The Indian Pyramid
Concentration of Disposable Income
Bangalore       28                    Yamuna Nagar    1   Mumbai       20   Rajamundry     1   Madurai        1Mumbai     ...
The HUB & Spoke chakraCV
3%All urban                  52%                 13%      20%        14%                         All urban                ...
The Indian Women segment      1.2 billion people                                          Housewives have higher „family‟ ...
It should fulfill              How do I choose                            promises               my products?             ...
1800                                                                         1600                                         ...
Branded                                                                                            Salons                 ...
Access to target market                                               On-the-spot decisions                               ...
LOréal Paris                     Gant                                                                                     ...
250                                     35                                                                                ...
LITE                                        Nature of service – Value for money                                         Na...
Need for growth                                                                          Need for career path             ...
Reach to the high aspiration-low availability segment                                                                     ...
Training model                                        North                                                       West  Pr...
Manpower Sourcing     First Year                Second Year          Fourth Year               Fifth YearPickup folks from...
Financials and Revenues     Financing model                                Franchisors                                   A...
Average Footfall Per Day               8                                    Revenue Per User                     250      ...
Projections for 5 years                                                                                                   ...
From       LITE                  LITE          ----   LITE
LITE
Big Salon bills?                                 Or                 little sister for a hairdresser?                      ...
natural          LITE   .
Lessons in Marketing Excellence - Client Lakme
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Lessons in Marketing Excellence - Client Lakme

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Lessons in Marketing Excellence - Client Lakme

  1. 1. The Indian Pyramid
  2. 2. Concentration of Disposable Income
  3. 3. Bangalore 28 Yamuna Nagar 1 Mumbai 20 Rajamundry 1 Madurai 1Mumbai 23 Delhi 22 Karnal 1 Delhi 13 Vijaywada 1 Pondicherry 1Delhi 18 Hyderabad 13 Panipat 1 Bengaluru 10 Vizag 1 Tirupur 1Hyderabad 12 Faridabad 1 Kolkata 9 Jorhat 1 Trichy 1 Mumbai 12Chennai 11 Gurgaon 1 Hyderabad 8 Muzzafarpur 1 Agra 1 Kolkata 8Lucknow 4 Gobind garh 1 Pune 8 Bhilai 1 Aligarh 1 Bangalore 4Ahmedabad 3 Ajmer 1 Chennai 4 Bilaspur 1 Allahabad 1 Patiala 3Gurgaon 3 Kota 1 Guwahati 3 Raipur 1 Bareilly 1 Agra 3 Ahmedabad 3 Anand 1 Ghaziabad 1Kolkata 3 Bikaner 1 Ahmedabad 3 Gurgaon 3 Rajkot 1 Gorakhpur 1Pune 3 Patna 1 Lucknow 2 Chandigarh 3 Surat 1 Kanpur 1Secunderabad 3 Varnasi 1 Ludhiana 2 Jaipur 3 Baroda 1 Mathura 1Amritsar 2 Vishakapatnam 1 Jammu 2 Lucknow 3 Karnal 1 Muradabad 1Chandigarh 2 Vijayawada 1 Jaipur 2 Patna 2 Panipat 1 Haridwar 1Indore 2 Mysore 1 VLCCKanpur 2 Udaipur 2 Ambala 2 Yamuna nagar 1 Goa 2 Chennai 1 Faridabad 2 Jammu 1Ludhiana 2 Nagpur 2 Cochin 1 Sonipat 2 Mysore 1Noida 2 Baroda 2 Anand 1 Goa 2 Calicut 1Thane 2 Surat 2 Navsari 1 Amritsar 2 Cochin 1Agra 1 Aurangabad 2 Rajkot 1 Bhatinda 2 Trivandrum 1Allahabad 1 Raipur 2 Bharuch 1 Jalandhar 2 Bhopal 1Baroda 1 Jamshedpur 2 Gandhi nagar 1 Ludhiana 2 Gwalior 1 GeographicalBhatinda 1 Bhubaneswar 2 Indore 1 Patiala 2 Indore 1Dehradun 1 Guwahati 2 Latur 1 Phagwara 2 Jabalpur 1 FootprintGhaziabad 1 Kanpur 1 Nasik 1 Coimbatore 2 Aurangabad 1Guwhati 1 Aligarh 1 Pune 1 Meerut 2 Kohlapur 1Jaipur 1 Bhilai 1 Noida 2 Nagpur 1Jalandhar 1 Mathura 1 Bilaspur 1 Varanasi 2 Nasik 1Jammu 1 Chandigarh 1 Siliguri 1 Dehradun 2 Shillong 1Mangalore 1 Panchkula 1 Durgapur 1 Siliguri 2 Kathmandu 1Mohali 1 Bhatindar 1 Guntur 1 Bhubaneshwar 1Nagpur 1 Jalandar 1 Ranchi 1 Kakinada 1 Rourkela 1Nasik 1 Sonepat 1 Silchar 1 Nellore 1 Mandi 1Panchkula 1 Hissar 1 Asansol 1 Ranchi 1 Moga 1PatialaPondicherry 1 1 HABIBS Belgaum 1 Panchkula 1 Hubli 1 Ajmer 1Varanasi 1Vishakapatnam 1 LAKME Mangalore 1 Udaipur 1
  4. 4. The HUB & Spoke chakraCV
  5. 5. 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
  6. 6. 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 educationWorking wives have the lowest self perceptions of their “attractiveness” and claim to use the beautyproducts the least
  7. 7. 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 Doesnt necessarily Chemicals are harsh onneed to smell good, but sensitive skin and a big just not bad. Smelling NO NOgood is a plus of course
  8. 8. 1800 1600 1652 Home décor Beauty,Personal and and 1400 furnishing, 5% Footwear, 38.40Healthcare, 4.9 1301 % 0% 1200Communication , 11.40% 1000 1024 800 806 600 635 500 400 Cloting and 200textiles, 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 spendFootprint in a branded salon – 15 to 40 1000 rs Footprint in a neighbor salon– 10 to 15 10000 rs
  9. 9. Branded Salons Convenience Distance from Home Products used Trendy HaircutsPersonalized 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
  10. 10. 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 & promotionLoyalty with long gestation period skilled people Lack of integrated strategy and motivation
  11. 11. LOréal 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 LOréal Professionnel Fairever Amway Lakmé LOréal Paris Fair & LovelyRetail footprint of 0 5 10 15 20 0 10 20 30 40 50 60Beauty 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 LOréal Professionnel LOréal Paris Super Vasmol Oriflame Chik Elle 18 Gemey/Maybelline/Jade Godrej Lakmé LOréal Paris Revlon Dabur 0 5 10 15 20 25 0 2 4 6 8 10 12 14
  12. 12. 250 35 20 30200 25 15150 20 10100 15 10 50 5 5 0 0 0 450 500040 4000 330 3000 220 2000 110 10000 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
  13. 13. 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 associationsMarketing – 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
  14. 14. Need for growth Need for career path Need for new clientele Need for personal growth Need for specialty training Need for AutonomyUnorganized Salon owners 160000 unorganized salons 38000 beauticians every year Lakme SalonAverage existence Penetrated all tier locations 80% of states with beauty courses Have a loyal set of consumers Employees come from Average Yrs of Experience6 – 8 years 4 – 6 years lower tier citiesOperational Model 1 Lakme Liberation Program Operational Model 2Invite and engage Salon owners to Invite and engage Lakme employees toget 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
  15. 15. 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
  16. 16. 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 expertsChallenges 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
  17. 17. Manpower Sourcing First Year Second Year Fourth Year Fifth YearPickup 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 the1 month training program clients regarding soft skills, quality standards etc
  18. 18. 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%
  19. 19. Average Footfall Per Day 8 Revenue Per User 250 Working days per year 312 Total Revenue for Frachisee 624000Franchise LakmeRent @ 6000/Month 72000 Margin from channelizing products 37440Salary for an employee @ 4000/Month 48000 Royalty 51480Cost of products used @ 30% of Revenues 187200 Cost of capital 12000Interest amount for the salon setup costs 12000 Profit Per Salon Per year 76920Sundry expenses such as Electricity @ 2000 PM 24000 343200Total Profit Before Royalty 280800Royalty to Lakme @ 15% of Profits 51480Total 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
  20. 20. Projections for 5 years Total number of Salons at the end of year Total number of cities/Towns ventured into 2500120100 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
  21. 21. From LITE LITE ---- LITE
  22. 22. LITE
  23. 23. Big Salon bills? Or little sister for a hairdresser? LITEsalon next to your doorstepWalk into aCertifiedFor upscale style at affordable prices !!
  24. 24. natural LITE .
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