Synopsis BUYING BEHAVIOR OF CONSUMER TOWARDS COSMETICS IN LUCKNOW Special preference to Lakme

in Partial fulfillment of the requirement for the award of the Degree of Master of Business Administration.

by Samra Mahboob MBA Integral University,Lucknow Roll no: 1100122130 Under the guidance of Zahid Raza Khan Asst. Professor, Marketing Integral University

Declaration
I hereby that I have worked on the topic BUYING BEHAVIOR OF CONSUMER TOWARDS COSMETICS IN LUCKNOW (Special preference to Lakme) All the information that has been collected, analyzed and documented for the project is authentic possession to me. I would like to categorically mention that the work here has neither been purchased nor acquired by any other unfair means. The data and information existing in this report are accurate and update to the current data, to the best of our knowledge. However, for this purpose of the project, information already compiled in many sources has been utilized. All information in this report is true representation of what I have experienced during the project.

Samra Mahboob

Acknowledgement
Co-operation and building up of moral are the essence of success. These are two factors that go a long way in achieving it. It is a Herculean task, which lacks these two determinants of success. It was an opportunity and great pleasure for me to be in such an environment and having interaction with concerned people. I express my heartily respect and profound thanks for their enlightening and meticulous guidance for the consummation and evaluating of this project. Prof. Zahid Raza Khan, Faculty Member, Department of Management & Research , who was in the role of my Faculty Guide, left no stone unturned in guiding me along the course of my Project work. I am grateful to them those given me this opportunity to work on such type of project, without their, it is not possible for me to complete the project. Finally, to my parents, for all the tea and care with which they overwhelmed me through these long months of creation. I sincerely hope that my first venue in this field is appreciated. Offering thanks.

Samra Mahboob

Executive summary
About the project
Within a short span of the last five-six years, the use of cosmetics by Indian consumers has increased significantly with more and more women and men taking greater interest in personal grooming, increasing disposable incomes, changing life styles, influence of satellite television and greater product choice and availability. This cosmetics and personal care industry has been growing at an average rate of 20 per cent for the last few years. The growing Indian cosmetics market offers promising prospects for international brands. The growth rate in the cosmetics market reflects an increasing demand for beauty care products in India. Perfumes and fragrances, skin care, and hair care products are some of the major segments with promising prospects for U.S. companies. Penetration of most cosmetic and toiletries is very low in India. Current consumption of many products is well below that of many countries in Asia. The low market penetration of many cosmetics and personal care products offers room for growth. The urban population with increasing purchasing power is the major force driving demand for cosmetics and toiletries. India is a very pricesensitive market and mass-market products constitute the major part of the cosmetics and toiletries market. Indias import of cosmetics and toiletries and intermediate raw materials is around US$ 120 million, of which the U.S. has a share of approximately 10 percent.

Objective of Study

Objectives are the route map of any research. Without setting objectives any research would be meaningless and all the efforts of the researcher will go in vain. The objectives of this project titled "consumer behaviour regarding purchase of cosmetics" were: 1) Finding major factors that influence the purchase decision of consumers to purchase cosmetics. 2) To find out the variety of cosmetics, the women and students prefer most. 3) The brands, which are popular for the particular type of product. 4) The expenditure and the frequency of using the cosmetics. 5) Determining the sources from where the women get theinformation about cosmetics. 6) Consumer perception towards the cosmetics ads. 7) Whether they are influenced and inspired by the ads.

INTRODUCTION
High priestess of sacred Indian temple meets English army officer who's unwittingly strayed into holy ground. They fall in love. Her orthodox father vows vengeance... That's the story of Lakm, a 19th century opera written by Frenchman Leo Delibes, from which Simone Tata borrowed the name Lakm (French for Lakshmi, the name of the priestess). The current size of the Indian cosmetic market is approximately US$ 600 million. Of this, the fastest growing segment is color cosmetics, accounting for around US$ 60 million of the market. Industry sources estimate a rapid growth rate of 20 percent per annum across different segments of the cosmetics industry reflecting an increasing demand for all kinds of beauty and personal care product. Growth has come mainly from the low and medium-priced categories that account for 90 percent of the cosmetics market in terms of volume. Even with a 20 percent average growth rate, the per capita consumption of cosmetics is very low in India. Current per capita expenditure on cosmetics is approximately US$ 0.68 cents as compared to US$ 36.65 in other Asian countries. However, with changing lifestyles, higher disposable incomes, increasing advertising, penetration of satellite television, awareness of the western world and growing importance of beauty pageants, there have been significant changes and use of cosmetics is on the rise. Lakme, a brand originally introduced by the Tata group of India, now bought over by Hindustan Unilever (HUL) of the Unilever group, Tips & Toes, another domestic player, and Revlon dominate the US$ 60 million color cosmetics market. Multinationals, Revlon of the U.S. and L'Oreal's Maybelline has a dominant share of the small premium lipsticks and nail enamels market. Mass-market products account for a major share, while the premium segment accounts only for a mere 9 per cent in lipsticks and 5 per cent in nail enamels. Lipsticks account for nearly a third of the market at US$ 21 million, while the market for nail enamels is estimated at around US$ 23 million. The color cosmetics

segment is very competitive and has a high penetration level of 80 percent. The skin care market in India is estimated at US$ 180 million. Within the last decade, this segment has seen many consumers slowly shift from the mass to the premium end of the market. The penetration rate is high in the skin-care segment as compared to color cosmetics. In the skin-care segment, price and volume played an equal role in value growth. Moisturizing lotions, fairness creams and face cleansers are the popular categories in the skin-care segment and account for approximately 60 percent of the skin-care segment. The major players in this segments are Lakme, Ponds, Fair & Lovely of the HUL group with a 50 percent market share, followed by players such as J.L. Morison that markets the Nivea range of products in India, Godrej and Revlon. Penetration levels of international cosmetics brands in India are still low. Foreign brands currently constitute only 20 percent of the market. A major reason for low penetration of international brands can be attributed to high pricing. These companies initially gained sales on their international brand image, however, repeat purchases were not forthcoming and to retain their sales growth, several foreign companies reformulated price strategies to tap the large Indian middle class. Urban women in the middle and upper income groups in the age range of 2350 is the target group for international brands, as this group looks for better products and is willing to pay a premium for international quality products. Industry estimates suggest that there are close to 10 million such women in India.

Company Profile

Hindustan Unilever Limited

Chairman: Harish Manwani CEO and Managing Director: Douglas (Doug) Baillie Director, Finance and IT: D. Sundaram Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited , is Indias largest consumer products company and was formed in 1933 as Lever Brothers India Limited. It is currently headquartered in Mumbai India and its 41,000 employees are headed by Harish Manwani, the non-executive chairman of the board. It is Fast-Moving Consumer Goods (FMCG) Industry that includes detergents, soap, shampoo deodorant, toothpaste, and other personal care items, and cosmetics HUL's personal care brands include soap brands such as Lux, Lifebuoy, Liril, Breeze, Dove, Pear's, and Rexona; shampoos and hair coloring brands including Sunsilk Naturals and Clinic; skin care brands Fair & Lovely and Pond's; and oral care brands Pepsodent and Close-Up. The company's cosmetic line is led by the Lakme brand. HUL also produces a line of Ayurvedic personal and healthcare items under the Ayush brand. In addition to the FMCG segment, HUL has developed a line of food items, primarily under the Kissan and Knorr Annapurna brands, as well as the ice cream brand Kwality Wall's.

VISION
To earn the love and respect of India, by making a real difference to every Indian.. HLL follows its parent companys mission to add vitality to life. They strive to meet everyday needs of nutrition, hygiene, and personal care products that help people feel good, look good, and get more out of life.

STRATEGY
Grow ahead of the market by leading market development Activities Leverage positive impact of growing Indian economy on consumer spending Grow a profitable foods and Top end business Grow the bottom-line ahead of top line Strong commitment to sustainable development

Lakme
Half a century ago, as India took her steps into freedom, Lakme, India's first beauty brand was born. At a time when the beauty industry in India was at a nascent stage, Lakme tapped into what would grow to be amongst the leading, high consumer interest segments in the Indian Industry - that of skincare and cosmetic products. Armed with a potent combination of foresight, research and constant innovation, Lakme has grown to be the market leader in the cosmetics industry. Lakme today has grown to have a wide variety of products and services that cover all facets of beauty care, and arm the consumer with products to pamper herself from head to toe. These include products for the lips, nails, eyes, face and skin, and services like the Lakme Beauty Salons. A little bit of Lakm history: In 1995, Lakm Ltd (a Tata Group company) and HLL formed a 50:50 venture Lakm Lever that would market and distribute Lakm's products. In 1998, Lakm sold its brands (and the 50 per cent it owned in the JV) to HLL, renamed itself Trent and entered a different business (retail). Only, the years between 1995 and 2000 saw HLL wrestling with several issues with a bearing on Lakm's future. A brand that has over 5 decades talked of beauty is none other than Lakm. Launched in 1952, it offered a range of cosmetics with nail polishes & lipsticks from the early 80s. Lakm also understands the importance of maintaining and accentuating a womens natural beauty, for this it has introduced a range of skincare products from 1987. These ranges have been constantly innovated to bring specialized beauty care and complete the range for the definitive women. A brand that has over 5 decades talked of beauty is none other than Lakm. Launched in 1952, it offered a range of cosmetics with nail polishes & lipsticks from the early 80s. Lakm also understands the importance of maintaining and accentuating a womens natural beauty, for this it has introduced a range of skincare products from 1987. These ranges have been constantly innovated to bring specialized beauty care and complete the range for the definitive women. Chopra accepts that distribution has been the company's Achilles heel for some time: ''The supply-chain hasn't been as robust as it should have been, but that has been the result of our efforts to reposition and reintroduce the brand.'' The positioning bit, although complex, is clear:

Ponds is Lever's primary skincare brand; Lakm, its aspirational colour cosmetics brand, which also has a presence in skincare. 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, ranging from Revlon (through Modi Revlon) to Chambor, are already slugging it out. Says Meghna Modi, 26, Executive Director, Modi Revlon: ''The numbers say it all. According to ORG-MARG's retail audit, we have an 84 per cent share of the premium end of the colour cosmetics market.'' Chopra is quick to rubbish this claim; he says ORG-MARG does not have a representative sample of the 60,000 outlets through which colour cosmetics are sold in India. Still, it is conceivable that Lakm's new-found aspirational strategy could have been brought about by competitors like Revlon and Maybelline, which targeted this segment. Indeed, the company's nontransfer lip-colour range follows in the wake of Maybelline's launch of a similar range, and its new nail-enamel colours come soon after Maybelline and Revlon launched their nail-enamel range. The company's defense is that it takes at least 15 months from the conceptualization to the actual launch of products. 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.''

SWOT ANALYSIS Of LAKME Strengths : local brand of specific relevance to India. Strong R&D capability, well linked with business. Integrated supply chain and well spread manufacturing units. Ability to deliver Cost Savings. Access to Unilever global technology capability and sharing of best practices from other Unilever

Weaknesses : Price positioning in some categories allows for low price competition. Varying quality range in its products. Falling Quality of Lame salons

Opportunities : Brand growth through increased consumption depth and frequency of usage across all categories. Upgrading consumers through innovation to new levels of quality and performance. Building brand image by collaborating with top designers in Lakme Fashion week

Threats : Aggressive price competition from local and multinational players. Spurious/counterfeit products in rural areas and small towns. Non Existence of brand image in long Run

RESEARCH METHODOLOGY

The research is based on:Primary Data 1) Questionnaire Secondary Data Internet Company Reports& Broachers Magazines Newspapers Articles &journals Data is also gathered by talking to the respondents (Target Audience, understanding their beauty needs,what aspire them to go for the (lakme)brand. Also the level of : Brand awareness, Price level, Visibility of brand personality. Expectancy of Communication

All these factors were the prime criterion for selecting (Which brand??), Short listing and ranking (level of trustworthiness? or most favoured ) which had helped us for identifying the winner in cosmetics industry.

BIBLIOGRAPHY
Kotler Philip , Keller Lane Kevin marketing , prentice hall of India , 2005 S.P Gupta , Business Statistics, 14th edition , 2005 Business Statistics , J. K Sharma , edition 2005 Tata Mc graw-Hill Edtion , Business research methods , Donald R.Cooper , Pamela S. Schindler.

References

www.hindubusinessline.com www.lakmeindia.com www.hll.com www.economictimes.com www.financialexpress.com