Fast moving consumer goods (FMCG) major Marico plans to enter the cooling hair oil segment by launching two products — Parachute Advanced Cooling Oil and Nihar Naturals Cooling Oil. The products are currently being test-marketed in a few rural belts — Parachute in Andhra Pradesh and Nihar cooling oil in Bihar and Jharkhand.
“At Marico, we keep fine-tuning the mix till we are satisfied that the model is scalable,” said Sameer Satpathy, head of marketing, Marico.
Marico had entered the cooling oil segment earlier with ‘Maha Thanda’, but the product never went national. The current move is seen as the company’s attempt to gain a bigger piece of the overall hair oil segment in India, which is worth about Rs 3,000 crore, out of which Marico holds a 21 per cent market share.
There are several regional players in the segment with a huge presence in rural markets. Emami’s Navratna, for instance, is the biggest player in the cooling hair oil segment with a market share of around 70 per cent.
The Rs 300-crore brand, which has a prominent presence in Andhra Pradesh, seems to have left no stone unturned in its strategy to market Navratna. As far as the advertising goes, it has managed to rope in Shahrukh Khan and Amitabh Bachchan as national and Telugu actor Mahesh Babu as a regional brand ambassador.
Marico, on the other hand, has some regional advertising that is handled by McCann Erickson and Bartle Bogle Hegarty (BBH) for Parachute and Nihar coconut oils, respectively.
“Our cooling oil will be differentiated on the fact that it will have coconut, which means it will be coconut-based and have cooling properties”, said Satpathy. Analysts say that although there are major hurdles for Marico’s new brands, there are enough opportunities in this segment.
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“This segment is difficult to break into and cooling hair oil is not a very aspirational product. Marico clearly seems to be riding on the success of its existing status in the market as it has a significant share in the branded market. Though cooling oil is more expensive, the price factor can be overcome with aggressive product promotion”, said Purnendu Kumar, an analyst from Technopak India.
Industry experts say Marico cannot afford to miss out on the Rs 450-crore cooling hair oil market and could expect 20-30 per cent of its revenue from the segment.
Even without the cooling oil variant, both Parachute and Nihar enjoy over 50 per cent market share in the branded hair oil segment. Parachute coconut oil in rigid packs grew about 13 per cent sequentially in volume in the April-June 2009 quarter. During the period, its hair oils in rigid packs grew 9 per cent.