Overview Of Skincare Industry India Marketing Essay

Over suck Of scratch anguish Indus endeavor India Marketing EssayThe preference of Indian consumers is changing from the merely functional products to the discriminatory products. The aver hop on annual spending of Indian consumers on ornamentals and toiletries in 2005 is just over US$3. The nonfunctionals and toiletries saw its value sh are rising from 27% in 1999 to 31% in 2005. This trend also move subsequently that with consistent increase in the appropriate. The foundation of many multinationals also fuelled the growth in the patience as outside(prenominal) players focussed more on product innovation. It is seen that global companies after coming to India trying to explore the traditional grate carry on products in India. Indian consumers are increasinglylooking to international face-to-face care gulls as lifestyle enhancement products which will create a sophisticated and focal ratio class image. The total tegument care marketplace is estimated to be around Rs. 3,400 Cr. The total size of the Indian retail beauty and cosmetics market is currently estimated at $950 million. The over on the whole beauty and wellness market, which allow ins beauty services, is $2.68 billion. The cosmetics market in India is growing twice as fast as that of the United States and European market. However, The peel care market is at a primary stage in India. The penetration level of this department in India is around 20 per cent. The improvement of medical engineering also fuels the growth of the market in India. Major companies active in this segment include Hindustan Lever Godrej Soaps, Colgate-Palmolive, Marico, Dabur and Procter Gamble. The skin care market dismiss be segregated into toners, cleansers, sunscreens, anti-wrinkle creams, dark circle removing creams, astringents, facial creams, moisturizers, luridness creams, day and night-creams.The penetration level for both the urban and rural market is low. Many people shut away prefer to use traditi onal products to cure the skinMore than 25% growth every year in the bark parcel out Industry nervus facialis skin care products pick up become an essential trigger off of the beauty marketGradual Adoption of the western cultureThe chart below shows major players in the skin care industry and their respective market sharesInternational Skin do by marketThe skin care industry worldwide is a 50 Billion Dollar plus melodic phrase. Caring for the skin of people throughout the world is a popular business. It is a business where people are passionate most their work, because it matters. It matters to their families, to their communities, to their profession and the whole world. It is a business where unmet needs still abound and where people around the world are waiting for invigorated and better solutions. The major product segments in the market are Face Care Products, Body Hand Care, and Depilatories, and, Sun Care Products. The sub product segments include Facial Moisturize rs, Facial Cleansers, and Hand Body Lotions/ wefts. At present at that place are about 889 companies in the international market including many key and box players worldwide such as Amway Corp.Asian markets ( 2007 Euromonitor Report)RankCountrySkin Care Value per CapitaCountry%Growth1Japan102 US $Indonesia262Hong Kong73 US $China163Taiwan58 US $Vietnam154South Korea57 US $India135Singapore41 US $Singapore106Thailand14 US $Malaysia107Malaysia10 US $Thailand98Philippines5 US $Philipines79China4 US $Taiwan510Indonesia1 US $Hong Kong411Vietnam1 US $South Korea412India1 US $Japan2From the above table it is clear that, The people in India spent least(prenominal) amount of money on the skin care with respect to the otherwise Asian countries, However India has shown a very rapid growth in the personalized care segment with a growth of 13% and is ahead of 8 prominent Asian nations. That shows that India has a tremendous potential for growth.The chart mentioned below tells about the Per Capita Skin care product Consumption of the India in comparison to other Asian countries( The values are in US $). ThisThere is a commodious potential market for skin care products in India as compared to other Asian countries as Indian market is still to be explored.Percentage of Skin care products in total cosmetics products segmentsSkin Care 16% well-nighHair Care 16% approximatelyBath and Shower products 46% approximatelyColour cosmetics 6% approximatelyFragrances 1% approximatelyDrivers of the IndustryGrowing worldwide wealthChanging consumer lifestyleGlobalisationCelebrity endorsement increases consumers cognizance and interestThe total disposable income of the people in Asia is 21% of that of the world which is estimated to increase to a value of the 23%( Euro monitor Report)The major Skin Care Segments and their DriversStrong Desire for the fair skinDriversAsians beliefsWhite hides three ugly bits median(a)er equals to upper classStressful lifestyleBusy lifestyle resultin g in less(prenominal) sleeping timeStress hormone sends the skins oil glands into overdriveDevelopment and witThese beliefs and the strong desire for the skin whitening products led to the development of applied science and evolution of new whitening products and formulations. The whitening creams are also produced for men. In recent years the fairness cream is combined with the anti-aging formulations which bring the satisfaction and tonicity good factor to the guest. Also with rise in work-stress and pollution people are more inclined to these products. Not only that, baby skin care products, sun protection products, bleach and facials also gained popularity among people.Anti AgersDriversGrowth in Aging PopulationAccelerated AgingRising Pursuit of AgelessnessDevelopment and OutlookTarget young consumers Prevention better than cureSuper-premium From global to local mugsMass brands developmentsCosmeceuticals Collaboration amongst cosmetics and pharmaceutical company revoluti onary engineering science and pieceMore regulated industry to ensure the condom of cosmeceuticalsFacing strong competition from aesthetic beauty service industrySkin Care ApplicationsDriversincrease consumer knowledge on skin care applicationTV beauty programs educates consumers on different products benefitsTechnology advancementSkin care evolution thank to technology and researchBeauty web blogs to allow consumers to exchange ideasNew RoutineCleansing LiquidCleanserLotionAC Essence feignEmulsionEffectorWhite Essence Cream Trends and developmentUsual RoutineCleanserTonerMoisturiserDevelopment of more powerful productsConsumers may outsource personal care and pay for spas and treatmentIndia has the maximum growth in the resort/hotel spa( 107% growth annually in 2007)Natural and ethical productsDriversMassive awake(predicate)ness of wellness wellnessSafety scares and recallsConsumers look for guarantee of authenticityRising greensumerismTechnology facilitate the development of m ore telling productsKey Trends and DevelopmentsEdible, inhering and herbal ingredientsenvironmentally friendly packagingNew retail conceptsMinerals and precious materials, including goldPackaging innovation eco-friendly packagingSame consumer buying both spicy technology and cancel productsEmergence of at-home- afford productsVenture into other products, such as sun careWell-known designers and celebrities increase consumers knowledge on rude(a) ethical products custody Skin CareDriversWorkplace Pressure from competition in workplace led to the emergence ofMetro sexual manGreater acceptance in exploitation nationsMove to more advanced productsKey trends and DevelopmentStronger growth than skin care In 2007, the Asian Skin Care Market has grown at a rate of 8%, where as the men skin care market has grown at a rate of 14%. Similarly intercommunicate growth in 2012 is 6%, whereas the growth of the men skin care segment is 8%.Moving away from 3 basic cleaning stairsMacho-sexual v s metrosexualIncreasing popularity of sportsmenLower acceptance of mens colour cosmeticsMain focus will still be skin care and other mens grooming productsNew technologyFocusing on convenience nonfunctionals surgery for menGetting popular in countries manage Japan and South KoreaInhibitors of the Skin Care Industryenvironmental StandardsIn 2003, Unilever, had been exposed by The Environmental Investigation Agency (EIA) and Friends of the Earth in an article in the Observer newspaper today for sourcing talc illegitimately quarried by an Indian mining company. The mining company has also listed US multinationals, Johnson Johnson, Revlon and Avon among its clients. The quarrying non only destroys tiger habitats but also devastates the forest and watersheds indispensable for the well being of local people. This is one of the examples of how the environmental protection standards can restore the business in skin care industry.Laws Regulations of the governmentCosmetics directly af fect peoples life. Hence, the regulations for the cosmetics match to that of the drugs considering the sensitivity of the skin care cosmetic products and their possible side do. The Drugs and Cosmetics Act 1940 is there to impose standards on the cosmetics manufacturing industries.Government import export taxes and regulations for the foreign companies also affect the skin care market. High end customers prefer MNC skin care products. Stringent government regulations are certainly inhibitors of the development of the skin care market in India.Trends Opportunities in IndiaGrowth in the young population (RBI report) Changing demographics in India2/3rd Population below age of 35Favourable Consumption Pattern The share of private consumption for personal care products increases consistently over the years( Economic Survey 2009)Increase in Urbanization in India The skin care products are not in the basic need category. Hence, the urban people whose basic needs are carry through are mor e inclined to these products and are potential customers to buy the skin care products.Urban Population in MillionsUrban Population as a percentage of total population197110919.9198116023.3199121825.7200128527.8Porters five forces analysis of International Skin Care IndustryThe manufacturing of skin care products is currently dominated by a small number of multinational corporations that originated in the early 20th century. The three largest skin care product companies in the world in name of market share are Procter and Gamble, Loreal and Unilever. But they face stiff competition from the interchangeables of Estee Lauder, Colgate Palmolive, Avon, Shisiedo, Johnson and Johnson, Beiersdorf. There are also a large number of local players at bottom each market.In this analysis we will be analyzing the forces which affect the global skin care industry as a whole because many of the forces retain similar effects across the world.Nature of CompetitionThe industry is a highly fragment ed market, marked by the presence of a few companies with a global presence, which control a significantly larger share of the cosmetics market. The top 3 companies (LOreal, PG, and Estee Lauder) control around 35% of the share. The top 10 companies control nearly the 50% of the market. The rest of the market is distributed between small players who have a highly local presence. The industry is highly competitive due to the presence of a large no. of SMEs (France alone has over 850 firms with 10 employees or less).Another form of competition is from direct selling companies like Avon and Amway.The high end of the market is characterized by low volume, high product differentiation and large brand strength, which restricts the competition. While the low end market with limited differentiation allows opportunities for smaller companies to make their mark.Natural cosmetics in particular are rapidly gaining popularity and present an opportunity for SMEs and new entrants can compete again st established giants. The industry is characterized by a high rate of product development and product obsolescence.Bargaining power of BuyersDue to the strong brand power of most of the large brands, buyer power of retailers and distributors is decrease as they must stock the most popular brands. But in operations where the retailers have a stronger position, markets where competition is intense, then buyer power increases. We can also analyze buyer power from the perspective of the end consumer because it is they who dictate the market trends.The customers do not always stick to one brand of physical composition or perfume or any variant offered because the switching costs are very low. This means that buyer power is high and demand for well-disposed prices.Bargaining power of suppliersWith global sales of nearly $300 billion in the cosmetic industry(2007 report), skin care products present one of the most tangled global sourcing challenges. Much of the sourcing for the indust ry involves a fragile web of small, fragmented suppliers that must be linked together using a sophisticated and effective logistics technology.Suppliers are often small in scale compared to the largest manufacturers and consequently their power is reduced, but this countered by the fact that chemical producers gain revenues from a wide diversity of sources, reducing their dependence on skin care product manufacturers. The trends seem to indicate similar conditions for the future. Overall, supplier power with respect to the cosmetic market is moderate. scourge of close substitutesThere are substitute products, but they are not fully developed in the Indian market as well as globally. There is a rise in popularity of the herbal and Ayurvedic products. People are more inclined to use skin care products that are made from natural herbs, rather than chemicals. Also well-nigh Ayurvedic medicines are believed to purify blood and bring good health to skin. The products made from chandan, haldi, rose water are used in villages to bring fairness in both girls and boys. These products are cheap and risk free. Hence , these products might act as substitutes to the skin care products produced by the companies.As the market of these herbal products is in the nascent stage, the threat from the substitute products is low. The same case is with the global skin care market. scourge from New EntrantsLarge firms broadly have significant rewards over new entrants. Large firms scale economies allow them to compete more effectively on price, and invest in their own business companies entering the market may find it difficult to compete. The brand strength of the major manufactures is considerable, which may negate much of the effect of low switching costs. New entrants may be able to bring out on a small scale, operating within a particular niche, such as make-up with anti-ageing components, for example, stressing natural ingredients. Hence, threat of new entrants is low.Barrie rs to EntryProduct interrogation and research is both time-consuming and costly. New entrants also need to persuade stores to stock their products, and major retailers, aware of their importance in the distribution chain, may be unwilling to risk displacing existing brands for the sake of new ones. Substantial funds are needed to start up a business in this market, with capital required for investment in production, distribution, and also advertising which is crucial to success in the market. Hence, barrier to entry is high and needs high initial spending.Industry regulation The companies are usually forced deal with strict regulations on issues like animal testing and environmental protection. Also cosmetic products have to face the highest level of scrutiny (almost the same level as pharmaceuticals) with regard to their safety levels.Strategy to be followedThey should try and target niche markets in the beginning and follow strategies like direct selling.Local penetration is requ ired before moving for internationalization.Regulatory Landscape flow rate Indian cosmetic regulations are complex and there are multiple regulations under different regulatory bodies. There is a need to simplify the regulations and there is also a need to address the growing issue of spurious products and counterfeits. Indian cosmetic industry is mature and responsible enough to ensure safety quality of its products and the industry can take up joint responsibility with the Regulator for cosmetic regulations in India. European and ASEAN countries have adopted this model of self regulation successfully and the same is being suggested here in the Indian context.There is a negative list of ingredients which cant form a part of any cosmetic composition. There is also a restricted list of ingredients such ingredients can be used only under specific tautness range in specific products and under specific conditions of pack declaration. In addition, there is a positive list of preservat ives and UV filters thus restricting the resource of such ingredients and their concentrations.Cosmetic labeling is dictated by multiple regulations This includes Drug Cosmetics act, BIS packing norms and Standards of Weight Measures act. More recently, several amendments have been notified in the labeling clause of Drug and Cosmetic Act.Manufacturer is required to submit the relevant information pertaining to the formulation, raw materials used and their specifications, product quality specifications and safety data in support of the formulation. The information is reviewed by local (State) FDA and a cosmetic license is granted or otherwise. The clinical trial of the skin care products is also done to ensure safety for the consumers. balance between Indian regulatory framework and the International regulatory framework for the skin care cosmetic products.EUASEANINDIALegislative DocumentEU Cosmetic DirectiveASEAN Cosmetic DirectiveDrugs Cosmetics Act, 1940 and Rules 1945Labelli ng declarations BISproduct standards PCROProduct classificationBroader Cosmetic definition-definition includes indirect benefitBroader Cosmetic definition-includes secondary benefitNarrow Cosmetic definition-No secondary benefit allowedCosmetic categories as illustrative listsyesyesNoClaim Guidelines forregulationnoyesNoValue Chain AnalysisThe value chain for the cosmetic and skin care industry is as follows. The flow of channel from the supplier of the raw material to the retail shop is in accordance to the international extrapolate value chain. The analysis is also valid for the skin care products.Finished product DistributorRetail birthday suit material Supplier and DistributorNeutraceutical and Pharmaceutical CompaniesRaw Material Supplier for Skin CarePersonal Care and CosmeticsSuppliersMedia manufactures Chemicals Biological reagentsRaw material supplierPreservative manufacturerCosmetic Finished goods manufacturers Salons incision StoresDermatologist OfficeFinished Good Br and OwnerCRO for finished goods and brand ownerGate KeepersPersonal Care CouncilHULIn the skin care industry HUL is one of the major players having largest market share. Its famous brands in skin care are as followsPonds Global Brand, first mover to the res publica in 1947Fair and good-natured Patented formulation and is an Asian brandLakhme Skin Care This is brought from Tatas and is important for Salon businessAviation Customized Skin Care solutionsVaseline Monopoly in Indian Petro-jellyThe personal product segment of HUL contributes to the 26% of the total revenue generated by the company.SWOT analysis of HUL Skin Care specialnessThe products have strong market reach. The soap brand LUX is on hand(predicate) both in high price and low price variations. The skin cream brand fair Lovely has a very wide spread market.Strong Sales and Distribution Networks.Many variants of each product Fair Lovely, Ayurvedic Fair Lovely, Fair lovely Anti marksUnder a particular sub-brand, there is a huge diversified portfolio of products. For example, under Lakhme, there are almost all types of skin care products.( Anti aging, scrub, fairness, face wash, oil control etc)Both value and volume growth are ahead of the marketWeaknessThe skin care products are mainly positioned as beauty products and are relevant to women. Though there is a huge opportunity to explore the products relevant to men, HUL has not much penetration to it. It is currently entering into the men skin care segmentThe sun screen, scrub and facial skin care products are not well developed till now and are not doing well compared to other skin care brandsPremium products are not popular in rural IndiasOpportunityLakme Lever Private Limited (LLPL) commenced operations during the course of the year with the objective of achieving excellence in beauty services and with a view to create and nurture a service mindset. The Company launched the Lakme Studio, a premium salon format commencing with Delhi whic h has shown early signs of success. Similarly, Lakme Studio have also been recently roll out in Mumbai, Chennai, Hyderabad and Bangalore.Liquid Body Wash is currently in growth stage. The HUL brands like Lakhme, Dove, Lux could produce products of these kind and capture the marketThreatHUL skin care is at a maturity stage. The revenues may decline if constant innovation is not followed.Strong Internal competition Competition between Lakhme Dove, Competition between Lux and Peers.External Competition and foreign players( Garnier, LOreal, Nivea etc)Brand PerceptionBrand Perception of the customers is mentioned is mentioned on the basis of perception about some specific brands like DOVE Fair and LovelyFair LovelyBrand PerceptionCustomers believe that Fair Lovely ( Anti marks) is specially designed for skin with marks and spots. Fair Lovely with breakthrough Vita-Aloe ComplexLightens different kinds of marks in 4 weeksGets visible fairness in 4 weeksHelps in preventing spots from coming backAyurvedic Fair Lovely has extensively researched the fairness secrets of ancient Ayurveda and created a unique mix containing extracts of special Ayurvedic herbs. Its proven formula penetrates mystical down your skin to give you a glowing fairness from within. Fair Lovely Ayurvedic contains Kumkumadi Tailam, an ancient fairness recipe of 16 precious Ayurvedic ingredients.Ayurvedic Fair Lovely Fairness Cream contains Nilopala Patanga. These Soothe relax skin cells, give a serene look. It also contains Chandana Ushira which reduce skin irritation, give long lasting cool sensation.Marketing Strategy AdoptedFair Lovely , apart from the fairness cream for girls entering into the men fairness segment and body lotion segment to increase its portfolio of products. Fair Lovely menz active is the product in this segment.Entering into Aurvedic segment, Fair Lovely is able to create a perception in the minds of the customer that its product is totally free from harmful che micals and can bring a permanent change in the colour of the skin without any side effects as Ayurvedic products are without side effects.Fair Lovely, also in its advertisements creates a picture of woman which is unsuccessful and rejected everywhere because of her dark skin. Where as after using the product, she is able to regain her self respect and becomes successful.EMAMIEmami , a kolkata based company has been in the skin care products since the last 30 years and has carry on a good position in ayurvedic products.ProductsBoroplus CreamFair and HandsomeBoroplus PowderNavratna Cool TalcNew Launched ProductsBoroplus Body LotionMalai Kesar Cold CreamMarketing MixProductEmamis products are mainly based on Ayurveda. The major skin care products are e.g.Fair and Handsome, Boroplus etc. Fair and Handsome continued its brand category dominance in the Middle East and the sub-continent Boroplus maintained its dominance in India, Russia, Ukraine and Nepal.New products (Boroplus Winter Lo tion and Emami Malai Kesar Soap) and new product variants (Navratna Oil) were launched. valueEmami has set the prices which are reachable to people of all economic status , and the products are available in wide variety of volumes e.g. Fair and handsome is available in SKUs of 7 ml, 12 ml, 30 ml and 60 ml.PlaceEmami has a good distribution network. The vast network includes over 4, 25,000 retail outlets, 2,800 distributors, 1,500 sub-distributors, 30 depots, six regional sales officesPromotionEmami invested Rs. 19,442 lac on advertisement and branding in 2009-10.Emamis products are endorsed by celebrities like Amitabh Bachchan, Shah Rukh Khan, Kareena Kapoor, Mumbai Indians (Sachin Tendulkar, Harbhajan Singh, Zaheer Khan), Saurav Ganguly, Virendra Sehwag, Madhuri Dixit, Chiranjeevi, Surya, Sunny Deol and othersSWOT AnalysisStrengthDistribution Network- Emamis products are available in 4,25,000 Indian retail outlets and 65 countries.Strong reach in rural indiaCelebrity ambassadors- E mamis products are endorsed by celebrities like Amitabh Bachchan, Shah Rukh Khan,Kareena KapoorAdvertisement Spent- Emami invested Rs. 19,442 lac on advertisement and branding in 2009-10 Advertising spend, as a proportion of the total revenues, was 18.7% in 2009-10 against 19.3% in 2008-09Innovation- Emamis Fair and Handsome created mans fairness as new category of skincare products in IndiaFiscally Efficient- Nearly 56.1 % of Emamis revenue were derived from tax exempted locations in 2009-10Certifications- Emamis quality credentials comprise respected certifications like cGMP, ISO 14000 and ISO 22000.WeeknessInability to launch new productsMajor products based on Ayurved onlyOpportunitiesThe growing demand of beauty products provides a good opportunity. Emami can take advantage of already captured greater market share in the Fair and handsome and Boroplus products.ThreatsA threat to the Emami is also the growing competition within the field of cosmetic brands. Due to the ongoing ad dition to the field of cosmetics, there is still the danger that other brands could surpass the profit.Another threat to the Company is the economic downturn that is kinda evident in other countries. Such could thus hurt the possibility of higher profit for the company.Problems or delays in integration with Zandus distribution network, positioning and brand building may result in lower profitFair and Handsome CreamEmami Fair Handsome is positioned as a product for virile and portrays a strong male image. The colors used are silver, black and orange, which gives a strong macho look to the product. The pink colour is being avoided. The typification on the cover page are before and after effects of the cream. It also contains a leaflet of information. This is to make sure that customer is well informed with the instructions and is satisfied with the product.It was Launched in October 2005 first fairness cream for men in IndiaCompetitors- Fair Lovely Menz Active (Hindustan Unileve r), Fair One Man (Elder Pharma, Shehnaz Hussain), Nivea for Men Whitening Cream (Nivea) and Set Wet Get Fair (Paras Pharma)Point of Difference- The unique five-power formula helps enhance skin fairness in just quaternary weeks. The formula includes double-strength peptide complex, sunguard, anti-bacplus, stress buster and herbocool.Market Share- enjoys 84% market share in the Rs. 137 cr domestic mens fairness cream marketSales- Sales grew by 27% in 2009-10Boroplus Antiseptic CreamAniceptic and curative cream which is ideal for hard weather conditions and minor skin problemsCompetitors- The brands principal competitor is Boroline. During winters, the brand competes with other winter care products like cold creams, petroleum jelly and lotion etc.Pont of Difference- The presence of ayurvedic elements enhances medicinal and anti-septic features.Market Share- Boroplus accounts for around 74% market share of the Rs. 269-cr boro brand creams in India.Sales- Largest selling antiseptic crea m not only in India but also in Ukraine, Russia and Nepal. Sales grew by 15% in FY 10Boroplus Brand has been ranked 77th in the Brand EquityZydus Wellness LtdSegmentationEveryuth is a brand of Zydus Wellness Ltd ,a pharmaceutical company which caters to a pliable market segment of woment aged between 18 to 35 years.They have a monthly income of Rs 10000 and above and they live in u