Hair Colour Shampoo

Hairsation Coloring Shampoo Marketing Management Report

SITUATIONAL ANALYISIS

MARKET SUMMARY

Segmentation

For our product we decided to survey the market and then carefully choose a level of

segmentation. We choose segment marketing i.e. identify large groups within the market

with similar characteristics and target either one or a few of them. This decision was

based on the fact that although the market consisted of people with the same need i.e. to

colour and shampoo their hair, but the market varied in other characteristics. The

segments we choose to target consisted of people who wish to colour their hair to hide

their gray hair and also people who would like to colour their hair just for the style. All

our strategies and positioning is targeted towards these segments. Due to the restraint of

resources we also decided to market the product in selected cities of Pakistan, to start

with, namely Karachi, Lahore and Islamabad.

Demographics

Hairsation plans to serve the age group 20 and above, both male and female because our

target market not only consists of those veterans who color their hairs to cover the gray

and to look young and smart but also the young generation who are fashion conscious

and want to have a new look by giving their hairs a new color. As our target market we

have included middle, upper middle and upper class whose incomes are Rs. 20000 and

above because most of the people using hair colors or getting their hairs streaked or

bleached fall into this category.

Institute Of Business Management -1-


Demographics

Age 20 and above

Gender Male and female

Income Rs. 20000 +

Social class Middle class, upper middles, upper class.

Behavioral Factors

Hairsation hair coloring shampoo provides benefits such as Beautiful different colors

with convenience of shampooing thus keeping you up to fashion and giving a smart look

and is meant for Regular, occasion and special occasion users and is expected to be used

by heavy users and light users. Heavy user market consists of those who shampoo almost

daily and also want to maintain or change their hair color with Hairsation as well as light

users who shampoo twice or thrice a week. As far as the buyer’s readiness stage is

concerned, most of the people (according to our survey) are aware of hair colors and but

are uninformed about a hair coloring shampoo as this for the first time in Pakistan that a

hair coloring shampoo in a liquid form is being introduced, consequently resulting in

enthusiastic and positive response.

Behavioral

Purchase occasion Regular, occasion and special occasion.

Benefits Beautiful different colors with convenience

of shampooing thus keeping you up to

fashion and giving a smart look.

User status Potential users, first time users and regular

users of hair colors

Usage rate Heavy users and light users



Readiness stage Aware but uninformed and are intending to

buy

Attitude toward product Enthusiastic and positive

Market Needs

The Basic need that we are trying to satisfy, by introducing Hairsation hair colouring

shampoo, is that of colouring hair. But to successfully market our product we need to find

out why, when and what kind of people need to colour their hair.

We found out that people start to colour their hair after the age of 40 so as to hide their

gray hair. These people on averae colour their hair once in 9 days using a hair colour. But

ofcourse if they use a hair colouring shampoo the usage rate will change.

Young people colour their hair to give themselves a new look and to stay abreast with

fashion. They satisfy their need of “colouring their hair” by going to a hair specialist.

Hairsation will provide them with added convenience as they will be able to colour their

hair themselves and at whatever time they want.

Market Growth

Although Hairsation is an innovative new product which is being introduced in Pakistan

for the first time, its basic need is already being satisfied by the hair colours available in

the market therefore our company is just another player in the hair colour industry. The

hair colour industry is currently in the growth stage and the number of people who wish

to colour their hair is growing day by day. Therefore we have a good opportunity to

capture a sunstantial share of a growing market. A growing market does not necessarily

mean success for our company. Success depends on how well we communicate our

message to the target market by means of advertising and positioning and how well we

can promote our product. These strategies are discussed in detail later



COMPETITION

Basically our product competes with two different industries at the same time, our major

competitor is the hair color manufacturing industry and the minor competitors is the

shampoo manufacturing industry because our shampoo contains an additive feature of

coloring the hair as well.

Competitors In The Hair Color Industry

Hairsation’s major competitors include the following:

1. WELLA (KOLESTON 2000)

Wella is a German company and is one of the renowned companies in the hair color

industry. It is the most widely used hair color among its target segment. It aims to serve

the middle and above classes.

2. CLAIROL (nice & easy)

Clairol is an English brand and after Wella, Clairol is the highest selling hair color. It also

sells its product to the same class as Wella.

3. REVLON

Revlon is a well known company for cosmetics products and has a strong brand equity.

Competitors In The Shampoo Industry

Hairsation might be facing competition from the shampoo manufacturers such as P&G

and Lever Brothers who might diversify into hair coloring shampoo industry and with

their strong brand image might steal our market share.



SWOT ANALYSIS

Strengths

Hairsation is the first and only hair coloring shampoo in Pakistan

It is self-applicable and convenient to use, that is it does not require a partner to

apply on your hair

Has no direct competitor

Hairsation is an excellent product when it comes to quality and works perfectly

It does not leave any mark on the skin where as the hair coloring creams leave

their mark on the skin and are hard to remove.

Weaknesses

The overall product is excellent but at the moment our weakness seems to be in

our competitor’s brand name strength as compared to our brand which would be

absolutely new in the market and consequently if our competitors imitate our

product quickly and not giving us much time to establish a strong brand name and

loyal customers then there is a strong likelihood of their taking our market share

We are a new brand in the market so it would be hard for us to persuade the

consumers to use our product (that would be overhauled by heavy advertising and

excellent product quality)



Opportunities

The hair coloring industry is highly lucrative

There are no direct competitors, only industry competitors

The number of hair color users are increasing day by day

Market has a very high growth potential

St. Dani’s has an excellent opportunity to exploit such a huge market with its

innovative features

Stage is set to invade an industry that is already through with the introduction and

xawareness stage.

Threats

Although provided with a number of opportunities, Hairsation is also likely to be

threatened by its major competitors, that is the hair color manufacturers and also by the

minor competitors that is the shampoo manufacturers. They might pose threats in the

following ways:

From Hair Color Industry

Some of the finest hair coloring companies like Wella, Clairol or Revlon might be

able to produce a hair co006Coring shampoo of their own

They may well claim the market share by making people conscious of the fact that

they are the pioneers of hair colors and know it better than any one else.

They might introduce a similar sort of product in an unserved territory.

Sell at lower price

From The Shampoo Industry

Renowned brands like Procter & gamble and Lever brothers might imitate our

product and introduce similar sort of shampoo with distinctive features

They may well be able to acquire some of our market share as they enjoy a

successful brand image.



They might introduce a similar sort of product in a unserved territory.

Sell at lower price

KEY SUCCESS FACTORS

The launch of an entirely different product like the one we have launched involves many

success opportunities as well as a lot of risks. We can expect of our product’s success

because of the following key factors:

Pioneer product

Hairsation is very different from traditional hair colors. With Hairsations, we can color

our hair whenever we desire and it also provides the convenience of shampooing. It is a

pioneer product in both the markets of hair color and shampoo.

Saving of time and money

Hairsations gives the convenience of shampooing as well as coloring hair in a very short

time, as contrary to the traditional hair colors which requires a lot of time. On the other

hand it also saves a lot of money as with other hair colors, we have to spend money on

shampoo as well as hair color. It is very inexpensive to use such a product which gives

both the benefits.

Natural looking hair color

Hairsations gives a nice and natural looking hair color with the facility of shampoo. With

herbal ingredients in the product, it gives an entirely natural look to the consumers.

Valued Product

With other traditional hair colors, you do not have to go through a range of steps as well

as you do not need anyone to help you in application. It does not need any marks on the



skin as with other hair colors. With it also provides healthy and nourishing hair as well as

saves time and money.

CRITICAL ISSUES

As it is mentioned earlier, the product involves some risks which can be critical to its

success. Some of the risks involved with its launch are:

Small Target Market

Basically in Pakistan, about 8% of the people color their hair and there are already a lot

of products in the market and they have built a strong reputation in the minds of the

consumers and gained a satisfactory market share. Because of this reason, we cannot

expect a large market share from the product. Although it is a shampoo too but this

shampoo can only be used by the customers who want color their hair.

Customer expectations

Generally the customer’s expectation become higher from an entirely different product

and there is a risk that if the product does not match with the customer expectations, then

it can never be successful. In such a case, the product will eventually come to the decline

stage. It is very necessary that the product matches with the customer expectations.

Lack of persuasion

With such a new product, it requires a lot of persuasion because people need to have a

knowledge about the different features and benefits of the product. The customers will

only use the product if they have a strong knowledge of the product.

Competitors

There are a lot of competitors in the market which can be very critical to its success. On

the other hand there is also a possibility that the competitors might imitate the new

product.



SERVICE OFFERING

Today, the product and services for a company becomes more and more

commoditized, as now the market is turning towards a competitive environment.

Many companies are moving to a new level in creating value for their customers.

Hairsation, to differentiate their offers, they are developing and

delivering total customer experiences. Products are tangible and

services are intangible, experiences are memorable. Whereas products and

services are external, experiences are personal and take place in the minds of

individual consumers. Companies that market experiences realize that customers

are really buying much more than just products and services. They are buying

what those offers will do for them. The experiences they gain in purchasing and

consuming these products and services. So, this is the best service offered by

Hairsation coloring shampoo comparative to other coloring shampoos in the

market.



MARKETING STRATEGY

MISSION

Hairsation is about passionately delivering better solutions in hair coloring to consumers,

for the ultimate purpose of creating customer value.

MARKETING OBJECTIVE

Hairsation has set the following marketing objectives

Marketing objectives of Hairsation

No. Cities Size (in terms

of units sold)

Hairsation’s

market share in

%

Hairsation’s market

share in terms of

units sold

1 Karachi 40,000 30% 12,000

2 Lahore 28,000 30% 8,400

3 Islamabad/Rawalpindi 10,000 30% 3,000

Total 78,000 30% 23,400



FINANCIAL OBJECTIVES

We want each business unit to deliver a good financial performance and have therefore

set the following financial objectives:

Increase the our annual rate of return to 15 percent by the end of the third year

Break even by the end of the first year

Earn a profit of Rs. 5 million in the second year

Convert the negative cash flows into a positive cash flow by the end of the first

year and produce a cash flow of Rs. 3.5 million in the send year.

TARGET MARKET

After evaluating different segments, the company must now decide which and how many

segments to serve. This is a problem of target market selection. A target market consists

of a set of buyers who share common needs or characteristics that the company decides to

serve; the firm can adopt one of three market coverage strategies

Undifferentiated marketing

Differentiated marketing

Concentrated marketing

But in this case we will focus on the third one, which is concentrated marketing.

Concentrated marketing is especially appealing when company resources are limited.

Instead of going after a small share of a large market, the firm goes after a large share of

one or a few segments or niches. For Example, we know Hairsation is a hair coloring

shampoo meant for those who use hair colors to cover the gray in order to look young

and smart as well as for young, fashion conscious and stylish people who get their hairs

streaked or bleached to get a cool and different look.



POSITIONING

Although we are not direct competitors either to hair coloring or shampoo industry since

what we offer is not being offered by any hair color or shampoo manufacturer, but we

plan to position our selves as the challenger to the hair color manufacturing industry, as

our product’s core benefit is hair coloring with convenience and in this way we pose a

direct threat to steal a major chunk of their market share by producing a hair coloring

shampoo.

STRATEGIES

Marketing strategy

We have outlined the broad marketing strategy or “game plan” that we would use to

accomplish the plan’s objective. It is presented in list form below:

Marketing strategy

Target market Gregarious people with high lifestyle and

with emphasis on both male and female

Positioning Lovely and natural looking hair color

with the ease and convenience of

shampooing

Product line Offer hair coloring shampoo for all types

of hair in different sizes

Price Price skimming that is high pricing

Distribution outlet All general and super stores normally

visited by target income group

Advertising Develop an advertising campaign that

supports positioning strategy



Generic strategy

We intend to go for the differentiation strategy with the scope of the strategic target in

which competitive advantage is to be achieved. Hairsation seeks to be unique in its

industry along all dimensions that would be widely valued by our customers, which

would be rewarded in the long run by a premium price. We opt to differentiate our

product in the following respect:

1. Our product is an innovative one

2. No one in the hair coloring industry has ever developed such a unique product

3. Consequently we can charge a premium price which implies that we are opting for a

differentiation strategy the basis of our uniqueness.

Product lifecycle

Even though we are the pioneers of the hair coloring shampoo in Pakistan and no other

company has developed such a unique product like ours but still our product is in the

growth stage. Because of the fact that we are competing with the hair coloring industry

which is already through with the introductory and awareness stage and is in the growth

stage as most of the people are well aware of the hair colors, so we just have to inform

our target customers about our innovative product in a stipulated industry and enjoy a

substantial market share. That is the reason why our product’s life cycle and industry life

cycle coincide with each other due to the nature of our product.

Marketing strategies during the growth stage

We would continuously try to enhance our product quality and add new product

features

We would introduce new models and flanker products (i.e. product of different

sizes, colors and so forth to protect the main product).



As far as entering new market segment is concerned, we have planned to target

young generation as well, where as previously hair colors were only meant for

those who had gray hair.

We would opt for product preference advertising

MARKETING MIX

Product

Hairsation is a hair coloring shampoo meant for those who use hair colors to cover the

gray in order to look young and smart as well as for young, fashion conscious and stylish

people who get their hairs streaked or bleached to get a cool and different look.

Product variety

Our product would be available in the following varieties

1. Hair coloring shampoo for normal hair

2. For dry, damaged and permed hair

3. For oily hair

4. It would also be available in the anti dandruff formulae, some time after introduction

Product features

Hairsation provides you with such features that can never be provided by the traditional

hair coloring creams and are following:



Lovely and natural looking hair color with the ease and convenience of

shampooing

Makes you look young, smart, fashionable and stylish, one with a high life style.

Most amazingly you can change the color of your hair every time you use a

shampoo of your own desired color.

The shampoo protects and nourishes your hairs.

Saves time in this fast moving world where every second is important, as you

don’t need to apply the hair coloring cream or powder to get the color on your

hair and then wait for it dry completely and than apply the shampoo to rinse it.

Saves money which can be spent on other important things, as it provides hair

color and shampoo in one so you don’t have to buy a hair color and a shampoo

separately

It provides the users with added value as it works to perfection yet saves money

and time by combining shampoo and color in one.

It does not leave any mark on the skin where as the hair coloring creams leave

their mark on the skin and are hard to remove.

Self-applicable, does not require a partner to apply on your hair.

Do not have to go to a barbershop or to a beauty parlor.



Pricing

Maximum market skimming

We would favor setting high price to skim the market, as our product is unique and

innovative. We have estimated the highest price we can charge, given the benefits of our

product versus the traditional hair colors. We have planned to set a price that makes it

worth wile for some segments of the market to adopt our product and each time sales

slow down, we can lower the price to draw in the next price sensitive layer of customers.

In this way we would skim a maximum amount of revenue form the various segments of

the market.

Pricing method(Mark-up pricing)

We have chosen the mark up pricing method because according to our market survey we

are fairly certain that we would be able to sell the expected number of units with

certitude.

Thus

Mark up price = unit cost/1-desired return on sales

= 272/.85 = 320 per 250ml. bottle

Distribution

We plan to opt for selective distribution as it involves more than a few but less than all of

the intermediaries who are willing to carry our product. In this way we will not have to

dissipate our efforts over many outlets; rather, we would try and develop good working

with our selected intermediaries and expect a better than average selling effort. Selective

distribution would enable our product to gain adequate market coverage with more

control and less cost than any other distribution strategy.



Distribution channel

Hairsation will distribute its product through private distributors.

We would use a two level channel which involves the distributors and retailers as our

company does not have enough sales force.

Promotion

We would promote our product through the following ways

1) Through T.V advertisement

Television advertising is a highly public mode of communication and a pervasive media

that would permit Hairsation to repeat a message many times. Our large-scale advertising

would say something positive about our size, power and success. Most of our ads would

be run on PTV, Indus Vision and Ary Digital.

2) Through leading fashion magazines

We will also advertise our product on renowned fashion magazines of Pakistan.

Advertising budget

We plan to allocate Rs. 3.5 million in the first three months. And then the ad budget

would be decided accordingly.

Pull strategy

We would use the push strategy in the form of heavy advertising as we need to inform

our target market about our innovative product to acquire a high market share

Push Strategy



As mentioned before, we will be using selected distributors for the distribution of our

product. We plan to use trade promotion tools to give an incentive to distributors.

Retailers would be given slotting fees and other incentives to stock our product and make

sure that we acquire good display space. Later large bulk discounts will also be given to

all distributors. A 7% cash refund will also be given to the top 2 distributors who sell the

highest number of units in the first three months. This will encourage the distributors to

carry out promotional activities and will result in high sales and rapid sales growth for

Hairsation.

MARKET RESEARCH

The systematic design, collection, analysis and reporting of data and findings relevant to

a specific marketing situation is a very important factor in the success of a particular

product. The selection of a specific research approach and research instrument is an

initial step in carrying a research. The proper selection of both is shown below:

Research Approach

Basically our major purpose of the research was to find out the people’s knowledge,

beliefs, preferences and satisfaction and to measure these magnitudes in the general

population. The best-suited research method for finding out such descriptive information

is survey research so we went for that. To find more about consumer preferences and

needs, we also contacted some respectable companies in both the markets of shampoo as

well as hair color asking them about the consumer expectations and their needs and wants

from both the products. Keeping in view the requirement and needs of the customers we

launched a product, which provides the convenience of coloring as well as shampooing in

one single product.

Research Instruments

The researchers have a choice of two main research instruments in collecting the

information that are questionnaire and mechanical devices. Keeping in mind our research



criteria we found questionnaire more appropriate for collecting the desired information. A

Questionnaire consists of a set of questions presented to respondents for their answers.

Because of its flexibility, the questionnaire is by the far most common instrument used to

collect the information. Questionnaires need to be carefully developed, tested and

debugged before they are administered on a large scale. We basically designed our

questionnaire keeping in view our basic requirement that was to find out the acceptance

of such a new product by the potential consumers. We were also interested in finding out

the particular percentage of the people who use hair color and what age group uses hair

colors.



FINANCIAL ANALYSIS

BREAKEVEN ANALYSIS

For our ease to conduct the break-even analysis we would consider the 250ml. bottle

figures. For the break-even analysis it is necessary to know the following data:

Fixed cost Rs. 220,000 / month

Selling price Rs. 320

Variable cost Rs. 272

B.E = 220,000/48 = 4584 bottles

To break even we need to sell 4584 bottles per month. This will cover our fixed and

variable costs. Any additional sales will bring in a profit of Rs. 48 per bottle sold.

Initially we might not be able to achieve this breakeven point but as our financial

objective stated, our target is to achieve breakeven by the end of the first year. To

breakeven we need to achieve a market share of only 6%.

Once we achieve a 30% market share we will be selling more than five times of what we

need to sell to breakeven. This means we will be enjoying health profits.

SALES FORECAST



The table below shows the number of units we expect to sell each month of the first year:

Month Expected Sales(no. of bottles)

January 450

February 780

March 1350

April 1520

May 1710

June 1950

July 2300

August 2850

September 3400

October 3900

November 4350

December 4650

MARKETING BUDGET

In setting our marketing budget we choose the objective task method, as we required

heavy promotional spending in the beginning for a successful launch. Our objective was

to achieve a 30% market share and we decided to identify the tasks required to achieve

this objective. Some of our tasks included sales promotions and heavy advertising. For

this we allocated Rs. 5,600,000 to the marketing budget in the first 3 months.



CONTROL

A strategic marketing plan counts for little if it is not implemented properly. The

marketing plans need to be converted into action assignments and it needs to be ensured

that such assignments are executed in a manner that accomplishes the plan’s stated

objectives. Strategy and implementation are closely related in that one layer of strategy

implies certain tactical implementation assignments at a lower level. For example, the

decision to achieve a 30% market share will be supported by marketing efforts at the

lower level. These efforts include appropriate pricing, advertising and sales promotions.

To deal with many surprises that occur during the implementation of marketing plans, the

marketing department continuously has to monitor and control marketing activities. For

this purpose we have devised a simple four step control process for our marketing plan.

o

Institute Of Business Management

What do we want

to achieve?

What do we want

to achieve?

What is happening

?

What is happening

?

Why is it happening

?

Why is it happening

?

What should we

do about it?

What should we

do about it?

Step 1: Goal Setting

Step 2: Performance measurement

Step 3: Performance

Diagnosis

Step 4: Corrective

action

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Documents

Hair Colour Shampoo