pg. 1

EMPIRICAL STUDY ON

“Consumer Buying Behaviour Regarding Cosmetic in India”

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF POST GRADUATE DIPLOMA IN MANAGEMENT

TO

M.S.RAMAIAH INSTITUTE OF MANAGEMENT

BY

SUBHRA SUTRADHAR(121245)

PIYUSH RAY CHOUDHURY(121231)

R. MANOJA(121235)

SANDEEP KUMAR(121240)

K. YASWANTH REDDY(121222)

UNDER THE GUIDANCE OF

MRS. JAYASHREE KOWTAL

M. S. RAMAIAH INSTITUTE OF MANAGEMENT

BANGALORE- 560054

pg. 2

CERTIFICATE BY THE GUIDE

Certified that this dissertation is based on an original project study conducted by this group under my guidance. They have attended the required guidance sessions held. This project report has not formed a basis for the award of any other Degree / Diploma of any University or Institution.

SIGNATURE OF THE GUIDE:

SIGNATURE OF THE HEAD OF THE DEPARTMENT:

pg. 3

STUDENT’S DECLARATION We hereby declare that the Project Report conducted on “Consumer buying behaviour regarding Cosmetic in India” under the guidance of Asst.Prof Jayashree Kowtal submitted in partial fulfillment of the requirements for the degree of POST GRADUATE DIPLOMA IN MANAGEMENT TO M.S.RAMAIAH INSTITUTE OF MANAGEMENT. It is our original work and the same has not been submitted for the award of any other Degree/Diploma/Fellowship or other similar titles or prizes. Place: Bangalore Subhra Sutradhar (121245) Piyush Ray Choudhury(121231) R. Manoja (121235) Sandeep Kumar(121240) K. Yaswanth Reddy(121222)

pg. 4

ACKNOWLEDGEMENT

We extend our special gratitude to our beloved Dean Shri Swaminathan Murthy &

Academic Head Shri. V. Narayanan and Program Head Asst. Prof. Jayashree Kowtal

for inspiring us to take up this project.

We wish to acknowledge our sincere gratitude and indebtedness to our project guide Asst.

Prof. Jayashree Kowtal of M.S. RAMAIAH INSTITUTE OF MANAGEMENT

Bangalore for her valuable guidance and constructive suggestions in the preparation of

project report.

STUDENTS’ NAMES: SUBHRA SUTRADHAR

PIYUSH RAY CHOUDHURY

R. MANOJA

SANDEEP KUMAR

K. YASWANTH REDDY

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PREFACE

Consumer behavior is the key factor affecting the today's marketing environment. After the

liberalization and the globalization there has been a sea change in the Indian market scenario.

The MNC's have entered the fray, which forced the Indian giants to change their strategies.

There is a cutthroat competition and in order to survive and to have an edge over competitors,

marketers have realized the value of consumers. Consumer’s orientation is the keyword in

present times.

The purpose of this project is to provide the students with the practical exposure of the market in

today's changing scenario. It helps in the development of practical skills and analytical thinking

process. It provides with basic skills required to perform the survey; and statistical tools required

analyzing the data. Also it makes more aware about the perceptions and tastes of consumers.

Thus it helps in molding the students according to the requirements of market. Consumers

buying preferences tastes choices have changed and they have become more conscious. Change

in consumer’s perception has lead to a situation of dissatisfaction among consumers. There has

been a lot of change in the rural consumers. Their living standard has got uplifted and they are

ready to spend more to have qualified products.

The present study is based on the behaviour of the consumers in urban area while purchasing

cosmetics. It gives the information about the attitude, perception and effect of social, cultural,

economic, and demographic and psychographics factors on purchase of the consumers

pg. 6

CHAPTER 1

Introduction

pg. 7

Section A: Background

“Beauty is only skin deep”- true, but not really relevant in today’s world. The origin of the

phrase dates back to 1613, when it was first found in a work by Sir Thomas Overbury.

Interestingly, along with the evolution of this mortal world, the meaning and the importance of

this saying has faded by the hour and by the minute. Even if beauty is superficial, physical

beauty that is, people do not care about it as long as it makes them happy, and boosts that thing

called “self confidence” of theirs. The reason why I have double quoted the word self confidence

is that, if it takes looks, or more specifically, good looks to make you feel and be confident, then

I would say that has no significance. People go through all the pains of searching for the right

products for their skin, and hair, and anything that would accentuate their looks. Another method

which has been in the limelight for decades now, is cosmetic surgery. For many, cosmetic

surgery isn’t the solution, not even an option may be. Here steps in the subject of our research-

Cosmetics.

Surprisingly, use of cosmetic products is not new to the world. It dates back to the early modern

civilizations. Some 6 thousand years ago, human made cosmetics appeared as the way to

enhance the appearance and odor of the human body. The aura of exclusivity around cosmetics is

the result of the complexity in manufacturing process, the amount at which they are priced, and

their connection to the elite class of the society. Because it is in human nature to always strive to

perfection and new ways to express ourselves, cosmetic played a really big role in our

advancements from ancient civilization to the modern way of life. Cosmetics helped us change

the way we look, fixed out bodies in time of sickness and enabled us to express our religion and

beliefs. For the long periods of time, cosmetic products were frowned upon in Western history,

and even actively forbidden to be used by many organizations. This “dark” period of cosmetic

use finally ended during the end of the 19th and early 20th century, when great advancements in

manufacturing, new entertainment industries and faster changes enabled the rise of famous

cosmetic brands and their widespread use.

Cosmetics have been used for as long as there have been people to use them. Face painting is

mentioned in the Old Testament (Ezekiel 23:40) and eye shadow was used in Egyptian burials

dating back to 10,000 BC (Llewelyn) The word "cosmetae" was first used to describe Roman

pg. 8

slaves whose function was to bathe men and women in perfume. The first archeological evidence

of cosmetics comes from the excavated tombs of Ancient Egypt pharaohs, but historians are

convinced that first natural made cosmetics were used by our prehistoric ancestors much before

rise of modern civilizations. Cosmetics were an inherent part of Egyptian hygiene and health.

Oils and creams were used for protection against the hot Egyptian sun and dry winds. Myrrh,

thyme, marjoram, chamomile, lavender, lily, peppermint, rosemary, cedar, rose, aloe, olive oil,

sesame oil and almond oil provided the basic ingredients of most perfumes that were used in

religious ritual and embalming the dead (Cohen) For lips, cheeks and nails, a clay called red

ochre was ground and mixed with water. As the centuries and millennia went, Egypt chemist

found a way to simplify the manufacturing process of cosmetics, but that did not manage to

remove the aura of their “exclusivity”. The ancient Egyptians took great pride in their

appearance and cleanliness. Most Egyptians bathed daily in the river or out of a water basin at

home. Wealthy homes had a bathroom where servants would pour jugs of water over their master

(equivalent to a modern day shower). 6 thousand year old relics from Egypt tell us that their

royalty and high class enjoyed several cosmetic products, such as face creams, perfumed oils,

eyeliners, hair paints, castor oil, lipsticks, and lip gloss. One of the most important causes for that

were their badly formed recipes, which often included poisonous ingredients that could cause

serious illnesses. However, even with that, cosmetics remained important part of the Egyptian

culture and especially their burial rituals. Among all cosmetic products, cedar oil was considered

to be the most sacred one, because it was used in the process of mummification. That process

used 7 types of oils, which were also the basis for the Egyptian ritual magic and medicinal

remedies for various illnesses.

Even though Egyptian priest guarded their cosmetic recipes from the neighboring “primitive”

civilizations, Mediterranean trade of the 1st millennia BC soon brought Egyptian cosmetic

products to the shores of the newly formed Greek and Roman civilizations. There, high fashion

was important and many wealthy people wore wigs, white face powder, and women used red

lipsticks and red oils to make their palms “more younger”. In Rome, woman was not considered

beautiful if she did not use face cosmetics. Lipsticks, skin creams made from beeswax, olive oils

and rosewater, powders, hair colors and many other beauty treatments were widely used in the

pg. 9

period of 100 BC and beyond. They even had special type of female slaves whose only task was

to help their masters to be more beautiful. Their names lives with us even today, Cosmetae.

In Greece, precious oils, perfumes, cosmetic powders, eye shadows, skin glosses, paints, beauty

unguents, and hair dyes were in universal use. Export and sale of these items formed an

important part of trade around the Mediterranean. During the 8th and 7th centuries BC,

Corinthian, Rhodian and East Greek traders dominated markets in perfume flasks and cosmetic

containers. Attic products stole the market with toilet oil dispensed in lekythoi flasks. Bulk

storage containers for scented oils and perfumes were called a pelike. Pelikes were initially

designed to withstand the constant handling and rigors of sea transportation while protecting the

contents and maximizing cargo space. By about 300 BC, myrrh and frankincense from Yemen

reached the Mediterranean by way of Persian traders. The trade routes swelled as the demand for

roses, sweet flag, orris root, narcissus, saffron, mastic, oak moss, cinnamon, cardamom, pepper,

nutmeg, ginger, costus, spikenard, aloewood, grasses and gum resins increased. Distillation of

essential oils and the use of aromatics progressed in the Far East as well. Like the Christian

Gnostics, Chinese Taoists believed that extraction of a plant's fragrance represented the

liberation of its soul. Like the Greeks, the Chinese used one word to represent perfume, incense

and fragrance. That word was heang.When Christianity rose, Christian woman started to

celebrate their religion with jewelry and cosmetics. Even the Old Testament mentioned two

kings who painted their eyelids sometimes around 840BC. However, with the fall of the Roman

Empire, Europe entered into dark ages where harsh living conditions, poverty, illnesses and

constant wars prevented the spreading of expensive and extravagant fashion trends. This meant

that almost all traces of cosmetic product disappeared from the European culture, not only

because of its scarcity but also because Christian church actively prevented it’s spreading.

Isolation of Europe finally came to the end in the 12th and 13th century, when warriors returning

from the crusades brought with them exotic cosmetic items from the Middle East where they

never went out of fashion. This new influx of riches and knowledge from the east soon kick-

started European renaissance, which transformed the Europe into advanced civilization. Fortune

started moving from the wealthy down to the middle classes, industry was rising, sciences and

arts received much needed funding, and trade routes started spreading new fashions much more

quickly than before.

pg. 10

Even with all the advances of Renaissance, cosmetics received little attention from general

population. Some used hair coloring, painted eggs on their faces to remove wrinkles and used

similar “old age” removal techniques, but widespread use of face and hand cosmetics never took

hold outside aristocracy. The only really popular period of time when cosmetics was well

received was during and shortly after the reign of English Queen Elizabeth I (1558 - 1603). Her

unique fashion style of stark white faces and brightly colored lips captured the attention of

royalty and aristocrats across England and France, but that lasted only for a short time. Soon

after that cosmetics (especially highly visible facial and nail paints) became common among low

class women, such as prostitutes. Nothing changed much between late 17th century and mid-19th

century. The Greeks invaded Egypt aware of the Egyptian mystification of oils but were

interested mainly in the medical knowledge rather than the entire Egyptian spiritual

epistemology. With 3,000 years worth of perfumery development under their belts, Egyptian

priests were unwilling to divulge the spiritual intrigue of Egyptian oils. Under pressure from

Alexander the Great, the priests released disinformation and half-truths to prevent the knowledge

from falling into the hands of the inept. When Alexander the Great entered the tent of defeated

King Darius after the battle of Issos, Alexander threw out the king's box of priceless ointments

and perfumes. Ironically, after Alexander traveled extensively in Asia, he became so addicted to

aromatics that he burned an Arabian incense by his throne constantly. Cosmetic products were

uncommon among majority of European civilization, in some cases receiving status of banned

and absolutely inappropriate merchandise. The only exceptions were medical cosmetic remedies

that were used by everyone but the poorest in 18th century.

The dawn of cosmetic use finally arrived in the second part of 19th century when industrial

revolution and great advances in chemistry (chemical fragrances) enabled much easier and varied

production of various cosmetic products. With much lower price and chemical ingredients that

were much less dangerous for health, cosmetics started gaining serious foothold. Some of the

most famous cosmetic products from that time were rogue red lipstick (it symbolized health and

wealth), zinc facial powder (much safer than previous lead and copper based powders) and eye

shadow and eye sparklers.

The turning point in the western fashion came in 1920s when mass marketed cosmetic products

finally became financially viable. And where profit can be found, there is the will to market and

pg. 11

sell it. Photography, cult of film actors and big marketing campaigns soon brought the fall of

traditional Victorian fashion, enabling women of all ages to start wearing cosmetic products in

the public. Early decades of cosmetics popularity in the west brought us many inventive

products, such as Lip Gloss by Max Factor, synthetic hair dye and sunscreen by L'Oréal, suntan

and red nail polish by Coco Chanel, and others.

After the World War II and its period of heavy material rationing, cosmetic industry experienced

its second renaissance. Countless new fashion trends were adopted, mostly being popularized by

various movie actresses and musicians. Today, cosmetics industry is a multi-billion dollar

business that stretches across entire world, always finding new ways and fashion trends that

sustains and ensures its growth. Change finally happened after European soldiers returned from

the Crusades in the Middle East, bringing home new exotic products and knowledge. Among

those products were many types of cosmetics, which were in first adopted only by nobility and

high-class citizens. After Renaissance managed to spread across entire Europe, cosmetics found

their foothold, but were still not publicly accepted, except during few fashion swings (such as

during the reign of Queen Elizabeth I (1559-1603) in England). According to the US Food and

Drug Administration (FDA), the law defines cosmetics as "articles intended to be rubbed,

poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body... for

cleansing, beautifying, promoting attractiveness, or altering the appearance." This includes skin

moisturizers, perfumes, lipsticks, fingernail polishes, eye and facial makeup, shampoos,

permanent waves, hair colors, toothpastes, and deodorants, as well as any component of a

cosmetic product. It does not include products used solely as soaps.

Cosmetics are different from drugs, which are defined as "articles intended for use in the

diagnosis, cure, mitigation, treatment, or prevention of disease" and "articles (other than food)

intended to affect the structure or any function of the body of man or other animals."

pg. 12

Section B: Literature Review

Literature review explain previous studies on various factors like price, quality, products

information, motivation, culture, attitude, brand image, consumer resources, group and family

and purchasing advisor that might influence the purchasing decision of females for cosmetics

and how their buying behavior affected by these factor.

1. Price

Price is a thing that is specified to buy and acquire some manufactured goods. The buying

behavior of females for cosmetics is usually affected by the price.

Solomon(2007) has said in respect of customers that they usually view a firm attitudes and

opinions between price and value of a product. A lot of consumers consider that products have a

high price are of better value, particularly in that situation when they have fewer or no

knowledge about the quality of product Evan etal (1996).

2.Quality

According to Shahzad khan (2011) quality means that how excellent and worse the things are or

highly valued. Quality is the unending procedure of making and keeping association by

preparing and satisfying the affirmed and required needs. Quality is the achievement of the

customer’s needs especially it goes beyond the customer’s hopes. According to Russell’s and

Taylor’s (2006), words quality of a product makes the product for utilization and it fulfills the

required needs.

pg. 13

3. Brand image

The brand image of a specific brand is the picture or notion that people are having in their mind.

It is a expression, sign or any other characteristic that is acknowledged by promotion of goods. In

the view of Loudon and Della Bitta (1988), brand image is the whole thought or feeling in the

customer’s intellect which is made up from different resources. Because of their high quality in

their mind they choose familiar brand. The purchase risks become lessen by the brand image.

4.Product information

Product information is specially that knowledge which can be achieved or obtained from the

products or different resources for which the customer is looking. Product information is a

fundamental thing without which a customer is puzzled and having unsuccessfully understanding

in respect of their buying behavior. In words of Chao and Rajandran (1993), for creating their

purchasing judgments customer needs or watch over to locate further information. In the eyes of

Borden (1964), information is like interaction procedures which is express by the company or the

product & compel the customer to enhance their buying decision.

5. Motivation

According to study of Shahzad Khan (2011) the thing which stimulates you to do something is

called motivation. It is also an inner & outer aspect that creates longing, needs & power in the

people to do something actively in achieving their goals.

In the theory of “Sigmund Freud” i.e. human motivation, people are generally uninformed about

the actual mental or emotional forces which make their attitude. He think that consumer’s

judgment making procedure is influenced by the part of their brain, which is called “inner drive”,

but the consumers are not conscious of it & this fulfill the requirements if consumers.

pg. 14

6. Attitude Attitude is the conduct, nature, temperament, thought & way of behaving. It can be positive or

negative & perform a very essential function in purchasing a product.

Noel (2009) defined attitude that is a powerful & long term assessment for which the customers

are having well built way of thinking & it can be an individual, entity, announcement or a matter.

In words of Kotler & Keller (2009, 2010), attitude is a permanent & satisfactory emotion, deed

or assessment propensity towards a plan or thing. They are also in a view that attitude is a

tremendously hard thing to alter due to the existence if sensitive nature

7. Culture Culture differentiates norms, customs, and way of thinking, values, traditions & rituals of one

society from another society. It also develops association in a social order. Solomon, Bamossy,

Askegaard & Hoog (2006) defined culture as a collective recall of the society. It is the mind set

& thoughts of a community having a combination of civilization i.e. rituals, faith that accepted

within a society & up-

till now continued in the present. In Kotler & Keller (2009), views culture & subculture is the

way of living of a people in a society, their thoughts & notions which are dissimilar from the

feelings, emotions & the way of life from other society. They have measured it a specific

category in consumer’s behavior.

8. Group and Family Group and family is an important societal group in a culture, naturally having one or two people

combine in a residence and they contribute principles, aim, and have long standing agreement to

one another. An individual cannot be considering as one person; he/she is in link to others. A

woman plays a very significant role in buying things exactly and correctly.

pg. 15

In view of Kotler and Keller (2009) the above variable has a nearness and well built relationship

with an individual manner and mind-set while in the eyes of Noel (2009) on the customer

conduct family has a direct and most important affect.

9. Personality Personality is defined as an entity variation in individuality, way of thoughts or it is an

amalgamation of traits that make a person unique, attractive and well-linked. It is also one of the

most aspects that affect the behavior of customers.

Kotler and Keller (2009) defined personality is a group of mental traits which lead to a specific

level having similar amount of achievement and behavior to ecological stimulus. In words of

Solomon (2007) customer personality is very essential in buying behavior, because they often

make their purchasing judgments without thinking.

10. Consumer Resources Smallwood, Denis E. and John conlisk (1979) a resource is a foundation from which a business

achieves success. Generally resources are other material goods that are altered to make profit.

Human beings requirements are also accomplished by resources. Every person has 3 resources

i.e. Time, money and information in their purchasing behavior. The purchaser scarifies time,

money and seeks information in this respect. In view of Fishchhoff and Philliphs (1982) that the

purchaser thoughts, feelings, qualities and resources are totally dissimilar from the true and

definite resources and characteristics. So this wrong thinking creates not a good purchasing

decision.

pg. 16

11. Purchasing Advisor Purchasing advisor has a powerful control on a purchaser. Large organizations particularly

appoint the purchasing advisor for their best and successful results. They suggest

recommendation to the customers through different ways in order to worth a product .In the

words of Elsey Sukato, (2009)

purchasing advisor has the supremacy to compel or persuade the customers to buy a specific

product.

International Review of Business and Social Sciences

Vol. 1, No. 9, Aug 2012 [68-76 ISSN: 2226-4124]

pg. 17

CHAPTER 2

Design of the Study

pg. 18

A study on consumer behavior regarding the purchase of cosmetics

Aim of the study: To study the consumer behavior regarding the purchase of cosmetics

Statement of problem: With the increasing revenue from wellness industry there has been a

steep rise in new players entering into the market. The behaviour of the consumer is not easy to

understand and is actually the core of this work. The focus will be on the relationship that

consumer have with self-appearance and cosmetics or beauty care product. is it rather better to

define different targets with different needs and wants? And therefore different marketing

strategies? To answer those questions, this study will focus on the customer behavior. This has

tempted us to carry out a study on consumer behavior regarding the purchase of cosmetics

Objective:

1) Finding major factors that influence the purchase decision of consumers to purchase

cosmetics.

2) To find out the variety of cosmetics, the women and students prefer most.

3) To find out the brands, which are popular for the particular type of product.

4) To know the expenditure and the frequency of using the cosmetics.

5) To determining the sources from where the women get the information about cosmetics.

6) To know consumer perception towards the cosmetics ads.

7) To find out whether they are influenced and inspired by the ads

pg. 19

Research Methodology:

Primary:- Questionnaire: A quantitative research method based on statistic data’s gathering

via questionnaires or surveys, in order to know the general public tendency. A qualitative

research is another research method, which evaluates information about opinions and values.

Secondary:-Secondary data were used in the first and second part, concerning the global

market of cosmetics, and also when developing the theory about self-concept.

Sample size - 100

pg. 20

RESEARCH METHODOLGY

Problem Formulation: It has normally observed that most of the marketers are spectacle about consumers in India. Each

company tries to provide more information about their products for consumers. Very few

companies are really providing information according to the requirement of Consumers. They

look for bargaining and lack of proper advertisement about products.Thus being a MBA student I

felt, I should study the effectiveness of information of the product of cosmetic consumers in

depth. Another side of coin is that cosmetic market in India is growing rapidly and enormous

untapped potential lies there. Thus also motivated me for selecting my topic of study as

"Consumer buying behaviour regarding Cosmetic in India".

Research Methodology: Market research methodology is as old as the marketing is without which it is almost impossible

to reach at any tangible decision. Although various methods are adopted to undertake this

activity but the goal is almost same i.e. to reach on a final decision or solution of the

problem.There is a very famous quote "if you are confident of doing something, half of the work

is done". And confidence comes when you have a proper framework for the particular work.

Hence to carry out any work of necessary to chalk out a framework.To carry out the research

project, we first define the research methodology that is to be used for the research.Research

Methodology is the way of systematically solving the research problem. It may be understood as

a science of studying how research is done scientifically. In it we study the various steps that are

generally adopted duringthe course of research along with the logic behind them. It is necessary

for their search to know not only the research methods but also the methodology.The purpose of

the research is to discover the answers to the questions through theapplication of scientific

pg. 21

procedures. Though each research study has its own scientific objectives, we may think of

research objective as falling in to a

number of following broad groupings:

1) To gain familiarity with a phenomenon or to achieve new insights into it.

2) To portray accurately the characteristics of particular individual situation.

3) To determine the frequency with which something occurs or with which it associates with

something else.

Survey Planning: Planning is the most essential part for a successful survey. A right approach has to be decided

before heading forward keeping in mind the objective.

Due consideration has to be given at this stage towards:

1) Purpose of the survey

2) Scope of the survey

3) Units of the data collection

4) Sources of data

5) Techniques of data collection

6) Degree of accuracy desired

7) Miscellaneous consideration

SAMPLING PLAN: Sample Size

Consumer (100)

pg. 22

Survey Methodology

(a) Collection of Data: This is the first step of the process. It forms the foundation for the whole of

statistical analysis. Faulty data can lead to unreliable conclusions so most care isrequired while

collecting the data.

Nature of data collection:

Primary Sources of data : Internet and Magazines

Secondary sources of data: Internet and Magazines

Instrumental Survey: Questionnaire

Types of Questions : Close Ended/Open Ended

b)Organizing the date: Collected data are meaningless unless presented in a proper manner to take them useful in

decision making. The data obtained is edited, classified and put in as tabulated form to make it

understandable.

c)Presentation: After collecting and analyzing the data, it is ready for presentation. There are different modes of

presentation including charts, diagrams, and graphs etc. the main purpose of presentation is to

put the collected data into an easy readable form. In the present project report data has been

graphically presented by pie diagrams.

d)Analysis of Data: Having gathered the data, the researcher has to proceed towards drawing conclusion by logical

inference. At this stage, the data is in a tabulated form and requires to be interpreted. It basically

pg. 23

involves bringing the raw data into measured data, summarizing the data, applying analytical

methods, to manipulate the data so that their interrelations and quantitative meaning become

evident.

Tools of Analysis: percentage and bar diagram.

e)Interpretation: Interpretation means to bring out the meaning of data or convert into information. The climax of

the research process is approached as one prepares to draw conclusion for the data analyzed. The

whole investigation culminates reaches in drawing inference that leads to conclusion. This phase

calls for a high degree of interpretative skill, both quantitative and logical.

pg. 24

CHAPTER 3

Profile of Cosmetics Industry

pg. 25

Use of cosmetics is not latest trend, it has its roots deep within the annals of

history. The word cosmetic has been given this modern name lately. Through regular and formal

use of cosmetics has gained momentum now, it has been in some form or other since a long time

To cite an example of the long usage of cosmetic, the cosmetics depict had

found its origin in China in the 4th century BC. Indian too has not remained far behind in the

development and frequent usage

of cosmetics. Household utility like haldi, chandan, basan uptan have been

used for centuries to preserve the natural beauty of skin. The reason for their usage was adequate

availability of pure material, apt knowledge of natural formulation and virtually zeros effects.

The cosmetics industry, which started glowing in the early 1990s, is expanding

exponentially. With more women and men becoming conscious of their and

willing to spend on their grooming, this industry has been growing at 20-25

percent the last few years. No wonder then that the shelves are stocked with a plethora of

products and brands, targeted at various segments, catering to the various needs of customers.

The enormous growth in this segment has not only. attracted many MNCs but also provided

space for many Indian companies to further expand their product range.

pg. 26

GROWTH TRENDS AND PROSPECTS

An ORG-Marg study reveals that while most FMCG products were affected by the general

slowdown, this segment witnessed relatively good growth in volume and value 2001. Not only

have more people started using cosmetics, they are also willing to pay more to look and feel

good. The penetration rate is higher in the skin-care segment compared to lipsticks. While

volume growth has remained low,at 3 percent, in the case of lipsticks, much of the value growth

has come from price rises.

This not only means that consumers are willing to spend the extra bit to look and feel

good, but also indicates the constant up gradation from mass to premium products. Though mass

products still constitute a major portion of the market, a certain segment is obviously ready to

upgrade to the next category as d ispo sab le inc o mes r ise . I nc r eased med ia

expo su r e, t he wil l ing nes s t o spend more on personal care, consciousness about looks,

and advertisements and promotions targeting various consumer segments are some reasons for

these trends in consumption and penetration. The growth trends definitely send posit ive

signals about the industry prospects. With numerous players fight ing for market share, is

the industry really big enough and the growth high to accommodate all the players? What makes a player tick

and create a niche for itself in the market? These questions need to be pondered upon before jumping to

conclusions about the industry's prospects.

Though most players see huge opportunity in this industry, what would actually

work wonders for the players is strong brand promotion, good distribution

network, constant innovation and quality improvement, the ability to provide a variety of

products and introduce affordable products without compromising on quality.

Cosmetics are still seen as elitist products and may be the last thing on an

average Indian consumer's mind. Though the low penetration levels for most

cosmetic products suggest much potential, the market for cosmetic products

may remain a niche market, accessed by a small proportion of the consumers.

Despite the tall claims, the actual growth prospects would be limited to this

pg. 27

extent. From the investment perspective, though many big listed companies have a presence in

the various sub-segments of the industry, HLL is the only listed company that has a visible

presence across all segments. Being a diversified large company, the turnover from this segment

may be too small for HLL to affect investment decisions. As to the recent entrants such as Dabur

and Dr.

Morepen, it may be a while before their financials reflect the dynamics of this industry. The

other listed players are Emami and J.L. Morison (India). Despite their good financial track

records, investing in these stocks may be highly risky for a retail investor as low traded volumes

and equity base characterize the

Stocks.

COSMETICS The cosmet ic segment primarily comprises of colour cosmet ics (Face, eye, lip and

nail care products), perfumes, talcum powder and deodorants. All these are very small

segments. Talcum powder is the most popular cosmet ic product in India. This market is

estimated at Rs.3.5 bn and is yet growing at 10-12% in pa.

Pond's dominates the talcum market with a 70% share following by Johnson & Johnson, which

has a 15% market share.

Attar and alcoholic perfumes each account for 50% of the fragrance market

estimated at Rs. 3 bn. In the alcoholic perfumes market, 1/3rd represented by an unorganized,

with the balance largely imported. The June 98 budget halved

duties to 50R Lakme has a minor presence in the segment. Perception of damage to skin on

account of chemical ingredients restricts usage of face care products. The nail polish market is the

largest at Rs.25-30%.Deodorants have a very negligible presence in the Indian market an estimated

of Rs. 0.3 bn. Worldwide, deodorants is the largest market followed by skin care,

shampoos and toothpaste. HLL has launched a couple of products in this segment.

pg. 28

MARKET SEGMENTATION T he I nd ia n mar ke t can be segme nt ed in t er ms o f p ro duct cat ego r y and

p r ice . Again oral care, hair care shampoos & oils, skin care, soaps and distribution

network may divide the product categories.

ORAL CARE The oral care market can be segregated into toothpaste (60%), toothpowder

(23%) and toothbrushes (17%). While 60% of toothpaste is sold on the family

platform, around 35% is sold on cosmetic propositions. On the other hand,

while toothpowder accounts for 52% of the market, red toothpowder accounts for 40%

and black toothpowder accounts 8%. The penetration level of toothpaste/powder in urban areas 3 X that in the

rural areas. Traditional

materials such as neem and tobacoo are popular for cleaning in the rural areas,

Frequency of usage for toothpaste is only 1.5 times among other consumers,

compared with 2 times in the developed world.

Given the low per capita consumption and penetration rates, toothpaste demand is mainly being

driven by the overall market growth of 8-10.The rural segment is also tooth powder growth.

HAIRCAREOILS The hair oil market is huge, valued at Rs.6 bn. Due to the varied consumption

habits of consumers across the country, where coconut oil and edible oil are

interchange used, the size of the market is likely to be higher than estimated.

More importantly, the market is growing at an impressive 6-7% in volume terms despite the high

penetration level.

Usage of hair oil is a typical Indian habit with 50% of the population out of

which some perceive that massaging the head with hair oil has a cooling impact.

The penetration of hair oil is fairly high at around 87% and evenly distributed

among the urban and rural areas.

pg. 29

HAIR CARE SHAMPOOS

The shampoo market in India is valued at Rs.4.5 bn with the penetration level at

13% only. The market is expected to increase due to lower duties and

aggressive marketing by players Shampoo is also available in a sachet, which is affordable and

makes up to 40% of the total shampoo sale.The Indian shampoo market is characterized by a

twin benefit platform- cosmetic and antidandruff. It is basically an upper middle class product, as

more than50% of the consumers use ordinary toilet soap for washing hair.While the awareness

level is high, the penetration level is very low even in the metros, which is only 30%. Urban

markets account for 80% of the total shampoo market; the penetration level is rapidly increasing

due to decline in excise duty, which was 120% in 1993 to 30% currently.

SKINCARE The skin care market is at a very nascent stage with basic requirements of the

consumers being protecting the skin from cold and dryness in winter, and

improving fairness of the skin. Most of the product categories are niche segments.

While the awareness rate is high in both urban areas accounting for 60R and

rural areas accounting for 30% the penetration level is low for both. This is

because of apprehensions that usage of skin care products may benefit in the

long run due to the chemical contents. Many households prefer to use traditional and natural

home made products.Since the market is at a very nascent stage with very low penetration levels,

the growth rates are expected to be higher at 24-255 over the next five years. New players such

as Avon and Oriflame have entered the market with the natural ingredient benefit platform,

which could further spur growth.

pg. 30

SOAPS The product categories can be classified into three segments; premium (Lux,

Dove), popular (Nirma, Cinthol), and economy (Nirma Bath, Lifebuoy). The price differential

between the premium and economy segments is about 2X. The popular and economy segments

account for about 4/5ths of the entire market for soaps.

Penetration of toilet soaps is high at 88.6%. However per capita consumption

levels remain low India's per capita consumption of soap at 460 gms per annum is lower than

that of Brazil at 1,100 gms per annum.

While the awareness rate is high in both urban areas accounting for 60R and

rural areas accounting for 30% the penetration level is low for both. This is

because of apprehensions that usage of skin care products may benefit in the

long run due to the chemical contents. Many households prefer to use traditional and natural

home made products. Since the market is at a very nascent stage with very low penetration

levels, the growth rates are expected to be higher at 24-255 over the next five years. New

players such as Avon and Oriflame have entered the market with the natural

ingredient benefit platform, which could further spur growth.

DISTRIBUTION NETWORK Soaps are available in 5 ml retail outlets in India, 3.75 m of which are in the

Rural areas. Therefore availability of these products is not a problem, 75% of India's population

is in the rural areas; hence about 50% of the soaps are sold in the rural markets.

PRICE SEMENTATION Price is common basis for segmenting the cosmetics market. The market segments formed

accordingly now describe:

pg. 31

POPULAR SEGMENT The sector is divided into two distinct segments-the premium segment catering mostly to urban

higher/upper middle class and the popular segment with prices

As low as 25%-30% of the premium segment , catering to mass segments in

Urban and rural markets. The premium segment is less price sensitive and more brand conscious.

ECONOMY SEGMENT India's rural markets have been a lot of activity in the last few years. Since

penetration levels are pretty high in most categories, future growth can come only deeper rural

penetration. FMCG majors are aggressively looking at rural India since it accounts for 70% of

the total Indian households.

GROWTH High consumer awareness and penetration levels will enable the market to grow

At an average 8-10% per annum with slightly higher growth in the rural areas.

Higher penetration stems from popularity of low-cost detergents. Hence, besides increase in per

capita consumption, there is tremendous scope for movement up the value chain.HLL, Nirma

and P&G are the major players in the market with 40%, 30% and 12%share, respectively. While

HLL dominates the premium segment, Nirma is the leader in the popular segment.

CONSUMER The term consumer is often used to describe two different kinds of consuming entities; the

personal consumer and the organizational consumer. The personal consumer buys goods and

services for is or her own (e. g. soap, shampoo etc.) for use of the household (e.g.TV VCR or

car) or as a gift for a friend

(E.g. bike, camera etc.). In each of these cases, individual who are

Referred to as end uses or ultimate consumers buy the goods for final use.

The organizational consumer buys goods and services in order to run their

Organization. Manufacturing companies buy raw material etc. to manufacture

pg. 32

and sell their own products. Institutions buy the material they need to maintain themselves.

UNDERSTANDING CONSUMEROLOGY IMAGE SELLING Whenever a consumer purchase a product, he is not just buying a brand. He is

also buying an image that is associated with the brand. Every marketer, and marketing company,

operates with the sole objective of crafting an array of image, and reinforcing this diverse image

in a contextual framework that is

relevant to the target segment. In ensures that the company is able to bring the brand so close to

the consumer that the brand creates a special place for itself in the consumer's mind Imagery is

everything. When a consumer parts with money to purchase a product, it is actually a response to

the image that a particular band of the product has contrived in his mind. This image, when

confronted by a need state translated itself into a purchase decision. During this period, the

consumer is

creating a relationship with the brand which, depending on is consumption

experience, determines the future-buying pattern of the consumer. A series of

good repeat purchase experience gives you a local customer.

CONSUMEROLOGY Once that real understanding of a brand's drives through an identification of the

unique associative image in obtained, in then becomes the task of the brand consumer ology to

craft relevant fit for the brand into the consumer-selected

image. From this fit an image is interpreted into a social and vocational set that

inconsonance with the consumer's image and the image of the brand through

the medium of an image solution.

Having identified the image solution, the next task is to deliver it through the

pg. 33

Variables of marketing like packaging, pricing, distribution, merchandising, promotion and

advertising. The most important aspect of Consumerology, and image solution, is that they never

dormant. Imagery, being everything is constantly changing, so do the image solutions. Thus,

these image solutions are

a function of listening to the consumer. They involves constant listening to

Check if a brand's drivers are changing, if the consumer's image is changing and if the image of

the brand is being molded according to the changing situation. So, the correct practice of

Consumerology implies the creation of market listening post, which is constantly receiving

consumer feedback and passing it

to the brand consumerlogist who, in turn, interprets it for the creation of new image solution. If

the listening stops, the solutions are no longer the result of

consumer understanding, but merely the products of the experiential biases of

the solution creators.

CONSUMER BEHAVIOUR Consumer behaviour is the study of individual, individual in a group as whole while the

individual decides to spend his/her time, effort and money on consumption related items.

Consumer behaviour refer to the behavior that consumer displays in searching for, purchasing

using, evaluating and is posing of products and services that they expect will satisfy their needs.

They study of consumer behaviour is the study of how individual make decision to spend their

available resources viz. Time, money and effort on they buy from, where they buy it, how often

they buy it and how often they use it.

Take the case of consumer durable e.g. the T.V. set. What features they look for? What is the

reason for buying particular T.V. Set? How likely are they to replace their old models when new

models with added features become available? The answer to such question can only be found

through consumer

research that provide. TV manufacture with important product scheduling, design modification

and opting final strategy. Although this study focuses on how and why consumers make decision

to buy T.V Consumer behavior and considers the uses consumers make of the good they buy and

then subsequent equations. For example, a buyer may experience dissatisfaction to friend, and in

pg. 34

turn influence his friend future TV purchase decision or may vow never to buy same brand or

model again, prescribing his own future selection decisions. Each of these possible consequences

of consumer post purchase strategies into their promotional campaigns.

NEED OF CONSUMER BEHAVIOUR STUDY For marketers, it is important for us to decide to whom to direct the promotional efforts by

recognizing why and how individuals make their consumption decisions. If marketers understand

consumer behavior they are able to predict how consumer are likely to react to various

informational and environmental cues, and able to shape their marketing strategies accordingly.

The initial thrust of consumer research was from a managerial perspective;

marketing manager wanted to know the specific causes of consumer behavior.

They also wanted to know how people receive, store and use consumption

related information, so that they could design marketing strategies to influence consumption

decisions. They regarded the consumer behavior discipline as an applied marketing science; if

they could predict consumer behavior, they could influence it.

DEVELOPMENT OF THE FIELDS OF CONSUMER BEHAVIOUR There are a number of reasons why the study of consumer behavior developed

as separate marketing discipline. Marketing had long noted that consumer did

Not always act or react as marketing theory would suggest. The size of the

consumer market in this country highly diversified. Even in industrial markets,

where needs of good and services are always homogeneous than in consumer

markets, buyers are exhibiting diversified preferences and less predictable purchase behavior.

To better meet the needs of specific groups of consumers, most marketers

adopted a policy of market segmentation, which called of the division of their

total potential markets into smaller, homogeneous segment for which they could design specific

products or promotional campaigns. To try to improve the new

product success rate to try to ensure consumer acceptance marketers make

determined efforts to learn everything they could about their perspective

pg. 35

consumer i.e. their needs, preference, changing life style. Research into

consumer behavior provided them with necessary insights to develop new products and services

and to design persuasive promotional strategies. The growth of consumer movement created an

urgent need to understands how

consumers make consumption decision e.g. in order to identify sources of consumer confusion

and deception, consumer advocates sought to discover

perceive and interpret various marketing and promotional information i.e. promotional appeals,

package labels, warranties etc. Most of organizations have recognized that need to market

globally to achieve major economies of scale. Marketers now use cross cultural consumer

research studies as the basis for product development and promotional strategies to meet the

needs of targeted consumers.

FACTORS INCLUENCING BUYING BEHAVIOUR:

PSYCHOLOGICAL FACTORS Diversity in human behavior often causes us to look the fact that people are

really very much alike. Psychologists and consumer behavior agree that most

people tend to experience the same kinds of needs and motives, they simply

express these motives in different ways. For, this reason an understanding of

human psychology is very important to market place. The human psychology is

major factors that influence the buying behavior of the consumer. Under the

psychological factors the following points are taken into consideration.

HUMAN NEEDS

MOTIVATION

PERCEPTION

LEARNING

ATTITUDE

pg. 36

Cosmetic products in the market

Every one of us has used some form of cosmetic at some point in our lives. Even talcum powder,

lip balm, hair oil and shampoo fall under this category. Any product used for cleansing or for

making a person more attractive by changing his or her appearance is called a cosmetic.

Although soap does not figure in this list, all coloring, conditioning, and cleansing products used

to protect the skin, hair, nails, lips, eyes, and teeth of humans are considered cosmetics. Ancient

civilizations in India, China, and the rest of Asia abounded in wealth, and kings, queens and the

common people used natural preparations as cosmetics, as is often mentioned in classical poetry

and literature from these regions. The Egyptians used a plethora of such preparations way back

in the 4th millennium B.C. Cosmetics were used widely in the Roman Empire too. Then the

European region became relatively devoid of cosmetics until the Middle Ages when they were

reintroduced from the Middle East. The usage of cosmetics was derided by many at the time and

considered too flashy and fit only for actors. However, things changed drastically, of course, and

now every social class has its own set of cosmetics, ranging from foundation, face powder,

rouge, eye make-up colors, and lipsticks of every hue. The hair has its own set of pampering

cosmetics, from shampoo, conditioners, hair colors, curlers, and straighteners. As cosmetics help

enhance the personality of a person and not just physical beauty, antiperspirants, mouthwashes,

depilatories, astringents, and bath crystals also get included. In the 1900s cosmetics were

scientifically prepared in France, spawning a huge industry which has grown in leaps and bounds

to date, with western brands like Revlon, Elizabeth Arden and Asian ones like Biotherm,

AmorepacificShahnaz, Lotus and Biotique gaining popularity for the quality and the

entrepreneurial acumen of the brand owners.

The 21st century witnessed the formation of large cosmetic companies and the value of the

industry growing into the billions of dollars. Many cosmetics of today originated in Asian

countries, especially the herbal kind, with India being a major source. “The beauty business has

been overwhelmingly taken over by the herbal cosmetics industry here, as organic and ayurvedic

cosmetics gain precedence over chemical concoctions,” said Shahnaz Husain, an Indian beauty

expert.Along with Shahnaz, several herbal beauty products adorn shop counters such as

Biotique, Himalaya, VLCC, Dabur and Lotus along with L’Oreal, Revlon etc. The Indian

pg. 37

cosmetics market is valued at US$4 billion and is fast growing at a seven percent rate. Hindustan

Unilever is the largest cosmetics company in India, followed by L’Oreal.

Organic cosmetics are preferred as they do not hinder vitamin D absorption by the skin. From

time immemorial henna (Lawsoniainermis) has been used to color hair, homemade kajal is used

to line the eyes, sandal wood paste to smoothen skin and turmeric paste as a hair remover. Egg

white and almond oil help condition hair, while oiling the hair keeps its sheen and postpones hair

whitening. With so many cosmetics available in the kitchen cupboard the industry needs to

satisfy consumer awareness and serve its customer base in increasingly wholesome ways.Mary

Kay Cosmetics, launched by American businesswomen Mary Kay Ash, ventured into India with

plans to invest US$20 million over a 3-4 year period to develop infrastructure, execute

technology transfer and provide training. It is now opening brand experience centers in all major

cities, where beauty consultants will provide consumers with customized beauty care.With

growing income levels, sales figures are expected to grow as the products target the upper

echelons of society with its mass prestige range featuring uniquely designed products for the

Indian populace.

Marico’s Kaya skin care products for both men and women is backed by the philosophy of

offering personal confidence through expert skin care which synergises looking good with

feeling good about one’s inner and outer self at all times. With clinics spread across India, the

Middle East and Bangladesh, the customized and personalized services from Kaya serve all

cosmetic needs.

China became a popular destination for Japanese cosmetics major Shiseido, which entered in the

year 2003 to leverage the huge Chinese population, which was then ten times greater than

Japan’s. HuanCaiJian, the company’s cosmetics store, was opened with 223 different cosmetic

items in Shanghai.

As a large cosmetics producer, China is expected to benefit more owing to the positive

regulatory environment and the growing Chinese economy. With more multinationals keen on

opening shops there, this is bound to happen in spite of the prevalence of counterfeit cosmetics

which act to discourage foreign investments in the industry.

pg. 38

Asia-Pacific cosmetics companies are going all natural and organic for ensuring safety and to

garner a big piece of the market already occupied by American and European brands like Avon,

Oriflame, and Garnier. Many natural cosmetics companies in the Asia-Pacific region are

following certified natural and organic cosmetic standards to differentiate their products from

that of competitors.

The Malaysian company I-Green was successful when it launched the first Asian line of certified

organic baby care products under the Buds Cherished Organic brand. The Australian brand

Jasmin Skincare saw success in China by marketing its products as ‘the best organic skincare in

the world’, said Organic Monitor sources.

The sudden awareness regarding cosmetics containing synthetic ingredients follows warnings to

consumers about a range of Taiwanese skin care products which were found to contain an

antibiotic called clindamycin a few years back, and that asbestos was detected in NU.K. baby

talcum powder and L’ocean cosmetics sold in China. Educated and informed consumers are now

wary and go through many stages before zeroing in on any product.

According to Datamonitor surveys, AsiaPacific consumers are more concerned about safe use of

cosmetics than global consumers. A survey conducted in 2008 showed that about 63 percent of

respondents from Asia-Pacific preferred 100 percent natural ingredients in their health and

beauty products, while only half this number felt the same in other regions.

Also in a 2009 survey, about 40 percent of Asia-Pacific consumers revealed that they were ready

to pay more for organic beauty products, which is more than the 33 percent global average.

This consumer preference served as an advantage for Asian companies which filled the void,

offering safe natural and organic products that were not yet offered by western brands.

Readymade Ayurvedic concoctions and home cosmetic recipes turned into huge brands

overnight. This niche has to be retained by Asian brands through developing consumer loyalty to

keep multinational brands at bay.

Cosmetics Leaders Asia is a “live forum” designed to bring cosmetic manufacturers, formulators,

scientists, sales and marketing professionals together on one platform along with ingredient

pg. 39

suppliers and cosmetics packaging suppliers. Conferences, brainstorming sessions, an exhibition

of new ingredients, etc., form part of the annual CLA event. This is expected to give impetus to

the cosmetics industry as a whole.

Even small countries like Taiwan form a lucrative market for skin care products, color cosmetics

and hair care products. Singaporeans demand better sun care products and men’s grooming

products, while Thailand shows demand for skin care products and perfumes. In Vietnam and

Indonesia, domestic cosmetic producers supply to the middle and low-end market segment while

multinational brands serve the affluence.

serve the affluent.

What’s New – Nutricosmetics

Taking ‘skin deep beauty’ even deeper, Nutricosmetics products promise to make skin, hair and

nails even more healthy and beautiful. In spite of the recent economic downturn, the

nutricosmetics sector is growing fast, says market research company Kline. Projected growth for

the global skin care market is about 11 percent per year up to the year 2012, owing to an increase

in new product launches.

These products include foods with carotenoids, cod liver oil, fish oil, multivitamins and others.

Promoting these products is difficult as most consumers feel that they do not need them as they

are already on a healthy diet, and many consumers feel nutricosmetics do not work. Consumers

still prefer a topical cosmetic product over functional foods or beauty supplements.

Nutricosmetics is still widely unknown to many, which prevents product penetration into new

markets. But the realization that beautiful skin does not happen overnight and that many

consumers use nutricosmetics along with their regular beauty regimen seems to be encouraging

for this new sector. The high levels of loyalty that consumers have for nutricosmetics once they

use them will serve this industry in the long run. Oral supplement and skin care specialist

Ferrosan launched its male grooming nutricosmetic, management, an anti-ageing supplement

treatment which can prevent dry skin, lines, wrinkles, and protects against UV damage and

pg. 40

increases moisture levels in the skin. In the U.K., response to the product was not so good, while

in Singapore and the United Arab Emirates sales were remarkably high.

Another brand, Functionalab, also witnessed good responses from Asian countries when

compared to the United States as nutricosmetics was easily integrated with the usual beauty

routine here. Nurturing the skin from inside out offers long-lasting results, as nutricosmetics

ensures.

Nestlé has developed an edible beauty bar for Kit Kat brand along with Tokyo Beauty Clinic

which comes in variants like bitter almond and aloe yoghurt. Breakfast cereals like Moody

Muesli, embellished with pumpkin seeds, cereals, cranberry, goji and grapes make them an anti-

ageing nutricosmetic. Nestlé Malaysia has introduced a coffee with 3-in-1 collagen complex

supposedly to strengthen skin elasticity.

The fact that beauty, nutrition and pharmaceuticals go hand in hand has inspired big and small

companies to launch innovative products and promotions.

Male Grooming Products

Beauty treatments are for men as much as they are for women, as proven from the fact that

global sales of male specific cosmetics stands at US$28 billion. And this number is growing at

12 percent a year, what with new salons cropping up, while barber shops upgrade to beauty

salons with increased celebrity endorsements.

What was a quick shave a generation back now encompasses an entire skin, hair and body

regimen. Men of all ages and classes are open to using new products. Even hair removal creams

for men are gaining popularity, and even in India, which is considered a conservative market.

Social pressures, competition at work and acceptance by many seems to encourage men to move

from a simple massage to facials, hair coloring, hair styling and so on.

Cosmetics for men have gone natural straight away with the launch of several successful mass

market products made of naturally derived ingredients. They include moisturizers, aftershave

pg. 41

products, face washes and face scrubs, shower gels, and shave gels. Aftershave products

contained perfumes and alcohol before, but now they contain soothing balms.

South Korean men are forming a lucrative market as they seem to be more interested in their

looks and eager to fight ageing indicators. Hyundai Department Store, a major retailer, increased

its male sales staff strength to sell cosmetics. Lotte Department Store representatives say that

men are mov- ing away from traditional products towards Biotherm and Amorepacific lotions,

sprays, ointments, tonics, gels and creams. Needless to say sales figures have been jacked up.

Military personnel and others working outdoors are early adopters of skin care products. The

male cosmetics segment is go- ing places for sure. The well-groomed look is in and the rugged,

hairy look is passé. Marketers are quick to take the ball and roll with it, like Amorepacific in

Korea, which is organizing grooming classes at college cam- puses and workplaces to teach men

to dress in style and take skin care seriously.

“Asia is regarded as the most important region for ingestible beauty, driven by consumer demand

and also because the regulatory system there is more sophisticated than in Europe,” said experts.

The FOSHU (Foods for Specified Health Uses) rules specify what can and what cannot be

claimed for a product. Sun protection and whitening for skin care products, and volume and

growth for hair care products are allowed as claims as long as they are not exaggerated.

Indian profile

Bearing a long glowing heritage of cosmetic and beauty, aesthetic makeup products is being used

since olden days and nowadays it appear like a booming economy in India which would be the

largest cosmetic consuming country in a next few decades. While the demand of beautifying

substances are growing day by day, a large number of local as well as international

manufacturers gradually extend their ranges and products in different provinces of India.Since

1991 with the liberalization along with the crowning of many Indian women at international

beauty pageants, the cosmetic industry has come into the limelight in a bigger way. Subsequently

pg. 42

their has been a change in the cosmetic consumption and this trend is fueling growth in the

cosmetic sector. Indian cosmetic Industry had rapid growth in the last couple of years, growing

at a CAGR of around 7.5% between 2006 and 2008. While this is due to the improving

purchasing power and increasing fashion consciousness, the industry is expected to maintain the

growth momentum during the period 2009-2012. In the Indian Cosmetic Industry both electronic

as well as print media are playing an important role in spreading awareness about the cosmetic

products and developing fashion consciousness among the Indian consumers.

Due to the development of satellite television and a number of television channels as well as the

Internet in the modern day, the Indian consumers are constantly being updated about new

cosmetic products, translating into the desire to purchase them. Additionally, the flourishing

Indian fashion/film industry is fueling growth into the Cosmetic industry in India by making

Indians to realize the importance of having good looks and appearances. Today most of the

cosmetics manufacturers in India cater to the domestic market but they are gradually establishing

their footholds in overseas markets. In recent years, cosmetic manufactures in India have

received orders from overseas markets; for example - Indian herbal cosmetic products have a

tremendous demand in the international market.

The Indian Cosmetics Industry is defined as skin care, hair care, color cosmetics, fragrances and

oral care segments which stood at an estimated $2.5 billion in 2008 and is expected to grow at

7%, according to an analysis of the sector.Today herbal cosmetics industry is driving growth in

the beauty business in India and is expected to grow at a rate of 7% as more people shun

chemical products in favour of organic ones.

The emphasis of the herbal cosmetic has been on the spectacular growth of the herbal and

ayurvedic beauty products business as conveyed by beauty expert Shahnaz Husain who was the

first to introduce the concept of ayurvedic cosmetics to the world when she launched her

products way back in 1970. Today, the Indian cosmetics industry has a plethora of herbal

cosmetic brands like Forest Essentials, Biotique, Himalaya, Blossom Kochhar, VLCC, Dabur

and Lotus and many more. The Indian cosmetics industry has emerged as one of the unique

industries holding huge potential for further growth. In 2009, the cosmetics industry registered

sales of INR 356.6 Billion (US$ 7.1 Billion) despite the global economic recession. Indian

pg. 43

cosmetics Industry has mainly been driven by improved purchasing power and rising fashion

consciousness of the Indian population and industry players spending readily on the promotional

activities to increase consumer awareness and develop their products.

According to a new research report, the Indian Cosmetics Industry is expected to witness

impressive growth rate in the near future owing to rising beauty concern of both men and

women. Today the industry holds promising growth prospects for both existing and new players.

The baseline is that there has been a rise in variety of products offered by the industry players in

the country. The companies have started going for rural expansion and are offering specialized

products to generate revenues from all the corners of the country. Improvement and

strengthening of the Indian economy in the coming years will also pave the way for the Indian

cosmetics market over the forecast period and develop the Cosmetic Industry.

The Indian Cosmetic market which traditionally a stronghold of a few major Indian players like

Lakme, and Ponds has seen a lot of foreign entrants to the market within the last decade. India is

a very price sensitive market and the cosmetics and personal care product companies, especially

the new entrants have had to work out new innovative strategies to suit Indian preferences and

budgets to establish a hold on the market and establish a niche market for them.

Top leading companies

Lakmé is the Indian brand of cosmetics, owned by Unilever. It started as a 100%

subsidiary of Tata Oil Mills (Tomco), part of the Tata Group; it is named after the French

opera Lakmé, which itself is the French form of Lakshmi, the goddess of wealth who has

is also renowned for her beauty.

Revlon is an American cosmetic for skin care, fragrance, and Personal Care Company

founded in 1932.

Oriflame Cosmetics S.A. (Luxembourg) is a cosmetics group, founded in 1967 in

Sweden by the brothers Jonas AF Jochnick and Robert AF Jochnick.

The L'Oréal Group is the world's largest cosmetics and Beauty Company. It

concentrates on hair colour, skin care, sun protection, make-up, perfumes and hair care.

pg. 44

Chambor cosmetic line is a blend of the finest traditions in terms of radiant color, soft

texture and skin accentuator.

Maybelline is a makeup brand sold worldwide and owned by L'Oréal.

Avon Products, Inc. is a US cosmetics, perfume and toy seller with markets in over 140

countries across the world.

Make-up Art Cosmetics or MAC Cosmetics, is a manufacturer of cosmetics which was

founded in Toronto, Canada by Frank Toskan and Frank Angelo in 1984

ColorBar cosmetics are one of the leading brands of color cosmetics in India.

Street Wear is a young, funky and hip brand which globally is positioned at the young

and trendy shopper and the range consists of about 30 SKUs covering categories like nail

enamel, lipsticks, lip gloss, face make-up kits and eye shadows.

Latest development

According to Indian Cosmetic Sector Analysis (2009-2012), the Indian cosmetics

industry is expected to witness fast growth rate in the coming years on the back of an

increase in the consumption of beauty products. Owing to growing disposable income of

the middle class households and changing lifestyle, it is expected that the cosmetics

industry will grow at a CAGR of around 17% during 2010-2013.

A study even shows that affordability and rising consumer base were the main drivers

behind the high cosmetic sales of around INR 356.6 Billion (US$ 7.1 Billion) in 2009.

Market players are getting lucrative and good opportunities as people have become more

beauty conscious due to changing lifestyle and spreading consumer awareness.

According to ASSOCHAM the size of India's cosmetics market will rise by almost a half

to 1.4 billion dollars in the next two-three years as people get fashion conscious and more

brands are launched. With increased awakening about cosmetics brands, which is evident

even in rural India, the industry size will grow to around 1.4 billion dollars from current

level of 950 million. It is projected to grow at a CAGR of around 7% during the forecast

period.

pg. 45

Indian Cosmetics Industry is set for a significant growth depending on the capability of

the manufacturers to market their products. Products that claim to renew cells, minimize

pores, and restore hydration have created an $83 billion worldwide market.

Due to the optimistic assessment the domestic cosmetic and toiletries industry show that

with increased awakening which is growing even in rural India, its size will grow in next

2-3 years to around US$ 1400 million from current level of US$ 950 million. Till then

India's per capita consumption of cosmetic and toiletries products could be on par with

that of China which currently is US$ 1.5, says ASSOCHAM analysis.

pg. 46

CHAPTER- 4

Analysis Of Data

pg. 47

ANALYSIS OF RESPONSES GIVEN BY STUDENTS

NON-WORKING AND WORKING WOMEN

USAGE OF COSMETICS

TABLE NO :-1

Product Student Non-working Working

Sampoo 54 32 14

Eye Liner 40 20 8

Kajal 8 0 1

Facewash 42 0 10

Moisturizer 34 20 8

Muscura 6 0 4

Compact 14 0 4

Conditioner 8 0 6

Bleach Cream 20 18 12

Astringent 16 0 6

Cleansing Milk 36 20 8

Foundation 12 6 2

Lipstick 50 24 12

Perfum 30 16 10

Deodorant 44 12 12

Nail paint 48 8 6

Cream 34 8 4

pg. 48

SampooEye Liner Kajal

Facewash

Moisturizer

MuscuraCompact

ConditionerBleach CreamAstringent

Cleansing Milk

Foundation

Lipstick

Perfum

Deodorant

Nail paintCream

Student

pg. 49

Sampoo

Eye Liner

Kajal

Facewash

Moisturizer

MuscuraCompact

Conditioner

Bleach Cream

Astringent

Cleansing Milk

Foundation

Lipstick

Perfum

DeodorantNail paint Cream

Non working

pg. 50

Sampoo Eye LinerKajal

Facewash

Moisturizer

MuscuraCompact

Conditioner

Bleach Cream

Astringent

Cleansing Milk

Foundation

Lipstick

Perfum

Deodorant

Nail paint Cream

Working

pg. 51

THE POPULAR BRANDS AMONG

Table no:-2

Product Student Non-working Working

Sampoo Sunslik,Pentence Clinic Plus Clinic Plus

Eye Liner Lakme Lakme Lakme

Kajal Lakme Lakme Lakme

Facewash Ponds,Pears Ponds Ponds,Pears

Moisturizer Ponds,Pears Ponds Ponds,Pears

Muscura Lakme Lakme Lakme,Revlon

Compact Lakme Lakme Lakme,Revlon

Conditioner Ultra Doux Ultra Doux Ultra Doux

Bleach Cream Fem,Joilen Fem,Joilen Fem,Joilen

Astringent Ayur Ayur Ayur

Cleansing Milk Lakme,Ayur Lakme,Ayur Lakme,Ayur

Foundation Lakme Lakme Touch,Revlon

Lipstick Lakme Lakme,Revlon Lakme,Revlon

Perfum El-Paso,Elle Rexona-Do-It Charlie,Oroflame

Deodorant Elle-18Rexor Rexona Ella-18,Fa,Ponds

Nail paint Revlon,Lakme Revlon,Lakme Alpha,Lakme

Cream Charmis F&L Ponds,Nivea Ponds,Nivea

pg. 52

TYPES OF COSMETIC USED

Table no:-3

Product Student Non-working Working

Branded 40 8 24

Local 14 6 8

The survey shows that students use branded cosmetics

Branded74%

Local26%

StudentBranded Local

pg. 53

The survey shows that non-working women use branded cosmetics.

Branded57%

Local43%

Not working

pg. 54

The survey shows that working women use branded cosmetics.

Branded75%

Local25%

Working

pg. 55

REASON FOR USING COSMETICS

Table no:-4

Reason Student Non-working Working

To improve your personality 26 9 6

Social Influences 5 10 3

Fashion and Status Symbol 5 5 2

Health point of view 8 4 1

Psychological Satisfaction 10 4 2

The survey shows that students buy cosmetics, keeping in mind health and personality improvement. Fashion and status and social influences

do not cater much.

To improve your personality

48%

Social Influences9%

Fashion and Status Symbol

9%

Health point of view15%

Psychological Satisfaction

19%

Student

pg. 56

The survey shows that the non-working buys cosmetics for their psychological satisfaction and health.

To improve your personality

28%

Social Influences31%

Fashion and Status Symbol

16%

Health point of view12%

Psychological Satisfaction

13%

Non working

pg. 57

The survey shows that working women buy cosmetics to improve the Personality and they are also affected by social influences

To improve your personality

43%

Social Influences22%

Fashion and Status Symbol

14%

Health point of view7%

Psychological Satisfaction

14%

Working

pg. 58

ABOUT COSMETICS

Table no:-5

Perception Student Non working Working

Luxury 10 6 2

Necessity 36 24 10

Both 8 2 2

The survey shows that students perceive cosmetics to be a necessity.

Luxury18%

Necessity67%

Both15%

Student

pg. 59

The survey shows that non-working perceive cosmetics to be necessity

Luxury19%

Necessity75%

Both6%

Non Working

pg. 60

The survey shows that working women perceive cosmetic to be a necessity.

Luxury14%

Necessity72%

Both14%

Working

pg. 61

Factors Behind Buying Decision

TABLE NO:-6

Factors Student Non-Working Working

Brand 40 8 8

Price 48 12 5

Quality 24 4 10

Packaging 6 2 4

Ease to Use 14 6 2

Availability 20 4 2

The survey shows that students consider price and brand name to an important determinant in buying cosmetics.

Brand26%

Price32%

Quality16%

Packaging4%

Ease to Use 9%

Availability13%

Student

pg. 62

The survey shows that the non-working women consider brand name price and easeof use

to be an important determinant in buying cosmetics

Brand22%

Price33%

Quality11%Packaging

6%

Ease to Use 17%

Availability11%

Non-Working

pg. 63

The survey shows that the working women consider quality and brand name to be important determinant in buying cosmetics.

Brand26%

Price16%Quality

32%

Packaging13%

Ease to Use 7%

Availability6% Working

pg. 64

Source Of Information

TABLE NO:-7

Sources Student Non-Working Working

Beautician 34 10 6

Doctors 8 4 0

Shop-Keepers 4 2 0

Friends 48 16 8

Media 30 24 12

The survey shows that friends and beautician are sources that make students aware of cosmetics.

Beautician27%

Doctors7%

Shop-Keepers3%

Friends39%

Media24%

Student

pg. 65

The survey shows that media and friends make non-working women aware of cosmetics

Beautician18% Doctors

7%Shop-Keepers

3%

Friends29%

Media43%

Non-Working

pg. 66

The survey shows that media and friends influence working women.

Beautician23%

Doctors0%

Shop-Keepers0%

Friends31%

Media46%

Working

pg. 67

Outlets For Purchase

TABLE NO :-7

Outlets Student Non-Working Working

General Stores 46 24 10

Exclusive Cosmetic 4 0 0

Beauty Parlours 28 4 3

Cosmetic Stores 14 4 2

The survey shows that student generally buy cosmetics from general stores and parlors

General Stores50%

Exclusive Cosmetic

4%

Beauty Parlours31%

Cosmetic Stores15%

Student

pg. 68

The survey shows that non-working women largely buy cosmetics from general stores.

General Stores75%

Exclusive Cosmetic

0%

Beauty Parlours12%

Cosmetic Stores13%

Non-Working

pg. 69

The survey shows that working women largely buy cosmetics from cosmetic stores.

General Stores67%

Exclusive Cosmetic

0%

Beauty Parlours20%

Cosmetic Stores13%

Working

pg. 70

Expenditure on cosmetics

TABLE NO :-8

Expenditure Student Non-Working Working

0-50 8 4 0

50-100 32 12 0

100-150 4 10 0

150-200 4 2 4

More 6 0 10

The survey shows that students spend Rs.50-100 monthly on cosmetics. The survey shows that working women largely buy

0-5015%

50-10059%

100-1508%

150-2007% More

11%

Student

pg. 71

The survey shows that non-working women spend on an average Rs.50-100 on cosmetics.

0-5014%

50-10043%

100-15036%

150-2007%

More0%

Non-Working

pg. 72

The survey shows that working women spend Rs. 150-200 on cosmetics.

0-500%

50-1000%

100-1500%

150-20029%

More71%

Working

pg. 73

Effect of Cosmetic Advertisements

TABLE NO :-9

Effect Student Non-Working Working

Help 36 8 8

Not Help 18 24 6

The survey shows that advertisement help many students to decide on type and specific brand of cosmetics.

Help67%

Not Help33%

Student

pg. 74

The survey shows that housewives are generally not influenced by cosmetic advertisements.

Help25%

Not Help75%

Non-working

pg. 75

The survey shows that advertisements play a role in helping working women to choose on specific brand and type of cosmetic.

Help57%

Not Help43%

Working

pg. 76

Type of Cosmetic

TABLE NO:-10

Type Student Non-Working Working

Herbal 40 22 10

No-Herbal 14 10 4

The survey shows that students prefer using herbal brands.

Herbal 74%

No-Herbal26%

Student

pg. 77

The survey shows that most of the non-working women use herbal products.

Herbal 69%

No-Herbal31%

Non-Working

pg. 78

The survey shows that most of the working women use herbal products.

Herbal 71%

No-Herbal29%

Working

pg. 79

Brand Switching

TABLE NO :-11

Attitude Student Non-Working Working

Change 34 22 10

Not-change 20 10 4

The survey shows that students generally change their brands.

Change63%

Not-change37%

Student

pg. 80

The survey shows that non- working women change their brands frequently.

Change69%

Not-change31%

Non-Working

pg. 81

The survey shows that working women too change brands.

Change71%

Not-change29%

Working

pg. 82

Same Brand For all Existing Product Category

TABLE NO :-12

Response Student Non-working Working

Yes 10 10 2

No 44 22 12

Yes19%

No81%

Student

pg. 83

The survey shows that non-working women do not use same brand for all cosmetics. However, a few still use same brand.

Yes31%

No69%

Non-working

pg. 84

The survey shows that a very high percentage of working women use different brands.

Yes14%

No86%

Working

pg. 85

Experience of Duplicity

TABLE NO :-13

Experience Student Non-working Working

Yes 12 12 2

No 42 22 12

The survey shows that a few students experienced duplicity.

Yes22%

No78%

Student

pg. 86

The survey shows that about one third working women have experienced duplicity.

Yes35%

No65%

Non working

pg. 87

The survey shows that a very few working women have experienced duplicity.

Yes14%

No86%

Working

pg. 88

Regarding Healthy Impression about The Quality of Cosmetics

TABLE NO :-14

Response Student Non-Working Working

Yes 78 56 71

No 22 44 29

The survey shows that students think that variety of cosmetic create a healthy impression about quality of cosmetics.

Yes78%

No22%

Student

pg. 89

The survey shows that non-working women think that variety of cosmetics of a particular brand does not create a healthy impression about the quality of cosmetics.

Yes56%

No44%

Non-Working

pg. 90

The survey shows that like students, working women also think that variety of cosmetics create a healthy impression about quality of cosmetics.

Yes71%

No29%

Working

pg. 91

Brand usage in the Family

TABLE NO :-15

Brand Student Non-Working Working

Same 32 22 8

Difference 22 10 6

The survey shows that that some families use all the products of cosmetics of the same brand.

Same59%

Difference41%

Student

pg. 92

The survey shows that almost all the non-working women use cosmetics of the same brand.

Same69%

Difference31%

Non-Working

pg. 93

The survey shows that half the working women families use cosmetics of different brands.

Same57%

Difference43%

Working

pg. 94

Price versus Utility

TABLE NO :-16

Perception Student Non-Working Working

Yes 22 20 10

No 32 12 4

The survey shows that students do not think that price is in sync with the utility they offer.

Yes41%

No59%

Student

pg. 95

The survey shows that non-working women think that price is correct according to the utility they offer.

Yes62%

No38%

Non-Working

pg. 96

The survey shows that working women also think that price is in sync with the utility they offer

Yes71%

No29%

Working

pg. 97

CHAPTER 5

Findings and Suggestions

pg. 98

FINDINGS

• In the present scenario, all the females use cosmetics. However the

number of cosmetics used varies. The highest response is being shown by working

women, next by students and least by non-working women.

• Nearly, all the females use branded products.

• Cosmetics are generally used for improving their looks and personality.

• Using cosmetics gives them psychological satisfaction and confidence.

• Cosmetics nowadays have become a necessity for all the females.

• Cosmetics are purchased keeping in mind the brand name, price and

quality. Packaging and ease of use do not hold much significance. This is true for all the

three categories.

• Friends and media play a very important role in making females aware of

cosmetics.

• Cosmetics are generally purchased from general stores by all the three categories of

females.

• Working women spend more on cosmetics on an average than housewives and student

• Cosmetics have after effect though their frequency is very les. But to satisfy their short

term need they are being used.

pg. 99

• Advertisements play a role in helping customer decide on specific brand of cosmetics.

Students and working women influenced more.

• Working women buy cosmetics in medium size, student in small size and working

women in large in size.

• There is trend to use herbal cosmetics. Due to the awareness, the ill-

effects are being considered while buying them.

• Customer while purchasing cosmetics are not brand loyal.

• No brand as such is providing all the popular products in cosmetics.

• Duplicity although very less is being experienced which result in brand

switching.

• Creating variety of cosmetics of a particular brand creates a healthy

• Price of cosmetics is found to be consummate with the utility it offers.

pg. 100

SUGGESTIONS

Marketers should try to create brand loyalty by making special changes in the product.

They should try to generate positive word of mouth by generating quality products.

Duplicity should be checked as per standards.

Proper attention should be given to make cosmetics free of after-effects.

For promotion purposes, more attention should be given to the general and cosmetic

stores.

As media plays an important role, TV and magazines should be properly exploited.

Celebrities and brand ambassadors should be included in the advertisements to make

them more effective.

pg. 101

BIBLIOGRAPHY

1.International Review of Business and Social Sciences

http://irbss.org/files/pdf/IRBSS-12-1913.pdf

2.International Journal in Multidisciplinary and academic research

http://ssijmar.in/vol2no2/vol2no2.28.pdf

3.Brickwork Sourcing (Blog)

http://www.brickworksourcing.com/blog/?p=12

4.History of cosmetics

http://www.historyofcosmetics.net

5.Cosmetics

http://www.cosmeticsinfo.org/history3.php

6. Philip Kotler

Marketing Management.

7.Social Science Research Network

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2111545

pg. 102

QUESTIONNAIRE

pg. 103

CONSUMER BUYING BEHAVIOUR AS REGARDS COSMETICS

1) Do you use cosmetics? a) Yes b) No If yes, please specify the name. 2) Which cosmetics do you use? a) Branded b) Local 3) Reasons for buying and using cosmetics: a) To improve personality b) Social influences c) Fashion and status symbol d) Health point of view e) Psychological satisfaction 4) What is your opinion about cosmetics? a) Luxury b) Necessity c) Both 5) What factors do you consider while purchasing cosmetics? a) Brand b) Price c) Quality d) Packaging e) Ease of use f) Availability

pg. 104

6) What are the sources that make you aware of cosmetics? a) Beauticians b) Doctors c) Shopkeepers d) Friends e) Media 7) From where do you purchase cosmetics? a) General stores b) Exclusive cosmetic stores c) Beauty salons 8) How much on an average do you spend on cosmetics? a) 0-50 b) 50-100 c) 100-150 d) 150-200 e)200 or more 9) Do you think cosmetic advertisements help you to decide on type and specific brands of cosmetics? If yes, please mention. 10) What type of cosmetics do you like to buy? a) Herbal b) Non-herbal 11) Do you regularly use the same brand of cosmetics or change the brand frequently? If yes, then reasons for changing are: a) Price change b) New brand introduction c) Product improvement d) Package changes e) Advertising intensity

pg. 105

12) Do you use the same brand of cosmetics for all the existing product categories in cosmetics? a) Yes b) No 13) Have you ever experienced any inferiority or duplicity in cosmetics you have purchased? If yes, how has that influenced your buying behavior? a) Brand switching b) Category switching c) Any other 14) Does variety of cosmetics of a particular brand create a healthy impression on your mind about the quality of cosmetics? a) Yes b) No 15) Do all your family members use same brand/type of cosmetics? a) Yes b) No 16) Do you think that the price of cosmetics in general is in sync with the utility they offer? a) Yes b) No Name : Age : Profession: Address :

pg. 106