Interview Questions

Full Interview with Harsh Mariwala

Harsh Mariwala:

At Marico, we recognize that product innovation is a key differentiator in a competitive world. Innovation and thought leadership are the fundamental building blocks of our organization. The spirit of innovation in Marico is demonstrated in its unique product designs. Look at the Saffola range of functional foods or Parachute Therapie (hair oil that promises to reduce hair fall). Then we have new 'sensorials' like Parachute Advansed Night Repair Crème and the Kaya product range. Examples for innovative packaging include a hair oil spray, a bottle heater for Parachute Hot Champi. We've also innovated in product delivery with Parachute Advansed (aimed at young adults), Starz (aimed at children), etcetera.

Harsh Mariwala:

Today, one cannot imagine product development without IT support. Starting with collecting literature, to running various equipment, data analysis, studying sensorial and clinical research, etcetera, - IT enables all of this. It also provides a platform for the R&D team to store and share knowledge with knowledge management portals.

Harsh Mariwala:

The Marico Innovation Foundation was founded to fuel innovation in India. It's focus areas are business and social innovation with special attention to knowledge building - essential for innovation. The last five years have seen the Marico India Foundation lead several successful initiatives. It has propagated its findings through several large-scale, high-impact platforms.  These findings have also been shared on an international platform.

One of these initiatives is the 'Innovation for India Awards', which recognizes those who had the courage to attempt to innovate, both in business and the social arena. In its second year, response to the Awards has been tremendous with over 340 entries. Then there is the Challenger Study. This project drew insights from Indian organizations that challenged conventions and achieved quantum growth through innovation. The foundation studied several companies to define a 'challenger organization'. The objective is to showcase them and inspire other potential challengers. Their findings were presented to institutes like IIM-Bangalore, ISB, Indian Merchants Chamber, CII and the Aditya Birla Group.

The foundation has also produced research around product innovation with Altair and Erehwon (a provider of innovative technology and an innovation consultancy, respectfully). Their research uncovered the mindsets that enable or disable product innovation in India. They also aim to provide a platform on which the experiences of successful organizations can be gathered and be used as reference.

 

Harsh Mariwala:

Marico's consumers are from across the country, both in terms of geographic spread and from towns across the population strata. In terms of urban and rural markets, approximately 75 percent of our revenues come from the urban markets.

However, in urban markets, we do not focus only on the affluent consumer. Urban markets in India have sections of not-so affluent consumers who form a large consumer base. A brand like Parachute cuts across income groups because it is available in both a modest price-point pack and in large sizes. While Saffola may go primarily into higher income households, consumers of some of our other brands such as Shanti and Mediker belong to a cross-section of income groups.

Rather than shifting to premium-priced brands, our strategy is to improve the overall margin profile of our portfolio. We continue to introduce new products to the market. As long as they serve a consumer need and their attributes are effectively communicated, they will contribute to our growth.

 

Harsh Mariwala:

Marico's 'uncommon sense' plays an important role here. The CTO does not identify the ROI to convince management of IT investments. For the most part, this is done by the businesses and IT helps them make the right decision.

IT investments are judged on the basis of some parameters. These include  whether they aid better management, speed up response time to the market, or deliver results faster to stakeholders. We take up projects that will lead to sustainable profitable growth.

 

Harsh Mariwala:

Marketing is key to the success of any FMCG company. However, implementing a marketing strategy needs the support of technology and at Marico, marketing and technology work closely to ensure this. Today, technology has to understand and balance three things to develop products and technologies for a marketing strategy.

First, technology must understand that consumers are always looking for new things. Second, science and technology are also changing with the development of new and more efficacious active ingredients, eco-friendly actives, delivery mechanisms, and nano technology. Last is the changing regulatory scene.

The technology team in any FMCG company needs to understand these elements, and develop new skills to deliver a value-for-money proposition in line with their marketing strategy - in compliance with the law. Protecting IP, patenting technologies and processes are also important aspects of technical support. At Marico, technology is also responsible for tracking and ensuring the quality of a product from development to manufacturing to distribution.

 

Harsh Mariwala:

The IT function has played an imperative role in Marico's success.  Our IT initiatives include tools like MINET & MIDAS, which have helped us gain visibility of secondary markets (critical for any FMCG business).

Sales and distribution is an acknowledged Marico competitive strength and IT has provided a strong platform to that function. Through tools like, MINET, MIDAS, SAP R3, APO and BIW, IT has enabled a shift to secondary-based sales, way ahead of the competition. Marico, for example, is one of the few companies whose distributors do not place an order for goods. The system checks their stocks, and according to a pre-fixed minimum stock level, creates an order.

MIDAS (Marico Industries Distributor Automation Software/System) helps us capture the sales, stocks and other relevant data pertaining to the distributor. The system is in use at 400 sites, which account for more than 85 percent of our business in value terms. MINET is a portal for distributors to upload and download data with the MIDAS System. The MINET portal aggregates data and feeds into the SAP APO system, which generates orders for distributors. MINET is also used as a reporting tool since it aggregates and consolidates data from all the distributors.

 

Harsh Mariwala:

Implementing MIDAS and MINET resulted in a reduction in loss of sale (due to distributor stock out) by 38 percent. We can ensure that only required stocks are dispatched and this has improved logistics and planning.

It has also reduced sales skew. The sales skew once stood at 10 percent in the first 10 days in the month, 28 percent in the next 10 days and 62 percent in the last 10 days. Post MIDAS and MINET, sales skew is 24 percent, 34 percent and 42 percent respectively. Excess inventory at the distributor level has come down by
49 percent. Other benefits include transparency of data across sales channels, our ability to track competitors across the country, and more control of the sales force and partner claim disbursements.

IT has not only helped us keep pace with the rapid growth in our business but has also helped us beat the competition.

 

Harsh Mariwala:

At Marico, the CIO is a business leader first and then a technology expert. The CIO  ensures that resources are not wasted on initiatives that do not deliver real benefits. This calls for a CIO to be a shrewd business leader and a technology expert. In fact,  our CIOs have come from functions other than IT. As a result, despite our investments in IT being considerably smaller than similar companies, we get many more benefits. The IT function at Marico, led by the CIO, acts as a business enabler. IT plays a pivotal role in simplifying business processes through e-enabled workflows. For example, it e-enabled workflows and transactions and it has simplified the capital expenditure approvals process. Using IT as a tool, we turned the entire buying process on its head. By e-enabling our purchases, our vendors can come to our portal and bid. This has simplified the process of procurement and has allowed us to drive process and savings.

Harsh Mariwala:

IT has given us an edge. We will continue to maintain this edge with the help of IT. To sustain profitable growth, we plan to invest in IT solutions that strengthen corporate performance management. As a result, the process of strategy dissemination, budgeting, planning and reporting will become much stronger leading to better allocation of resources and better financial performance. We also plan to experiment with technologies such as Web 2.0 to enable collaboration and innovation.