1. NCRD’S Sterling Institute of Management Studies
An innovative approach to increase
BRAND VALUE OF LAKME PRODUCT
Submitted to:
Prof. D.R.KAMRAJ
Submitted by:
DEEPAK R GORAD
ROLL NO.- C-9:
2. Emerging Trends At Present
0
5
10
15
20
25
30
35
2005 2015 2025
AggregateDisposable
Income
(Trillion,INR)
Globals (>1000)
Strivers (500-1000)
Seekers (200-500)
Aspirers (90-200)
Deprived (<90)
Rising Disposable Income
0
20
40
60
80
100
120
1995 2005 2015 2025
ShareofAvg.HouseholdConsumption
(%,Thousand,INR)
Health Care
Education &
Recreation
Communication
Transportation
Personal Products &
Services
Household Products
Housing & Utilities
Apparel
Food, Beverages &
Tobacco
Shift in India’s Wallet Share
Best in Class
International
Quality Offerings
Shift in Wallet
Share
Largest
Youth
Population
Proliferation of
Media
Attention to Grooming &
Looking Good
RISING
CONSUMERISM
IN INDIA
Dedicated
Shows, Events,
Celebrity
Association
SOURCE : Mckinsey Global Institute
3. Expected Growth Potential For Segments &
Sub Segments In Wellness Space
Slimming Centres
Salons
Spas
Alternative Treatments
Ayurvedic Treatment
Centres
Non Surgical Cosmetic
Procedures
Gyms
Alternative Medicines
Ayurvedic Medicines &
Products
Cosmetic Surgery
Cosmetics & Fragrances Skin & Hair Care
Products
Treatment Based
Beauty Products
Dietary Supplements
Health Food
& Drinks
0
5
10
15
20
25
30
35
40
0 1000 2000 3000 4000 5000 6000 7000
GrowthRate(%)-Till2012
Approximate Market Share as of 2009 ( Crs, INR)
Double Digit Growth Segments driven
by increasing Consumer Awareness
and demand for such types of
Services
4. Course of Action for targeting Lower LSM
LSM 8 +
LSM 12+
CUSTOMER BASE PYRAMID
( Actual & Potential )
x
10 x
Below LSM 8
POA FRAMEWORK
Metrics for Success Measurement
Promotional Strategies
Customer Service Proposition
Training & Development Module
Choice of Location for Setup of Salon
Choice of Business Establishment & Expansion Model
Choice of Brand Elements & Vertical Extension of Brand
LAKME
Identification of Key Drivers for Footfall Improvement
HUGE
Business
Opportunity
5. Association of LAKME with
Brand Imagery Statements
(N = 60)
NON - USERS USERS
(N = 72)
75%
73%
68%
66%
57%
55%
52%
52%
52%
47%
43%
40%
37%
26%
26%
9%
3%
Popular brand
Premium brand
Most associated with females
Best known for skin care/ hygiene
I would NOT recommend this brand…
Brand leader
For young people
Gives me a perfect look for an…
Up market and stylish brand
Best understands Indian environment
Brand I love
Value for money
Unique offerings
Offers best hair care & styling…
Offers one stop solution
For someone like me
Brand for old people
84%
76%
76%
75%
74%
73%
73%
70%
67%
66%
64%
62%
59%
35%
30%
15%
10%
Popular brand
Premium brand
Most associated with females
Best known for skin care/ hygiene
Brand I love
For young people
For someone like me
Up market and stylish brand
Brand leader
Gives me a perfect look for an…
Value for money
Best understands Indian environment
Offers best hair care & styling services
Unique offerings
Offers one stop solution
I would NOT recommend this brand…
Brand for old people
6. Brand Personality & Positioning of LAKME
LAKME : Unique Combination of Local Roots with Global Scale
Beautiful ,Confident and
Independent Women
On top of the world
Source of Radiant Beauty
Beauty Expert of Indian Women
Trendy and Stylish complete Range
of products for Skin and Beauty
Care
On the JENNIFER AAKER BRAND PERSONALITY CHART ,
Lakme’s Brand Personality comes out to be that of an
‘Exciting’, ‘Competent’ and ‘Sophisticated’ Person
EXCITING
COMPETENT
SOPHISTI -
-CATED
Daring and Spirited Brand, most
of the products are trendsetters
and the Brand has lived up to its
position as Market Leader
Reliable & Intelligent, has never
compromised on quality thereby
THE Brand Indian Women trust
for their skin
Portrayal of Indian Women in
Lakme Ads is that of an Upper
Class charming girl who is
Smart, Confident & Independent
8. LAKME NEXT – The Concept
Vertical extension of the ‘Lakme’ Brand
Positioning in line with Image of Lakme – Premium Brand delivering Trendy
and Quality services at Economical Cost
Salons to offer Basic In-Demand Services (Both Skin & Hair)
Cost saving through Lower Training Cost, Lower Investments (Tier II & Tier II
cities), Lower Infrastructure Requirements
Lakme
Next
Lakme
Salon
Lakme
Studio
TARGET SEGMENT :
-Premium Class
- SEC A1, A2
- 16 to 25 year old
women
TARGET SEGMENT :
- Upper Middle
Income Class
- SEC A2, B1
- 16 to 25 year old
women
TARGET SEGMENT :
- Lower Middle Income Class
- SEC B2, C1
- 16 to 25 year old
women ( Student &
Working class)
9.
10. Business Establishment & Expansion Model
for LAKME NEXT
STRATEGY :
Operations via COCO Model in Short Term & HYBRID Model in Long Term ( Economies of Scale & Economies of Skill)
Parameter COCO Model Franchise Model
Setup Cost
High Capital
Requirement
Low
Operational
Cost
Upfront Costs &
Ongoing Costs
Cost incurred on
Training
Cost incurred on
Training
No Product or
Inventory Holding
Cost
Growth
Progress
High Investments
involved in
expanding reach
Rapid Expansion
Greater Spread
Return on
Investment
(ROI)
Lower due to High
Capital Investment
Higher ( Royalty to
the extent of 10-
15%)
Reach to TG
Lower due to
limited Operational
Spread
Better Proximity to
Potential Users
Profit Gain Higher Profit Margin
Lower Absolute
Profit per Franchise
Greater
Cumulative Profit
Hypothetical Profit Margin Model ( COCO Vs Franchise)
Rs in Thousands Assumptions Involved COCO Model Franchise Model
Sales/Revenue
Generated Avg. Annual Footfall : 12000 3000000 600000
Bill Generated Per Customer :
250
( Commission on
Sales)
Revenue through
Brand Fee 0 100000
Revenue via Sales to
Franchise
SP lower than MRP offered to
Franchise 0 200000
Variable Cost
Products Cost
Mfg. Cost (COCO),
Sales(Franchise) 360000 0
Includes Equipment & Beauty
Product Cost
Maintenance Cost 20 % of Rent 120000 0
Training Cost
Incurred only by COCO (5000
per Employee) 10000 0
10 Employees trained every 6
Months
Advertising Cost
Brand Fee received from
Franchise 100000 60000
Fixed Cost
Salaries
10 Employees Overall, 9000 per
Month 108000 0
Rent Rs 100 per sq ft monthly 600000 0
Total 1298000 60000
Profit 1702000 540000
After taking Taxation into account Profit Margin for COCO : 30-40% , Profit Margin for
Franchise : 6-8%
11. 2011
• Launch of LAKME NEXT
• Initiation with
COCO Model
• Target Group :
- Age : 16-25 yrs old
women
- Region: Tier II & Tier III Cities
- Socioeconomic: SEC B2, C1
• Expected No. of Outlets – 2 to3
• Initiation of Franchise
Model
• Increased Spread of
COCO Outlets to expand
Reach
• Expected No. of COCO
Outlets – 10 to 12 ( Pan
India)
• Co-Existence
of COCO & Franchise
Models (Hybrid)
• More emphasis on
Franchise model to
enhance scalability
2013 2015
Investment Rs 50 lac–1 cr
Brand Fee Rs 20-30 lac
Floor Space 2500-4000 sq ft
Royalty 10%
Investment Rs 30–50 lac
Brand Fee Rs 3 lac
Floor Space 1500 sq ft
Royalty 15%
Investment Rs 10–20 lac
Brand Fee Rs 5 lac
Floor Space 100 -400 sq ft
Royalty 15%
Investment Rs 5 –10 lac
Brand Fee
Floor Space
Royalty 10%
Investment Rs 30–50 lac
Brand Fee
Floor Space 1000-1600 sq ft
Royalty 15%
Investment Rs 15 –25 lac
Brand Fee Rs 10 lac
Floor Space 500-600 sq ft
Royalty 15%
Competitor Arena
Strategic Road Map
12. AT THE LEVEL OF KNOWLEDGE
FACTORS
1 Growth in Personal Disposable Income
Real Estate Costs2
3
Competitive Analysis to understand
Saturation level
Proximity to Training Academy/
Operational Costs
4
5 Consumer Behaviour in terms of
Spending Patterns
Choice of Location for LAKME NEXT Salons
Current Spread of Lakme Salons & Studios Pan India
TARGET CITIES:
Tier II and Tier III cities such
as Surat, Vadodara ,Ahmedabad , Nagpur, Pune in West
Zone, Jaipur, Ghaziabad, Gurgaon, Noida in North
REASONS
• Booming destinations for businesses and experiencing
a skyrocketing growth in Infrastructure and Real Estate
• Experiencing high influx of people and improving standards of
living
• Lesser Spread of Competition in these states
• Proximity to Training academies in Mumbai and Delhi
Key Locations to set up salon: HIGH STREET
• High popularity of high street shopping concept
• High conversions as people visiting are generally serious buyers
13. Customer Service Proposition
• Trimming
• Hair Styling
• Shampooing
• Dying
• Highlighting
HAIR CARE
• Threading
• Face Cleansing
• Bleaching, Waxing
• Body/Face
Massages
SKIN &
BODYCARE • Pedicure
• Manicure
• Nail Treatments
NAIL CARE
Loyalty Programs : Get a Service Package free after 5 services
Gift Vouchers, Employee Award Coupons and Discounts
Seasonal or Festive Discount Packages
Tie ups with Megastores and Departmental Stores like
Shopper’s Stop, Globus & Westside
USP
Holistic Beauty
Experience for THE
Woman of today at an
Affordable Cost
14. Holistic Marketing of LAKME NEXT
LAKME
EMPLOYEES
CUSTOMERS
EXTERNAL MARKETING
Pricing Distribution
Promoting
Service
INTERACTIVE MARKETING
Technical
Marketing
Functional
Marketing
INTERNAL MARKETING
Employee
Training
Motivating
to serve
customers
well
SALON
BUSINESS
15. Sources of Awareness
From a friend or relative
Advertisement in newspaper/
magazine
Advertisement on hoarding
Advertisement on the internet
Events -(Lakme fashion week, fashion
shows at colleges,etc)
Pamphlets
Advertisement on television
Advertisement displays at
shop/supermarket/ shopping mall
Advertisement displays at a gym/
fitness center/ social club
Advertisement on radio
Advertisement displays at a multiplex /
cinema hall
72%
64%
57%
53%
47%
45%
32%
23%
17%
13%
9%
(N = 132)
• Study conducted by the Keller Fay Group revealed
that members of generation Y have about 145
conversations a week just about BRANDS which is
twice the rate of adults
Importance of
Role of Word of
Mouth
Marketing, Social
Media, Print
Media
16. Promotional Strategies
ABOVE
THE
LINE
On Air Contests and
Sponsorships
Promotion through
Local Television
Channels
Newspaper Inserts
and Pamphlets
BELOW
THE
LINE
Road Show
Promotions, E
ntertainment
Events, Retail
Displays, Trials
in Malls and
moving Vans
of Lakme
Hoardings/Fle
xes in
Malls, Screens
outside the
Malls playing
advertisement
s of the Brand
In-Shop and
Shop Front
Activities &
Display Units
Distributing
pamphlets, Br
ochures and
service
Catalogues
Holding
Seminars, Pro
duct
Launches, Co
mpetitions/Ev
ents in
Colleges in
Fashion shows
17. http://www.mckinsey.com/- India’s Urban Awakening : Building Inclusive
cities, Sustaining economic growth April 2010.
http://www.mckinsey.com/- Indian Consumer Trends
www.euromonitor.com/
www.indiastat.com/
www.lakmeindia.com
www.schwarzkopf.com
www.loreal.co.in
www.vlcc.co.in
www.shahnaz.in
Primary Survey (online) of 132 respondents across India (urban cities)
Interviews with industry Professionals and Experts
Study of various salons like Lakme Salons , Naturals, VLCC, Sprat, Bounce, Affinity,
Looks ,Harry and training academies like ASK, Lakme training academy spread across
Mumbai, Bangalore and Delhi
BIBLIOGRAPHY
