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Contents
ABSTRACT
To describe and analyse the
existing STP strategy of Emami
Navratna oil, proceed with an
Environmental Analysis and
draw the Porters 5 forces which
will help to figure out a growth
path for the brand.
MEMBERS: TEAM 2
1. Abhilash ChakrabortyP152002
2. Akshay JainP152008
3. Tony Vijay XavierP152068
4. Vineet SinhaP152073
5. Poomalai S PravinP152037
Contents
Table of Contents
Introduction ............................................................................................................................................ 2
STP for Navratna Cool Oil ....................................................................................................................... 3
Environmental Analysis (PESTLE)5
Porters 5 Forces Model Analysis7
Challenges faced by Company/Brand.9
SWOT Analysis.10
Issues that need to be resolved11
Growth Plan..13
Conclusion..14
References..15
TEAM 2
Introduction
Indian hair care market is mainly dominated by the hair oil segment, which constitutes over half of the
overall hair oil market. Purchasers of hair oil have a wide array of options to select ranging from light,
heavy, cooling types. Hair oil purchase is a decision which purchasers evaluate carefully. In a country
like India where the hair care market is growing at a rapid pace and various types of hair oils are being
launched, it becomes extremely important for both the store and the company to understand shopper
preferences.
The market type of hair oil can be described as perfect competition i.e. many buyers and sellers. The
movement of products are dominated by organised and unorganised retail segments. In recent years
beauty salons are also emerging as an important destination for reaching customers.
Sub Categories of Hair Oil:
'Thanda Thanda Cool Cool' brand Navratna has been the most trusted and preferred brand in the
therapeutic cooling oil segment for a very long time. It is the undisputed leader in its category
providing multi-purpose benefits to its set of satisfied and ever growing consumer base. It has been
meticulously prepared from a combination of nine unique ayurvedic herbs. Its everyday massage
gives enjoyable cooling which provides relief from daily mental and physical stress- and its related
symptoms like headache, fatigue, tension, insomnia etc. It not only solves specific hair and body
related ailments, but delivers superlatively on all desired benefits, like beauty & nourishment,
traditionally sought from hair oils.
TEAM 2
Geographic
Demographics
Psychographics
Behavioural segmentation
Navratna oil being a cool and ayurvedic oil has the following segments:
Demographics:
1. Based on the age of the people who can
use Navratna oil, it would be safe to say
that people in the age group from early
20s to late 50s generally use this product.
2. Since the product is available in a sachet
of Rs. 1.5, there is no income problem that
would hinder its sales.
3. There is not much segmentation in
terms of gender. Men and women both
use this product.
4. Based on occupation, people in an
occupation which involves a lot of stress,
which has late working hours or which has
irregular timing schedules.
Behavioural:
Navratna oil is usually used at night, for
its overnight application. It is generally
not used as on daily oil and is used 2 to
3 times a week.
TEAM 2
Geographic:
1. It is mostly sold in urban market,
especially targeting the working
population.
2. Although it can be used in both
winters and summers, the usage in
summers is more pronounced as it is a
cool oil.
Psychographics:
People believing in the age old
tradition that oil helps relief in
headache, stress, body ache would
probably choose Navratna oil.
2. Targeting: As evident from the various advertisements, we can say that Navratna oil targets
that segment of people who are mostly prone to stress, headache, body aches or have
irregular work timings and are suffering from insomnia.
The first commercial featuring Amitabh Bachchan, shows a working professional who has a lot of
paper work and is under stress because of that. After applying Navratna oil, he has relief from stress
and is shown to enjoy his work.
In another commercial featuring Shahrukh Khan, a common man is shown to have a lot of problem in
his busy life, because of which he is suffering from stress, but when he applies Navratna oil, it is shown
that his life becomes easy going.
From the above example we can conclude that Navratna oil wants to target the working professionals,
common man, and people doing daily routine jobs, housewives and youngsters.
3. Positioning: Product position is the way the product is defined by consumers on important
attributesthe place the product occupies in consumers minds relative to competing
products.
Navratna oil has positioned itself as a therapeutic oil that helps rejuvenate an individual. It has
marketed itself as a cool oil and has been successful in doing so, as it has 57% of market share in cool
hair oil market. People in general ask for a Navratna oil whenever they want to buy a cool ayurvedic
oil.
It has been doubling sales for the last three years even though it is among the costliest hair oil in the
therapeutic segment oil.
TEAM 2
Issues
Stable political government
Corporate tax rates
Economic
Reduction in individual
disposable income.
GDP per capita
Economic growth
Inflation Rate
Consumer and Investor
confidence
Social/Culture
Technological
TEAM 2
Impact on Business
Aggressively expand
operations and market the
product.
Lowers Raw Material Costs
Legislation
Environmental
TEAM 2
Brand loyalty of customers: The pricing of the Navratna Oil products is very competitive without
compromising on the quality hence the relative price performance of substitutes is as low as
compared to Emami. For instance Emami Navratna Hair oil has the largest Market Share of 65% in
800 Crore Cool Oil Category in India.(Business Standard-NOV 2014)
Perceived level of Product Differentiation: Emami products generally have strong Herbal and
Natural profile. In addition the Navratna Brand enjoys a strong association with Cooling. Its
Tagline Thanda Thanda Cool Cool has found a place for itself in Popular Indian Parlance.
Ayush, the Ayurvedic Association of India has declared strict adherence to ayurvedic norms; any
new company claiming to sell Ayurvedic product need to comply with the norms of Ayush.
Brand equity of Navratna Oil is very high as it is a well-established brand and scores very high in
terms of Brand recall.
It has a well-established distribution channels network across India in both urban and semi-urban
areas. Supply Chain and Logistics dictates New Brands ability to penetrate and gain Market Share.
All the advantages of first mover, learning curve, brand loyalty, patents and economies of scale
exist with Emami.
Emami is in business for more than 40 years. It made its beginnings with a small factory, but has
continued to learn and grow to a commanding status in the industry. The Company has gone a long
way in popularizing and making easily available a whole range of products based on the traditional
science of Ayurveda. And it has set very high standards in developing products and processes that
meet stringent quality norms.
TEAM 2
Cool Oil Category has high growth rate and the Major Competition for Navratna Oil is from
much smaller brands like Himgange and Rahat Rooh. (Business Standard- SEPT 2010)
The competitors of Navratna Oil are mostly prominent in the Rural Market and have well
established distribution network within their respective Target Market.
Emami has a strong dependency on its existing distribution channels and is prevalent in urban
areas and rural areas, which makes it vulnerable to competitors eyeing for their Market Share
in the rural market.
Low Cost of Switching to competitors but Brand association with perceived benefits of the
product is very high.
In FY13 Emami spends around to 16% (390.03cr in FY10) of its sales in advertising. The
company believes in higher celebrity endorsements, like Amitabh Bachchan and Shah Rukh
Khan as it is easy for them to maintain a National presence. (First Post JUN 2013)
Since the industry is growing at a very rapid pace and so is the number of players. So Emami India has
to constantly relook at its strategy in order to increase its global dominance.
4) The bargaining power of customers: Low
The ability of customers to put the firm under pressure and it also affects the customer's sensitivity to
price changes.
Due to high consciousness of consumers in for health, the Ayurvedic and Natural products
have gained more prominence.
Since Market share of Navratna Oil is high in hair care, it has strong bargaining power. Also,
Customers are scattered and not concentrated which leads to low bargaining power of buyers.
Customers have moderate incentive to buy Navratna oil to have an association with the Brand.
TEAM 2
Raw Material Cost relative to the Final Price of the End Product. Company insulate itself from
volatile commodity prices through hedging.
Due to their long Business presence, Emami has strong relationships with its suppliers.
They constantly gear themselves to challenges by replacing select inputs which improve
product yield and quality.
TEAM 2
SWOT Analysis
1. Navratna hair oil is the Market leader in its category of cool hair oils.
2. Endorsements by Amitabh Bacchan, Shahrukh Khan throughout India and by Chiranjeevi, Surya and Upendra in South
India have helped establish a high brand recall.
Strength
3. Company has invested on product innovations and launched Navratna Oil Lite, Navratna Extra thanda oil, Navratna
coconut cool oil. This has benefited the brand immensely.
4. Company has been strong both in ATL as well as BTL activities. Activation programs conducted through rural vans,
participation in rural festivals, congregations, wet sampling initiatives at railway stations, BPOs, religious places, factories,
bus terminals, ghats etc to demonstrate efficacy have increased product trials and awareness
Weakness
The celebrity presence seems to overshadow the brand proposition, thus the brand
message gets lost and only celebrity recall is there.
Opportunity
2. India represents a nation with one of the largest proportion of young income
earners.
3. The brand can look for additional promotion through extensive wallpaintings,
dealer boards, hoardings and shop presence especially in the rural markets.
1. The modern day youth prefer taking medicines for headaches and such other ailments and shy
away from using oils.
Threat
2. With almost all the competitors offering similar benefits, celebrityendorsements alone might
not provide competitive edge over a longterm.
3. Many players are entering the market
TEAM 2
10
Where issue lies: Before new extensions of Navratna oil products are to be introduced in market, one
has to actually get the attention of consumers and their immediate needs. Emami may face the issue
of not having a large enough volume of interested prospective customers, while there is uncertainty
to which channels they should focus for the highest return.
Solution: In order to attract a higher volume of prospective customers, company needs to generate
more awareness through the various channels available to consumers. Positioning of Navratna
extensions in market is achieved by inclusive marketing. It is one of tools to spread awareness about
Navratna oil.
Targeting Effectively
Where issue lies: Targeting is one of the most important components of marketing. To be more
effective at targeting one needs to identify the needs and the requirements of the customers. The
targeted market should be such that the product alleviates the problems of the consumers.
Solution: Initially a detailed picture of target customers is to be determined. The best way to
understand consumers behaviour is to build buyer personas with 3 steps: segmentation by
demographics, consumer needs to be identified and behaviour-based profiles be
developed. Segmenting customers appropriately will allow Emami to target correct set of customers.
Where issue lies: Emamis marketing strategy has gone through many transitions, especially in the last
decade. Their marketing focus has shifted from print media to online media, and they have witnessed
the decline of direct mails and one to one calls. Technology has introduced new tools that make their
communication with potential customers more efficient and effective. Navratna oil was prone to these
marketing changes so issue was how to cope with new trends and stay current.
Solution: Emami kept up with new transformations with its innovative approach. Company invested
heavily on these latest developments in marketing of Navratna oil. These steps strengthened customer
satisfaction and marketing productivity.
TEAM 2
11
Where issue lies: Emamis marketing model is constituted where it is able to measure and understand
the value of each of its efforts in terms of leads, customers, and revenue. But it needs to prove that
Navratna Oil segmentation would provide return on investment that is high enough to generate effort,
time, and money.
Solution: Navratna Oil was able to tie customer, and revenue back to the marketing initiative that
Emami had created. This is how company was able to prove its worth, and understand how to
efficiently reach their consumer base. Through the widespread marketing analysis and assumptions,
Emami was able to reveal real data about success of their marketing efforts. Company used advanced
marketing analytics to track which marketing activities are generating consumers, and revenue
TEAM 2
12
Growth Path
We propose integrative growth as a growth path for Navratna oil. The reason to choose this strategy
is because, Navratna oil being a cool oil, doesnt has much scope for innovation. The other way that is
left is to acquire other companies, which are having similar products, so that they can enhance their
product base and have a greater control over the market.
The recent takeover of the Kesh King oil depicts their growth strategy. The Kesh King oil was brought
by Emami in 300 Crores Rupees.
(Rupees)
By acquiring new companies (product) it can develop a market in which it can create it niche. It can
then bring out products that can be used on daily basis.
TEAM 2
13
Conclusion
Our study on Navratna Oil shows how the product had done its segmentation, targeting and
positioning to reach to a market share of 57% of the cool hair oil market. It shows that it had targeted
mostly the people who are prone to stress, body aches or headaches. They had segmented the people
from early 20s to the late 40s. This surely helped them to reach such a staggering market share but
further analysis such as the Porters five forces, PESTEL analysis and the SWOT analysis also shows the
challenges, hindrances and the opportunities that the product faces. There is a moderate threat from
new entrants but definitely a high threat from its competitive rivals. To keep up with the market share
Navratna Cool Oil definitely has to devise an innovative growth strategy or rather come up with a
product that would cater to the needs of the people from diverse segments.
TEAM 2
14
References
1. http://articles.economictimes.indiatimes.com/2014-02-15/news/47358885_1_hair-oilcoconut-oil-market-leader-marico
2. http://www.emamiltd.in/brands/71/161/navratna-cool-oil.php
3. http://www.emamigroup.com/Navratna-Oil
TEAM 2
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