Deepak r gorad brand positioning of lakme

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brand positioning

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  • 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
  • 7. LAKME Celebrity Associations
  • 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. 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%
  • 10. 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
  • 11. 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
  • 12. 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
  • 13. 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
  • 14. 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
  • 15. 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
  • 16.  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
  • 17. Thank You DEEPAK R GORAD C-9