Category Management Analysis Conducted at (Easy Day, Grihasthi, Local Medical Store)

Submitted in Partial Fulfillment of the requirements of the Project to Dwarika Prasad Uniyal

(Course Faculty)
On

(10th September 2013)

By

Kunal Delwadia & Malay Kumar Mandi Students Post Graduate Diploma in Management IIM Kashipur
Project Title: Secondary Market research on Hair Oil Market in India. Background of the Researchers: Engineers Course to which project belongs: Marketing Management-1 Term in which the Project is to be evaluated/credited: Term-1

Executive Summary The FMCG market is the forth-largest sector in the economy with a total market size in excess to $ 12.1 billion. It has a string MNC presence and is characterized by a wellestablished distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble from $11.6 billion in 2003 to $33.4 Billion in 2015. Penetration level as well as per capita consumption in most product categories is low indication the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from upgrading in the matured products categories.
Hair care increases by 18% in current value terms in 2012, to reach Rs116 billion Consumers willingness to spend more and try salon hair care products at home aids value growth Colorants sees the fastest current value growth of 29% in 2012 Average unit prices increase as manufacturers offer value-added benefits Hindustan Unilever leads hair care with a 17% value share in 2012 Over the forecast period hair care is expected to increase by a constant value CAGR of 10% to reach Rs185 billion

The hair oil market is huge, valued at Rs 6 bn. Due to the varied consumption habits of consumers across the country, where coconut oil and edible oil are interchangeably used, the size of the market is likely to be higher than estimated. More importantly, the market is growing at an impressive 6-7% in volume terms despite the high penetration level. Usage of hair oil is a typical Indian traditional habit. It is perceived to offer benefits of nourishment, hair strengthening, faster and better growth, and reduce the problem of falling hair. There are two types hair oil available in the market; coconut oil and nongreasy perfumed oil. Coconut oil comprises 2/3rd of the total market and the balance comprises the non-greasy perfumed oil. Usage of hair oil is an everyday habit with 50% of the population out of which some perceive that massaging the head with hair oil has a cooling impact. The penetration of hair oil is fairly high at around 87% and evenly distributed among the urban and rural areas. The coconut oil market accounts for 72 per cent share in the hair oil market. In the branded coconut hair oil market, Marico (with Parachute) and Dabur are the leading players. The market for branded coconut oil is valued at approximately $174 million.

Objective of your study: Understanding the hair oil purchase pattern and behavior of consumer at retail store by doing secondary market research. Understating the market share of the whole hair oil industry and brand share hair oils. Understanding of the point of purchase, time and frequency of purchase, method of purchase, response of consumer for promotion. Introduction: Indian Hair market is mainly dominated by the hair oil segment, which constitutes over half of the overall market. Perfumed oil (cooling oils, light oils, and heavy amla oils) and coconut oil comprises the main segment of hair oil market, while others account for minimal share in the market. The consumption pattern of hair oil differs across different regions and age group of the country. Coconut oil is very popular in southern regions, while people in the north prefer others, such as sesame, rapeseed, etc. The buying pattern in this category is rapidly changing as younger generation look towards having a product, which caters not only to their styling but also to their specific needs. The demand for customized offerings has result in emergence of niche segments in Hair oil category. Although the market is conventionally dominated by the womens segment, men are fast emerging as a separate consumer category. In the current scenario, the market is witnessing a tremendous change in buying pattern of the mens segment, as growing young generation are looking for care and styling products catering to their specific needs. Consequently, industry players are also introducing various products to meet the growing male buyers demand. The hair oil market is valued at ` 6 billions. Hair oiling is a major niche in the hair care segment. Unlike market abroad, India has a large number of consumers whose hair care expenditure also includes hair oils. The penetration level of hair oil is around 87%. Around 50% of the population uses hair oil everyday. The growth rate of hair oils in rural India is faster than the growth rate in urban India. Industry Size and Structure

Overall Hair oil Market in India

Light hair Oil Market in India

Market Share Trends all India (Urban plus Rural)

Cooling Hair Oil Market in India

Light Hair Oil Market Key characteristics:

Brand Entrants and Failures in Last 5 years Entrants 1. Antidandruff Hair Oil under the brand Mediker by Marico 2. Entrants cooling oil Market: The range of new products launched by all existing market leader under this category. Some of the products are parachute advanced cooling Oil, Him Gange from GK burman Labs. 3. Herbal oil Entrants: Veola by Bajaj herbal. Parachute Ayurvedic hair Oil Marico. Failure 1. Marico ltd Launched Mahathanda, but it never become a national product. 2. Sampurna under coconut oil category by Marico that proved to be failure. 3. Keo Karpin failed to sustain its market as an industry leader and market is captured by Bajaj Almond drops hair oil. 4. Meera Herbal hair oil by canvincare failed as anational player but still has some presence in south India. Observational study at Retail Studying customer behavior in retail stores usually deal with 1.Identification of customers and 2.Their buying patterns. The aim of such studies is to ascertain who buys where, what, when and how. In addition, such studies endeavor to learn about the customer response to sales promotion devices. The results of these studies are useful in the solution of an array marketing problems.

In recent years, theses studies are gaining importance in marketing research. It is safe to predict that interest them will increase greatly in the next decade. This study is summarizing our experience at Easy day, Grihasthi, Local Kirana shop and Medical stores. Identification of Customers: The customer and consumer are not synonymous. A customer is a purchaser of a product or a service; a consumer is a user of a product or a service. The buying behavior of the customer is influenced by the needs and preferences of the consumer for whom products are purchased. A husband and wife shopping together may represent two customers, or one customer and one bundle carrier, and it is not always possible to tell which is which. A boy accompanying his mother may influence decisions in selection and purchase of several items, even if the youngster has no purchasing power of his own. Therefore practically every person who enters a store is a potential purchaser and represents a unit in the store's customer traffic. Identification of customers seeks to ascertain who the customers are. It is not sufficient to study buying behavior patterns without knowing whose buying behavior is involved. Hence it is necessary to identify the composition and origin of customers. Composition of customers: This includes many characteristics, such as sex, age group, color, economic and educational status, origin and so on. Both consumption and buying behavior are affected by these characteristics; and the relative significance of each of these characteristics varies greatly, depending upon the nature of the problem. Each customer has his or her own buying habits. Customers buying habits or behavior patterns are not permanently fixed, and certainly not sacred, even though some habits tenaciously resist change. Customer buying behavior patterns can be grouped in relation to: 1. 2. 3. 4. 5. Place of Purchase Items purchased Time and frequency of purchase Method of purchase Response to sales promotion devices.

Place of Purchase In general, customer divided their purchases among a number of stores. They shop in more than one departmental store. In Kashipur, People do buy Hair oils in supermarket store (Easy day, Grihasthi), Local kirana stores and medical stores (Madan Medical Store, Tondon Medical store). Easy day and Grihasthi, only available supermarket store in Kashipur city. Where customers have the choice of purchasing the Grocery, Dry Grocery, Spices, Beauty and

Personal Care such as Baby and Child specific products, Bath and shower, Color cosmetics, Deodorants, Depilatories, Fragrances, Hair Care, Mens grooming, Oral care, Skin care, Sun care, Soft drinks, Laundry care, contraception etc.

Easy Day Hair Care, Bath and Shower, Contraception, Laundry Care, Colors, Deodorants, Hair Gel, Powder

Easy Day Hair Oil Section

Hair Oil Brands at Grihasthi Super Market Store There are various Local Kirana stores available in Kashipur where people purchases Grocery, Dry Groceries, Oral care, Hair Care, Laundry Care, Skin Care, Spices, Cooking Ingredients such as Garam Masala etc. These kirana stores have limited number of inventories for specific categories. For an Example a small kirana store may have limited number of hair oil brands available to them with comparatively in small size with respect to the demand from the customers and frequency of the purchase in comparison to the super market stores. There are other factors such as low profit margins, less demand, limited customer base also encourage them to go for limited stoke in specific category in relatively smaller shops where the consumer base is limited variance

in sex, age, color, economic back ground, religion in terms of the income and education status.

Hair Care section at Local Kirana Store Medical Stores We have visited and observed two medical stores to study the buying pattern of our category Hair Oils in Kashipur. Primary consumers at medical stores are for Medicare and Health related purchases. Medical stores generally have all age group people, both gender (Male and female) as their customers base. Hair oils are additional purchase to their primary purchases. There were not any single customers who visit medical store for buying Hair Oil. The main purpose of visiting the store is to get medicine and may buy hair oils, as their additional purchase to the Medicare purchase. Additional purchase isnt necessary to be a Hair Oils only; it can be anything ranging from skin care, oral care, hair care, contraception, gel and deodorants. According to the Medical store personal, most of the hair oil buyers are newly wed couples that buy contraception as their primary purchase and hair oils as their secondary purchase from medical store. The second most selling is baby oil and hair oils; most of the customers are couples with newly born babies. As far as the heavy hair oil market is concern, Kesh King hair oil (SBS Bio Tech) brand is leading the market at Kirana stores and medical stores.

Where customers have the choice of purchasing the same goods in a number of stores, their patronage loyalty to any one store is by no means permanent. Studies of customer buying behavior patterns with respect to place of purchase are useful in selecting store locations, in choosing distributors for a product, and in merchandising. Items purchased Every customer purchase and vary store sale consists of a transfer of one or more Specific commodities. No one customer purchases all the different items for sale in a store. Over a period of time a customer will purchase substantial selection of the total items available in the store. But that selection will vary somewhat with each customer. Therefore, studying customer buying behavior patters it is necessary to ascertain what items and how much of each item customer purchase. Customers at Easy day and Grihasthi: Most of the customers have come to purchase for their monthly items required. More than half customers were with family, couple and with children. They purchased almost all necessity items required for daily uses. In grocery most of them bought their grocery, some dry snacks, rice, bathing and shower requirements, Hair care Hair oils, Shampoos, conditioners, Bathing soaps, Dettol, toiletry care, home care, Mosquito liquid, as it is rainy session out here in Kashipur. Hair Oil Brands Available at Easy Day and Grihasthi Super Market

Local kirana shops were having very limited customer base. During our observation, most of the customers were from lower economic section that were very price concern about the items purchased. Most of them were buying items in smaller units and smaller sizes. Therefore the varieties of the items available were very less at the local kirana

store. Storekeeper is not willing to stoke the specific items, which are not demanded by the customer. He has 4-5 hair oil brands, with smaller size and fewer prices.

Medical Store: There were not any single customers who visit medical store for buying Hair Oil. The main purpose of visiting the store is to get medicine and may buy hair oils, as their additional purchase to the Medicare purchase. Additional purchase isnt necessary to be a Hair Oils only; it can be anything ranging from skin care, oral care, hair care, contraception, gel and deodorants. According to the Medical store personal, most of the hair oil buyers are newly wed couples that buy contraception as their primary purchase and hair oils as their secondary purchase from medical store. The second most selling is baby oil and hair oils; most of the customers are couples with newly born babies. As far as the heavy hair oil market is concern, Kesh King hair oil (SBS Bio Tech) brand is leading the market at Kirana stores and medical stores.

Hair Saloon:

Time and frequency of purchase Store operations must be geared to mesh with customers time of purchase pattern. Store buyers and merchandise must be available in the store in adequate supply if maximum sales are required. To study time of purchase patterns it is necessary to relate this purchase with seasons, weather and regional differences. Every retailer knows from experience that his volume of sales is not uniform by days of the week, nor by hours of the day. The variations are very pronounced. Attempts by retailers to modify customer time of purchase behavior patterns, with the view of improving service to customers or raising efficiency of operation, have by no means been entirely successful. The long lines of customers waiting impatiently to be checked out in super markets during peak periods in contrast to the buying inactivity at other times illustrate a continuing troublesome store operations problem created by the customers' time of purchase pattern.

Frequency of purchase depends primarily upon the type of commodity involved. The size of the total purchase, the number of items and the quantity of eachitem bought all vary with frequency ofpurchase. The more frequently a customer visits a store, the more is that customer exposed to the impact of sales promotional devices used in the store. Method of Purchase Weather a customer buys on a cash and carry or on a charge and delivery basis, weather a customer shops alone or s accompanied by some one else, and whether a customer walks or rides to the store are some of the elements in method of purchase. Store should provide. 1. Adequate parking facilities to accommodate the customer. 2. Size and frequency of purchases in grocery stores are definitely affected by the mode of travel to make the purchase. Couples shopping in super markets buy more per transaction than does a woman or man shopping alone. The same applies in other type stores. Many a woman will invite her husband to help her select a purchase; the husband influences the choice and frequently approves the acquisition of a more expensive item. Response to sales promotion devices A. Displays B. Pricing C. Demonstrations D. Sales talks In so far as possible or practical, consumer goods are packaged to create eye appeal when put on display. Thus the shape, size, label and packaging Material of the product all plays their part in sales promotion. The manner in which an item is arranged on a shelf or table, in a display case or window, the space and position given to it, and the type of sale promotional material (Posters, signs, etc.) used for reinforcement are also influencing factor.

Description of Stores visited Easy Day & Grihasthi: Easy day and Grihasthi only available super market store in Kashipur city. Easy day store shop that caters to every familys day-to-day needs. They bring wide range of relevant goods, high quality products and great n store experience and service, all under one roof. This neighborhood format store offers range of products at the comparatively reasonable price. The wide range of assortment of goods includes personal care products, stationary, household articles; daily need grocery including staples, processed foods, and fresh products. Store location is reachable and these are the only available super market store, They are enjoying customer loyalty, the parking facility was not adequate or up to the mark, interior display is attractive and color and music inside the store is attractive and soothing. Local Kirana store: It is located in the city of Kashipur inside the market. it was comparatively small. It carries a general line of merchandise. It carries limited selection of merchandise where people from surrounding areas can access to purchase all their general goods. The store carries general routine stock and obtains special orders from customers. It has routine products like home personal and daily used products. The store got products range soft drinks, ice creams, skin care, hair care, cigarettes with limited brands, and cooking oils. Medical Store It is more or less similar to local kirana shops in terms of hair care products. It is located on the road in from of Kashipur bus stand. The store location is accessible but the noise pollution is very high. Customers most of the time are not able to hear the conversation with the sales person in the store. The store is very congested and they use software to identify the product on the self and stock. The hair care section is located just in front of the store where customer can see the section.

Findings (Various levels) 1ST LEVEL: The overall hair oil market is huge, valued at Rs 6 bn. The market is growing at impressive 7-8 %. Hair Oil Brands: Dabur Amla

Parent Company Category Sector Tagline/ Slogan USP

Dabur Personal Care brands - Hair care FMCG Zyada Lambe, Zyada Mazboot, Zyada Khubsoorat Baal, Asli amla Dabur amla Largest hair oil brand in India STP

Segment Target Group

Hair oil segment with natural ingredients Youth and middle aged men and women Contains the nourishment of Amla and makes hair strong from inside, beautiful outside SWOT Analysis 1. Established product and trusted brand name 2. Provides shine and softness and makes hair healthy from inside 3. Contains trusted natural ingredients like amla 4. Strong distribution network across the country

Positioning

Strength

5. Celebrity/ film star brand ambassadors 1.Preferred by loyal customers as youth find other brands attractive2.Sticky and oily, stains the pillow when used overnight

Weakness

Opportunity

1.Expansion in rural markets2.Export potential3.Innovation in other hair care products 1.Aggressive competitors2.Threat from new entrants or local players selling oil with natural ingredients3.Introduction of oil in the market with better fragrances, ingredients and innovation

Threats Competition 1.Maricos Shanti Amla 2.Bajaj Brahmi Amla Competitors 3.Emami Plus Hair Oil

Himani Navratna oil Parent Company Category Sector Tagline/ Slogan

Emami Haircare FMCG Sirdard, Tension, Anidra aur Thakan Jao Bhool - Raho Thanda Thanda Cool Cool Potent therapeutic oil, prepared from a combination of nine Ayurvedic herbs, provides stress relief, relaxation and a sense of rejuvenation.

USP STP Segment Target Group Positioning

Therapeutic Hair oil Masses, especially young and middle aged men who suffer from a day to day stressful life It can rejuvenate you if stressed SWOT Analysis

Strength

1. Market leader in its category with around 50% market share 2. Endorsements by Amitabh Bacchan, Shahrukh Khan throughout India and by Chiranjeevi, Surya and Upendra in South India have helped

establish a high brand recall 3. Company has invested on product innovations and launched Navratna Oil Lite, Navratna Extra thanda oil. This has benefited the brand immensely. 4. Company has been strong both in ATL as well as BTL activities. Activation programs conducted through rural vans, participation in rural festivals, congregations, wet sampling initiatives at railway stations, BPOs, religious places, factories, bus terminals, ghats etc to demonstrate efficacy have increased product trials and awareness 1. The celebrity presence seems to overshadow the brand proposition, thus the brand message gets lost and only celebrity recall is there. 1. Introduction of newer variants would help better penetration in both rural and urban markets 2. The brand can look for additional promotion through extensive wall paintings, dealer boards, hoardings and shop presence especially in the rural markets. 1. The modern day youth prefer taking medicines for headaches and such other ailments and shy away from using oils.2. With almost all the competitors offering similar benefits, celebrity endorsements alone might not provide competitive edge over a long term Competition 1. Himgange 2. Marico Maha Thanda 3. Dabur Super Thanda 4. Banphool Competitors 5. Rahat Rooh

Weakness

Opportunity

Threats

Parachute Parent Company Category Sector Tagline/ Slogan

Marico Personal Care brands- Haircare FMCG

Gorgeous Hamesha

USP

100% Pure Coconut Oil STP

Segment

Appearance and health conscious people of all ages Women of all ages in both urban and rural population of India & Young and appearance conscious consumer Positioned on the platform of purity SWOT Analysis 1. Market leader in its category, has a huge loyalty in the urban & rural sections of India 2. Brand has sought to remain relevant and differentiated through a slew of initiatives in packaging & communication like the weight-test (proving that pure Coconut oil is heavier than impure oil) 3. Parachute enjoys tremendous equity and trust with every passing generation 4. Is entering the shampoo market with Starz and has a range specifically for the age group of 3-10yrs

Target Group Positioning

Strength

5. One of the most recognized and trusted brands 1. Innovations like personal massager where available only in select cities and limited quantities 2. Parachute Hot Oil should be a seasonal product and should be sold in winters and not during summers in places where it gets very hot.

Weakness

3. The original parachute oil solidifies in winter season. 1. Parachute can get into skin care by introducing oils for application on the entire body 2. Launch variants that have not only coconut but also other natural ingredients that benefit the hair. This will help fight competition from brands that are not made of coconut but other ingredients like badam, amla, mustard etc. 1. Many players are entering the market2. Parachute as a brand is positioned as a coconut oil. Competitor brands are communicating the advantages of using oils that are made of badam, amla, mustard etc. Competition

Opportunity

Threats

Competitors

1.Dabur2.Navratna3.HLL

Bajaj Almond Hair Oil Parent Company Category Sector Tagline/ Slogan USP

Bajaj Corp Ltd Hair care (Hair oil) FMCG

Nourished hair. Stylish you. Provides quality with style STP

Segment

Hair oil segment Women who want their hair to shine and look good, maintaining quality at the same time A hair oil which nourishes your hair and maintains style at the same time SWOT Analysis 1. Well known brand in India 2. A good distribution network3. Non-stickiness adds to the product value 4. Packaging ensures its almond oil proposition is well visible

Target Group Positioning

Strength

5. Good brand visibility owing to TVCs and print ads 1. Has an image of being used by elderly ladies, i.e. not too common amongst urban youth

Weakness Opportunity

2. Priced at a premium to other hair oils due to which it loses out on the lower middle class market share 1. To use non-traditional promotional strategies in order to penetrate the market 2. Introduce sachets and other price points which shall help introduce it to the price conscious lower middle class female (market entry)

3. Try to introduce a packaging which not only speaks of its almond oil proposition but also doesnt break that easily 1.The Indian consumer is moving towards shampoos Threats 2. Foreign players coming up with better hair care products Competition 1. Vatika 2. Dabur 3. Parachute Competitors 4. Schwarzkopf

Dabur Vatika Parent Company Category Sector Tagline/ Slogan USP

Dabur Personal Care brands - Hair care FMCG

Hair that shine with health Natural ingredients which include heena and amla STP

Segment

Premium segment and high price market segment Confident, well educated and young women ready to spend money for nourishment and healthy products Resolve hair problems and make hair healthy SWOT Analysis

Target Group Positioning

Strength

1. Innovative product offering containing henna, amla and lemon other than basic hair nutrients

2. Strong distribution network 3. High involvement in R&D 4. Extensive supply chain 1.Aggresive competitors 2.High price Weakness 3.Sticking to only ayurvedic technology 1. Enter new categories; innovate offerings 2.Increased purchasing power of the middle class Opportunity 3.Threat that it may contain chemicals and is not a pure product 1. Competition from well established names 2. 2.Threat from substitutes Threats 3. 3.Provides ayurvedic products only which are not recognized in various markets Competition 1.Bajaj 2.HULs Clinic plus and Clinic All Clear Competitors 3.Maricos Parachute Oil

Insights

2nd LEVEL:

Gender

Which Hair Brand Do you Prefer Over Others?

Opinion about-packing size of hair oil is good [Product Quality]

Opinion about-the brand has sufficient color [Product Quality]

Opinion about-"variety of styles in brand" [Product Quality]

Opinion about-"styles of the brand features" [Product Quality]

Opinion about reputable to the brand [Brand Name]

Opinion about-pricing of brand is satisfactory. [Brand Name]

From where do you purchase the hair oil?

Opinion about-store location of the brand [Store Environment]

Opinion about-interior display is attractive [Store Environment]

Opinion about-salesperson of the store is well trained [Store Service Quality]

Opinion about-salesperson of the stores friendly and courteous [Store Service Quality]

Opinion about-advertisement of the brand is attractive [Promotion]

Opinion about-window displays are attractive [Promotion]

Opinion about-the brand provide goods value for money [Price]

Satisfaction from the product?

Does your purchase influenced by any factor?

Conclusion: Consumer preference for hair oil in India is very clear from the above research and one single brand parachute is dominant brand with 43% while Bajaj Almond is just away with 10% in consumer mind. Place of purchase is significantly changed from super market, General Kirana store and medical store. As response shows that consumer doesnt care about the place of purchase as soon as he/she gets the preferred brand. Consumption of the hair oil is more by male as compared to women because of the hair oil consumption habits are less in case of female. Male use hair oil on regular basis however, the new young generation is shifting towards hair styling gel and other substitute products such as Hair Cream, Hair Styling Gel and Spray. However product satisfaction is more in case consumer uses hair oil.