Mktg - Different ways of reaching consumers

Ever heard of Alfaparf Milano? If you haven’t , you will certainly hear, and see, more of this brand on your next visit to a salon.Unless your salon owner is a diehard loyalist to the likes of L’Oreal , Wella or Schwarzkopf Professional. Three months back, the hair care brand entered India through a partnership with Yerazig Impex. But instead of making an effort to link up with conventional consumer goods distribution channels, the brand chose to enter consumer mindspace through their hair stylists. Arpit Jain, director marketing, Yerazig says, “We came into India about three months back and have partnered with over 1,600 salons in the country. We intend to reach 6,000 salons by the end of this year.” That target is an ambitious one. Considering that even those who have been around in the channel for substantially more time — L’Oreal , Wella and Schwarzkopf Professional are present in about 10,000 salons, 4,000 plus salons and 3,000 salons respectively. One thing is however clear. Salons as a channel for selling grooming and beauty products are extremely important. That stature has only been growing with time. In 1994, the same year when Sushmita Sen and Aishwarya Rai won the Miss Universe and Miss World pageants respectively , cosmetic brand L’Oreal established its 100% subsidiary in the country . Then, the market was largely dominated by consumer goods giant, Hindustan Unilever’s (HUL) brands Lakme and Ponds. While it was not easy to shake HUL’s base, particularly in the retail trade channels, the new entrant had to look at other avenues — salons. Other international brands like Wella and Schwarzkopf Professional followed L’Oreal into salons. In some ways, it helped that the salon business in India was highly unorganized — each one could pick and choose their hotspots. The good part was that the salon segment was growing in a spectacular fashion. Dinesh Dayal, COO, L’Oreal India says that the company’s salon business grew by above 30% in 2007. For Schwarzkopf Professional that started its Indian operations in 2001, Murali Sundar, country manager, Schwarzkopf Professional, says the brand has been growing at a CAGR of 25% since then. Wella Professionals’ marketing manager, Kamran Siddiqui seconds that, “We have been enjoying a good double-digit growth.” Jagdeep Kapoor of Samsika Brand Consultants estimates that business from salons should be in the region of Rs 14,000 crore and will grow at the rate of 40% for the next three-four years. To capture the market potential, L’Oreal has taken a segmentation approach . L’Oreal’s Professional products division has three brands L’Oreal Professionnel, Matrix and Kerastase. While Kerastase is a premium professional luxury hair care brand available in only top-of-the line salons, Professionnel and Matrix chase the numbers. For these companies, salons are much more than display windows. The big push that stylists can give these brands is in the form of a positive word-of-mouth . Even HUL’s early advertisements for Sunsilk recognised the power of the salon when they featured hair stylist Colleen Khan in their advertisements several years back. Geet Nazir, marketing manager, Jean Claude Biguine India, part of the Rs 975 crore global salons and spa chain is an of the examples of those who vouch for a single brand. “We have partnered with L’Oreal as it gives us the confidence to recommend their products to our customers .” Habib’s the salon chain with 110 outlets use Wella and Sunsilk in their outlets . “Wella offers a good range of colours products that match our colour requirements and professional ethics,” explains Jawed Habib, the founder-promoter of the chain.Of course, recommendations do not come easy. Salon owners are often wary of whom they tie-up with. Apart from product strengths, distribution is one critical factor they look at. Anil Adamane, owner of Bellezza chain of salons says, “We have been approached by others but have decided to stick with L’Oreal because their network is very strong. It is important in our profession that we have continuous supply. If we give in to greed then it can be harmful to us in the long run.” Brands are not just banking on distribution and exclusive tie-ups . Training and in-store branding are other avenues to strengthen the link. So, L’Oreal , Wella and Schwarzkopf Professional conduct several training programmes for the trade. L’Oreal and Wella, for instance, have five technical training centres each across the country, Schwarzkopf Professional has centres in Bangalore, Delhi and Mumbai and will add Chennai and Kolkata by the year end. L’Oreal launched the International Hairdressing Academy in Mumbai in 2006, that trains people who are part of the industry as well as those who aspire to be a part of it. “In 2007, more than 30,000 hairdressers were trained at our technical centres, while 37 students were trained in the hairdressing academy in 2006,” says Dayal. To build further equity, these brands regularly bring international stylists and conduct workshops and seminars. In-salon branding is another avenue that’s being used. “We provide signages, posters, standee displays, capes, aprons, trolleys, tool holders, scissors etc to the salons who tie up with us,” says Sundar of Schwarzkopf Professional . Wella invests about 40% of its marketing budget in training and branding activities. Have they been successful? One strong indicator proves that they have. In the past, L’Oreal and others took the salon route, as the conventional retail route was in the grip of HUL. Now, HUL is following them into the salons. The company is introducing the Sunsilk Styling range which includes products like shampoos, conditioners, mousse and hair wax only for salons. It’s tying up with the Habib’s chain to introduce these products to customers. Last year, the company had launched Clinic All Clear Men through salons. N Rajaram , vice president - hair care and Lakme says, “Salons helps us understand the latest trends in hair and also helps our consumers experience new and fashionable hairstyles using our brands. Recently we have used this channel for Dove, Clinic All Clear and Sunsilk.” But salon brands are not taking their success for granted. “While the initial excitement may bring in the consumers, it is very important that they are educated about the products. There is a tendency among salon owners to go multibrand and when that happens, consumer will have to make the choices,” says Sundar. When that happens, salon brands may head for the retail stores.