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GCPL Diversification into
CosmeticsBy :
Shivraj Chavan
Abhinav Mishra
Tanya ShindeAnuja Deshpande
Ankita Jalla
Kushal D Sankhe
Ankit Jodawat
Ankit Sharma
Harshada Khopkar
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Corporate DNA
Mission statement: Striving for excellence by nourishing
developing and empowering employees and suppliers
Vision statement: Strengthen our leadership positions in
India and rapidly globalize our business
Values: Heritage Transparency and Trust
Competencies:Strong distribution network
Efficient marketing has enabled GCPL to achieve high
penetration or high market share
Expertise in R&D and manufacturing
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Market Analysis Current cosmetics industry
size - US$950m, Expectedindustry size - US$1.4 Bn (By2015)
Cosmetics market growthrate - 15-20% (for the lastfive years)
Contribution by medium andlow priced category - 90%
Colour cosmetics market size US$60m
Wallet share for personal
care products-2.1%
37 38 31 38 38
28 2531
28 28
24 26 2425 23
11 11 14 9 11
0
20
40
60
80
100
120
All North South East West
Hair Care Personal Care Skin Care Oral Care
Share of spends on Personal Care products
Sources: Technopak , McKinsey Global Institute
Expected Per capita income by
2025 =7100 USD
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Competitor Analysis
Major Players:
Lakme, Emami, Marico, Himalaya, Maybelline, Synergie, LOral, Shahnaz
Hussain, Amway, Cavin care,Chambor, Revlon
Premium Players: MAC, Christian Dior, Estee lauder, Vichy
Future Players: Color Bar, Dabur
Brands classified as per the pricing of their offerings:
Mass market category- Rs 45 to Rs 200
Middle market - 200 up to Rs 800
High End market - Rs 800 to about Rs 5000
Premium Range - up to Rs 35,000 Lakme leads the overall cosmetics market with share 32%
Revlon leads the high end market with 70 % market share
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Consumer Analysis No. of people under the age of 35
830 Million (70% of population)
20 to 49 years-old age group predictedto grow by 7.1% over the next 10years.
Every year, the 20 to 24 age group
increases by 3 million. This particularage group is the one enjoying thehighest buying power increase
Middle class households with anannual income of 2-10 lakhs perannum which accounts to 8.3% of thepopulation
By 2016, more than half of householdsin selected 20* cities will be middleclass, while the high income segmentcould more than triple. Meanwhile theshare of low income households couldhalve
3225 21 19
8
48
46
4034
22
1724
3138
55
3 5 8 915
0
20
40
60
80
100
120
98-99 01-02 04-05 07-08 15-16
Low income Aspirants Middle class High Income
Source: NCAER/FCR
* THE 20 SELECTED CITIES ARE DIVIDED INTO 3 CATEGORIES VIZ- MEGA CITIES, BOOM TOWNS AND NICHE CITIES
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Consumer Analysis
Target group for international brands Women aged 23-50 yrs (Middle
and Upper income group) accounting to 10M in number
Expenditure on Skin Care products as a %age of total personal care
spending 25%
Percent share of all india make up sales by women aged 15-24 29.8%
Indian male cosmetics industry remains a nascent niche with a growth rate
of 6%
SEC A spends the highest in value on personal care products with Hair care
and Skin care attracting the largest chunk
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Buying Behaviour
Who? Predominantly females(Age 15-50yrs) across SECs A,B and
C
When? Buying is irregular and differs across product ranges. Make
up products bought on an irregular basis while other cosmetic
products are frequently bought
What? More inclined towards cosmetics which are easy to
remove and contain Natural Ingredients
What Influences? Recommendations by friends and beauticians
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Insights from Survey
Godrej as a brand stands for trust and experience
Customers prefer to buy Godrej products where highlevel of trust is required. Ex: Personal careproducts, safety equipments etc
Possible areas for product line extension for GCPL-Cosmetics, Food and beverages, Baby care productsetc.
Consumers switch brands based on
recommendations by friends and beauticians Godrej hair dye has the highest recall value amongst
its various product offerings
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Insights from Primary Survey-II
Consumers do not like push strategy and rather want to getattracted by the product
They buy make up products on an irregular basis as andwhen the need arises while other cosmetic products are
frequently bought Packaging is an important factor influencing the purchase
decision. Subtle colors are more appealing
People are more of category loyal than being brand loyalist
Brand switching is caused mostly by word of mouth
recommendations Customers like cosmetics which are easy to remove and
contain Natural Ingredients
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Thank You
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GCPL Overview
Promoted by Godrej & Boyce ManufacturingCompany, GCPL was formed in November 2000
GCPL is a major player in the Indian (FMCG) market with
presence in soap, hair dye and hair colour, liquid
detergent and toiletries categories Through acquisitions like Keyline, Rapidol, Kinky Group
and Godrej Global Mideast FZE; GCPL has also established
presence in the hair and hair colour, personal care and
toiletries markets of the UK, South Africa and middle east.
It has three state-of-the-art manufacturing facilities
across the country located at Malanpur (M.P) Guwahati
(Assam) and Baddi (H.P)
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STRENGTHS
Expertisein making value for money
products for masses
Strong distributionnetwork
Decades ofexperience and unparalleledunderstanding of consumerpreferences
inpersonal care
Companyis financiallysound and
continuesto operate onnegativeworking
capital
WEAKNESSES
"Me-too products,whichillegally mimic the
labels oftheestablished brands.These
productsnarrowthescope of FMCG products
inrural and semi-urban market
OPPORTUNITIES
Untapped rural market
Rising income levels, i.e. increase in
purchasing power of consumers
Large domestic market- a population of overone billion.
Export potential
High consumer goods spending
THREATS
The grey channel makes up about 60% of the
Indian cosmetics market
Limited product portfolio in categories that
are either highly penetrated or enjoy a highmarket share
Acute competition from players like LOreal
and Garnier at the premium end of the hair
colour market
Sales have remained stagnant in the liquid
detergent segment with the category itself
stagnating
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DIVERSIFICATION into COSMETICS
GCPL has vast knowledge of the consumer
preferences so we suggest GCPL to foray into
the growing Cosmetic market
Following products will be made available to
the customers1. Lipstick, lip gloss, lip liner, lip plumper, lip balm, lip conditioner and lip
boosters2. Foundation, Powder, Rouge, Concealer and Blush
3. Mascara, Eye Liner, Eye Shadow and Shimmer
4. Nail Polish and Nail Polish remover
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Why Cosmetics ??
India's per capita consumption of cosmetics and toiletries stands at US$0.68as against US$10 in Malaysia and Taiwan, US$12 in Japan and US$1.5 of
China thus showing a vast scope of growth
With increased awakening about cosmetics brands in rural India, the industry
size will grow to around US$1.4 billion from current level of US$950m
The cosmetics market has been growing at the rate of 15-20% for the last
five years Growth mainly from medium and low priced category that accounts for 90%
of the cosmetic market
GCPL has vast experience and understanding of customer preferences in
Personal Care category
GCPL has been catering to Indian masses for years with its products like
Godrej No.1 and Godrej Hair Dye
Godrej in its rebranding spree emphasizes on a modern approach and
feel, this makes Cosmetics a possible area of diversification
Lower penetration of branded cosmetics in Semi urban and rural markets
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Major Players - Cosmetics
Indian brands: HUL, P&G, Emami, Godrej, Himalaya and Dabur.
Foreign brands: L'Oral, Este Lauder, MAC, Revlon, Avon
Lakme is the current industry leader which primarily caters to
the lower middle class segment. Brands like L'Oral, Este
Lauder, Olay etc mainly target the high end consumers
GCPL has its presence in personal care products like soaps, talc
and hair colors. In sync with its vision and values, Godrej can
foray into skin care and beauty products for masses
Cosmetics market is on rise and players like Dabur and Colorbarare entering with a range of skin care products
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TargetSegment
Semi Urban and Rural emerging
markets
Women from the segments SEC
B and C Middle class households with
an annual income of 2-10 lakhs
per annum which accounts to
8.3% of the population
By 2016, more than half ofhouseholds in selected 20*
cities will be middle class, while
the high income segment could
more than triple. Meanwhile
the share of low income
households could halve
ssss
3225 21 19
8
48
46
4034
22
1724
31 38
55
3 5 8 915
0
20
40
60
80
100
120
98-99 01-02 04-05 07-08 15-16
Low income Aspirants Middle class High Income
Source: Marketing White Book 2009-10
* THE 20 SELECTED CITIES ARE DIVIDED INTO 3 CATEGORIES VIZ- MEGA CITIES, BOOM TOWNS AND NICHE CITIES