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Q) Pick any fashion product.

Show how a company retailing this


product has managed to be successful by taking recognition of the
changes in retailing. Provide at least 3 specific instances of how the
company has adjusted to changes in retailing to become a success.

Ans) Retailing - no marks for guessing this is the most active and attractive
sector of the last decade. While the retailing industry itself has been present
through history in our country, it is only the recent past that has witnessed
so much dynamism.

The emergence of retailing in India has more to do with the increasing


purchasing power of buyers, especially post- liberalization, increase in
product variety, and the increasing economies of scale, with the aid of
modern supply and distribution management solutions.

The current retailing revolution has been provided an impetus from multiple
sources. These `revolutionaries' include many conventional stores
upgrading themselves to modern retailing, companies in competitive
environments entering the market directly to ensure exclusive visibility for
their products and professional chain stores coming up to meet the need of
the manufacturers who do not fall into either of the above categories.
Attractiveness, accessibility and affordability seem to be the key offerings of
the retailing chain.

The fashion product chosen by me is Cosmetics manufactured by Lakme (A


Brand of Hindustan Unilever Ltd.).

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 her from head to toe.
These include products for the lips, nails, eyes, face and skin, and services
like the Lakme Beauty Salons.

In 1995, Lakmé Ltd (a Tata Group company) and HLL formed a 50:50 venture
Lakmé Lever that would market and distribute Lakmé’s products. In 1998,
Lakmé 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 Lakmé’s future. A brand that has over 5 decades talked of beauty is
none other than Lakmé. Launched in 1952, it offered a range of cosmetics
with nail polishes & lipsticks from the early 80’s. Lakmé also understands the
importance of maintaining and accentuating a women’s 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. With a unique blend of
understanding of women of all ages, today, Lakmé is all about setting trends
and dominating the fashion arena.

With changing retail scenario Lakme has constantly innovated and


modified its products and marketing techniques to retain its
position in the competitive market.

The 3 basic instances which have transformed the image of the company
and have repositioned the company are discussed as follows –

1. Firstly, Lakme Launched Elle 18 in 1998, that targeted the first-time


cosmetic user and currently sports two product lines comprising
lipsticks and nail enamel. This brand extension targeted youth, sporty
youngsters who want to be trendy at affordable prices.
“In the first three years, Elle 18
registered sharp growth rates and the
purpose was to create a new segment
of consumers,” said Mr. Chopra. There
was a conscious price differential
between the brands to attract the first
generation users of cosmetics. So,
while a Lakme Lipstick would have an
MRP of Rs 165, an Elle 18 Lipstick was pegged at Rs 55. The brand
extension was successful and helped the company enter into new
market segment and penetrate in the market.

2. Secondly, The Company started Sponsoring


fashion shows and introduced Lakme
Fashion Week with an aim to integrate India
into the global fashion world. This gave a
good base to help company promote its
products and enhance its brand image.
Because of increased competition and
constant need for innovation, The Company
has to develop newer methods and ways to
reposition its products and enter different
market segments. Lakme fashion week being a success helped
company attain new heights and improve its image in the minds of its
customers.

3. Thirdly, The Company recently inaugurated its new salon named as


‘Lakme Beauty Salon’ to extend its service line and enter new
market. As people want efficient services at affordable prices, along
with good experiences, trendy ambience and well –trained staff, it
became easy for the company to enter into this service sector to
expand its business all across the country.
Thus, these innovative ideas and
marketing efforts have helped the
company respond successfully to the
changes in retail trends and have
helped company grow by entering into
various marketing segments. The
company realized the importance of
customer needs and changing behavioral patterns and has made optimum
use of the opportunity to maximize profits and acquire a distinct image in the
minds of its customers.