December 18, 2012

[Maitreyee Shukla (122) - LAKM]

BRAND MANAGEMENT

LAKM
Assignment Report

Maitreyee Shukla - 122

18TH DEC

2012

BRAND MANAGEMENT | Brand Lakm & its Taxonomy

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Table of Contents
Brand Lakm & its Taxonomy ....................................................................................................................... 2 Brand Awareness .......................................................................................................................................... 3 How Lakm built a strong brand ................................................................................................................... 3 Advertising Strategies by Lakm ............................................................................................................... 3 In-store sampling .................................................................................................................................. 3 Brand placement & Event sponsorship................................................................................................. 3 Internet promotions ............................................................................................................................. 4 Line Branding ........................................................................................................................................ 4 Lakm - Retail & Distribution .................................................................................................................... 4 POP & POD .................................................................................................................................................... 6 Points of Difference .................................................................................................................................. 6 Brand Audit ................................................................................................................................................... 7 How well the business current brand strategy is working....................................................................... 7 SWOT Analysis........................................................................................................................................... 8 Perceptual Mapping ................................................................................................................................ 10 For The Masses ................................................................................................................................... 10 For The Classes .................................................................................................................................... 11 How strong is the business competitive position in comparison to its competitors ............................. 11 What strategic issues / various factors affecting the business? ............................................................. 12 Macro Environmental Factors............................................................................................................. 12 Micro Environmental Factors.............................................................................................................. 12 Product Strategy ......................................................................................................................................... 13 PRODUCT: Face products .................................................................................................................... 13 PRICE ................................................................................................................................................... 13 PLACE AND PROMOTION .................................................................................................................... 13 Lakm - Advertising............................................................................................................................. 13 Getting the spread right...................................................................................................................... 14 Kapferers Brand Identity Prism .................................................................................................................. 15

BRAND MANAGEMENT | Brand Lakm & its Taxonomy

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Brand Lakm & its Taxonomy

Lakm is an Indian brand of cosmetics, owned by Unilever and run by CEO Anil Chopra. Lakm started as a 100% subsidiary of Tata Oil Mills, part of the Tata Group; it was named after the French opera Lakm, which itself is the French form of Lakshmi, the goddess of wealth, also renowned for her beauty. Indian cosmetic Lakm was started in 1952, famously because the then Prime Minister, Jawaharlal Nehru, was concerned that Indian women were spending precious foreign exchange on beauty products, and personally requested JRD Tata to manufacture them in India. Simone Tata joined the company as director, and went on to become its chairman. In 1996 Tata sold off their stakes in Lakm Lever to HLL, for Rs 200 Crore (45 million US$), and went on to create Trent and Westside. Even today, when most multinational beauty products are available in India, Lakm still occupies a special place in the hearts of Indian women. Lakm also started its new business in the beauty industry by setting up Lakm Beauty Salons all over India. Now HUL (Hindustan Unilever Limited) has about 110 salons all over India providing beauty services. Lakm has been ranked as 47th most trusted brand in India by The Brand Trust Report. The company is the title sponsor for Lakm Fashion Week(LFW) a bi-annual fashion event which takes place in Mumbai. Contemporary Indian beauty expert Lakm continuously innovates to offer a wide range of high performance and world class color cosmetics, skincare products, and beauty salons. Combining international cosmetic technology with an in-depth understanding of the Indian womans needs, Lakm also offers its consumers a comprehensive beauty experience through its products and services at the Lakm Salons and Studios. KEY FACTS:

Lakm was the country's first cosmetic brand to introduce make up to Indian women and takes pride in being the expert on Indian Beauty for over 50 years It is a complete beauty brand spanning colour cosmetics & skin care and extending to beauty services through the network of Lakm Beauty Salons. Its bond with beauty and fashion is manifested through the Lakm Fashion Week, which is now the largest fashion event of its kind in the country.

BRAND MANAGEMENT | Brand Lakm & its Taxonomy

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Brand Awareness
Lakm Fashion Week has had a very favorable impact on the brand awareness as well as the brand image. Theres a quantum jump in Lakms brand equity in the last five years. We measure the brand on a continuous basis in terms of what the perception of the brand is in the eyes of consumers. The major attribute of Lakm brand is that it understands the Indian women the best. With brand activation around our fashion week, they have succeeded in targeting modern, young women in India. They make fashion statements every season with new product launches to popularize the brand. When it comes to mass media and campaigns and below-the-line activities (events) for spreading awareness, theres no fixed formula for Lakm. Your media spend is very much decided by your strategic plans. Earlier, you had only two options print and television campaign. But now the communication world has become more dynamic. Hence, they use SMS and Internet communications to connect to consumers. It has become a far bigger game now and there are no set rules. If you have a great idea, you pack it full, it could be mass media ads or brand activations. Consumers are changing, so integrating all your options to connect with consumers is necessary. As far as Lakm Fashion Week is concerned, they are only focused on Indian markets. They are market leaders in this sector and will continue to sustain the leadership. In fact, they are significantly ahead of their nearest competitor. With a market share of 32%, they lead the pack and their nearest competitor has only 9-10% share in colour cosmetics sector. So, they are three times bigger than their nearest competitor.

How Lakm built a strong brand

Advertising Strategies by Lakm
In-store sampling Lakm has in-store trail products. Since it in the cosmetics market it is very essential to provide samples, many stores in Mumbai from time to time have Lakm sampling offers. Where they allow you to try the product and then buy it. Brand placement & Event sponsorship Brand placement often referred to, as product placement is the sales promotions technique of getting a marketer's brand featured in movies and television shows. When a firm sponsors or co-sponsors an event, the brand featured in an event immediately gains credibility with the event audience. The audience attending an event already has a positive attitude and affinity for the contest that they choose to attend. When this audience encounters a brand in this very favorable reception environment, the brand benefits from the already favorable audience attitude. Lakm India Fashion Week, thus creates a positive image and has a huge impact on the sales of a brand. Lakms association with the annual Lakm India Fashion Week (LIFW) has helped significantly in the brand's growth chart. A beauty brand, like Lakm, must always remain contemporary and define trends. The LIFW has certainly helped Lakm acquire that position. Product ranges have been launched every year to coincide with the event and have met with considerable success. BRAND MANAGEMENT | Brand Awareness 3

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Internet promotions They are the most recent form of sales promotions. They are promotions that are done via the Internet. It is becoming increasingly popular because of the large use of Internet. Lakm offers its wide range of skin and hair products as well as salons through its website www.lakmeindia.com. Line Branding Lakm is a brand launched with a distinct concept - "source of radiant beauty". The brand appeals to a distinct market segment who appreciate and like the brand concept. The core idea is that the brand connects with the consumer group. Now the customers do not tend to be content with the one product, which the brand offers. Rather they want additional product which go hand in hand with the brand concept or application; for example a Lakm user wants all the products which enhance beauty-beauty lotion, deep pore cleansing cream, lipsticks, nail enamel, eye make up etc. Line branding strategy illustrates how well cultivated brand can be extended on to a host of related products under a common concept. This strategy seeks to penetrate the customer rather than penetrating the market. It seeks to fulfill all complementary needs that surround a basic need. Line brands start with a product but later extend too a whole range of complementary products. The products in the line draw their identity from the main brand. Marketing products as a line enhances the brand's marketing power rather than selling them as an individual brand.

Lakm - Retail & Distribution

Channels of distribution are categorized as follows: Broad - Cosmetic discounters, Supermarkets, and mass merchandisers. Examples are D-Mart, Big Bazaar etc. Alternative - is identified by five different marketing methods: Direct Sales Direct Mail/TV/Print Free Standing Stores Health Food Stores Salons Lakms Retail marketing has evolved, the consumer has become more knowledgeable and demanding, and cosmetics themselves have become more sophisticated and innovative. About the only thing that has remained constant in the cosmetics industry over the years is women's love of cosmetics.

BRAND MANAGEMENT | How Lakm built a strong brand

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Technological advances have allowed for the creation of multifunctional products of Lakm products that perform more than their basic role. For example, Lakm cosmetics that contain ceramides and vitamins, as well as UV protection are popular. Today, foundations protect from ultraviolet rays, lipsticks moisturize and mascaras thicken and condition. These Lakm Multifunctional products have enjoyed much success, thanks to more discerning consumers who are demanding value for money in their colour cosmetics purchases. The biggest performance development in Lakm colour cosmetics has been the creation of "stay-on" products. Lakm has also attracted consumers by products that are easier to apply and convenient to use, such as pen lipsticks and fast-drying nail polishes Women buy the majority of their cosmetics from mass, drug or food stores, where selecting products yourself is the norm. Lakm has introduced its wide product range at all these facilities. Research shows that sales doubles when self-service is offered. Giving people the choice attracted new customers to Lakm. Innovative technologies have allowed manufacturers to create dramatically improved cosmetic samples and to distribute samples beyond the point-of-sale, even into the home. Lakm believes that the most effective sampling vehicles are those designed to reach consumers at home. Greater product penetration in suburban and rural areas, frequent product launches and greater interest in personal grooming, especially among the younger population, drives growth of Lakm. Higher levels of disposable income and lower product prices through smaller packaging sizes made these cosmetics affordable to more consumers. SKUs - Selling Kit Unit sizes and packaging can be effectively used to generate trial and initiate demand for a product, without compromising on price. Lakm has various SKUs in colour cosmetics. Lakm is also emphasizing on making the brand prominently visible in the crowded stores. Their outlet visibility programmes cover over 25,000 outlets in key cities, deploying a large number of third party merchandisers and agencies to ensure superior display of their products. Greater interaction is the key to touching consumers and they are using the point-of-purchase for a much higher level of direct contact. For example, Lakm Beauty Advisors in key outlets promote sales and provide specific information and product testing, facilitating an informed choice to women seeking 4 beauty solutions. Encouraged by this, they are undertaking a similar initiative across many of their other brands where instore facilitators offer promotions and provide product information. For many developing categories, such in-store sampling, education and experience will play a major role in building the brand. Lakm started using CRM. It set up dozens of beauty salons across the country, where it has Lakm beauty advisors who interact directly with customers and advise them. This helps the company get firsthand knowledge of customer preferences. As a result, sales at the outlets are growing by 42%. This is way above the 10% to 25% enjoyed by the 60,000 outlets that sell Lakm products sans advisors.

BRAND MANAGEMENT | How Lakm built a strong brand

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

POP & POD

Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competing brand i.e. points where you are claiming superiority or exclusiveness over other products in the category. Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared by other brands i.e. where you can at least match the competitors claimed benefits. While POPs may usually not be the reason to choose a brand, their absence can certainly be a reason to drop a brand. While it is important to establish a POD, it is equally important to nullify the competition by matching them on the POP. As a late entrant into the market, many brands look at making the competitor's POD into a POP for the category and thereby create a leadership position by introducing a new POD. POP may not be the reason to choose a brand, but it's absence can be a reason to drop a brand.

Points of Difference
POD for Lakm are as follows: It covers ALL facts of beauty care. Helps arm the consumer with products to pamper her from head to toe i.e. a complete product range. The quality of its products is excellent. Indias first beauty brand and it has been in the market for quite a long time. As opposed to this, a majority of the foreign brands have come quite recently.

BRAND MANAGEMENT | POP & POD

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Brand Audit
A brand audit is a thorough examination of a brands current position in an industry compared to its competitors and the examination of its effectiveness. The basic concept of a brand audit is to determine whether a business resource strengths are competitive assets or competitive liabilities. This type of audit seeks to ensure that a business maintains a distinctive competence that allows it to build and reinforce its competitive advantage. The Brand Audit for Lakm is as follows:

How well the business current brand strategy is working

Current Strategy

Loyalty programmes and reward systems: As part of its marketing strategy, Lakm Unilever Ltd removed loyalty programmes and encouraged beauty salons. Lakm Unilever has also launched 'New Lakm Beauty Salon Rewards Programme' with a tagline 'Get benefits worth Rs 3,225 for Rs 350 only' to attract customers. There are also different magazines and booklets designed with acme promotion and stuffs. New look of Website: he company also re launched a new looking Website Lakmeindia.com to have a change in marketing of the company. Direct Marketing for 'Lakm Pure Defense': Deviating from the traditional mode of advertising, Lakm Unilever opted for direct marketing concept to create awareness for their new launch 'Lakme Pure Defense'. The company deployed a bevy of beauty advisors at 1200 Lakm retail outlets across the country to promote its new launch-dumping mass media ad campaigns. Their strategy is not to use mass media advertising to promote Lakm Pure Defense-the first of its kind across the globe. Instead, they opted for the 'education' route to create awareness for their product. Tie-up with Schwarzkopf: Lakm had a recent tie up with FMCG Player Henkel group's high end hair product brands Schwarzkopf Professional. Currently, Lakm has over 100 salons across the country. Under this exclusive pact, Lakm will use Schwarzkopf hair care products in all its salons. In return, Schwarzkopf will provide training for hairdressers in the salons.

Future Market Strategy

Online e-group: Lakm can form some e-group like Sunsilk Gang Of Girls (GOG) to understand consumer requirement. It requires no formal surveys, easy to administer, reduces paper work. In all it used technology to effectively to promote the brand and advertises the brand through e-generation. Online ordering of Lakm products Online appointments for Lakm Beauty Salon

BRAND MANAGEMENT | Brand Audit

December 18, 2012 Strategies under Product Mix

[Maitreyee Shukla (122) - LAKM]

New product lines can be added to the existing one which may be related or unrelated to the company. Within the product line, they can have different brands at different price points to cater to different segments of customer. Growth of Lakm Beauty Salons can provide better display of products and a beauty adviser can make it much more attractive in the eyes of the customer. Packaging can be improved or changed of Lakm products to make it more attractive to the customer.

SWOT Analysis
Strengths

Access to Unilever's global technological capability and sharing of best practices from other Unilever companies. HUL distribution network is recognized as one of Lakm's key strengths. Lakm is the overall market leader in the color cosmetic segment with a wide range of products catering to consumer needs. Being one of the earliest entrants into the Indian market, it is perceived as one of the most trusted and reliable brand. Lakm has the spread in the premium segment of Indian market in form of 'Aviance' which has been positioned as a customized beauty solution. Strong and well diversified range of products including cosmetics, skin and hair care products with leading share positions. The Lakm India Fashion week is an internationally acclaimed event. Lakm Salons are another innovative initiative of the company.

Weaknesses

The premium products of Lakm lack popularity and have a low market share. 80% of this segment is captured by Revlon alone whereas Lakm still stands low at 9% It has entered the Hair Care segment lately, hence still doesn't have a substantial market share. Promotion for the Hair Care segment lacks. Lakm still faces stiff competition from the International brands, as it has not been able to break their image because of its Indian origin.

BRAND MANAGEMENT | Brand Audit

December 18, 2012 Opportunities

[Maitreyee Shukla (122) - LAKM]

The Indian cosmetics and toiletries market grew by 8.4% in current value terms in 2006, with value sales amounting to Rs172 billion. Hence overall a healthy picture for sales in the cosmetics industry The increasing size of the middle-class population in India, representing a growth in disposable incomes, has led to more consumers for the cosmetics and toiletries market. With its present technological capability and distribution network it can even diversify towards the male segment espically due to men becoming more and more conscious of their looks. Can Unilever age the latest IT technology and position itself across countries as a sourcing hub for skin care products under Unilever brand, also using Unilever's excellent distribution systems. The hair care products industry is huge and is growing, there's opportunity to increase its share of the market through Hair Next range.

Threats

Due to market liberalization there are many competitors within the same market Earlier it was the case that the products were not priced competitively but alone with the competition within the market now the market have become more price sensitive. A counterfeit/spurious product in rural areas and small towns eats away into Lakm's business.

BRAND MANAGEMENT | Brand Audit

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Perceptual Mapping
For The Masses The Perceptual Mapping of Lakm against its competitors with respect to the masses is as follows:

BRAND MANAGEMENT | Brand Audit

10

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

For The Classes The Perceptual Mapping of Lakm against its competitors with respect to the classes is as follows:

How strong is the business competitive position in comparison to its competitors

Lakm is the market leader in beauty services with its offering through Lakm Salons and Lakm Studios across 130+ centers in about 25 major cities. The above salons are made up of a mix of franchisee salons (105) and company salons (25). It enjoys leadership in the organized beauty services market. Lakm is India's biggest and oldest beauty brand. The Lakm business expanded into beauty services in 2002 to leverage the brand in the services arena. The Lakm salons business has grown at a (CAGR) of over 35% for the past 4 years, ahead of market growth, estimated between 25 to 30%. The growth of Lakm is made up of an average organic growth of 20 % with the rest coming from inorganic addition. The size of the organized beauty services market for women is currently estimated at Rs 500 Crore. Currently Lakm Salons and Studios interact with more than 150,000 active customers every year. The majority (90%+) of the customers are in the bracket LSM 10+ and 70% are in LSM 12+ (SEC A+).

BRAND MANAGEMENT | Brand Audit

11

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

What strategic issues / various factors affecting the business?

o o

Macro Environmental Factors Demographic factors: India has a large population out of which a major segment is the youth, which in turn is a advantage for the cosmetic industry. Out of the large population present, another aspect important for the cosmetics and hair care industry is the age mix. Our country has a good percentage of the youth which is the major consumer base for the products. Education and increased awareness levels are also additional reasons. The need to look good and present oneself well is on the rise due to this, thereby giving a boost to the cosmetic industry. Economic factors: The higher income levels of the consumers and the amount of disposable incomes affect their purchasing powers. The need for personal hygiene and grooming has a high impact on the industry. Social-Cultural factors: With the changing times, there is a change in the people's habits, attitudes and behavior. More and more prefer to use the latest cosmetics and are generally aware of what they want and what suits them. This gives a major boost to the sales and scope to the company and the industry. Fashion also plays a major role in influencing the consumer's mind and in his decision making abilities and preference of products he chooses to use. Micro Environmental Factors These are internal factors close to the company that have a direct impact on the company's strategy. These factors include: Customers: Organizations survive on the basis of meeting the needs, wants and providing benefits for their customers. Failure to do so will result in a failed business strategy. Employees: Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of an organization. Training and development plays an essential role particular in service sector marketing in-order to gain a competitive edge. Suppliers: Increase in raw material prices will have a knock on effect on the marketing mix strategy of an organization. Prices may be forced up as a result. Closer supplier relationships are one way of ensuring competitive and quality products for an organization. Media: Positive or adverse media attentions to a company's product or service can in some cases make or break it. Consumer programmes with a wider and more direct audience can also have a very powerful and positive impact, forcing the company to change their tactics. Competitors: The name of the game in marketing is differentiation. What benefit can the company offer which is better than their competitors? Can they sustain this differentiation over a period of time from their competitors? Competitor analysis and monitoring is crucial if the company is to maintain its position within the market. Competitors include Revlon, Oriflame, Mac, Avon, Maybelline etc. BRAND MANAGEMENT | Brand Audit 12

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Product Strategy
Product: Lakm Pure Defense Deviating from the traditional mode of advertising, Lakm Lever, part of the Hindustan Unilever Ltd (HUL) has opted for a different strategy to market its new launch Lakm Pure Defense. The company has deployed a bevy of beauty advisors at 1200 Lakm retail outlets across the country to promote its new launch-dumping mass media ad campaigns. On the other hand, HULs arch rival Procter & Gamble India (P&G) has kicked off an aggressive consumer activation programme to popularize its skin care brand Olay in Mumbai. Clearly, the accent seems to be on direct consumer contact in the Rs 2,200 crore Indian skin care market. On Lakms new initiative, Anil Chopra, vice-president, HPC Hindustan Unilever Ltd said Our strategy is not to use mass media advertising to promote Lakm Pure Defense-the first of its kind across the globe. Instead, we have opted for the education route to create awareness for our new product. With the help of Unilever skincare technology, the company has developed Lakm Pure Defense in India, informed Chopra. According to industry analysts, Indian skin care majors are increasingly opting for direct marketing concept to create awareness for their products. Recognizing the growing significance of targeted marketing, HUL is now using this method to woo consumers at malls, retail outlets and departmental stores, explained an analyst based in Mumbai. With increasing competition, the sector is expected to register a healthy growth this year. To support its new launch, Lakm is also introducing Pure DefenseAnti Pollution facials at Lakm Beauty Salons across the country.

PRODUCT: Face products A complete line of foundations, powders and blushers for all skin types and complexions. Come in a range of flattering finishes and beautiful shades. PRICE As the product umbrella of Lakm is vast, which caters for cosmetic and skin care need for almost all kind of women, hence the pricing structure reflects variation in market-segment requirements, purchase timings and order levels. Lakm product's price is uniformly administered across the country with slight variation for the products delivered abroad. PLACE AND PROMOTION Lakm - Advertising By not following the traditional mode of advertising, Lakm Unilever, adopted different strategy for the product launches. The company does not use mass media marketing for the launch or advertising Lakm Products; They have adopted the education' strategy that means they educate their customer about the use of the products.

BRAND MANAGEMENT | Product Strategy

13

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Getting the focus right The 'aspirational' qualification would mean Lakm would compete at what the company terms the 'upper-mass' (premium) end of the colour cosmetics spectrum (products priced between Rs 85 and Rs 250) where a slew of competitors are already slugging it out. And fashion consultants like Meher Castelino believe the brand commands an edge at the high-end: ''By appropriating the fashion platform for itself, Lakm has entrenched itself at the glamour-end.'' Getting the spread right The premium segment, however, is just a slice of the Indian market for colour cosmetics (estimated size: Rs 275 crore). Today, the company has three brands: Lakm itself, which will be positioned as a fashionbrand.

BRAND MANAGEMENT | Product Strategy

14

December 18, 2012

[Maitreyee Shukla (122) - LAKM]

Kapferers Brand Identity Prism

Physical Facet: The basis of the brand. Lakm: Cosmetics / Beauty Products Personality: Answers the question what happens to this brand when it becomes a person? Lakm: India-inspired beauty line, helps the Indian woman discover not just the fine art of makeup but also the beauty that she possesses.

Culture: Symbolizes the organization, its country of origin and the value it stands for. Lakm: Customer centric and Indian

Relationship: The handshake between consumer and the organization. Lakm: Trust and wide range of beauty products (from top to toe, everything ranging from hair care to skin care to beauty salons). Reflection: The consumers perception of what the brand stands for. Lakm: Glamour Self Image: What the consumer thinks of himself. Lakm: Looking good & feeling great.

BRAND MANAGEMENT | Kapferers Brand Identity Prism

15

December 18, 2012 Externalization:

[Maitreyee Shukla (122) - LAKM]

This is the external brand experience consisting of the name, logo, advertising, brand identity and the products & services. Internalization: This is the internal brand experience consisting of the customer relations, brand values, training, quality, staff motivation, recruitment policies etc.

BRAND MANAGEMENT | Kapferers Brand Identity Prism

16