Sales Case Study

A Sales Case Study on Acquisition of Personal Care Brands of Paras from Reckitt Benckiser

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Kunal returned to office exhausted. He had just spent an entire day in the Delhi market and things hadnt seemed that great. The Paras acquisition had brought with it a whole host of challenges and he didnt know where to begin! The brands that were acquired from the Reckitt were playing primarily in the deodorant, gels and hair serum categories. Other than the hair serum category where Maricos Hair & Care Silk n Shine had the second highest market share, Marico had little or no experience in the other categories. Traditionally, Maricos strength lay in hair oils and edible oils category which reflected in the type of outlets that it serviced. Since Marico enjoyed market leadership in these categories, the way Marico played in these markets was very different- these were not competition intense categories and hence Marico played a huge role in shaping the terms of trade. Kunals apprehensions from his observations of the Delhi market were mirrored in the internal data as well. Maricos direct distribution consisted of 45% kirana outlets, 35% general outlets, 16% chemist outlets and 4% cosmetic outlets. Overall, 45% of its outlets were in urban markets and 55% in rural. Sales contribution as per market data* suggested the following:

The product details were as follows:

Currently, Marico actively sold about 150 SKUs (Stock Keeping Units). All the Paras brands were to be launched simultaneously which meant that 23

new SKUs were to be taken to the market over and above the currently sold ones at one shot, there was an increase of 16% SKUs that the Distributor Sales Representative (DSR)1 was to call at each retailer. Depending on the type of outlet, a DSR could cover between 15-25 retail outlets in a day from where he took the orders of Marico products. In the current set up, a DSR reached the first outlet at 10 in the morning and finished his/her beat (set of outlets for the day) by 3 pm post which he went back to the distributor point to enter his orders in the distributor software for the deliveries to take place the next day. The order taking process or the call consists of the DSR explaining each brand and its benefits to the retailer, the margins and discounts, checking the stock levels of each SKU at the retail outlet and then finalizing the order. Typically, a call can take from 20 min for large outlets to 5 min for smaller outlets. In the existing Marico portfolio, Kunal knew that the margins and discounts did not change much on a monthly basis since Marico was a market leader in its categories and there were not too many dynamic discounts offered by the competition that the brands had to respond to. This meant that the DSR as well as the retailer were well aware of the schemes and the discussions on the same used to be limited to a few SKUs only. However, in each category of the Paras products, there were a lot of big competitors:

1A

DSR is a part of the frontline field force of the organization not on the company payroll but employed by the distributor. Typical profile of a DSR: he/she should be 12th pass, understand basic mathematical skills and should have a minimum of 1 year experience in any other FMCG organization. On an average, a DSR is paid Rs. 8,000 per month (excluding incentives which would typically be in the range of Rs 500-1500 per month)

What was bothering Kunal was the Herculean task of rallying the entire sales force into launching a whole host of products and SKUs across multiple categories without any slack. All the products were important for the successful launch of the entire portfolio. In the past, Marico had never launched more than a single brand in a single category with more than 3 SKUs at any one time. Here, he was looking at launching 23 SKUs across 5 brands and 4 categories. If you were Kunal, how would you tackle the following problem areas? 1. 2. 3. 4. 5. Optimizing DSR efficiency Building channel focus and relevance Potential issues with distributors and their infrastructure Ensuring focus by the Marico frontline Sales team (DSR,TSO and ASM) Building capability in the sales force