JAMNALAL BAJAJ INSTITUTE OF MANAGEMENT STUDIES

THE GENESIS

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If I want to knock a story off the front page, I just change my hairstyle. Hillary Rodham Clinton We always hear people say - First impressions are lasting impressions. Each of us in todays competitive world is trying to get that first impression just right which makes personal grooming of paramount importance. Every individual pays close attention to how he or she looks. Over the past decade the Personal Grooming category has grown at a CAGR of X%. Rising disposable incomes coupled with beauty consciousness and lavish spending on personal grooming is what is expected to drive the category in the years to come. In the past few years, beauty concerns have risen among both men and women in India, making them particular of what products or brands they choose for styling / grooming specially in the hair care market. Hair Care products, hitherto unfamiliar to most Indians are beginning to find shelf space now. One company that has created a mark for itself in this industry is Hygienic Research Institute Pvt. Ltd. (HRI), a company with more than five decades of experience in the field of cosmetics; five decades of commitment to Research and five decades of customer satisfaction and assurance to deliver quality goods. HRI has come a long way since the 1950s, with an aim to satisfy consumers needs in the modern cosmetics world. HRIs vision - We will always be a preferred organization offering excellent products and services, growing with stakeholders and spreading happiness across the globe, PASSIONATELY This has helped them achieve growth and compete with the global players. They have created marquee brands Like Super Vasmol 33 Keshkala and Streax Hair colour signing leading Bollywood actress like Kajol and Malaika Arora Khan as their Brand Ambassadors.

THE CASE
The Hair care / styling products like any other FMCG product is sold through Retail, Modern Trade and B2B channels catering to Professional Division. This channel is a specialized division which caters to the salons & barber industry. They deliver specialized hair care or skin care products which require professional skills for applications. The constant pursuit of newer and better processes, products, services and management practices led to the companys foray into the professional arena by launching Streax Pro, a Basket of hair care products which require professional skill sets for its application. HRI currently has a dedicated sales team of 139 sales personnel called Beauty Consultant (BC) and 16 technicians who are entrusted with the responsibility of demonstrating product usage to salons as each of the products has different usage based on formulations that perhaps a commoner cannot use independently. They introduce the products to the salons and if the salon owner is not convinced then a demo is arranged where in the technician goes and shows the method of application of each product on volunteers and also teaches them some advanced techniques. These advanced techniques are constantly updated by the head technician to include latest cuts and styling methods and it serves as a value addition to the salon professional. The BC also arranges workshops or seminars where all the salon owners and their key technicians are called and a leading stylist from Mumbai introduces them to latest trends using HRI products. Through this specialized division, HRI caters to approximately 15000 salons all over India directly through their sales team, of which only 5% contribute giving Rs 5000 + sales per month . They are categorised as Priority salons in the system and special schemes, discounts and yearly incentives are offered to these salons. The sales of each BC Beauty Consultant (sales person) is recorded every day by a call centre service where in the BC calls and gives the total sale (secondary) done for the day and to which salons. A Beauty Consultant generally has to spend somewhere between 15 to 20 minutes per salon as he has to provide details about various products. Also, at times if the professional is busy with the client, he has to wait till the service gets over. These salons are scattered all across the city and hence there is no fixed beat plan or PJP (Permanent journey plan) for every BC.

THE CASE
The B2B or the Professional Salons are divided in three categories The Class A Saloons are the high end Hair Stylist Saloons and Beauty Parlours The Class B Saloons are the neighborhood Saloons and Parlours with AC The Class C saloons are without AC And the Barber Stores are 1 to 2 chair barber shops

Currently HRI is focused on Class B and Class C categories. Here, the sales force directly goes to these establishments and sells their product thus enabling a better price point.

One major problem faced by the organization is that these salon establishments in class B and class C find it hard to make the payment for the goods because of the nature of the business.
The barber shops which are generally on the road side, bus stands, and railway stations have low purchasing capacity limited to purchasing shaving cream, some oils and powder dyes that are low cost products. Usually they just apply the colour and the customer has to wash his hair at home due to the lack of washing facility at the barber shop. If the Beauty Consultant has to visit them then he has to do cash sales and give delivery instantly because of which they are also reluctant to service them as it is a time consuming and a very low value sale.

DISTRIBUTION CHANNEL

HRI

Super Stockists

Town Distributor

Currently HRI dispatches the product to super stockists who in turn supply it to the town distributor. The town distributor then dispatches the product to salons as per the sales order received from the sales team. HRI is currently giving a credit period of 45 days which in turn is extended at all levels of distribution except to the Barber shops. HRI under this category currently has annual sales of Rs 25 Cr. and a CAGR of 30%. Also, the organization believes that this category has the potential to explode and achieve quantum growth. However, they are facing difficulties as distributors are not incentivized enough because of the low volumes.

DELIVERABLES
Thus as the CEO of the organization, you need to suggest remedial measures in the following areas (consumer insights validated through primary research will be given more weightage) 1. Currently the company is catering to only B & C category. As a CEO would you suggest HRI to stick to the said category & find ways to increase volume or do you suggest them to explore Class A? If yes, what strategies (both short and long term) should HRI implement over the next 3 years so as to achieve the necessary growth rate and capture a share of mind of the consumer?

2. HRI is known for giving a value for money product and wants to exploit the brand and the categorys true potential. What should be ideal product mix, and brand extension to do so?
3. Suggest ways if any in which the company can reduce its working capital cycle?

4. For the year 2013-14 HRI plans to design & implement PJP (permanent journey plan) for Beauty consultant , Suggest / present a plan on how can this be designed.

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APPENDIX

APPENDIX
Currently they cover the following states Andhra Pradesh Bihar Chattisgarh Delhi

NE States
J&K Madhya Pradesh Rajasthan

Goa
Jharkhand Maharashtra Tamil Nadu

Gujarat
Karnataka Orrisa Uttar Pradesh

Haryana
Kerala Punjab Uttaranchal

West Bengal

Price & SKUs Product SKU Price in Rs

Streax Pro Hair colour Crme

Streax Pro Hair colour Crme Premium Repair Max, Colour Radiance Deep Hydrating Volume enhance Deep Hydrating Masque Hair Spa Hair Straightener Hair Studio De-Stainer Hair Serum

60 ml
60ml 250,500,1000 Ml 250,500,1000 Ml 250,500,1000 Ml 250,500,1000 Ml 200, 500 GM 500 GM 80 ml 10 ml 100,250 ML

85
120 210,400,625 210,400,625 210,400,625 210,400,625 250,450 500 250 75 175,295 160