The Hair Care Category From The Consumers Marketing Essay

The Hair Care Category From The Consumers securities industrying EssayWhat the consumer expects from the pig misgiving family line is startly a lave that is suitable for their haircloth slip and rears them with the results they pauperism after using a lave much(prenominal) as cleansing of hair and scalp, holding hair soft and smooth and strong. The consumer expects that the lave every last(predicate)ow make her hair thick, shiny and free from damage.Secondly, the consumer expects that the shampoo she has chosen should be accompanied by a supplementary product i.e. conditioner which forget render to her subscribe to of making her hair soft and moisturized.Lastly, the consumer has started to expect additional products in terms of mousse, gels, serums, leave-ons etc. that exit cater to her individualized needfully and problems. They forget serve well her to change the texture and type of her hair temporarily for theoretical account makes her hair straight with a straightening serum when she has frizzy hair.The consumer expects that whole her hair inevitably are strong-off conveniently and effectively by means of these off the shelf items instead of having to waste her time using deadening home remedies such(prenominal) as egg and yogurt on her hair.Another straits to mention here is that men get under ones skin started to expect products that are made especi every in anyy for them.Hair Care Category in Pakistan The hair care category in Pakistan consists of all addressable solutions for hair care including shampoos, conditioners, leave-ons, oils, colorants and styling available in retail, wholesale and salon pass ons.The Business we are in UPL hair care category at the importation consists of shampoos and conditioners in beauty, herb tea and anti-dandruff portions and overly plans to provide styling products in the future.The Business we want to be in The hair care category at this moment is providing generic solutions fo r hair care and the comp two needs to cue towards providing more(prenominal) change solutions for all the variant hair types and needs. The consumer is evolving and wants more hi-tech ingredients and technologies rather than just graphic ingredients. on that point is more emphasis on beauty and fashion and the consumer wants hair care companies to give them solutions accommodate made for their hair type and hair problems for example frizzy hair, straight hair, damaged hair, curly hair, wilted hair etc and these solutions to be provided in the form of not just now shampoos shape up more evolved product types such as serums, sprays, gels and masks. UPL also wants to build the male breeding segment through AD shop view.Regions UPL presently provides its products nationally including urban, suburban, hobnailed and dark rural. They reach consumers through their cabalistic dissemination which has penetrated even in deep rural through provision of specialized skus like sachets.Customers users Anyone who washes their hair is part of UPL betoken foodstuff. Therefore women, men, children of all ages are the ones UPL wants to provide solutions to. Users can be further divided into heavy, medium and light users and the schema employ is based on what category they fall into.Channels Used Hair care category go bulge out provide the products to the above consumers through General Trade stores, Family Grocers, Modern Trade Channels, International Trade and OOH which includes salons so as to be available to reach consumers wherever they are. We leave alone not make ourselves available in low contributing channels such as pan kiosks.What business we pass on not go in UPL Hair care testament not go in the businesses of spare oils, hair colorants and liquid ecstasy for hair wash because we give provide all solutions to our consumers through our current and future products. For example we will provide the benefit of mustard oil by incorporating mu stard oil extract in our shampoo or provide the cleansing properties of scoopful through clarifying shampoos.How Competition defines their scope The rivalry for UPL hair care includes direct and indirect antagonists i.e. anyone who provides hair wash and care solutions. This would in that respectfore include lather (both hind end and laundry) and loose oil providers. Our direct competition includes PG (HS and Pantene) and Forvil (Bio Amla).PG has the same scope as ours in terms of customers/users and regions, but they facet at the commercialise differently by dividing it cleanly into the three categories and ensuring that there is no convergency between the three.Bio Amla on the other hand has a rural proper(postnominal) focus and channelize their resources on herbal segment. They focus on their rich heritage and providing solutions that will be handed down from generation to generation.So How do we stool customers? UPL can create customers firstly by creating awareness a bout the different problems that can plague consumers hair. Once they are aware of this, thus UPL will provide them will solutions for their specific needs by giving them an entire system for their hair i.e. shampoo, conditioner and styling product. It will also create young customers in terms of men who currently use clean or borrow the beauty shampoo from the lady in the house, by providing them a shampoo made just for them.Hair Care 1As per the above charts, UPL is only present in the shampoo and conditioner categories. There are a a few(prenominal) acters that have just started to emerge in the styling segment such as LOreal, Garnier and Toni Guy. Before they make a mark, and the consumers associate them as the experts on styling, UPL should introduce their own styling range as well.As far as the dispersion structure goes, the focus is mainly on GT/MT with cosmetic channel and salons not universe concentrated upon. The potential of these two channels is therefore not bei ng utilized. Both of these channels shares should be change magnitude with particular focus as to how to develop them, especially salons which is a channel to which you can handle to for their own use and to sell from, to people who visit these salons.Market sizing of it Volume (Tons)Segment2006200720082009CAGR % strike6,2447,2047,4578,60911%herbal tea5,9416,4667,8438,81114%Anti Dandruff2,9233,3923,9684,47715%Conditioners6,4116,6776,8537,0533%Styling1491541661664%Colorants7828158498653%In 2008, the herbal category overtook the mantrap Category in mass. This can be attributed to the price additions (7%) taken by thespians in the beauty category, turning consumers to the herbal shampoos which were at a can to beauty shampoos.2007 saw the origin of a new player in the AD category i.e. effloresce shampoo which has propelled sufferth in the AD segment since.Conditioner category erectth may look small, but this is primarily because of lessen in loose oils and inwrought ing redients as consumers switch towards dirted products. The lave-off branded conditioner market on the other hand is in truth growing at 6%.Styling products usually consist of those that come in through the grey channel and are not actively being marketed therefore hardly any growth. Even the colorants market has not collide withn any new entrants until now and therefore the slow growth.Market Size Value (Rs Mn.)Segment2006200720082009CAGR % smasher3,3684,0044,3026,33523%Herbal1,6052,0202,5933,33528%Anti Dandruff1,6432,0562,4523,74832%Conditioners9,5279,0368,6558,467-4%Styling1031121121246%Colorants1,0081,0261,0191,0381%The herbal category, even though it has overtaken the beauty category in volume, has not been able to do so in cling to out-of-pocket to the high price per ml of shampoos in beauty category. However, ascribable to the price increases in Herbal category, the cherish there has also increased specially in 2009.The AD category has seen the highest growth in mensura te especially in 2009 collect to massive price increases taken by HS (20%)The conditioner market is declining due to the deterioration in loose oils and natural ingredients market however the rinse off conditioner market is steady growing.The styling and colorants market contribute less than 10% of overall hair care market due to its low gross tonnage.Assumptions for product for Each SegmentShampoos The shampoo market will continue to grow due to consumption building activities in the rural segment. There are still massive amounts of soap being used for hair wash and when it is replaced with shampoo, market will grow further. Within the shampoo category, AD category will see the highest growth due to the further investment behind brand Clear as a shampoo especially for men, followed by Herbal which will be taken as the frontrunner to develop the rural market.The usership of sess soap for hair wash in rural is 30% and laundry soap is 50%. It will be herbal categorys (Lifebuo y shampoos) job to convert these soap users to shampoo with the natural and herbal proposition, because according to query 46% rural consumers use soap due to the perception that soap cleans hair more thoroughly and that shampoo damages hair. Only 12% say that they cannot afford shampoo. However, if any sensitivity to price exists, it will be overcome by the fact that less dosage of shampoo is needed to replace soap and hence the shampoo bottle will last as much as or more as soap does.The way forward will be to educate them about benefits of shampoo vs. soap and get them to use Lifebuoy shampoo and the next step will be to bm them onto beauty shampoo i.e. Sunsilk which is more productive. Those in rural who are already using shampoo, for them the job will be to move onto Sunsilk from whatever else they are using. Therefore both beauty and herbal categories have a role to play in rural.Conditioners As the market is evolving, two changes are taking place. Firstly, consumers are paltry towards branded products and that is passing to see the decline of loose oils and natural ingredients (reetha, amla shikakai etc.) usage. Secondly, consumers are starting to become aware of their own specialized needs and want products to be suited to their individual preferences. Therefore second generation hair care products such as rinse off conditioners will be more in demand. This will further be fueled by international and local anaesthetic media.Styling With respect to the above, consumers will also start moving towards more evolved products for hair care to cater to their individualized needs and preferences. Also with the entrance of new players such as LOreal, Garnier and Toni and Guy, there will be more awareness about these needs and the market will start to get increasingly developed. There will also be high development in trade and channel by these new entrants fuelling the growth even further.Colorants Until now this market has been dominated by old players s uch as Wella, Polycolor, Schwarzkopf, Kalakola etc. But with the recent entry of LOreal and Garnier, investment in colorants market by these players will see development in this area.Market Size Estimation (Volume Tons)Segment2010201120122013CAGR % salmon pink9,34910,27011,01812,12512%Herbal9,60710,92711,91313,93815%Anti Dandruff5,1155,8866,6567,60014%Conditioners7,3837,8558,2078,7366%Styling20724929033017%Colorants8818989159613%The conditioner might look like its showing dismal growth, but what is of interest is the rinse off conditioner category which is actually tone ending to grow at 9% due to heavy investment. The growth number is being dragged down due to negative growth in loose oils and natural ingredients by -5% and -9% respectively. The branded oils category is to grow by 2%.The AD market will show high growth due to investment in a whole new brand i.e. Clear in the new market for male grooming. Herbal however will still be in the acquire as regards absolute volume as it should cater to the soap conversion job in the rural segment. mantrap segment will grow due to new entrants in the segment and increase in consumption in rural.Market Size Estimation (Value Rs Mn.)Segment2010201120122013CAGR %Beauty75479272111811503726%Herbal343042044901582219%Anti Dandruff466159467402937426%Conditioners8,6098911922293653%Styling15618721824817%Colorants1,0581,0781,0981,2636%Any increases in the herbal segment value will be due to volume increases and not price increases. On the other hand, the increase in market value of beauty and AD segment will continue due to high price per ml along with increases in volume.The styling category will be a profitable category as it will be sold at a tribute to the other formats available. So even small increases in volume will bear higher returns.Once a fix looking at the total conditioner growth number would be misleading. To quit it up, the area of interest which is rinse off conditioners will actually grow at 16% due to i ts high price per ml and increase in volume simultaneously whereas the loose oil and natural ingredients market is declining at -5% each.Competition ingathering MatrixCompetition Growth Matrix ConclusionUPL has a comfortable lead in the beauty segment but it needs to maintain this lead in view of growing competition.The AD and Herbal categories of UPL are lagging behind PG and Forvil respectively. Since the AD category is evaluate to show healthy growth of 12% in the future, UPL needs to maintain at least the market growth rate for its AD brand. Herbal must be invested in specifically in rural areas to convert soap users.Styling is a niche yet profitable market segment that is expected to grow at a whopping 17% in the future. Opportunities hypocrisy for UPL here in development in this category and gaining and market lead.Conditioning (rinse off) will also be growing at 9%. UPL has already started focusing on this category before any other company and should direct further investm ent this way to take advantage of the growth.Through analysis it is evident that Forvil (Bio Amla) is also a formid(prenominal)able competitor in the market where as Unilevers strategies are based on competition from PG. In future Bio Amla should be given equal importance in competitive as well as brand strategy formulation.Product Life CycleProduct Life CycleSegmentsIntroductionGrowthMaturityBeautyXPanteneXSunsilkXHerbalXLifeBuoyXBio AmlaXAnti DandruffX principal ShouldersXClearXConditionersRinse OffXSunsilkXPanteneXLoose aneleXNatural Ingredients mark OilsXStylingXLOrealXToni and GuyXColorantsXGarnierXKala KolaXThe shampoo category is in growth stage, fueled by the rural segment. brainstorm and consumption in this segment will keep on increasing as awareness increases through media proliferation. Improvement in distribution will further fuel this trend.Rinse off conditioners are in the introduction stage. Even though they have been on shelf for awhile, they have just started to be pushed by the companies in terms of communication, and that also one brand until now i.e. Sunsilk.Since rinse off conditioners are only being pushed in urban, rural for the time being will be using loose oils for instruct purposes. Natural ingredients are on the decline however as consumers are getting these in the shampoos themselves and also do not have the time anymore that it takes anymore to use them.Styling segment is in introduction stage and therefore it can be an opportunity for UPL or any other company to gain a first mover advantage there.There has been no new news in colorants segment until now with the introduction of LOreal and Garnier in the market. The advent of these two brands will have an impact on overall category and cause awareness about this segment, leading to growth in off-take of colorants.Distribution StructureFor all the 3 segments of shampoos, over the next few years , contribution of GT will decrease with well-nigh of the consumer craft moving to wards MT and therefore the companies also shifting their volumes towards MT. For Beauty category Salon channel will also gain importance.Rinse-off conditioners are limited to being sold at MT at this point in time as they are targeted towards higher LSMs. In the future as they start to be used by lower LSMs, their contribution in GT will increase.The biggest jump in contribution of Styling products is in Salon channel. This is where consumers will receive education about the use of styling products and will also be a point of urge purchase. This channel will serve as the foundation for development of this segment, and will lead to increase in contribution of GT as consumers make their repeat purchases from there.Distribution Shares and Companys PositionThe outlet reportage reflects that of Urban only. The numbers for rural by channel were not available to us, however we did find out that they were much lower. (Outlet insurance coverage in total rural is approximately 60%) Therefore , if the job is to convert soap users in rural, then the outlet coverage must also be increased.Although urban outlet coverage is healthy, UPL is lacking behind in turnover share as compared to PG probably due to higher NPS/ton of PG brands. The turnover share we have taken is in terms of value, and if we compare volume turnover then UPLs is higher.In terms of outlet coverage, UPL is at par or more than both PG and Forvil in all cities except Islamabad. Hence special assist must be paid to this region n the distribution plan.Top 6 External TrendsUPL is taking advantage of growth in rural segment with a companywide project to promote its brands in rural. They want to gain a first mover advantage there which will be possible if PG and Forvil dont act.All companies have taken prices increases to be able to hold their margins.Growth of MT and the increase in demand for bulk products have led UPL, PG and Forvil to introduce large size bottles (400ml and 700ml) specifically for this chan nel.UPL being the first one to focus on conditioners is taking advantage of the trend to provide specialized products for the consumers. PG although it has a range of styling and conditioning products is not actively promoting them.Both UPL and PG are turning towards digital mediums such as the internet and cell phones for advertising. Furthermore, there is an increased use of activations and sales promotions to catch the attention of the increasingly fragmented audience.Growth of small unknown brands in rural with Re. 1 sachets is threatening the higher priced sachets of UPL, PG and Forvil. PG has increased their sachet prices further and are not focusing on them as sku. UPL is trying to counter this by giving a better product at a slightly higher price (Rs. 2 and Rs. 3).Summary External AnalysisUPL hair care category at the moment consists of shampoos and conditioners in beauty, herbal and anti-dandruff segments and also plans to provide styling products in the future.Segments ide ntified in the Hair care market are Shampoos (Beauty, Herbal, and AD), Conditioners (Rinse-Off, Branded Oils, Loose Oils, and Natural Ingredients), Styling and Colorants.In 2008, the Herbal category overtook the Beauty Category in volume. This can be attributed to the price increases (7%) taken by players in the beauty category, turning consumers to the herbal shampoos which were at a discount to beauty shampoos. 2007 saw the introduction of a new player in the AD category i.e. Clear shampoo which has propelled growth in the AD segment since.The AD category has seen the highest growth in value especially in 2009 due to massive price increases taken by HS (20%). The conditioner market is declining due to the decline in loose oils and natural ingredients market however the rinse off conditioner market is still growing.The shampoo market will continue to grow due to consumption building activities in the rural segment. There are still massive amounts of soap being used for hair wash an d when it is replaced with shampoo, market will grow further. Furthermore, the next four years will be more about development of rinse off conditioning and styling.Consumers are starting to become aware of their own specialized needs and want products to be suited to their individual preferences. Therefore second generation hair care products such as rinse off conditioners will be more in demand.Styling is a niche yet profitable market segment that is expected to grow at a whopping 17% in the future. Opportunities lie for UPL here in development in this category and gaining and market lead.Through analysis it is evident that Forvil (Bio Amla) is also a formidable competitor in the market where as Unilevers strategies are based on competition from PG. In future Bio Amla should be given equal importance in competitive as well as brand strategy formulation.For all the 3 segments of shampoos, over the next few years , contribution of GT will decrease with most of the consumer traffic mo ving towards MT and therefore the companies also shifting their volumes towards MT. For Beauty category Salon channel will also gain importance.UPL is taking advantage of growth in rural segment with a companywide project to promote its brands in rural. They want to gain a first mover advantage there which will be possible if PG and Forvil dont act.Performance Analysis follow IndicatorsLagging Indicators20072008 gross sales++++Total TOVol++++Val++++GrowthVol++++Val+++++Market ShareVol++Val++Profit+++ROI++++GP Margin+Cost++Sales Sales in 2008 did not grow by much due to price increases taken across brands in order to make up for inflationary insistings. In 2009, volume growth was driven by activities in rural and by the price advantage that UPL had due to massive price increases taken by PG. They key takeout therefore is to let PG be at a premium to us and second keep on developing rural to get volume growth.Growth The value growth increased in 2008 because of price increases wher eas the volume declined but this was reversed in 2009 for reason of ease in pressure in prices.Market Share Shares grew by a constant rate across the years. Again, any increases came from rural, gaining from make it two competitors i.e. Forvil and PG especially in 2009.GP% Gross margins were pressured due to increase in raw material, overhead, and cede chain. They were maintained by taking price increases and through optimization of formulations.Performance Analysis Leading Indicators induction The number of product innovation both in terms of re-launches and new variants/SKUs to cater to different consumers needs. In the past 3 years there has been one new brand introduction that is Clear, two brand re-launches and one new variant launch.Investment in Human Capital The continuous training of all the employees to make them fully knowledgeable in the area of their performance. This is done by creating employee skill profiles where training needs are identified and future performanc e standards and objectives are set.Localization Switching from foreign supplier of advancement to local ones to decrease cost, lead time and increase flexibility.Information engine room The use of Information Technology for quick collaboration with the regional counterparts, suppliers and within different departments of the organization. Integration of ERP, SAP and linking with region and global center.CSR integrate CSR activities into brand portfolio to demonstrate responsible business behavior. This will help to enhance brand equity and theatrical role and gain community trust.Use of Innovative Media The use of innovative mediums of communication not used by anyone else in this category, for example leveraging the power of companionable media, PR and search engine optimization to target specific audiences at point of time and point of purchase.Further analysis on leading indicators is on the following page.SWOT AnalysisStrengthsUPL has brands specifically to cater to each seg ment of the shampoo market and these brands have established brand images.UPL hair care portfolio have a range of offering for all types of socio scotch classesFirst Mover advantage with the launch of Sunsilk conditionersRange of variants catering to a different consumer needsVersus any layer in the competition UPL holds a very strong distribution network which helps in deep penetration and lowering operation cost.An AD brand that provides solutions both for Men and Women.Ability to use UPL clout nail in advertising media industryOpportunitiesLeveraging of UPL distribution might to make inroads into ruralMake the most of hair fall need through 3 brands variantsOwn conditioners segment by investing in distribution channels and communicationUse innovative mediums to have a targeted focusLBS to benefit from premium shampoo bottle user in both urban and rural down trading to mid tier brandCan use Clear to generate growth for male grooming productsTo increase share in AD segment throu gh AD specific brand ClearWeaknessesLifebuoy shampoo has a outdated image in the market due to LB soapSunsilk is only a generic beauty shampoo and needs to stand for something moreClear has not been able to create too large of a dent in its main competitor HSThreatsLow tier and pluck brands pushing the product in trade channelGarnier and LOreal entering the market targeting both the upper class and the middle class through their brand portfolioInflationary pressures may force the consumers to switch to other available options thus resulting in a lower share for all the premium brands.PG may start local production of shampoos which will result in a decrease in their pricesCounterfeit goods are adversely affecting the sales of branded goods and as counterfeit trade increase the company stands to lose all its brand equity and exclusivity. Besides, it may also result in customer dissatisfaction, which could be detrimental to the companys image. resistance MatricesBecause Sunsilk has be en the first to actively try and establish the conditioners category, they have a high chance of owning this segment both in terms of distribution as well as communication as both customers and consumers will see Sunsilk as the authority on rinse-off conditioners.All 3 brands have numerous variants and therefore will be able to cater to hair fall needs of all income segments. Hair fall is the latest need to be catered to by all the shampoo brands.Strong distribution network of UPL can help it to make inroads in rural segment faster and more effectively than other brands.The male grooming segment is one that is un-catered to at the moment and Clear with its range just for men can engage this gap.UPL will have an easier time integrating innovative advertising mediums such as PR and social media in its current advertising mix due to the clout it enjoys in advertising industry.Because Clear still hasnt been able to pose too much of a threat to number 1 AD player HS, it will not be abl e to increase UPL share in AD segment. The brand needs to start doing much better before it can grab share from HS and become an AD brand of equal measure.Inflation should not hit UPL too hard because users can downgrade within the UPL portfolio from Clear and Sunsilk to Lifebuoy Shampoo and similarly from competitor premium brands like HS and Pantene. Furthermore, because UPL has such a portfolio that caters to all segments, it will be able to resist price decreases if PG were to start local production and resist entry of LOreal and Garnier.UPLs strong distribution network may also help it to resist growth of mushroom br