A case study on Marico Central sales organization...
Marico Questions : 1. Give Timeline of all imp incidents that happened: 1948 : Set up as Bombay Oil Industries 1990 : The consumer products division separated into Marico Industries Ltd. 1998 : Implementation of CSO began, worked upon 3 dimensions Competencies, Culture and Customer, also a distribution alliance with Indo Nissin to launch Top Ramen , also launched a rural distribution model 1999 : Formed distribution alliance with P&G to distribute its 5 products namely Ariel bar soaps, Camay soaps, Pampers, Old Spice and Clearsil 2000 : FMCG sector grew at a rate of 6.7% 2002 : Introduction of MIDAS an ERP software
2. Value chain of the co. The value chain of the company includes inbound logistic operation (production), marketing and sales (demand) and services (maintenance) The support activities include administrative infrastructure management and human resource. Marico’s sales department or central sales organization had 3 basic objectives : Track changes in consumer attitudes Develop and consolidate core skills in distribution Add value by serving as a platform for third party sales The CSO was primarily set up to build new areas of competence and gather market intelligence and sales detailing.
3. FMCG Industry The Indian FMCG market was fragmented and the unorganized part made 70% of the market. The sector was estimated to grow at 7% per annum, indicating latent demand. The presence of 6 million retail outlets with 70% in rural sector made distribution the single largest barrier for a potential entrant in the sector on a national scale. Read the report: Two types Principal and secondary, disposable income
4. Organisation structure prior to implementation of CSI - reasons for change; the current model Should they change? Initially the company had a structure comprising of a Manufacturing, a marketing, human resource and a finance functional division. Each
function was headed by a vice president reporting to the chief executive officer . The CSO brought in SBU structure where in the business was divided into 2 operating units, Health Care and Natural Care, each had a manufacturing and marketing functions tweaked as per the business requirement. There were 3 supporting units as well sales, human resource and finance providing a common pool of service. Sales division was designated as CSO. Reasons for change: The competition in FMCG sector was increasing, and the increased rate of distributor turnover and attrition coupled with the need of driving down the costs in sales value chain, resulted in formation of CSO and the change in structure. Also the probability of using CSO as a distribution arm for other companies in the FMCG sector was considered was considered , which eventually happened and they did collaborated with Indo Nissin and P&G.