ATL, BTL

The terms ‘Above the line (ATL)’ and ‘Below the line (BTL)’ came into being when way back in 1954 when Proctor and Gamble started using various payment rates to its advertising agency based on what its target audience reach was.

‘Above The Line’ (ATL) advertising is an advertising where mass media is used to promote brands to reach out to the target consumers which includes radio and television advertising, conventional media as we knows it, internet as well as print. Here, the communication is targeted to a thick spread of audience, and is not specific to individual consumers. ATL advertising attempts to reach out to the mass as consumer audience. In 2012, Parachute decided to own the most significant positioning platform “World’s Best Hair.” The campaign featured the celebrity endorser Deepika Padukone which was on air in most of the channels. The campaign involved  digital in a big way and was based on a research finding that consumers of Parachute Advansed Hair Oil had better hair than the non-users. It was not just the research but the positioning platform which was totally strong and influential. By taking the ownership of “World’s Best Hair” and backing it up with a research, Parachute Advansed moved a step up in terms of positioning. The brand put itself into a strong position and compelled the competitors to do something powerful to compete with it. As for the consumers are concerned, the campaign not only bolstered their choice of using Parachute hair oil for hair protection but also induced non-users to try out the product.

‘Below the line’ (BTL) advertising is mostly about one-to-one communication and involves the allocation of pamphlets, stickers, brochures, promotions, handbills placed at point of sale, on the roads through placards and banners. Product samplings and demos at places like market places or malls or residential complexes are also a part of it. For example, moving hoardings or road shows with the advertisement of the product, and vehicles with promotional staff interacting with people substantiating the product and distributing literature on the product. Less conventional methods are used of advertising being very distinct channels of advertising unlike ATL. It also contains telemarketing PR, sales promotions targeted at particular potential customer and direct mail promotional campaigns.Since internet penetration is low, Parachute got tied up with magazines, attached bottle of Parachute Advansed Coconut Oil and a pre-addressed envelope sent with every copy with message, ‘try this and if you like it, recommend it to a friend by posting back envelope to us.’ Friend would later receive a letter, an oil bottle and two envelopes.

However, digital media in today’s world has more or less broken the limits of ATL versus BTL. Digital communication has the potential to address both at the same time. Interestingly, there is a new phrase called Through the Line, or TTL, which assimilates activities of both ATL and BTL. The concept of line is sinking gradually with agencies increasingly using the Integrated Communication approach. And to recapitulate all this, O&M’s Piyush Pandey can be quoted who rightly exclaims that “It is not a question of mass media versus below the line or above-the-line anymore. It is an era of mass media plus the line.”

Distribution Decisions

Channel Design:

Various channels for Parachute Hair Oil include - wholesalers, retailers, sales agent, and advertising agencies.

Parachute Hair Oil employs both pull and push strategy. A push strategy uses trade promotion money, manufacturer’s sales force or other means to induce intermediaries to carry, promote, and sell the product to customers. The benefits that Parachute Hair Oil provides are well understood by the customers. Parachute uses majorly a pull strategy product which use promotion, advertising and other forms of communication to a very large extent.

Value: The Company should first decide and narrow down on a target market, target group and then take into consideration the demand of the product. Designing of the supply chain backward from that target group should be done leading to a demand chain planning and thus selecting a value network.

Decision Making:

Analysing Customer Needs and Wants:

Consumers choose the channels they prefer based on convenience, price as well as their shopping motivates. Parachute hair oil is often used in small quantities by consumers. The waiting and delivery time is almost nothing as the product is available readily to be picked up from the shelf at any store.

Establishing Objectives and Constraints:

Channel objectives vary with product characteristics. Parachute Oil products are transported in bulks to stores and therefore channels that minimize the shipping distance and handling amount is used. This provides appropriate level of service and helps reduces the cost.

Distribution Decision: The distribution channels help businesses meet their marketing sales objectives. Marketing channels not only serve the market and but also help make markets. These channels must be in accordance to the company's strategy with respect to segmentation, targeting and positioning.

Importance of Distribution:

1)  Distribution constitutes a significant competitive advantage and is designed to save on cost, improve and increase efficiency, provide easier transactions, provide larger customer base, and allows businesses to focus on other aspects of the organization.

2) Businesses with brand strategy, strategic promotion and convenience for customers is provided.

3) Channels that are poorly chosen can have long term consequences and can ultimately lead to a failure in the market.

Retailing, Wholesaling and Logistics

Wholesaler: Sell at a margin of 8-10%. Sell at local Kirana stores in case the stock is left over.

Kirana Store: The product is purchased at MRP and a margin fixed by the distributor of the company is earned.

Super Markets: Buyers decide on pricing Strategies depending on the locality and nearby retailers. Products can be sold at a discount of Re1 or 50 paisa for Parachute Hair Oil.

Hyper Markets: They sell in packs of 3 and reduce the total MRP by Rs 5-8. Small SKU's are at times available for free with the product.

Branding

Branding is defined as the, “ name, term, sign, symbol or design or a combination of them intended to identify the goods and services of one seller or a group of sellers" by the American Marketing Associations (AMA). Branding is aimed at making the product stand out so as to communicate the look and feel of the product to the potential targeted customers. Branding is not restricted to the logo and tagline of the product but incorporates inculcating various strategies that helps in the better positioning of the product or services in order to aid better recall of the product by the customer at the time of purchase.

Elements of Branding (Product-Parachute)

Brand Awareness

Parachute creates awareness about its product through various mediums like print, radio, television and digital.

Eg. Campaigns like “Shudhta ki Pehchaan” and “Kamaal Ka Dhakkan”

Kamaal Ka Dhakkan Campaign

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Brand Imagery

It projects itself as a herbal solution oil for hair care. It uses colors like Blue and Green for this purpose.

Slogans

It uses slogans like “gorgeous humesha”, “Lambe baal bhule to kaise”, “Worlds best hair” and “100% Purity”.

Logo

The logo is simple and resonates it purpose of being a herbal oil. The color code is green and blue and a simple green image of a coconut is used to serve the purpose of it signifying the oil being made of coconut.

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Brand Promise

Parachute assures its customers on delivering healthy nourished hair through the use of the their product. It also ensures repairing damaged hair and the betterment of the hair quality in terms of volume, texture, length and various other aspects.

Brand Personality

The brand has constantly being trying to change itself from the traditional old hair caring brand to a new advanced form of hair care solution in order to connect to the younger generation customers. From being the first preference of the head of the family, it has a major crossover to being a choice of today’s informed trendy youth who are taking hair care problems seriously.

Brand Credibility

Parachute has maintained its image as a “pure coconut oil” and has not been involved in any crisis till date. This has created and given the brand a very good credibility in the minds of the customers that is often envious to the other brands. It is an affordable, non sticky hair oil available in various fragrances and used extensively by both urban and rural areas.

Organizational buying behaviour and buying decision

Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

Major Influences on Business Buyers

Environmental factors:

Expected demand for the product that the buying organization is selling, expected shortages for the item, expected changes in technology related to the item etc. are the environmental factors that will have an effect.

Organizational factors:

Changes in purchasing department organization like centralized purchasing, decentralized purchasing and changes in purchasing practices like  long-term contracts, relationship purchasing, zero-based pricing, vendor-performance evaluation are the organization factors of importance to marketers.

Interpersonal factors:

These factors are the relationship between buyers and sales representatives of various competitor companies.

Individual factors:

These factors related to the buyer. What sort of ways of interacting and service are appreciated by the buyers and what ways are considered as irritants? Marketers have to understand the reactions of buyers.

  

Organizational Buying Situations

Straight rebuy:

In this buying situation, only purchasing department is involved. Thet get an information from inventory control department or section to reorder the material or item and they seek quotations from vendors in an approved list.

The "in-suppliers" make efforts to maintain product and service quality. The "out-suppliers" have to make efforts to get their name list in the approved vendors' list and for this purpose they have to offer something new or find out any issues of dissatisfaction with current suppliers and promise to provide better service.

Modified rebuy:

In this buying situation, there is a modification to the specifications of the product or specifications related to delivery. Executives apart from the purchasing department are involved in the buying decisions. The company is looking for additional suppliers or is ready to modify the approved vendors list based on the technical capabilities and delivery capabilities.

New task buy:

In this situation, the buyer is buying the product for the first time. As the cost of the product or consumption value becomes higher, more number of executives are involved in the process. The stages of awareness, interest, evaluation, trial, and adoption will be there for the products of each potential supplier. Only the products which pass all the stages will be on the approved list and price competition will follow subsequently.

Systems buy:

Systems buying is a process in which the organization gives a single order to a single organization for supplying a full system. The buying organization knows that no single party is producing all the units in the system. But it wants the system seller to engineer the system, procure the units from various vendors and assemble, fabricate or construct the system.

Pricing Decisions

Price is the one element of marketing mix that produces revenue while the other produces cost (Kotler). Revenue not only drives the company’s profit margin but also decides how well a product will be accepted by the customers leading to its stay in the market. When deciding a product price, a company needs to remember

·         The past, present and current market scenario

·         Competition

·         Customer

·         Company’s own status quo (positioning, value proposition, target segmentation)

Product Pricing

Selecting the pricing objective:

The main objective of pricing is to acquire maximum market share. Parachute is sensitive in its pricing strategy and is not that expensive in order to stimulate its market growth. According to 2012 survey, Parachute has a market share of 53% and is the brand leader and the first brand in that particular segment.

Determining Demand:

The Indian customers prefer small frequent purchases. Parachute hair oil is available in different sizes thereby providing all the options to its customers. Parachute faces tremendous competition from Vatika, Bajaj, Dabur, etc,  but it still remains  the leader. It targets the rural and the urban population both. The price Catalog of Parachute Hair Oil is as follows.

Normal 200ml- Rs39, 20ml- Rs5; mini pack- Re1; Parachute Therapy 50ml- Rs190 Parachute Advanced 80ml- Rs27, 170ml- Rs48, 300ml- Rs80. Customers are loyal to this product and purchase this in spite of small changes in prices.

The price of the oil also differs in various distribution channels:

For Example:

Product	Parachute advanced tender coconut hair oil (200ml)
MRP	Rs85/-
Kirana store/Medicos	Rs85/-
Easy day	Rs84/-
Big  Bazaar	Rs83/-
Whole seller would probably sell at even cheaper price

The difference in price is very minute through the different distribution channels but has no effect on consumer’s choice preference.

Estimating Costs:

The cost of the oil is mainly influenced by its raw materials, packaging and ingredient oil prices. The cost is different for different variants as the key ingredients and packaging differs from product to product.

Analyzing Competitors Cost, Pricing and Offers:

The brand Parachute enjoys tremendous amounts of brand loyalty from its customers. Competitor’s presence has never really affected Parachute but it is crucial for it to strategize on its pricing at par with the competitors to attract new customers and hence needs to subtract the cost of additional features.

Selecting a Pricing Method:

Parachute aims at pricing its products so as to suit the requirements of both rural and urban areas. It aims at being non expensive but also feasible and appropriate at the same time.

Selecting the Final Price:

The final price is selected keeping in mind the various additional factors including the impact of other marketing activities, company pricing policies, gain and risk sharing pricing and the impact of price on other parties.

Marketing Mix

4 P's of Marketing: Product, Place,  Price and Promotion.

Product - 'Product' refers to the variety of products or services that a company is selling including  quality, reputation  and branding of the product. The variants of Parachute (Product Depth) are Parachute Advansed, Parachute Scalp Therapie and Parachute Jasmine, etc. 

Price - Price is the amount of money for which the product is available. Parachute oil products are available in different forms and also in different sized packs. Parachute: 200ml- Rs 39, 20ml- Rs 5, mini-Re 1; Parachute Jasmine: 500ml-Rs90, 50ml-Rs 12; Parachute Therapie: 50ml-Rs 190; Parachute Advansed: 80ml-Rs 27, 300ml-Rs 80. The different sizes and accordingly different prices ensure that Parachute affordable for all.

Place - It is the location where the shops selling Parachute exist and where this product is actually sold. Parachute hair oil is easily available in urban as well as rural India and also a few other countries where it is expanding its market. It is available in supermarkets and kirana stores alike.

Promotion - Parachute promotes its product by advertising through Print,  Digital Media and Television. It has celebrities promoting the brand such as Deepika Padukone and Yuvraj Singh. Advertising is especially heavy before Holi and during winters. Campaigns like '1 hour champi kiya ' help remind people about the benefits of oiling before hair wash. Sales promotion such as 20% extra was also made on the 200ml pack. This creates awareness among the people and generates more customers.

Five Product Levels:

Core benefit:  For Parachute hair oil, The actual service that the customer is buying is strong and healthy hair.

Basic product is generated by the company as it provides with customer benefit. The company is the first to provide such a product with a fresh design and in a new form. Marico created the basic product, Parachute Hair Oil.

Expected product: It is the reaction to all the products available in the market. Customer compares the competitors such as Bajaj Almond Oil, Dove Elixir, etc.

Augmented Product: It points towards product differentiation. It explains why variants of Parachute Hair Oil were introduced.

Potential product: The company or the innovator of the product has this aspect in its hands. Competition will also have potential product as it innovates to create products that can compete with the company's product. This would be an impetus for innovative line extensions, product line filling and stretching.

Market Sructure and Competition

Competitors are not really a trouble if they are dealt with and understood pro-actively.  They give insights of your current position relative to them and when do you need to make changes in your management to outrun them. Competition makes the companies want to stay out of their comfort zone and put efforts in delivering exceptionally. If you know your competitor well, it can help you make assumptions about their futuristic decisions and guesses and act accordingly.

Competition analysis is a learning process which helps you knowing about your competitors in and out. Parachute, despite being the world’s largest selling coconut hair oil, is subject to competition. 

Here are the competitors of Parachute:

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Direct competitors are competitors who compete against the brand in same product category while indirect competitors are competitors who can act as a substitute for a product. Parachute coconut oil is facing direct competition from Vatica Enriched Coconut hair oil since both are in the same category. Now, brands like Bajaj Brahmi Amla oil, Dabur Amla hair oil, Bajaj Almond drops et cetera are substitutes for Parachute coconut oil since they also offer hair care, but with different type of oil. If customer prefers other types of oil and is unhappy with Parachute’s sticky oil, they might just shift their preference to any substitute.

This is how the competitors differ with each other.

The demand for hair oil is very elastic, hence product differentiation and positioning plays a very important role in carving out a niche and eliminating competition, thereby increasing market share.