Sales and Distribution
Sales and Distribution
Management
Management
Project Report
Project Report
on Water
on Water
Purifiers
Purifiers
Submitted to: Prof. Bhalendar Singh Nayyar
Submitted to: Prof. Bhalendar Singh Nayyar
Submitted by:
Submitted by:
Group 10, SDM-E
Group 10, SDM-E
Pratik Jain
Pratik Jain
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–
211099
211099
Rahul Garg
Rahul Garg
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–
211107
211107
Shreshtha Gupta
Shreshtha Gupta
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–
211136
211136
Shubham Jain
Shubham Jain
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–
211138
211138
Varun Arora
Varun Arora
–
–
211158
211158
Aanchal Mahajan
Aanchal Mahajan
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–
211160
211160
Lavi Aggarwal
Lavi Aggarwal
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–
211170
211170
Table of Contents
Table of Contents
Part
Part –
– I
I –
– Industry
Industry Scenario
Scenario ...
...
...
...
...
... 6
6
Industry GrowthIndustry Growth over over last flast five years ive years ... ... 66 Changing market
Changing market share of share of different companies: ... different companies: ... 66 Industry growth
Industry growth for for next three next three years years ... ... 66 Method
Method used ...used ... 6... 6 Environment Scan o
Environment Scan o f the f the last two last two years: ...years: ... ... 77 Pestle
Pestle Analysis: ...Analysis: ... 7... 7 Political
Political and and legal: ...legal: ... ... 77 Economic: ... Economic: ... ... 77 Social: Social: ... 7... 7 Technology: ... Technology: ... ... 77 Environmental: ... Environmental: ... ... 77 Porters Five
Porters Five Force for Force for the industry: ...the industry: ... ... 77 Supplier
Supplier Power: ...Power: ... 8... 8 Buyers
Buyers Power: ...Power: ... 8... 8 New
New Entrant: ...Entrant: ... 8... 8 Threat
Threat from from substitute: substitute: ... 8... 8 Competitive
Competitive rivalry: ...rivalry: ... 8... 8 Major changes
Major changes in target in target market profile market profile and consumer behaviour and consumer behaviour ... ... 88 Target
Target Market ...Market ... 8... 8 Shift in
Shift in target market target market profile and profile and consumer behaviour ...consumer behaviour ... ... 99 Deprived: ...
Deprived: ... ... 99 Major
Major Changes: ...Changes: ... 9... 9 Aspirers:
Aspirers: ... 9.. 9 Major
Major Changes: ...Changes: ... 9... 9 Seekers: ...
Seekers: ... ... 99 Major
Major Changes: ...Changes: ... 9... 9 Strivers:
Strivers: ... 9.. 9 Global
Global Indians: ...Indians: ... 9... 9 Overall
Overall Major Major Changes: Changes: ... 9... 9
Part
Part –
– II
II –
– Sales
Sales Organisation
Organisation ...
...
...
...
...
... 10
10
Eureka ForbesEureka Forbes Limited ...Limited ... 10... 10 Territory design
Table of Contents
Table of Contents
Part
Part –
– I
I –
– Industry
Industry Scenario
Scenario ...
...
...
...
...
... 6
6
Industry GrowthIndustry Growth over over last flast five years ive years ... ... 66 Changing market
Changing market share of share of different companies: ... different companies: ... 66 Industry growth
Industry growth for for next three next three years years ... ... 66 Method
Method used ...used ... 6... 6 Environment Scan o
Environment Scan o f the f the last two last two years: ...years: ... ... 77 Pestle
Pestle Analysis: ...Analysis: ... 7... 7 Political
Political and and legal: ...legal: ... ... 77 Economic: ... Economic: ... ... 77 Social: Social: ... 7... 7 Technology: ... Technology: ... ... 77 Environmental: ... Environmental: ... ... 77 Porters Five
Porters Five Force for Force for the industry: ...the industry: ... ... 77 Supplier
Supplier Power: ...Power: ... 8... 8 Buyers
Buyers Power: ...Power: ... 8... 8 New
New Entrant: ...Entrant: ... 8... 8 Threat
Threat from from substitute: substitute: ... 8... 8 Competitive
Competitive rivalry: ...rivalry: ... 8... 8 Major changes
Major changes in target in target market profile market profile and consumer behaviour and consumer behaviour ... ... 88 Target
Target Market ...Market ... 8... 8 Shift in
Shift in target market target market profile and profile and consumer behaviour ...consumer behaviour ... ... 99 Deprived: ...
Deprived: ... ... 99 Major
Major Changes: ...Changes: ... 9... 9 Aspirers:
Aspirers: ... 9.. 9 Major
Major Changes: ...Changes: ... 9... 9 Seekers: ...
Seekers: ... ... 99 Major
Major Changes: ...Changes: ... 9... 9 Strivers:
Strivers: ... 9.. 9 Global
Global Indians: ...Indians: ... 9... 9 Overall
Overall Major Major Changes: Changes: ... 9... 9
Part
Part –
– II
II –
– Sales
Sales Organisation
Organisation ...
...
...
...
...
... 10
10
Eureka ForbesEureka Forbes Limited ...Limited ... 10... 10 Territory design
Sales force
Sales force skill set skill set Analysis ...Analysis ... ... 1111 Recruitment o
Recruitment of f EuroChamp ...EuroChamp ... 12... 12 Selection
Selection of of EuroChamp EuroChamp ... 12... 12 Training
Training & & Development ...Development ... 12... 12 Training
Training for for Leaders ...Leaders ... ... 1313 Other
Other Trainings Trainings ... ... 1313 EFL
EFL Compensation Compensation Structure Structure ... 13... 13 Prospecting, Reporting &
Prospecting, Reporting & Degree of Degree of sales force automation ... sales force automation ... 1414 ION Exchange
ION Exchange (Zero B) (Zero B) ... ... 1515 Recruitment
Recruitment & & Selection ...Selection ... ... 1515 Training
Training & & Development ...Development ... 16... 16 Skill
Skill Set Set Analysis ...Analysis ... 16... 16 HUL
HUL Pureit ...Pureit ... 16... 16 Sales
Sales Organization Organization and and Territory DTerritory Design esign ... 16... 16 Sales
Sales Organization ...Organization ... 17... 17 Territory
Territory Design Design ... ... 1717 Skill set
Skill set required for required for front line front line sales people ...sales people ... ... 1818 Recruitment and S
Recruitment and Selection process oelection process o f the f the sales people sales people ... ... 1818 Effectiveness of
Effectiveness of various training mvarious training m ethods for ethods for the sales the sales staff staff ... ... 1919 Compensation
Compensation Structure ...Structure ... 19... 19 Method of
Method of prospecting and prospecting and reporting with reporting with degree of degree of sales force sales force automation automation ... ... 1919 TATA
TATA SWACH ...SWACH ... 20... 20 Sales organisation
Sales organisation and Territory and Territory Design ...Design ... ... 2020 Sales S
Sales Structure for tructure for Online Online Sales: Sales: ... ... 2121 Sales Structure for
Sales Structure for Croma & other Croma & other Modern Retail outlets: ... Modern Retail outlets: ... 2222 Skill S
Skill Sets required ets required for Sfor Sales Staff ales Staff by Supervisor: by Supervisor: ... ... 2222 Skills set required
Skills set required for the for the Area Sales Manager by Area Sales Manager by Zonal Manager: Zonal Manager: ... ... 2222 Recruitment and
Recruitment and Selection PoSelection Policy for licy for sales people: sales people: ... ... 2222 Training given
Training given to the to the Sales staff Sales staff and its and its effectiveness effectiveness ... ... 2323 Compensation
Compensation Structure ...Structure ... 23... 23 Method of Prospecting and Reporting with
Method of Prospecting and Reporting with the degree of Sales Fthe degree of Sales F orce Automation ... orce Automation ... 2323 Kent
Kent ... ... 2424 Direct sales division (DSA’s)
Direct sales division (DSA’s)- - ... 24... 24 Retail
Corporate
Corporate sales sales division- division- ... 25... 25 Territory
Territory design- ...design- ... 25... 25 Analysis of the
Analysis of the effectiveness of the effectiveness of the current sales strategy: ... current sales strategy: ... 2525 Hierarchy of
Hierarchy of the organization (the organization ( Sales division) ... Sales division) ... 2626 Ranking of
Ranking of skill sets required for skill sets required for sales staff by sales staff by supervisors...supervisors... ... 2626 Recruitment and S
Recruitment and Selection of election of sales people sales people ... ... 2626 Effectiveness of
Effectiveness of different training different training methods for methods for sales staff sales staff ... 26... 26 Compensation structure
Compensation structure of of the sales the sales force force ... ... 2727 Method of
Method of prospecting and prospecting and reporting with reporting with degree of degree of sales force sales force automation automation ... ... 2727 WHIRLPOOL ...
WHIRLPOOL ... ... 2727 Retail
Retail channel channel sales: sales: ... 27... 27 Corporate
Corporate sales sales division: ...division: ... 27... 27 Recruitment and S
Recruitment and Selection of election of sales people sales people ... ... 2828 Compensation structure
Compensation structure of of the sales the sales force force ... ... 2828
Part
Part –
– III
III –
– Distribution Network ... 28
Distribution Network ... 28
Eureka ForbesEureka Forbes Limited ...Limited ... 28... 28 Traditional
Traditional Retail Retail channel ...channel ... ... 2828 Business
Business Partner Partner (Franchisee) (Franchisee) ... 29... 29 New
New Channels ...Channels ... 29... 29 Rural Channel (described
Rural Channel (described in Changes over last in Changes over last five years) ...five years) ... ... 2929 Supply
Supply Chain ...Chain ... 29... 29 Retail
Retail Channel ...Channel ... 29... 29 Direct
Direct Sales Sales Channel...Channel... 29... 29 Changes in Distribution
Changes in Distribution policies over last policies over last 5 years... 5 years... 3030 Channel
Channel Conflicts Conflicts ... ... 3131 Retail:
Retail: Pull Pull Strategy ...Strategy ... 31... 31 Direct
Direct Selling: Selling: Push SPush Strategy ...trategy ... ... 3131 Trade Margins
Trade Margins and and Other Discounts ...Other Discounts ... 32... 32 Impact o
Impact of Modern f Modern Retail on Retail on Distribution Distribution ... ... 3232 Impact o
Impact of f Internet over Internet over distribution ...distribution ... 32... 32 Ion
Ion Exchange(Zero Exchange(Zero B) ...B) ... ... 3333 Trade Margins
Trade Margins and and Other Discounts ...Other Discounts ... 33... 33 Cooperative
Cooperative Advertisement ...Advertisement ... 33... 33 HUL Pureit’s
Distribution
Distribution Network ... Network ... 3434 Main
Main Impact ...Impact ... 35... 35 RURAL
RURAL Segment ...Segment ... 35... 35 Service Output
Service Output demand for Wdemand for Water Purifier ater Purifier Industry:- Industry:- ... ... 3535 HUL Pureit’s SERVICE OUTPUT DEMAND and Its Application:
HUL Pureit’s SERVICE OUTPUT DEMAND and Its Application:- - ... ... 3636 Marketing flows considered important
Marketing flows considered important by the customers by the customers for the category ... 36for the category ... 36 Areas of vertical
Areas of vertical and horizontal conflict and horizontal conflict and possible solutions ... and possible solutions ... 3838 Solutions
Solutions to to these conflthese conflicts ...icts ... 38... 38 Impact of
Impact of modern retail modern retail on distribution ...on distribution ... 38... 38 Trade margins
Trade margins and other and other discounts ...discounts ... ... 3838 Impact of
Impact of internet on internet on distribution ...distribution ... ... 3939 Supply chain
Supply chain of the of the industry ...industry ... ... 3939 Level o
Level of f Cooperative Advertising ...Cooperative Advertising ... 40... 40 TATA
TATA Swatch Swatch ... ... 4040 Distribution
Distribution Network ... Network ... 4040 Major Changes i
Major Changes in Distribution n Distribution Policies in Policies in past 5 past 5 Years Years ... ... 4141 RURAL
RURAL Segment: ...Segment: ... 41... 41 SERVICE OUTPUT D
SERVICE OUTPUT DEMAND and EMAND and Its Application... Its Application... 4141 Marketing flows considered important
Marketing flows considered important by the customers for by the customers for the category ... the category ... 4242 Areas of
Areas of Vertical Vertical and Horizontal and Horizontal Conflict Conflict ... ... 4343 Impact of
Impact of modern retail modern retail on distribution ...on distribution ... 44... 44 Trade Margins
Trade Margins and and other discounts ...other discounts ... ... 4444 Impact
Impact of of Internet on Internet on Distribution Distribution ... ... 4444 Supply
Supply Chain ...Chain ... 45... 45 Level of
Level of Cooperative promotion Cooperative promotion in Tata in Tata Swach Swach ... ... 4545 Kent
Kent ... ... 4545 Marketing flows considered important
Marketing flows considered important by the customers for by the customers for the category ... the category ... 4646 Trace the route back from retailer to manufacturer to determine levels and intensity of
Trace the route back from retailer to manufacturer to determine levels and intensity of distribution ...
distribution ... ... 4747 Trace any major changes in
Trace any major changes in the distribution policies over the the distribution policies over the last 5 years and their last 5 years and their impact impact ... ... 4747 Identify areas of vertical a
Identify areas of vertical and horizontal conflict and nd horizontal conflict and possible solutions ... possible solutions ... 4848
Horizontal Conflict
Horizontal Conflict... 48... 48 Impact of
Impact of modern retail modern retail on distribution ...on distribution ... 48... 48 Trade margins
Impact of internet on distribution ... 49
Supply Chain of the Industry ... 49
Level of cooperative advertising ... 50
WHIRLPOOL ... 50
Sales organization and territory design ... 50
Recruitment and Selection of sales people ... 50
Compensation structure of the sales force ... 51
Distribution ... 51
Trade margins and other discounts ... 51
Areas of vertical and horizontal conflict and possible solutions ... 52
Possible Solution ... 52
Impact of modern retail on distribution ... 52
Impact of internet on distribution ... 52
Supply chain ... 53
Part – I – Industry Scenario
Industry Growth over last five years
Year Turnover 2012-13 1650 Crores 2011-12 1400 Crores 2010-11 1142 Crores 2009-10 980 Crores 2008-09 840 Crores
Source: Adi-Media Publication, Economic Times.
Changing market share of different companies:
RO Based water purifiers
% Share value-wise
Aquaguard (EFL) 44.3%
Kent 38.8%
Zero-B 10.3%
Fig. % share of major players in RO based water purifiers (2010-11)
Offline Based purifiers
% Share value-wise
HUL 73.62%
Aquasure (EFL) 17.60%
Kent 8.14%
Fig. % share of major players in Offline Based water purifiers (2010-11)
Inline/UV based purifiers
% share value-wise Aquaguard (EFL) 65.64%
Aquasure (EFL) 19.77%
HUL Autofill 5.46%
Fig. % share of major players in Inline/UV based water purifiers (2010-11)
The market leader of course is Eureka Forbes‟ brand Aqua guard with 57 per cent share in the RO, 75 per cent in UV and 20 per cent in the storage category (Aquasure). Overall, it has 54 per cent share in
the industry (as of 2012).
Industry growth for next three years
Year Market size(Rs crore)
2013-14 1989.6
2014-15 2387.52
2015-16 2865
Method used
Assumption- Water purifier segment in India will grow at a compounded annual growth rate (CAGR) of about 20 per cent due to the rising demand for water purifiers and increasing disposable incomes of the people. We do not take the 25 percent growth due to the high penetration and stagnation of the RO segment.
Therefore taking the actual industry size of 1658 i n 2012-13 and applying the CAGR of 20%, we get the forecast for the next 3 years.
If we take both the organized and the unorganized sector, the current market size is around 3200 crores and taking a CAGR of 20 percent, the size in the next 3 years for 2013-14, 2014-15, 2015-16 will be Rs 3840crore, Rs4608 crore, Rs5529.6 crore respectively.
In 2013, taking in account RO filters grows at 17% CAGR = 49.28cr
In 2014, taking in account RO filters grows at 16% CAGR so does whirlpool = 57.17cr In 2015, taking in account RO filters grows at 15% CAGR = 65.74cr
Environment Scan of the last two years:
Pestle Analysis: Political and legal:
“Water Quality Association” has taken a step to maintain a minimum quality standard for the
industry, in the back drop of increasing home grown low quality product companies.
The country is going through a politically stable period which is good for the industry.
Economic:
The economic condition is still better as compared to the global condition, although the
growth has slowed down to 5% the water purifier industry is growing at a rate of around 20% annually.
Countries middle class is still growing and the buying capacity of consumer is increasing. The value of rupee is falling in comparison to dollar which in turn deterrent for small
companies which imports purifier parts from China and other nations. Social:
Awareness of ill effects of tap water is increasing among the consumer which in turn is
increasing the sales of water purifier.
Reach of pure water in rural area is less as compared to urban areas which is again increasing
the sales of water purifier.
The consumers are becoming more hygiene conscious and hence water purifiers are becoming
basic necessity. Technology:
Tata Chemicals has launched a low price water purifier based on Rice Husk technology to
serve the masses.
Eureka Forbes has partnered with Water Security Corporation to launch a low cost purifier
based on NASA technology. Environmental:
India is rapidly growing with this there is pressure on every natural resource and as such large
scale deterioration is taking place in the quality of water.
Rivers are flooded with industrial waste also the quality of ground water is decreasing with
these high level of harmful content the sales of water purifier is increasing.
Supplier Power:
The supplier power islow as the components used in manufacturing of water purifier are basically commodities which are easily available to all the companies. Also the market is fragmented with no company having a share of more than 60%.
Buyers Power:
The buyer power of consumers is high in water purifier industry because there are many firms in the market selling almost similar product with same price tag. Also power of distributors is high as most of the sales of water purifier takes from this channel.
New Entrant:
The industry is still in its growth phase and as such many new consumer durables have entered the market and some are still planning to enter the market, also the investment requirement in this industry is low as compared to returns that are possible and hence we can see many home grown companies like Kent Ro in the market which are performing well. Hence the treat of new entrants is
high.
Threat from substitute:
Substitutes like boiling water and other methods are still used by the consumers, also as these methods do not require any additional investment this will be a viable substitute for water purifiers. Lack of electricity, replacement of batteries, and maintenance requirement of water purifier make the
substitute better for the consumers. But the consumer behaviour is changing and more people are shifting towards water purifier, hence treat from substitute ismedium.
Competitive rivalry:
The industry is growing at a very rapid pace and hence, has seen the entrance of industry giants like Tata Chemicals, Philips, Videocon etc and also many new players like Kent Ro have come up in the market. Hence we can see that all the companies are trying to grab as much share in the market by using their competency like high capital investment capability (Tata Chemical), innovation (Kent Ro), distribution network (HUL) etc. Hence we can say that competitive rivalry in the water purifier
industry ishigh.
Major changes in target market profile and consumer behaviour
Target Market
As per 2011 Census, total number of households in India is 246,692,667 (24crore). Out of thisRural households are 167,826,730(16crore) andUrban households are 78,865,937 (8crore).
Potential target user for EFL‟s products is any household which does not have access to safe drinking water. This means a potential target of 40 crore people which is almost 10 crore households.
According to the 11th Five-Year Plan report, there are about 2.17 lakh quality-affected habitations in the country, and about 66 million people are at risk due to excess fluoride in 200 districts of 17 states. As of 2012, EFL had a customer base of 9 million households and with the after sales service
demands of the customer these households also form a part of target segment.
EFL follows full market coverage and has a differentiated product offering suiting the needs and demands of different types of consumers.
Major factor that differentiates the products is whether they are in electrical or non-Electrical
segment. The non-electric segment also called the Inline or Storage based segment is targeted towards
semi urban and rural areas which do not have a regular electric supply. Since regular water supply is not needed for storage segment, it is suited for areas where water and electric supply is
unpredictable.Since, the water problems are more profound in the Ti er II and III cities and rural areas products have been designed specifically keeping the needs of such areas in mind. Aquaguard Water
shops have been set up in rural areas to educate consumers about the hazards of drinking unclean water. Certain products like Aquaguard Integra 7 which is a seven stage water purifier was designed keeping in mind the specific drinking water problems faced inDelhi and neighboring region
(Geographic Segmentation).
The low-cost offering of high-end durables targeted at households in small t owns and rural India are the water purifiers from the house of Eureka Forbes and Hindustan Unilever. Both are becoming increasingly popular because they are effective and affordable. Also, they do not run on electricity or
require continuous water supply and, therefore, are ideal for locations where water and power supply is unpredictable. Other aggressive brands available in the offline category are Kent, Zero B, Bajaj, and Tata.
Market was divided so as to cater the need of every individual. First segmentation was done on the basis of Annual Income of the family.
On the Basis of Annual Income Households in Millions
Deprived < Rs 90000/- 85
Aspirers Rs 90,000/- to Rs 200,000/- 135
Seekers Rs 200,000/- to Rs 500,000/- 11
Strivers Rs 500,000/- to Rs 1000,000/- 2.5
Global Indians >Rs 10,00,000/- Less than 1.5 Millions
Source: Adi-Media PublicationEthnic Consumers Consulting, Economic TimesIvey Case Study Shift in target market profile and consumer behaviour
Deprived: This segment mainly consists of Subsistence farmers and unskilled labourers. These people are not concerned of taste of the water; these are just concerned about water being not
contaminated and fit for drinking. Since these households are daily-wage earners, so they cannot afford to miss work. These people lives in rural areas and are deprived of Electricity resources as well. These people do not have continuous supply of water, they generally stores water in mud-pots or steel buckets.
Major Changes: Numbers of Deprived are getting reduced because of development and growth. Aspirers: This segment mainly consists of Small scale shopkeepers, farmers who owns small piece
of land and industrial workers. These people are also not concerned about taste but only health. Many of these households are not deprived of electricity but they never get continuous electricity and they also do not get continuous supply of water.
Major Changes: With the development of rural India and schemes for benefitting the deprived people, many of this segment has risen and are looking for better basic necessities.
Seekers: This segment consists of Young college graduates, Government employees at intermediate level and owners of small to medium sized businesses. These types of people are not only concerned about health of the family but also about taste of water and have continuous supply of water and electricity.
Major Changes: With the increase in buying appetite of these people, this segment has also rising and falling into strivers segment wherein they look forward for making their life much better. Strivers: This segment consists of Senior Government employees, owners and managers of
individuals. These people concern about health and taste of water, they also think water purifier as a style statement.
Global Indians: This segment consists of Senior Executives in Large corporations, owners of larger businesses, politician and rich farmers with large land holdings. These people are concerned about
health of the family, taste of water and design of water purifiers as they want it to be fully automatic and sleek in look.
Overall Major Changes: It is reported that groundwater in one-third of India's 600 districts is not fit for drinking as the concentration of fluoride, iron, salinity and arsenic exceeds the tolerance levels. With increasing number of people becoming conscious of the risks of drinking contaminated water, the demand for water purifiers is rising rapidly. The rising prosperity in rural India means people may be willing to pay more for safe water.
Part – II – Sales Organisation
Eureka Forbes Limited
Sales force at EFL has been grouped into three divisions –
Direct Sales division Retail Sales division
Professional Sales division
Possible reasons for this division can be as follows –
Different selling process – Professional sales period is typically longer as compared to direct
and retail divisions.
Different selling skills needed by the sales force – Direct Sales rep needs to have an in depth
knowledge of the product as compared to Retail Sales rep.
More focused approach to cater to customers – Retail and Professional sales divisions posting
strong growth rate (55.75% in retail and 40.38% in Industrial division as of 2006-07).
1. Direct Sales Division
The Direct Sales division comprises of 8000 plus salesmen. To avoid competition with a parallel Retail sales division, only high end products like “Aquaguard Total” and “Aquaguard Genius” are sold via the direct sales route. This seems logical too because the high end products which are more expensive and loaded with extensive features need proper demonstration possible only via door to door demonstrations. Direct Selling is expensive, so it is suited for higher value products. As of 2012, there are over 200 direct selling centres in over 100 cities commanding a base of more than 6 million customers (source : Economic Times dated Nov 2, 2012).
2. Retail Sales Division
EFL Water Purifiers have presence in 15000 outlets through which primarily mass market products priced around Rs. 1600 like non electric resin based purifiers (AquaSure) are sold. The
outlets are spread over 600 Indian cities with a dedicated sales force of over 150 people. (Source: Economic Times dated Nov 2, 2012).
Decision to shift focus from direct sales to retail was taken because of change in people‟s
lifestyles and increased competition. Nowadays, both husband and wife are working, so t here is no one at home and therefore the direct sales force is unable to reach a l arge segment of people. As per Mr. MarzinShroff, CEO of direct sales and senior vice-president of marketing, EFL is selling several models,both premium and mass segment, across national and regional stores and Canteen Department Stores. Moreover, it is manufacturing certain products only for the retail channel. However, price of products sold in retail stores is less than those sold by direct route because customers look for good value for money products in the retail outlets.
3. Professional Sales Division
EFL appointed a fully functional B2B sales division by 1990s. The sales force had to reach the customer directly and through the distributors. By 2007, t he professional sales division grew to a sales force of 100 salespersons servicing over 9000 workplaces including schools, institutions, offices etc.
Direct Sales force hierarchy at EFL is as follows – 1. National Head
2. General Manager 3. Area Sales Manager 4. Divisional Sales Manager
5. Deputy Divisional Sales Manager 6. Branch Manager
7. Head of location 8. Team Leader 9. Group Leader
Retail sales force hierarchy at regional level is as follows – 1. National Sales Manager
2. Regional Sales manager 3. Zonal Head
4. State Head 5. Area Head
6. Territory Sales Executive a. ISP Co-ordinator
i. In shop promoter b. Territory head
i. Field Sales officer Territory design at EFL
Territories are designed by the upper level management through considering 4 parameters: 1. Selecting a basic geographical control unit
2. Determining the sales potential present in each unit 3. Combining units into tentative territories
4. Adjusting the differences in coverage difficulty
Clover leaf territory shape is used in which customers are located randomly in the territory. Due to the effective territory design, 10000 plus demonstrations happen in India each day. Over 40000 kitchen visits are done each day by the service team. With the existing territory design, EFL‟s direct sales force is able to cover 8 cities and 149 towns in Tier I, II and III. This comprises of 63% of SEC A& B households.
Off late, a shift has been observed with the territory allocation parameters. Apart from the geography and sales potential, the local water quality i s also taken into account. Salespeople of areas in which TDS (Total dissolved salts) is less e.g. Mumbai are given the task of selling UV based products and not RO.
Sales force skill set Analysis
Sales Managers are involved in three key processes: Recruiting, Training and Managing. Sales Managers therefore have identified some skill sets that they look for while recruiting.
Expectations from Sales Executive (Sales Person) for Direct Sales:
Knocking/meeting prospective customers.
Convincing the customers about the benefits of Aquaguard water purifier and Euroclean
Vacuum cleaner
Writing daily activity report. Issue of units and clearance.
Depositing payments in Accounts. Late afternoon commercial knocking.
Product deliveries and collection of payments. Evening demonstration and sales closing.
Though the company saw a drop in the quality of sales people in 2006-07 as much skilled talent was being taken away by the other employment sectors offering better income and lifestyle. In 2006, EFL
faced high attrition rate of 40%. But EFL has been able to combat this issue by offering better salaries and better opportunities to grow in the organization. Now EFL considers its 8000+ sales force as an asset and consider them to be “Solution Providers”. To maintain a sales force with great skill sets, EFL at their annual Eurochamps ceremony send over 1000 performing young salesmen abroad to places like Phuket, Hong Kong and Macau. EFL now believes that apart from money, their motivation
and appreciation techniques have helped to retain salesmen with appropriate skills and have made Eurochamps go beyond their roles and raise the bar.
Expectations from Sales Person for Retail –
Demonstrate company‟s world class products Sell products in high numbers
Foster Relationships
Grow in organization through the route of professional selling and meeting people one to one. Put in hard work and enjoy with generous contributions from the company.
Expectations from Institutional Sales Executive:
Sales: achieving revenue targets from the territory.
Generation and business development in the assigned territory. Proposal submission.
Negotiation.
Payment collection.
New account development and management. Structured Reporting: Weekly
Recruitment of EuroChamp
Recruitment refers to the process of finding and hiring the best-qualified candidate (from within or outside of an organization) for a job opening, in a timely and cost effective manner. It is the most important function because unless the right types of people are hired even the best plan and
organization system would not do much good. Systematic recruitment of salesman leads to greater productivity. In Eureka Forbes, first of all recruitment policy is established when it is found that there
is a need for a salesman. First, the information is sought about the prospective employees from the present or former employees of the organization. The evaluation of the information collected is done
and a decision is made to select or reject the prospective salesman. The company also gives advertisement in local newspaper, journals and magazines. Interviews are held up as per a proper selection process.
Selection of EuroChamp
Selection is the processes in which candidates for employment are divided into two classes, those who offered employment and those who are not. While selecting the salesman in Eureka Forbes, following qualities are taken into consideration:
Physical Qualities Social Qualities Mental Qualities Moral Qualities
The different channels of recruitment at Eureka Forbes:
Friends Get a Friend‟ scheme Newspaper Advertisements Recruitment Through Campuses Employment Exchanges
Apart from all these methods, Eureka Forbes has also started approaching rural and semi urban communities, through NGOs and people who work in this field especially in the areas like
Maharashtra, Madhya Pradesh. They interact with the rural and semi urban communities, shortlist people, and conduct training for selected people.
Training & Development
Mix of Training Methods is used like Lectures, Mentoring and Job Instruction.
All the new people are first of all made familiar with the company. They are first of all briefed about the company in detail. After this they all go through a week long Training Program known as “My First Week”.
It comprises of
Orientation on the Company Selling Skills
This training covers both Soft Skills and the Hard Skills. It is a mix of Classroom training and Field training. Half of the day is on classroom training and second half on field training in which they all practice what all they have learnt. This training involves:
Prospecting
How to make a door entry How to interact with customers How to demonstrate the product How to handle customer‟s objections How to close sale
Employees practice this on field and come up with doubts next day.
At the end of the training program, test is conducted to check how much they have learnt. In this way follow up can be easily taken up and required change and improvement can be suggested.
For initial 2-3 weeks, new employees work with the senior executives and learn practically from them. Once the senior executive think that now employees can handle a call, they are given their targets.
The problem with this Mentoring Method is
It is not necessary that senior executives have good mentoring skills. Senior Executives can also take it as a burden.
But on the other hand, this training method leads to optimum utilization of time and is cost effective. Training for Leaders
EFL has a culture of grooming employees to leaders. They don‟t recruit people from outside but groom the present pool of employees.
For this Lecture Method and Role Plays are used.
Training for 2-3 days is imparted on Managerial Skills, Recruitment Skills, and Mentoring etc.
This motivates the employees to perform better and will inculcate the feeling of Pride and Satisfaction as these training grooms an employee on a personal front.
Other Trainings
Salesmen are sent for MBA so that they can develop managerial skills which can be used in
performing their job in a better way.
Undergraduates are given opportunities to study further and become graduates.
As new product is launched, all the employees are trained about the features and functioning
of that very product.
All this will lead to Employee Satisfaction because of personal development and will lead to a
culture of Continuous learning in organization.
Despite of so many effortand cost involved in training, the attrition rate among Euro Champs is high due tothe sales target. Compensation is variable and based on the t arget achieved. As a result people don‟t get enough motivation to work and there in these training processes also do not contribute in motivating employees to work.
Another problem is that the supervisors are many times not comfortable with training or mentoring the new employees as their focus is solely on meeting their targets and this responsibility of new employees comes up as a burden.
All the training methods in EFL aim for development of employees and company which helps it maintaining its market leadership.
EFL Compensation Structure
Compensation Structure: 60% Fixed/ 40% Variable
Income
Eurochamp Group Leader
Fixed Component – A (In INR) (in INR)
Basic 3200 4100
House Rent Allowance 800 1150 Leave Travel Concession 200 250
Medical 75 75
Bike Maintenance 100 100
Bonus 500 700
Provident Fund 250 350
Special Pay or Allowance 250 250 Special Promotion Expenses
Total – A 5375 6975
Variable Component – B
Holiday Bonus 200 200
Sales/Service related Expenses
Petrol 1000 3000
Quarterly Commission 500 700 Commission (monthly for BM)
Group Commission
Contingency Compensation
Performance Incentive 1600 1500 Productivity Bases Incentive
HCRC Allowance
Friendship Chain 900 600
Total B 3500 6000
Total A+B 8875 12975
Position Monthly Salary Range (INR) Monthly Average Salary
(INR)
Service Coordinator 6687 – 7285 6900 Team Leader 15000 – 18000 16800 Territory Head (HCRC) 36300 – 39000 37250
In its early days EFL followed a compensation structure of 50:50 with respect to its fixed and variable components respectively, but that structure was subsequently replaced by a 60:40 compensation
structure. This change is in tune with EFL‟s new found principle of rewarding the process rather that result. As a result of this structure the Eurochamps are less burdened with the final conversion rate and are more focused towards the customer satisfaction and problem solving. More over this structure has greatly reduced the high turnover ratios which EFL was earlier suffering from. Since the
Eurochamps are now greatly rewarded for the various steps they follow during a sales pitch their overall performance has improved, resulting in improved sales for EFL.
Prospecting, Reporting & Degree of sales force automation At EFL the prospecting are done in the following ways –
a) Customer Enquiry – The EFL advertisements generates customers enquiry which is then converted into prospects by following up on them and telling them about the benefits of the products
b) Household Knocking – The Eurochamps go from door to door in the areas they are allocated and then do random household knocking asking the people about interest in their products c) Telemarketing – The telemarketing division at EFL gives random calls from yellow pages
and then if any person shows any interest then that interest is converted into prospect. d) Chain prospecting – The prospect who is interested to buy the product or the ones who are
converted into sales are further asked for recommendation for prospects if any of their friends or family are interested in buying the EFL products.
e) Call Connect System – A consumer fills out and submits a “lead form” online, an automated process identifies his or her location based on the pin code supplied. The system then
identifies the nearest sales team, makes an outbound call to a salesperson and one to the customer. The system then connects the two calls -- all with an expected hold time of less
than 30 seconds. “There is often a lag between a customer filling out a lead form and the team getting back to him. This system cuts down the lag time drastically. It also works on SMS and telephone.
f) Leads from Facebook and website – EFL currently gets only four to five leads from
Facebook every month. But it manages 35,000 leads a month through organic traffic and an additional 40,000 leads a month from its brand display campaigns. The conversion of leads from hits on EFL‟s own website are high -- 40% to 45% of total leads. It‟s brilliantly cost effective. The cost of each lead is the lowest as compared to advertising or door knocks. The company web-site and call centre (manned by disabled individuals), provides the salesmen with thousands of referrals every month.
Steps in Prospecting–
Identify and qualify prospects
Company qualifies the leads by contacting them by mail or phone to assess their level of
interest and financial capacity
'Hot' prospects are turned over to the field sales force Warm prospects to telemarketing units
It takes about 4 calls on a prospect to accomplish a business transaction
Eurochamps are then required to learn as much as possible about the prospect before
approaching them
Then the EuroChamp are required to set up call objectives, i.e. to qualify the prospect, gather
information and/or make immediate sale
Eurochamps them initiates the contract by making a phone call to the prospect to take an
appointment for the demonstration
After that the sales person tells the product "story" to the buyer using features, advantages,
benefits and value approach
Handling customer's psychological and logical resistance. To handle such objections t he
Eurochamps needs to have positive approach.
Eurochamps are required to negotiate on issues regarding price, contract completion time,
quality of goods and services offered and product safety.
The last and one of the most important parts is closing the sales. This includes closing signs
from buyers i.e., physical action, statements or comments and questions. Eurochamps also provides buyer with minor choices such as colour or size, or indicate what the buyer will lose by not placing the order now.
Reporting–
Briefing is till 8 o'clock in the morning 8:15am to 11:15am is household knocking 12noon-2pm is reporting including lunch time 2pm-4pm commercial knocking
4pm-5pm is reporting
5pm-8pm demos if any/fresh knocking Last reporting
The Eurochamps have a cycle of 28days and sets target accordingly and they have a weekly closing of 7 days at the end of which there is again reporting.
ION Exchange (Zero B)
Recruitment & Selection
At ZERO B (ion exchange), the opportunities for the job of sales executive are open for one and all. The application for the hiring of sales executives is posted on the company‟s website and also
communicated to many applicants via the existing employees of the organization. The applicants are required to clear two stages to get the job: the first one is the i nterview by the Human Resource
department of the company. If the applicant clears this interview, he/she moves on to the next step which is the interview by the Head of relevant department (in this case, Sales). The employees having prior experience are valued.
The candidate, who clears both the stages, negotiates the salary and is then arranged for a training period of limited duration to get acquainted with the new job and working environment. The
r esponsibilities for the job are basically the fulfill ment of sales quotas and monitoring and reviewing of the dealers and customer‟s satisfaction. The company has introduced a system of performance appraisal against objectives or key result areas, set and reviewed jointly, half-yearly and annually. The appraisal process is considered important because it helps identify the strengths of a person, the
potential for development and growth, areas of improvement and training required. It also serves as a tool for long term human resource planning and development.
Training & Development
Zero B focuses on the training of employees on three aspects:
Product Training Application Training Functional Training
Most of the trainings are doneon-the-Job and throughstructured group programs. Initially, when an employee joins the company, 3-4 days orientation training i s given so that employee gets familiar with the organization. Along with that employees are given proper knowledge about the products and its functioning. Whenever new product is launched, training is imparted to the employees accordingly. Technical and Managerial Training is imparted from time to time. Such trainings are provided by the HRD department. Some of the trainings are outsourced to external institutions.
Skill Set Analysis
Expectations from sales executive –
To do institutional sales, corporate sales.
To visit Hotels/ Hospitals/ builders/ architecture/ Govt.sector To handle dealers and pull business through them.
To increase business by generating enquiries
To contact customers, give demonstration and sell range of water purifiers.
HUL Pureit
Sales Organization and Territory Design
National Sales Head Area Sales Manager(North) Business Developer Territory Sales Officer Sales Representative Area Sales Manager(South) Business Developer Territory Sales Officer Sales Representative Area Sales Manager(West) Business Developer Territory Sales Officer Sales Representative Area Sales Manager(East) Business Developer Territory Sales Officer Sales Representative
Sales Organization
Territory Design
The above diagrams show the Sales Organization and Territory design at HUL Pureit. India geographically has been divided into four regions by the companies which are as follows:
North South East West
Each region comprises of six to seven states and each state is further divided into various zones.
For example-In case of Delhi, the division is such that the entire state is divided into four major zones, where Noida, Ghaziabad and the whole of South Delhi come under one zone and similarly, the same is applicable for Gurgaon and Faridabad as well.
Division of the state depends upon not just the population of that state but also t he total area of that state.
For example- big cities like Uttar Pradesh is further divided into two parts and similarly, Rajasthan is also divided into four parts.
At the same time, interestingly, Delhi, though is relatively a smaller state in terms of area but it is divided into 4 zones because of its high and growing consumption capacity.
Thus, it‟s not just the population that the company keeps in mind while creating zones for a particular state, but also its population and hence the consumption capacity.
•Territory Area Sales Manager
The number of Area Sales Managers responsible for a particular state is on the basis of its area and population.
For example- In case of Delhi, there is one Area Sales Manager, who is responsible for the entire sales and distribution of the state.
• Business Developer
Business Developers work under the purview of the Territory Area Sales Managers. They are responsible for the sales and distribution for particular zones in a state.
For example-In case of Delhi, there are four Business Developers for four different zones in the state, i.e. North, South, East and West.
Noida and Ghaziabad area are under the same Business Developer who is responsible for Faridabad and Gurgaon.
Big states like Rajasthan are divided into four parts connecting major cities. Each part comes under one Business Developer and there are about two to t hree Territory sales officers who report directly to Business Developers and are responsible for their particular regions.
India
North
States
Zones
Districts
South
States
Zones
Districts
East
States
Zones
Districts
• Territory sales officers
They are responsible for one particular region. Although, most of the times, these Territory Sales Officers come under the purview of the Business Developers, however, in some cases, they directly report to the Area Sales Manager.
Also, Territory sales officers are in direct contact with the distributors and sales representatives, which are outsourced to the third parties by HUL.
Pros and Cons of the sales structure and territory are as follows:
Pros:
All the people under Area Sales Managers are not under the payroll of Pureit as it is outsourced; hence the cost of recruiting and firing i s less.
There is normally one Territory sales officer for one distributor, hence the service given to each distributor is not compromised
Cons:
The Territory sales officers are outsourced; hence the motivation level in them is less.
The Territory sales officers are managed by another company hence there is always a chance of conflict between Pureit and the outsourced company.
Skill set required for front line sales people
Good communication skills: It is very important for the sales persons at HUL Pureit to have good communication skills since this ensures clarity of words and thoughts. A salesperson with good communication skills can very easily explain all the details to the customer well and similarly, handle all the necessary queries well
Good Negotiation Skills: Good Sales personnel must have good negotiation skills in order to understand the customer requirement well and make a good decision on the part of both, the company as well as the customer. At HUL Pureit, negotiation skills play a very important role at every step of the sales process.
Intellectual Ability:Presence of intellectual ability in sales people cannot be ignored since in field of sales, speed and consistency matters. It is not only important for the sales person to be speedy and consistent in his performance, but it is also important to have agility or in other words to be flexible enough to deal with various kind of customers and work under various situations.
Prior experience in Sales:It is considered very good to have a sales person who has prior work experience in the field of sales since this prior experience of the employee helps the company serve their customers better.
Relevant Experience in Water Purifier Industry:At HUL Pureit, one of the most important skills required in a sales person is his/her specialized experience in the water purifier industry. Sales Personnel having such relevant experience are given the first
preference. Since such a sales personnel understands the industry very well, it becomes easier for the company to put him at work get the desired performance and thereby the results out of him.
Good in Distribution Management:It is very important for a sales person at HUL Pureit to handle the entire distribution network under his control efficiently and reliably. Correct and timely delivery to the customer is always of utmost importance in any company.
Also, at HUL Pureit, past specialized experience in the Water Purifier industry is the most important factor when it comes to selection of people especially, for the post of Territory Sales Officer and Business Developers.
Recruitment and Selection process of the sales people
Recruitment of Area Sales Managers, Business Developers and Territory Sales Officers
Recruitment for the above mentioned posts are done through Employment consultancies or through the organic route, i.e. internal promotion of the employees from within the company.
However, the company is now also focusing on recruiting the Territory sales Officers through „on the campus recruitments‟ at various reputed Business Schools.
HUL basically recruits Male Sales representatives
The recruitment for the front line sales personnel is done through getting them from companies like Ikea, Mafoi etc. These companies are responsible for generating sales lead for HUL Pureit.
The Process for selecting is through Interview which is a 3 round process
1. In this round, Interviewer makes the interviewee comfortable and asks him to talk as much as he can.
2. This is the stress round, in which interviewer shows the real face of the market by using harsh or abusive language.
3. In this round they are asked to compare the products and are strictly told not to say a bad word about competitor.
Effectiveness of various training methods for the sales staff
Training for front line sales personnel:
Currently the training program at HUL Pueit mainly focuses on the product development abilities for the front line sales people.
These training programs are usually outsourced to another company, which specializes in conducting such training programs. In case of HUL Pureit, the training programs are conducted by Hufs.
The training needs are identified and specified by the company to Hufs and on the basis of these needs and requirements; Hufs creates a tailor-made program for HUL Pureit‟s employees.
This is a three month program in which 15 days is induction, in which company details are shared and also how a water purifier is made. Then after induction 75 days is field training.
Training for Business Developers and Area Sales Managers:
Interestingly, for the Business Developers and the Area Sales heads, the company designs and executes an in-house designed program itself.
Compensation Structure
The front line sales people get compensation of around 2 to 3% per product. However, it varies from case to case.
The salary structure of a sales representative is as follows:
Total Salary = Fixed Salary + Incentive + Commission on every machine. Commission on Machines is as follows:
For, UV = Rs 480 per Machine * number of machines sold RO = Rs 680 per Machine * number of machines sold
Pureit offline = Rs 20/40 per Machine (depends on the capacity of the machine) * number of machines sold
PPL(pureit premier league), which is organized by HUL during the IPL, where they reward their retailers on the basis of points earned by each retailer through selling HUL pureit products and at the end of the PPL, HUL calculates points of each and every retailers and
rewards the top 10 retailers with gifts and trips to various places.
Distributors also have a compensation structure based on various preset parameters and points are given to parameter.
For Distributors and Territory Sales officers, the compensation part is mostly fixed, whereas for PWE (Pureit Water Expert), it is more of variable rather than fixed.
Method of prospecting and reporting with degree of sales force automation
The channels are basically divided into three sub-channels in HUL to avoid conflicts and to cater different target customers
1. Symphony Channel:
In this channel, PWE are hired to work at Exclusive outlets and Multi-brand Outlets. This is done to give demonstration to customers about the product inside t he shop.
2. MT Channel:
This channel is called Modern Trade channel; this is basically for Malls and Shopping Complexes.
3. DTH Channel:
There are two ways of prospecting and reporting with degree of sales force automation, which are as follows:
Pureit Water Expert (PWE):
One is through PWE (Pureit Water Expert), these people are assigned to each retail outlet of HUL Pureit and whenever customers enter the outlets, their responsibility is to entertain and attract the customers by giving them demonstrations and assisting them in purchasing Pureit Water purifier. These People are given a Samsung Tab by the company, on which Pureit Software is pre-installed. Thus, whenever a customer buys or makes an enquiry about HUL Pureit, the PWE‟s responsibility is to do “child entry” or in other words, to f ill all the necessary information of the customer into the database through this software and the data is then directly transferred to their Central Database, from there the technical team traces the customer for changing of filters at appropriate time by generating a pop up on these PWE‟s TAB screen so that they can contact those customers and remind them of the problem.
Also, whenever a customer visits these outlets and assures the PWE of purchasing Pureit after 3 days then this information is also stored at the central database through these TABs and on the 3rd day a pop up is flashed on these PWE‟s screens, so that they can contact the concerned customer.
Ace Channels:
Secondly, it is through their “Ace Channels” or HUL Pureit Call Centre. Wherein a customer calls to these center and requests for demonstration and fixes a date for these demonstrations. So Customer‟s information is stored at the central database, where the company traces their sales representatives, which are on HUL payroll, whether they have given t he demonstration to the respective customer within 3 days of the call made by the customer or not. If the demonstration has been made the, what are the chances of selling Pureit Water purifier and if the demonstration have not been made then what is the reason of not giving demonstration.
Interestingly, PWEs and Team Leaders at every retail outlets are changed every month.
TATA SWACH
Sales organisation and Territory Design
Sales Structure of TATA Swach
The above image shows the sales organisation structure of TATA Chemicals for Water Purifier Division, the organisation is managed by National Sales Head Currently Mr. APS Ahluwalia takes this post. The whole country is divided into four zones namely North, East, South and West. All zones are headed by Zonal Sales Managers. Currently North zone is headed by Mr. Manish Gupta. All the zones are further divided into 4-5 Areas with one Area Sales manager representing each Area. Under every Area Sales manager (ASM), there are 5-6 number of Territory Executives. Under every ASM, there are 1-3 Technical Staff. Both the Technical Staff and the Territory Executives are not under the payroll of TATA Chemicals. Technical Staff is there not to generate orders but to focus on client
National Sales Head Zonal Sales Manager(North) Area Sales Managers Territory
Executives Technical Staff Zonal Sales
Manager(South)
Area Sales Managers
Territory
Executives Technical Staff Zonal Sales
Manager(West)
Area Sales Managers
Territory
Executives Technical Staff Zonal Sales
Manager(East)
Area Sales Managers
Territory
servicing, demonstrations, return etc. The company is also planning to remove all the technical staff and open service outlets in the near future, but the decision is pending and also it is not clear if the technical staff will be placed in the outlets or not.
Pros:
All the people under Area Sales Managers are not under the payroll of TATA Chemicals, hence the cost of recruiting and firing is less.
The structure has a separate team i.e. combination of Territory Executive and Technical Staff for returns and hence the conflict during returns of defective units is less.
The sales team basically focus on channel sales and not direct selling; hence the main purpose of the sales team is servicing distributor and retailers
There is normally one Territory Executive for one distributor, hence the service given to each distributor is not compromised
The sales force is not direct to the customers hence the cost of the sales force is less as number of sales person required are less.
Cons:
Due to less number of Sales people, many retailers are not happy with the service of t he company
The Territory Executives (TE) and Technical Staff (TS) are both outsourced; hence the motivation level in them is less.
Both the TE & TS are managed by another company hence there is always a chance of conflict between TATA Chemicals and the outsourced company.
The company have no direct sales force to create awareness and demand; more dependent on the Ads by the company or word of mouth.
Sales Structure for Online Sales:
This section is only explanatory about the online sales, made through TATA‟s own portal for sale of water purifiers, and not other e-commerce players
The sales generated by the company‟s website are passed to the distributor belonging to t he area from where sales are generated and the distributors deliver the product to the customer. The distributor is then credited with the amount of rupee which he charges the dealer; hence the distributors are not affected by online sales. Also the management of online sales is easy from company‟s point of view.
Advantages:
Absence of channel conflict as the sales through company‟s website does not affect the distributor‟s sales.
The company has no extra sales team to manage online sales, hence cost is less.
Distributors are also happy as they get extra sales with no extra efforts.
1
•
Online Sales through www.tataswach.com
2
•
Sales redirected to regional Distributor
3
•
Distributor ships the product
Sales Structure for Croma & other Modern Retail outlets:
The company has a separate team for managing the Modern retail outlets which is in Mumbai and also the sales of TATA Croma. These outlets are not mixed with retail division. The sales of TATA Croma are managed through ERP Software which automatically generates sales order when t he inventory reduces to a particular level.
Advantages:
No separate team of Sales person in different territories, hence the cost of managing modern retail is less.
The sales of TATA Swach in modern retail is managed by a separate team, hence the quality of service is good.
Absence of conflict with traditional retail channel. Skill Sets required for Sales Staff by Supervisor:
Area Sales Managers manage Territory Executives and also the Technical Staff, both the Territory Executives and the Technical Staff are not under the payroll of TATA Chemicals. These are hired by a different agency and also paid by the agency itself.
Different Skill set required for the Sales Staff by the Supervisor are as follows:
Prior Work Experience: It is better to have a sales person who has prior work experience it also helps them to service the distributors and the customers.
Specialised Work Experience in Water Purifier Division:This is one of the most important skill required in a sales person, it is definitely not a necessary part to become a TATA Swach Sales person. The contacted Area Sales Manager informed that a sales person who have prior experience in Water purifier industry understand the business better and generally gives better result than a sales man, who has no or experience in other industry
Technical Knowledge of Water Purifiers: The knowledge about the product is must for every sales person, the company imparts this knowledge during the training period and explain the functionality of water purifiers and also teaches them how to service these equipments
Communication Skills: Area Sales Manager always see that the sales person are good in communication skills, and are they capable in dealing with the distributors and the retailers or not. English is not important for the Technical Staff and Territory Executives as they basically deals with retailers and distributors, but definitely good communication is a must for them to effectively handle the channel partners
Convincing Abilities: As is the communication ability so is the case with convincing ability, this is also an important ability for a sales person, they ought to have a good convincing ability to convince the channel partners and generate sales.
Skills set required for the Area Sales Manager by Zonal Manager:
Prior Work Experience of at least 3 years: All the Area Sales Managers are recruited internally from TATA Chemicals or from referrals, and the first condition for t hem to hold this position is a work experience of at least 3 years. This is necessary because an ASM handles a team of around 20-25 sales person under him, hence if he has no prior experience he may not be able to effectively utilize the sales people time.
Managerial Ability: This point has similar logic as the above point, managing ability is of utmost important for ASM‟s as the sales persons are in the field most of the time, hence to manage the efforts of all the sales person ASM has to have a good managing ability.
Communication Skill: It is imperative on the part of sales person to have a good
communication skill, he basically deals with the sales staff or the distributors, hence he need to convince and also make sure all the people under him understand their work properly. Recruitment and Selection Policy for sales people :
Recruitment of National Sales Head and Zonal Sales manager: The recruitment of National Sales Head and Zonal sales manager is done by internal sourcing from TATA group itself. It is to be noted that these post can be filled by other TATA Business Units also and not only TATA Chemicals. Recruitment of Area Sales Managers: This is done by two methods
a) Internal Sourcing from other departments of TATA Chemicals, managers with experience more than 3 years can be chosen for the post of ASM
b) Employee Referral program in which employee can refer someone who fulfils the requirement can be recruited for the post. The benefit of this method is that the cost of recruitment is less and also there is some non-monetary benefit for the employee who refers Recruitment of Territory Executive and Technical Staff: The territory executive and technical staffs is not under the pay roll of TATA Chemicals and are hired by another firm and outsource them to TATA Chemicals. But even then the selection of these sales staffs are done on the parameters discussed above as the basic skill set required for the sales staff
Issue of Non Performance: The Company handles the issue of non-performance in a manner so as to reduce the number of terminations. ASM first discuss with the sales person about the difficulties he/she is facing in the field. Then he clarifies what TATA Chemicals is expecting from him, after that the sales person is allotted a time in which he has to complete certain number of sales, generate some new retailers and also handle certain number of customer inquiries. The company very rarely puts a person out of his job, and sales staff is given every chance to continue the job. This is a good practice as this increases the employee morale in TATA Swach, but then it also reduces the competitiveness of sales staff
Training given to the Sales staff and its effectiveness
Training program for ASM: Area sales managers are given a one week induction program in the Head office were they are introduced to different products, facilities and National Head of Water purifier division. After the initial training the ASM‟s are given field training.
Training for Territory Executive and Technical Staff: The training of Sales staff is about a month long, the training starts with a formal in-office training explaining product portfolio, product features and industry standards. After the initial tr aining the next 26-28 days sales staffs is trained on-field, this training is given by the ASM under which he/she shall be posted. ASM gives the sales staff firsthand knowledge about their roles. During the training ASM also clarifies the expectation of the company from the sales staff. The training is effective as it clearly defines the roles and responsibility of the sales staff, also it is basically given on the field where sales person will be posted hence the sales staff get a chance to understand the work from the perspective of ASM and also from his own perspective.
Compensation Structure
Compensation structure of ASM: The compensation of ASM is a mix of fixed salary with
travelling allowances; the travelling allowance has an upper l imit based on the region and area of the ASM. The affect of fixed salary is directly seen in the motivation level in the ASM‟s which is
manifested by the large number of complaints lodged by the r etailers about the service level of TATA Chemicals. The compensation is made of 90% fixed and 10% variable depending on tangible and intangible metrics administered by Performance Management System (PMS). The PMS takes into account many things like sales generated, new retail outlets roped in for sales of TATA Swach etc. The details of weights given to different variables were not available with the ASM and the Territory Executive
Compensation structure of territory Executive and Technical Staff: The compensation of Territory Executives and Technical Staff is composite of only fixed component and travelling allowances. The technical staff is given a salary upwards of Rs. 6000, and territory executives are given a salary upwards of Rs.10000. The compensation structure is not much motivating but in the same time it also does not put undue pressure on the sales staff, which may be the cause of low employee turnover.
Method of Prospecting and Reporting with the degree of Sales Force Automation
Degree of Automation: TATA Chemicals is currently not using any type of ERP software and/or Sales Automation Applications for the sales force. Hence the sales force is still
