Customer Perceived Value

In an increasingly customer centric market, it is indispensable to understand the concept of ‘Customer Perceived Value’. Let’s try to delve into this marketing concept using the hair oil industry as an example (specially, Parachute hair oil).

The customer today has a plethora of choices. 

The question then is: Why should (s)he choose your product?

The spoilt-for-choices customers are now actively engaged in picking out alternatives as they seek optimal return on investment. The idea is to give customers enough reasons to buy your product over others, along with giving them an incentive to come back for it again. These reasons are what constitute the “value” for the customers.

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Mathematically, Customer value = Total benefits - Total Costs.
‘Customer Value’ must not be mistaken for the lowest price alone. If that were the case, customers would flock towards the brand that is able to offer the lowest price. As we all are aware that this is not the case. Customers take into account numerous factors, consciously or sub-consciously. Some of the factors are as mentioned below :

• quality of the product
• convenience
• performance and reliability
• availability
• post purchase maintenance and feasibility
• utility

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So, the value for the customer extends beyond just the monetary benefit.

Parachute is a market leader in the category of hair oil. Let us study how Parachute has been able to deliver customer value.

1. Availability and Accessibility:

The key to good availability and accessibility is a sound distribution channel which ensures deep and wide penetration. Marico distribution network spreads over 30 lac retail across India and also reaches the international market. 

Marico’s website says “Currently present in 25 countries across emerging markets of Asia and Africa, Marico has nurtured multiple brands in the categories of hair care, skin care, health foods, male grooming, and fabric care. Marico's India business markets household brands such as Parachute Advansed, Saffola, Hair & Care, Nihar, Mediker, Revive, Manjal, Setwet, Zatak and Livon among others that add value to the life of 1 in every 3 Indians. The International business offers unique brands such as Parachute, Hair Code, Fiancee, Caivil, Hercules, BlackChic, Code 10, Ingwe, X-Men, L'Ovite and Thuan Phat that are localized to fulfil the lifestyle needs of our international consumers.” Marico charted “an annual turnover of Rs. 47 billion (Financial Year 2013 - 2014) across our portfolio.”

A sound distribution channel can be made possible only if there is sufficient manufacturing in place. Extrapolating on the classic concept of Economics, the demand needs to be met by increasing supply to reach equilibrium.Marico has been awarded by India international Logistics forum (IILF) for ‘innovation in supply chain award 2011’ for ‘Best strategy innovation in supply chain’ category.Marico has manufacturing facilities at Goa, Kanjikode (Kerala), Jalgaon (Maharashtra), Saswad (Maharashtra), Pondicherry, Daman and specialized manufacturing division for its hair care products in Uttaranchal. 

Making the products of the brand is not enough, it is important to publicise the fact that it is available, which means visibility needs to be increased. Marico thus collaborated with therapy centres, salons and spas

2. Price:

While cost may not be an important factor for loyal customers but it is a deciding factor for others. Parachute provides a wide range of options to customer to suit his/her pocket size.

3.Variety and Utility:It provides product variants in form of Parachute Coconut hair oil (hair oil with nourishing nutrients of coconut), Parachute Advanced hair oil (rich hair oil with deep fragrance), Parachute Jasmine hair oil (Lingering fragrance delivered in a completely non-sticky format), Parachute Therapie(A Therapeutic solution to reduce hairfall in 45 days), Parachute Advanced Starz hair oil (specially created for kids of 3-10 years).

Parachute uses natural contents mostly in its pure form and hence oil has nourishing effect, which entices both the target groups- traditional (who are concerned about their products being organic) and the modern youth (who like experimenting with their hair). For example, Parachute Hot Oil has herbal ingredients (traditional) and takes only one hour to show results (suitable for modern, fast paced life). 

4. Convenience:

Parachute was the first brand to package oil in plastic bottles. It also pioneered the Re. 1 bottle shaped sachets.

5. Quality and reliability:Parachute positions itself as a brand that offers 100% purity and quality. Even as part of the labeling, Parachute mentions “100% Pure Coconut Oil”. As a testament to Parachute’s reliability as a brand, Superbrands voted Parachute a Super Brand in UAE & Bangladesh, Parachute ranked the 2nd Most Trusted Brand in Bangladesh, and Hair Code voted it to be in Egypt.  

6. Experience

Parachute has not only focused on its core but also extended its effort in improving the holistic experience on using the product. Example: Parachute Advanced Personal Champi is a combination pack, consisting of a Parachute Advanced 300 ml bottle and a head massager. Parachute Advanced Hot Champi is a combination pack consisting of hair oil warmer and a bottle of Parachute Advanced coconut hair oil.