Marketing Research Proposal

On

Case based analysis of leading cosmetics brands in Indian market

Submitted by

Preeti Pujari

Under the supervision of

Mrs. Jagriti Mishra

Submitted to

Department of Fashion Management Studies (FMS)

National Institute of Fashion Technology (NIFT)

(Ministry of Textiles, Govt. of India)

GH-0 Road, Behind Infocity

Gandhinagar 382007. Gujarat

http://www.nift.ac.in

September, 2015
Title

Case based study of leading cosmetic brands in Indian market

Background of the Research

The Indian cosmetic industry comprises of hair care, skin care, make up, bath and body
care, fragrance, etc. The inclination of men and women towards beauty has propelled
the growth of the Indian cosmetic industry in the past few years. The Indian cosmetics
market registered impressive sales worth INR 264.1 Billion in 2011, and with rising
purchasing power and growing fashion consciousness, the industry is estimated to
expand at a CAGR of around 18-20% during the next couple of years. Consumers’
preference is shifting towards ‘herbal’ and ‘organic’ cosmetic products as they are
considered as safer options. For example, the growth of herbal and ayurvedic cosmetic
brands such as Shahnaz Hussain, Kama Ayurveda, Biotique and khadi have seen
tremendous growth in the last few years. The rising fashion consciousness and the
improved purchasing power has given a boost to the Indian cosmetic industry. Also,
women have started spending more on cosmetic products as they are actively earning
and are willing to take more interest in their grooming and hygiene. Moreover, the
markets of hair and beauty salons, spas, and cosmetic surgery are now an integral part
of the cosmetic industry.

Problem Definition

The Indian cosmetic industry is on a growing stage. The increased purchasing power
has made it possible for the fashion conscious people to care about their beauty and
wellness. Moreover, the choice of herbal and ayurvedic cosmetic products give the
consumers a sense of surety about the regular usage of these products. Hence, the Indian
cosmetic brands see a great opportunity for growth in the coming years.
Review of Literature

The Indian cosmetic industry is one of the most profitable and stable sectors. The
opportunities for growth of the Indian brands are vast. The Indian cosmetic brands are
growing due to the product development and marketing. Consumer behaviour is one of
the massively studied topics by the researchers and marketers in the past and still being
studied. Researchers show different reasons as to why consumer behaviour has been the
topic of many academics and researchers. One of the common views is that
understanding consumer behaviour has become a factor that has a direct impact on the
overall performance of the businesses. The need for a cosmetic brand is not just
functional but has become more ‘advanced and specialised’.

(Barson, 2004) India in cosmetic industry rose from 27% in 1991 to 31% in 2005 and is
advancing at a faster rate now so much so that the estimated growth rate for the next
couple of years stands at 18-20%. (Briney, 2004)The penetration of the foreign
cosmetic brands in the Indian market is giving a tough competition to the Indian
cosmetic in the urban areas.

As competition in the cosmetic sector is increasing day by day, consumers are

continually bombarded with information on different brands in the same product
category of cosmetics. In such a situation it gets difficult for a company to create brand
loyalty amongst existing customers. Therefore, many marketing managers are
concerned with the growing trends of switching brands. So it has more important for
marketers to have a greater knowledge of the determinants of brand loyalty,

The lifestyle of an Indian male or female is getting better and thus they are ready to
pay for a better products at affordable prices. This has increased the demand for the
essential everyday items such as shower gel and other toiletries, oral hygiene, make up
like Kohl, mascara, lipstick, sunscreen, perfumes and deodorants. Many scholars and
research agencies have done their research on this sector and provided us with their
views on this regard.

The hair and beauty salon and spas have gone up to a new level. Women on one hand
are much concerned about their grooming, may it be hair, skin, nails or face. (Junaid,
2013)The popularity of cosmetic is increasing with a faster rate the reason may be due
to the women who are becoming a part of workforce these days and hence their
disposable income is increasing and also improving their lifestyle. Not only in urban but
also in rural the popularity of the cosmetic is increasing, as the rural women try to look
like their urban counterparts. Growing at a CAGR of around 7.5% between 2006 and
2008, Indian cosmetics had a rapid growth in last decade the reason behind the growth
may be due to the increase in the purchasing power of women as well as increase in
their consciousness towards fashion.

The salons and spas usually use just one or maximum two kinds of cosmetic brands for
the various beauty treatments. The packages are more popular now and the people don’t
step back from availing them as it is considered to be more economical in the long run.
Men and women both have involved these beauty regimen in their routine. Earlier, men
didn’t show much interest in the spas or massages due to the societal pressure but these
days they don’t shy away from such treatments. There are beauty products especially
designed for men which we didn’t see in earlier times. We see celebrities doing
television commercials for men and men only. Men are becoming increasingly
conscious of their physical appearance and this has given rise to variety of products
specifically designed for men. The increasing popularity of the fashion shows and
beauty pageants has made them more aware and conscious of their looks which in turn
has resulted in increasing sales of the Indian cosmetic brands.

Research Gap

The major gap is the regional aspect as no research has been carried out pertaining to
Ahmedabad. Secondly, the preferences of the consumers now in 2015 has seen a drastic
change as compared to the consumers in the 1990s. The consumer buying behaviour has
changed because of a lot of factors, like consumer buying capacity and lifestyle etc.
Objective:

To study about consumer’s perception and buying behaviour about cosmetic brands.

Methodology

The approach in meeting the objectives will include both qualitative and quantitative
measures. Qualitative because both performance of the leading brands and the demand
of both men and women requires questionnaires. The nature of methodology would be
exploratory.

The sampling frame is Ahmedabad. .

Sample element: both men and women. Age group of the sample would be 18-50 years

Questionnaires and sample size: A series of questions and other prompts will be
answered by 100 respondents.

Data collection: This study being quantitative and exploratory, it will include both
sources of data collection: Primary and Secondary data. Primary data is the first
hand data which are selected afresh and are original in character. Primary data is
required as my research will specially contain the samples of Ahmadabad which
hasn’t been done before. We find a nationwide approach of this study but none re-
stricted to Ahmadabad. Secondary data refers to information gathered from al-
ready existing sources. This will help in formulating a theoretical basis and help
us know the existing research papers, journals, eBooks, fashion blogs and reports
published by market research companies, which relate to this study.

Scope of the study

The leading cosmetic brands has been witnessing a positive growth and this is going to
increase in the coming years. Both men and women realise the need of a well-groomed
body and are taking interest in maintaining the same. Currently valued at around $ 4.6
billion, according to the Confederation of Indian Industries (CII), the beauty and
cosmetic industry is projected to grow between 18-20 per cent per annum in the next
couple of years. The consumers today not just want beauty products, they want to use
the best of the brands to protect their body. There is a visible increase in the use of
herbal and ayurvedic brands. Not just women but men are taking interest in their
grooming too.

Bibliography

Barson, D. C. (2004).

Briney, C... (2004). Global Cosmetic Industry.

(Euromonitor International, 2006)

(Monteiro, 2003)

(Chernev, 1997)

(Bitta., 1986)