Marico sales competition-IIM-Lucknow

Aman Sehgal PGP28153 IIM Lucknow [email protected] 8755148080

Aniket Bandhekar ABM09016 IIM Lucknow [email protected] 8009966496

Pramila Bharti PGP28242 IIM Lucknow [email protected] 9005072041

Aniket Bandhekar is a marketing

enthusiast who believes that live

projects and case studies are the true

way to learn.

The IIML campus winner of HUL

LIME Season 5, he has proven his

marketing acumen by earning a PPI

from Syngenta India Ltd, where he did

his internship in marketing domain.

With a rural stint of 2 months during

the internship and a specialization in

Agri-business, Aniket brings a different

perspective to the team.

Aman Sehgal is the campus usual

suspect with the HUL LIME Season 5

campus winner prize and Mahindra

War Room & ITC Interrobang campus

finalists positions already in his kitty.

Known as marketing buff, he has

shown his marketing acumen by

redesigning GTM strategy and sales

force optimization for Marico during

his summer internship.

He is an Electronics and

Instrumentation engineer from

coveted BITS-Pilani university.

Pramila Bharti is a marketing buff with

keen interest in sales and distribution.

Her expertise in HR management adds a

different flavor to the team while

analyzing sales force issues.

She has proven her HR and marketing

acumen by motivating a team of more

than 30 members in doing 360

competitive analysis for HT Media in

IIML INDEX Live project.

Her past work-experience in TCS brings

real life insights and practicality to the

team.

Team - TROIKA

Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions

Research methodology

Detailed Industry Analysis

Qualitative ResearchIn-depth interview of Retailers and

Distributors in Tier-II city, Lucknow and Tier-I city, Mumbai. Also, visited market

with DSR in above mentioned cities.

Problem AnalysisAnalyzed Case problem based on the

theoretical concept and gathered data about the distribution channel

Recommendations

Objective

150 existing SKUs of Marico

23 new SKUs of Paras

To optimize DSR efficiency

To build channel focus and relevance

To find out distributors and infrastructure related issues and possible solutions

To ensure focus of Marico frontline sales force

To build capability of Sales force

In India, FMCG growth is a function

of:

Rising incomes driving

purchasesDesire to

experiment with brand products

Evolving consumer lifestyles

New product launches

Increasing consumer demand

Greater awareness

of products,

brands Hence, the following points

are expected from FMCG

sector (in India)

Demand for new categories. (e.g.. Men’s grooming)

Entry of new brands, brand/line

extension

Products must offer value for money

Upgrading in some categories (e.g. hare-care)

Source: PWC report, The Indian FMCG sector (February 2013)

Consumer Goods

Household care Personal care Health careFood & Beverages

Fabric WashHousehold cleaners etc.

Oral care, hair care, skin care, cosmetics/deodorants,

perfumes, feminine hygiene, paper products etc.

Health beverages, staples/cereals, bakery products, chocolates, processed fruits and

vegetables etc.

OTC products and ethical

Source: India Brand Equity Foundation, FMCG (March 2013)


15.717.8

21.324.2

30.2

34.8

2006 2007 2008 2009 2010 2011

Trends in FMCG revenues over the years (USD billion)

CAGR 17.3%

43%

22%

12%8%

4% 4%2%

5%

Market Breakup by revenues (2009)

Food Products

Personal Care

Fabric Care

Hair Care

Households

OTC products

Baby Care

Others

Leading Segments

0%

5%

10%

15%

20%

25%

30%

0

10

20

30

40

50

60

Refined Oils Non-Refined Oils Iodised Salt Hair Oil Shampoo

Growth in urban and rural FMCG markets (2011)

Urban Rural UR Growth

High growth potential sectors: Iodized salt, Edible refined oil

High growth potential in rural market

59%

13%

8%6%

3%6% 5%

Sales Channel Breakdown (2010)

Grocers

General Stores

Chemists

Paan Plus

Food Stores

Modern Trade

Others

Low penetration level: High opportunitySource: India Brand Equity Foundation, FMCG (March 2013)


-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Conditioner Hair Dyes Herbal Remedies Shampoo Hair Oil

Value of Hair Care Market in India (in Rs.)

FY 08-09 FY 09-10 FY 10-11 Growth

0

50

100

150

200

250

300

USD

mill

ion

Antiperspirant and Deodrant Market in India

2008 2009 2010 2011 2012

CAGR 25%

By 2022, 75% more urban citizens and 10% more rural citizens would be

using deodorant

27%

11%

11%5%

5%

5%

5%3%

2%

2%

24%

Deodrant Market shareAxe

Wild Stone

SetWet

Nivea

Eva

Spinz

Fa

Dove

Park Avenue

Old Spice

Others

Indian Deodorant

Market (in 2012): Rs 1,400-crore

The male segment contributes Rs.1,000 cr,

pegging the male to female ratio at 70:30

Source: slideshare.net

Source: gyananalytics.com, Indian Personal Hygiene Market (2017)

Hair Care Market in India is growing

by 20%

Estimated Indian Hair Care Market (in 2014): Rs. 208 billion

In hair care market, rural India is growing by 11%, while urban India by 4%.

0.279

0.169

0.0690.0580.057

0.043

0.042

0.283

Men's Grooming India - Company Shares (2012)

P&G-Gillette

HUL

Marico

Malhotra Shaving Products Pvt. Ltd

Vidyut Metallics Ltd

McNroe Chemicals Pvt Ltd

Emami

Others


Proposed Delivery Plan

Division of Product Portfolio Transportation Salesman Beat redesign

Is there an issue with the efficiency of DSR?

What is the issue?

Yes, its difficult for DSRs to

manage and take orders for high number of SKUs

The logical approach wouldbe to address the issuesfaced by DSRs by modifyingthe current delivery plan

How can this issue be addressed?

Current Structure

Deliverymen is unable to

deliver order on time for such a large

product portfolio

Majority of retailers are kirana sellers. Because of little means they keep a fixed amount for each order they place. Even

after the product portfolio has increased the amount

to order is fixed.

Because of large product portfolio DSRs

are unable to push products. Specially, new products are yet to build

its brand value so it’s getting difficult for DSRs

to push them

DeliverymenRetailersDSRs


Existing Product Portfolio


Product Line Price Market Share

Parachute Rs.120 (500ml)

Parachute Advansed Rs.97 (300ml)

Parachute Advance Body Lotion Rs.70 (100ml)

Nihar Rs.26 (100ml)

Hair & Care Rs.80 (200ml)

Mediker Oil Rs.28 (50ml)

Livon Rs.215 (100ml)

Saffola Oil Rs.680 (5ltr.)

Saffola Rice Rs.330 (5kg)

Saffola Oats Rs.38 (200gm)

Saffola Salt Rs.21 (1kg)

Revive Rs.88 (400gm)

Manjal Herbal Soap Rs.33 (1 piece)

Zatak Deodrant Rs.150 (150ml)

Set Wet Deodrant Rs.150 (150ml)

Set Wet Hair Gel Rs.130 (250ml)

Low Medium High

Solution

Divide Product Portfolio

according to the flowchart

ProblemMany

product lines with huge number of

SKUs

Number of Products in each

portfolio section should be almost

equal

Total price of products in each

product portfolio should be

comparable

Work load on each DSR should be

equal

Products that are market leader in

their respective area should be

equally divided into the sections of

product portfolio

Start

Stop



Low Medium High

New Product PortfolioProduct Portfolio 1 Price Market Share

Parachute Rs.120 (500ml)

Parachute Advanced Rs.97 (300ml)

Parachute Advance Body Lotion Rs.70 (100ml)

Nihar Rs.26 (100ml)

Hair & Care Rs.80 (200ml)

Mediker Oil Rs.28 (50ml)

Livon Rs.215 (100ml)

Set Wet Deodorant Rs.150 (150ml)

Set Wet Hair Gel Rs.130 (250ml)

Product Portfolio 2 Price Market Share

Saffola Oil Rs.680 (5ltr.)

Saffola Rice Rs.330 (5kg)

Saffola Oats Rs.38 (200gm)

Saffola Salt Rs.21 (1kg)

Revive Rs.88 (400gm)

Manjal Herbal Soap Rs.33 (1 piece)

Zatak Deodorant Rs.150 (150ml)

Each of the new portfolio will have one market leader

product: Parachute & Saffola respectively

Portfolio 1 has 30 SKUs & Portfolio 2 has 24 SKUs

Division of Paras products between the 2 portfolio ensures

DSR can give enough time to push these products

Pitching for new products to be done in the start of sales pitch

Beats to be redesigned so that travel time of DSR is less


Objective and Research Methodology Industry Analysis On-Field Insights Case Problem and Solutions Team Profile

Proposed Division of Product Portfolio

Hair Care Products Health and Personal Care Products

Hair & CareHair&Care-Silk n Shine

Nihar NaturalsNihar Uttam

Parachute Adv. Hot OilParachute Adv. Cool OilParachute Adv. Jasmine

Parachute Adv. SachetParachute Adv. Ayur Oil

Parachute Adv. Hair CreamParachute Adv. Hair Gel

Parachute Adv. Scalp Therapy

Parachute FlexiParachute Kerela

Parachute RigidParachute Sachet

Parachute Adv. Body LotionParachute Adv. Summer Fresh

Saffola ActiveSaffola GoldSaffola KO

Saffola RiceSaffola Arise Basmati

Saffola Arise Long Grain

Saffola CholestrolSaffola Muesli

Saffola Oats

Saffola Salt Zatak DeodorantSet Wet Style Deodorant

Manjal Herbal Soap

Revive StarchRevive Liquid Starch

Set Wet Hair Gel TubeSet Wet Hair Casual Hold

Set Wet Hair Ultimate Hold

LivonLivon Hair GainLivon Silky Potion

Mediker Anti-Lice TreatmentMediker Anti-Lice NaturalMediker Shampoo


30 SKUs 24 SKUs

Solution


Marico’s Salesforce Team

ChemistsKey DSRs Others

Problems in Salesforce

Require time and experience to accommodate for the new

product line

Uneven work load on DSRs and key DSRs

All DSRs and key DSRs are not completely aware of the company, product and

technical knowledge required to perform the job efficiently

Categorize the Salesforce based on their personal characteristics and knowledge they posses to make them specialized in a particular domain of sales

Design knowledge based benefits and other benefits based on the type of Salesforce team to motivate them



Divide Salesforce into 3 categorize

Trade Salesforce

Missionary Salesforce

Technical Salesforce

Proposed division of Salesforce Team

Division of Salesforce could be done based on the importance of following

characteristics and knowledge

Characteristics / Knowledge

Knowledge of customer and

business methods

Verbal Skills

PersuasivenessEducation &

Technical knowledgeAggressiveness Empathy Experience

Trade Salesforce

Missionary Salesforce

Technical Salesforce

Comparatively High

Moderate

Comparatively Low

Doesn’t make a difference


Existing Beat design

ProblemAll key DSRs take order for the

complete product portfolio of Marico in one area on one day. This increase in product portfolio is making it difficult

for delivery. This leads to uneven work load on delivery men.

Area-01

Area-02

Area-03Area-04

Area-05

Area-06

Mon Area-02

Tue Area-01

Wed Area-03

Thus Area-04

Fri Area-06

Sat Area-05

All Key DSRs

Takes order for complete

portfolio

Building Channel Focus and Relevance



Beat to be redesigned to accommodate the changes made in the product portfolio

Current bear structure to be taken as input for new beat plan

New beat plan to be made to adjust for the increased stress on channel partners

All clusters that are close to one another should only be considered

All the new cluster should have equal business per month(BPM)

Once clusters near each other and having equal BPM are found, optimize the number of bills in the cluster as well

Try to accommodate for regional variables like holidays, bandhs etc.

Analyze existing clusters

Beats close together?

BPM in range?

No. of bills in range?

Regional Variables?

Stop

Move Boundary Outlets

Move Boundary Outlets



Proposed Beat design

Area-01

Area-02

Area-03Area-04

Area-05

Area-06

Product Portfolio - 02 Health & Personal care products

Product Portfolio - 01 Hair care products

Increase the no. of key DSRs in 4:3 ratio

Divide key DSRs into two equal halves

One half of key DSRs responsible for

Product Portfolio-01

Other half of key DSRs responsible for Product Portfolio-02

Product Portfolio - 01 Product Portfolio - 02

Mon Area-01 Area-02

Tue Area-03 Area-04

Wed Area-05 Area-06

Thus Area-01 Area-02

Fri Area-03 Area-04

Sat Area-05 Area-06



Vehicle Plan

We tried to benchmark vehicle capacities on basis of best industry

practices

Increase the number of vehicles and loaders keeping this bench-marking in mind

For e.g. if portfolio of one distributor increases by 5 lakh per delivery

Extra vehicles Required New number of loaders

1 TATA 407 + 1 Piaggio 6 + 2

Vehicle Type Vehicle Capacity No. of loaders

Tata 407 3.5 lakhs 5+1

Tata Ace 2.75 lakhs 3+1

Piaggio Ape TM 1.5 lakhs 1+1

Wholesale Delivery High Concentration of delivery at

a single point Large Demand for same product

Exceptions



Is there an issue with the channel of Marico

Large number of Order cancellation because of piled up inventory at

retailers point

SolutionInventory lite model at distributor point

Increase the number of days between sales order and delivery of the products at retailer’s door-step

Retailers put orders based on the expected future sales, but orders based on the actual past data

makes more sense in the case of Marico products

PresentIssues



Current Method Inventory lite model at distributor point

Delivery of the order at retailer’s point

Order taken by Sales person

Delivery of the order at retailer’s point

Enter details in computer and release the order

Order taken by Sales person

• Salesmen take orders in PDA device• Report generated on software by salesman on same

day• Delivery of order made on the following day• Leads to high inventory build up at distributor point

• Salesmen generate order detail on day 2• Based on the actual retailer demand orders can be

brought from the depot to distributor• Lower inventory level at distributor point because

orders are taken on basis of actual demand at retailer


Potential issues with distributors and their infrastructure

Figures in thousand Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9

Turnover Per Month 9152 58500 7230 5730 8081 6297 6648 6512 8052

Margin on Sales 353 221 272 225 301 246 251 244 320

TOTAL GROSS INCOME 353 221 272 225 301 246 251 244 320

Unit Expenses 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3

Salaries 109 109 109 109 109 109 109 109 109

Rent 25 25 25 25 25 25 25 25 25

Administration 26 26 26 26 26 26 26 26 26

TOTAL EXPENSES 218 218 199 193 212 199 200 200 212

Avg. stock holding 907 796 834 830 784 1203 2652 1200 1265

Total Gross Investment 3647 2851 2700 2467 2566 2868 4414 3063 3471

ROI 5% 0% 4% 2% 5% 2% 1% 2% 4%

ROI sheet for hypothetical distributor

As per the current model, ROI of the distributor

remains uneven. Going much below the average in some

months.

This leads to high subsidy expense for Marico

Turnover of an average size distributor

Assuming 3.8% margin

For 2 TATA 407

Assuming 6 DSRs and 14 loaders and

drivers

Monthly ROI


Potential issues with distributors and their infrastructure

Figures in thousand Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9

Turnover Per Month 10982 7019 8676 6877 9698 7557 7978 7815 9663

Margin on Sales 424 271 335 265 374 292 308 302 373

TOTAL GROSS INCOME 424 271 335 265 374 292 308 302 373

Market Discounts 52 52 33 27 46 33 34 35 46

Unit Expenses 12.6 12.6 12.6 12.6 12.6 12.6 12.6 12.6 12.6

Salaries 120 120 120 120 120 120 120 120 120

Rent 25 25 25 25 25 25 25 25 25

Administration 26 26 26 26 26 26 26 26 26

TOTAL EXPENSES 225 225 225 225 225 225 225 225 225

Avg. stock holding 907 796 834 830 784 1203 2652 1200 1265

Total Gross Investment 3647 2851 2700 2467 2566 2868 4414 3063 3471

ROI 6.8% 1.5% 5.9% 2.88% 8.2% 3.33% 2.4% 3.45% 5.41%

New ROI sheet on basis of portfolio split

2 extra vehicles added on rent

Cost for additional DSRs &

loaders

Increase in sales due to more

attention given to new products

Increase in turnover more than offsets the increase in salary and vehicle expenses

Increase in ROI reduces burden of subsidy on Marico


To ensure focus of Marico frontline sales force (1/2)

Issue with Marco SalesforceIncreased number of SKUs and fixed number of frontline Salesforce

SolutionIncrease the number of DSRs in 4:3 ratio every region based on the size of order placed by that region

New Issue with Marco SalesforceDifficult for TSE and ASM to manage the increased number of DSRs

SolutionPromote 20% of DSRs to the next level ‘Head DSR’ who will report to TSE and eventually to

ASM. Head DSRs will manage all other DSRs.

15 DSR

3 TSE

1 ASM

24 DSR

3 TSE

1 ASM

6 Head-DSRExisting System Proposed System



IssueUnequal time taken by Marico Salesforce for taking orders on different days of the week and different time of a day

SolutionTo conduct Time Motion Study for

frontline Salesforce

Tim

e M

oti

on

Stu

dy

Ste

ps

Standard job for frontline Salesforce is to take orders from retailers on daily basis

Break down the order taking process into small daily activities

Analyse each activity in the order taking process to determine the number of minutes per task and

percentage of time devoted to each task

Rate DSRs for these activities based on the time taken by them to complete it

Average time to complete all these activities is to be calculated

Normal Time = average Time X Rating factor

Standard Time = Normal Time X (1 + Allowance Factor)

Compute the standard time

Establish the standard job method

Breakdown the job into elements

Study the job

Rate the worker’s performance

Compute the average time

Compute the normal time

Compute the number of DSRs required based on Time Motion study

No. of DSRsAverage time per DSR

Standard Time to complete the activity



Optimum Salesmen Capacity

Start

PDA Backup

Calculate average order

taking time

Calculate average transit

time

Calculate time taken to

travel from A to B

• Total order taking time is sum of waiting time, order taking time and traveling time

• Total time available to a DSR to take orders ranges from between 5-6 hours

Salesmen Type Efficient number

Key 20 to 25

Chemist 27 to 36

Others 40 to 50

Stop

• Efficient number of orders that can be taken by a DSR on basis of Industry benchmarking



Role of Chemist

BRANDShare by

ValueShare by Volume

Livon 29% 5%

Deo+Gel 14% 8%

Mediker 4% 2%

Body Lotion 9% 11%

Parachute Rigid 22% 46%

Rest 22% 28%

Total 100% 100%

Paras Portfolio has a disproportionate share in terms of value (43%) in the Chemist Channel

Increasing relevance of Chemist retailers to push Paras range of products

Opportunity Challenges

• Lack of focus on chemist channel due to its small contribution to overall business (<5%)

• Supply not managed well due to preference to Mera/Super Mera outlets

•Increasing FMCG sales in metros through chemists (6k cr, Gr. 17%)

•SKU’s stocked growing by 7% in number, 20% in value



Role of Chemist

Common Pharma Distributor with exclusive DSR

• Benchmarking of different alternative pharma models was done to come up with an ideal distribution model

• To increase focus on chemists, common pharma model with exclusive DSRs turns out to be best


Advantage• Delivery boy delivers Marico products

along with medicines of other companies

• Marico gets same credit terms as other firms (1-3 weeks)

To build capability of Salesforce

Marico Branded-Salesforce

Increase Visibility Feel-Good Factor Training Sessions

Increase Visibility Provide Merchandise to Salesmen in which Marico and name of the salesperson both should be present

Feel-Good Factor

Celebrate Birthdaysof Salesmen in office

with staff and colleagues to make

him/her feel homely and special in office

Reward

“Best Salesman Award”Every month based on the

sales figure of the particular month and contact details of new

retailers

Provide Health insurance and Education loan to key DSRs and other major sales employees for 1 year. It will help in creating emotional

touch to the lives of Salesforce team


To build capability of Salesforce

Characteristics / Knowledge

Product Knowledge

Market/Industry Orientation

Company Orientation

Time & Territory Management

Legal/Ethical Issues

TechnologyBody

LanguageEye

Movement

Trade SalesforceMissionary SalesforceTechnical Salesforce

Excellent Training program should make Marico’s salesmen recognizable in the market for their knowledge and selling skills

Training Sessions

Provide following training sessions to the different type of Salesforce based on the type of job they do


Thank-You !

Required

Moderate

Not Required

Marico sales competition-IIM-Lucknow

Marketing

Transcript of Marico sales competition-IIM-Lucknow