PRICING STRATEGIES FOR HAIR OIL

Varun Jain
Nitin Chugh
Tanya Srivastava
Siddharth Venkataraman
Priyanshi Kejriwal

PRODUCT:-HAIR OIL
Hair oiling is an age-old traditional habit of Indians.
Benefits of Hair Oil Nourishment, Strengthening hair , Faster & Better
growth ,Reducing Hair Fall.
Cosmetic Appeal for hair styling ,soft & shining

HAIR CARE INDUSTRY

FMCG Rs.116,100 cr
Hair Care Rs. 9,200 cr
8% salience
Shampoo Rs. 2,840 cr
Perfumed Oil Rs. 2,900cr
Coconut Oil Rs.2,100 cr
Hair Conditioners
Rs.100cr
Hair Dyes Rs. 1,200 cr
Branded hair oil segment
grew 19.8% CAGR in value
terms during FY07-12

HAIR OIL MARKET

Coconut based Oils (51%)
Heavy Amla based Oils (15%)
Light Hair Oils (14%)
Cooling Oils (12%)
Others (8%)
Hair Oil is > 55% of the overall hair care industry in India
Unit Price
Starting from 5 Rs/20ml and varies according to size of the product.
Life of the product
Best before15 months from Mfd.
Product Life Cycle Stage
Growth Phase
Overall market Size
The Indian hair oil market is estimated to be worth Rs 4,600crore.
Market Potential
Volume growth for the hair oil category is currently pegged at 12.8 per cent and value
growth at 17.7 per cent.

HAIR OIL CATEGORIES

Coconut Hair Oil

Dabur Vatika Enriched Coconut Hair oil

Parashute Coconut oil
Dabur Anmol Coconut Oil

Light hair oils(Fastest Growing Segment)

Bajaj Almond Drops 46.8 %

Keo Karpin
21.5 %
Marico's Hair & Care 15.2 %
Others
16.5%

Heavy Amla Oil

Dabur Amla
Marico's Shanti Amla Badam
Dabur Sarson Amla
Bajaj Brahmi Amla
Others

69.5 %
8.3 %
5.8 %
3.4%
13%

Cooling Oil
Emami's Navratna 44 %
Him Gange
29%
Others (Ayurvedic Vasmol Thanda Tel)

27%

LEADER BRAND

Leader Brand
Parachute is leader in oil market in India.
Market share in India is 53.4%.

12.6%

bajaj
16%
53.4%

Strength18%
100% pure coconut oil
Edible oil
Market Availability
Brand Name
Available in different packs (20ml,50ml,100ml,200ml,500ml,1litre)

WeaknessMore sticky as compare to other light hair oils

Replacement product
Hair poition,Hair Cream , and other conditioning and moisturising
shampoo(Sunsilk,Vivel etc)
Advantage-Non sticky as compare to Hair oil.
Disadvantage-Expensive as compare to Hair oil.(35Rs./15ml)

parachute

dabur
others

DIFFERENT BRANDS AVAILABLE IN GREATER

GHAZIABAD
Parachute (Parachute Coconut oil,parashute jasmine,
Parachute Advanced)
Dabur ( Dabur Amla Hair Oil , Dabur Amla Flower Magic
Hair oil , Dabur Vatika hair oils ,Vatika Enriched Coconut
Hair Oil , Vatika Enriched Almond Hair Oil, Dabur Anmol
Coconut Oil )
Bajaj ( Bajaj Brahmi Amla hair Oil ,Bajaj Coconut Hair
Oil ,Bajaj almond drops hair oil)
Emami
(Navaratna ,Emami Amla Plus Hair Oil)
Clinic plus (Clinic All Clear Dandruff Oil)
Godrej (Godrej Anoop Hair Oil)

Himani
Navratna

Hair &
Care

Dabur
Vatika

Bajaj
Almon
d
Drops

Parachut
e
Advance
d
Jasmine

Parachut
e Hair Oil

Parachu
te
Advans
ed
Hair Oil

Parachut
e
Advanse
d
Ayurvedi
c Hot Oil

Parachut
e
Advanse
d
Therapie

Himalaya
Anti Hair
Fall

Rs. 125

Rs. 100

Qty.
(ml)
50

Rs. 30

75

Rs. 33

90
100

Rs. 43
Rs. 55

Rs. 44

150

Rs. 50

Rs. 34

Rs. 27

Rs. 65

175

Rs. 47

Rs. 61

190
200

Rs. 76
Rs. 100

Rs. 80

Rs. 95

250
300

Rs. 65

Rs. 180
Rs. 64

Rs. 130

Rs.
125

Rs. 225

Rs. 94

Available SKUs & Pricing For Different Brands

Brand Comparison
BRAND

PRICE/100 ML MARKET SHARE OF

THE COMPANY

MEDICATE VALUE PROPOSITION

D

NICHE/MASS MARKET

Himani Navratna

Rs. 55

6%

YES

cooling sensation has multiple benefits

of providing relief from headache,
tension, sleeplessness, Body ache and
other hair related problems

MASS MARKET

Hair & Care

Rs. 44

4%

NO

nourishment without adding stickiness

MASS MARKET

Bajaj Almond Drops

Rs. 50

5%

NO

nourishment without adding stickiness

to the hair with purity and effectivness

MASS MARKET

Parachute
Advanced Jasmine

Rs. 34

3%

NO

lingering fragrance of Jasmine that

nourishes hair to keep it healthy and
beautiful. While the goodness of
Coconut acts as a moisturizer.

MASS MARKET

Parachute Hair Oil

Rs. 27

10%

NO

Nourishment and shiny hair

MASS MARKET

Parachute Advansed Rs. 125

Therapie

1%

NO

strengthen hair from within leaving it

NICHE MARKET
looking nourished and healthy. when
applied pre-wash, reduces protein loss
up to 28% and restores the health of hair

Himalaya Anti Hair

Fall

<1%

YES

Prevent hair loss

Rs. 100

NICHE MARKET

DIFFERENCE IN PRICING

1.
2.

Cost Structure
Bajaj Almond hiked prices by 8.6% to offset input cost pressures.
Key raw materials, Light Liquid Paraffin (LLP) and vegetable oil prices increased over
25% in the last fiscal year, while glass bottles were expensive by around 12%.

Market Segments Targeted

1.

HUL has launched Dove hair-oil at a price point ranging Rs 180-200 for 100 ml
bottle," said one of them. This would make it a super-premium brand.

2.

Specialty hair oils, which are growing faster in modern trade and earn better margins
for retailer and brands.

3.

Targeting urban youth by introducing it in super premium category Dove will be super
premium at Rs 180-200 for 100 ml. The same quantity of Bajaj Almond Drops and
Parachute Scalp Therapie will cost Rs 125, while Marico's Hair & Care is priced just Rs
44 for 100 ml.

URBAN MARKET

Channel Management

Greater Ghaziabad market is mostly having semi-urban markets and urban markets is mostly
consisting of some supermarkets, hypermarkets

Major brands

Dabur amla
Bajaj Almond
Parachute/Parachute Jasmine
Clear oil
Few Luxury brands like Loreal, Garnier etc

Target Consumers Females of all ages ,mainly with age 1430 years & Males of age group 25-40
years

SKUs size

Most prevalent SKU size was 50 ml and 100ml though the size got even smaller as we went into the interior
and smaller localities

Brand awareness was mainly through Television commercials and few billboards,
newspapers,magazine

Margins Dependent on the service level in distribution channels;

a)
b)
c)

Distributer : 2-4%
Retailers : 7-9 %
Whole seller 8-10 %

RURAL MARKET

Channel management

Major brands
Dabur amla
Bajaj brahmi amla
Parachute
Navratan
Local brand/commodity

Target Consumers Mainly young females with age 14 30 yrs. Males either do not use hair
oil at all or use locally available mustard oil.

SKUs size - Prevalent SKU size was 50 ml though the size got even smaller as we went into
the interior and smaller sized villages. In villages like sekhaira where population size was less
than 4000 only 1 re pack (2.7 3.5 ml) were available.

Brand awareness was mainly through Television commercials.TV was available in almost
every household even in small villages with population less than 4000. However people were
not very aware and particular about a brand, they only recall product feature.

Margins Dependent on the service level in distribution channels; In case of HUL in town
Pilkhuwa where there were no whole sellers in the channels margins were as under :a)
Distributer 4.75 %
b)
Retailers 10 %
While in case of Dabur margins were as under:a)
Distributer 2.75 %
b)
Whole seller 3 %
c)
Retailers 10 %

AREA WISE SALES OF BRAND

Area

Max. sales

Navyug Market

Dabur Amla

Syani Gate

Parachute Coconut Oil

Choupla mandir

Dabur Amla

Ghantaghar

Dabur Amla

Patel Nagar

Dabur Amla

Kirana Mandi

Dabur Amla

Maliwada Chowk

Parachute Coconut Oil

Mohun Nagar

Dabur Amla

Vaishali

Dabur Amla

Indirapuram

Parachute Coconut Oil

RDC

Parachute Coconut Oil

Sector-10

Dabur Amla

Sanjay Nagar

Parachute Coconut Oil

PRICING STRATEGY FOR PARACHUTE LEADER BRAND

Analysis of 100ml Parachute hair oil
MRP
Retailer Profit
Distributor selling price or
Retailer cost price
Distributor profit margin
Distributor cost price
Company profit
Company Cost price

MRP
Retailer Profit
Distributor selling price or
Retailer cost price
Distributor profit margin
Distributor cost price
Wholeseller profit margin
Wholeseller cost price
Company profit
Company Cost price

28
13%
24.77876
4%
23.82573
12%
21.27297

28
8%
25.92593
3%
25.17081
8%
23.3063
12%
20.8092

PRICING STRATEGIES USED BY BRANDS OF

VARIOUS CATEGORIES :

As in coconut oil category, parachute is the market

leader and hence all the new brands coming in generally
follow their pricing and thus this follows the Going Rate
Pricing Policy

Different Schemes that are offered by brands like

navratna and bajaj almond tends to destroy the leader
and thus follow the predator pricing strategy.

Some luxury brands like Loreal and Garnier give value

to customers and thus follow the value pricing strategy.

PRICING STRATEGIES BY DIFFERENT RETAILERS:

Easy Day(SuperMarket)
Buyers decide on pricing strategies depending on locality and nearby
retailers.Selling at a discount of Rs1 or 0.50 paise for most hair oils.

Big Bazaar (Hyper Market)

Sell in packs of three and reduces the total mrp by Rs5-8

Smaller SKUs are also sometimes free with shampoo and other hair care
products

WholeSaler

Sell at a margin of 8-10%.Sell it local kirana stores incase stock is leftover.

Kirana Stores/Medical Stores

Sold at MRP and earned a margin fixed by the distributor of the company

FIELD EXPERIENCES:1.

Difficulties In Comparison of prices

2.

Shopkeepers in supermarkets/hypermarkets were not willing to let

us note down their pricing strategy.

3.

Wholesalers were not willing to explain their pricing strategy or talk

about the margin earned.

4.

Harder to compare the pricing since they sold in boxes of 12 or 10

(min)

5.

6.

Some brands sold their products in different skus such as 190 ml

or 50 ml.Doubling the qty did not give accurate results.
Parachute even though the market leader brand some of its
product lines were very expensive targeting niche segments which
we observed only during this experience.

eg Parachute Advanced Therapie Hair oil(Rs125) 100ml was costlier

than Himalaya Anti Dandruff Shampoo(Rs100).

CONCLUSION

Pricing based on their target profits

Various products targeting Various customers.

Channel for distribution decides the amount at which the

product reaches the consumer

More the number of middlemen, more is the price

Better inventory management & better channel

management effectively reduces the operational costs and
thus can reduce the price further.

THANK YOU