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Pricing Strategy of Parachute Hair Oil: Setting A Pricing Policy

Parachute Hair Oil sets prices based on several factors: - Raw material and packaging costs which vary by product size and composition - Competitor prices and features which Parachute analyzes to set competitive prices - Value-based pricing where customers' perceived value determines the price Parachute uses different pricing for different distribution channels and offers, and prices vary for its different brand variants based on promised benefits. The objective is to acquire maximum market share in the price-sensitive hair oil market.

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Uditi Bhandari
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639 views2 pages

Pricing Strategy of Parachute Hair Oil: Setting A Pricing Policy

Parachute Hair Oil sets prices based on several factors: - Raw material and packaging costs which vary by product size and composition - Competitor prices and features which Parachute analyzes to set competitive prices - Value-based pricing where customers' perceived value determines the price Parachute uses different pricing for different distribution channels and offers, and prices vary for its different brand variants based on promised benefits. The objective is to acquire maximum market share in the price-sensitive hair oil market.

Uploaded by

Uditi Bhandari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PRICING STRATEGY OF PARACHUTE HAIR OIL

SETTING A PRICING POLICY

Pricing Objective:  To acquire maximum market share is the objective. The


market for Parachute Hair Oil is price sensitive and a low price stimulates its
market growth.

Determining Demand: In India, customers prefer small frequent purchases.


Parachute targets both rural and urban population through differentiated
packaging. The hair oil is available in different sizes thereby providing all the
options to its customers. Parachute faces competition from Vatika, Bajaj,
Dabur, etc,  but it still remains  the leader.

Estimating Costs: The cost is influenced by key raw materials, the cost of


packaging and ingredient oil prices . The cost is different for each variant
depending on different composition and packaging. Total cost and the fixed
cost together determine the total cost of the product.

Analysing Competitors' Cost, Prices and Offers: As mentioned above,


Parachute Hair Oil has a strong base of loyal customers. Presence of
competitors does not really affect this product. But for new customers, it is
crucial that Parachute analyses the features offered by the competitors on
their product and hence price its own product accordingly by subtracting the
cost of those additional features.

Selecting a pricing Method: Parachute has perceived value pricing


method and delivers its product to the customers at a price that they perceive
feasible and appropriate.

Selecting the Final Price: The final price is selected keeping in mind the
additional factors, including the impact of other marketing activities, company
pricing policies, gain and risk sharing pricing and the impact of price on other
parties.

PRICING STRATEGY OF PARACHUTE

1. The major factors in pricing of Parachute hair oil includes:


- Key raw materials i.e. Coconut (copra) and oil seed input costs
- Packaging costs ( Parachute prices the same products differently
depending upon the packaging and the quantity of the product)
- Competitors.
- Certain times pricing can be used to promote a product too. This is called
promotional pricing strategy. Parachute includes promotional pricing of 20%
extra.
For example: Parachute provides 20% extra on 100ml bottle.
- The pricing of Parachute is also influenced by the competitive price of other
hair oil brands.

2. Parachute also does value-based pricing i.e. a strategy of setting prices


primarily based on a consumer's perceived value of a product or service.
For example, Parachute Advanced Therapie Hair oil (Rs125) 100ml is costlier
than Himalaya Anti Dandruff Shampoo(Rs100) as it promises not only
dandruff solution but also hair fall treatment and hair dryness repair.

3. The price of the oil also differs according to various distribution channels:
For Example:

Product Parachute advanced tender coconut hair oil


(200ml)
MRP Rs85/-
Kirana store/Medicos Rs85/-
Easy day Rs84/-
Big Bazaar Rs83/-
Whole seller would probably sell at even cheaper price

4. Parachute offers differential pricing for is various brand variants.


For example:
For same volume of 100ml:
-parachute advanced tender coconut hair oil (Rs 45/-)
-parachute jasmine hair oil (Rs 34/-),
-parachute therapee (Rs 125/-)
-parachute advanced tender coconut hair oil:100ml (Rs45/-) and 200ml
(Rs85/-)

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