IT STARTED WITH PUNKS who wanted their hair to stand up in bizarre spikes or look like porcupine bristles on their heads. The need for hair mousse and gel was born. Then as more people began to wear spiky hairdos, the original punks began to color their spikes with Day-Glo orange, green and pink. Soon, like many street fashions, this one was toned down, modified and passed on to the average woman. Hair changed from being a political statement with shock value to being a fashion accessory. And in that quick trip from street to salon, a million-dollar product was born.

First came mousse, which proved to be a wildly popular hair product in the early 1980s. And just when the mousse boom appeared to be leveling off, marketing masterminds gave consumers an extra twist: mousses and gels with nonpermanent color.

The Day-Glo glops of the early days were transformed into creamy mousses or light gels in more natural shades, such as rose, bronze and copper. With these products, men or women could go wild on the weekend -- but could wash out the look when they tired of it.

These new products were, of course, an immediate boon to the industry. But the marketing masterminds on Madison Avenue saw beyond the present. Not only would colored gels and mousses appeal to men and women who wanted the highly styled and colored hair fashions of the day, but they would also introduce people to the notion of changing their hair color.

Many women in earlier years had learned the hard way about the nasty side effects when using permanent hair colors. Hair broke off, fell out or turned green when exposed to chlorine in swimming pools. In the 1970s there was a scare that hair color could cause cancer. Clairol, Revlon and other industry giants believed that a new generation of women, devoted to the "natural" look, had no interest in experimentation with hair color. But market studies at L'Oreal, an upscale hair products manufacturer, showed that one out of every three women was dissatisfied with her hair color: Too dull, too mousy and too limp were three complaints.

So the industry first promoted mousses and gels as being beneficial to hair care, and emphasized their styling and conditioning aspects -- and, oh yes, incidentally, they had the added benefit of color. The youth market in particular was targeted for these new products. The long-range hope, according to Pat Sloane, senior editor at Advertising Age, is "for these kids to get their feet wet. With these bright nonpermanent colors . . . you are getting them used to the idea of coloring their hair later."

The new colors range from Vidal Sassoon's wild bright purple and blue, 12 shades in all, to Clairol's more subtle coppers, bronzes, golds and rose shades. These choices, according to one Clairol representative, are "colors that can be worn to school."

The Clairol Pazazz line is also a good example of how marketing departments in the hair industry have changed their strategy. Ad campaigns for new products used to emphasize how hair products related to hair types; there were shampoos for dry hair, conditioners for oily hair, etc. But the new strategy relates hair products to life styles: For example, Flex n' Sun by Revlon appeals to people who spend their summers on the beach. And when Clairol started to promote Pazazz it focused on nightclubs and a rock fashion video that is going on a 10-city tour to promote Pazazz. The "Rock n' Style Club Tour" will be seen in clubs frequented by people Clairol hopes to attract to their products for a lifetime.

Reviews are mixed as to how well color mousse and gel live up to their promises. Kent Lodemore, who is with Ilo, a salon in Georgetown, believes that for some people color mousse works well. "I know a model in New York who has mousy hair. She uses the color mousse regularly. It makes her hair stand out. I have also seen it work well in correcting a previous coloring job."

Gels can be more complicated to use. They work best on short, specific haircuts, to which the colored gel can be applied in strips. But one frequent complaint about both colored mousses and gels is that the colors rub off on clothing and on sheets. Also, the products can leave thick hair feeling heavy and dull. And, one user warns, do not get caught in the rain. These nonpermanent hair colors are formulated to come out with one shampoo.