Step 1
In categorical variable we simply assign labels for identification. Categorical values are discrete in nature and it belongs to a particular finite set of categories or classes.
Step 2
Hair colour is a categorical variable because here we assign the labels such as black, brown, white etc. In this case colours such as brown, black, white are categories which are discrete in nature. There are 3 sets of categories here. Among categories, there is no particular order, so it is Nominal variable.