UNIVERSITY OF MUMBAI

A PROJECT ON
PARACHUTE HAIR OIL
MASTER OF COMMERCE PART-1
SEMESTER-I
2014-15
SUBMITTED BY
RAJKUMAR D. VISHWAKARMA
ROLL NO-65
PROJECT GUIDE
Prof. Sebastian Rebello

SHANKAR NARAYAN COLLEGE OF ART

&COMMERCE
BHAYANDAR(EAST), THANE-401105

DECLARATION
RAJKUMAR VISHWAKARMA student of
M.COM-I (SEM-1)
SANKAR NARAYAN COLLEGE OF ART &COMMERCE
hereby declare that we have completed this project on
PARACHUTE HAIR OIL
in the academic year 2014-15.
I declared that the project report is my
original work and it has not been submitted by me in
part or full to any other university/institution/statutory
body for the award of any degree/diploma/certificate.
Name of candidate: .
Sign: ..

Place:
Date: ..

CERTIFICATE
We certify that the above declaration is true to the best
of our knowledge and belief.
.
.

Project Guide
Coordinator
Prof. Sebastian Rebello
Prof . Ajit Jadhav
Date : ....
Date:
Date: .

SHANKAR NARAYAN COLLEGE ART &

COMMERCE
BHAYANDAR (EAST) NAVGHAR ROAD THANE
401105

CERTIFICATE
This is certify that RAJKUMAR
VISHWAKARMA has completed the project titled
PARACHUTE HAIR OIL under the guidance of Prof.
Sebastian Rebello in practical fulfilment of the
requirement for the award of Master of Commerce
part-I studies degree for academic period 2014-15.

..
.

PROJECT GUIDE
PRINCIPAL
Dr. V.N.YADAV

Prof. Sebastian Rebello

..
..
EXTERNAL GUIDE
CO-ORDINATOR
Prof. Ajit Jadhav
Date: ...

ACKNOWLEDGEMENT

The Gratification and joy that accompanies the

successful completion of any task would be incomplete
without the humble and deep felt expression of
gratitude to everyone who has made it possible.
I would like to convey my sincere thanks to Prof.
Sebastian Rebello , my internal project guide, who has
been a constant source of motivation and inspiration
and has helped in bring out the best in me.

Parachute hair oil

INDEX
Introduction
History
About company
Company profile
Management discussion & analysis
SWOT Analysis
Analysis of cost sheet
Situation Analysis
Segmentation

Positioning
Product differentiation aspects
Advertising aspects
Conclusion
Bibliography

PARACHUTE HAIR OIL

INTRODUCTION
The company was founded in 1957 By Kanji Morarji and
is headquartered in Mumbai ,India.
The company provides coconut oils, edible oils, hair
oils and other hair care products, fabric care products,
processed foods, soaps, and baby care products, as
well as skin care and ayurvedic products.
Parachute is the flagship brand of Marico which consists
of edible grade coconut oil. Marico manufactures and
markets its coconut based hair oils under its popular
brand Parachute Advansed and a series of extensions
thereof.

HISTORY

Parachute is the flagship brand of Marico. Before

the 1991 economic liberalisation in India the
government classified vegetable oils as an essential
commodity and as being in short supply, and thus
ineligible for export. This meant that Parachute
products could not be exported to foreign markets.
In the late 1990s Marico made its first serious entry into
foreign markets by setting up a manufacturing plant
in Bangladesh. Parachute's market share rose to 70%
within ten years and it had become one of the most
recognized and trusted brands in that country.

ABOUT THE COMPANY

Marico Limited is one of India's leading consumer
products companies operating in the beauty and
wellness space. Empowered with freedom and
opportunity, we work to make a difference to the lives
of all our stakeholders - members, associates,
consumers, investors and the society at large. Currently
present in 25 countries across emerging markets of
Asia and Africa, Marico has nurtured multiple brands in
the categories of hair care, skin care, health foods,
male grooming, and fabric care. Marico's India business
markets household brands such as Parachute
Advansed, Saffola, Hair & Care, Nihar, Mediker, Revive,
Manjal, Setwet, Zatak and Livon among others that add
value to the life of 1 in every 3 Indians. The
International business offers unique brands such as
Parachute, Hair Code, Fiancee, Caivil, Hercules,

BlackChic, Code 10, Ingwe, X-Men, L'Ovite and Thuan

Phat that are localized to fulfil the lifestyle needs of our
international consumers. Charting an annual turnover
of Rs. 46 billion (Financial Year 2012 - 2013) across our
portfolio, Marico's sustainable growth story rests on an
empowering work culture that encourages our
members to take complete ownership and make a
difference to the entire business ecosystem.

COMPANY PROFILE
CATOGERY

Consumer Products
SECTOR

FMCG
TAGLINE / SLOGAN

Be more everyday
UNIQUE SELLING PROPOSITION

Huge Market: 1 out o 3

Indians uses a Marico
product.

PRODUCT PROFILE
Consumer Products
Parachute
Hair & Care
Shanti Amla
Silk and Shine
Mediker
Revive
Kaya Skin Clinic
Saffola
Sweekar Oil

COMPETETION
ITC
L'Oral
Nirma Ltd
HUL
Colgate-Palmolive
Procter and Gamble
Dabur

MANAGEMENT DISCUSSION
AND ANALYSIS

SWOT Analysis
Strengths
Market leader in its category, has a huge
loyalty in the urban & rural sections of India
Brand has sought to remain relevant and
differentiated through a slew of initiatives in
packaging & communication like the weighttest (proving that pure Coconut oil is
heavier than impure oil)
Parachute enjoys tremendous equity and
trust with every passing generation
One of the most recognized and trusted
brands

Weaknesses
Parachute Hot Oil should be a seasonal
product and should be sold in winters and not
during summers
The original parachute oil solidifies in winter.

 Innovations like personal massager where

available only in select cities and limited
quantities.

Opportunities
Parachute can get into skin care by introducing
oils for
application on the entire body
Launch variants that have not only coconut but
also other

natural ingredients that benefit the

hair.

will

This

help

fight

competition

from

brands that are not made of coconut but other

ingredients like badam, amla, mustard etc.

Threats
Many players are entering the market
Parachute as a brand is positioned as a coconut
oil. Competitor brands are communicating the
advantages of using oils that are made of badam,
amla, mustard etc.

ANALYSIS OF COST SHEET

Freight and forwarding charges form about
12.018% of selling and distribution overhead.
Advertisement expense constitutes about 74.589%
i.e the company focuses more on advertisements.
General expenses account to major portion of
Administrative overhead which is 52.1%.
Direct material constitutes 5.91% of the prime cost
while Direct labour constitutes only
12.12 %
The factory overhead consists mainly of power
and fuel which is 36.08%. and followed by
processing charges which is 17.86% . Depreciation
forms the major part of the factory overhead which
is 24.87%
Rent paid for the building constitutes 12.07%.
Profit margin is 32.049 % of net sales.
Factory OH as a % of Direct labour

65.25

Administrative OH as a % of works cost

11.14

Selling OH as a % of Cost of production

29.71

The total depreciation expense incurred during the

year is Rs. 3496 crores out of which Rs. 2118 crore
is towards plant and

machinery and Rs.170 crore is only for office

furniture and fixtures.
Depreciation on Plant and machinery is 71.18% of
depreciation on factory assets
Overall deprecation constitute of 1.98 % of total
cost of production.

MARGINAL COSTING
Marginal costing is the ascertainment ,by differentiating
between fixed cost and variable cost of marginal costs
and of the effect on profit of changes in volume or type
of output.
It is not a system of ascertaining cost but a special
technique which is concerned with the changes in costs
resulting from the changes in volume or range of
output.
The technique of marginal costing involves:
Differentiation between fixed cost and variable cost
Ascertainment of marginal costs
Ascertaining the effect on profit due to changes in
volume i.e cost volume profit analysis.
Tools of marginal costing:
Contribution

 P/V Ratio
Break even point
Margin of safety
FIXED COSTS
Depreciation on Building
Depreciation Plant & Machinery
Depreciation lease on land

Rs.in crore
727
2118
10

Rates And Taxes

348

Depreciation Vehicle

196

Depreciation furniture & fixtures

170

Depreciation computer

275

R&D

368

Auditor's Remuneration
General Expenses

76
9201

Security

446

Insurance

286

Director's Fee
Telephone and Fax
Legal and Professional
Repair and Maintenance Building
Processing charges
Other Repairs
Rent

2192
355
2159
281
2098
678
2132

Advertisement

39019

Total Fixed costs

63135

VARIABLE COST
Repairs To Machinery

423

Direct Labour

18000

Raw Material

77335

Primary Packing Material

50071

Power and Fuel

4239

Stores and Spares

1172

Excise Duty

3099

Sales tax

289

Freight and forwarding

6287

Travel and Conveyance

3007

Commission and Discount

3166

Total Variable costs

167088

Total Cost

230223

All the expenses have been classified under two

categories of cost:
Fixed cost
Variable cost

Fixed cost as a % of Total Cost

27.423

Variable cost as a % of Total Cost

72.575

 Major part of the expense is variable cost

accounting to 27.423% while only 27.423% is fixed
cost. That means if variable cost per unit is
controlled to some extent then cost can be
controlled. Though fixed cost seems to be low
when compared to variable cost it is also an
indication that company has invested well in fixed
assets as 27.423% is a comparably high value.
The company has invested a considerable amount
in advertisement and publicity which accounts to
around 63.13% of fixed cost
Expense on raw materials and primary packing
material together constitutes 76.25% of variable
cost. This depends mainly on the market demands
as well the capacity of production.

Calculation of Marginal Costing Tools

Particulars
Break Even
Sales(in Rs.
Crores)

Formula

Calculation

Fixed cost/
(P/V ratio)
(Contribution
P/V ratio
/ Sales )*100
Margin of
Actual Sales safety
BEP(Rs)
(Margin of
Margin of
Safety /Actual
safety Ratio Sales)*100
Working Notes
Sales
Fixed Cost
Variable Cost
Contribution
P/V Ratio

Result
129336.24

3737.91/16910.
06
16910.063032.036

0.48815
197100.76

13878.02/1691
0.06

326437
63135
167088
159349
0.488146258

Suppose the company expects a profit of Rs. 150000

crores for the next financial year
Column1
Desired Profit

P/V Ratio

Column2
150000

0.488146258

60.38

Fixed Cost
Desired sales

63135
436621.1899

ANALYSIS OF MARGINAL COSTING

Margin of safety is an advantage to the company. It indicted the extra profit the company earns over
the breakeven point.Daburs MOS is 60.38% which is high. This means that the firm will earn profits

even if there is a slight fall in production or sales.This also contributes to a high angle of incidence
BEP sales is Rs. 129336.24 crores which is extremely low in comparison to current sales (Rs.326437

crores).
BEP analysis will help the banker in appraisal of actual/projected performance of the borrower.It also

acts a sensitivity analysis tool to judge the projected performance.

For the company to reach a profit value of Rs.150000 it has to impove its sales by Rs.110184 crores.

Situation Analysis
Today the blue bottle is a strong metaphor for
the Coconut Oil category and reaches 18 million
households every year.

Marico had established this brand in 1987.

The hair oil market in India is a 6664 crore
industry which is dominated by unbranded
oils. According to 2012 survey Parachute has
bagged the market share of 53% . Maricos

Parachute is the Brand Leader and it is the

first brand in that segment.
Parachute has been enjoying the market
position since three decades
The core and continuous focus on the hair oil
market is the key concept behind this
success.
Parachute has constantly changed its brand
with time and demand and has not ignored
the older touch of the brand.

With timely changes in the brand like

Parachute Advanced and Parachute Jasmine,
they have provided options to customers who
prefer Brand Switching with every next
purchase.

Marico had established this brand in 1987.

 The hair oil market in India is a 6664 crore

industry which is dominated by unbranded
oils. According to 2012 survey Parachute has
bagged the market share of 53% . Maricos
Parachute is the Brand Leader and it is the
first brand in that segment.
Parachute has been enjoying the market
position since three decades
The core and continuous focus on the hair oil
market is the key concept behind this
success.
Parachute has constantly changed its brand
with time and demand and has not ignored
the older touch of the brand.

With timely changes in the brand like

Parachute Advanced and Parachute Jasmine,
they have provided options to customers who
prefer Brand Switching with every next
purchase.

Segmentation
The main market segment for Parachute Brand is
people who firmly believe in nutritious value of the
product.
DEMOGRAPHIC
Females
Early teens to old age
SEC B,C and D

 GEOGRAPHIC
Urban and Rural India
PSYCHOGRAPHIC
Working and non-working women
Believes in age old tradition that oil actually
nourishes hair rather than going for chemicals
and looking beautiful
Parachute coconut hair oil has mainly targeted
the women of all age category of rural and
urban market. The main reason behind
targeting the women is that in male segment
there was not particular choice in hair oil.
BEHAVIORAL
Hair oils are typically used before taking a hair
wash(2-3 times a week)

Segmenting The Indian hair Oil Market

STP for Parachute Advanced

segmentation
DEMOGRAPHIC
Females
Late teens to old age
SEC A1, A2 and A3
Educated Middle Class and Upper Middle
Class
GEOGRAPHIC

 Urban India: Metros and Tier 1

PSYCHOGRAPHIC
For Women of today, who enjoy their
elaborate lifestyle to the fullest and is
conscious of her appearance
Working and non-working women
Believes in age old tradition that oil
actually nourishes hair rather than going
for chemicals and looking beautiful
BEHAVIORAL
Hair oils are typically used before taking a
hair wash(2-3 times a week)
Targeting
GENDER
Females
AGE
19- 50 yrs of age
PRIMARY MARKET
Married, Middle aged Women and female
members of her family
SECONDARY MARKET

 Single, Women in their twenties

LIFESTYLE
Upper Middle Class;,SEC A1, A2 and A3
Socially Active
Working as well as non working
Positing
POINTS OF PARITY(POPS)
Available in different Sizes
Suitable for different Hair Types viz.
Dry/Oily etc.
Suitable for different Hair Problems viz.
Dandruff, Dry hair, Color protection
POINTS OF DIFFERENCE
Relevance: Emphasizing on Type of Hair and
the Hair oil problems commonly faced by
women
Distinctiveness: Light hair oils focusing
on repairing the problem from its root
Believability: Using ordinary looking
(non-models) in advertisements

 BENEFITS

Number of Benefits like Dandruff-Control,

Freedom from Dry hair, Hair-repair,
Nourishment etc.

Positioning

Parachute has positioned its firmness with 100%

purity.
They have campaigned with weight-test with
the proven statement that pure coconut oil is
heavier than manipulated.
They have maintained the trust of people with
affordable prices and no controversies.

The Positioning Exercise

Identifying competition Two of the
competitors of Parachute are Dabur and Navratna.

 Understanding the positioning of

competitors

Understanding the positioning of competitors

Dabur Vatika coconut Hair Oil
Segment- Value added coconut hair oil.
USP-Has henna, amla & lemon along with coconut
oil.
TG- women of all ages urban and rural who are
appearance conscious and wants herbal
components for a problem free hair.
Brand positioning- was that of A premium
coconut hair oil with the extra nourishment of
henna, amla and lemon to provide problem-free
hair.
Tagline- proof hai,better hai.

Himani Navratna Hair Oil

 Segment- Therapeutic Hair oil.

USP- Has nine Ayurvedic herbs, provides stress
relief.
TG-Masses, especially young and middle aged
people who suffer from a day to day stressful life.
Positioning -is based on rejuvenation.
Tagline -Sirdard, Tension, Anidra aur Thakan Jao Bhool
- Raho Thanda Thanda Cool Cool

How is Parachute Different?

Parachute coconut hair oil:
Segment- Pure coconut oil.
USP- 100% pure coconut oil (weight-test
campaign was held proving that pure Coconut oil is
heavier than impure oil)
TG-Women of all ages in both urban and rural
population of India
Brand Positioning-Based on the platform of
purity.

 In order to tap an increasing number of

discerning customers, Marico has come up
with value added hair oils.
Parachute Advansed takes care of all the
value- added coconut personal care products,
especially hair oils.

Other Aspects
Best Strategies Applied So Far
Product Differentiation Aspects
Advertising Aspects

Best Strategies Applied So Far

They changed pack shapes to one that is

sleek, modern and aesthetic.

 Flip top cap to ensure safety and purity of

parachute oil
Easy jar of parachute to facilitate usage
during winters
Parachute mini-a bottle shaped sachet sold
at an MRP of Re 1
20 ml parachute-a Rs 5 that enables loose oil
users to upgrade
Their establishment of a value added hair
oil/hair care category as an answer to the
growing hair needs of urban India.
Nihar, Parachute Advansed and Hair & Care
have each established significant franchises.
Strong distribution network

Product Differentiation Aspects

Parachute After Shower Hair Cream
It is a special hair cream for men.
Parachute Oil Spray

 It can be used by modern generation like

the youth.
Parachute Ayurvedic Oil
The herbs and medicinal herbs are used
to enrich the oil content
Parachute Scalp Oil
To Prevent Excessive hair loss.
Parachute Tender coconut Hair Oil
A light coconut hair oil as an answer to
the perception that the original
Parachute is heavy and sticky.

Advertising Aspects
Advertising Agencies: BBH India,
Ambience Darcy Ad Agency and Madison.
Rural Advertising:

 Tamper-proof Packaging
Covered more than 200 towns each in Gujarat,
Maharashtra, Rajasthan and Punjab
Sponsored all social causes
Used pamphlets in theatre
plays in towns of Kolkata
It advertises through Televison, Print,
Outdoor, Digital, Radio
The brand has been endorsed by celebrities
like Deepika Padukone,Nargis Fakri, Diya
Mirza, Yuvraj, Sreesanth
Advertising is heavy before Holy & during
winters
Popular & effective campaigns like 1 hour
champi kiya, help remind people about the
benefits of oiling before hair wash
Parachute also uses van campaigns, Haats in
rural areas to promote the brand
Sales Promotions like 20% extra was made
on the 200ml pack

And most
importantly :
Tender Love
and Care

CONCLUSION
1. One-thirds of the sample do not use Parachute
Coconut Hair Oil.
2. The non-users of Parachute Coconut hair Oil used:
Parachute Advansed, home-made oil, Til Sona,
Parachute Jasmine, Hair n Care, Ultra Doux, Cocoraj
Cool, Bajaj Almond Drops, Nihar, Shanti Badam Amla,
Keo-Karpin, Shalimar, or Vatika.
3. It can be said that the alternatives to Parachute
Coconut Hair Oil within Marico are Parachute Advansed,
Parachute Jasmine, Hair n Care, Nihar, and Shanti
Badam Amla
4. The other oils are mostly that is mostly herbal.
5. Marico must look at including herbal ingredients in
Parachute to continue having a stronghold in the hair
oil market.

BIBLOGRAPHY
www.google.com
www.wikipedia.com
www.marico.com
www.parachutehaircare.com

THANK YOU