Russell & Robbins Inc.

Russell & Robbins is a Multinational Company headquartered in London. It was formed in 1907 by the
merger of 2 well known companies of their times ‘Russell Broths’ and ‘Henry Robbins Milk Co.’

In the 1890s, John & Jacob Russell created a food product utilizing legumes that was quick to prepare
and easy to digest. Their instant pea and bean soups helped launch Russell Broths. By the turn of the
century, the company was producing not only powdered soups, but also sauces and flavourings.
Meanwhile, Henry Robbins had become famous for his condensed milk. In order to leverage each
other’s strengths, the 2 companies decided to merge and ‘Russell & Robbins ( R&R)’ was born.

Most production facilities remained in Europe and the onset of World War I brought severe
disruptions. Acquiring raw materials and distributing products became increasingly difficult. Fresh-milk
shortages throughout Europe forced factories to sell almost all their supplies to meet the needs of
local towns. Nevertheless, the war created tremendous new demand for dairy products, largely in the
form of government contracts. To keep up, R&R purchased several existing factories in the United
States. By war's end, the Company had 40 factories, and its world production had more than doubled
since it was started.

R&R began acquiring brands and companies and gradually moving into personal care & home care
categories in a host of countries. It continued to expand and opened its businesses in South Asia,
Europe, New Zealand and Australia. The Product portfolio was diversified and included Food &
Beverages, Home Care and Personal Care. It had a total of 239 Brands in 75 countries

The total commitment to quality was the single biggest reason for R&R’s success. To ensure that the
consumer saw the diversified products coming from the R&R House, they used the Tag Line ‘Our
products all have one thing in common, they help you get more out of life’ in all the product
advertising as well.
Over the last decade the company’s profits have been steadily declining. R&R has decided to
consolidate its businesses and restructure its wide-ranging portfolio. The company has divested a
number of under performing brands and businesses and is keen on focusing on key brands. This
strategy would allow R&R to concentrate efforts on higher margin businesses and build brand value,
thus gaining increased pricing power with super market retailers. As a result the company has cut
down its brand portfolio from 239 brands to 126 brands globally.

R&R entered India in 1990. The entry into India was an experiment of sorts and was to be the hub
for the South Asian region. The entire Sub-continent was to be serviced from India. The initial years
looked good and the products attracted the audience. This bullish run did not last for long though.
Over the last 5 years the slump has hit the Indian operations as well. Of a total 10 brands in India, 4
are performing well; yielding good profits and have high profit margins. The remaining 6 have seen
some rough times. Given the global business strategy, the London office has given a directive that
the Indian Operations also need to clean up their act.
R&R had hired a large number of sales employees from leading FMCG brands in 1997-98 when it was
trying to get a foothold into the highly profitable Metros market. However, this bulky sales force is
now hampering the profitability further as the revenues from the Metros continues to come in at a
rate slower than what R&R had forecasted.
The Sales & Marketing Team is relatively flat and has three levels – National S&M Head, Regional
Sales Heads and Regional Sales Managers who look into territories. There is a Fleet Sales organisation
which primarily comprises contractual employees and they are dedicated to a product or at most, two
products for a specified territory. There is no dedicated National Sales Head position presently, but
there may be a need for one soon.
Most of the recent hiring has been for the Regional Sales Managers, who manage all products for a
specified region. They are typically MBAs with a couple of years of FMCG Sales experience.

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 R&R’s operations team is relatively more layered and starts at the worker/supervisor level. This
accounts for approximately 60-65% of the workforce in each BU. The distribution of workforce
amongst the first, second and senior managers are 20%, 10% and 3%. The senior managers report
to the BU Head. Certain support functions such as the quality team and accounts team, are dedicated
to the BU. Remaining support functions are centralised.

The CEO of R&R India has come to the conclusion that managing more than 8 Brands at this point of
time would marginalize the Company’s efficiency. He has therefore decided to hive-off 2 brands,
namely Waves Detergent and Mentadent mouthwash.
The HR team of R&R is aligned across locations. Therefore the locational HR teams are responsible
for people matters related to all business in the particular location. You are the Business HR Lead of
the Gurgaon Factory of R&R, which is the main production facility where all the 10 products are
presently manufactured. You have been selected to be part of a pan-India HR Task Force, which will
create and implement the transition plan from 10 brands to 8, across the country.

The management team has asked you to do the following, to manage the transition.
1. You are required to prepare the design of the new organisation, with 8 brands. Your plan
should include an implementation plan including your approach on re-aligning the existing
workforce of Taazgi and Mentadent.
2. Arrive at a clear transition plan, using your knowledge of problem solving, leadership styles
and other frameworks you have studied, so that this change is smooth and effective.

You have 60 mins to go through the following case details and answer the above. You are provided
with:
1. Details of each Product
2. Data on :
a. Distribution of Workforce
b. Sales Contribution
c. Profit as % of Sales
d. Wage Bill
3. Brief Profile of the BU Heads of Waves Detergent and Mentadent Mouthwash.

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Russell’s Condensed Milk and Robbin’s Soup
Russell’s Condensed Milk and Robbin’s Soup were the 2 products with which R&R entered the Indian
Markets in 1990. The production lines of both these brands combined employ more than 40% of the
total R&R India workforce, and most of the employees in these 2 teams have been with R&R India
since 1990.

Russell’s Condensed Milk, a premium product was the first of its kind in India when it was launched.
Getting Consumers to try the product was the first biggest challenge for the Company. A lot of money
was spent on advertising. R&R introduced a cookbook with recipes, which used condensed milk. The
product did well in the Metros.

It however did not grow at the pace that was expected. While it has no real competition, the product
category itself is very small and has not been able to become a regular item of the housewife’s
monthly shopping list. A very large consumer promotion was run in 2004, which involved huge
spends to try and increase the product’s penetration. This resulted in a marginal increase in sales but
the product had to take a hit on its profits. 2005 saw the product settle back at its normal levels.

Robbin’s Soup has been a genuine winner for R&R all the way. It has managed to do well across the
country and has a market share of 55% across the Country. Many other Indian and Foreign brands
have tried to make a dent but no one has managed to shake this giant. While Sales have slowed
down over the last 2 years, the management seems very bullish on this product.

Aha Coffee
Aha Coffee is genuine feather in the R&R cap. Aha was launched in India in 1992 along with Petal
and Waves. The strategy for Aha was to launch in the predominantly coffee drinking territories in
South India and then grow the market.

The unique selling proposition of Aha was that it came in various flavours. This became an instant hit
and captured Indian taste buds in a short time.

Today Aha is the biggest brand for R&R India. The team from India has been asked to travel to other
countries to share best practices with the local teams.

Waves Detergent & Taazgi Detergent

Waves, a premium detergent targeted at the upper middle class, is another Flagship Brand of R&R
and is present in 56 countries. It has done very well in the Western Markets. R&R launched Waves in
India with a lot of fanfare in 1992. It managed to capture a share 45% in the first 2 years itself.
Waves has won accolades and is a part of ‘Pride of R&R’, the Top 10 brands for the company
worldwide.

It was a market leader and set the agenda for the category. Seeing the trend of Waves consumers,
R&R realised that it was not reaching the mass middle class. It decided to introduce a local brand,
Taazgi, which would be more affordable and reach the masses.

Taazgi was launched in 2003 and was an instant hit. Taazgi capitalised on the positive impact of
Waves and soon outgrew Waves. Closer study shows that while Taazgi has attracted many new
consumers, erstwhile Waves consumers are also converting to Taazgi.

Petal Soap

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Petal Soap was launched in India in the second phase in 1992. It had managed to wake up the
almost monopolistic market leader of the time. Petal was test launched in India and seeing the
success, R&R took petals to the South East Asian and African markets.

In India, Petal has a market share of 30%, not far behind the market leader at 35%. The category
growth over the last 4 years has however stagnated at around 3-4%. Industry experts see this trend
continuing for a long time.

Soft n Silky Body Lotion

Soft n Silky was introduced in India in 1995. It is one of R&R’s first acquired brands in the Personal
Care category and as part of the acquisition agreement, the complete workforce of the acquired
company was made a part of R&R India, making it the third largest department in the company. It
has done well in almost every country in which it is was introduced. The lotion has high levels
moisturizing ingredients, which helps in getting a soft and rejuvenated complexion.

The product has not done well in India. It has been able to capture only 10% of the market share in
the last 10 years. Over the last 1-year there have been press reports on waste products from the
plant being discharged into the nearby river. This has created unrest amongst the local villagers who
have been instigating the workers as well. This has resulted in worker indiscipline and absenteeism
and has thrown the predictability of production schedules out of gear. The impact can be seen in the
sales figures for the year. Before any of this unrest started, the Research team was working on a
variant, which helps in increasing fairness. This formula has shown very promising results in the lab
and could have tremendous impact on sales of Soft n Silky in the future and could result in becoming
a huge money spinner for the company in India going forward.

MentaDent Toothpaste and MentaDent Mouthwash

MentaDent Toothpaste was launched in India in 1995. It had a slow start and found it very difficult to
find its place in an already overcrowded market. It was patient and entered new markets only after
making its place in the existing market. This strategy worked for them. MentaDent is well entrenched
in North and West India and is slowly moving to the Central, East and South India. It is not a market
leader but is doing very well.

Seeing the success of MentaDent toothpaste, the Company decided to launch MentaDent Mouthwash
in the same markets in 2002. This idea was the brainchild of the then marketing head (present CEO).
Since there were very few players in this product category, R&R was very bullish on it. In anticipation
of huge sales, large volumes of product were produced and are in the current inventory. Given the
sales for the last 3 years, the existing inventories will last another 2 years. The product has a Best
Before Date of 5 years and that also needs to be dealt with.

Mazaa Sauce
Mazaa Sauce was acquired in 1997 in India. It had a national reach and did will in the category B
cities. It had a market share of 25%. After R&R took over Mazaa, a lot of money was spent on its
makeover and trying to get it into the Metros as well.

A lot of small players have entered the market in the last five years. This has resulted in huge price
cuts and almost yearlong consumer promos to ensure retention of market share. This is showing on
the dwindling profits of the brand. Mazaa has however managed to increase its market share to 30%
gradually over the years and is the market leader.

Recently there have been complaints flowing in from certain markets on the quality of the product.
Consumers are reported to be saying that such price cuts have to be at the expense of the quality of
the product. Internal findings show that there has been no change in the quality and it is understood
that some duplicate product may be making its way to certain markets.

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 Workforce Distribution
Condensed Milk (Russel's)

Packaged Soups (Robbin's)

4%
5% 4% 4% 21% Sauces (Mazaa)

5% Coffee (Aha)

Body Cream (Soft n Silky)

Oral Care (MentaDent)
15% 19%
Oral Care (MD Mouthw ash)
11% 12%
Detergent (Waves)

Detergent (Taazgi)

Soap (Petal)

Performance Reports of R&R Inc

Sales Contribution % 2005 2004 2003 2002 2001

Condensed Milk (Russel's) 4% 5% 4% 4% 5%
Packaged Soups (Robbin's) 11% 10% 9% 10% 10%
Sauces (Mazaa) 8% 8% 9% 10% 13%
Coffee (Aha) 17% 16% 14% 15% 15%
Body Cream (Soft n Silky) 4% 4% 4% 5% 6%
Oral Care (SuperDent) 14% 13% 15% 16% 17%
Oral Care (MD Mouthwash) 4% 4% 4% 4% 0%
Detergent (Waves) 10% 10% 14% 15% 16%
Detergent (Taazgi) 14% 13% 12% 0% 0%
Soap (Petal) 15% 16% 16% 19% 19%

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Profits % of sales (Rs. Mn) 2005 2004 2003 2002 2001
Condensed Milk (Russel's) 2% -10% 9% 13% 25%
Packaged Soups (Robbin's) 16% 18% 18% 18% 17%
Sauces (Mazaa) 7% 9% 11% 12% 11%
Coffee (Aha) 14% 14% 19% 19% 20%
Body Cream (Soft n Silky) 13% 17% 17% 19% 20%
Oral Care (SuperDent) 20% 22% 18% 19% 22%
Oral Care (MD Mouthwash) 13% 15% 14% 14%  
Detergent (Waves) 12% 12% 10% 11% 13%
Detergent (Taazgi) 20% 20% 21%    
Soap (Petal) 13% 13% 12% 12% 13%
Total 14% 15% 15% 15% 17%

Wage Bill (%) 2005 2004 2003 2002 2001

Condensed Milk (Russel's) 15% 15% 15% 16% 19%
Packaged Soups (Robbin's) 14% 14% 14% 15% 17%
Sauces (Mazaa) 21% 20% 20% 19% 23%
Coffee (Aha) 15% 15% 15% 15% 16%
Body Cream (Soft n Silky) 12% 12% 12% 12% 12%
Oral Care (MentaDent) 7% 7% 7% 7% 7%
Oral Care (MD Mouthwash) 7% 7% 7% 7%  
Detergent (Waves) 3% 3% 3% 3% 3%
Detergent (Taazgi) 3% 4% 4% 3%  
Soap (Petal) 3% 3% 3% 3% 3%
Total 100% 100% 100% 100% 100%

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Profile: BU Head of Waves Detergent

Rita, has been with R&R since its entry in India. She joined fresh out of B-school and is presently one
of the youngest BU Heads in R&R. Her efforts at building, not only the Waves but also the R&R
brand, in India, has been well recognised by the organisation. She is considered an expert at ‘niche’
marketing strategies and has been able to ensure close to zero defect production of Waves for the
past 10 years.
However the success of Taazgi is attributed to consolidated efforts of the management team and the
BU Lead of Maaza Sauce in particular, who presently shares a large part of the strategic responsibility
for Waves while she remains the Operational Head for the brand.

Profile: BU Head of Mentadent Mouthwash

Amit, has joined R&R 4 years back and was handpicked by the CEO, from the organisation that both
worked in before. Initially, the BU Head of Mentadent Toothpaste handled both the brands and was
responsible for P&L of both, while Amit was the operations Head of Mentadent Mouthwash. Over the
past year, Mentadent Mouthwash has been operating as an independent BU, headed by Amit.
Amit is a Mechanical Engineer and started his career in the production function of a leading consumer
durables company. He moved to Sales & Marketing later in his career and reported to the present
R&R CEO directly, in the Marketing Team of a leading FMCG MNC.

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