S. Ramesh Kumar, Ande Teja and Syed Hussain prepared this case for class discussion. This case is not intended to serve as an endorsement, source of primary data, or to show effective or inefficient handling of decision or business processes.
Copyright © 2012 by the Indian Institute of Management Bangalore. No part of the publication may be reproduced or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise (including internet) – without the permission of Indian Institute of Management Bangalore.
S. RAMESH KUMAR, ANDE TEJA AND SYED HUSSAIN
EXPLORING CATEGORY BENEFITS FOR BRAND BUILDING: KAYA AND THE BEAUTY CARE MARKET
India has been an emerging market that is witnessing radical changes in lifestyles and spending patterns of customers. Customers have been used to branded creams and lotions, and several of these offerings are being advertised with strong symbolic appeals associated with enhanced self-concepts. Kaya was also a brand in the beauty care category. However, the brand’s offerings dealt with medically anchored services intended to enhance the looks of the customers. The brand opened up a new facet of beauty care services that was associated more with up- market and state-of-the-art hospitals, where customers opted for these services under the supervision of doctors who had specialized in cosmetic surgeries/interventions. Would the differentiation between the first-time users of a beauty parlor and the loyal customers of a parlor offer insights that Kaya would find useful? Issues related to services management as well as customer value and customer loyalty were relevant to Kaya’s competitive strategies. Although the customers of a beauty parlor could be demographically different from Kaya’s customers, the commonality of the benefits related to the beauty services offered were the same. The challenge for Kaya was to use the insights from the customers in a related category of beauty parlor services in developing its category that did not face direct competition. INTRODUCTION: BEAUTY CARE INDUSTRY IN INDIA Traditionally, beauty care products in India had been limited to herbs and homemade products. Only soaps, hair oil, shampoos, and talcum powder from the organized industry had been able to penetrate the Indian market. However, with a steady increase in the awareness of hygiene and personal grooming across urban and rural India, several beauty and personal care categories gained momentum. In India, marketing activities generally involved popular celebrities, and traditionally highlighted aspects such as elimination of body odor and dandruff, improved oral health, and the prevention of infection. This further boosted the demand for beauty and personal care products. The Indian beauty care industry grew rapidly in a few years with the penetration of premium beauty care products and services. The rising disposable income and the changing lifestyles of Indians led to a boom in the beauty and personal care industries. The India skin care industry, for instance, was forecast to grow at 9% compounded annual growth rate (CAGR) during 2009–2014.1 Major fast-moving consumer goods brands such as Hindustan Unilever Limited (HUL) and Procter and Gamble (P&G) aggressively expanded their product portfolios, distribution networks, and marketing activities in this segment. With the proliferation of beauty and personal care categories and brands, customer awareness of the different types of products and brands increased. The consumption of beauty products and services seemed to have experienced significant growth.2 The emergence of brands such as Marico’s Kaya Skin Clinic, Lakmé Beauty Salon, VLCC, Shahnaz Husain Herbals, CavinKare’s Limelite, Green Trends, Keune, and Jawed Habib Hair & Beauty (JHHB) could be attributed to this trend. The boom was evident: HUL was opening up a new Lakmé salon almost every week, and JHHB had grown from 37 parlors in
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