2. The Indian Pyramid

3. Concentration of Disposable Income

4. Bangalore 28 Yamuna Nagar 1 Mumbai 20 Rajamundry 1 Madurai 1
Mumbai 23 Delhi 22 Karnal 1 Delhi 13 Vijaywada 1 Pondicherry 1
Delhi 18 Hyderabad 13 Panipat 1 Bengaluru 10 Vizag 1 Tirupur 1
Hyderabad 12 Faridabad 1 Kolkata 9 Jorhat 1 Trichy 1
Mumbai 12
Chennai 11 Gurgaon 1 Hyderabad 8 Muzzafarpur 1 Agra 1
Kolkata 8
Lucknow 4 Gobind garh 1 Pune 8 Bhilai 1 Aligarh 1
Bangalore 4
Ahmedabad 3 Ajmer 1 Chennai 4 Bilaspur 1 Allahabad 1
Patiala 3
Gurgaon 3 Kota 1 Guwahati 3 Raipur 1 Bareilly 1
Agra 3 Ahmedabad 3 Anand 1 Ghaziabad 1
Kolkata 3 Bikaner 1
Ahmedabad 3 Gurgaon 3 Rajkot 1 Gorakhpur 1
Pune 3 Patna 1
Lucknow 2 Chandigarh 3 Surat 1 Kanpur 1
Secunderabad 3 Varnasi 1
Ludhiana 2 Jaipur 3 Baroda 1 Mathura 1
Amritsar 2 Vishakapatnam 1
Jammu 2 Lucknow 3 Karnal 1 Muradabad 1
Chandigarh 2 Vijayawada 1
Jaipur 2 Patna 2 Panipat 1 Haridwar 1
Indore 2 Mysore 1
VLCC
Kanpur 2
Udaipur 2 Ambala 2 Yamuna nagar 1
Goa 2 Chennai 1 Faridabad 2 Jammu 1
Ludhiana 2
Nagpur 2 Cochin 1 Sonipat 2 Mysore 1
Noida 2
Baroda 2 Anand 1 Goa 2 Calicut 1
Thane 2
Surat 2 Navsari 1 Amritsar 2 Cochin 1
Agra 1
Aurangabad 2 Rajkot 1 Bhatinda 2 Trivandrum 1
Allahabad 1
Raipur 2 Bharuch 1 Jalandhar 2 Bhopal 1
Baroda 1
Jamshedpur 2 Gandhi nagar 1 Ludhiana 2 Gwalior 1
Geographical
Bhatinda 1
Bhubaneswar 2 Indore 1 Patiala 2 Indore 1
Dehradun 1
Guwahati 2 Latur 1 Phagwara 2 Jabalpur 1
Footprint
Ghaziabad 1
Kanpur 1 Nasik 1 Coimbatore 2 Aurangabad 1
Guwhati 1
Aligarh 1 Pune 1 Meerut 2 Kohlapur 1
Jaipur 1
Bhilai 1 Noida 2 Nagpur 1
Jalandhar 1 Mathura 1
Bilaspur 1 Varanasi 2 Nasik 1
Jammu 1 Chandigarh 1
Siliguri 1 Dehradun 2 Shillong 1
Mangalore 1 Panchkula 1
Durgapur 1 Siliguri 2 Kathmandu 1
Mohali 1 Bhatindar 1 Guntur 1 Bhubaneshwar 1
Nagpur 1 Jalandar 1 Ranchi 1
Kakinada 1 Rourkela 1
Nasik 1 Sonepat 1 Silchar 1
Nellore 1 Mandi 1
Panchkula 1 Hissar 1 Asansol 1
Ranchi 1 Moga 1
Patiala
Pondicherry
1
1
HABIBS Belgaum 1 Panchkula 1
Hubli 1 Ajmer 1
Varanasi 1
Vishakapatnam 1 LAKME Mangalore 1 Udaipur 1

5. The HUB & Spoke chakra
C
V

6. 3%
All urban 52% 13% 20% 14% All urban 97%
SEC E 5%
48% 13% 22% 17% SEC E 95%
SEC D 53% 12% 20% 14% 3%
SEC D 97%
SEC C 54% 13% 20% 14% 2%
SEC C 98%
SEC B 52% 15% 20% 13%
3%
SEC B 97%
SEC A 57% 14% 18% 11%
2%
SEC A 98%
0% 20% 40% 60% 80% 100% 120%
Up to 1 lakh above 5 lakh 1 to 5 lakh Metros 0% 20% 40% 60% 80% 100%
Female Male
All urban 6% 23% 68% 3%
SEC E 6% 10% 81% 3%
SEC D 6% 24% 68% 2% 34% of spare cash was spent on Holidays and vacations
SEC C 7% 20% 71% 2%
31.5% of the spare cash was spent on spent on New clothes
SEC B 7% 30% 60% 3%
SEC A 6% 26% 65% 3%
0% 20% 40% 60% 80% 100% 120%
Single/unmarried Married without children
Married with children Others
40% usually does something with other members of the family
38% prefers to go out with other members of the family

7. The Indian Women segment
1.2 billion people Housewives have higher „family‟ incomes
than households with working wives/moms
Housewives show better SEC profiles than other
segments
567.3 million women
Women students 168 million Self-education
Working maidens Status/fame Brand & trend conscious
Working wives 75 million Health
Working moms Children education
Housewives Family Price conscious
280 million
Housewives moms Children education
Working wives have the lowest self perceptions of their “attractiveness” and claim to use the beauty
products the least

8. It should fulfill
How do I choose promises
my products? Products promise a lot
these days to woo
trials
It shouldn‟t It shouldn‟t
smell WEIRD harm my skin
Doesn't necessarily Chemicals are harsh on
need to smell good, but sensitive skin and a big
just not bad. Smelling NO NO
good is a plus of course

9. 1800
1600 1652
Home décor Beauty,Personal
and and 1400
furnishing, 5% Footwear, 38.40Healthcare, 4.9 1301
% 0% 1200
Communication
, 11.40% 1000 1024
800 806
600 635
500
400
Cloting and 200
textiles, 21.70%
0
2010 2011 2012 2013 2014 2015
Household
appliances, 24.8
0% Equipment,pap
er &
Stationery, 29.7
For every branded salon,
there are 4 neighboring
The Market
0%
Why I prefer my neighborhood salons present
saloon?
Neighborhood salon
Typical spend
500 rs
2000 rs
Branded salon
Typical spend
Footprint in a branded salon – 15 to 40 1000 rs
Footprint in a neighbor salon– 10 to 15 10000 rs

10. Branded
Salons
Convenience
Distance from Home
Products used
Trendy Haircuts
Personalized attention & Recommendations Smoothening
Trained professional Facials
Past Experience
Cleanliness
Relationships
Value for money
Visual Cues from ads
Visual Cues from peer
Neighbor
Start Salons
Word of Mouth

11. Access to target market
On-the-spot decisions
Competition
Demanding more value with
from Customers need differs
price consciousness
unorganized restricting standardized offerings
players
Price Regional
Sensitivity differences
Challenges
Investment
costs and Increase in
Payback input costs
Lag in brand creation & period Shortage of Rentals, advertizing & promotion
Loyalty with long gestation period skilled
people
Lack of integrated strategy
and motivation

12. L'Oréal Paris
Gant
Clarins
Elizabeth Arden
Lactocalamine
Azzure
Christian Dior Clinique
Salvatore Ferragamo Ayur
Clinique The Body Shop
Calvin Klein Aviance
Nina Ricci Fair One
Oriflame Ever Yuth
Schwarzkopf Emami
Wella Oriflame
L'Oréal Professionnel Fairever
Amway
Lakmé
L'Oréal Paris
Fair & Lovely
Retail footprint of 0 5 10 15 20
0 10 20 30 40 50 60
Beauty Products
Danruf Others
The Body Shop Clinique
Clarins
Nizoral
Aviance
Oriflame Amway
Livon The Body Shop
Essensual
Schwarzkopf
Diana of London
Wella Mac
Revlon Avon
Colorbar
L'Oréal Professionnel
L'Oréal Paris
Super Vasmol Oriflame
Chik Elle 18
Gemey/Maybelline/Jade
Godrej
Lakmé
L'Oréal Paris Revlon
Dabur
0 5 10 15 20 25
0 2 4 6 8 10 12 14

13. 250 35
20
30
200
25 15
150 20
10
100 15
10
50 5
5
0 0 0
4
50 5000
40 4000 3
30 3000
2
20 2000
1
10 1000
0 0 0
Lakme Vs Competition in Franchising
Territory rights – Given by 60% of Franchisor
Analysis of 27 Performance Guarantees– NOT given by 70% of Franchisor
leading Operating Manuals – Given by 70% of Franchisor
franchisors of Franchise training options – Mumbai, New Delhi, Centralized, In premises (1 to 60 days)
beauty care
Field Assistance – Given by 90% of Franchisors
Salon Services
Head Office assistance – Given by 90% of Franchisors

14. LITE
Nature of service – Value for money
Nature of Branding – Line Extension
Target Segment – SEC B (LSM 8-10)
Business Strategy – Using the Lakme brand awareness to tap into consumer aspirations while minimizing brand dilution
Long term business goal – To create strong Lakme beauty service loyalists
Vision – Empowerment to all through value based beauty services
Mission – Beauty care is for everybody
Philosophy – Changing the face of unorganized beauty services in India
Economic Viability – To reach out and expand to lower SECS and lower tier locations in a cost effective manner.
Activation - Sourcing and communicating the brand through existing players & employees;
These centers become centers of communication; Lending the Lakme brand associations
Marketing – Easy WoM; Local cable channels , newspaper flyers, Community Radio, Drive by Vehicles and mobile studios;
Focus – Strong hold today, Long term returns tomorrow.
Branding – Customizable by end user
Royalty – Ensuring a win-win partnership with a focus on long term engagement and loyalty
Quality of Service – Regular trainings through centralized hub and diverging spoke model
Audit – Regular runs to ensure compliance to products and service

15. Need for growth
Need for career path
Need for new clientele
Need for personal growth
Need for specialty training
Need for Autonomy
Unorganized Salon owners 160000 unorganized salons 38000 beauticians every year
Lakme Salon
Average existence Penetrated all tier locations 80% of states with beauty courses
Have a loyal set of consumers Employees come from Average Yrs of Experience
6 – 8 years 4 – 6 years
lower tier cities
Operational Model 1 Lakme Liberation Program Operational Model 2
Invite and engage Salon owners to Invite and engage Lakme employees to
get endorsed by the LakmeLITE brand be entrepreneurs under the LakmeLITE brand
Access to professional products Access after 5 years of service
Niche and Specialty training Incentive to reduce attrition
Marketing efforts Continuity in career path
In Store Branding Reduction in training costs
Access to personnel Brand ambassadors
Access to CRM Ease in increase of footprint
Access to upgradation to Studio/Salon

16. Reach to the high aspiration-low availability segment
Impact
Providing opportunities for employment to youth
Social Impact
Raising LSM levels in smaller towns & cities
Disruptive Innovation
Extracting money from customers in
Measurement those services where price sensitivity
Metrics Unique positioning
is low
Footfall of Brand adoption
Additional revenue
Franchisee profits Building relationships for
Customer satisfaction the future
Defaults
Differentiated service
+ = Competitive Advantage
Large consumer base

17. Training model North
West
Product Experts + In
The franchise owners will get
house Lakme team + South trained at hub by the trainers
Soft Skill Trainers
East
Train A Trainer Program:
Trainers will be placed at the hubs who will
in turn get trained by the experts
Challenges
 No specialized training (Eg: Hair styling)
 Bossy Salon owners who are demoralizing the workers
Our Solutions
 With Train A Trainer Program, Lakme can invite trainers of international
standards and train trainers at a low cost
 Softskill, Leadership training for Salon owners

18. Manpower Sourcing
First Year Second Year Fourth Year Fifth Year
Pickup folks from tier empower them with Sign them up with
2/3 colleges who more training and management education
teach fashion and courses based on courses, provide Given them
beauty stuff their interest percentage of profits entrepreneurial
based on the number opportunity
and the quality of the
1 month training program clients
regarding soft
skills, quality standards
etc

19. Financials and Revenues
Financing model Franchisors
Average Leasing Amount: Capital required to set up
1 Lakh the parlor: 1 Lakh
Banks
Projections
Considerations and assumptions for revenue and profit projections
Cost of Capital: 12%
Average Revenue Per User: 250
Average Footfall Per Day Per Salon: 8
Royalty to Lakme: 15%
Average Footage of the Salon: 500 Sqft
Profit from products channelized through Lakme: 20%

20. Average Footfall Per Day 8
Revenue Per User 250
Working days per year 312
Total Revenue for Frachisee 624000
Franchise Lakme
Rent @ 6000/Month 72000 Margin from channelizing products 37440
Salary for an employee @ 4000/Month 48000 Royalty 51480
Cost of products used @ 30% of Revenues 187200 Cost of capital 12000
Interest amount for the salon setup costs 12000 Profit Per Salon Per year 76920
Sundry expenses such as Electricity @ 2000 PM 24000
343200
Total Profit Before Royalty 280800
Royalty to Lakme @ 15% of Profits 51480
Total Profit after Royalty 229320
No of Salons 30 250 400 700 2000
Profits 2307600 19230000 30768000 53844000 153840000
Cost of Training + Ads 4000000 4000000 4000000 4000000 4000000
Total Profit -1692400 15230000 26768000 49844000 149840000

21. Projections for 5 years
Total number of Salons at the end of year
Total number of cities/Towns ventured into 2500
120
100 2000 2000
100
80 1500
70
60
50 1000
40 700
30 500
20 400
10 250
0 0 30
1 2 3 4 5 1 2 3 4 5
Years Years
Profits (In Lakhs)
1600
1498.4
1400
1200
1000
800
600
498.44
400
267.68
200 152.3
0 -16.924
-200 1 2 3 4 5
Years

22. From
LITE
LITE
---- LITE

23. LITE

24. Big Salon bills?
Or
little sister for a hairdresser?
LITEsalon next to your doorstep
Walk into a
Certified
For upscale style at affordable prices !!

25. natural
LITE .