STRATEGIC MANAGEMENT OF MARICO

MGT489 GROUP PROJECT

Submitted By,

Name ID
Towhid Tamim 1420993030
Anika Anjumi Kabir 1510779030
Md. Sajidur Rahman Khan 1520644031
Sakib Al Razee 1531221630
Soraya Alam 1531423030
Hasan Mahmud 1610051030
Syed Md. Abu Saleh 1611850030
Mohammad Shahin Ullah 1612201030

SECTION: 06

Submitted To,

Samuel Mursalin
Lecturer

Department of Management

School Business Economics

North South University

Date of Submission- August 23rd, 2019

August 23rd, 2019

Samuel Mursalin,

Lecturer, Department of Management

North South University, Dhaka, Bangladesh.

Subject: Final Report Submission

Dear Sir,

In response to the project, which was given to us as a part of our Strategic Management
course, we have prepared this report. Here we worked on Marico, and we collected our
information from secondary sources.

We have tried our best to complete this paper meaningfully and correctly, as much as
possible. We sincerely hope that you will find this report useful and appropriate as per
the requirements. We seek your pardon for the mistakes that we have done throughout the
report. However, if you need any assistance in interpreting this paper please contact us
without any kind of hesitation.

It will be very kind of you to examine our project work and give us further suggestions
and enhance our skill for future prospects.

Thank you.

Regards,
Towhid Tamim
Anika Anjumi Kabir
Md. Sajidur Rahman Khan
Sakib Al Razee
Soraya Alam
Hasan Mahmud
Syed Md. Abu Saleh
Mohammad Shahin Ullah
 Acknowledgement
All praises to almighty, the lord of the whole universe and the greatest force behind of
success.

We feel great pleasure and honor to express our heartiest gratitude and deep sense of obligation
to our course instructor Mr. Samuel Mursalin. His valuable guidance and advice inspired us
greatly to work in this project. His willingness to motivate us contributed tremendously to our
project.

We would like to thank the authority of North South University for providing us with a good
environment and facilities to complete this project. We are, also, grateful to those who have
directly and indirectly contributed towards the preparation of this project, especially the group
members.
Table of Contents
Company Overview.........................................................................................................................5
HISTORY....................................................................................................................................6
MISSION & VISION...................................................................................................................7
Lines of Businesses..........................................................................................................................8
Hair Care Products.......................................................................................................................8
Skin Care Products.......................................................................................................................9
Health Care Products.................................................................................................................10
Laundry Detergent Products......................................................................................................10
Men’s Grooming Products.........................................................................................................11
Competitors Analysis.....................................................................................................................12
Industry Analysis...........................................................................................................................15
Porter’s Five Force.....................................................................................................................15
PEST Analysis...............................................................................................................................17
Political Factors..........................................................................................................................17
Company Analysis.........................................................................................................................17
Corporate Level Strategy...............................................................................................................22
Business level Strategies................................................................................................................23
Functional Level Strategy..............................................................................................................26
Business Ethics..............................................................................................................................28
Recommendation...........................................................................................................................29
Company Overview
Marico Limited is one of India's leading consumer products companies operating in the
beauty and wellness space. Empowered with freedom and opportunity, they work to
make a difference to the lives of all their stakeholders - members, associates, consumers,
investors and the society. Currently present in 25 countries across emerging markets of
Asia and Africa, Marico has nurtured multiple brands in the categories of hair care, skin
care, edible oils, health foods, male grooming, and fabric care. Marico's India business
markets household brands such as Parachute, Parachute Advanced, Saffola, Hair & Care,
Nihar, Nihar Naturals, Livon, Set Wet, Mediker and Revive among others that add value
to the life of 1 in every 3 Indians. Charting an annual turnover of INR 63 billion
(Financial Year 2017 - 2018) across their portfolio, Marico's sustainable growth story
rests on an empowering work culture that encourages the members to take complete
ownership and make a difference to the entire business ecosystem.

Marico Bangladesh Limited is amongst the top 3 FMCG MNC companies and a trusted
brand in beauty and wellness space in Bangladesh. The company touches the lives of 1
out of every 2 Bangladeshis with an array of brands in various categories, through a
strong distribution network that reaches more than 790,000 outlets throughout the
country. [ CITATION Cha19 \l 1033 ]
HISTORY
➢ The Company was originally a joint venture between Lever group and Nissan of Japan.
➢ In 1988 The Company was incorporated on 13th October, under the name of Marico
Foods Ltd. It obtained the Certificate of commencement of business on 22nd
November.
➢ In 1989 the name of the Company was changed to Marico Industries Limited.
➢ In December, the Company entered into an agreement with M/s. Rasoi Industries
Limited for purchase of its unit located at M.I.D.C Industrial Estate, Jalgaon.
➢ Saffola won the Most Outstanding `Brand of the Year' Award instituted by
the Advertising Club of Mumbai in 1993.
➢ In March 1996, the Company made a fresh issue of 10,00,000 equity shares of Rs.10/-
each, at a premium of Rs.165/- per share, simultaneously with an offer for sale by the
promoters of 26,25,000 equity shares of Rs.10/- each, at a premium of Rs.165/- per
share.
➢ Marico acquires HLL`s Nihar for Rs 216 cr in 2006.
➢ Nihar wins a Bronze for 'Jaani Na' Campaign in 2011
➢ Hair Code wins a Silver in the Non-Food/FMCG Category in 2012. At the same year
Parachute Advanced Ayurvedic Hair Oil wins a Gold at the Media Abby's in the
Print Category.(Slideshare.net, 2019)
MISSION & VISION

'COME WIN' - their vision and mission is captured in this acronym, which means the
following: -

Boundarylessness: Seeking support & influencing others beyond the function &
organization to achieve a better outcome without diluting one’s accountability.

Bias for Action: Preference for quick thoughtful action as opposed to delayed action
through analysis.

Innovation: Experimentation and calculated risk taking to increase success probability of

radical/pioneering ideas to get quantum results.

Transparency & Openness: Allowing diversity of opinion by listening without bias,

giving & receiving critique, with mutual respect and trust for the other.

Opportunity Seeking: Identifying early opportunity signals in the environment to

generate growth options.

Consumer Centric: Keeping consumer as the focus and a partner in creating and
delivering solutions.

Global Outlook: Sensivity and adaptability to cultural diversity and learning from
different cultures.

Marico's Goals and objectives: They commit themselves to improve the quality of
people's lives in several parts of the world, through fast moving consumer products and
services.
Lines of Businesses

Hair Care Products :

➢ Parachute Coconut Oil

A market leader in its category and one of our oldest brands, Parachute Coconut Oil
today stands for purity and quality. Over the years, the brand has seen a lot of
innovations in packaging, sizing and tamper-proofing. Parachute enjoys enormous
loyalty in urban, semi-urban and rural market.

➢ Parachute Advansed

- Parachute Advansed Aloe Vera Enriched Hair Oil

- Parachute Advansed Men Classic Hair Cream
- Parachute Advansed Men Anti-Dandruff hair cream
- Parachute Advansed men Anti-hairfall Hair Cream

➢ Hair and Care Dry Fruit Oil

➢ Livon

- Livon Shake & Spray Serum

- Livon Color Protect Serum

- Livon Serum for Dry and Unruly Hair

- Livon Hair Gain Tonic

➢ Nihar naturals
 The Nihar Naturals portfolio today offers quality solutions for the needs of the
progressive woman. Its portfolio includes :

- Nihar Naturals Shanti Badam Amla Hair Oil

- Nihar Naturals Sarson Kesh Tel

- Nihar Naturals Extra Care

- Nihar Naturals Coconut Hair Oil

➢ Mediker Anti-Lice Treatment

➢ Parachute Advansed Cream Oil

- Parachute Advansed Coconut Crème Oil

- Parachute Advansed Coconut Serum Oil

- New Age Nurishment Kit

➢ True Roots Botanical Hair Tonic

Skin Care Products :

➢ Parachute Adavansed Body Lotion

- Parachute Advansed Soft Touch

- Parachute Advansed Deep Nourish

- Parachute Advansed Refresh

- Parachute Adbansed Butter Smooth

- Parachute Summer Refresh Lotion Spray

 ➢ Kaya Youth

Kaya Youth is a skin care range with products that contain a micro-circulation
complex that enhances Oxygen in the skin. Feel the youthful glow of 20s.
The oxy-infusion face wash gently cleanses skin and its micro-circulation
complex enhances oxygen supply to skin cells, leaving the skin fresh and clean.
After cleansing, a gentle massage with the Kaya Youth Face Cream rejuvenates
and revitalizes the skin, giving it a boost of oxygen to skin. Face wipes and
Micellar water helps cleanse and remove make-up; hydrate the skin; leaving the
skin with a refreshed glow.

Health Care Products :

➢ Suffola Oils

- Suffola Salt Plus

- Saffola Total

- Saffola Oats

- Ssffola Masala Oats

- Saffola Aura

- Saffola Active Slimming Nutri-shake

➢ Saffola Fittify Fourmet

- Hi-protein Slim Meal Shake

 - Hi-protein Meal Soup

- Green Coffee

Laundry Detergent Products :

➢ Revive

- The Brand is Available as Revive Liquid and Revive Powder.

Revive was launched in 1993 and is another Marico product

that created a market where none existed. Revive Powder gave
consumers the convenience of an instant cold water starch at
home. In 2007, Revive Liquid was launched, which, unlike
traditional powders, leaves no patches on coloured clothes.
Revive Liquid can also be used on terry-cottons.
Men’s Grooming Products :
➢ Studio X

- Perfume spray

- Body wash

- Face wash

- Styling shampoo

- Hair Wax

- Pomade

- Hair and beard serum

➢ Set Wet

Set Wet is a brand with an agenda of making men feel great

again by bringing back confidence in them. Set Wet plays a
key role by standing by the man of today, showcasing the
very best of him to boost his confidence and self-esteem.
The brand partners him in putting up a show to gain
admiration from peers and women in particular. So that the
next time he looks into the mirror, he sees a playful, joyful
version of himself, smiling back at him. Product line
includes:

- Set wet Gel

- Set wet Deo

- Set wet Wax

Competitors Analysis

Hindustan Unilever
Hindustan Unilever is a consumer goods Company founded in 1933 and
engaged in the manufacture and distribution of products which are mainly
for home care, personal care and foods. The company is one of the leading
consumer goods company in the world. In fact, Unilever owns thirteen of
the world’s top 50 brands[ CITATION Abo19 \l 1033 ]. It had an
approximate sales turnover of 38,224 crores, net income of 6036 crores and
total asset of 7,659 in 2019[ CITATION Com19 \l 1033 ]. Unilever has a
strong roots in local markets and also a first-hand knowledge of the local
culture.

Dabur India Ltd

Dabur is one of the largest Ayurvedic medicine & natural consumer
products manufacturer in India. The company has been building on a
legacy of over 133 years. In India Dabur is considered one of the most
trusted name in the industry. The consumer goods company had a sales
turnover of INR 6,273 crores, net profit of INR 1,264 crores and total
asset of INR 4,103 crors in 2019[ CITATION Com19 \l 1033 ]. Dabur
has a portfolio of over 381 trusted products spread across 21 categories
including hair care, oral care, and skin care[ CITATION Abo191 \l 1033
]. The company has a widespread distribution network in both rural and
urban market which covers more than 2.8 million retail
outlets[ CITATION Abo191 \l 1033 ].
Godrej Consumer Products Limited
Godrej is a consumer goods company based in Mumbai, India. Godrej has a
large variety of products including soap, hair colorants, liquid detergents and
toiletries. The company owns many well-known brands including Cinthol,
Godrej No.1, Godrej Fair Glow, Ezee liquid detergent, etc[ CITATION Abo192
\l 1033 ]. It has a sells turnover of INR 5,679 crores, net profit of INR 1,754
crores and total asset of INR 4,926 crores[ CITATION Com19 \l 1033 ]. Godrej
has a large distribution network in both rural and urban market. The company’s
distribution network covers around 650,000 retailers all over India.

The following charts shows comparison between leading companies in the industry:

Compa Marico Hindust Dabur Godrej

ny an India Consum
Name Unilever Limited er
Product
Limited
Industr Consume Consume Consumer Consume
y r Goods r Goods Goods r Goods
Compet • Homecare • Food • Foods • Homecare
ing • Personal • Homecare • Homecare • Personal
Sectors Care • Personal • Personal Care Care
Care • Health
• Water Supplements
Purifier

Human 2402 18000 7243 1200

Resourc
e
(Emplo
yees)
Marico Limited’s advantage over competitors:
Marico Limited’s two most popular products are edible oils and hair oils. The company
attains around 70% of its total revenue from edible oil (Saffola) and about 20% of the
total revenue from hair oil (Parachute). Saffola and Parachute are the two famous brands
of Marico which are widely popular in South Asia region. They have excellent
advertising team which enables them to build strong brand loyalty with customers. The
company’s management is quite experienced and also have a good R&D department. In
present the company is operating in more than 25 countries across the continent of Asia
and Africa[ CITATION Abo193 \l 1033 ]. Marico is present in more than 25 countries
across Asia and the African continent. The company ensures the availability of the
products and maintains a strong distribution network covering over 2.5 million retail
outlets and nearly 130 million customers[ CITATION Abo193 \l 1033 ]. Marico also
have an advantage of having distribution rights of some of the products of one of its
major competitor P&G.

Marico Limited’s drawbacks

One of the key problems a company face in consumer goods industry is intense
competition among fast moving consumer goods companies. There are other strong
FMCG companies such as HUL, Dabur, Godrej, etc. present in the industry which limits
the market share of Marico. Since the consumer goods market is saturated with a lot of
domestic and international companies the products that Marico offers have to go through
stiff competition. FDI in retail sector is allowing international companies entering to the
market which increasing the competition even more.
Industry Analysis

Porter’s Five Force

Marico is an international consumer goods company and while operating in global market
it has to deals with different external factors. Five force is an analysis shows the intensity
of competition in an industry along with the profitability of a business. The level of
intensity of those five forces can vary considering the industry. The following shows the
level of intensities of the external five force of Marico:

❖ Intensity of rivalry (High)

❖ Bargaining power of buyers (High)
❖ Bargaining power of suppliers (Moderate)
❖ Threat of substitutes (Low)
❖ Threat of new entrants (Low)

Intensity of rivalry

Competition in an industry is always an important factor while entering into a market.

Especially in consumer goods industry competition is the most important external force
to consider. In this industry the intensity of rivalry is very high. Therefore, Marico will
face high intensity of competition in the industry. In consumer goods market there are a
lot of firm operating and offering their products to the customers. Since there are many
companies in the market and offering same sort of products, the switching cost for the
customers is very low. As there are several options available in the market, building
brand loyalty is difficult for companies like Marico.

Bargaining power of buyers

In consumer goods industry a company’s business entirely depends on the response of the
consumers to the product. Hence, for Marico the bargaining power of buyers is high. As
there are a lot of competitors in the market, the switching cost for customers is very low.
All the information about the products are available to buyers which gives them the
opportunity to judge and pick the best option considering their needs. Therefore, the
buyers have the high bargaining power over the companies and Marico have to provide a
good quality product in minimal price.

Bargaining power of suppliers

The bargaining power of suppliers in the industry is considered to be moderate. The
number of average suppliers in the industry is moderate. Still Marico has a wide range of
options to get their supplies. Besides, the company shares a very good relationship with
its suppliers as well as the customers. Therefore, the bargaining power of suppliers is
moderate.

Threat of substitutes
Substitute of products can be a big thread to Marico by reducing the profitability the
company. The products that Marico offers is less likely to be substitute which makes the
thread of substitutes very low. The company has been providing good quality products
for years which has made them a trusted name to the customers. Hence, the customers are
less likely to switch for any substitute product.

Threat of new entrance

The cost of brand development is very high in this industry. Hence, for a new company
brand development is quite difficult. Secondly, the new entrances face a high economy of
scale. The existing companies already reached their economy of scale which makes it
difficult for new companies to match the price. Therefore, the threat of new entrance is
low for Marico.
PEST Analysis
PEST analysis examines and shows the external factors a company will face and must
abide by.

Political Factors:
Marico is running their business in more than 25 countries across the continent of Asia
and Africa. Hence, the company have to abide by the regulatory laws and restrictions of
Asia and Africa. If Marico violate any law, it will face many legal problems such as
getting fined, civil and criminal charges. There are many restrictions and regulations
regarding export, import, trade which must take into concern while running the business.

Economic Factors
A company’s success directly depends on its customer. Consumers are more likely to
want good quality products in a cheap price. Considering the competitions the company
have to offer a price that meets the consumers’ expectations. If the demand of the
products goes down, the company won’t be able to keep its profitability. Since Marico is
operating in various countries, it has to have some knowledge about the demand
conditions in that particular area.

Social Factors
Marico has a good reputation in the market and a trusted name amongst the consumers.
Since, most of the products of Marico’s are related to personal care, the company delivers
a message that shows the willingness make them look good.

Technological Factors
Marico is using new technology to produce new products while maintaining the quality.
The company has also started to sell the product online. Digital marketing is also playing
an important role in their success. The new automation system has also become an
essential tool to quicken the supply chain management.

Company Analysis

Strengths

➢ Diversified Portfolio of Products and Services: Marico has several kinds of diverse
product lines. Their product lines include hair care products (hair oil, hair gel, etc.), body
lotions, edible cooking oils, after wash products, etc. Due to this diverse portfolio, the
overall risk of the company is minimized and the constant growth of the brands under the
Marico umbrella, leading to higher profit margins.

➢ Focus on New and Undesired Market Segments: Marico has a tendency to seek out
market segments that are undesired or overlooked by other multinational companies such
as fabric conditioner, anti-lice shampoo, ethnic hair care categories, etc. These innovative
products were viewed as insignificant with a very low share, that’s why; MNCs ignored
them, whereas Marico made those categories as their primary products. Thus, stepping in
a market segment that has very low competitive pressures and rivalry.

➢ Strong Brand Image: Marico operates in Bangladesh, India, Egypt, Malaysia, Vietnam,
South Africa and Middle East. They are an internationally well-known MNC. The brands
under their parent umbrella such as Parachute, Hair Code, Saffola, Nihar, etc. are
extremely popular in the international marketplace. Some of their brands are only locally
sold in the domestic counties and even those are quite popular among the locals.
Combining all of those brands together makes Marico’s brand image extremely high in
the global marketplace.

➢ Strong Consumer Loyalty: Customers of Parachute, Saffola, Nihar, etc. are quite loyal
to these brands. Although they are other companies offering similar products but the
consumers still prefer to use these brands over the competitors, due to the immense trust
that they have on Marico products.
 ➢ Financially Strong and Credible: The financial condition of Marico is quite good.
Investors are extremely eager to invest in Marico. The existing shareholders are also quite
happy with the performance and profit margin of the company.

➢ Market Awareness: Marico invests heavily in their research and development programs.
They are highly responsive to market changes and consumer needs/demands. They
always try to fulfill the market demands and needs as soon as it reveals itself.

➢ Reliable: Marico believes in creating greater value to the customers by providing them
with high quality products and services. They are also focused to create greater
shareholders wealth for their shareholders without doing anything that is unethical and
socially unaccepted.

➢ Strong Organizational Culture: Marico believes in transparency and openness,

innovation, excellence and much more. The culture of Marico supports and appreciates
innovative suggestions, opinions, criticism, etc. with mutual respect for the all the parties
involves. Their culture does not allow hierarchical polities to interfere in the way of
innovation and feedbacks of the respective employees. They consistently try to improve
their standards for performance and capability building for the better and glorious future
of the company.

➢ Strong Distribution Network: Marico’s distribution networks are considered to be one

of the best of their industry in the entire World. They have partnered with Nissin Foods
Ltd. for the distribution of “Top Ramen” products locally. There sales volumes in the
rural areas are also considered to be among the top three in their industry. They have a
strong network of distribution channels that not only increases their sales but also
drastically increases their annual profits through higher sales and minimizing
transportation and inventory costs.

Weaknesses

➢ Failure to Create Premium Brand Image: Over the years, Marico has tried to position
itself as a premium brand as well, but it has consistently failed. The have tried to enter the
 premium market segment through the induction of new products and acquisition of
several companies, but all of their struggle went in vain as the final consumers still view
them as only value brand.

➢ Enormous number of products: Marico has a history of launching at least one new
product per year, but this tendency has put them in a difficult situation right now. They
are unable to focus adequately on all of the product lines, which is increasing their costs
and decreasing sales. They are also facing difficulty to provide sufficient and required
resources to all of their products.

➢ Perishable Inventory: Marico produces several agro-based products and the raw
materials used them are perishable. Which is why, the inventory maintenance cost of
Marico is quite high and there is always the risk of those inventories being spoilt.

➢ High Price Charged on Some Products: Some of Marico’s products are of very high
quality, which is why; their material cost is a bit high then their competitors leading to
higher prices of the products in comparison of their rivals.

Opportunities

➢ Increase consumer base and demand: They can adopt strategies to penetrate further
into the urban areas, they are still lots of market segments that are unclaimed by others,
Marico could easily target them and increase their respective consumer base. They could
also increase their existing market shares with product bundling offers, linking discount
offers for unpopular products with popular products, etc.

➢ Merge with other Strong FMCG Brands: Marico could merge with their fierce
competitors such as ITC Limited, Nirma Ltd, Colgate-Palmolive, etc. to reduce industry
rivalry and conquer greater consumer base leading to higher profit margins.

➢ Manufacture New Innovative Products: Marico can invest more in their Research and
Development Department in order to create new innovative products that will fulfill
consumers’ needs more efficiently and create greater value for the product in the
consumers’ mind. Marico’s R&D should be focused only on innovations for which the
consumers are willing to pay higher prices.
 ➢ Attract Foreign Direct Investments: Marico can use its goodwill and reputation across
the globe to attract FDIs and expand their manufacturing capacities leading to greater
economies of scale. They can also empower their existing departments and
manufacturing plants to counter the current resource crisis.

Threats

➢ Products with chemical components: People are getting more and more anxious
regarding FMCGs with chemicals, leading to higher demands in organic products and
decreasing demand for inorganic products. This social movement has already decreased
some of Marico’s demands in brands such as “Set Wet”, “Hair Code”, etc. and the future
could prove to be more disastrous for them, if they don’t take proper actions right now.

➢ Intense Competition: There are several strong FMCG brands in the marketplace such as
HUL, P&G, Nestle, ITC, etc. who are proving to be extremely competitive and creating
intense competitive environment for Marico. Many unbranded FMCG companies are also
occupying market shares, although individually their market shares are very little but
together they are grabbing a significant portion of the market making the marketplace
more hostile.

➢ High Price Sensitivity: Marico’s products are price sensitive, since the power of choice
is quite high and the switching cost is extremely low, consumers can easily pressurize
Marico to be cost effective and charge lower prices for their products.

➢ Changes in Local and International Laws: Changes in local laws in countries where
Marico operates is a hugh threat for them. If Goods and Services Tax (GST) increases, it
would lead to decrease in sales as the prices would rise. Changes in laws regarding
importing and exporting could increase the cost structure of Marico leading to lower
profit margins. There are several other rules and regulations whose changing could
impact Marico negatively either directly or indirectly.
Corporate Level Strategy
Marico is emphasizing on providing value goods to consumer. Marico expands its
business in different countries through acquisition and joint venture. By acquisition
company gets economies scale easily and it also helps to understands local culture of
acquiring country. It also helps to get proper distribution channels and factor endowments
which help to reduces cost structure. In 27 January 2006, Marico Ltd. announced that
they have been acquiring Hindustan Lever Limited Nihar brand of coconut oil and
perfumed hair oils ("domain-b.com: Marico to acquire Nihar from HLL", 2019). Marico
has acquired South African hair styling brand of Isoplus for Rs 36 core. This is the
second acquisition made by the Marico major in South Africa. Marico already has a
presence in South Africa since 2007 when it had acquired local company Enaleni and
made it a subsidiary ("Marico acquires South African hair styling brand Isoplus for Rs 36
cr", 2019). In Feb 2003, Marico acquired a controlling equity interest in Sundari LLC, the
owner of the SUNDÃRI line of luxury Ayurvedic skincare products This entry in the
Global Ayurvedics segment represents Marico’s first acquisition in a developed country
and its entry into the skincare products market ("Marico - Global Ayurvedics (Sundari)",
2019). In 2006, Marico acquired herbal bath soap brand Manjal from Kerala. In
2005, Marico acquired a clutch of soap brand in Bangladesh like Camelia,
Magnolia, and Aromatic through which Marico entered into toilet soap
markets in Bangladesh (NEWS & News, 2019).
Business level Strategies
Business level strategy refers to the way a company positions itself in the market place to
gain a competitive advantage by using different positioning strategies that can be used in
different industry settings.

Diagram: Product portfolio of Marico

There are three types of Generic business strategies:

1) Cost Leadership: When the competitive advantage of an organization lies in its lower
cost of products or services relative to what the competitors have to offer, it is termed as
cost leadership.

For decades, Marico has focused on niche categories. Marico’s strategy was to launch
differentiated products in segments where there was no real competition. Marico's hair oil
brand, Parachute, and anti-lice treatment, Mediker, have been leaders in the market for
over 20 years. But recently Marico has found itself in a competitive scenario as it entered
deodorants, hair styling, fabric conditioners, breakfast cereals, skin care, etc. Also, other
FMGC companies have focused on ayurvedic and natural products segment with
Patanjali’s recent entry in the industry. Marico therefore follows a competitive pricing
strategy to maintain its leadership in its brands like Parachute and Saffola. It operates as a
pioneer in these brands.

Marico enjoys market leadership in domestic and international market. In domestic

market, its key brands like Parachute and Saffola enjoys market leadership with a market
share of 57% and in the international market, Parachute Coconut Oil (Bangladesh), hair
code and fiancée hair gels (Egypt) relishes a market share of 81%. These market leading
brands helps Marico boost its sales.

The company possesses the value of excellence, innovation, etc and company’s
operations always adhere to these values. The company has always managed to come up
with innovative products. Example- Marico is the first one to come with the brand
Parachute Stars which is targeted to the children in the age group of 8-15 years. The
company is constantly making profits and they utilize their fund in strengthening their
brands in foreign market and by acquiring the foreign brands.

It occupies the leading position as manufacturing takes place in its seven plants at
different places in India and sourcing is done from sub-contractors. Consumption of
Marico’s products takes place mainly in the urban and semi-urban areas of India and by
expatriates outside India. As an FMGC company, Marico has implemented supply chain
planning and management systems. They have implemented SAP (Strategic Advantage
Profile) systems in their supply chain and in various operations from Asia to South Africa
resulting in less procurement and operating cost. The company uses G-talks for instant
conversations between various levels of employees. They follow a flat management
structure in the organization.

Marico’s has well established distribution network and product availability. The portfolio
of Marico’s products has brands consisting of Edible oil, Hair oils, Skin care, Fabric
Care, etc. Popular brands, good brand visibility, and excellent advertising of products
have led to strong brand loyalty. It has great experience management and got research
and development. It is rated as one of the most innovative companies by Business Today.
Externally, the factors helping Marico are intense competition between organized and
unorganized segments and wide availability of raw materials in India. Marico attempts to
leverage its national competitive advantage to operate in SAARC countries under its
regionalization strategies and in the Middle East under its internationalization strategies.
Franchising and acquisitions are the main drivers of its regional and international
expansion. Marico has a large amount of capital and other technological to boost
production and cut down on costs. It has strong distribution network because of which it
has acquired distribution rights from its competitors like P & G.

2) Differentiation: The exploitation of a product or service which is considered to be

unique is termed as differentiation. Marico tried to avoid head on competition with
formidable MNCs such as the Hindustan Unilever by differentiating on the basis of
unique ethnic Indian products and services. Its business model is based on focused
growth across all its brands and territories, driven by offering better value propositions to
consumers, market expansion and widening of the distribution network. The brand
Parachute and its extensions for hair and Saffola and its extensions which operate on the
health platform provide benefit for a healthy heart. Both brands rely on the differentiation
platforms of branded, quality, and reliable products with moderately high prices.

3) Focus Strategy: When targeting a niche market and coming up with differentiated
products for each market. The Kaya Skin solutions adopt a focused differentiation
strategy by seeking to provide dermatological services for high-quality, premium skin
care through its clinics located in India and some Middle Eastern countries. Sundari Spa
Care embarked in the US by acquisition and spread to European cities as a specialty
range of skin products, capitalizing on the increasingly popular solutions for skin care.

Therefore, Marico follows Market segmentation strategy as it offers differentiated

products for different market segments.
Functional Level Strategy
Functional Level Strategy is one of the most superior strategy of Marico that operates and
control through assembly line employee. They implement those strategy with maintaining
all the guide line which is taken up by corporate and business holders. Marico has
successfully achieve their target market & profit margin by incorporating these
techniques in their value chain.

Extensive network distribution: Marico has more than 3000 plus associate people and
200 plus direct employees. They have reached a diverse market through their strong
supplier, distributor, and sales person so far they can produce a better product at cheapest
cost price. In the international perspective, Marico has achieve their target market just
because of their widespread networks channels. They have successfully established their
market in 25 plus countries in Asia, Africa, and Middle East. Market metamorphosis is
another important factor that Marico already take away. That’s why they were
enthusiastically producing new product as far market demanded. For instance, Saffola to
sweeker oil.

Customer value proposition through responsiveness: Retaining their customer instead

of acquiring them is the first priority of Marico. They were authorized of opportunity
seeking and make them highest transparency level so that Marico can easily giving,
receiving the thoughts of their customer. It would create e greater mutual understanding
of your customer. They take many more action for retaining their customer and
understand the trues customer needs. Their distributors always connect with the customer
and try to find out the how they will create a better relationship by serving their product
at any time in any place. Most of the cases Marico has upgraded it through the bias free
action and open minded thoughts gaining.

Superior effectiveness & efficiency: As we already know that, Marico has widespread
network channels which is impact the product cost lower than any other company does.
They take huge advantage in the campaign of cost cutting structure. They have gained
economics of scale in which they can purchase bulk amount of raw material. It may
concern that Marico has successfully matching the experience curve through learning
 curve which implies the cost goes down because of fewer employee manufacture huge
amount of products. They produce multiple products in the same assembly line that
regards to the flexible product technology like parachute, saffola, mediker plus etc. And
of course they used the mass customization marketing process for targeting the
individuals from the same assembly line. So everything is fall under the term of cost
management.

Achieving superior quality: Marico takes the advanced value chain technology for the
product quality purpose. From raw materials to customer, they focused more on every
steps in their value chain. Like collecting the best materials where manufactures superior
goods then using the just in time inventory process for sales smoothing. After that it has
started the research and development of the market based products. A strong human
resource team supervise the main objectives of their strategy.

Enhancing core categories: They achieved both quality of reliability and quality of
excellence for making the best outfit of product design and serving the best products in
the market. Marico has followed total quality management for their products line and
maintain the six sigma for the seeking of reliability. They have targeted a separate market
in terms of the products. As a results, they are attaining excellence by positioning of
prominent attention. For example, Saffola oil is for whole family, and Parachute oil for
women, and set wet hair gel for men.

Product innovation: Marico have increased their commercialization by building a strong

relationship towards their existing customer. Therefore, they can achieve their mission
statement and also enhancing this site stronger. They were very sensitive at the time of
new innovation. They provide sample products for feedback and make the final products
according to the customer demand. As a results they can reduce their innovation failure
for making the best product in the market. Besides, Marico think about their customer by
facilitating newer things in the market.

Marico Brand Portfolio

MARICO Functional
Level Strategy

HAIR
HAIR CARE EDIBLE OIL Other
OIL
CAtegory Category Products
Category
 SHOWER SHINE MEDIKER ZATAK
WET

PARAC SHANTI
HUTE HAIR & SWEEKAR
CARE AMLA SAFFOLA OIL

Business Ethics
Marico is a global organization and recognizes and respects cultural diversity.
Employment, at Marico, is based solely upon individual merit and qualifications directly
related to professional competence. Marico believes in equal opportunity in every aspect
of our business & respect diversity - this includes the manner in which work with other
business partners & vendors. Each Member is free to support any legal political
organization, group or association and is free to contribute their time and support to
candidates, and/or parties of their choice. “Customary” activities in “modest” form are
permissible. Members are expected to exercise fair judgment in giving and receiving of
gifts. Members to note that the offering, receiving or giving of improper benefits in order
to influence the decision of the recipient, even if he or she is not a government official,
may not only entail disciplinary sanctions but also result in criminal charges. Marico's
CSR is based on interdependence and it believes in the need for an efficient business eco-
system, where business and the rest of the society co-exist with respectful
interdependence. Under this initiative Marico at various office and factory locations in
India and overseas promotes education, sports, art, culture and supports welfare and relief
operations (2019).

Recommendation
After all the research for strategic management, we have come out with some suggestions
for Marico which they may follow to improve overall business strategy.

❖ Right person to the right position: In the SWOT analysis we have seen that Marico
have been facing severe managerial issues. To overcome this problem the Human
Resource Development should play the most important role. They should recruit or
appoint manager on the basis of the company needs and that person’s experience. This
will help them to solve the problem. Moreover, they can send their managers in different
countries for training so that they can give exactly what the company needs.
❖ Stock based compensation: Marico can offer it’s employees to buy the stock of the
company. After buying the stocks, the employees will also get a portion of the profit. The
more profit the company makes, the more money they will get. So they will start to work
harder and more effectively to make more profit.
❖ Monetary and non-monetary compensation: Marico can also offer different monetary
or non-monetary offers to the employees to increase their productivity. Marico can offer
paid vacations, tour packages to the employee so increase their seriousness to the
company. Also they can start different motivational activities like employee of the month,
employee of the year so that other employees get motivated to work harder and more
efficiently.
❖ Marketing Strategy: Marico can change their promotional activities to increase the sale
of their products. They can increase their promotional activities for products like Set Wet
and all the products of Stuido X. As there are facing high competition from different
competitors, they can increase their promotional activities to increase their market share.
In addition, they can create more customer engagement posts in different social media,
through which they can create proper brand images to the customers mind and also they
will be able to collect feedbacks from the customers to develop their products.
❖ Differentiation Strategy: Marico can follow differentiation strategy along with the cost
leadership as they facing very high competition in the market. They should offer fully
differentiated product from their customer and that have to be in a lower price as Marico
follows the cost leadership strategy. Otherwise, it will be very difficult for them to
survive in this competitive market.
❖ New Market: In opportunities of the SWOT we have shown that Marico has a scope to
grab new market where they will face no competition. So the research and development
team should do research in the market to know that which segment is missed by their
competitors and Marico should grab those market. Big competitors like Unilever, P&G,
Nestle will not enter that market because that market is very niche and the return will be
very low as well. As a result, Marico will easily be the first choice of that specific
segment and which will eventually increase their overall sale.
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