Page 23 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes Knowledge Processed Outsourcing (KPO)

Real estate and construction services
Self Assessment

Fill in the blanks:
14. Several developments in the economy and society are attributable for the growth and
development of service sector in ...................... .

15. One of the key measurements of growth of the ...................... sector is its contribution to the
Gross Domestic Product (GDP) of the country.

Task Services sector is playing the role of growth driver in many developed and
developing economies. Discuss.

Case Study Case: Lakme Beauty Salon – Extending into Service

Brand

he Lakme Beauty Salon (LBS) was inspired by Lakme, the brand that has for 50 years
Tnow led the way in truly understanding the Indian woman. It is the classic example of
an exercise in extending a product brand to a service brand. It seems not to have escaped
the usual pangs of extensions, although it has clearly sought to exploit definite market
opportunities. Lever had tasted success in its previous brand extension exercises: Rexona,
Lux and Liril soaps to deodorants, with Rexona particularly performing exceptionally,
capturing almost 70% of the organised market share (it has, by 2004, dropped to 50%). But
this brand extension was different: the product offer (Lakme cosmetics and skin cares) of
the mother brand possessed more tangible features than the extended service offer (LBS),
which mostly promised experience.

Simone Tata, wife of the late Naval Tata, had promoted Lakme, a distinctive jewel from the
House of Tatas. But as a perceived misfit to the new strategic blueprint for the group drawn
by Ratan Tata, the Chairman of Tata Sons (the holding company), in the mid nineties, the
cosmetic major was sold off to the FMCG major Hindustan Lever Limited (HLL).
HLL turned over a ‘new leaf’ in 2001 when it set up LBS under its beauty brand, Lakme. The
idea was to offer a complete brand experience. Three years later, LBS contribute 11 per cent
to the company’s turnover, but only one per cent of Lakme product sales are through LBS
outlets. LBS have not been a major success, since its branded service was often as uneven
as the local beauty parlor. But, can the effort be called a failure?
Performance: Lakme Lever has 50 per cent share in cosmetics market and 22 per cent in
skin care, aiming to have a larger pie of the ` 1,000 crore salon industries, which is
Contd...

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