BRITANNIA
-
Channel focus: Primarily Grocery and wholesale. In addition, Bakeries, chemists and eateries are also covered.
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Selling-in: Minimum productivity advocated is 60%. However, this is not strictly adhered to or followed up. Primarily aided by trade schemes and consumer promotions.
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Selling-out: High focus on Consumer promos & FODs.
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Relationship building: No structured effort observed on the part of the company. Is entirely subject to the individual initiative of the Distributor.
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Width of coverage: 60% of the universe. However, the no. of outlet: distributor ratio is lower vis-à-vis ITC signifying a higher focus at the outlet level and also because of the large no. of SKUs.
HLL
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Channel focus: Primarily Grocery, General stores and wholesale. Other channels include chemists and Pan-bidi shops as well.
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Selling-in: Aided primarily by trade promotions and highest incentives for salesmen to achieve distribution benchmarks. Minimum productivity desired is 60% from every DS route.
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Selling-out: Aided by media and consumer promotions. Show windows are hired for the purpose of merchandising in addition to FODs.
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Relationship building: Local sales promotional activities are used as opportunities for interacting with the trade. However, these are not at frequent intervals.
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Width of Coverage :Objective is to maximize O/L coverage; target is to cover 90% of universe.
Chapter 5:
ORDER CAPTURE AND DELIVERY SYSTEMS
The order capture systems vary from company to company. Most companies with a large no. of SKUs prefer to go in for the advanced order booking system as it helps them distribute all SKUs more efficiently. This could be the reason why Perfetti stands out amongst all the companies studied in persisting with the ready-stock system as it has relatively smaller number of SKUs. However, in order to make sure that the distributions of SKUs don’t suffer, they have grouped all their SKUs into two, each group being manned by a separate unit.
PARLE
Advance order booking for all outlets. However, frequency depends on the class of the outlet.
This has become effective from 1st February 2002. Prior to this all other outlets irrespective of the classification were being covered on the weekly basis. As a result of different frequencies for different type of outlets, they have different salesman covering each class. The company was capturing orders on a ready stock basis till two years back. However they shifted to the Advance order booking system in order to distribute all SKUs evenly. The number of outlets covered per beat is as follows.
Orders are taken one day before the delivery.
BRITANNIA
Advance order-booking system for all outlets. The service is given on weekly basis. All the outlets are covered on the route wise basis. Order is taken on the previous day of the delivery. Generally the delivery is done through 5 – wheelers.
PERFETTI
There is no system of advance order booking system in perfetti. The reason for avoiding the advance order booking system is that a large proportion of orders are cancelled among the total orders booked. It had grouped its total SKUs into two groups in order to aid effective distribution.
HLL
Advance order booking systems is there for all the outlets. The frequency depends on the class of outlets and no. of outlets per route.
Thus the order capturing and delivery system can be summarized as follows:
- All the companies with a large product range are into the order capturing.
- Perfetti is into ready stock system but they have divided their already few SKUs into two groups for more effective distribution.
- Perfetti is into weekly coverage irrespective of outlet classification.
- Parle and HLL are into bi-weekly, weekly and fortnightly coverage as per the outlet classification.
- Perfetti sell their entire range in cash, Parle sell all biscuits in cash while confectionary is in credit.
- All the companies advocate a week’s credit but in reality it spills over to 15 days. However HLL gives 3 to 4 weeks of credit.
Chapter 6:
ADMINISTRATION OF TRADE SCHEMES
PARLE
Trade schemes are of two types in Parle.
- Trade Load.
- Consumer promotions.
Both trade load and consumer promotions are decided by the marketing team depending on the focus brand. Trade loads are basically incentives for the retailers, in the form of discounts to buy more stocks and thereby increase the share of the brand in the outlet and also to make it available.
The extent of trade load differs for the product categories. The maximum trade loads on various categories are as follows.
After the trade loads are announced, commitments of both primary and secondary sales are taken from the distributors after deciding the growth to be targeted. The target for the distributors is broken down by the Salesmen and by beats. The targets are then tracked and followed up every week. Targets are set for both sales and distribution. This is the only method used by Parle for administration of schemes. Communication of schemes to all the outlets is ensured by taking review of the no. of the retail outlets who have enrolled for the schemes and the sales thereof.
Consumer promotions are again decided by the Marketing team and every distributor is given a fixed allocation of the promotional product, which is to be proportionately distributed across all the outlets.
Whether all the retail outlets have received the promo product is ensured through the periodic review of the sales and list of the outlets to which it has been supplied.
PERFETTI
Trade schemes are of two types:
- Trade load.
- Consumer Promotions.
Both trade load and consumer promotions are decided by the brand team.
The extent of the trade load again differs across brands. The maximum trade loads in various categories are
After deciding the percentage growth targeted for the brand through schemes, the target for the territory is broken down by distributors, by Salesman by routes. The same is then tracked every week and reviewed.
Ensuring whether the communications has reached all the outlets is done be reviewing the no. of retailers who have availed of the scheme.
Consumer promotions are again decided by the brand team depending on the brand to be inputted and the objective. Fixed allocations are given for a promo product to each distributor and distribution of the promo product is ensured through review of the list of outlets to which the SKU has been supplied.
BRITANNIA
Trade schemes are of two types in Britannia also.
- Trade load
- Consumer promotions.
Both trade loads and the brand team decides consumer promotions. The extent of the trade load differs from brand to brand. Normally it is between 3 – 5 %. After deciding the percentage growth targeted for the brand through the scheme, the target for the territory is broken down by distributors, by salesman and by routes. The same is then tracked every week and reviewed.
Consumer promotions are again decided by the brand team depending on the brand to be inputted and the objective. Fixed allocations are given for a promo product to each distributor and distribution of the promo product is ensured through review of the list of outlets to which the SKU had been supplied.
Generally whenever there are consumer promotions going on, there is no trade scheme.
HLL
The trade scheme is generally decided by brand team and then it is communicated to field staff. However, the concern TSI can restructure the scheme within the given budget. But, in return the TSI has to ensure that same sales take place, which the company has expected by inputting that scheme.
After deciding the percentage growth targeted for the brand through the scheme, the target for the territory is broken down by distributors, by salesmen and by routes. The same is then tracked every week and reviewed.
Consumer promotions normally take place in the form of consumer oriented schemes, consumer contact at the outlet and free sampling.
The brand team again decides these promotions.
The administration of the trade schemes can be thus briefly summarized as follows.
- Schemes are basically trade and consumer promotions and they are administered by and large in a similar fashion across all the companies.
- Trade promotions are generally referred to as Trade Loads.
- The extent of the trade load differs for different cos. depending on the objective which could be either to garner extra sales or to enhance distribution.
- Sales or distribution targets are set depending upon the growth percentage to be achieved.
- Targets are broken down by distributors, by salesmen and by beats.
- These are then tracked and reviewed on a weekly basis with the help of the dealer cards.
- For consumer promotions, every Distributor is given a fixed allocation of the promo SKU that is to be proportionately distributed across all outlets.
- A review of the same is done through the dealer cards to ascertain the number of outlets to which the SKU has been supplied.
- In addition to these two types of promotions, consumer contact and special offers are also done at selected outlets for shorter durations for specific objectives.
- Some companies like HLL give their TSIs more flexibility to modify the schemes by O/Ls.
Chaper : 7
WORKING NORMS FOR TERRITORY – IN – CHARGE.
The working norms for the TSI in both Parle and Perfetti have been framed keeping in mind that the TSI is the only resource from the company in the territory for ensuring sales growth, achieving distribution benchmarks and T&D inputs, and thereby ensure the company’s objectives are achieved. Hence, quite a few of the working norms for the Territory in-charge in both Parle and Perfetti are similar.
PARLE
The territory- in- charge is supposed to work on all the A- class outlets in the territory and is supposed to contact them once in a month. In addition, he also calls on the other classes of outlets but is not on a fixed frequency.
The TSI while working in the market is supposed to lead by example. The sales made by the TSI in any outlet should have at least 15 brands, which should be proportionately distributed.
All T & D inputs to the field force are administered while working in the market with the resource. In addition, the TSI checks on the service levels and freshness of products at the outlet level and redresses grievances if any of the outlet.
PERFETTI
The daily norm for the Territory-in-charge is to compulsory call on 40 outlets, out of which 25 have to productive. While working in the market the TSI is to ensure that all the brands are equally distributed in the outlets. T & D inputs to the field force particularly the Distributor salesman and the TSI while working in the market with the salesman and the TSI is supposed to lead by example and show the salesman how to sell and distribute various brands. Therefore, all the brands have to be proportionately represented in the sales made by the TSI.
While working in the market, the TSI is to check on the service levels of the distributor and the availability and distribution of various brands and take the corrective measures where necessary. The TSI is also to ensure that the market working is as per the norms of the company and those samples of products and presenters and proper detailing to the outlets is taking place.
BRITANNIA
TSI in Britannia is basically responsible for leading the distributor’s sales team to achieve sales targets and growth as per the company’s norms and therefore achieving company’s norms and therefore achieving objectives. He himself sets example by working in the market, capturing orders and making all the brands.
He is supposed to work one route at least daily, and achieving productivity in at least 25 O/Ls. Moreover, he is also responsible to make sure that WDs achieve sales target for primary as well as secondary sales.
TSI also works with salesman and Pilot salesman, and leading by example shows them how to sell and distribute various brands and SKUs. He is also responsible for the on-the-job training for WD and his sales force.
Also, TSI looks and checks WD records, freshness of goods in markets and overall administration of Schemes/Consumer promos at the territory level.
HLL
TSI in HLL is supposed to make at least 40 calls per day with 60 % productivity. While doing so he has to sell maximum no. of lines and has to fill up his DSR pass book.
TSI also works with salesman and pilot salesman, and leading by example sows them how to sell and distribute various brands and SKUs.
He is also responsible for the on – the – job training for WD and his sales force.
Also, TSI looks and checks WD records, freshness of goods in markets and overall administration of Schemes / Consumer promos at the territory level. He conducts regular classroom session for WD team for T & D. He is also responsible for primary and secondary sales of WDs.
Chapter 8: MERCHANDISING
Merchandising provides you with an opportunity to assist your customer in selling out and reaching more consumers for your brands.
The strongest point at which to influence the consumer is the retail O/L. At this point you have the potential to co-ordinate the presentation of products, POP material and lighting to our best advantage in order to attract the consumers’ attention.
Thus at the retail O/L. the company should find ways to attract the consumers’ attention and move them to buy the company’s brands. Merchandising is one way to attract the attention of consumers and communicate to them.
Merchandising conveys the message visually. The company wants to inform the consumer about different features of brands (images, price, etc) by arranging shelves, placing different merchandising materials (posters, dispensers, etc) in a way that moves consumers to buy the company’s brands.
Merchandising is defined as any activity done inside the shop that helps the SWDs and the retailers to sell the product or motivates him to push the product.
A lot of accent is put on facings, POP and displays for both Biscuits and Confectionaries and is also detailed to the O/L at all the points of time.
In order to help merchandise better, there is an exclusive merchandiser at every WD point who performs these functions. The merchandiser accompanies the Salesman on their beats by turns. Now - a – days, a new practice has come into being. The merchandiser visits the O/Ls one day after the delivery of the orders brought by the DS so that the merchandiser not only does the activity of merchandising but also keeps the track on the availability of the range.
PARLE
The merchandiser on his beat strives to maximize shelf displays in all the O/Ls. in addition to this, at the time of launch of a new product or in the case of a Drive Product, SIGNATURE DISPLAYS are put up across all the routes. Signature displays are basically displays of the same size and same pattern put up across all the O/Ls in order to arouse the curiosity and prompt trials from the consumers. However, none of the displays are paid by the company and are achieved solely through the rapport and the good will of the merchandiser, salesman, Distrtributor or Company with the O/L.
In addition to facings and POP, permanent merchandising is also done in the form of Glow – signboards at Exclusive Parle Shops for which they pay a rental not exceeding Rs. 200 per month. However these are very limited in number.
In the case of confectionaries, since facings are not possible because of the nature of the product, the merchandiser tries to maximize the no. of jars in the shop used for the confectionaries by transferring the confectionaries kept in poly bags to jars. The objective of the merchandiser, the pilot salesman or TSI is to add one extra jar for the Parle on each visit to the O/L.
Further, in the process of jar capturing the company has started Jar packs for its confectionary brands instead of poly bags.
PERFETTI
Perfetti does not have an exclusive Merchandiser for performing the task of merchandising. It is the salesman who performs these functions. Since Perfetti’s only products are confectionaries, merchandising is done in the form of Jar capturing which is similar in process to that of parle.
The company to a large extent packages its products in jars in order to aid the process of Jar Capturing.
In addition to POSM, permanent merchandising is done in the form of Glow- sign boards which is given out maximizing visibility. The rationale for putting up GSBs is quite similar to the one used by ITC.
BRITANNIA
There is no exclusive merchandiser in Britannia. It is the salesman’s job to put a POP at the O/L.
However a lot of emphasis is given on the shop based merchandising activities. It is in the form of Glow signboards and dispensers. The rent of these glow signboard is in the rang of Rs. 200-400 depending upon the O/L. profile and size of glow sign.
Unlit on shops are also put up as a part of merchandising. Displays are not the regular practice in Britannia. However, they are there during the time of consumer promotions.
FODs are given a lot of importance.
Now – a – days, the practice of giving displays in Britannia has changed a lot. The O/Ls. are given the displays not on the fixed value of Rs. but the amount of Rs. given for displays is variable depending upon the amount of purchases done from the company. 3 – 4 % of the total amount of purchases is given as displays. This is good practice done by Britannia in order to motivate SWDs for giving displays.
HLL
HLL’S merchandising activities comprises of POSM, Displays, dispensers and in shops. They do not put on shops. These activities are done by exclusive merchandiser appointed by the WD. They have a lot of displays comprising of backing sheet, POSM and the product itself. They have also paid displays only of product facings.
FODs are given a lot of emphasis in HLL. They use lot of danglers and chain pendants as POSM.
Chapter 9: TRAINING & DEVELOPMENT INPUTS
Structured training and development inputs in all the Cos. studied are confined to the AE and the AM who then cascade it down to the field-force on-the-job. However, HLL is the only Co. that conducts regular classroom sessions for its salesmen.
FOR DS
By WD Supervisors-
On the job training:- Six days a month for each DS during distribution calls.
Areas to be covered are –
- Product detailing.
- Accurate order capturing.
- Productivity
- Importance of visibility with respect to FODs and POP
- Negotiating skills for selling – in space / space booking
- Rapport building with the retailer
Off-the-job training: Review sessions by Supervisors once a week collectively for all DSs on problem areas of the above.
By AE
To take a classroom session once every three months on Effective communication, selling skills, relationship building and other TM&D related issues.
For WD SUPERVISORS
BY AEs,
On-the-job - once a month for each supervisor which will cover the following areas:
- Negotiation skills
- Relationship building
- Merchandising
Off the job: - along with DS once every month as mentioned above.
TRAINING & DEVELOPMENT OF VARIOUS COMPANIES STUDIED ARE AS FOLLOWS.
PARLE
There does not seem to be any structured training and development inputs laid down for the Salesman, pilot salesman or the TSI. T & D inputs are only on – the – job inputs and no off – the – job or classroom sessions are held for any rung of the field force.
On – the – job training inputs basically relate to
- Range selling
- Visibility
- Merchandising
- Time planning
- Objective Setting
- Target Setting
- Rapport building with the trade
- Order Capturing.
PERFETTI
Training and development inputs to any rung of the distribution network are very much on – the – job and no classroom sessions are held. T & D inputs basically relate to the following skills
- Order capturing
- Merchandising
- Time – planning
- Freshness of Stock
- Objective setting
- Target setting
- Rapport building
BRITANNIA
There does not seem to be any structured training and development inputs laid down for the Salesman, pilot salesman or TSI. T & D inputs are only on – the – job inputs and no off – the – job or class room sessions are held for any rung of the distribution network.
On the job training inputs basically relate to
- Range selling
- Merchandising
- Time planning
- Objective setting
- Target setting
- Rapport building with the trade
- Order Capturing
HLL
Although there is no structured way of training and development inputs for pilot salesman, there are weekly/monthly classroom sessions taken by TSI at the distributor point. However, the company introduces a formal training and development programme for salesman and pilot salesman at regular intervals.
On the job training inputs basically relate to
- Range selling
- Merchandising
- Time planning
- Objective setting
- Target setting
- Rapport building with the trade
- Order capturing
Chapter 10: TRADE RELATIONSHIPS:
Trade relationship is playing most important part in Trade Marketing. The customer relationship Management (CRM) is the key for maintaining the Trade Relationships. Trade meets should be conducted by WD, AE and AM at regular intervals to get the trade feedback and to solicit greater involvement of the trade in the business.
The objective would be to enhance rapport between company and the trade.
Events like new product launch, new brand launch, new SKU or any other scheme implementation could be used effectively for this purpose.
Chapter 11: ANALYSIS OF THE QUESTIONNAIRE
The primary objective of this questionnaire is to ascertain from a cross section of wholesale O/Ls as to which are the factors that they rate as the best for increasing the sales in the wholesale channel.
However prior to inquiring into this, it is necessary to understand the elements that constitute service from the traders’ point of view. Based on the interaction in the wholesale channel thus far, the following factors have been identified as the key parameters for increasing the sales.
Q. Which is the preferred company of traders in confectionary category?
Q. Which is the preferred company of traders in biscuits
category?
Q. Do you pass on the trade scheme to the consumers or not?
Generally most of the traders pass on the trade schemes to the customers so that they can sell out more quantity. Moreover passing on the trade schemes makes the overall price less thereby increasing the sales tremendously. Thus the trade scheme should be constantly floated even after the launch of the product in order to continue the sale of the product.
Q. How much credit you receive from the wholesale dealers?
A.
PARLE
Generally PARLE – G is sold on the cash basis but other brands of Parle are given approximately credit period of one week.
BRITANNIA
One week to fortnight period is given as credit in case of Britannia.
PERFETTI
Perfetti gives the credit of about one week. However, it delivers with ready stock so traders are also giving them cash on delivery.
HLL
Generally HLL gives credit for 3 to 4 week. This may spill over to one month by extending and giving various reasons and excuses.
Q. Are the retailers and the traders aware of the brands that you are selling in confectionary category?
Q. Are the retailers and the traders aware of the brands that you are selling in biscuits category?
Q. Does the Company give you any incentive schemes or offers for selling more or not?
A. All the O/Ls have replied in negation for the above-mentioned questions. Thus a specific amount of target should be given to the traders so that they can sell more goods. More over each and every O/L. should be visited by the DS with the last month’s sales figures so that they can set targets there by giving them incentives for selling more.
Q. Do you think displays are important for increasing sales and brand awareness?
A. Displays are important means of trade promotions because with the help of displays we can grab more customers. Moreover Britannia is giving displays on the basis of 3 to 4 % of the total amount of monthly sales of that particular O/L. Thus by giving displays on monthly Loads, we can be assured that sales will increase as a result of the traders’ greediness to obtain more amount for the displays done in the market.
Q. What is the personal interest in increasing the business at your point? A cross section of 50 O/Ls were taken for the survey.
Q. Should the consumer promotions and trade scheme be given to the consumers and trade?
A. The semi wholesaler’s first question in trade marketing is for trade scheme or products with consumer promotion. When a DS visits to the trader, the trader is willing to place the products that offer the trade schemes or consumer promotion goods. Therefore adequate trade schemes should be formulated in order to increase the sales.
Q Does the POP materials and Advertising play major role in increasing the sales?
Chapter 12:
RECOMMENDATIONS FOR SALES FORCE
Following are the recommendations that should be observed in order to increase the sales
- MARKET PENETRATION
Market penetration is of utmost importance for effective distribution. Generally 75 – 80 % of the universe should be covered in order to achieve the targeted sales. Therefore more no. of O/Ls should be covered in order to increase the sales substantially. From the work practices observed by the parle in the market, it can be stated that more attention should be given to the retailers instead of wholesalers so that focusing retailers can increase consumer demand. This can indirectly increase the sales of the wholesale channel.
- CLASSIFICATION OF OUTLETS
Each and every competitor company of I T C has classified all the serviced O/Ls in the command area according to turnover, channels, type of O/Ls or type of services given to the O/Ls. I T C has also classified its O/Ls in the tobacco division according to no. of cigarettes sold by the O/Ls. Thus there should be classification of each and every O/Ls so that effective penetration of the company’s products can be done. The rationale behind the classification of the O/Ls is as follows.
- Different types of O/Ls demand different types of schemes. The owners of different O/L want them to be treated in a different way by the company so that they feel they are satisfied by their existence in the market.
- This feeling to the owners of those O/Ls indirectly makes our DS to get more loads thereby increasing the sales.
Key O/Ls and Institutional O/Ls bring most of the sales of the product in the WD TOWN. So special schemes should be made in order to gain sales from these O/Ls. The command area studied has varied no. of institutional O/Ls which help the company to increase the sale. Thus prompt services should be given in these O/Ls.
- ORDER CAPTURE AND DELIVERY SYSTEMS
Order capturing systems for confectionary and biscuits.
Frequency of service to be increased from once/week to twice/week, for all O/Ls.
- STOCK LEVEL SYSTEMS
- 10 days inventory should be available at major outlets.
- For smaller outlets and medium scaled outlets, the stock should be maintained as per the potential of SWD and attempts should be made to convince them to keep the minimum level of the inventory decided by the AE.
- FRESHNESS
- The Grocery channel and its consumers view the freshness factor for foods much more closely than a Panwala does it for Cigarettes.
- The above is reflected in the following –
- Feedback from the retailers contacted
- Practices followed by all companies to ensure freshness
- Practices followed by all companies (barring HLL) are liberal w.r.t stock replacement, though there are budgets.
- The D&D budgets range from 0.25% to 0.3% of WD’s annual T/O
- Stock rotation & FIFO are religiously practiced by all field force.
- Parle has the system of all WDs reporting in a prescribed format of any stock of biscuits > 3mths from the date of manufacture lying in his godown.
- The freshness norms that are followed in the market place are
- 6 months for the case of biscuits.
- 12 months for the case of confectionary
- However each of the following persons have to take due care for maintenance of freshness in the market.
DS: -
The DS is responsible for maintaining the freshness of the goods sold by him in his route. In the market, there are complains about the freshness of the sugar boiled candies. According to them, most of DS do not check the freshness and the stocks are not replaced even after the date is expired. So the stocks at the fast moving outlets should replace stocks at slow moving outlets.
SUPERVISOR:
The supervisor is responsible for maintaining the freshness of entire stock of foods during distribution call.
Generally, the frequency of the Foods Supervisor is once a month at every outlet.
WD:
Reports on code dates of foods from key outlets to be sent at fixed frequencies, like once a month or as per the schedule fixed.
- MERCHANDISING
DS: -
Responsible for maintaining pre-decided space in O/Ls for foods (could be paid displays, space for FODs, place for dispenser, etc.)
Put up the routine POP.
WD SUPS: -
Supervisor to monitor and review status of FODs during distribution calls with the salesman.
- Put up routine POP
- Negotiate space for displays, FODs.
- Put up displays, dispensers, etc.
- Checks whether the DS makes the calls quantitatively and qualitatively as per the schedules.
Chapter 13:
PLANS FOR INCREASING THE SALES
1. POP MATERIALS & ADVERTISINGS
There should be extensive use of POP materials like posters, banners, etc. For biscuits category of ITC, the characteristic of product differentiation is observed. The two biscuit flavors Butter Scotch Cream and Marie Orange are unique of its types in biscuits segment. Therefore ITC should take fair advantage of its strength. Masses of target market are lacking this brand awareness. This should be highlighted by making advertisements in the form of handouts printed in local newspapers so that masses of target market can be focused easily and with low cost.
MERITS:
- In marketing, we have to establish a relationship between a brand and our retailers and consumers. Advertising helps us to establish this relationship.
- More no. of retailers and consumers will come to know about the brands thereby increasing consumer & retailers awareness substantially.
DEMERITS
- Generally life of the POP materials like posters and danglers is very short and purpose of advertising is not achieved by use of posters.
- There can be wrong impression of the brand in the minds of retailers and consumers if the product is not communicated properly and effectively.
SUCCESS RATE
- The success rate of the POP and Advertising depends upon how effectively the merchandiser uses his wit to attract the attention of the retailers and consumers
- Merchandiser should select the location and design of placing the POP materials in such a way that maximum no. of retailers and consumers are able to grab the attention of the brands.
2. DISPLAYS
Displays are cost incurring trade promotion tool with no guarantee to have considerable increase in sales. The marketing team of the companies generally designs these types of trade promotion tools and a fixed budget is allocated as per the requirement. In this era of competition every product has to shout ALUOD to be noticed in the market
MERITS
- Those retailers who are not aware of the brand will get brand awareness that will result in new sales at the retail O/Ls.
- Those retailers who have forgotten the brand will switch over to the brands shown in displays.
- Brand loyalty will increase when the brands are shown in display.
DEMERITS
- Company has to bear extra amount of expenses in order to drive this option. Therefore accurate planning is required in order to give displays.
SUCCESS RATE
- The success rate of displays depends upon the type of the area selected for display. Often the purpose of the display is not solved when attention-attracting space is not selected. So utmost care should be taken in order to select the space for the displays.
- Proper visual communications & Eye catching ideas are required To make any product stand out In the age of fast information, Displays are the only way to project the right image of the product
LIMITATIONS
- Displays can’t be placed at O/Ls if some competition brand has made some prior agreements.
3. CONSUMER PROMOTION GOODS
Schemes for the consumers can be floated around in order to attract more consumers and increase the customer base. Many times SWDs don’t pass on the consumer schemes to the retailers and consumers in order to increase their margin. SWDs will find out those goods that are giving more consumer schemes.
MERITS
- SWDs net purchasing price may decrease considerably which may compel them to sell the goods at lower price than the competition brands.
- This will again help to sell out less competition brands, as SWDs will not purchase more no. of competition brands.
DEMERITS
- Once the consumer offer is stopped, it may be difficult to sell in and sell out those goods as some other competition brands might have rolled out schemes in order to attract more purchases.
SUCCESS RATE
- Compared to other wholesalers’ promotion tools, this tool has found to be more successful as the net purchasing and selling price can be decreased considerably.
- This will automatically increase the overall selling in and selling out of the goods.
4. SALES FORCE PROMOTION
Salesmen that sell goods to the wholesale channel may be motivated to sell more goods by offering them bonuses, incentives and targets for selling a fixed quantity of goods.
MERITS
- Extra amount of costs in incentives and bonuses are incurred only when the company is able to achieve targeted amount of sales.
- The returns on investment are fixed because sales force will be given bonuses and incentives if and only if the required level of sales are achieved.
DEMERITS
- In order to achieve the bonuses and incentives, the salesmen will dump the extra amount of goods in those O/Ls which do not have the capacity to sell more than a fixed amount of goods.
- This will result in dead stock if freshness is not maintained and transfer in and transfer out from one O/L to other O/L is not done at the subsequent phases after the sale.
SUCCESS RATE
- If the sales force will not realize the incremental benefits availed to them by increasing the sales, then they will not work hard to increase the sales to the targeted level.
- Therefore appropriate of amount of confidence should be built up in the minds of sales force to sell more products. If the salesmen are willing to sell the products, then half of the task is assumed to be completed.
5. TRADE LOAD
Generally ITC does not have any trade loads schemes offered till now. In the universe we have different SWDs with different capacities to purchase the goods. The schemes formulated for all the SWDs are same.
SWDs are demanding various trade offers for varied trade Loads. So we should have various price slabs that will increase the sales of the goods.
MERITS:
- SWDs purchasing stocks at lower denomination of the slab will be tempted to buy the goods sold at higher slab with large amount of overall margin.
- Once more amount of our stocks are inventoried at the SWD point, the SWD will not buy the competition brands,
- By using this tact, brands of ITC will get a chance to be in the trial stage after the awareness stage of the product communication.
DEMERITS
- Burning problem of price discrimination may arise because of giving goods at different rates to different SWDs. Therefore retailers will buy goods from those SWDs who will give them at lower rates compared to other sources.
- As more amount of trade load is inventoried at the SWD point with lower purchasing capacity, ultimately WDs may suffer as the SWDs may ask for more no. of credit period.
- Increase in credit may however lead to bad debts resulting in resistance from WDs to incorporate the schemes on trade loads.
SUCCESS RATE
- Because of price discrimination, implementation of this promotion tool can prove to be great failure in market with high density of SWDs.
- The success rate of this scheme is dependent on the final consumers. If the final consumers like the taste and quality of the product, then the chances of switch over from their loyal brands to ITC brands are increased tremendously.
LIMITATIONS
- Purchasing capacity of the SWDs may be a major limitation of incorporating the scheme.
Chapter 14: MODEL FOR INCREASING SALES
1. TRADE SCHEMES
Trade schemes can be incorporated in three ways
OFFERS IN SLABS.
There are certain SWDs in every market who provide most of the sales of WD town. For these special O/Ls. we can formulate such trade loads schemes so that we can get adequate amount of the sales thereby increasing the sales in substantial amount.
LINKAGE OF VISIBILITY WITH CASH DISCOUNT
Trade schemes should not only be given on trade load but if the schemes on trade load can be linked along with the visibility and cash discount then there can be effective implementation of trade load so that sell out can be done easily. If the
INCENTIVIZATION OF TRADE ON LAST MONTH SALES
Two routes can be selected for studying the incentivization of the trade load schemes. One route of any SWD DS can be selected for this plan. Previous month’s sale can be obtained from the records and the sale after implementation of above mentioned trade schemes can be studied in order to see the effect of giving the trade schemes. If the sales compared to the previous month is increased then the pre fixed amount of incentives can be offered based on the percentage rise in the sales of the schemes. If there is no increase or decline in the sales, then no incentives should be given and those O/Ls should be motivated to increase the sales so that they can avail the advantage of increasing the sales. Finally the results of test route and observed route can be compared to see the effectiveness of the model.
2. INCENTIVISATION OF THE DS
The objective of this model is to increase the sale of company’s products and simultaneously provide the growth to the DS who is contributing a major participation in increasing the sale of the company.
DESCRIPTION
The salary break up for the DS can be done in basic salary, petrol allowances and commission earned on the sale of the goods. The basic salary and petrol allowances are fixed for every month and commission earned is variable with respect to the amount of goods sold. Over and above this, one more component in the salary of DS can be included. This can be called as incentive on achieving the following heads.
- Productive calls
- Range Selling
- Quantity wise Targets
- Value wise Targets
PRODUCTIVE CALLS
Productive calls can be defined as percentage of no. of O/Ls visited on a route from which a DS gets the order. Incetivisation can be done on having more no. of productive calls or a certain fixed amount of productivity made on every route. The productive calls can be tracked daily through out the month and at the end of the month incentives can be given on average of percentage of productive calls.
RANGE SELLING
In productive calls we can include the range selling. It is selling all the brands & if possible all the SKUs in that category or division. If a DS sells one particular brand like candyman and does not sell Mint-O and biscuits and other goods of that channel, then the company’s motive of achieving target is not fulfilled. Thus DS should be motivated to sell all the brands and not sell one particular brand whose demand is natural in the market.
QUANTITY WISE TARGETS
Targets can be given on the basis of the certain amount of quantity sold by the DS. The targets can be fixed for any duration of time. It can be fixed for a week, for a month of for a year. Generally targets are fixed for the month and at the end of the month if the quantity wise targets are achieved then additional remuneration is paid to the DS so that he is motivated to earn more money. For making the DS to work sincerely for achieving targets, a negative remuneration on fixed salary should be done. This will motivate the DS to increase the sell ins.
Utmost care should be taken in giving incentives for achieving quantity wise targets. Fixed amount of incentives should be set at the end of the month beyond which even if the DS sells the additional quantity of any particular brand, he will not be allocated on proportional basis, i.e. the upper limit for the incentives should be fixed. That means his target is to sell 100 units of any particular brand and if by his skill or market pull of that brand, he is able to sell 400 units, then he will not be given 4 times incentives on that product and the incentives are given keeping in mind the upper limit of the incentives because that will be ambiguous and we have to avoid all these ambiguities
VALUE WISE TARGETS
In certain cases the DS is not required to sell any fixed quantity of a particular brand of products, but he is required to sell the products in terms of values, i.e. the DS has to make the turnover of certain amount. Generally this type of practice is not done because different products have different margins and company is not interested to sell only a particular product but on an average the performance should be good in all the products selling. Therefore these types of targets are generally not given to the DS.
As mentioned above in quantity wise targets, care should be taken to limit the incentives given to the DS. If the DS sells more than the set value of the targets, he should not be given on proportionate basis.
MODUS OPERANDI
Two routes can be taken in order to study the effect of this model. First route can be taken as the test route on which we will implement the practices of said model. And on other route we will not implement the practices. We will simply observe the route as the work is done in the normal course of time. Care should be taken that the two routes selected for study should be of the same WD town and same locality or tastes and preferences of SWD should be same so that there won’t be any ambiguity in making the tests. Impact should be also given on the merchandising, visibility status, in which slab of the Trade Load scheme the SWD is purchasing the goods and what value of the goods are being purchased so that required focus on any particular tool can be made in order to increase the sales.
Two routes say Monday route on which the above model is implemented and other route say Wednesday on which the above model is not implemented. The data can be tracked for the two routes for one month i.e. say four visits per month and at the end the month the analysis and comparison should be made with the Last month’s sales of the test route so that change in the sales quantity and final results can be found out. The whole model can be summarized as below
Chapter 15: CONCLUSION
The market for food is simply huge and estimated to be Rs 500,000 crore annually. It is growing for two main reasons: population growth and improvement in consumers’ spending ability. Hence effective utilizations of resources in Food Business will increase the profit of the company tremendously.
Looking to the work practices of different companies in Biscuits and Confectionary category, it is concluded that I T C has still to incorporate many changes in its work practices that are recommended in the previous chapter.
Moreover, biscuits and confectionary industries are highly affected by the unbranded products sold in the market. Adequate measures should be taken and strategies should be formulated in order to overcome this problem.
Brand awareness is highly lacking among consumers and traders. In order to achieve high proportion of brand awareness, attack should be made from all the four sides. Consumers, traders, SWDs & all the relevant channels of marketing should be targeted for brand awareness.
Chapter 16: BIBLIOGRAPHY
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Kotler, Philip. Marketing Management. New Delhi: Prentice-Hall of India
Private Limited, 2003.70699
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Introduction of I TC Foods Division, July 2004 (updated),
19-30 May 2004.