A Report on

Exploring the market of pre-cut aluminium foil sheets in the beauty industry.

for

on 31st May 2008

in partial fulfillment of the requirement for the Summer Training Project in Post Graduate Program in Management

by Aditi Srivastava

Under the guidance of

Project Giude: Amitabh Babbar AGM (Sales and Marketing) Consumer Products Hindalco Industries Ltd. Mumbai.

Mentor: Prof. Anantha Murthy Indian Business Academy Bangalore

11/16/2008

CEOs Certificate

This is to certify that Ms. Aditi Srivastava is a bonafide student of Indian Business Academy, Bangalore. She is presently pursuing a Post Graduate Program in Management.

She has submitted her project report titled Exploring the market of pre-cut aluminium foil sheets in the beauty industry under my guidance, in partial fulfillment of the requirement for the summer internship project during the Post Graduate Program in Management.

This report has not been previously submitted as part of another degree or Diploma of any other Business School or University.

Mr. Manish Jain, CEO, Indian Business Academy INDIAN BUSINESS ACADEMY Lakshmipura, Thataguni Post Kanakpura Main Road, Bangalore 560 062 INDIA Tel: +91-80-28435931/32/33/34 Fax: +91-80-28435935

11/16/2008

Deans Certificate

This is to certify that Ms. Aditi Srivastava is a bonafide student of Indian Business Academy, Bangalore. She is presently pursuing a Post Graduate Program in Management.

She has submitted her project report titled Exploring the market of pre-cut aluminium foil sheets in the beauty industry under my guidance, in partial fulfillment of the requirement for the summer internship project during the Post Graduate Program in Management.

This report has not been previously submitted as part of another degree or Diploma of any other Business School or University.

Prof. Subhash Sharma, Dean, Indian Business Academy INDIAN BUSINESS ACADEMY Lakshmipura, Thataguni Post Kanakpura Main Road, Bangalore 560 062 INDIA Tel: +91-80-28435931/32/33/34 Fax: +91-80-28435935

11/16/2008

Internal Guides Certificate

This is to certify that Ms. Aditi Srivastava, is a bonafide student of Indian Business Academy, Bangalore. She is presently pursuing a Post Graduate Program in Management.

She has submitted his project report titled Exploring the market of pre-cut aluminium foil sheets in the beauty industry under my guidance, in partial fulfillment of the requirement for the summer internship project during the Post Graduate Program in Management.

This report has not been previously submitted as part of another degree or Diploma of any other Business School or University.

Prof. Anantha Murthy, Internal Guide, Indian Business Academy INDIAN BUSINESS ACADEMY Lakshmipura, Thataguni Post Kanakpura Main Road, Bangalore 560 062 INDIA Tel: +91-80-28435931/32/33/34 Fax: +91-80-28435935

11/16/2008

Student Declaration

I, Aditi Srivastava, the undersigned, a student of Indian Business Academy, Bangalore, declare that this project report titled Exploring the market of pre-cut aluminium foil sheets in the beauty industry is submitted in partial fulfillment of the requirement for the summer internship project during the Post Graduate Program in Management, a prestigious Post Graduate Diploma awarded by Indian Business Academy, Bangalore.

This is my original work and has not been previously submitted as a part of any other degree or diploma of another Business school or University.

The findings and conclusions of this report are based on my personal study and experience, during the tenure of my summer internship.

Aditi Srivastava PGPM 2007-09 INDIAN BUSINESS ACADEMY Lakshmipura, Thataguni Post Kanakpura Main Road, Bangalore 560 062 INDIA Tel: +91-80-28435931/32/33/34 Fax: +91-80-28435935

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Acknowledgement

I am sincerely grateful for the assistance of several individuals, who have contributed towards fulfillment of this report. The knowledge, experience, guidance and the most important factors support from these people are indeed valuable.

I am extremely grateful to Mr. Amitabh Babbar, AGM (Sales and Marketing) Consumer Products, Hindalco Industires Ltd. (Foil Division) and Ms. Shilpi Srivastava, Senior Officer- HR, Foil and Wheel Business, Hindalco Industries Ltd. for giving me an opportunity to work on the project Exploring the market of pre-cut aluminium foil sheets in "beauty care" segment, arriving at the SKU required, designing the packaging for the application, launching this in the city of Mumbai, and preparing a blue-print for launch in other cities.

I express my sincere gratitude to Mr. Manish Jain, CEO, Indian Business Academy Mr. Subhash Sharma, Dean, Indian Business Academy and my guide, Prof. Ananthmurthy for their valuable inputs. I would like to thank Indian Business Academy for giving me the platform to gain practical exposure apart from the regular curriculum and to experience life from its near distance.

Aditi Srivastava

11/16/2008

Table of Contents

Executive Summary Aditya Birla Group Hindalco Industries Ltd. Aluminium Industry An Overview About the Project Step 1: Market Survey Step 2: Designing the SKU required Step 3: Recording Customer Reaction Step 4: Deriving a price Step 5: Brand Name and Tagline Step 6: Launching the Product Step 7: Estimated Consumption of the Product Graphical Findings from the survey Exhibits Bibliography

8 10 13 16 19

29 41 48

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Executive Summary

Backed by over four decades of experience and expertise, Hindalco today enjoys a domestic market share of more than 40 per cent in the foil packaging business. Aluminium foil is has been widely in use for food packing since long. Hindalco entered in to this industry to create the market for aluminium foil. So Hindalco made an attempt to identify whether aluminium foil can be used for some other fruitful purpose other than food packing. For this purpose the Consumer Products Division was evolved. The CPD team is committed to increasing usage of aluminium foil in India. The domestic aluminium foil and packing industry has witnessed decent growth on recent times. This has been helped by the onset of organized retail wherein quality product offerings get preferred placement. A number of beauty salons in India are using household foils for the process of highlighting hair. Highlighting, or streaking is meant to add depth to hair by adding lighter colors, to strands of the hair .The CPD sees a potential in this market segment and wants to explore the needs of this segment and accordingly arrive at the SKU required and successfully launch such a product. Stage 1: Market Research: Primary research carried out to evaluate the needs of the market. The survey was conducted to find out the response of the salons regarding the concept of a customized hair foil which would reduce wastage and be less time consuming. Stage 2:Designing the SKU required: After the survey if there was any positive response from the salons then the next task was to ask them about their requirements in the foil in terms of dimension, cost and other features and then design the product as per the requirement. This step involves the developing of the product based on the market research carried out. After the survey if there was any positive response from the salons then the next job was to ask them about their requirement in the aluminium foil in terms of cost and other features and then design the product as per the requirement.

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Stage 3: Sampling: This stage required the SKU to be distributed to a few select salons to test the product. This stage will help us find out whether the concept of customizing the foils will be accepted in beauty segment.

Stage 4: Product and Packaging Design: In this stage, the product is to be designed incorporating the feedback received from the sampling. This would also include deciding the size (length & width) & thickness of aluminium foil cut sheet, specs of interleaving paper, the pack size and the packaging design for the final product. This would involve consumer in-outs on the acceptable price points for the product being tested.

Stage 5: To Launch the Product: Once the product has been designed and packaging has been done, the next objective would be to launch the product in the market. This would include getting distributors in place for the launch and the use of BTL activities to ensure success of the same.

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The Aditya Birla Group

The Aditya Birla Group is Indias first truly multinational corporation. Global in vision, rooted in values, the Group is driven by a performance ethic pegged on value creation for its multiple stakeholders. A US $ 24 Billion conglomerate, with a market capitalization of US$ 31.5 billion, it is anchored by an extraordinary force of 100,000 employees belonging to over 25 different nationalities. Over 50 per cent of its revenues flow from its overseas operations. The Groups products and services offer distinctive customer solutions worldwide. Its 100 state-of-the-art manufacturing units and sectoral services span 20 countries- India, Thailand, Laos, Indonesia, Philippines, Egypt, Canada, Australia, China, USA, UK, Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Malaysia and Korea. A premium global conglomerate, the Aditya Birla Group is a dominant player in all of the sectors in which it operates. Among these are viscose staple, metals, cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilizers, insulators, financial services, telecom, retail, BPO and IT services. The Group has been adjudged the best employer in India and among the top 20 in Asia by the Hewitt- Economic Times and Wall Street Journal 2007.

Aditya Birla: Group Businesses At a Glance

Non-ferrous Metals:

Hindalco Novelis Inc Aditya Birla Minerals Limited India Aluminium Company Limited

Cement:

Grasim UtraTech Cement Limited Shree Digvijaay Cement Company Limited

10 11/16/2008

Textiles apparel)

(Pulp,

fibre,

yarn,

fabric, Grasim Thai Rayon PT Indo Bharat Rayon Birla Jingwei AV Cell Inc Alexandria Fiber Aditya Birla Nuvo PT Elegant

Chemicals

Grasim Aditya Birla Nuvo Bihar Cautic & Chemicals Thai Peroxide Aditya Birla Grasun Chemicals Pan Century Surfactants

Agribusiness

Aditya Birla Nuvo (unit Indo Gulf)

Carbon Black

Aditya Birla Nuvo (unit Hi-Tech Carbon) Alexandria Carbon Black Thai Carbon Black Liaoning Birla Carbon

Wind Power

Essel Mining

11 11/16/2008

Sponge Iron

Grasim

Aditya Birla Nuvo Insulators

Telecommunications

Idea Cellular

Financial Services

Birla Global Finance Company Birla Insurance Advisory Services Birla Sun Life (Life Insurance, Asset Management and Distribution companies)

IT & BPO

PSI Data Sytems Aditya Birla Minacs Worldwide Ltd

Retail

Aditya Birls Retail Limited

12 11/16/2008

Hindalco

Hindalco was established in the year 1958 which is a part of Aditya Birla Group. Mr. Kumar Mangalam Birla is the Chairman of this company. It is the worlds largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. The company has been accorded the Star Trading House status in India. Its aluminium metal is accepted for delivery under High Grade Aluminium Contract on LME (London Metal Exchange). It is one of the lowest cost producers of aluminium in the world. It has a fully integrated aluminium plant at Renukoot, UP. It has its foil plants at Silvassa and Kalwa and aluminium wheel plant at Silvassa.

In May 2007, Novelis Inc. a Canadian company which is a world leader in aluminium rolling and can recycling market became a Hindalco subsidiary with the completion of acquisition process. This transaction makes Hindalco the worlds largest aluminium rolling company and one of the biggest producers of aluminium in Asia

The aluminium foil segment of the company has been divided into following two categories:

Housefoil sold under the two brands of Freshwrapp & Superwrap Semi rigid aluminium foil containers sold under the brand Freshpakk

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Principal Activities of HINDALCO:-

Hindalco in India enjoys a leadership position in aluminium and copper. The company's aluminium units across the country encompass the entire gamut of operations from bauxite mining, alumina refining, aluminium smelting to downstream rolling, extrusions, foils and alloy wheels, along with captive

power plants and coal mines. The Birla Copper unit produces copper cathodes, continuous cast copper rods along with other by-products, including gold, silver and DAP fertilisers.

ALUMINIUM Hindalco is the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. In India, Hindalco enjoys a leadership position in speciality alumina, primary aluminium and downstream products. Hindalco's major products include standard and speciality grade aluminas and hydrates, aluminium ingots, billets, wire rods, flat rolled products, extrusions, foil and alloy wheels

COPPER Hindalco's Birla Copper unit at Dahej in Gujarat is the world's largest single location custom copper smelter with 500,000 tpa capacity. The plant is backed by captive power plants, oxygen plants, as also by product facilities for fertilisers and precious metals. A captive jetty with cargo handling capacity of over four million tpa, facilitates easy input of copper concentrate and other imported raw materials.

MINES The two copper mines in Australia were acquired in 2003. Birla Nifty mine consists of an open-pit mine, heap leach pads and a solvent extraction and electrowinning (SXEW) processing plant, which produces copper-cathode. A copper sulphide deposit is located at 14 11/16/2008

the lower levels of the Nifty open pit mine and an underground mine and concentrator have been developed to mine and process ore from this deposit.

HINDALCOS VISION, MISSION AND VALUES

Vision To be a premium metals major, global in size and reach, with a passion for excellence.

Mission To relentlessly pursue the creation of superior shareholder value by exceeding customer expectations profitably, unleashing employee potential and being a responsible corporate citizen adhering to our values.

Values

Integrity Honesty in every action.

Commitment On the foundation of integrity, doing whatever it takes to deliver, as promised.

Passion Missionary zeal arising out of an emotional engagement with work.

Seamlessness Thinking and working together across functional silos, hierarchy levels, businesses and geographies.

Speed Responding to stakeholders with a sense of urgency 15 11/16/2008

Indian Aluminium Industry: An Overview

The domestic aluminium industry can be divided into two broad categories: Primary metal producers process bauxite into aluminium ingots, billets or properzi rods. Primary producers are generally integrated producers, engaged in the entire chain of activities fro mining of bauxite to smelting of aluminium. Secondary fabrication units process aluminium into value-added aluminium products such as rolled products, extrusions, foils, bars & rods, wires, plates, sheets, etc rolled products, foils, sheets or extrusions. Given that production of aluminium (the metal) is a more capital-intensive activity than fabrication, there are just five large ingot producers in India, as against several small downstream manufacturers. Despite being secondary products, rolled products are largely manufactured in the primary sector on account of the high capital costs involved in setting up cold/hot rolling mills. Since primary players produce aluminium at lower costs vis--vis the landed cost of imported aluminium that is used by most secondary players, the margins of primary producers increase if they undertake secondary processing themselves. The primary industry has thus started integrating downwards. Primary metal producers The primary aluminium industry in India is concentrated in three business groups i.e., the Aditya Birla Group, Sterlite Industries, and Public Sector Undertakings (PSUs). The five primary metal producers in the domestic aluminium industry are: PSU: National Aluminium Company Limited (Nalco) 16 11/16/2008

Aditya Birla Group: Hindalco Industries Limited (Hindalco), Indian Aluminium Company Limited (Indal). In FY2000, Hindalco acquired a majority stake in Indian Aluminium Company Ltd (Indal), which had a major presence in downstream aluminium products. Sterlite Industries: Bharat Aluminium Company Ltd (Balco), Madras Aluminium Company Ltd (Malco). Secondary metal producers Secondary rollers and extruders in the Indian aluminium industry either purchase the primary metal (billets and blooms) from domestic producers or import the same and process the metal at their own fabrication plants into semi- or fully fabricated products. Such secondary metal producers include India Foils, Pennar Aluminium, and Century Extrusions, which together control over 70% of the market for extrusions and foils. The secondary metal (aluminium) industry in India is characterised by: Low entry barriers because of low capital costs and low dependence on technology. The low entry barriers imply keen competition and low capacity utilisation. High input cost: Most of the domestic production of primary aluminium is either captively consumed or exported by the primary producers. The secondary players, therefore, rely heavily on imported aluminium, which is expensive because of the high import duties. In fact, the high landed costs of primary aluminium exert great pressure on the margins of secondary producers. The annual production capacities of some of the major domestic secondary producers are presented in the above table. Industrys features High degree of concentration: The domestic aluminium industry is characterised by a high degree of concentration because of the following reasons: 17 11/16/2008

 High capital costs because of large plant sizes (1.5 lakh - 2 lakh tonne per annum smelters) and high capital intensity (Rs 1 lakh per tonne of aluminium capacity as compared with Rs. 30,000 per tonne of integrated steel making capacity), Restricted access to technology; tie -ups have to be entered into with global technology suppliers, and Entry into the aluminium industry restricted by licensing controls till 1989. Hindalco accounts for the highest share, followed closely by Nalco. The other three players cumulatively have a share of around 25% of the total domestic production of aluminium. Threat of substitutes

Steel, wood and copper are the main substitutes of aluminium. The relatively low per tonne cost of steel, the higher aesthetic appeal of wood, and the higher conductivity of copper are some of the major factors favouring the use of these prime substitutes of aluminium. However, aluminium with properties like higher strength-to-weight ratio, durability, and higher corrosion-resistance is still able to counter competition.

Low per capita consumption

The per capita annual consumption of aluminium in India is around 0.7 kg, which compares poorly with the figures for most developing countries, including China, which has a per capita consumption of around 3 kg per annum. The current low consumption of aluminium in the country points to large growth potential for the sector.

18 11/16/2008

About the Project Hindalco is the largest manufacturer of aluminium foils in India. It entered the downstream products to create market for these products. As already mentioned earlier the Consumer Products Division or CPD in Hindalco is dedicated towards increasing usage of aluminum foil in India. It had been observed that among the consumers for household foils, beauty salons too end up using the same for hair highlighting. Foil highlighting is the process of using foil to separate strands of hair that will be lightened from strands of hair that will remain in their natural color. The process is done by applying lightener to the hair that has been woven and separated using an applicator brush. The foil is then folded as to protect the hair and surrounding area during the "processing" time. This is the amount of time required to achieve the desired results. If we are able to tap this segment, we can reap huge profits since it is a premium product. The socio-economic changes like increase in the number of working couples and rising disposable incomes that is leading to experimenting with appearances make this sector well poised for a boom. In this project, a survey of beauty parlors which provide highlighting services was to be conducted. This was to be carried out to explore the potential market for customized hair foils. The first step here was to find a list of beauty salons complete with their addresses. It was decided that institutes which offered training in beauty courses would be targeted. The first visit was to the VLCC Institute in Andheri. We met the Head of the Institute; Ms. Rashi Narula. Rashi introduced us to her hair stylist faculty Ms. Anette Khwamaichiugrywa. Anette explained the entire process of hair highlighting and the common problems faced when using the foils. We took a look at the foils sheets used and noted down the specifications. She was excited about the idea of customized hair 19 11/16/2008

foils and promised to help us. However we drew a blank on a list of beauty salons. She gave us a list of VLCC institutes and Spa centres in Mumbai. But they could not help us with a list of salons in Mumbai. We then got a lead with the Area Sales Manger of Schwarzkopf, Mr. Rajesh Pathak. Schwarzkopf is a Henkel Product and a leading player in quality products for every type of salon treatment including hair coloring, hair styling and care. We visited his office at Akruti Centre,Andheri and discussed the project. He was helpful enough to look at our questionnaire and give useful inputs. He agreed to give us a list of twenty top salons in Mumbai, to start us off. The list of twenty salons covered some high end salons like Hakim Aalim etc. However twenty salons were not enough to conduct a survey. We then searched the internet and found a list of salons, complete with their addresses on the Mumbai Mirror website. Once the list was in place, the salons were divided area wise. Area Visited South Bombay Mahim Dadar Santacruz Bandra Khar Juhu Andheri Malad Chembur Kandivli Number of Outlets Visited 46 5 4 12 25 9 7 1 7 1 2

20 11/16/2008

Market Survey: The first step was to have a discussion with the salons about their opinion regarding the concept of introducing a customized aluminium foil for the process of highlighting. This discussion was important, since it established if a need for customized foils existed in the market or not. For this purpose a questionnaire had been designed, which recorded responses about the product dimensions, the problems they were facing with the current household foil. Findings from the Survey: From this discussion we found out that currently, beauty salons are using either imported hair foils or foils which is thinner than their requirements. Since there is no customized product available a lot of wastage occurs. The response from the survey was overwhelming. 75% of the respondents felt a need for a customized product. 60 % felt that the foil were too thin for their requirements- You cant even cut it properly, it is so thin 75% felt that household foils led to a lot of wastage Almost half of the foil gets wasted because it tears easily The current trend in beauty salons is of using household foils. Freshwrapp and Superwrap are the market leaders in this category. The survey showed that Freshwrapp and Superwrapp are being used in 68% of the salons covered. However, the present thickness of 11 micron is thinner than the salons requirement. As mentioned above, the colouring process requires the foil to be thick or sturdy enough to withstand the brush while the colour is applied to the hair. Furthermore, the foil has to be folded. Thus, the foils tear easily leading to a lot of wastage. The methods of tearing these foils are either with the help of A thread 32% Scissor 3 % Scale / Edge of the table 1% The cutter provided in the foil box 62%

21 11/16/2008

Household foils are of the length 30 cm and the consumer can tear out the required length. Thus, the foil sheets that are used by the salons, all have the common length of 30 cm with the width varying from 10 cm to 15 cm. Another important finding from the survey was that nearly all the salons agreed that they used aluminum foils for no other purpose except coloring. Designing the SKU required: Based on the findings of the survey, two samples were decided upon- pre cut foil sheets and foil rolls. To develop these samples, the manufacturing plant of Hindalco in Silvassa was visited. Here we met Mr. Joshi, who looks after CPD production at Hindalco. He explained the entire process of manufacturing aluminium foils of reducing the 600 micron thick sheet to 14 micron foil, to the process of splitting and annealing. We were given one foil roll of 14 micron and width 300 mm

Manufacturing Process

Rolling the 600 micron thick foil to 14 micron These foils are then further split into two sheets
Annealing the sheets: wherein properties like strength and hardness are changed

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Based on the discussion with the beauty salons, sample foil rolls of width 1214cm instead of 30cm, with an increased thickness of 14 microns and an embossed finish to provide better stay of colour were prepared. For this process of splitting and embossing the foils, the foils were taken to another plant- Hai Pack which manufactures cut sheets for HIL. The end result was 50 samples of 10mts foil rolls of width 10 cm and 14 cm each A pack of 50 cut sheets of 14cm by 25 cm were designed

SKU

Width (cm)

Length

14 Rolls 10 Cut Sheets 14

10 M 10 M 25 cm

Fifty salons were given these free samples of 50 cut sheets of 14 cm width and 25 cm length and 10 metre foil rolls of width 10 cm and 14 cm . Recording customer reaction: Feedback regarding the specifications of the sample along with the monthly consumption and spending habits were recorded for which a separate feedback form was designed. One of the problems faced while conducting the survey and feedback, was the salons reluctance to share their monthly consumption and expenses. Responses to the question of their average expenditure on foils were usually vague and unhelpful. To overcome this problem, they were asked if they bought their foils at a discounted rate or at the market price. This gave a some what clearer picture on their expenses. 23 11/16/2008

The feedback from the sampling is as follows: 85% preferred cut sheets over foils- Though rolls give the freedom to cut foils according to the customer, Cut sheets are more convenient

85% found it time saving- Now we dont have to prepare beforehand. We can now use them at the time of colouring itself.

87% said wastage reduced- These foils dont slip, tear or bleed.

87% Satisfied with the new thickness The thickness is perfect. Imported foils are much thicker, which just make them difficult to use.

23% Satisfied with the new length- The Indian hair is long, these sheets are good for shorter hair or men

62% Satisfied with the new width of cut sheets 52% said embossing does not help 30% said they would prefer rolls over cut sheets if a dispenser is provided 90% said they would like to buy in bulk 24 11/16/2008

Keeping this feedback in mind, the specifications of the product were slightly changed. Since the width of 10 cm was too narrow and 14 cm was too broad, a width of 12.5 cm was decided upon. Only 23% were happy with the length of 25 cm. The length had to be increased. Once these changes were incorporated in the product, and the new sample (of length 35 cm and width 12.5) was ready, re-sampling was done. This time we targeted only 20 salons. Feedback from this sampling is as follows: 100% felt that the products length was more convenient than the previous samples length of 25 cm. 20% said they would prefer a length of 30 cm than the current length of 35 cm.

Deriving a price: To arrive at a price for the product, there were two options. Either the cost of manufacturing such a product should be calculated and then sold at that cost. Or a price based on the monthly consumption of the salon, gathered from the survey is calculated. This will give an idea about how much the salons are willing to pay and then accordingly a price for the product could be reached. Since a premium segment is being targeted, the price of the product was based on the consumption and their willingness to pay for the product. First, it was calculated how much aluminium foils are costing the salons on per piece basis. Based on the calculations, the average cost a salon is currently paying came out to be Re. 0.89 per sheet. Taking into account the estimated consumption the pricing was done as Rs. 375 for a pack of 500 sheets, which is 0.75 per sheet Rs. 170 for a pack of 200 sheets, which is 0.85 per sheet

Brand Name and Tagline: Once a positive response was received from the sampling and feedback, it was important to come up with a brand name, logo, tag-line and packing 25 11/16/2008

for the product. The brand name should relate to the product and convey explicitly what the product is all about. Since both Freshwrapp and Superwrap are mother brands, the brand name for the foils had to have either of them mentioned. Freshwrapp has the wordfresh in product name. This has associations with food more than with beauty and care. That left us with the brand Superwrapp. Thus, the name of Superwrap Hair Foils was decided upon. The words Hair Foils convey about the product usage. For the tagline, two options were narrowed down For easy and smart colouring Makes colouring smart and easy Basically, any foil be it household foil or customized hair foils, can be used for colouring. Since a good tagline should provide a functional as well as an emotional connect, by using words like Smart an intangible emotional connect is being added, while the word Easy gives a functional connect with the product. A small survey over the phone was carried out and it was decided that the tagline should be For easy and smart colouring. The logo is the identity of the product; it has to be unique and appealing. The graphic representation of the product had to be uniquely designed for ready recognition. Since the beauty segment is all about appearances, it was decided that bright colours like pink, blue and their shades should be worked with. Launching the product: Once the product specifications had been decided, the next step was to launch the product. Since customized hair foils are a B2B product, and there was a limited advertising budget, the following options were available: Co-branding Participation in Trade shows and fairs Endorsement

For co- branding it was best to approach cosmetic companies like LOreal and Schwarzkopf. Co-branding made sense, since an established distribution network is 26 11/16/2008

directly available. Also co-branding will ensure that the good- will and brand equity of the company will rub off on to our product. However, there is a downside to co-branding as well. There is a possibility that the company could develop our idea and sell it under their brand name. Moreover, as in the case with LOreal, their product already exists in the market. By this time an alternative was found. The most effective method of reaching across to all the salons in Mumbai and India would be through a magazine or publication. The product would be launched through the magazine - New Age Salon. New Age Salon is a bi-monthly publication and is Indias first ever magazine that caters to the hair and beauty industry. The magazine is directly mailed to over 10,000 recognized salons in India and with over 9,000 copies as paid circulation. We got in touch with Mr. Richie Dsouza, an advertising executive at the magazine. After a meeting with him and the Editor, Mr. Allen John, we decided that the product will be advertised and distributed exclusively through New Age Salon. The advert will carry a sample of cut sheets along with a coupon which will be filled in by the salons interested in buying the product. This advertisement will be carried in two issues whereas the innovation shall be carried out in the 1st issue only. The advertisement will have an aluminium foil sheet stuck on the magazine page, which when torn will reveal a small sample pack of the product. Along with the sample, there will be a information leaflet To build on a database of salons, we will also carry an offer of free sample of

hairfoils. This free sample will ensure that salons will fill in the coupon with their details Estimated Consumption of the Product: Based on our survey and feedback, the potential consumption of the product was calculated. Although we distributed samples to 50 salons, only 37 were able to give feedback. These 37 salons were divided into three categories based on their monthly consumption of foils. (12.5 cm in width by 35 cm in length) 32% fell into the A category i.e. their monthly consumption above 1000 sheets 35% fell into the B category i.e. their monthly consumption is above 500 sheets 32% fell into the C category i.e. their monthly consumption is 200 pieces sheets 27 11/16/2008

Among the 10,000 salons, that New Age Salon reaches out to, 25% (assumption) do not offer hair colouring services, so we are left with 75,00 salons. Now this classification of salons is projected on to the 75,00 salons that New Age Salon is distributed to.

2400 salons fall into the A category 2625 salons fall into the B category 2400 salons fall into the C category The average monthly consumption of 75,00 salons across India is 4192500 sheets. Multiplied by the volume of one sheet (1.66) the consumption is approximately calculated as 7 tonnes.

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Graphical Findings from the Survey:

Question 1 : Are you facing any problems with the thickness?

Are you facing any problem w ith the thickness?

35 30 25 20 15 10 5 0 Yes No 31

21

29 11/16/2008

Question 2:: Are you facing any problems with the length ?

Are you facing any problem s w ith the length?

60 50 40 30 20 10 0 0 Yes

52

No

Question 3: Is there any wastage?

Is their any w astage?

45 40 35 30 25 20 15 10 5 0 Yes No 13 39

30 11/16/2008

Question 4: What method you use for cutting foils?

What method you use for cutting the foils?

30 25 25 20 15 10 5 0
Th re ad Bo x cu tte r Sc iss or s Sc al e

13

31 11/16/2008

Graphical Findings from the Feedback:

Question 1: Are you satisfied with the thickness of the sample?

Are you satisfied with the thickness?

40 35 30 25 20 15 10 5 0 Change 5

35

Satisfied

Question 2: Are you satisfied with the width of the sample?

32 11/16/2008

Are you satisfied with the width?

30 25 25 20 15 15 10 5 0 Change Satisfied

Question 3: Are you satisfied with the length?

Are you satisfied with the length?

35 30 25 20 15 10 5 0

31

Change

Satisfied

Question 4: Do you find it time saving?

33 11/16/2008

Do you find it time saving?

40 30 20 10 0

34

Yes

No

Question 5: If given a choice what would you prefer?

If given a choice what would you prefer?

40 35 30 25 20 15 10 5 0

34

Foil Roll

Cut sheets

Question 6 : Is wastage reduced?

34 11/16/2008

Is wastage reduced?
40 35 30 25 20 15 10 5 0 Yes No 5

35

Question 7 : Does the embossed foil help the colour stay better?

Does the embossed foil help stay the color better?

21.5 21 20.5 20 19.5 19 18.5 18

21

19

Yes

No

35 11/16/2008

Question 8: If provided with a dispenser to cut the foil, would you prefer it over the cut sheets?

If provided with a dispenser to cut the foil would you prefer it over the cut sheet?
30 25 20 15 10 5 0 Yes No 12 28

Question 9 : Would you like to buy foils in bulk?

Would you like to buy foils in bulk? If yes than at what length?
40 35 30 25 20 15 10 5

36

4 0 0
18 mts 72 mts 1 kg

0
No

0 9 mts

36 11/16/2008

Question 10: Are you happy with the fact that someone has paid attention to the beauty segment and is coming up with a customized product?
Are you happy with the fact that someone has paid attention to beauty segmant and is coming up with customized product?
35 30 30 25 20 15 10 10 5 0 Yes No

QUESTIONAIRE

1. Name:

2. Which brand of foils are you using? [ ] Freshwrapp [ ] Superwrap [ ] International Brand

[ ] Any other (If some other brand, mention name).

3. How many rolls of foils do you buy in a month? [ ] 9 mts [ ] 18 mts [ ] 72 mts [ ] 1 kg pack

[Note down: Thickness, Length

4. From where you purchase foils? 37 11/16/2008

[ ] Retailer

[ ] Distributor

[ ] Local Shops

[ ] Any other (If some other brand, mention name).

5. How much does it cost?

..

6. What are the methods you use for tearing foil? [ ] Thread/ Blade [ ] Scissor [ ] Cutter provided in the box

[ ] Any other (If some other brand, mention name).

7. What is the dimension (length and width) of the foil that you cut?

8. How many pieces of foil do you use in a single sitting of highlighting?

For Crown

..

For Over all ..

9. How many sittings do you have in a week?

10. What are the major complaints about the foil you are using currently?

Thickness

Length 38 11/16/2008

.........................

Wastage

..

Any other

11. Do you use aluminium foils for any other process besides highlighting?

12. Are the beauticians/staff trained from a particular institute? [If yes, mention the Name].

FEEDBACK FORM

1. Name:

2. Are you satisfied with the changes in

a) Thickness

..

b) Width

...

c) Length

..

3. If given a choice, what would you prefer: Roll or Cut sheets and why? 39 11/16/2008

4. Do you find the length of the Cut sheets convenient?

5. Is wastage reduced or still exist?

[The next sets of questions are to be asked with respect to the foil rolls]

6. When using the foil roll what is the method you use for cutting?

7. What is the length at which you are cutting the foil?

8. If provided with a dispenser to cut the foil would you prefer it over the cut sheets?

9. Any more suggestion for changes:

40 11/16/2008

Costing Area Density Weight sq m g/cubic m Density volume area x 2.71 thickness .35 x .125 1.66 162 0.16 0.27 0.00 0.10 5.00

14

Weight Metal rate Metal rate Metal cost Transportation Job work cost Packing cost 41 11/16/2008

g Rs./kg Rs./g Rs./pc Rs./pc Rs./pc Rs./pk

2000 kgs 1500 0.75

No. of pcs/pack Outer carton No of packs/carton Packing cost Product Cost Product Cost Price Excise Freight CST Landed to dis Distributor margin VAT Landed to SD SD margin Landed to customer

Rs./carton

200 20 20 0.03 0.40 80.53 108.263525 15.6116003 1 124.875125

0.00075

Rs./pc Rs./pc Rs./pack 14.42% 0%

5% 4% 10%

6.24375624 5.24475524 136.363636 13.6363636 150 Current 0.75 cost

Landed cost/pc Contribution kgs/pack Contribution Rs./pack Rs./kg

27.74 0.33 83.5503603 Monthly Consumption of Foils Cost per sheet (Whe n length =35 cm) 0.81 0.84

Salon Name Ti amo Create Be you Beauty Salon Ritu's

No. of Total She Cost of Monthl ets One No of y per M pack Pack Expendi pac ts Rs s ture k 9 50 1 50 72 9 52 1 52 72

Cost per sheet ( When length=3 0cm) 0.69 0.72

Monthly Consum ption ( In number of sheets) 72 72

9 9

55 55

2 2

110 110

72 72

0.76 0.76

0.89 0.89

144 144

42 11/16/2008

Lakme Juhu Haute hair Arista Bluewe lla Lulu's Salon Preciou s Salon de Beaute Curl up and dye Spatika Glam girls and guys Jueness es Slender Gender VLCC Raih Wet n Wild Trendy Chi kaba Vous Prochi's Rewind Impress ion Redz B-Age Coleens Dilshad Pretty woman Rah mehr Mad o wat 43 11/16/2008

9 9 9 9 9 9

49 42 42 55 40 55

3 3 3 3 3 3

147 126 126 165 120 165

72 72 72 72 72 72

0.68 0.58 0.58 0.76 0.56 0.76

0.79 0.68 0.68 0.89 0.65 0.89

216 216 216 216 216 216 20 0

9 9 9

55 50 50

3 4 6

165 200 300

72 72 72

0.76 0.69 0.69

0.89 0.81 0.81

216 288 432

9 18 9 9 68 72 72 9 72 72 9 50 68 72 72 72 72 18 9

45

6 3

270 0 300 270 450 250 200 472 375 375 550 500 750 400 400 400 400 450 1350

72 144 72 72 544 576 576 72 576 576 72 400 544 576 576 576 576 144 72

0.63 0.00 0.69 0.63 0.83 0.43 0.35 0.82 0.65 0.65 0.76 0.63 0.69 0.35 0.35 0.35 0.35 0.31 0.63

0.73 0.00 0.81 0.73 0.97 0.51 0.41 0.96 0.76 0.76 0.89 0.73 0.80 0.41 0.41 0.41 0.41 0.36 0.73

432 432 432 432 544 576 576 576 576 576 720 800 1088 1152 1152 1152 1152 1440 2160 50 0

50 45 450 250 200 59 375 375 55 250 375 200 200 200 200 45 45

6 6 1 1 1 8 1 1 10 2 2 2 2 2 2 10 30

Champ agne Makeo ver Glory Beyond the fringe N&Y Total Catego ry 1000s 500s 200s

9 9 18

55 42 40

30 36 30

1650 1512 1200

72 72 144

0.76 0.58 0.28

0.89 0.68 0.32

2160 2592 4320

68 9

150 59

15 150

2250 8850

544 72

0.28 0.82 0.76

0.32 0.96 0.89

8160 10800 46664 10 00

N Percen o. tage 12 32% 13 35% 12 32% 25% 10,0 00 7,50 0 2,43 2 2,63 5 2,43 2 All parlours Parlours into streaking 2,432,43 2 1,317,56 8 486,486 4,236,48 6 7.03

Total

37 Categ ory A Categ ory B Categ ory C 1000 500 200

Bibliography

Books: Marketing Management, Philip Kotler

Websites 44 11/16/2008

http://www.google.com http://www.hairfoils.com http://www.consumer.schwarzkopf.com/hair-beauty http://www.loreal.com/_en/_ww/index.aspx http://www.vlccinstitute.com/about_us.html http://www.hindalco.com http://www.foillights.com http://www.style-hair-magazine.com/highlighting-hair.html

45 11/16/2008