Natural Products by Lux

Group 3
 Problem Statement

How should Lux take advantage of the current

growing ‘premium natural skincare’ product
market consisting of consumers who are conscious
about their consumption and ethical living?
 • $14 Billion Beauty and Personal Care Industry
• Increase in Online sales
Industry
• Rise in sales of premium and natural
Analysis
products
• Increasing customer awareness about effects
of these products on their skins
• Preference to ethical and environmentally
harmless production
• New tech helping preservative-less
natural products last longer
Consumer Secondary PESTEL • Organic > Natural > Normal products
Behaviour Research • HUL is increasing its natural product portfolio
• Increasing impetus on brands like Lever
Ayush, Indulekha
• Natural variants of existing brands like
Lakme, Close Up, Fair & Lovely
• Body wash, Soaps and Shower Gels are the
skincare products being used
Internal • Recommendations from social circles
Analysis more valuable than TV Advertisements
• Shift from products promising overnight
effects to natural and healthy claims
 Primary Research Objectives

Skincare • Customer perception and buying behavior of Skincare products

Products

Natural
• Customer preference of natural products, reasons and relation to price and packaging
Products

Lux • What do people think of the current Lux product range?

Products

• Exploratory research to gauge reception of a natural range of Lux products and

Probe promotional activities
 Primary Research Findings
1. Skincare Products
• 61% Soap, 29% Body wash and Shower Gels
• Major focus of Lux natural product line must be on soaps; will generate maximum sales
• 66.7% people preferred combo packs for ease of purchase and price benefits
• Although natural products have low shelf lives, combo packs must be made viable
• 52.5% purchase skincare products on a monthly basis
• Our product line must have SKUs that are sufficient for a month
• 46.5% change skincare products yearly, 23.2% never change it
• Customer retention must be prioritized by creating good value
• Social circle influencers and TV Advertisements have maximum promotional impact
• Only 16% acknowledged celebrity influence; Lux must shift from celebrities to other
methods.
 Primary Research Findings
2. Natural Skincare Products
• 74% consider the long term effects on their skin
• Product and promotion strategies must be centered around long term benefits
• 87% people indicated high likelihood of imminent shift to natural products
• Affirms the lucrativeness of quickly launching a powerful natural product line
• 52.5% are ready to pay between ₹40-80 for a natural product
• Another 30% people are ready to pay ₹80-130. Our product can be priced aggressively.
• 60% consider impact of their product choices on the environment
• Marketing campaigns must depict an environment-friendly brand
• 46% preferred environment friendly packaging but were not ready to pay >₹5 for it
• Feasibility of such packaging must be checked, it is not an essential part of our product
• Forest Essentials, Body Shop and Patanjali are most trusted natural product brands
• Brand trust and proven results stated as main reasons. Our product must build these
 Primary Research Findings
3. Lux
• Most respondents related Lux to its Celebrity affiliations, not product benefits
• Promotions, given the customer insights, must revolve around product benefits
• 73% Respondents have used Lux in the past
• Lack of customer retention, since Lux only has a 14% market share by volume
• Only 20.2% are current Lux users
• Points to a big pool of dissatisfied users. New product line must focus on quality.
• Only 29.3% trust Lux products for their skin
• New product line will face challenge of convincing people to try it. Marketing strategy
must involve free samples if feasible
• 40% said they will trust Lux if it comes up with Natural Products
• Opportunity to capture a nascent market with a high quality product
• Respondents said they will largely expect fragrance and quality from Lux Naturals
• These must be fulfilled and additional expectations must be met (Variants, flavours)
Strengths Weaknesses
• Established brand • Low user satisfaction from existing
• HUL Distribution Channel products
• Low customer retention of the brand
• No natural/organic affiliation to Lux

SWOT

Opportunities Threats
• High margins leveraging premiumization of
segment
• Nascent market, ready to be captured
 Recommendations
• Quality Product must be prioritized, ingredients used must be premium
• Market will be receptive to a premium priced natural product line
• Major competition from Forest Essentials and The Body Shop (Premium)
• Marketing Strategy must stress upon organic origins of product and move
away from celebrity-based promotions
• Environment-friendly packaging is an optional auxiliary benefit, based on
feasibility
Thank You