Setting a Pricing Policy: Revlon Street Wear Mineral Lip Gloss

 Ø Selecting  a Pricing Objective: Among all the international players in the cosmetic segment in India, the first one to launch was none other than Revlon in 1995. It happened due to the collaboration between Umesh K Modi along with Revlon Pvt Ltd  in 1994 . Pricing is done for the mid-level consumers as it neither too high nor too low priced. The company owns approximately 20-25 % of the domestic color cosmetic market share. As Revlon places itself among the top 10 brands in India…it aims to be the PRODUCT-QUALITY Leader in the market.

 Ø Determining Demand:

1)    INCREASING FOCUS ON NATURAL PRODUCTS

       There is a growing demand for natural / organic products in most developed countries, a trend led by the evolved markets of the US and Western Europe. There is an increased preference for less synthetic, eco-friendly and natural products and packaging.

2)    RISE OF THE 'MASSTIGE' PRODUCT SEGMENT

There is a growing trend towards the so-called 'masstige' products which are premium brands sold at lower prices through mass distribution.

·        To reach greater distribution, prestige and premium brands are taking the route of mass distribution.

·        The mass products and smaller players are catching up in terms of innovation and product quality, which prevents the big brands from charging a significant premium.

·        The recessionary macroeconomic outlook over 2008-09 has led to consumers shifting to the upper price band of mass products from the prestige segments. The ‘masstige’ products are priced at this price range.

(http://www.trefis.com)

 Ø Estimating Costs:  In October 2013, Revlon Consumer Products Corporation ("RCPC" and together with Revlon, Inc.)acquired The Colomer Group Participations ("Colomer") and disclosed that it planned to integrate Colomer's operations into the Company's business. The Company is now implementing these integration actions, as well as additional restructuring actions identified to reduce costs across the Company's businesses.

(http://biz.yahoo.com/)

 Ø Analyzing Competitors’ Costs,Prices & Offers:

      1.    Lakme- The Domestic Consumer business grew by 16% with 7% underlying volume growth.  Online shopping portals(Flipkart, VioletBag etc offering a discount of around 3%-5% in the cosmetics.

     2.    L’Oreal- The company has come up with offers like L’Oreal Paris Free Rouge Caresse, Beauty & Personal Care combo kits- MIN 20% OFF etc along with discounts ranging from 10%-50%.

 Ø Selecting A Pricing Method:

a)      Revlon’s overall pricing strategy is to market to a wide range of consumer’s with its product at a range of retail prices they can accept. 

b)    Their price strategy is consistent with the stage of the product life cycle the product is in. 

c)     They offer discounts in the form of coupons as a term of sales for their product.

 Ø Selecting The Final Price:

Revlon is a Brand with high relative Quality & high Advertising budgets and hence charge highest prices. It strives to be the market leader.

It offers the products ranging from the lowest price of around 150 INR to maximum 950-1000 INR.