BRAND EXTENSION
KRITI CHAWLA
PEARL ACADAMY OF FASHION
FMG-3
IDEA
To introduce a line of natural organic Make-up by FOREST ESSENTIALS.
No synthetic colors, artificial fragrances or petrochemicals
Made from natural plant extracts, herbs, flowers using ayurvedic recepies.
Natural and safe products dealing with the problem rather than the outside
effects.
The products will be made in a village of Uttaranchal, where the existing
products are made using local labor and not in factories.
The products will be available in all the existing stores of FOREST
ESSENTIALS.
PROJECT SCOPING
PROJECT NAME
PROJECT MANAGER /TEAM MEMBERS
Brand Extension of FOREST ESSENTIALS
Kriti Chawla
OPPORTUNITY
The colour cosmetics market is booming in India and there is a demand for natural
chemical free makeup products. Forest essentials has established itself as a premium
brand for luxurious natural ayurvedic products thus it would be a great opportunity for
the brand to enter the colour cosmetics market with natural makeup products.
PROJECT GOAL
Brand extension of FOREST ESSENTIALS into natural make up products
OBJECTIVES
To study the Indian cosmetics industry
To study the brand in depth
To develop a new line of makeup
To review the financial position of the brand
To analyze the competitors
SUCCESS CRITERIA
Interaction with the store managers of all the 6 stores in Delhi
Interaction with the loyal customers
Finding the monthly sales
ASSUMPTIONS, RISKS,OBSTACLES
Consumers of natural cosmetics will buy natural make up
Research and development
Time consuming
Identifying consumers
RATIONALE
Shift in consumer preferences towards natural
Cosmetics
With increasing globalization, the young Indian
woman has realized the importance of always
looking good
 Consumers around the world are interested in
beauty products with a natural heritage
 The cosmetics industry registered impressive
sales worth Rs 422.3 Billion in 2010
INDIAN COSMETICS INDUSTRY
Size of the
Industry
The size of Indian Cosmetics Industry globally is
$ 274 billion, while that of the Indian cosmetic
industry is $ 4.6 billion.
Market
Capitalization
According to analysis and figures given by the
Confederation of Indian Industries (CII), the
total Indian beauty and cosmetic market size
currently stands at US$950 million and showing
growth between 15-20% per annum.
Output per
annum
Industry sources estimate a rapid growth rate
of 20% per annum
Percentage in
World Market
The overall beauty and wellness market that
includes beauty services stands at about
US$2,680 million
http://www.indianmirror.com/indianindustries/cosmetics.html
NATURAL COSMETICS MARKET
http://www.naturalcosmeticnews.com/focus/natural-products-outperform-the-overall-personal-care-market
MARKET SIZE
The current size of the Indian Cosmetic Industry is
approx US$ 950 million.
Among these fastest growing segment is colour
cosmetics, accounting for around US$ 60 million of the
market
Industry sources estimate a rapid growth rate of 20%
per annum across different segments of the cosmetics
industry during 2010-2013
http://www.indianmirror.com/indianindustries/cosmetics.html
According to Kline's Professional Skin Care 2007:
India Market Analysis and Opportunities report,
Forest Essentials holds an 18.4% share in the Indian
spa market, which is expected to grow by more than 13%
annually through 2012
 Today organic cosmetics industry is driving growth in
the beauty business and is expected to grow at a rate of 7%.
 Color cosmetics market is growing at a rate of 25- 30 %
http://www.cosmeticbusiness.com/en/showartikel.php?art_id=1603
BACKGROUND
 Founded in the year 2000, by Mira Kulkarni
 Offers a range of natural skin care hair care products
 All the ingredients are sourced from plants, trees
and herbs naturally grown in forests
 The products are not made in factories, but in the
Himalayas, in villages in Uttaranchal
 Started with handmade soaps
 Forest Essentials is the top spa brand in the country
and is very strong in the ultra-luxury resort and hotel
channel
www.forestessentials.com/introduction
By 2008, the company emerged as the top spa
products maker in the Indian market.
 Currently has 16 stores
Plans of domestic and international expansion- to
open 35-40 retail outlets across India.
Following an increasing demand for natural products in
international markets, Forest Essentials, sold a minority
stake to the US based cosmetics maker Estee Lauder,
with this the company hopes to go global.
PRODUCTS
FACIAL
CARE
BODY
HAIR
CARE
CARE
WELLNESS
Advanced skin care formulations that use the most potent
and sophisticated natural extracts and actives, avoiding
synthetic compounds, to produce an amazing product range
 The brand revives traditional ingredients like kokum, rawcane sugar in its products
STRATEGY
DIFFERENTIATION BUSINESS
LEVEL STRATEGY
PRODUCT DIFFERENTION
AND INNOVATION
PREMIUM PRICING
STRATEGIC ALLIENCE WITH
ESTEE LAUDER
STRENGHTS:
WEAKNESS:
- Trusted and reputed brand
- New
- Natural and safe
- Lack of awareness
- High quality
- Present in few cities
- Collaboration with Estee
Lauder
- Doesn’t advertises much
SWOT
OPPORTUNITY:
THREAT:
- Great potential
- Can be copied
- Increasing demand for
organic products
- Present brands
- To go global
- Taste and preferences
BRAND ELEMENTS
BRAND NAME
FOREST ESSENTIALS- timeless, tireless, stands for the products it sells
LOGO
COLORS
Natural earthy colors, honey color, browns and white
TAGLINE
Luxurious Ayurveda. The brand has positioned itself around its tagline.
SENSATION
Scent, texture ,natural feel of products sets the brand apart
PACKAGING Elegant packaging, great to gift
BRAND ETHICSNever test products on animals,
None of the products are manufactured
using child labour
Support traditional production
methods
BRAND IDENTITY
PURITY
SIMPLICITY
SENSORY PLEASURE
http://blog.eastdayspa.com/2011/07/22/prod
ucts-we-love-9/
POSITIONING
Forest essentials positions itself as the only
Indian Luxurious Ayurvedic brand. With the
launch of a whole new makeup range the
brand will position itself as a one-stop shop for
cosmetics in luxurious ayurvedic products.
Point of difference: premium quality, highest
quality control methods, handmade products
from organically grown and processed
ingredients.
Products are not made in factories
Point of parity : there are many brand catering
to natural cosmetics
Vegetarian products
BRAND AUDIT
What
springs to
your mind
NATURAL
AYURVEDIC
TRADITIONAL
What else
Come to your
mind
Others
Using it
How you
Feel using it
Other
brands
How you
compare
THE BODY
SHOP
TOP OF THE
LEAGUE
LOGO
GOOD TASTE
REFRESHED
ELEGANT
PACKAGING
NATURE
LOVERS
CALM AND
SOOTHING
BIOTIQUE
TRUST
NATURAL
BEAUTY
CARE FOR
THEMSELVES
CLOSE TO
NATURE
SHAINAZ
HUSSAIN
QUALITY
LUXURIOUS
SCENT OF ITS
PRODUCTS
STORE
AMBIENCE
TRADITIONAL
EARTHY
COLORS
RELAXED
SAFE
SPA
EXPENSIVE
BEAUTIFUL
SKIN
FABINDIA
KHADI
MADE IN
INDIA
PICTURE OF SENDER
E
X
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E
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N
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T
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O
N
Physique
Natural products
Store ambience
Eco- friendly
High Quality
Logo
Personality
Natural, traditional,
Ayurveda, pure , luxurious
Relationship
Trusted brand
for natural
beauty
“ The purest , most nutritious,
the very best”
Culture
Believes in deep
rooted beauty
through
AYURVEDA and
Uses ayurvedic
Recepies in all its
products
Self-image
I feel exclusive and
pampered
Reflection
True and lasting
beauty
PICTURE OF RECIPIENT
I
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N
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S
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O
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Value Proposition
Functional
benefits
• Natural
beauty
• High quality
• No side
effects
Emotional
benefits
• Safe
• Trusted
• Guilt free
beauty
Self-expressive
benefits
• Luxurious
• Exclusive
• Close to
nature
COMPETITOR
PRODUCT: Skincare
Hair care
Makeup
Bath and body
PRICE: Rs.125 to 1895
Fragrance
PLACE: Stand alone
Stores, M.B.O’s
2400 stores around the
world
69 stores in India 15 In Delhi
PROMOTION: Loyalty cards,
social media, magazines,
newspapers, campaigns for
social cause
SEGMENTATION
Demographics
Geographics
AGE- 18-50 YEARS
Mumbai, Bangalore,
GENDER- FEMALE
Chennai, Hyderabad, Delhi,
Jaipur, Ludhiana
DISPOSABLE INCOME- 1 Lakh ABOVE
OCCUPATION- STUDENTS,
WORKING PROFESSIONALS,
HOME MAKERS, BUSINESSWOMEN
Psychographics
Behavioral
ATTITUDE- sober, cheerful, positive
outlook, outgoing, friendly, nature
lovers, health and fitness freaks
Usage- moderate to heavy
INTEREST- music, movies, reading,
shopping, gym, power yoga, spa visits
informed, positive
LIFESTYLE- social, busy
Buyer readiness- aware,
Benefits sought- chemical free
natural products resulting into
healthy skin
TARGETING
Demographics
AGE- 20-40 YEARS
Geographics
GENDER- FEMALE
DELHI
INCOME- 1 lakh above
OCCUPATION- STUDENTS,
WORKING PROFESSIONALS
Psychographics
Behavioral
ATTITUDE- sober, positive outlook,
nature lovers , friendly, caring, health
and fitness freaks
Usage- moderate to heavy
Bags used: Louis Vuitton, GUCCI,
Charles and Keith
informed, positive
Magazines Read: Vogue, Elle, Grazia,
Femina
Buyer readiness- aware,
Benefits sought- chemical free
natural products resulting into
healthy skin
Name: Varsha Arora
Age: 21 years
Profession: Student at L.S.R
I like the brand Forest Essentials; they are one natural brand where
the products feel and look natural. You know what I mean; the
products don’t look slick, smell natural and also feel refreshingly
nice. Only if their prices weren’t sky high.
CONSUMER DILO
INTRODUCING A WHOLE NEW RANGE OF
ORGANIC MAKEUP
LUXURIOUS AUYURVEDA
www.forestessentialsindia.com
All in one face base
Pressed face powder
Loose face powder
Foundations
Concealers
EYE DEFINERS
EYE SHADOWS
MASCARA
LIQUID LINERS
LIPSTICS
LIP GLOSS
HANDMADE
LIGHT,
PLESUREABLE
USP
PREMIUM
QUALITY
AYURVEDIC
INGREDIENTS
PLACE
THE NEW RANGE WILL BE
DISPLAYED IN THE CENTRE OF
THE STORE ON THE WOODEN
TABLE.
PRICING
FACE
- Foundations
- Concealers
- Powder
- Blushers
(Rs. 12,95 to 22,95)
Eyes
-Eye shadows
- Eyeliners
- Mascara
(Rs.995 to 1795)
Lips
- Lipsticks
- Lip-gloss
(Rs.995 to 1895)
ADVERTISING
You
tube
And
PROMOTIONS
Facebook
Website
MAGAZINE
ADS
1,035 likes
PRESS COVERAGE
MAGAZINE ADS
VOGUE
CIRCULATION-40,000
READERSHIP-2,00,000
FEMALE- 45%
AGE GROUP- 18 YEARS TO 45 YEARS
HALF PAGE AD IN VOGUE- 1.8- 2.0L
GRAZIA
Circulation in – 55,000
Half page ad – Rs. 2.5- 3 Lakhs
ELLE
Circulation: 80,000
Half page ad - Rs. 1.5 – 2 Lakhs
DIGITAL MEDIA
MAKE UP BLOG
ON THE WEBSITE
AS A GUIDE FOR
LATEST TRENDS
AND TIPS
MAKEUP
TUTORIALS
UPLOADS ON
FACEBOOK
CURRENT
WEBSITE WILL
BE UPDATED
WITH A NEW
MAKEUP
CATEGORY
ONLINE
BANNER ADS
BY VIDYA
TIKARI
ADVERTISING BUDGET
4 TIMES IN VOGUE
Rs. 8,00000
2 TIMES IN ELLE
Rs. 5,00000
2 TIMES IN GRAZIA
Rs. 4,00000
EVENT BUDGET
COST FOR VIDYA TIKARI
RS. 7,00000
COST FOR HER ASSISTANTS
Rs. 1,00000
RENT FOR THE CENTAL
ATTRIUM
Rs. 2,80,000
MISSELANEOUS EXPENSES
Rs. 2,00000
S
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INTEGERATED MARKETING COMMUNICATION MIX
Month
Activity
Details
Feb
Pre launch advertising
In Vogue, Grazia
March
Digital marketing
Banner ads online and makeup blog,
Facebook and twitter
PR activity
Magazine ads
Sales promotion
BEAUTY WEEK AT SELECT CITY WALK
MALL
In Vogue, ELLE
In store makeup sessions
April
Direct marketing
SMS- coupon codes
July
Sales Promotion
Vouchers in Vogue
(10% OFF)
August
Sales Promotion
Loyalty card holders
Magazine ads
In Vogue, Grazia
September
Sales Promotion
SMS- cupon codes for potential
customers
October
Customized Bridal boxes
In stores
November
Customized Diwali gift boxes
In store
Sales Promotion
Loyalty card holders
Magazine ads
In Vogue, ELLE
December
ROLL OUT PLAN
CITIES
YEAR 1
YEAR 2
NEW DELHI
7
0
MUMBAI
0
4
BENGALURU
0
1
CHENNAI
0
1
JAIPUR
0
1
LUDHIANA
0
1
HYDERABAD
0
1
FINANCIALS
YEAR-1
EBO’s
Monthly Sales
Estimated
Additional sales
per month
Total
Rent per month
Dlf
PPromenade
New Delhi
Select City
Walk
New Delhi
Pacific mall
New Delhi
Gk -1 N block
New Delhi
Rs. 20,00000
8,00000
28,00000
Rs. 200000
Rs. 20,00000
8,00000
28,00000
Rs. 300000
Rs. 7,00000
3,00000
10,00000
Rs.150000
Rs. 13,00000
6,00000
19,00000
Rs.150000
Gk-1 M block
New Delhi
Rs. 10,00000
5,00000
15,00000
Rs.200000
Khan market
NEW Delhi
Rs. 24,00000
10,00000
34,00000
Rs.400000
Rs.94,00000
Rs. 40,00000
Rs. 1,3400000
Rs.14,00000
SALES VALUE= monthly sales* 12
= Rs. 1,34,00000*12
= Rs. 16,08,00000
Units sold annually= sales value/average price
= 160800000/1000
= 160800
SPF= SALES/SIZE OF THE STORE
ANNUAL SPF= 160800000/350*6
= RS 76571
MONTHLY SPF= RS. 6381
Preliminary
expenses
Legal Expenses
Brand Launch
costs(Marketing)
Other Preliminary expenses
total
Rs.
20000
20,00000
0
20,20,000
Brand launch costs will include:
1. FLYERS would be distributed to the customers visiting the store.
On an average 5000 flyers are printed @ Rs.2 per piece= Rs.10,000
2. EVENT: a “Beauty Week” will be hosted by the company at Select City Walk.
The event would cost around 13 lakhs.
3. In stores makeup sessions by trained makeup artists for a month for 6 stores- Rs. 1.8 lakhs.
4. Pre launch advertising- Rs. 3 lakhs.
5. ONLINE BANNER ADS and WEBSITE CHANGES- RS. 2,00000
Initial investment-
total
Existing fixed assets
Interiors
2500*6*350
= 5250000
NA
Other Fixed Assets
NA
Building
NA
Total Fixed Assets
52,50,000
20,20,000
Pre operative expenses
Working Capital Investment (20% of First year
Sales)
Opportunity cost of existing fixed assets
Initial Investments
3,21,60,000
NA
3,41,80,000
INITIAL INVESTMENTS
35000000
30000000
25000000
20000000
15000000
Series1
10000000
5000000
0
FIXED ASSETS
PRE-OPERATIVE
EXPENSES
WORKING CAPITAL
COST SHEET
Monthly
Annual
Cost of Finished Goods
( Product Cost * Units Sold)
64320000
(400*160800)
Add Other Direct Costs
0
Cost of Goods Sold
Add Office & Administration Overheads
Rent
64320000
1400000
16800000
Electricity
Salary
70000
540000
840000
6480000
Depreciation
787500
787500
24907500
Add Selling & Distribution Overheads
Advertising (8% of sales)
Logistics (2% of sales)
sales promotion(1% of sales)
12864000
3216000
1608000
17688000
Cost Of Sales
Add Interest cost
( Interest Rate * Loan)
Total Cost
0
0
106915500
PROJECTED INCOME STATEMENT
Year 1
In Rs.
Sales
160800000
Less Cost of Goods Sold :
64320000
Gross Profit
96480000
Less
Office and Administration Overheads
24907500
Selling and Distribution Overheads
17688000
=Operating Profit (EBIT)
53884500
Less Interest on Loan
Less Preliminary Expenses ( Written Off- 1/5th of preliminary expenses)
0
404000
EBT
53480500
Less: Income Tax @33.99%
18129890
EAT (NET PROFIT)
3,53,50,610
GROSS PROFIT
Series1
96480000
67680000
28800000
TOTAL GROSS PROFIT
EXISTING GROSS PROFIT ADDITIONAL GROSS PROFIT
GROSS PROFIT
TOTAL PROFIT
GROSS PROFIT INCREASES BY 15% DUE TO THE
ADDITONAL SALES FROM THE
NEW MAKEUP LINE
EXISTING PROFIT
ADDITIONAL PROFIT
15%
50%
35%
YEAR - 2
SALES VALUE= Units sold* average price
= Rs. 60*9*365*1000
= Rs. 19,71,00000
25% growth in year 1 sales= 160800000 + 40200000
= 201000000
Total sales value = 197100000 + 201000000
= Rs. 39,81,00000
Assumptions:
Units sold= On an average 40 existing units sold
and 20 new units sold each day in 1 store.
The cosmetics industry is growing at a rate of
25-30% every year. Therefore 25% growth in 1st
year sales is taken.
Units sold annually= sales value/average price
= 398100000/1000
= 398100
SPF= SALES/SIZE OF THE STORE
ANNUAL SPF= 197100000/350*9
= RS 625714
Monthly SPF = Rs.52142
Preliminary
expenses
Legal Expenses
Rs.
20000
Brand Launch
costs(Marketing)
Other Preliminary expenses
20,00000
total
20,20,000
0
Brand launch cost will include:
Hosting a similar kind of “BEAUTY WEEK” in Mumbai and Bangalore for the launch of new
product line. Because after Delhi these two cities generate the maximum sales.
Other cities will have in store makeup sessions for a month by trained makeup artists.
Initial investment
Existing fixed assets
total
Interiors
2500*15*350
= 13125000
NA
Other Fixed Assets
NA
Building
NA
Total Fixed Assets
Pre operative expenses
Working Capital Investment (20% of second year
Sales)
Opportunity cost of existing fixed assets
Initial Investments
13125000
20,20,000
79,62,0000
NA
8,16,40,000
COST SHEET
Monthly
Annual
Cost of Finished Goods
( Product Cost * Units Sold)
159240000
(400*398100)
Add Other Direct Costs
0
Cost of Goods Sold
Add Office & Administration Overheads
Rent
Electricity
Salary
Depreciation
159240000
2600000
1500000
1170000
1968750
31200000
18000000
14040000
1968750
65208750
Add Selling & Distribution Overheads
Advertising (8% of sales)
Logistics (2% of sales)
sales promotion(1% of sales)
31848000
7962000
3981000
43791000
Cost Of Sales
Add Interest cost
( Interest Rate * Loan)
Total Cost
0
0
268239750
PROJECTED INCOME STATEMENT
Year 2
In Rs.
Sales
398100000
Less Cost of Goods Sold :
159240000
Gross Profit
238860000
Less
Office and Administration Overheads
65208750
Selling and Distribution Overheads
43791000
=Operating Profit (EBIT)
129860250
Less Interest on Loan
Less Preliminary Expenses ( Written Off- 1/5th of preliminary
expenses)
EBT
Less: Income Tax @33.99%
EAT (NET PROFIT)
0
404000
129456250
44002179
8,54,54,071
450000000
400000000
350000000
300000000
250000000
year 1
200000000
year 2
150000000
100000000
50000000
0
sales
gross profit
net profit
Sales at the end of 1st year in Delhi= Rs.16,08,00,000
Gross profit at the end of 1st year in Delhi= Rs.9,64,80,000
Net profit at the end of 1st year in Delhi= Rs.3,53,50,610
Total sales at the end of 2nd year= Rs. 39,81,00000
Total Gross profit at the end of 2nd year= Rs. 23,88,60,000
Total Net profit at the end of 2nd year= Rs. 8,54,54,071
Assumptions:
Product cost is assumed as Rs. 400 on an average which includes labor, raw material
manufacturing and packaging of the product.
Working capital is taken as 20% of sales according to industry parameters
Electricity is taken as Rs. 12000 approximately for each store
Advertising is taken as 8% of sales according to industry parameters
Logistics is taken as 2% of sales according to industry parameters.
Sales promotion is taken as 1% of sales according to industry parameters.
Depreciation is taken as 15% of existing fixed assets value.
THANKYOU