Marico sales competition-IIM-Lucknow
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Transcript of 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)
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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)
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
-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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
Existing Product Portfolio
To optimize DSR efficiency
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
To optimize DSR efficiency
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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
To optimize DSR efficiency
30 SKUs 24 SKUs
Solution
To optimize DSR efficiency
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
To optimize DSR efficiency
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
Building Channel Focus and Relevance
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
Building Channel Focus and Relevance
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
Building Channel Focus and Relevance
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
Building Channel Focus and Relevance
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
To ensure focus of Marico frontline sales force
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
To ensure focus of Marico frontline sales force
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
To ensure focus of Marico frontline sales force
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
To ensure focus of Marico frontline sales force
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
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
Team Profile Objective and Research Methodology Industry Analysis Case Problem and Solutions
Thank-You !
Required
Moderate
Not Required