marico over the wall operations case study

8/13/2019 Marico Over the Wall Operations Case Study

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Operations Case Study

An Operations Case Study on Acquisition of Personal Care

Brands of Paras from Reckitt Benckiser

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transferred in any form or by any means, except with the prior written permission of Marico.

Marico Limited 2013


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Nitin parked his car in the office parking lot and started walking towards the

elevator. He looked forward to a challenging and exciting day. The office

environment was infectiously enthusiastic these days (even more than the usual!);

Marico had taken a big step by acquiring the personal care brands of Paras from

Reckitt Benckiser.

Nitin checked his mail in the elevator; subject line read Paras brands Current

Situation and Way Forward. Nitin smiled- the brands were still being called

Paras brands even though Marico had already acquired them.

His heart sank when he went through the excel sheet attached with the mail. The

excel sheet contained the actual material stock figures- details of the stocks

currently present at various points in the supply chain- depots, distributor pointsetc. The material stock spread across batches and to top it all, the stock value was

significant!

After taking over the portfolio, the Marico team had decided that they will focus on

a few categories initially- Deodorants for Men, Male Grooming, Hair Gels and Hair

Serums. The brands in these categories- Set Wet, Zatak and Livon- were to be re-

launched in the first phase- the benefits accrued from the margins and synergies

would be immense. However, the material stock data made Nitin question the


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decision to re-launch these brands. The best before dates for all the products was

24 months. What should be done with the various categories of stock- expired,

soon to be expired- and the brands which were to be launched later? This was a

difficult question and he decided to reserve his judgment for now.

He moved on to the next sheets; it had the sales figures of various brands over the

last few years and also the market share figures.

He also knew that the value share of Set Wel Gel had increased from 23% in 2008-

09 to 28% in 2010-11. Livons value share had increased from 61% in 2008-09 to

62.5% in 2010-11. For Set Wet Deo, the value share average across 2009-11 was

around 7% and for Zatak, this figure was around 1%. At time of the acquisition in

February 2012, the deodorant category was growing in excess of 50%, hair gels

around 30%, serums or leave-in conditioners at 20% and the hairfall category was

growing at close to 13%.


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Clearly, the market share of some of the brands had been declining over the years

due to low focus by the owners of the brands- sales targets were not being

aggressively driven in the market. This meant that this data did not give an

accurate representation of the market potential. To add to his woes, Nitin knew

that some of the categories were new to the organization- the team had limited

understanding of the way these categories behaved. Nitin had time till June- that is

when Marico would start handling the stocks.

Will you help Nitin with the following?

1. Material stock handling strategy: What should Nitin do about the stocklying at the depots and with the distributors?

2. Demand forecasting: What scenarios should Nitin consider whenforecasting demand? Also, how much demand should be forecasted?

Assume that Maricos growth aspiration was 25% across all categories.

marico over the wall operations case study

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