Page 26 - DMGT522_SERVICES MANAGEMENT

Unit 1: Service Operation Management

Promotions, in-store activities: LBS have striven to make its in-store promotions Notes
innovative and personality-driven:
Special tips and advice by India’s ace make-up artist Cory Walia.

basing the noted hair trichologist Dr. Rita Khatwani at Lakme Beauty Salon, Churchgate,
to make her available for consultancies.
Workshops with hair expert Samantha Kochhar introducing the look of the year at
the Lakme Beauty Salon, in New Delhi, along with Lakme Image Consultant Malvika
Tiwari and Sunsilk Hair. The workshop was a part of the promotion that leading
shampoo brands Sunsilk, Clinic Plus and Clinic All Clear have initiated across the
country where the consumers can avail of professional hair advice at an affordable
price.
Expert Samantha Kochhar briefing media on the Winter Look of 2003 at the Lakme
Beauty Salon, New Delhi.

Industry Opportunity & Competition Analysis
Baccarose, the companies that distribute and markets premium lifestyle brands like Elizabeth
Arden, Escade, Nina Ricci and Siedo, is planning to open Clarins beauty studios in Bangalore,
Delhi and Chennai over the next two years. At present, it has only one studio in Mumbai.
Meanwhile, several companies that run beauty salons are setting up training institutes,
competing head on with Lakme in another area. L’Oreal Professional, a division of L’Oreal,
has invested in four technical centers (in Mumbai, Delhi, Kolkata and Bangalore). Schwarzkopf
Professional, a division of Henkel Spic, has a training academy in Delhi. According to
Shekhar Sethu, general manager at Schwarzkopf Professional: “Technical and service standards
have been improving rapidly with companies investing in technical education.”
Salon Business & Growth: If the big boys are expanding, it’s because business is growing
at impressive rates. Lakme’s beauty salons in Mumbai clocked 28 per cent growth in
revenue, 21 per cent growth in Chennai and a hefty 60 per cent or so growth rate in
Bangalore. The Marico Industries-promoted Kaya Skin Clinic (which the company says is a
skin treatment business) started in the third quarter of 2002-2003, but now has over 10
clinics in India and abroad. Kaya’s turnover crossed ` 1 crore (` 10 million) during the third
quarter of 2003-2004. The clinics have started breaking even.
Product off take: Furthermore, companies like Henkel, L’Oreal and Wella, the German hair care
company, are seeing the off take of their products from beauty salons climb. According to
industry sources, the salons generate over ` 200 crore (` 2 billion) in product sales. The
statistics tell a fuller story. According to Value Notes Database, the Pune-based research firm,
India has over 61,000 beauty salons in towns that have a population of over one million. It is
difficult to estimate the beauty salon industry’s estimated turnover, which is anywhere between
` 1500-2,000 crore (` 15-20 billion), with the metros accounting for about 60 per cent of this. The
large beauty salons take up over 27 per cent of the revenue in the towns.
Consumer behaviour: So why is the beauty salon business booming? Explains Dipali
Prasad, brand manager, retail, House of Baccarose: “As ‘feel good’ is becoming very
important in today’s high stress urban environment, beauty treatments at salons, gyms,
massages, the spa experience and so on have become a part of people’s lifestyles. Owing to
the increasing demand the salon segment is experiencing a high growth rate. Salons are
coming out of their 5-star environment and making an appearance in stand-alone formats.”
The business itself is rapidly changing. A few years ago, beauty salons used to offer
regular services (waxing, threading, bleaching, facials). Now they offer specialised services

Contd...

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