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HUL Case Study | TIGI Professionals

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The presentation details the penetration that HUL can follow to penetrate the Indian market for TIGI products.

The presentation details the penetration that HUL can follow to penetrate the Indian market for TIGI products.

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HUL Case Study | TIGI Professionals Presentation Transcript

  • 1. For the Hairdressers, By the Hairdressers Team Iguanas (IIM Ranchi) Pulkit Bohra (pulkit.bohra12@iimranchi.ac.in) Pulkit Mathur (pulkit.mathur12@iimranchi.ac.in) Tarun Gupta (tarun.gupta12@iimranchi.ac.in) TIGI Professionals
  • 2. [8] Establishing TIGI as a premium, international quirky and cool brand. Keeping Hair stylists excited and engaged with TIGI Converting the challenge of limited target market into an opportunity Create buzz/talk around the brand going beyond traditional media Strategy for TIGI Case Study Objectives 1 2 3 4
  • 3. Executive Summary Objective 3 Objective 4Objective 1 Objective 2 To establish TIGI as a premium, quirky and cool brand Placement: Difficult for salon chains with high number of outlets to adopt a new product Placement: Target high end salons with limited number of outlets; Avoid retail stores/supermarkets. Salons are the key engagers in a Professional product’s life cycle managing product sales to product feedback to R&D team. They suggest a product only once they are satisfied with the product and comfortable with the usage. Rest is taken care by margins & incentives Hair Stylist Student: Invest in associations with hair care training academies. Offer franchisee for vocational training centres. Few existing players in the high growth market signal ample opportunities. Capture the latent demand for premium products in the segment by targeted promotions at high end clubs, and associations with resorts and events like Sun Burn To create a buzz around the town Strategic objectives Insights Recommend- ations To keep the hairstylists excited and engaged To tackle the challenge of Styling as a small category Promotions: Easy acceptance of foreign brands; Sampling works best when customer is encour- aged to visit salons to use them Styling market limited to Men and with only mass market products Traditional media is costly and doesn’t work best for TIGI Communication strategy is the key, should be engagement centric than just FYI High growth ~ CAGR of 21% during 2007-12 Promotions: Bed Head – Hair styling workshops in colleges; Kiosks in high end malls and happening pubs in the metros. S-Factor – Sampling of products with magazines & in 5-star hotels Hair Stylist: Direct-to-Stylist incentive system and an annual TIGI Style Stars meet for top 30 stylists Target focused social media marketing with interactive YouTube channels and Facebook groups Communicate with users at three levels – Emotional, Technical and Engagement Pricing: High enough to maintain the Luxury exclusivity, but low enough that can be sold down Lack of knowledge on correct usage and implications Pricing: Bed Head – INR 500-1100 S-Factor – upwards of INR 1400 Salon Owners: Offer central software POS system, free samples, look books and furniture for salon Innovative campaigning • Hair Pageants • User based sampling Executive Summary Research methodology Industry Analysis Objective Recomme- ndations
  • 4. Information Collection Research Methodology Secondary Research  Leveraged access to 10+ databases with IIM Ranchi Library  Studied research reports, company annual reports, analyst reports  Drawn inferences from published articles in the media Primary Research  Field visits to premium salons in Ranchi, Hyderabad and New Delhi  Telephonic interviews with Salon owners in Bangalore (YLG) & Chandigarh (Headmasters)  Online and Offline survey conducted with 106 respondents Analyzed data gathered to determine the following:  Market Dynamics  Drivers and Restraints in the Market  Critical Success Factors Future Projections  Growth Trends from the industry reports  Stakeholder Views Quality Check & Information Analysis  Four objectives analysed in detail  Recommendations given based on the analysis done in the initial sections Case Objectives & Recommendations Executive Summary Research methodology Industry Analysis Objective Recomme- ndations
  • 5. Industry Analysis: Trends, Issues, Drivers & Constraints Market • In 2012, Hair Care increased by 18% to reach INR 116 billion • Growth observed in consumers’ willingness to spend more and experiment with salon hair care products at home • Fastest growth observed in the colorants category 0 50000 100000 150000 200000 2007 2012 2017E Haircaresalesbycategory (INRmillion) Colourants Conditioners Salon Hair Care Shampoos Styling Agents Hair care market in India is growing fast TIGI’s target market should be the top 8 metros 5% 7% 7% 8% 9% 12% 25% 27% Ahemdabad Pune Hyderabad Chennai Bangalore Kolkata Mumbai Delhi NCR Salon hair and skin products sale, 2011 (~INR 3500 million) Executive Summary Research methodology Industry Analysis Objective Recomme- ndations
  • 6. L’Oreal Matrix Schwarz- kopf Wella Product Range Brand Awareness Outlet Penetration Perceived as Youth Brand Value for Money TIGI: Competitor Analysis 47 41 42 73 67 53 46 67 11 18 21 9 8 13 15 16 18 21 9 8 20 8 3326 18 16 9 17 13 23 6 8 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Others Garnier Wella Schwarzkopf Matrix L'Oreal Current Market Share of Leading Players in Top 8 Metros • Professional products market is highly consolidated with 3 major players – L’Oreal, Schwarzkopf and Wella. • L’Oreal has the best reach in the market with products in Luxury (Kerastase), Premium (Professional) and Affordable (Matrix) range. None of the current brands is perceived as a Youth Brand. This gap can be utilized by TIGI Bed Head Wella and Schwarzkopf do not have an extensive range. Their share is easy to target for S-Factor. Executive Summary Research methodology Industry Analysis Objective Recomme- ndations
  • 7. Understanding our Customer: Bed Head & S-Factor Bed Head S-Factor Smart Rebellious Individualistic Sceptical Age: 18-25 Years Gender: Male/Female Re-bonding, Smoothing treatments is the most prominent time for transition from normal to professional products Age: 30-45 Years Gender: Female Brand Conscious Beauty as a means to achieve control Enjoy superiority Fear of Ageing Love to avail discounts They listen to their hair stylists for guidance on hair care. Motivated when their brands feature in top magazines. Executive Summary Research methodology Industry Analysis Objective Recomme- ndations
  • 8. Establishing TIGI as a premium, international quirky and cool brand. Keeping Hair stylists excited and engaged with TIGI Converting the challenge of limited target market into an opportunity Create buzz/talk around the brand going beyond traditional media Strategy for TIGI Case Study Objectives 1
  • 9. Recommendation 1 Basis analysis of our target customers, primary research & competitors marketing/branding techniques below mentioned are the principles specifically applicable for TIGI: YLG (You Look Good) is a high end Salon & SPA chain with more than 40 outlets. Rahul says that it is tough for a brand like his, which have to maintain consistency over all the outlets to shift to a new brand, since the stylists in his salons trust the existing brand in use and know in & out of it. *Salon’s Average billing = Rs 1000/Client/visit A k Senthil COO, YLG Salons & SPA • Hence initially the placement for TIGI products should be in high-end Salons in Metros which have a single or limited number of outlets and draws premium customers. • Premium Salons also have a tendency to stock brands which are not available in retail market. Hence TIGI should not focus on retail as a channel to reach customers. Placement of Products Executive Summary Research methodology Industry Analysis Objective 1 Recomme- ndation
  • 10. Recommendation 2 The market for female styling products in India is minimal, because Indian women keep hair long making styling difficult. Moreover females want to use products which make their hair look good and offers longevity at the same time. We have also noticed an easy acceptance of products by foreign brands. *Salon’s Average billing = Rs 2000/Client/visit Archana Patel Owner, Ashton Pierra Salon Hyderabad “Sampling works best when the customer is encouraged to visit the brands nearest salon and use their sample under the guidance of experts, resulting in customer turnout ratio of greater than 10% of the samples given.” – CEO, YouLookGood Salon & SPA • Hair styling workshops in colleges like NIFT, NID etc giving tips on hair care, followed by a demo of product use. • Quick makeover kiosks in Malls, Multiplexes established with a motive to give our target customer(18-25) a feel of the product, followed by a likely sale. Promotions Bed Head S-factor • Sampling of products along with magazines like Cosmopolitan, Femina etc. • Tie-up with luxury hotels to make TIGI products available to use in rooms and have an outlet/Small Kiosk in the hotel as well. (Usage increases propensity to buy. Executive Summary Research methodology Industry Analysis Objective 1 Recomme- ndation
  • 11. Brands in India have to be really careful while pricing their products for salon segment, in India services are priced 5-10 times the product price as compared to 3- 6 times as per international standards, making it challenging for the brand to strike the perfect acceptable price band. *Salon’s Average billing = Rs 2000/Client/visit Rajveer Kaur Marketing Manager Tony & Guy, Hyderabad Recommendation 3 Shampoo prices by Brand (est. for 250 mL) 0 200 400 600 800 1000 1200 1400 1600 Price Gap Optimum for Bed Head Optimum for S-Factor Vacant Premium Price Zone PricesinRupees Product Pricing Two Different Vacant Premium Price Zones are identified in Indian Market: • for S-Factor: >INR 1400 (250 ml pack size) • for Bed Head: INR 500-1100 range (for 250 ml) Executive Summary Research methodology Industry Analysis Objective 1 Recomme- ndation
  • 12. Establishing TIGI as a premium, international quirky and cool brand. Keeping Hair stylists excited and engaged with TIGI Converting the challenge of limited target market into an opportunity Create buzz/talk around the brand going beyond traditional media Strategy for TIGI Case Study Objectives 2
  • 13. Understanding the role Why is a Salon/Stylist Important in Professional Products Segment Key Takeaways Salons are the key engagers in this Professional Product’s Life cycle. Salons manage: • Product Sales • Sales Collection • End Customer • Product Feedback to R&D Team Two Key Person in Salon are: • Salon Owner • Stylist Need to Incentivize both separately R&D Key Function Key Function Key Functions Manufacturing Marketing Sales Training Distributors Product Company Salons Product SalesProduct Sales Sales ReceiptsSales Receipts End Customer Services & Retail Sales Product Feedback Sales Training Receivables Management Logistics Product Use As part of Service (Consumption) Sources: Indian Salon Hair & Skin Products Industry Report- Reevolv Executive Summary Research methodology Industry Analysis Objective 2 Recomme- ndation
  • 14. Keeping Hairstylists Excited & Engaged Targeting loyalty from the start of owner-stylist’s professional lifecycle through early exposure with the brand and later with an innovative incentive system Invest In Setting Up College Salon Labs • Target Institutes: NIFT, LTA School of Beauty, etc. • Benefit: Comfort & early exposure to TIGI Professional brand. These are the future salon owners who would buy TIGI franchise Offer franchise of vocational training in Hair Care Benefits: • Early exposure to TIGI Brand for hair stylists. • Development of Loyalty & early adoption of brand by stylists. Incentivise The Salon Owner • Margin Sharing Incentive System • Provide Owners a central software POS system for salons to ease their setup/operations • Provide ipad software to salons to show customers their expected hair style with TIGI process. • Provide salons with look books of TIGI products. Innovative direct-to-stylist incentive system to record TIGI sales made by each stylist & to remunerate them accordingly. Organize a Grand TIGI Style Stars Meet at Goa for top 30 Hair Stylist associated with TIGI. Benefits: • Motivate the hair stylist to sell more TIGI products. • Identify low performing stylists & aid them with product training. Hair Stylist - Professional Salon OwnerHair Stylist - Student Diploma Vocational Course Engage Stylists right from start Incentivize current stylists to boost sales Incentivize Owner to buy franchise Executive Summary Research methodology Industry Analysis Objective 2 Recomme- ndation
  • 15. [8] Establishing TIGI as a premium, international quirky and cool brand. Keeping Hair stylists excited and engaged with TIGI Converting the challenge of limited target market into an opportunity Create buzz/talk around the brand going beyond traditional media Strategy for TIGI Case Study Objectives 3
  • 16. Opportunity Transcends Challenge TIGI can be a “Big fish in small pond”: First mover advantage in the premium styling product segment by targeted marketing at high end clubs, events like Sunburn and educating men for usage and implications of styling products Styling Market, 8.00% Others, 92.00% 1.70% 1.90% 2.00% 2.00% 2.14% 2.14% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2007 2008 2009 2010 2011 2012 Styling Agents as a % of Hair Care Market Leading Product Price (in INR) Pack Size (in gm) Brylcream 60 60 Set Wet 85 100 Parachute After Shower 160 75 Gatsby 72 100 Park Avenue 95 100 • The hair care market has grown with a CAGR of 15.7% (2007- 12) • The Styling market has grown at a CAGR of 21% So with increasing market pie of Styling Market, and very few existing players, opportunities are abound for TIGI • Currently styling products are mass market products. • Identified a latent demand for a premium styling product. TIGI can use directed & niche marketing at high end clubs, tie- ups with resorts, association with events like SunBurn, etc. to capture this latent market. Some foreign brands (minimal availability) Price (in INR) Pack Size (in gm) Tony & Guy - Mist 700 50 Tony & Guy- Smoothening Balm 975 200 Paul Mitchell 1295 100 Total Hair Care Market Market Facts: Styling Market In India Mainly Comprises Of Men Styling Products Lack of education on correct usage and implications. Sources: Passport-Hair Care in India – Euromonitor, Sept’2013; Indian Salon & Skin Products Report’2013 Key takeaways Executive Summary Research methodology Industry Analysis Objective 3 Recomme- ndation
  • 17. [8] Establishing TIGI as a premium, international quirky and cool brand. Keeping Hair stylists excited and engaged with TIGI Converting the challenge of limited target market into an opportunity Create buzz/talk around the brand going beyond traditional media Strategy for TIGI 17 Case Study Objectives 4
  • 18. Comparable Case Study In 2008 when Mad over Donuts started in India there was no category known to Indian customers called Donuts. Despite this challenge, over a period of time they have been able to build a recognizable brand and are the biggest donuts selling chain in the country. “Companies in this business spend 5-6% of their revenues as marketing expenses, we on the other hand have focused heavily on Social Media with no traditional media. This has not only reduced our marketing cost to 2-3% of the revenues but has also given us an opportunity to connect with our customers on a personal level and to engage with them even after they have used our product. “ – Tarak Bhattacharya, COO, Mad over Donuts Recommendation 1 We suggest a similar marketing strategy for TIGI with focus on Social Media and innovative campaigns to reach a larger audience. All Social media channels and campaigns should have a consistent communication strategy focusing on the 3 pillars. Emotional Technical Engage via Campaigns The communication should be directed in a way that focuses on building a loyal customer base by relating to them on an emotional level. Target updates/ communication based on the products portfolio. There by portraying our technical expertise in the hair care segment. Each communication should be build on the philosophy “Engage every time, every customer” . Just FYI updates aren’t able to spark conversations. Executive Summary Research methodology Industry Analysis Objective 4 Recomme- ndation
  • 19. Recommendation 2 : Targeted Advertising Bed Head S-Factor There are 26 Lakh people in the identified cities who are in age bracket 18-25, use Facebook, own an Iphone5 or buy luxury products. Facebook Ads targeting this segment can do wonders for BED HEAD in building its brand. The target segment of S Factor is not found online in large numbers. Hence other forms of promotions , advertising can lead to a better ROI. Executive Summary Research methodology Industry Analysis Objective 4 Recomme- ndation
  • 20. Recommendation 3: Innovative Campaigning Hair Pageant A large scale online campaign inviting applications from the targeted cities, among which the best entries (based on voting) will win the titles of Mrs Adorable Hair & Ms/Mr Stylish from TIGI Colgate launched a similar online campaign “Visible white angels”, which encouraged people to upload their smiling pictures. The winners get featured on the magazine. The campaign has been very successful with participation touching one lakh entries and generating a reach of more than 2 million people. User based Product Sampling Encouraging people to get their hair tested before a suitable product sample is given to them. Such Kiosks can be setup in Malls & Multiplexes. Moreover encouraging user to use these samples by visiting the nearby authorized salon so as to get advice from an hair expert. Bangalore based You Look Good salons undertook such a campaign in the recent past. From among 3000 people who were given the samples, 300 people turned out at the salon to use their sample in the presence of an hair expert. Hence generating an turnout ratio of 10%. Executive Summary Research methodology Industry Analysis Objective 4 Recomme- ndation
  • 21. APPENDIX References Reports/News • Estée Lauder Shows Strength in Its Super Premium Strategy, GCI Magazine • HUL to introduce premium brands for hair styling, Economictimes • Curl Care With TIGI, All What she wants • HUL to push Lakme salons, new products, Business Standard • Can HUL take over L'Oreal's hair care market share?, Rediff News • Educational Manual - TIGI Products • Salon hair care industry : Business analysis, Brand spreads, Player Profiles – Passport • Mad Over Donuts Social Media Strategy, SocialSamosa Databases • Euromonitor – accessed on 8th Sep’2013 • ISI Emerging Markets - accessed on 8th Sep’2013 • Frost & Sullivan - accessed on 11th Sept’2013 • Euromonitor Passport - accessed on 11th Sept’2013
  • 22. Industry Analysis: Trends, Issues, Drivers & Constraints Drivers and Constraints for a premium product brand like TIGI Drivers • Increasing disposable incomes and influx of brands, awareness of various products and services has increased manifold • Foreign brand or ‘imported’ still has an edge • Pampering yourself is now equated to high self esteem – look good, feel good • Men’s grooming market is showing a significant upward trend • Salons are frequently visited not only for hair cut but also for hair straightening, colouring and treatments Challenges/Constraints • The growing middle class is well travelled and they want best products at best prices • Indian consumer (particularly in the 30-45 age group is akin to natural and herbal products • TIGI is not a well-heard of name vis-à-vis names like L'Oreal and Wella
  • 23. Salon Chains and Hair Brand Affiliations Salon Hair Brands Affinity Wella, Sebastian B Blunt L'Oréal, Kérastase Bellezza L'Oréal Enrich L’Oréal, Kérastase Envi Salon L’Oréal, Kérastase Geetanjali L’Oréal, Kérastase Green Trends L’Oréal Jawed Habib L’Oréal JCB L’Oréal, Kérastase Juice TIGI Salon Hair Brands Kapils L'Oréal Lakme Schwarzkopf, TIGI Lime Lite L’Oréal and Wella Looks L’Oréal, Matrix, Kérastase Naturals Schwarzkopf SAKS Kérastase Strands L’Oréal and Matrix VLCC L’Oréal YLG L’Oréal and Matrix