Page 24 - DMGT522_SERVICES MANAGEMENT

Unit 1: Service Operation Management

growing at 20 per cent. With 150 salons, LBS would also enter relatively small towns, Notes
while adding new salons in metros like Delhi, Mumbai, Bangalore and Chennai.
Lakme and Beauty Industry Performance
The Indian cosmetics industry is in a state of flux. Even as the premium segment is getting
crowded, the rural market is turning out to be the stronghold of smaller, regional players.
Although stiff competition has emerged for Lakme Lever within the ` 250-crore color
cosmetics market, it continues to lead. In the skincare market, estimated at ` 700 crore,
Lakme’s market share averages 7–8 per cent. (2003). Lakme Lever, which saw a 32 per cent
growth in 2003–04, plans to concentrate on growing the salon business through its LBS,
while consolidating its core business of color cosmetics and skin care.
Lakme’s Other Ventures
Lakme has had a mixed bag of success whenever it made forays into areas other than its
core cosmetics and skin care segments:
Fragrances

Lakme had two fragrance brands, Ivana and Shie, which they withdrew some years ago.
The fragrances market in India is too fragmented and has always had a strong presence of
brands smuggled into the country and brought in through the grey market. Other Lever
brands (as distinct from Lakme’s) like Rexona and Lux have had more success in their
extension exercises in deodorants. Rexona, in the early nineties, was more successful in the
deo-stick segment and then in the deo-spray. Lux soon followed suit and, combined, have
over 50 per cent of the deodorant market sewed up.
Lakme has no immediate plans to stage a re-entry in the fragrances sector in the immediate
future under brand Lakme. The macro strategy is on rationalising the skincare and color
cosmetics portfolio.

Hair Care
HLL has several brands in the hair care segment. So there are no plans to extend the Lakme
brand to hair care products such as shampoos and oils. The core thrust areas remain color
cosmetics and skin care.

Co-branding: By 2002, Taj Group of Hotels and Lakme Lever had joined hands for beauty
salons. The salons were to be managed by the Taj while Lakme would be in charge of
sourcing equipment, experts and training the staff. As a case study for co-branding, the
two had initially tied up to open unisex Lakme salons in the hotel chain’s business and
leisure properties across the country. A beginning was made by opening two such salons
in Taj Connemara, Chennai, and Taj Blue Diamond, Pune, with planned expansion of up to 11
such salons at its various properties by the end of 2002. In an interview to Business Line,
Mr Tarun Mehra, and GM - Salons, Taj Group of Hotels had said that the partnership for salon
management would,” not only enable us to get expertise from Lakme, but will also help us
to get the right kind of inputs to make our salon business a success”.
This tie-up with Lakme Lever included setting up of Lakme salons in all those properties
that did not have beauty salons – as well as conversion of the existing salons into Lakme
Salons. “We are trying to standardizs the quality of Taj’s salon service across all our
properties through this tie-up,” remarked Mr Mehra. “We believe that Lakme Lever’s
Beauty Salon has the required expertise to add value to our chain of salon operations,” he
added.
Contd...

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