expanding hair conditioner market in india shivani pal mansi baranwal aditya mukherjee
TRANSCRIPT
Driven by changing preferences,“look good” trend & rising incomes, Hair conditioner market grown~40%
An increasing middle class aspiring to buy more expensive products
Product innovations and further segmentation
Aggressive promotions by major players
• Premium and value-added products in the mass segment increase
•New functional claims: UV protection, scalp disorder and anti-aging conditioners
• Beauty-enhancing claims: Moisturizing/hydrating hair, protecting damaged hair
•Plant ingredients & Product naturalness
•Ethical claims: Not tested on animals
• Aggregate adv. expenses of the 3 prominent players increased by ~10% in FY10
1 2 3
Growth Drivers
Source:* ―Hair care India: Euromonitor.com
2009 2010 20150
20
40
60
80
100
120
140
Hair care Conditioners
CAGR ~ 40%
32%
16%13%
14%
25%
% Brand share
Clinic Plus Sunsilk Dove Pantene Others
Why is conditioner penetration so low, and frequency of use so limited in India?
How can we counter it?
Qriusteam
Oil: A substitute or complementary?
Primary surveys reveal a huge gap between what consumers perceive and what the actual product is
Gap Analysis1 2
Oil Vs. Conditioner
Nourishment
Long term effectsMoisturizing
(While oil is good for roots and scalp, conditioners are good for
nourishing hair strands)
(While Oil helps hair growth, conditioners
help in long term health )
(Unlike conditioners, oils do not contain
any hydrating element)
Conditioners are a necessary part of hair care regime for their long term benefits
•Conditioners help moisturize the hair strands • Proper hydration keeps hair healthier over years
• Not all are harmful• Need for specific hair conditioners for every Indian hair type
•Conditioners are not necessary for hair care• To be used only for “additional” care
• Conditioners give hair a “short-term” shine and de-tangling effect• Shine/ Softness lasts only for a day
• “Repeated usage can harm my hair”• “How do I know if this conditioner would suit my hair type”?
HAIR CONDITIONER COMPANIES
MARKET
Actual product need
Perceived product need
Actual product benefits
Actual experience
Perceived product benefits
Perceived experience
Actual Hair conditioner offering
Perceived Hair Conditioner offering
GAP
Conditioner penetration low due to perception of short-term use to hair & oil as nourishing substitute
Conditioner penetration lower than similar countries due to perception issues
Source: Expert interviews, primary data
Penetration driven by westernization of habits and conception of beauty
The perception problem has to be countered on three major points
People who’ve used conditioner think its usefulness to hair is temporary
•They feel its for looks, not nourishment, since it is chemical
•They feel that oil nourishes, hence are more loyal to hair oil People who haven’t used often do not know what it does or why it’s useful
Makes hair look shiny, smooth but not oily
•The combination is important in westernized aesthetics
As consumers get westernized they accept conditioner as part of habit like lipstick, gel, deodorant etc
•However volume sold to such consumers still low because of perception issues
Its not nourishing since its chemical1
2
3
No real long-term use for hair
Oil and shampoo together are enough
Product innovations with more natural, organic products
Focus on distinct usefulness:•Quality of hair strand against brittleness, dryness given by shampoo•Protection from sun
Competitive de-positioning of oil:•Oil is protects hair root & scalp, while conditioner protects hair strand•Oil y hair makes user look un-progressive
India is an aspiration-al, follower market in lifestyle products leading to distinct pattern of adoption
Indian lifestyle market follows western tastes with two main drivers*
•Exception is natural, organic products where Indian households can be early adopters since it ties in to traditional home remedies and cures•**Quantified by percentage of people in daily life they converse in English withSource: Expert interviews, primary data, analysis
• Since other countries have industrialized earlier, the standard for ‘modern’ life has been set
• Aspiration to global living standards is leading Indians to adopt new lifestyle products
• Direct influence of western culture happens via everyday interaction with globalized institutions
• What has ‘value’ is based on underlying cultural assumptions
Underlying prosperity leading to expanding lifestyle
Related to importance of western culture in their everyday life
King Regent•Politicians•Family biz owners in t3,rural
Mister Pukka•Professionals (doctors, law) in tier2•Family business owners in tier 2
Big Boss•IT and medical sectors in metros•Lawyers, bankers, execs in metros
Dharam Vir•Big farmers•Government officials in tier 3•Shop-keepers in t1, t2
Babu Moshai•Academics in tier 2 and smaller tier 1 institutions•Professionals in vernacular media
City Sahib•Class 1 civil servants and army•Academia in premier institutes•Professionals in English media, BPO
Workmen•Small farmers•Barbers, domestic help
Oliver Twist•Staff in mid-market services•Workers in semi-skilled jobs
Metro Slick•Staff in malls, cafes, upmarket restaurants, salons
Leading to the following household segmentation for propensity to adopt:
House-hold
income
Strength of direct linkage to western institutions**
Within households, younger people have higher propensity to adopt new lifestyle products
21
* Primary survey from shopkeepers Strength of direct linkage to western institutions
King Regent
Mister Pukka
Big Boss
Dharam Vir Babu Moshai
City Sahib
Workmen Oliver Twist Metro Slick
Expansion can be done in stages by targeted widening of ages and household types of users
House-hold
income
0 to 10 10 to 20 20 to 30 30 to 40 40 to 50 50 to 60
Segment’s value distribution by age*
Current users
Currently users focused in the 20s in Big Boss and City Sahib households
Phase 1 increases frequency & expands to 30s, 40s age segments in these households
Phase 2 and Phase 3 focuses on expanding to new households in 20s, 30s and 40s
Strength of direct linkage to western institutions
House-hold
income
Strength of direct linkage to western institutions
House-hold
income
King Regent
Mister Pukka
Big Boss
Dharam Vir Babu Moshai
City Sahib
Workmen Oliver Twist Metro Slick
King Regent
Mister Pukka
Big Boss
Dharam Vir Babu Moshai
City Sahib
Workmen Oliver Twist Metro Slick
What are the specific needs of these segments that we want to target?
How do we meet these needs?
Qriusteam
The Big Boss, City Sahibsegments
20s – 30s
Source: Expert interviews, primary data
Profile• Modern progressive youth• Smart, compete globally• Riding on economic progress - High
disposable income• Take own decisions• Looking good is important• Less sensitive to price
30s – 50s
• IT and medical service professionals• Lawyers, bankers, other execs• Class I civil servants, army personnel• Professional in media, BPO
Profile• Educated adults who have seen the
economy transform• Worked hard for success• Respect roots but enjoy ‘high class’
living, status is important• Partly value & partly class
conscious, family important
•Based on product information and brand association•Through visits to salons, beauty clinics & malls•Magazines & word-of-mouth
Purchase Decision
•Based on family preferences, brand & product value•Also buy for teenagers in Indian homes•Magazines, televisions & word-of-mouth
Purchase Decision
Repeated use of conditioner leads to long-term quality of hair
Oil and shampoo as a combination are not enough for healthy, beautiful hair
Push positioning using celebrity ads and salons
Society will judge you on your looks, including hair
Oily hair is not connected with upper class aesthetics nowadays
Push positioning through product placement in primetime soaps
Positioning Strategy
The Mister Pukka, Metro Slick segments
20s – 30s
Source: Expert interviews, primary data
Profile• Full of aspirations • Attracted towards modernity• Value conscious but not for
products symbolizing better living• Adaption accelerated by Big Boss• Looking good indicator of status• Want to feel different & special
30s – 50s
• Professionals (doctors, lawyers) in Tier II• Family business owners in Tier II• Staff in malls, cafes, upmarket
restaurants, salons, tourism industry
Profile • Adaption rate decreases with age
and value consciousness increases• Looks are important only on
special occasions• Unstated/secret need to look sexy,
young, beautiful• Family is important
•Oscillation between own aspiration and family needs•Beauty products used to express identity•Influenced by advertisements and branding
Purchase Decision
•Women of the house take shopping decisions•Buy for teenagers as well in Indian homes•Associate with ideal mothers and wives
Purchase Decision
Beautiful hair helps gain self-confidence, social upwardness
Oil and shampoo as a combination are not enough for healthy, beautiful hair
Push positioning using celebrity ads and promo deals
Looks including hair a component in family’s prestige
A good mom takes care of family’s hair care needs
Push positioning through family based ads and product placement in primetime soaps
Positioning Strategy
The King Regent and Babu Moshai segments
KING REAGENT (20s – 40s)
Source: Expert interviews, primary data
• Wealthy, well respected individuals in small towns & big villages
• High disposable income, price insensitive, spend on status symbol
• Don’t spend much on beauty. Most toiletries buying habitual
• Family is important
BABU MOSHAI (20s – 40s)
• Politicians• Family business owners in Tier III & rural• Academics in Tier II & smaller Tier I• Professionals in vernacular media
• Slow adapters, slow lives• Value conscious, need based
shopping, price sensitive• Modernity is a marketing gimmick• Close to their roots & nature• Family & values important• Not affected by economic flight
•Ladies of the house take most purchasing decisions•Not much exposure to fashion trends except from television & movies
Purchase Decision•Lives are about their own community and work •Watch TV and have strong association with movies •Men do most shopping, decisions affected by women
Purchase Decision
Looks including hair a component in family’s prestige
Oily hair is not connected with upper class aesthetics
Introduce herbal variants to bridge perception gap
Prestige based ads and primetime soaps
Looks including hair a component in family’s prestige
Introduce herbal variants to bridge perception gap
Push positioning through touch points promo deals
Positioning Strategy
Based on these consumer insights we have created three broad positioning statements
Source: Expert interviews, primary data
“It’s a Beautiful Life”
‘Aaj Duniya Hamari Hai’ – Today the World is Ours
Oil nourishes hair root and scalp, conditioner nourishes hair strand
• Showcasing the idea of comfortable living• Pushing the idea that beauty is important thus encouraging beautifying yourself
• Setting a youthful mood
• States ambition, aspiration and the idea of self-confidence• Also shows that the world is new and changing ; and the rules have changed
• Gives a clear logic for why conditioner is needed• De-positions oil
• Nonetheless positions oil and conditioner as complimentary
“It’s a Beautiful Life”
‘Aaj Duniya Hamari Hai’ – Today the World is Ours
Oil nourishes hair root and scalp, conditioner nourishes hair strand
Our 3-year Media rollout plan ties our positioning strategy to a clear channel roadmap
CYCLE
CORE THEME
MONTHS
MEDIUMTV PR Internet Radio Print Media
0
1. Educate the consumers: Create an awareness about oil and conditioner 2. Portray
the difference between oil and conditioners; project them as complimentary
products
Pre-campaign Teaser commercials on Oil versus conditioners
1. “Indian hair needs not just oil “
2.Hair health trivia in malls and transits
Facebook and Twitter activities commence
You can make the difference to your
hair's long health 10 sec commercial
Hair needs long-term care! On TOI, Femina,
Cosmopolitan
June Making people realize about
the hair nourishing vs. conditioning cause
1. Transit advertisements
2. Posterior of autos 3. News channel coverage
Website launched with "check your hair
type" app
Launch of ads to show difference is made by regular
usage of conditioners 30 sec commercials
"You can make a difference to your hair's long health" Full and half page
length ads
1 Connect with the audience via a compelling story
July How can you carve your hair story?
Concept popularized through in-mall
promotional activities
Blogging, tweeting about the campaign
starts. People update their tweets and status messages
How you can carve your hair story? ads. Adv. For goal 1
AugustRemedies to make hair conditioning a successSeptember Event promotional
ads. Adv. For goal 1
2
Connect with the Indian family and make people
realize how their daily hair care habits could go a long
way
October Family values: Oil and conditioner good for hair Launches calendar for
an average Indian's monthly Hair care
Get customer feedback through an online survey. Viral
videos on Consumer feedback
Adv for Goals 1 & 2November
DecemberCustomer testimonials focus
on interviewing satisfied customers
3Connect with the audience
through the holiday festivities and season its
opportunities
January
Season's greetings themes ads Rope in celebrity
New year resolution campaign. People
post their resolutions to give hair care
requisite attention, starting with conditioning
Season's greetings & tips on how to get the right conditioner to help turn a new
leaf in your personality February
March
4 Brand buildingApril Office goers, housewives
joining ads; use conditioners daily
"I care for my hair" freebies
"Keep your hair cool this summer with Dove conditioner"
short campaignAdv for Goals 1 & 2
May June
Based on our financial analysis, the media plan offers scale and sustained future profitability for HUL
HyderabadBangalore
Mumbai
Chennai
Delhi
Kolkata
Phase-I: 6 metros Phase-II: 14 major cities1
Year 1 Year 2 to 3
0-3
m3
-9
m9
-12
mMap cityAppoint Promotion plan
Establish ~5 billboards/ city
Establish total ~20 billboards/city
PuneNagpur
Ludhiana
AhmedabadSurat
Coimbatore
Faridabad
AmritsarChandigarh
JaipurKanpur
Lucknow
Bhopal
0-3
m3
-12
m
12
-36
m
Map cityAppoint Promo plan
Geogra
phic
al
Expansi
on
Establish ~3 billboards/ city
Establish total ~10 billboards/ city
Financi
al A
naly
sis
Yr 0 Yr 1 Yr 2 Yr 3 Total Capex Expenditure (Rs. Mn) 36 Revenues- Rinse-off (Rs. Mn) 7662 18476 47307 Revenues- Sachets (Rs. Mn) 215 386 693 Revenues-Leave on (Rs. Mn) 9295 32756 117604 Total Revenues (Rs. Mn) 17171 51618 165604 Raw material cost (Leave-on) (Rs. Mn) 72 72 72 Raw material cost (rinse-off) (Rs. Mn) 60 60 60 Packaging material (bottle + sachets) (Rs. Mn) 16511 31627 61747 General Expenditure (Rs. Mn) 12 12 12 Advertising & Sales promotion (Rs. Mn) 477 477 477 Total Operating Expenses (Rs. Mn) 17132 32248 62368 EBITDA (Rs. Mn) -36 39 19370 103236 Depreciation (Rs. Mn) 0 36 0 0 PBT (Rs. Mn) -36 3 19370 103236
0 1 2 3-50
50000
100050
Years
PBT
(Rs.
mn)
0
Rinse-off80%
Leave-in20%
~ 30% margin
AssumptionProduct Mix
~ 25% margin
Break-Even analysisCash flow analysis for Company
Break-even achieved in ~ 1.5 yrs
Deep knowledge of consumer needs & diverse habits forms the basis of category wise performance
Second-tier cities like Rajkot and Aurangabad, for e.g., are growing fast but lack awareness about post-shampoo hair care
Additionally, a diversity in top consumer hair needs
Tier 1 Sec A
Tier 2Sec A/B
Tier 3 Sec A/B
Rural Sec C/D
Pre-wash habit Oiling Oiling Oiling Oiling
Shampoo Usage days
Conditioner usage days
Preferred packs Tubes Bottles Bottles/Sachets Sachets
Tier 1 Tier 2 Tier 3 Rural
Hair Fall 3 3 1 2
Damage 2 4 5 5
Longer/ Strong 4 5 3 1
Dandruff 5 2 2 3
Shine 1 1 4 4
Sharply tailoring market development
Need for Awareness on conditioners
Nee
d fo
r pro
duct
In
nova
tion Tier 1
Tier 2 & 3
Rural
Pen Profile of theTarget customer
• Mid-twenties to late-thirties. Female. Independent and Working women, mostly in a fast paced-work place
Demographic Profile
• Socially conscious, eager to please, fashionable, desire to look young, beautiful and fit within the peer group
Psychographic Profile
• „On-the-go“women, specific need users. Trust in big brands important
Behavourial Profile
Among competitors in the Tier 1 cities, HUL compares favorably on most of the relevant parameters
What does the Customer look for in a Conditioner?*
38%
42%
1%
10% 9%Specific functional usageBeauty enhancement Product naturalnessPeer review of condi-tionerBrand loyalty
* Based on Primary Research (43 respondents)
* All competitors analyzed are within the city of Banga-lore
Mark
et
Analy
sis Attributes DOVE SUNSILK PANTENE L’OREAL
Price High Intermediate High Very High
Promotion Very High High Intermediate Intermediate
Distribution Very High High High Low
Range of Conditioners
High High Low High