Segmentation, Targeting and Positioning

Segmentation:

Market Segmentation is identifying and categorizing of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Generally three criteria can be used to identify different market segments:

1.   Homogeneity (common needs within segment)

2.   Distinction (unique from other groups)

3.   Reaction (similar response to market)

    

Hair oil category is aimed at consumers in both segments- urban and rural regions as it is a weekly used, essential product. Parachute has its market base in India as well as international markets in South-East Asia, Gulf, Bangladesh, UAE and Egypt. It focuses explicitly on middle aged and young women. In order to penetrate the rural market, Parachute came up with bottle shaped Re 1 sachets. Also, variations of bottle sizes are easily available too.

Targeting:

Targeting refers to direct all activities, campaigns and energy towards a specific market segment or a section of people. Following are the types of market targeting:

1.   Mass Target Marketing

2.   Individual Target Marketing

3.   Differentiated Target Marketing

4.   Product Specialized Marketing

5.   Market Specialized Marketing

6.   Niche Target Marketing

Initially,  the target market was females of all age groups who used coconut oil. However, Parachute has expanded its target audience had has now extended its product line for kids (Parachute Starz) and for people with fair fall problems (Parachute Therapie) or people who seek fragrant oils (Parachute Advansed Jasmine).

Positioning:

Positioning is a marketing strategy that aims to make a brand occupy a distinct position, and differentiate itself from other brands in the customer’s eyes. Companies apply this strategy either by emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. It is said that once a brand is positioned, it is very difficult to re-position it without destroying its credibility.

Parachute has always established itself as a natural product for healthy hair. Parachute hair oils have been positioned as everyday use hair care products. Parachute has been able to leverage this position as Parachute is a pioneer and hardly had any competitors earlier.Parachute always sticks to its core values and position of being a coconut hair oil brand that offers purity and quality. Building on that credibility, Parachute keeps pivoting around its position and modernizes its appeal according to the demand.

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.

Source

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

Source

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.

Introduction

Understanding Marketing Concepts: Parachute Hair Oil Case Study

Parachute has created a brand name for itself as the blue bottle has become iconic in the hair oil category. Parachute has risen to be the market leader with approximately 53% of market share in a category which once was a 1500 Cr industry dominated by unbranded oils in India. It is then not surprising that Parachute has become the flagship brand of Marico Ltd. Marico positions itself in the ambit of “beauty and wellness”.

The pioneer in packing hair oil in plastic bottles capitalized the insight that having healthy hair has become an important concern in an age wherein harsh chemicals are being rampantly applied, along with the challenge of managing different types of hair and hair problems in our stressful lives.

Parachute has been reputed for its purity (it guarantees 100% pure coconut oil).

In terms of Maslow’s hierarchy of needs, using hair oil would come under esteem needs, people who are concerned about their appearance and status in the society, and about hygiene habits usually demand hair oil.

While initially the target market was females of all age who used coconut oil, Parachute has now introduced various brand variants like Parachute advanced, Parachute Therapie, Parachute advanced starz etc, thereby expanding target market to consumers with hair fall problem, consumers who don’t want sticky oils and look for fragrance, customers who have kids of age 3-10 years.

As it has been evident from the kind of advertising that Parachute reflects that today, one of its main target is trendy youth who have moderate disposable income and like experimenting with their hair, hence want good hair care product. Parachute has delved into various nuances and insights relating to usage of hair oil, as can be seen through its advertisements. Parachute’s ‘Gorgeous Hamesha’, ‘Lambe baal koi bhule to kaise’, ‘1 hour champi kiya kya’ have been very successful taglines. The brand has been endorsed by celebrities like Deepika Padukone, Diya Mirza, Yuvraj, Sreesanth. Advertising is usually heavy before Holi (non-sticky hair protection solution) and also during winters (non-freezing oil).They also did a campaign with “weight-test” with the proven research statement that ‘pure coconut oil is heavier than manipulated’. 

While Parachute has extended its product line heavily, it has always maintained its core value of being pure and safe. This also reverberated when Parachute came out with tamper proof seals for its packaging. This modernization and evolution of the brand has helped increase its consumer base.