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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

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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, Lakm Ltd (a Tata Group company) and HLL formed a 50:50 venture

Lakm Lever that would market and distribute Lakms products. In 1998,

Lakm 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 Lakms future. A brand that has over 5 decades talked of beauty is

none other than Lakm. Launched in 1952, it offered a range of cosmetics

with nail polishes & lipsticks from the early 80s. Lakm also understands the

importance of maintaining and accentuating a womens 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, Lakm 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.

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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 Weekwith 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.

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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.