Brand: Parachute
Company: Marico
Category: Premium coconut oil
Segment: FMCG
Positioning: Pure and quality coconut oil
Sundays in my house
meant three things, oil ‘champi’, good food and leisurely sprawling across with
a book or catching up on TV show. The oil ‘champi’ meant 20 minutes of sitting
cross legged with my eyes closed, while either my mum or dad would apply
coconut oil and brush my hair thoroughly. How did Parachute make its place in
the minds and homes of millions of Indians?
Let us look at how
Parachute became synonyms with pure coconut oil to so many of us. The Indian
hair oil market is estimated at Rs 8,000 crore and Parachute dominates the
segment and is estimated around 57%.
Political factors: As Marico operates in developing economies of
Asia and Africa that have a political instability; a drastic political
situation could impact the brand. But, the company has established strong risk
management policies.
Economic factors: If there is inflation or a dip in
the economy, people might opt for unbranded products over branded products. As
Parachute is priced affordably ranging from 1 rupee bottle sachets to Rs. 110
large bottle, they can withstand moderate economic crisis or changes in buying behavior.
Social factors: The rise in conscious and people wanting
organic products can play an advantage for Parachute as the brand stands for natural
ingredients and purity.
Technological: In the early 90’s oil used to be packed in tin boxes as a norm.
Mariwala wanted to position parachute as the premium coconut oil brand and
pioneered to start packaging coconut oil in plastic containers. Parachute has
time and again proven their merit by campaigns to prove the purity of the
coconut oil. Pure coconut oil is heavier than the impure oil.
Parachute has certain
draw backs as it fell behind in terms of technology. While other brands
launched head massagers Parachute was left behind. Another drawback was that
they launched hot oil and kept it throughout the year instead of just winters
while the normal oil got solidified in the cold weather.
Environmental factors: When Mariwala and team initially launched oil
in plastic bottles, retailers did not want to buy the bottles. Parachute
conducted a research to identify what the issue is. What they found was
fascinating. Oil was being packed in square shaped plastic bottles and rats
would destroy the bottles at the stores. As a result, parachute was designed in
a circular fashion so that the rats can’t get a grip on the bottle.
Legal factors: Parachute and the government had been in a row
over excise duty and taxes for many years. Parachute did not want to pay excise
duty and argued that it is edible oil and needs to be exempted from the taxes.
Even though, most of the country uses the oil for hair, the packaging does not
mention the word hair oil. Parachute has a separate line of products for hair
oil like Parachute advanced care, Parachute hot oil.
The government
questioned the brand regarding the small packages if it was edible oil.
Parachute argued that it was for students and others who did not want to store
oil. Finally, the government changed the law that if the coconut oil was packed
in less than 200 ml packaging, it would be considered as cosmetics and
Parachute will have to pay taxes for it.
Sources:
Much better this time. Good.
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