Herbal Essences Proposed Hair Oil Range Essay

The Indian hair oil market comprises over 50 % (approximately ?6664 crores) of the hair care market (approximately ?13000 crores). In addition to ‘champi’ being a part of the Indian culture since time immemorial, the recent rise in hair damage due to lifestyle, environmental changes and styling and hair colouring has led to increased consciousness among urban population. This has led to a healthy double digit growth in this market for the last 5 years: 20% rate of CAGR growth by value and 12. 5% rate of CAGR growth by volume).

Light hair oils comprising around 15% of the hair oil market (approximately ?950 crores) which tend to be non-sticky have reported consistent increase of about 10% over the last 5 years. The market is concentrated in the urban areas due to comparatively high cost, consciousness of the urban population and their willingness to try new products. Scented hair oils seem to be preferred in this category. •Company : The core strengths of P&G are consumer understanding, innovation, brand building, go to market capabilities and scale.

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One of the things P&G does absolutely brilliantly—it’s a company hallmark—is to start with the customer, to understand the customer’s relationship with that category, its products, and the way they’re purchased. It understands how products are used, how they appear in the store, and what those products mean to customers’ lives and their psyche. When it acquired Clairol thereby acquiring the Herbal Essences brand, an almost 35 year old mass market hair care brand for women was in a long term decline phase. To revive it, differentiation was necessary.

P&G successfully identified women of Generation Y as the new target. This was primarily because, at that time there was hardly any brand that catered to their needs well. Hence it went all out to create a vibrant brand with attention to detail and the brand began to grow again, with sales growth rates in high single digits. Currently, the company sells shampoos and conditioners with a natural and herbal base. Thus it already has an established brand that can be leveraged to foray into the hair oil segment. This will allow them to utilize their xisting capabilities to widen their product line while offering a ‘Complete Hair-Care Package’ to their customers. •Competitors: There is little competition in the light hair oil segment. The major competitors include have Bajaj’s Almond Drops, Marico’s Parachute Scalp Therapie and Hair and Care. These companies offered a single product item in this category. There was no company that offered an entire product line to cater to this market. Recently Dove launched a line called ‘Elixir’ that offers range of 3 hair oils as a separate offering.

Thus the scope for capturing a major portion of this market is tremendous. With a focus on natural and herbal ingredients amid a range of products seen to be highly chemical, hair oils from the house of Herbal Essences could leverage their brand to fill this void. Also, as it already has shampoos and conditioners that complement each other, adding oils to this combination will complete the hair care package. Existing packaging, distribution channels and other resources could be utilized to create high value at lower cost.

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