A Presentation By

HARSH C. MARIWALAChairman & Managing Director

Marico Limited

INSTITUTIONALISING

INNOVATION

… family managed

Turnover

Rs. 5 crores…amongst three

businesses

No Professionals

BOMBAY OIL INDUSTRIESBOMBAY OIL INDUSTRIES

&

Edible oils in bulk…

BOMBAY OIL INDUSTRIESBOMBAY OIL INDUSTRIES

Contributing Rs. 50 Lakhs sales turnover…….

• Acquired Consumer Products Division of Bombay Oil Industries Limited in 1990 - opportunity to take a quantum step

• Opportunity to re-design the organization structure and address skill gaps

• Staffing - attracting managerial talent

FORMATIONFORMATION

DIFFERENTIATION THROUGH DIFFERENTIATION THROUGH

A UNIQUE CULTURE A UNIQUE CULTURE

• Induction of professionals from different companies

• Manifestation of different styles

• Draft note - ‘Corporate Values’.

• Top Management Discussions

• Work with a group of 3 levels of managers

• Communicating to members

CULTURE & VALUESCULTURE & VALUES

Sharing of InformationOPEN

First names – artificial barriers not thereINFORMAL

Consensus, task force – group workPARTICIPATIVE

Autonomy within directionEMPOWERING

No Gossip !!APOLITICAL

Influence does not work – loyalty not rewardedMERIT BASED

Higher responsibilities, cross functional exposureLEARNING

Stimulus to organization & personJOB ROTATION

MARICO CULTUREMARICO CULTURE

Created the coconut oil usage

explosion in consumer packs

with HDPE

Parachute WM

created all season

usage ease

PARACHUTE JOURNEY…. PARACHUTE JOURNEY…. THROUGH THROUGH

INNOVATIONINNOVATION

• First edible oil in laminated pouches

• Helped establish a new rural category for Parachute

OUR INNOVATION JOURNEYOUR INNOVATION JOURNEY

Parachute Flip – Top – enables ease of identification of genuine Parachute and leak – proofing of pack

Market expansion through :

• PCNO pouches

• Parachute Mini ‘B’ Pack

PARACHUTE JOURNEY…. PARACHUTE JOURNEY…. THROUGH THROUGH

INNOVATIONINNOVATION

• HUL entered the coconut oil market through the acquisition of TOMCO

• In 1999 HUL acquired Cococare•Clear expression of interest in

category

• Could Marico survive an MNC onslaught ?

• Would Marico sell out ?

THREAT FROM HULTHREAT FROM HUL

• 1999-2000: Nihar from HUL positioned as challenger to Parachute:

– Backed by disproportionate advertising spends– Strong distribution muscle– A mind set to be leaders in the category– Acquisition threat by Levers to take over Marico

entirely– Marico shares in the stock market fell dramatically

MARICO’S RESPONSEMARICO’S RESPONSE

On all fronts…

Product DistributionPromotion

Superior product

quality of Parachute

Our Passion

“Contemporarizing” purity with

the Shuddhata ki Seal

Hi Value promotions on

Parachute

Ramping up our own distribution

Parachute Ki Kasam launched

for internal

sales force

MARICO’S RESPONSEMARICO’S RESPONSE

• Nihar met with little success: Only took share from smaller players

• Marico acquired Nihar in 2006

Critical take-aways

Single-minded focus can overcome brute forceMotivating people down the line critical in crisis times

An emotional & psychological victory for Marico.

OUTCOMEOUTCOME

• Drove the concept of ‘champi’ with Parachute before shampooing

• Building “additional” values to the Champi.

“PERSONAL”CHAMPI “HOT OIL”

INNOVATION ON PARACHUTE INNOVATION ON PARACHUTE CONTINUESCONTINUES

From aFrom a

Coconut OilCoconut Oil to ato a

Beauty BrandBeauty Brand

Innovations in the look and packaging of hair oil

Aftershower-Gels & Creams

Starz-Flavored shampoo & oil for

Kids

Night Repair Crème-contemporarize use of Parachute

Therapie-First scientific solution for Hairfall

Jasmine – Expand the market through lighter, fragrant oils

FROM A COCONUT OIL TO A BEAUTY FROM A COCONUT OIL TO A BEAUTY BRANDBRAND

Built strong equity of

Oil

on a

Heart Platform

Saffola

OUR INNOVATION JOURNEYOUR INNOVATION JOURNEY

Strong equity of oil on Heart Platform

• 15 ltr tap – to enable ease of usage

• Blends – creating a First in the

industry• Saffola Gold Losorb

Saffola

OUR INNOVATION JOURNEYOUR INNOVATION JOURNEY

From Cooking Oil to a Thought Leader

• Thought leadership stance on World Heart Day

• Core equity of Saffola

• Propagated ‘Walking everyday’

CREATING THOUGHT LEADERSHIP via CREATING THOUGHT LEADERSHIP via INNOVATIONINNOVATION

From an

Edible Oil to a

Health Brand

: FROM AN EDIBLE OIL TO : FROM AN EDIBLE OIL TO A A

HEALTH BRANDHEALTH BRAND

First to introduce oil ‘blends’ – Kardi, Corn Oil blend etc.

Diabetes & Cholesterol Management - Entry into the Functional Foods Space

Low-Sodium Saffola Salt

Edible Oil

Lifestyle Products

SAFFOLA : FROM AN EDIBLE OIL TO A SAFFOLA : FROM AN EDIBLE OIL TO A HEALTH BRANDHEALTH BRAND

Instant Starch for the harried housewife - Revive

Mediker launched in an oil format for greater acceptability

OTHER INNOVATIONSOTHER INNOVATIONS

• Culture & valuesOpenness – Meritocracy –

Informal

Experimentation/ Learning from failures

Flat Structure

Cross functional forums

ENABLERS TO INNOVATIONENABLERS TO INNOVATION

Emergence of an experimentation culture

Experiments over the years:

– New Product prototypes

– Marketing programme experiments

BRAND WORKSHOPSBRAND WORKSHOPS

• Jump in strike rate of new product launches: example: MALO, Shanti Amla,Saffola Gold, Silk-n-Shine

• Growth in existing brands: Parachute, Saffola and Mediker

GROWTH IMPACTGROWTH IMPACT

• Claim Expenses Against

Self Authorization (CEASE)

• ‘Members’ maintain their own leave records on the Intranet

• 1000 Crore Celebrations

• 2000 Crore Celebrations

INNOVATION PRACTICESINNOVATION PRACTICES

• Organization Structure

―Two Bands – Manager & Partner

―Not more than 5 levels from bottom to top

• Remuneration Structure

―Individual freedom to choose - Flexi

INNOVATION PRACTICES : HUMAN INNOVATION PRACTICES : HUMAN RESOURCESRESOURCES

• IBG – Initial Days..

• A total Indian- Centric approach driven by :

- Access to clusters of Indian expatriates inGulf, US, Canada, Singapore & Malaysia

- Common Ethnicity/ Hair Oiling habitsBangladesh, Nepal, Pakistan, Bhutan

JOURNEY FROM INDIAN TO JOURNEY FROM INDIAN TO GLOBALGLOBAL

Shift in IBG strategy over time

Using common ethnicity/

Hair oiling habits

– Fiancee & Haircode – hair care brands in Egypt

– Consumer Products Division of Enaleni – in South Africa

– Code 10 – Hair Creams & Gels in Malaysia

Developing New Categories

Promoting Own Brands

Aggressive Acquisitions

India CentricDeveloping Localized

Offerings

JOURNEY FROM INDIAN TO JOURNEY FROM INDIAN TO GLOBALGLOBAL

• Largest Indian Company in Bangladesh• Parachute is the biggest brand in the

Personal Products category in Bangladesh

IBG over the years IBG Turnover (Rs Cr)

63 74 95 116

193

307

440

0

125

250

375

500

FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

17 %

56 %

JOURNEY FROM INDIAN TO JOURNEY FROM INDIAN TO GLOBALGLOBAL

JOURNEY FROM INDIAN TO JOURNEY FROM INDIAN TO GLOBALGLOBAL

INCUBATION CELLINCUBATION CELL

Emergence of new businesses

like

Journey from

Products

to

Solutions

What is a solutions approach?

This will enhance the efficacy of service

Home Care Product

Zeroing on the Customer need and

Finalizing the solutions required

Personal Diagnostic

This will be the in clinic service

Service

Will include diet, lifestyle related advice

Advice

JOURNEY FROM PRODUCTS TO JOURNEY FROM PRODUCTS TO SOLUTIONSSOLUTIONS

Revenue – Strong GrowthTurnover (Rs Cr)

520

48

75

101

159

-

20

40

60

80

100

120

140

160

180

FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

Present in India & Middle EastKaya Clinics

36

15

4248

65

85

0

30

60

90

FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09

RAPID GROWTH OF KAYARAPID GROWTH OF KAYA

KAYAKAYA

Critical Takeaways

Create room for nurturing innovative, new ideas

Remove escape buttons for people when you want an outstanding result

Seek opportunities continuously

KEY INGREDIENTS FOR CREATING CULTURE OF INNOVATIONKEY INGREDIENTS FOR CREATING CULTURE OF INNOVATION

• Mindset creation for all – training is a good medium

• Experiencing success critical to buy in

• High collaboration - continuously align all stakeholders

• Over commitment of resources - no escape buttons

• Persistence - keep integrating new member

• Beyond great ideas - need high rigor in implementation & detailed execution

• Creation of in-house facilitation

• Perpetual reinforcement – Top Management reviews of brand plans, sales plans, workshops

INNOVATION : THE MARICO INNOVATION : THE MARICO EXPERIENCEEXPERIENCE

• C&D Model

• Diversity

• Co-Creation

FUTURE INITIATIVES FUTURE INITIATIVES

RAPID GROWTHRAPID GROWTH

Turnover - 1991 to 2009

100

400

700

1000

1300

1600

1900

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Rs.

Cro

re

Sweekar and

Launch

Parachute

Cream

Kardi Corn Blend

CAMELIA &

Bangladesh

& HAIR CODE - Egypt

Hair & Care

ReviveDubai Office

Saffola Salt

MBL formed

New Business entry - KayaSundari

Advansed

Parachute After Shower

Parachute RelaunchSaffola GoldSilk - N - ShineParachute Jasmine

Parachute Hair Cream - Gulf

SIL

MEDIKEROIL OF MALABAR

AROMATIC -

NIHARMANJAL

FIANCEE

Acquisition in SOUTH AFRICA

2400

2009

SHARE PERFORMANCE ON STOCK EXCHANGES

SHAREHOLDER VALUESHAREHOLDER VALUE

Marico - BSE v/s BSE FMCG Index

0

200

400

600

800

1000

1200

1400

1600

1800

2000A

pr-

02

Sep-0

2

Feb-0

3

Jul-03

Dec-0

3

May-0

4

Oct-

04

Mar-

05

Aug-0

5

Jan-0

6

Jun-0

6

Nov-0

6

Apr-

07

Sep-0

7

Feb-0

8

Jul-08

Dec-0

8

May-0

9

Oct-

09

Mar-

10

Pri

ce In

dexed

to

100

Marico FMCG Index

• Kaya Ltd. won the ‘Most Admired Retailer for Health & Beauty' at the Images Retail Award 2009.

• Parachute was ranked the 2nd Most Trusted Brand in Bangladesh - The Bangladesh Brand Forum

• Marico was awarded NDTV Profit Business Leadership Award 2009 - in the FMCG (Personal Hygiene) category.

• Parachute was awarded the Super Brand Status in the UAE by the Super brands Organization in 2009.

• Mr. Harsh Mariwala wins the Talent Management Award at the CNBC TV18 India Business Leader Awards – 2009

• Mr. Harsh Mariwala wins the Ernst & Young ‘Entrepreneur of the Year Award’ 2009 in the Manufacturing Category

• Marico is awarded the IMC Ramkrishna Bajaj National Quality Award (RBNQA) 2009 – Outstanding Achievement Trophy, in the Manufacturing Category

THE MOST AWARDED FMCGTHE MOST AWARDED FMCG

Local Global

Low margin High margin

Low value add High value add

OilsFMCG

Products

FMCG Products

Beauty and Wellness solutions

SNAPSHOT OF MARICOSNAPSHOT OF MARICO

ENTREPRENEURSHIP (Start Up Phase)ENTREPRENEURSHIP (Start Up Phase)

• Skill Gaps Consultants Doing it yourself

• Ambiguity Flexible Courage of Conviction Resilience

• Evolving Business Model• Hard Work• Learning Curve• High uncertainty about future

ENTREPRENEURSHIP (Consolidation ENTREPRENEURSHIP (Consolidation Phase)Phase)

• Medium & Short Term

• Organisation Structure, In House FunctionsCQA, Safety, Legal, HR

• Culture Building• Systems• Team Building• Image Building• Delegation – Trust

ENTREPRENEURSHIP (Scaling Up)ENTREPRENEURSHIP (Scaling Up)

• Sustenance• Public Company

Investor Relations, Quarterly Pressures, CSR

• Board Management• Vision, Values & Culture• Safety, Health & Environment• Succession Planning• Acquisitions

Starting New BusinessoKaya, IBG

• Culture of entrepreneurship in a large organization• Understand Family dynamics and leverage

• Show interest in softer aspects

―Strong Belief in People

―Be open to ideas

―Operate from trust paradigm

―Build constructive “no men” & not “yes men”

―Willingness to experiment & learn from failures

ROLE OF CEO / TOP ROLE OF CEO / TOP MANAGEMENTMANAGEMENT

To SUM UP……To SUM UP……

Needs a lot of hard work, rigour and persistence

Innovation is a journey….It is exciting, but tough….

• Apply conventional thinking and you will only come up with Conventional Solutions

• But open your mind and you will find a world of opportunities opening up before you.

Thank You