Economic Factors on LAKME – ON Top Of The World

Lakme is among the top Indian cosmetic brand owned by Hindustan Unilever. It is the country’s top cosmetic brand which has introduced makeup and at the same time, it takes pride in being the Indian Beauty Expert for a period of over 50 years.

Lakme deals in various products such as face cream, nail paint, face wash, lipstick, eyeliner and much more variety of makeup products all under one roof. Hence the products share common input diversification, which further leads to cost savings. Here comes the concept of Economies of Scope. Therefore the total cost of producing two types of output together is less than the total cost of producing each output separately.

Under one roof Lakme offers various products ranging from makeup kits to face wash and so on. Therefore the unit cost required to produce a product gets decline as the variety of product increases. This is referred to as Economies of Scale i.e. the amount of more different but similar goods is produced the lower will be the total cost of production for each one of them.

Lakme offers a combination of Sun Expert and Fairness Cream in one package at Rs 200 and at the same time, Lakme Fairness cream is also available at Rs 337. Therefore people will prefer to buy Lakme Sun Expert and Fairness Cream as compared to the normal fairness cream as it provides sun protection along with fairness at a lesser price. Here the economic concept of Opportunity Cost can be seen, which is referred to as the cost of the next best alternative.

Lakme tends to satisfy the needs of its customer by introducing variety in its products such as face cream, nail paint, makeup items, shampoo, conditioner for both men and women at different rates. This concept is referred to as Utility, where the consumer derives satisfaction from their consumption.

As Lakme deals in almost every cosmetic product, consumers are facing Trade-Offs. The products offered by Lakme are of best quality and targets the youth as well as middle age people. From normal face cream to anti-aging, summer to winter cream, face wash to scrubbers etc; it almost deals with every product. Due to which consumers are so much attracted to the brand and at the same time they are sacrificing the other brands such as Lotus, Revlon, Ponds, Maybelline and so on.