows

 Lakme provides future owner with sustainable growth in the business model.
 Benefits of availing loan from private and public sector banks at attractive interest rates
to female entrepreneurs.
 Active support and guidance for Franchise startup for the Franchisee.
 Continuous Support in Business development, delivery of products to the customers
and marketing.
 Course design and delivery support.
 Academic and technical functions will be conducted under training.
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 Additionally, training will be covered in the areas such as project management, standard
operating procedure, and IT development.

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 at the end of the business cycle. It stipulates that
any business should be organized around the marketing functions, anticipating, stimulating and
meeting customer’s requirements. The customer, not the corporation has to be the centre of the
business universe. A business cannot be 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.

Lakme is the Indian Cosmetic brand owned by Hindustan Unilever Ltd. founded in 1952. The
brand Manufacture, Market and sell beauty and cosmetics products worldwide and is the
number one selling the cosmetic brand.The brand has been famous for its Lakmé Salon and
Lakmé Fashion Week events in the country which is helping the brand in increasing share of
heart & share of mind in the market. The beauty brand has been spreading awareness about
colour cosmetics & Skincare, products through Lakme beauty salon spread across the country.

The features of marketing concept are Consumer Orienation, Integrated Management Action
and Consumer Satisfaction.

Segmentation, targeting, positioning in the Marketing strategy of LAKME–

 Lakme has used customer groups such as individual customers and the professionals
through its network salon and the varied need of the customers in the areas of Beauty,
Haircare, Make-up, and skin care as a basis of segmentation.

 It has targeted to the young and upper and upper middle affluent class customers who
have enough disposable income and want to show off their beauty.

 The brand has been positioned as India’s largest or biggest beauty care and cosmetic
brand reaching out to nook and corner of the country.
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 Lakme is in business segments of Skincare, Make-up, Lakme salon along with the
online store.

 All the three business segments work in a collaborative manner to give the customer a
360-degree view of the beauty & wellbeing products. The segments help the customer
& company to co-create the offerings in the ecosystem herein the brand and the
customer or user learn and get benefitted with each other, all the strategic business
segments of the company are therefore are starred in the BCG Matrix.

The supply chain of the company hovers around quality, customer service, creating customer
delight, end-to-end quality focus, cost-saving programmes for customers and partnering with
suppliers. Inform of Lakme Lever Private Limited (LLPL), the Company has 360 salons, out
of which 60 salons are owned and managed by LLPL and 300 are franchised salons.
Additionally, brand Lakme market & distributes its offerings through the existing network of
the distribution of its parent company Unilever and e-commerce. LLP has manufacturing
facilities across the countries wherein Lakme products are manufactured but Unilever’s other
brand products like Dove are also produced through these facilities. Lakme highlights the
sensuality of the customers and gives them the medium to express their inner self and enabling
customers to realize who they are. Lakme beauty salon and Lakme fashion week show have
helped the brand in unleashing its true potential. In the brand trust report, the brand has been
ranked 36thin India most trusted brands list. The brand is the title sponsor of the event LFW
(Lakme fashion week) which is the bi-annual event in Mumbai.

Competitive analysis in the Marketing strategy of LAKME-

A rise of herbal and Ayush Ayurvedic products are turning out to be a major competitor of
beauty & cosmetics brand Lakme. Brand competes on the basis of the strong portfolio, deep
assortments within the products categories which give customers ample choice and options
within the brand and easy availability of the products through various mediums retail outlets,
e-commerce sites, and wholesalers. Additionally through Lakme fashion week brand has been
creating visibility and easy acceptability of the brand in the market. Lakme competes with
companies in the industry such as L’Oreal, The Body shop, Himalaya Herbals, Revlon,
and Ponds.

Market analysis in the Marketing strategy of LAKME-

With the migration of the people from villages, changing the lifestyle of the customers,
increase in hygiene, penetration of social & physical media channels in the remotest areas,
Customers are becoming more concerned about their looks and beauty. The brand has been
doing market penetration through teaching the customers the right kind of make-up through is
websites and the salons.
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Customer analysis in the Marketing strategy of LAKME–

The Beauty brand focusing on colour cosmetics and skin care has been extending its reach by
reaching the individual and professional salon or company-operated salon chains. In Retail
segments, it targets customer in the age group of 35-55 years who are the midst of their career
and want to look young either by colouring their white hairs or by using beauty & skin care
products. In business segment, it primarily serves Lakme Lever Private Limited, which is 100%
subsidiary of the company and have company-owned and franchised outlets.

COMPETITION

The Indian cosmetic market, which has been traditionally a stronghold of a few major Indian
players like Lakme, and Ponds has seen a lot of foreign entrants 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 and toiletries companies launched their
products in smaller pack sizes to make them more affordable. HLL 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. Stiff
competition in the cosmetics and toiletries market also saw an increase in the range of new
products being introduced for newer application concepts in the last few years. In the skin-care
segment, from just creams and moisturizers, there has been a upgrade to value-added products
such as under-eye wrinkle removing creams, dark circle removing creams toners, sunscreen
lotions, fairness creams, and many more. Beauty counsellors or advisors at retails outlets have
been very successful in gaining attention, creating product awareness and overcoming
consumers lack of familiarity with, and fears about many cosmetics and personal care products
such as home hair permanents and colour cosmetics. Some companies such as Lakme have
even set up exclusive Lakme beauty parlours at major cities in India through the franchisee
route . LOreal markets its range of specialized hair care products exclusively through salons
and beauty parlours. LOreal currently is the only company in the market that has a hair colour
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range tailored exclusively for parlours. A strong brand promotional campaign, good
distribution network, constant product innovation and quality improvement, and the ability to
provide a variety of quality products are some of the major reasons for the success of most
companies. HLL, is currently India& largest cosmetics and personal care products producer
and its brands has the dominant share (more than 50 percent) in segments such as personal
wash, skin care, shampoos, lipsticks and nailpolish.

RECOMMENDATIONS

 Promotions beyond fashion week

 The brand should not lose its focus away from cosmetics. It can be proved to very
detrimental.
 For vast reach unlikely, in the short-term. “Some sort of an alliance or co-branding with
the salons that already exist may, perhaps, have been a better strategy.
 The general perception is that company-owned salons are expensive.
 Though Lakme beauty salons are reasonably priced, it has not been communicated well
enough.
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CONCLUSION

Since the Null hypothesis is rejected therefore it states that the customers are not satisfied well
with the lakme products . This would be the major cause of lose of market share in the country.
Another reason is the upcoming of Regional brands in the country that is making lakme loose
its sheen. Therefore the company should take in strategic steps and planning to revive its brand
image accordingly. The local cosmetics and toiletries market is valued at approximately
RM3billion or about US$800 million, with a growth rate of 13% annually. It is estimated that
there are more than 60,000 types of cosmetic products in the local market. Imported products
from Thailand, the United States, France, Singapore and Japan dominate the market. The local
cosmetics and toiletries industry generally involves mixing and formulation processes, using
imported ingredients. Many of these companies are contract manufacturers, mainly for
products such as shampoo and conditioners, other hair care products, perfumes, and
cosmetics. Advertising and promotion is crucial for cosmetics and toiletries products, in order
to create an awareness of new products and build brand loyalty among
consumers. Advertisements in TV and the print media such as newspaper and magazines,
especially women’s magazines, are very common. Samples of toiletries products are
distributed to individual households and products in sachet form are attached to
magazines. Free gifts are given during promotion periods and are advertised in the local major
newspapers and on the web. According to the industry, the market is saturated with many
different types of products, and in the long run, established brands that emphasize quality and
service will have the edge.
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