Innovation and New Product Development Case Study

Marico's Kaya Skin Clinics – Product Service Balancing Act

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Abstract:
InMarico Ltd, a company in the Indian fast moving consumer goods (FMCG) space, has moved from being a commodity player to a branded FMCG and services company. Marico primarily known for its oils until 2002, entered the skin care solutions business with its first skin care clinic in Mumbai under the brand Kaya. In 2007, it extended its business beyond skin care solutions by getting into the weight-loss space, and in 2008 Kaya totalled 65 clinics spread over India and West Asia. The Indian beauty services industry is dotted with big Indian and international players like:

1. Lakme beauty salon
2. Vandana Luthra Curls & Curves
3. Shahnaz Husain Herbals
4. Jean-Claude Biguine
5. Franck Provost
6. Jacques Dessange

FMCG companies like Hindustan Unilever Ltd and Marico have leveraged their product brands, taken advantage of the booming service sector and higher profit margins of the consumer services area, and entered the beauty services sector. Marico expects to increase the percentage share of services in its total portfolio, and Kaya to be a major driver of its future growth. The case discusses the rationale behind Marico's move from products to services and the challenges that it is likely to face while scaling up. It also looks at the business models followed by some of the beauty players. The next few years will be crucial for Kaya and the success of its business model. It remains to be seen whether Marico manages to balance the dichotomy between growth and profitability of the Kaya brand, and the portfolio of products and services.

Pedagogical Objectives:

• To why a product based company enters the services sector
• To with independent dermatologists and small beauty salons as well as the branded players dominating the beauty care industry, how successful will Kaya be in its venture?
• The different business models adopted by players in the beauty and wellness sector.

Keywords :  Marco, Kaya Skin Clinic, Beauty and wellness, FMCG (fast moving consumer goods), Lakme, Kaya life, Diversification from product to services, Medi spa, Beauty through technology, Hair care products, Shop in shop model