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GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh
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GlaxoSmithKline GSK CH - A report on Business Strategy and Growth Avenues in Himachal Pradesh

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A summer internship report on GlaxoSmithKline Consumer Healthcare (GSKCH) Himachal Pradesh. Report comprises the sales structure, business and supply chain model of GSK Consumer Healthcare in Himachal …

A summer internship report on GlaxoSmithKline Consumer Healthcare (GSKCH) Himachal Pradesh. Report comprises the sales structure, business and supply chain model of GSK Consumer Healthcare in Himachal Pradesh. It also includes the comparative analysis of GSK supply chain and sales structure with competitor FMCG companies like HUL, P&G, Nestle and Colgate etc, Himachal Pradesh geographical audit, revenue model, remunerations of sales team, incentives and much more...
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  • 1. “Growth Avenues for GSK in Himachal Pradesh” 2012 0 “Growth Avenues for GSK in Himachal Pradesh” Summer Internship report on finding the Growth Areas for GlaxoSmithKline Consumer Healthcare in Himachal Pradesh This document is a report based on the exercise for finding the growth potentials for GSKCH in Himachal Pradesh Area under xxxxxxxxxxx ASM Punjab, xxxxxxxxxxxxx ASM Himachal Pradesh and xxxxxxxxxxxxx TSE Himachal Pradesh. The duration of this exercise was 2 months from 11th May, 2012 to 10th July, 2012. Submitted by- Maneesh Garg ID: 20110025 Manigarg21@hotmail.com MBA 2011-13 Jindal Global Business School
  • 2. “Growth Avenues for GSK in Himachal Pradesh” 2012 1 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Acknowledgement A Summer Training project is a synthesis of knowledge and experience of experts in their related fields. However, no project is possible without the guidelines and help that are extended by the experts to the student with the sole benevolent purpose of intellectual development. First and foremost I would like to express my gratitude and thank to xxxxxxxxxxxxxx ASM, Punjab who was my mentor, for guiding me throughout the entire training period. I owe enormous intellectual debt towards my teacher Dr. xxxxxxxxxxxxxxxx whose suggestions and guidance were invaluable and helped me throughout my project I am also thankful to Mr. xxxxxxxxxxxxxxx (ASM, Himachal Pradesh), Mr. xxxxxxxxxxxxxx (TSE, Himachal Pradesh) and Mr. xxxxxxxxxxxxxx (HR, Delhi Branch) for guiding me and for providing fruitful insights on subject. This Report would not have completed without the inputs and the words of advice from them for which I shall always remain grateful to them. I would also like to thank all members of the Sales, Marketing and HR Department who have directly or indirectly helped in providing the information and amenities which have helped in development of this report, without such help this report would not have been possible. This project has given me the opportunity to work with one of the most respected companies in the world. I am Thankful to GlaxoSmithKline for providing me with this opportunity
  • 3. “Growth Avenues for GSK in Himachal Pradesh” 2012 2 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Table of Contents Executive Summary........................................................................................................................................................................................ 5 INTRODUCTION............................................................................................................................................................................................... 6 About GlaxoSmithKline................................................................................................................................................................... 6 GSK Products....................................................................................................................................................................................... 6 Organizational Structure of GSK................................................................................................................................................. 7 Incentives to USRs............................................................................................................................................................................. 7 Table 2 – GSKCH Product Details ............................................................................................................................................... 5 The Distribution System................................................................................................................................................................. 7 GSK Distribution Model........................................................................................................................................................ 7 Trade Parties............................................................................................................................................................................. 7 Margin Structure of agents dealing in GSK products .............................................................................................. 8 Growth Avenues for GSK.............................................................................................................................................................................. 9 The Research....................................................................................................................................................................................... 9 Facts and Points to be considered for this Research......................................................................................................... 9 Process of Research.......................................................................................................................................................................... 9 Retailer Questionnaire........................................................................................................................................................10 Distributor Questionnaire.................................................................................................................................................17 Benchmark Companies...............................................................................................................................................................................18 P&G........................................................................................................................................................................................................19 Products List ...........................................................................................................................................................................19 P&G’s Revenue by segment ..............................................................................................................................................19 Distribution Model ...............................................................................................................................................................20 P&G’s Working style............................................................................................................................................................21 P&G’s Strategy........................................................................................................................................................................21 Initiatives..................................................................................................................................................................................22 Nestle....................................................................................................................................................................................................24 Strategy .....................................................................................................................................................................................24 Nestle products list and major brands...................................................................................................................................24 Organization Structure.......................................................................................................................................................26 Sales and Distribution Model...........................................................................................................................................26 Transportation Expenses ..................................................................................................................................................27 Display Scheme......................................................................................................................................................................28 Travelling Allowence in case of Night Halt................................................................................................................32 Field Force Travel entitlement .......................................................................................................................................32 HUL........................................................................................................................................................................................................34 HUL products detail.............................................................................................................................................................35 Organization Structure.......................................................................................................................................................36
  • 4. “Growth Avenues for GSK in Himachal Pradesh” 2012 3 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Distribution Model ...............................................................................................................................................................37 Strategy .....................................................................................................................................................................................37 Growth Drivers ......................................................................................................................................................................38 Marketing Initiatives...........................................................................................................................................................40 Colgate Palmolive............................................................................................................................................................................42 Products Detail.......................................................................................................................................................................42 Organization Structure.......................................................................................................................................................43 Salary Structure of PSR (Primary Sales Rep)- Colgate....................................................................................................43 Sales and Distribution.........................................................................................................................................................44 Colgate Distributors .......................................................................................................................................................................44 Analysis of Himachal Population and Geography...........................................................................................................................46 Map of Himachal Pradesh..........................................................................................................................................................................47 Analysis of sales on “Per Capita” and “Per Outlet” basis..............................................................................................................48 Analysis of per capita sales in HP.............................................................................................................................................51 Analysis of sales per outlet in HP .............................................................................................................................................52 Cost cutting in transportation expenses.............................................................................................................................................53 Analysis of existing transportation expenses.....................................................................................................................53 Transport quotation (at floating rate).........................................................................................................................53 Transport quotation @ floating rate ............................................................................................................................53 Transport Quotation @ fixed rate .................................................................................................................................55 Visibility Analysis..........................................................................................................................................................................................57 POS material-.....................................................................................................................................................................................57 In Store Visibility.............................................................................................................................................................................57 Visibility of other brands...................................................................................................................................................60 SKU Analysis....................................................................................................................................................................................................61 Horlicks................................................................................................................................................................................................61 Analysis of competitors’ products (Malt Drinks) ...................................................................................................61 Research results ....................................................................................................................................................................64 Women & Mother Horlicks..........................................................................................................................................................65 Target Market.........................................................................................................................................................................65 Availability...............................................................................................................................................................................65 Junior Horlicks..................................................................................................................................................................................66 Availability...............................................................................................................................................................................66 Target Market.........................................................................................................................................................................66 Product packaging comparison......................................................................................................................................66 Boost .....................................................................................................................................................................................................67 Research results ....................................................................................................................................................................67 ENO........................................................................................................................................................................................................68
  • 5. “Growth Avenues for GSK in Himachal Pradesh” 2012 4 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Analysis of competitors’ products.................................................................................................................................68 Sensodyne Toothpaste..................................................................................................................................................................70 Analysis of competitors’ products.................................................................................................................................70 Packaging Comparison .......................................................................................................................................................70 Research Results ...................................................................................................................................................................71 Availability...............................................................................................................................................................................71 Sensodyne Brush.............................................................................................................................................................................72 Competitor product detail ................................................................................................................................................72 Product Packaging Comparison .....................................................................................................................................72 Research results ....................................................................................................................................................................73 Iodex......................................................................................................................................................................................................74 Analysis of competitor products....................................................................................................................................74 Product packaging comparison- ....................................................................................................................................74 Research Results ...................................................................................................................................................................75 Crocin Tablet .....................................................................................................................................................................................76 Analysis of competitor products....................................................................................................................................76 Packaging Comparison .......................................................................................................................................................76 Research Results ...................................................................................................................................................................77 Horlicks Foodles ..............................................................................................................................................................................78 Analysis of competitor products....................................................................................................................................78 Packaging Comparison .......................................................................................................................................................79 Research Results ...................................................................................................................................................................79 Reason of product failure..................................................................................................................................................79 Horlicks Biscuit ................................................................................................................................................................................80 Research Results ...................................................................................................................................................................80 Analysis of USR’s job satisfaction level................................................................................................................................................81 Table showing job satisfaction score of USRs.....................................................................................................................81 Recommendations ..........................................................................................................................................................................81 Van Operations (Ready Stock Model) ..................................................................................................................................................82 Analysis of 2nd Base for Super Distributor.........................................................................................................................................83 Other Observations and Recommendations .....................................................................................................................................84 Increasing the product portfolio ..............................................................................................................................................84 Joining hands with culture ..........................................................................................................................................................85 Recommendations (Schemes for SKUs)..............................................................................................................................................86 Summary of Growth Avenues..................................................................................................................................................................87 Campaign Ideas..............................................................................................................................................................................................88 Learnings ..........................................................................................................................................................................................................89 References........................................................................................................................................................................................................90
  • 6. “Growth Avenues for GSK in Himachal Pradesh” 2012 5 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Executive Summary The scope of this project was to identify the avenues of growth for GSKCH (GlaxoSmithKline Consumer Healthcare) products in Himachal Pradesh. The duration of this internship was two months. The project involved benchmarking the “go to market model” and distribution structure of Major FMCGs in Himachal Pradesh along with their distribution models, current coverage status, gaps in their distribution structures, margins, transportation expenditures and distribution infrastructure. The project also involved benchmarking the “in-market” visibility standards of major FMCGs, identifying the sources of growth for GSKCH, devising a complete annual brand activation calendar, doing a pilot implementation of suggested recommendations and doing a cost benefit analysis of the activation plan. By looking into this report, the company will be able to know the current status of the distribution model, availability, loopholes in the current distribution system, visibility of GSKCH products at major outlets in HP(Himachal Pradesh), possible scope for cost cutting, optimum utilization of available resources, SKU wise analysis and their marketing plans. This report also helps to understand the competitors' and other major FMCGs’ (P&G, HUL & Nestle) strategies. The below table shows a snapshot of HP demographics and the sales data in the three different belts of Parwanoo, Mandi and Dharamshala for an overall view of the region. Code Belt Population No of distributors No of drug licensees No of Direct/ Super Distributors No of outlets Avg. per capita sales Average sales per belt in percentage 1 Parwanoo 364000 18 11 2 540 ₹8 40% 2 Mandi 142000 15 10 0 715 ₹8 25% 3 Dharamshala 133500 22 15 1 587 ₹12 35% Himachal 6850000 56 36 3 1842 ₹1 100% Parwanoo Belt-Shimla, Ponta Sahib, Una, Baddi, Solan are the major towns Mandi Belt-Mandi, Bilaspur, Manali and Bilaspur are the major towns Dharamshala Belt-Kangra, Dharamshala, McLeodganj, Hamirpur and Bhota are the major towns. As a part of this internship, more than 350 retail stores, and 50 distributors were visited at 25 places, their issues addressed, observed the sales pattern, collected research data, checked visibility and availability of products, analyzedretailers’ choice, and analyzed the strategy of other FMCG companies.
  • 7. “Growth Avenues for GSK in Himachal Pradesh” 2012 6 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in INTRODUCTION About GlaxoSmithKline GlaxoSmithKline is a leading healthcare company born out of the merger of two leading international organizations: GlaxoWellcome and SmithKline Beecham. GSK Consumer Healthcare Ltd. and GSK Pharmaceuticals Ltd. are the two businesses of GSK in India of which the former is headquartered at DLF Gurgaon and the latter at Worli, Mumbai. In the Indian market, GSKCH's journey began with Horlicks. Headquartered in the UK GSK has over 100,000 employees worldwide including 35000 employees at 85 manufacturing sites in 37 countries, over 16,000 in R&D and over 40,000 in sales and marketing. GSKCH Owned Manufacturing Sites in India are at  Nabha, Punjab  Rajahmundry, Andhra Pradesh  Sonepat, Haryana GSKpharma is the parent company which has two divisionsviz., GSKCH (GSK consumer healthcare) and GSK pharma. GSK’s global quest is to improve the quality of human life by enabling people to do more, feel better and live longer. GSK Products GSKhas three different types of products a) Nutritional(also called HFD-Health Food Drinks)  Boost, Horlicks [Competitor products are Bournvita and Complan)  Horlicks Biscuits  Foodles [Competitors are Nestle Maggie, Knorr Soupy Noodles, Yippee Noodles, etc.] b) Oral Healthcare Sensodynetoothpaste and brush [Competitors- Colgate Sensitive] c) Wellness  Analgesics-Crocin Range [Competitors are Saridon and Disprin]  Gastro Intestinal-Eno [Competitors are Digene, Gas-O-Fast, Pudin Hara, Fast Melt]  Rubs-Iodex [Competitors areMoov, Volini, Fast Relief]
  • 8. “Growth Avenues for GSK in Himachal Pradesh” 2012 7 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Organizational Structure of GSK Incentives to USRs Every company has some kind of incentives for its employees and dealers. This motivates them to give more to their work and take more responsibility. The incentives could be in the form of money or material. At GSK, the incentive structure is based on three kinds of targets  D1- It is based on the number of parties billed for particular products. For example, on selling Women Horlicks to 15 distributors, Rs.340 will be paid as incentive.  D2- This is same as D1 but for products which are different from those in D1. If D2 is achieved Rs.320 will be paid as incentive.  D3- This target is based on the total number of parties billed, irrespective of the products. For example on billing 25 parties (Distributors) in a particular month, If D3 is achieved then Rs.320 will be paid as incentive.  Value Target- Value target is set based on sales revenue that needs to be generated in a month. For example, a USR(Upcountry Sales Representative) needs to achieve a sales target of Rs.20 lakh in a particular month. If the value target is completely(100%) achieved, then Rs.1000 will be paid as incentive and if 105% is achieved, then Rs.1200 will be paid as incentive. Hence a sales man can claim a maximum of (340+320+320+1200) = Rs.2180 as incentive per month.
  • 9. “Growth Avenues for GSK in Himachal Pradesh” 2012 5 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Table 2 – GSKCH Product Details Product Detail of GSKCH (Consumer Healthcare) - Himachal Product Category Product Name Variants SKU (Stock Keeping Unit) Case Lot Expiry MRP per unit USP (Unique Selling Point) NHC (Nutritional Healthcare) [R- Refill; J- Jar] Horlicks Standard/Original 200 gm./500 gm./1 Kg. 48/24/12 12 months Rs.80/165/285 Taller, Stronger, SharperElaichi 500 gm. 24 ₹165.00 Chocolate 80gm./200gm./500gm. 96/48/24 Rs.25/80/165 Junior Horlicks (Stage1) Standard/Original 500gm. 24 12 months ₹190.00 "Specially designed for toddlers" 1) A-Z Nutrition, 2) 100% RDA of Nutrients 3) DHA for brain developmentChocolate 500gm. 24 ₹190.00 Junior Horlicks (Stage2) [Refill] Standard/Original 500gm. 24 12 months ₹190.00 "Customized for preschoolers"1) 25 vital nutrients 2) Power of protein 3) Smart nutrients for brain development 4) Rich in calcium Chocolate 500gm. 24 ₹190.00 Women Horlicks Chocolate 330gm. 24 12 months ₹180.00 For confident, Health Conscious and Multi- Tasking women (Hemocal Nutrients for Blood & Bone Health)Caramel 330gm. 24 ₹180.00 Mother Horlicks Standard 500gm. 24 12m ₹260.00 Boost Standard 80gm.(R)/180gm.(R)/ 450gm(Jar)/750gm(R) 96/48/24/12 12 m Rs. 25/75/162/240 Increase stamina by 3 times Horlicks Cookies Butter 80gm. 96 6 months ₹10.00 Contains calcium equillent to two glass of milk ( 1.No Artificial flavor 2.No Artificial color 3.No Cholesterol 4.No Trans-fat)Cashew 80gm. 96 ₹12.00 Horlicks Biscuit Standard 52.5/114/152.5/244/ 310gm. 144/72/60/48/36 6 months Rs.5/10/15/20/ 25 Contains cornflakes crunchies and calcium equillent to two glasses of milk Horlicks Foodles 4 Grain-Tomato 80gm. 120 6 months ₹15.00 Health maker with power vitamins (4 Grains- Rice, Wheat, Ragi, Corn) Regular Must Masala 80gm. 120 ₹10.00 Health maker with power vitamins. (The more Nourishing Noodles) OHC (Oral HealthCare) Sensodyne Toothpaste Fresh Gel 40gm./80gm. 144/72 24 months Rs.45/ 85 Clinically proven relief and daily protection for sensitive teeth, Works in 60 seconds Fresh Mint 40gm./80gm. 144/72 Rs.45/ 85 24*7 sensitivity protection Rapid Relief 40gm./80gm. 144/72 Rs.55/ 110 Clinically proven to relieve the sensitivity of tooth, Works in 60 seconds Sensodyne Brush Ultra-Sensitive 1 unit 12 pieces*12 Box=144 ₹45.00 Specially designed for people with sensitive teeth
  • 10. “Growth Avenues for GSK in Himachal Pradesh” 2012 6 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Wellness or OTC (On The Counter) Crocin Tab. Pain Relief 10 Tab. 40 Dispenser*10 Blisters= 400 24 months ₹20.35 Targeted pain relief Cold & Flu 6Tab.*2stripes=12 Tab. 80 Hangers*5 Blisters= 400 ₹11.60 Multi Symptom Relief Analgesic Tab. 15 Tab. 35 Blisters*48 Dispensers=1680 ₹22.39 It’s my trusted choice Advance Tab. 15 Tab. 25 Stripes*36 Dispensers= 900 ₹30.00 Paracetamol fast release tablet Crocin Syrup Suspension 60 ml. 72 Bottles 24 months ₹33.73 Suspension-DS 60 ml. 72 Bottles ₹35.31 Crocin Drops Standard 15 ml. 25 Bottle*8 Box=200 24 m ₹26.50 Analgesic and Antipyretic ENO Regular 5gm. 30 Pouch*72 Dispensers=2160 24 months ₹6.00 Gets to work in 6 seconds 30gm. 12 Box*12 Bottles=144 ₹36.00 100gm. 48 Bottles ₹80.00 Lemon 5gm. 60 Pouch*36 Dispensers=2160 ₹6.00 30gm. 12 Box*12 Bottles=144 ₹36.00 100gm. 48 Bottles ₹80.00 Orange 5gm. 30 Pouch*72 Dispensers=2160 ₹6.00 100gm. 48 Bottles ₹80.00 Cola 5gm. Iodex Ultra Gel 30gm. 180 units 24 months ₹70.00 Effective relief from Back, Joint and Muscular pain Double power 10gm./20gm./50gm. 384/240 units/120 units Rs.24/ 46/? Quick Action, Fast Relief Fast Relief 20gm. 240 units ₹46.00 Breath Right Standard 8 Strips 72 units of 8 strips=576 strips 5 years ₹55.00 Breath better, Relieve nasal congestion, Reduce snoring
  • 11. “Growth Avenues for GSK in Himachal Pradesh” 2012 7 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in The Distribution System GSK Distribution Model Trade Parties Company has two kinds of trade a) General Trade – In General trade goods are sold to directly to distributors and then from distributor to retailers. b) Modern Trade - In this type of trade goods are sold to big organized retail stores like Big Bazaar, Vishal Mega Mart and WalMart, etc.
  • 12. “Growth Avenues for GSK in Himachal Pradesh” 2012 8 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Margin Structure of agents dealing in GSK products There are different kinds of agents like distributors, retailers, wholesalers, etc. who deal in GSK products and push the products in the market to fulfill Consumer demands and company’s objectives and targets. They form an important and an integral part of the supply chain of the GSK products in the market. The margin structure of GSK is different for agents at different levels and is decided by the company. The margins for various agents are as follows Distributor’s Margin  Direct Distributor- 4.5%  Super Distributor- 1.7% + 1% (as transportation expenses from GSK) Retailer’s Margin  Malt Drinks – 8%  Biscuits - 10%  Foodles – 10%  Wellness (ENO & Crocin)- 20%  Iodex – 23%  SensodyneToothpaste– 15%  Sensodyne Brush- 40%  Biscuit/ Cookies – 12%
  • 13. “Growth Avenues for GSK in Himachal Pradesh” 2012 9 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Growth Avenues for GSK Himachal Pradesh is an important state for GSK and GSK wants to grow its business in Himachal. But to grow, the company needs to find out the ways by which it could devise a different strategy for each of its products. The company needs to know the current position of its products (visibility, availability, product placement, and USP of the products) and the competitors’ strategy. The Research A research was to be done on finding out the growth avenues for GSKCH in Himachal Pradesh as a part of this internship in GSK. This research aims to fulfill the objective stated above and also to find out the demand and supply scenario of each product, i.e., if the product is pulled by or pushed to the customer. The responsibilities for this research included visiting the distributors and retailers of GSK products and also of the competitors’, liking and brand image of GSK products among the distributors and retailers, finding out their margin structure from other companies, transportation cost, salaries/wages paid to sales persons, product availability, visibility, etc. Facts and Points to be considered for this Research  Measuring of consumer loyalty is not included in this research. Consumer Loyalty depends on the buyer’s satisfaction upon consuming the product. Consumer satisfaction has a crucial impact on consumer loyalty, but it is beyond the scope of this research.  A pre assumption was made about availability of all the SKUs of GSK products at the retailers. But this was not the case when the actual visit happened. Many of the SKU variants were not available at a few retailers. But the retailers were aware of all the SKUs. Process of Research The research was done with two questionnaires, one for retailers and the other for distributors. The one for the retailers had all questions based on awareness about GSK products, self-use, personal opinion about the product, availability of products, visits by USR and Sales Persons, SKUs and other details related to competitor products. The questionnaires and the resulting outcome from the analysis are presented in the next few pages of this report.
  • 14. “Growth Avenues for GSK in Himachal Pradesh” 2012 10 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Retailer Questionnaire Firm Name- Owner’s Name- Contact No.- Place- Date- Any Comments, Complaints or Suggestions (Write in this box after filling up the questionnaire) 1. Please mark the products you are aware of or used sometime… Aware Used Aware Used Horlicks Iodex Boost Sensodyne Toothpaste Horlicks Biscuits Sensodyne Brush Horlicks Cookies Crocin Tablet Horlicks Foodles Crocin Syrup ENO Crocin Drops 2. Whether customer asks for the product or you suggest him to buy the product? (Mark in the appropriate column) Customer asks for this product You Suggest Customer asks for this product You suggest Horlicks Iodex Boost Sensodyne Toothpaste Horlicks Biscuits Sensodyne Brush Horlicks Cookies Crocin Tablet Horlicks Foodles Crocin Syrup ENO Crocin Drops 3. As a retailer if you need to suggest the customer, what would be your 1st choice and Why? Mark the product & write (1)For Higher Margins (2)Better Schemes/Incentives (3)Better Advertisement (4)Bettertaste/quality(5)No such particular reason (6)Other (please specify) Product (+Any Scheme you are getting) Reason Of your choice Complan Boost Bournvita Horlicks Other Horlicks Biscuit Other [ ] Maggie Horlicks Foodles Yippy Noodles(ITC) Knorr Other Fast Melt Gas-O-Fast ENO Other Moov Iodex Fast Relief Volini Other Seridon Crocin Disprin Other [ ]
  • 15. “Growth Avenues for GSK in Himachal Pradesh” 2012 11 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in 4. How frequently GSK salesman visits at your shop? a)Twice in a week b) Once in a week c) Oncein 2 weeks d) Once a month e) You order on phone (visit very rarely) 5. SKU’s available at store… (Mark in the box) Mark Grocery & Confectionary Variants Mark Medical Stores Variants Horlicks ST CH El PCH Horlicks ST CH EL PCH Women Horlicks CH CR Women Horlicks CH CR Junior Horlicks ST CH Junior Horlicks ST CH Boost ST PCH Boost ST PCH ENO ST LM OR CO ENO ST LM OR CO Sensodyne Toothpaste FG FM RR Sensodyne Tooth Paste FG FM RR Sensodyne Brush ST Sensodyne Brush ST Iodex FR Iodex FR DP UG Horlicks Foodles 4G RM Crocin Tablet ANL ADV CF PR Horlicks Biscuits & Cookies St CF BC CC Crocin Syrup SS SS-DS Crocin Drops ST Other product related details… Sr. No. Product Margin Scheme Any Other Incentive Distributor/wholesaler (+place) Any other comments (campaigning or display) 1 Colgate Sensitive 2 Sensitive Brush 3 Bournvita (Cadbury) 4 Complan (Heinz) 5 Nestle Ceramal/ Lactogen/ Nan 6 Maggie (Nestle) 7 Knorr Soupy Noodles(HUL) 8 Yippy Noodles (ITC) 9 Fast Melt (Digene) 10 Gas-O-Fast(Mankind) 11 Pepfiz (Ranbaxy) 12 Moov (ParasPharma) 13 Volini(Ranbaxy) 14 Fast Relief (Emami) 15 Disprin (RB) 16 Seridon (Bayer CH) 17 18 19
  • 16. “Growth Avenues for GSK in Himachal Pradesh” 2012 12 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Research Results from Retailer Questionnaire Q.1 Please mark the products you are aware of or used sometime… Table 3 – Product Awareness Product awareness Not aware Aware Used Not aware Aware Used Horlicks 100% 73% Iodex 100% 73% Boost 100% 45% Sensodyne Toothpaste 100% 55% Horlicks Biscuits 36% 64% 45% Sensodyne Brush 9% 91% 27% Horlicks Cookies 73% 27% 9% Crocin Tablet 100% 55% Horlicks Foodles 45% 55% 18% Crocin Syrup 100% 45% ENO 100% 91% Crocin Drops 27% 73% 27% Sample size-33 retail outlets Observations-  ENO is our landmark product. 100% people are aware of it. Almost all of them have used it.Most of our brands (Horlicks, Boost, Iodex andCrocin) have 100% awareness.  73% of retailers don’t even know that there is a product called Horlicks Cookies, which is quite alarming. For more detailed analysis please refer to “SKU wise analysis” in this report.
  • 17. “Growth Avenues for GSK in Himachal Pradesh” 2012 13 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Q.2Whether customer asks for the product or you suggest him to buy the product? Objective- If the retailer is pushing our product, we need to give more focus to retailer – hence incentivize the retailer (by giving him better margin and schemes). If consumer is pulling our product we need to focus more on consumers – hence incentivize the consumer (by giving them better discounts and promotional offers). Table 4 – Consumer’s Choice Consumer's choice Product Don’t keep this product Customer asks for this product You Suggest Product Don’t keep this product Customer asks for this product You suggest Horlicks 82% 18% Iodex 91% 9% Boost 9% 73% 18% Sensodyne Toothpaste 45% 64% Horlicks Biscuits 36% 36% 27% Sensodyne Brush 9% 27% 64% Horlicks Cookies 45% 36% 18% Crocin Tablet 73% 27% Horlicks Foodles 36% 36% 27% Crocin Syrup 64% 36% ENO 82% 18% Crocin Drops 73% 27% Sample Size-33 retail outlets  Most of the retailers say that Horlicks, Boost, ENO, Iodex (highlighted in green) are the products which most of the customers ask themselves. So we do not need to increase the retailers’ margin in these products. But we should incentivize the consumer for these products to further increase the sales.  Sensitive category is the category where the company should be highly focused. Because 64% of the retailers say that they suggest the consumer to choose a brush or toothpaste for sensitive toothpaste. So there should be more incentive for retailers in this category. Also our competitor Colgate sensitive is trying to increase its market share through better product visibility, and consumer and retailer offers. For further detailed research analysis please refer to “SKU analysis” in this report.
  • 18. “Growth Avenues for GSK in Himachal Pradesh” 2012 14 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Q.3 As a retailer if you need to suggest the customer, what would be your 1st choice and Why? Objective-If a product is most of the retailers 1st choice than they will always try to push that product. The objective of this question was to find out that which of our products are retailers 1st choice, and which are not. The products which are not retailers 1st choice are the products where need to focus more. Table 5 – Retailer’s first choice and ranking Retailer's First Choice and Ranking Category Product Results Rank Reason of choice Malt Drinks Bournvita 64% 1 Higher Margin, Better Schemes Horlicks 18% 2 Compaln 9% 3 Good No. of variants Boost 9% 4 Scheme Biscuit Others (Britannia) 91% 1 Consumer asks for it Horlicks Biscuits 9% 2 Noodles Maggie 73% 1 Consumer's first choice/ Better Ad Yippy Noodles 18% 2 Horlicks Foodles 9% 3 Knorr 0% 4 Digestives ENO 82% 1 Old brand/ Consumer's first choice Gas-O-Fast 18% 2 Good placement of product/ Tv Ad Fast Melt 0% 3 Pain relief cream Moov 45% 1 Tv Ad Iodex 27% 2 Fast Relief 18% 3 Volini 9% 4 Pain relief Tablet Disprin 55% 1 Old Brand Seridon 27% 2 Crocin 18% 3 Sensitive Toothpaste Sensodyne 64% 1 Better Ad/ Quick relief Colgate Sensitive 36% 2 Sensitive Brush Colgate Sensitive 64% 1 Better Schemes/ Higher Margins Sensodyne 36% 2 Sample size-33 retail outlets Observations-  In malt drink category Bournvita is at top. It is also the first choice of most of the retailers. 3 out of 4 Retailers will suggest Bournvita to consumers (if they need to).  Our top products are Sensodyne Toothpaste and ENO, which are most of the retailers’ first choice.  In Pain Relief Tablets, Crocin and in Sensitive Brush category, Sensodyne are at bottom. Which means most of the retailers’ 1st choice is some other product, and not ours.
  • 19. “Growth Avenues for GSK in Himachal Pradesh” 2012 15 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Q.5. Product Availability Sheet-All retailers do not entertain the request of filling up questionnaire. So this sheet was made to record the observation related to product availability (SKU ), visibility % and POS Material.This is same as given in Q.5 of Retailerquestionnaire. Outlet No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Visibility % POS Mat. Y, N ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH El El El El El El El El El El El El El El El El El El El El El El El El El PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR CR ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH CH ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH PCH ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM LM OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR OR CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO CO FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FG FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM FM RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR RR Sensodyne Brush ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR FR DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP DP UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG UG ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ANL ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV ADV C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F C&F PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR PR SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS SS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS DS Crocin Drops ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST Product Availability Sheet (M.S.) Sensodyne Toothpaste Horlicks Women Horlicks Junior Horlicks 1 Junior Horlicks 2 Boost ENO Crocin Tablet Iodex Crocin Syrup
  • 20. “Growth Avenues for GSK in Himachal Pradesh” 2012 16 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Analysis of Product availability Table 6 – Results of product availability analysis Results of product availability analysis Variants Availability Variants Availability Horlicks ST 66% Sensodyne Toothpaste FG 60% CH 76% FM 38% El 46% RR 40% PCH 18% Sensodyne Brush ST 48% Women Horlicks CH 38% Horlicks Foodles 24% CR 30% Horlicks Biscuits & Cookies 28% Junior Horlicks 1 ST 56% Iodex FR 46% CH 42% DP 40% Junior Horlicks 2 ST 38% UG 40% CH 26% Crocin Tablet ANL 52% Boost ST 50% ADV 44% PCH 22% C&F 64% ENO ST 42% PR 40% LM 98% Crocin Syrup SS 56% OR 28% DS 32% CO 60% Crocin Drops ST 40% Sample Size-50 retail outlets The above sheet shows the results of product availability analysis. Columns in Green show the products which are above average and columns in red show the products which are below average (in terms of availability at stores). Observations- Product Availability-  ENO Lemon is GSK’s landmark product which was available at 98% of the retail outlets visited.  Horlicks Standard, Chocolate, Junior Horlicks (St-1) Standard, Boost, ENO Cola, Sensodyne Fresh Gel, Crocin Analgesic, Cold & Flu, and Syrup are above average- available at more than 50% of the stores.  Horlicks & Boost Pouch, Women Horlicks Caramel, Junior Horlicks (Stage-2) and ENO Orange were available at very few stores. Product Visibility-  GSK’s average visibility score was approximate 35%. This is below average score which means, GSK’s competitors have65% share of visibility. POS Material- No POS material was found at any Store except Parwanoo and some retail shops in Solan.
  • 21. “Growth Avenues for GSK in Himachal Pradesh” 2012 17 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Distributor Questionnaire Firm Name- Place- Population- Total GSK Sales- Date- No. of Outlets- Any Comments, Complaints or Suggestions (Write in this box after filling up the questionnaire) Q. Which other company’s distributorship you have apart from GSK? (Please Name them) Sr. No. Company Name Distributor Type (Direct/Supe r/ Sub) Dist. Margin Retailer Margin Scheme (If applicable) Any Other Incentive (Transportati on etc.) Monthly Sales Total Himachal’s monthly Sales Credit Period 1 Colgate 2 Cadbury 3 Heinz 4 Rickett Benckiser 5 Nestle 6 ITC 7 HUL 8 9 10 Product wise detail… Sr. No. Product Distributor /Retailer Margin Scheme Any Other Incentive Transpor tation Expenses Monthly Sales (Individua l) Total Himachal Sales (per month) Any other comments (campaignin g/display/ Credit Period etc.) 1 Colgate Sensitive 2 Sensitive Brush 3 Bournvita (Cadbury) 4 Complan (Heinz) 5 Nestle Ceramal/ Lactogen/Nan 6 Maggie (Nestle) 7 Knorr Soupy Noodles(HUL) 8 Yippy Noodles (ITC) 9 Fast Melt (Digene) 10 Gas-O-Fast (Mankind) 11 Pepfiz (Ranbaxy) 12 Moov (ParasPharma) 13 Volini(Ranbaxy) 14 Fast Relief (Emami) 15 Disprin (RB) 16 Seridon (Bayer CH)
  • 22. “Growth Avenues for GSK in Himachal Pradesh” 2012 18 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Benchmark Companies These 3 companies are chosen as benchmark companies- The reasons of choosing these companies as benchmark are following-  They have very large portfolio of products.  Their supply chain is much better than others.  Their coverage is better than other FMCG companies.  They are the most innovative companies in this sector.  They are the market leaders, in terms of highest revenue and market share. There are many things which can be learned from these companies. They handle so many brands under the single roof with their continuous innovation and efficient network. Focus Areas- These are the things which differentiate them from others. The key focus areas are- i. Working strategy ii. Organization structure and Supply chain iii. Product portfolio iv. Innovations v. Marketing strategies vi. Payments and expenses structure Note- Everything is not included while analyzing the strategy of these companies. The data which is only relevant for GSK is included in this report.
  • 23. “Growth Avenues for GSK in Himachal Pradesh” 2012 19 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in P&G Products List P&G Product List and Key Brands Segment Products Key Brand Revenue By Segment Beauty Cosmetics, Deodorants, Hair Care,Personal Cleansing, Prestige,Fragrances, Skin Care Head & Shoulders, Olay, Pantene,Wella 23% Grooming Blades and Razors, Electric Hair,Removal Devices, Face and Shave,Products, Home Appliances Braun, Fusion, Gillette, Mach3 10% Health Care, Snacks, Pet Care Feminine Care, Oral Care, Personal Health Care, Pharmaceuticals, Pet Food, Snacks Actonel, Always, Crest, Oral-B, Iams, Pringles 17% Home Care Air Care, Batteries, Dish Care, Fabric,Care, surface Care Ariel, Dawn, Downy, Duracell, Gain,Tide 28% Family Care Baby Wipes, Bath Tissue, Diapers,Facial Tissue, Paper Towels Bounty, Charmin, Pampers 16% P&G’s Revenue by segment Revenue By Segment 0% Family Care 16% Beauty 23% Grooming 10% Health Care 17% Snacks 6% Home Care 28% P&G - Revenue By Segment
  • 24. “Growth Avenues for GSK in Himachal Pradesh” 2012 20 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Distribution Model P&G has entirely different systems of distribution. GSK has a C&F agent (in Zeerakpur) and also has appointed 8 Redistribution stockiests (who cover the urban areas), and to cover the Rural areas they further appoint wholesalers. Redistribution stockiestsbill the wholesaler at Basic Margin + 1.5% extra on all items and 3% extra on Vicks. Plans for wholesalers  Wholesale – 1.5% extra margin on all items and 3% extra on Vicks  Wholesale 1 – Target + Extra 1.5% (on all items) and 3% (on Vicks) + schemes + Quarterly points  Wholesale 2 – No quarterly points + Extra 1.5% (on all items) and 3% (on Vicks) + Extra 1% + Scheme
  • 25. “Growth Avenues for GSK in Himachal Pradesh” 2012 21 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in P&G’s Working style  P&G has complete control over retailers and sales team. The company selected 547 retailers in Kangra District (retailers who sell at least 15-20 products of P&G and give good sales to the company). There is a target fixed for these retailers as well. The retailers get some extra incentive of 1-1.5% on completing these targets.  A wholesaler can work for many companies but distributors work only for P&G.  The sales team is entirely paid by the company. And distribution expenses are also fully paid by the company.  The distributor has its own vehicles for distribution/ or they hire.  Company pay salary of 12000-15000 per month to the drivers + Fuel expenses (actual) Or They are also paid on per Km. basis (Depending upon the route)  Supply is weekly at most of the places. They take order one day in a week and supply next day by jeep.  The sales man need to cover approx. 32 retail shops a day. Or 8-10 wholesale shops per day.  Company use SWING (software package) for all of its Billing and online operations. P&G’s Strategy  Differentiation through Research and advertisement-Procter & Gamble competes through differentiation, and spends heavily on research and development to create products that are differentiated from that of competitors. P&G spends over twice as much on research and development than its nearest competitor. Company spends heavily on advertising to signal the value of its brands.P&G’s largest competitors by 4 quarters revenue (in 2008) are Unilever ($60B), Kimberly Clark ($19B), and Johnson & Johnson’s consumer segment ($16B). Only Unilever has the scale to come close to what P&G can spend on advertising. A high absolute value of research and development spending allows the development of Products that actually do add value over the products of rivals, and high spending on Advertising facilitates the signaling of this value. Some examples:  Detergent optimized for cold water washing (saves energy costs)  Detergent optimized for single rinse (where clothes are washed by hand)
  • 26. “Growth Avenues for GSK in Himachal Pradesh” 2012 22 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in  Compact detergents to reduce packaging waste P&G’s relative level of innovation is apparent from the results of the 2008 industrial research institute’s pace setter study that measures the top new products measured by sales. In 2008, P&G had 10 out of 25 of the top new products in the non-food category. In comparison, Unilever, J&J, Kimberly Clark, Colgate, L’Oreal, and Energizer collectively had 7.  Very well placement of product-P&G place their products so well in the market that no retailer can do business without keeping P&G’s products. For example- Wal-Mart accounting almost 20% of sales. But Wal-Mart needs P&G about as much as P&G needs Wal- Mart.  Continuous cost cuts-P&G consistently cuts costs unrelated to differentiation, giving P&G a cost advantage that acts as a barrier to entry. For example, continuous reformulation can provide the same product performance with different ingredients, allowing the formulation to be optimized for current commodity costs, and consequently saving on input costs.  Evergreen products-P&G sells the types of productswhich are typically resistant to diminishing demand during a recession. Procter & Gamble realized it needed a “consumer-driven supply network” to stay ahead in the consumer packaged goods industry. Initiatives Consumer Driven Supply Network (CDSN) - Initiative P&G started its supply chain from store shelves and moved back to its suppliers. This operating strategy was called Consumer Driven Supply Network. CDSN required P&G to create a responsive supply chain that would produce and supply products as per demand at the customer level. CDSN – Intelligent Daily Forecasting (IDF)IDF is one of the most important components of CDSN.IDF is software used by P&G to forecast the demand based on actual sales. Following are the Inputs and outputs that this software provides. Input: ◦ Daily Order Information ◦ Daily Shipment Information ◦ Weekly shipment forecast Output: ◦ Daily estimates for next 42 days ◦ Refreshed Daily Collaborative Planning Forecasting and Replenishment (CPFR) Overview- Procter & Gamble’s CPFR focus is to build on the current success of the Continuous Replenishment Program (CRP). CRP has delivered greater than 99% service levels, and has reduced
  • 27. “Growth Avenues for GSK in Himachal Pradesh” 2012 23 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in customer distribution center inventories by as much as 50% in customers representing over 40% of our U.S. and European businesses. P&G has deployed CPFR to enable creation and integration of consumer demand data. This will trigger product flow from our manufacturing plants to our customers’ DCs, from the customers’ DCs to their retail store shelves, and ultimately from the store shelves into consumer homes. ModelCPFR is a nine-step process model consisting of 1 •Developing collaboration agreement 2 •Creating joint business plan 3 •Creating sales forecast 4 •Identifying exceptions for sales forecast 5 •Resolving collaborating on exception items 6 •Creating order forecast 7 •Identifying exceptions for order forecast 8 •Resolving / collaborating on exception items 9 •Generating orders
  • 28. “Growth Avenues for GSK in Himachal Pradesh” 2012 24 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Nestle Nestlé is one of the world’s leading nutrition, health and wellness companies. Founded in 1866, the company now employs over 280,000 people and has factories or operations in nearly every country in the world. It is one of the leading branded processed food companies in the country with a large market share in products like instant coffee, weaning foods, instant foods, milk products, etc. It also has a significant share in the chocolates and other semi-processed foods market. Nestlé's leading brands include Cerelac, Nescafe, Maggie, Kit-Kat, Munch and Milkmaid. It has 511 factories in 86 countries and employs nearly 283,000 individuals around the world. Nestlé has been a partner in India's growth for over nine decades now and has built a very special relationship of trust and commitment with the people of India. Strategy The Company continuously focuses its efforts to better understand the changing lifestyles of India and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness through its product offerings. The culture of innovation and renovation within the Company and access to the Nestlé Group's proprietary technology/Brands expertise and the extensive centralized Research and Development facilities gives it a distinct advantage in these efforts. It helps the Company to create value that can be sustained over the long term by offering consumers a wide variety of high quality, safe food products at affordable prices. Top 5 towns Sales Rank Town Sales 1 Shimla 80 L 2 Parwanoo 65 L 3 Kangra 60 L 4 Kullu 58 L 5 Rampur 50 L Distributor Margin Re-distributor Margin (Direct Dist. Keep 1.8%) Retailer Margin Scheme Transportation Maggie 5.80% 4% 9.00% NA Approx. Rs.12- 15 Per Case Nestle products list and major brands Growth Actual 18-19% Expected 25% Credit Period (For Distributor) 3 Days
  • 29. “Growth Avenues for GSK in Himachal Pradesh” 2012 25 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Category Products & Brands % Share in Revenue 1 Beverages  NESCAFÉ Classic  NESCAFÉ MY FIRST CUP  NESCAFÉ Cappuccino  NESCAFÉ Sunrise Premium  NESCAFÉ Sunrise  NESTEA ICED TEA 30% 2 Milk products and Nutrition  NESLTÉ JUNIOR DAHEEZ  NESTLÉ MILKMAID Creations  NESTLÉ a+ milk  NESTLÉ ActiPlus Probiotic Dahi  NESTLÉ Creamy Vanilla  NESTLÉ EveryDay Dairy Whitener  NESTLÉ EveryDay Ghee  NESTLÉ BhunaJeeraRaita  NESTLÉ Milkmaid  NESTLÉ NESLAC  NESTLÉ Real Fruit Yoghurts  NESTLÉ Slim Dahi  NESTLÉ Slim Milk  Nestle Cerelac  Nestle Lactogen  Nestle NAN 43% 3 Chocolates & Confectionery  NESTLÉ DARK CHOCOLATE  NESTLÉ DARK CHOCOLATE Dry Fruits  NESTLÉ Fudges  NESTLÉ SELECTIONS Fine Chocolates  NESTLÉ SELECTIONS Panned Dry Fruits  NESTLÉ KITKAT  NESTLÉ BAR-ONE  NESTLÉ MUNCH  NESTLÉ MUNCH POP CHOC  NESTLÉ Milk Chocolate  NESTLÉ MILKYBAR  NESTLÉ MILKYBAR CHOO  NESTLÉ MILKYBAR Crispy Wafer  Eclairs  POLO HOLE NEW FASHION  POLO 14% 4 Prepared Dishes & Cooking Aids  Maggie Noodles,  Maggie Pazta,  Maggie Sauce,  Maggie Bhuna Masala,  Maggie Coconut Milk Powder,  Maggie Soups,  Maggie Magic Cubes 14%
  • 30. “Growth Avenues for GSK in Himachal Pradesh” 2012 26 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Organization Structure Sales and Distribution Model VP GM Branch Head (BH) Regional Sales Manager (RSM) Area Sales Manager (ASM) Sales officer (SO)- [Total 6 in HP] Primary Sales Executive (PS) DS
  • 31. “Growth Avenues for GSK in Himachal Pradesh” 2012 27 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Nestle does not have Super model in HP. Nestlé’s business is running through Direct Distributors only. Nestle is having total 26 Direct Distributors in Himachal Pradesh. Transportation Expenses Nestle pay 12-15 Rs. /case to distribute goods from Direct Distributor to Sub-D Cash Distributors- The entire business of Nestle is conducted through Cash Distributors known as CD. The CD is the main party of contact between the company and the Retailer. There are around 450 CDs under the Delhi Branch. The role of a CD is:  Accomplish the Company Business Plan  Shares Leadership of the company  Provides support in Distribution
  • 32. “Growth Avenues for GSK in Himachal Pradesh” 2012 28 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in  Maintain effective contact with the market  Co-ordinate with the Sales Officer There are 3 main groups of CDs: a) Trade Parties- This CD handles all those products which come in retail packs and are meant for the end consumer to buy directly from the retailers b) Nestle Professional (NP) - This includes CD who looks after the Food Services (FS), Vending & Alternate Trade Channels (ATC). FS includes all the Nescafe and Maggi Stalls that we see in different Institutions. Vending products are those which are packed in bulk for the various Vending machines that we see for ex. The Nescafe Vending Machines. ATC includes packings meant for events, gatherings ex. Weddings. There are CDs specially established for the sale of these packs or a CD can look after both Trade Products and NP products c) Chilled Dairy-This includes CDs who handle only the milk products of Nestle. There are only 6 exclusive Chilled dairy CDs and that only so far in Delhi as the other areas face problems of logistics. Each CD has a Sales Officer (SO) who is an employee of Nestle. A SO is the link between a CD and the company. A SO reports to an Area Sales manager (ASM) who looks after a particular area. This area may be a city and a few towns in the same district. The ASM in turns reports to the Regional Sales Manager. There are 6 RSMs. Re-Distributor/ Sub-Distributor- Another important party is the Re-Distributor known as RD. A RD is a distributor in small rural areas where it is not viable to set up a separate CD. An RD looks after a smaller area mostly which are in the rural areas. A RD is set up under a CD. The Role of a RD is:  Vital distribution link  Sell in areas which cannot be reached by a CD  shouldn’t be in the same town as a CD Display Scheme
  • 33. “Growth Avenues for GSK in Himachal Pradesh” 2012 29 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in The Display claims in Nestle mostly come under “Nestle Corporate Visibility Program‟ (NCVP) head. There are 3 main programs under NCVP described as below: STAR PROGRAMME Display Long Term NCVP Star Programme Platinum Silver Gold Diamond Magic Stick Chocolate Dominance Gold Silver Short Term
  • 34. “Growth Avenues for GSK in Himachal Pradesh” 2012 30 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in The objective is to have dedicated space for Nestle Products within the shop, showcasing Nestle Products & New from Nestle to the Shopper with the purpose of increasing Sales. The priority channels targeted here are Large Grocers and Tier III Supermarkets. This program would operate in areas where there are currently CDs undertaken Merchandise. The Payout for the retail outlets would be on a Quarterly basis. The Star Program is classified into Platinum, Gold, Diamond and Silver. Summary Of The Star Programme T 1.2–Summary of the Star Program Star Programme Monthly Turnover in Rs. Brands & Products Maximum Pay Out in Rs. Classification Pay Out (Quarterly) Minimum Maximum 2.50% 5000 7449 *F&B(-C&C-NUT- GHEE) SILVER 2.75% 7500 14999 F&B-C&C-NUT- GHEE GOLD 3.00% 15000 79999 F&B-C&C-NUT- GHEE DIAMOND 3% 80000 F&B-C&C-NUT- GHEE 9000 PLATINUM *Food & Beverages excluding Chocolate & Confectionary, Nutrition and Ghee MAGIC STICK PROGRAM The objective is to have a dedicated space for nestle product specific SKU‟ s within the shop on a hanger called Magic Stick for a clear visibility to the shopper with the sole purpose of inducing trials & increasing sales. The priority channels for this program are Small Groceries. The payout is fixed at Rs. 300 per quarter. The SO has to provide the Sales data for each outlet monthly. A SO also has to make visits at outlets to see if the Displays are put correctly and are clearly visible. Summary of Magic Stick
  • 35. “Growth Avenues for GSK in Himachal Pradesh” 2012 31 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Magic Stick Minimum Turnover Brands & Products Pay Out Rs. 300/- per Quarter 1500/- *Only F&B (- Ghee-NUT.) *Food & Beverages excluding Ghee and Nutrition CHOCOLATE DOMINANCE PROGRAM The objective is to have a dedicated space for only Nestle Chocolates within the shop, showcasing Nestle Chocolates & Confectionery to the Shopper with the purpose of increasing Sales through Visibility Program. The priority channels here are Bakeries & Large Grocers. The payout here would be made on a monthly basis. There are 2 classifications here are Gold and Silver. Summary Of Chocolate Dominance Programme Chocolate Dominance Programme Monthly Turnover in Rs. Brands & Products Maximum Pay Out in Rs. Classification Pay Out Minimum Maximum 4% 2000 4999 *C&C SILVER 5% 5000 C&C 2500 GOLD *Chocolate & Confectionnary Incentives & Allowences Grade M L Level Officer Executive Daily Headquarter Allowance 125 125 Daily Travel Allowance(1) 110 110 Conveyance Allowance 800/month 800/month Mobile Expenses 400/month 400/month Laptop/Wireless/Data 1000/month 1000/month
  • 36. “Growth Avenues for GSK in Himachal Pradesh” 2012 32 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Fax,CyberCafe,Photocopy,Postage 200/month 200/month *The Executives who possess their personal Vehicle (4 wheeler) are entitled to Rs. 6/KM. In this case the person will not be eligible for 110/- Travelling Allowence in case of Night Halt The employees travel to various locations. The towns and cities have been classified as Metros & Mini Metros, Class A & B towns are divided on the basis of their cost of living index. The towns that have been identified as per the classification mentioned above. Branch Metros & Mini Metros Class A Class B Delhi Chandigarh Amritsar Rest all towns Delhi Dharmshala Gurgaon Jaipur Jammu Joshimath Kathmandu Leh Lucknow Ludhiana Manali Nanital Pokhra Shimla Delhi Srinagar Udaipur Agra Allahabad Dehardun Jaisalmer Jalandhar Kanpur Kullu Mussiore Parwanoo Rishikesh Varanasi Bathinda Field Force Travel entitlement L Grade-
  • 37. “Growth Avenues for GSK in Himachal Pradesh” 2012 33 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Particulars Entitlement Own arrangement with night halt Rs. 400 per night Up country allowance ( with night halt only) Rs. 1000/- per day (Class A towns) this includes Upcountry allowance- Rs.210/-, Hotel stay & others (incl. morning tea, laundry, etc.) up to Rs. 790/- Rs.750/- per day (class B towns) this includes Upcountry allowance of Rs. 210/-, Hotel stay & others (incl. morning tea, laundry, etc.) up to Rs. 540/- Transit Bhatta Rs.175/- per night Head quarter Allowance/Ex-head quarter allowance without night halt Rs.125/- per day Conveyance allowance Rs.6/- per k.m. for employment with cars. Actuals for auto/ Rickshaw/Bus & for others, capped at Rs. 110/- per working day. Travel Road:  State transport/ Luxury buses must be availed where it is convenient and time saving. (Bus tickets above Rs.100 per travel needs to be attached to the expense statement)  Shared taxis allowed in consultation with ASM (only pre-approved routes or where the above mentioned mode is not applicable)  Special taxi coverage is allowed only on need basis duly approved by Branch manager.  Train  During day journey- 2nd Tier AC chair car/ 1st class ordinary.  During overnight journey- 1st class ordinary/AC sleeper- 2nd tier/ AC sleeper-3rd Tier  Air:  Economy class air travel allowed only in defined sectors as approved by Branch manager. M Grade- Particulars Entitlement Up country allowance (with night halt only)  Rs. 650/- per day (class A towns) (Upcountry allowance of Rs.150/- and hotel stay (incl. all expenses) up to Rs. 500)  Rs 600/- per day (class B towns) ( Upcountry allowance of Rs. 150/- and hotel stay (Incl. all expenses) up to Rs. 450) Transit bhatta Rs 175 if the person reaches HQ town after Midnight Head quarter allowance/Ex- Head quarter allowance without night halt Rs. 125/- per day Conveyance allowance Actual Auto/ Rickshaw/ Bus for others, capped at Rs. 110/- per working day. Travel Road:  State transport / Luxury Buses must be availed it
  • 38. “Growth Avenues for GSK in Himachal Pradesh” 2012 34 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in is convenient and time saving. (Bus tickets above Rs 100 per travel needs to be attached to the expense statement.  Shared Taxis allowed in consultation with ASM (only pre- Approved routes or where the above mentioned mode is not applicable)  Special taxi coverage is allowed only on need basis duly approved by Branch manager Train:  During day journey- 2nd tier AC chair Car/ 1st class ordinary  During overnight journey- 1st class ordinary/AC sleeper – 2nd tier/ AC sleeper- 3rd tier Air:  Economy class air travel allowed only in defined sectors as approved by Branch manager. Sales Incentive Scheme-  It is an performance based Scheme for sales personnel  Performance evaluation is done on monthly/Quarterly an annual basis  It is designed to drive in market execution  It is structured with focus on a) RIG achievement b) Redistribution turnover c) Bad goods d) Trade spends  The grade- incentive entitlement at 100% achievement level is as follows for „eligible employees‟ : L & M Grade : 30% or 18.08% of fixed salary (as per the role) Performance Bonus Scheme- Maximum bonus payout under this bonus scheme is up to 18.08% for employees in sales team (Activation, Sales training, Channel, Key accounts etc.) and 12% of fixed salary for other employees. HUL Hindustan Unilever (HUL) is the largest pure-play FMCG Company in the country and has one of the widest portfolio of products sold via a strong distribution channel. It owns and markets some of the
  • 39. “Growth Avenues for GSK in Himachal Pradesh” 2012 35 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in most popular brands in the country across various categories, including soaps, detergents, shampoos, tea and face creams. HUL products detail Products List of HUL Food brands: Homecare Brands Personal Care Brands:  Annapurna salt and atta  Bru coffee  Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea  Kissan squashes,ketchups, juices and jams  Liptontea  Knorr soups & meal makers and soupy noodles  Kwality Wall's ice cream  Modern Bread, ready to eat chapattis and other bakery items  ActiveWheeldetergent  CifCream Cleaner  Comfort fabric softeners  Domexdisinfectant/toilet cleaner  Rin detergents and bleach  Sunlight detergent and colour care  Surf Exceldetergent and gentle wash  Vimdishwash  Aviance Beauty Solutions  Axe deodorant and aftershaving lotion  LEVER Ayush Therapy ayurvedic health care and personal care products  Breeze beauty soap  Clear anti-dandruff hair products  Clinic Plus shampoo and oil  Close Up toothpaste  Dovebar & skin cleansing, hair care range,lotions & Creams and anti- perspirant deodorants  Denim shaving products  Fair & Lovely - fairness products  Hamam  Lakmé beauty products and salons  Lifebuoy soaps and handwash range  Liril2000 soap  Lux soap  Pears soap  Pepsodent toothpaste  Pond's talcs and creams  Rexona soap  Sunsilk shampoo  Sure anti-perspirant  Vaseline petroleum jelly, skin care lotions
  • 40. “Growth Avenues for GSK in Himachal Pradesh” 2012 36 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Organization Structure VP GM Senior Sales Manager (SR) Area Sales Manager (ASM) Territory Sales Manager (TSM) Team Leader (TL) Sales Executive (SE)
  • 41. “Growth Avenues for GSK in Himachal Pradesh” 2012 37 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Distribution Model Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products HUL is not having Super model in Himachal Pradesh. They are covering the low population areas through wholesalers (P&G is also doing same). Strategy HUL always believes in customer friendly products with major emphasis on low cost overall without compromising on the quality of the product. They are leveraging the capabilities and scale of the parent company and focusing on the value of execution. The entire product portfolio is also being tweaked to include premium offerings such as Pond's Age Miracle and dove shampoo in skin and hair care. HUL C&F Agent Redistribution Stockiest Wholesaler Retailer Customer Retailer Customer
  • 42. “Growth Avenues for GSK in Himachal Pradesh” 2012 38 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in HUL is driving innovation, not only in their products, but across the value chain of their business. For example HUL introduced Project Shakti to penetrate the rural market (covering 135000 plus villages) is an innovative win-win distribution model, which helps HUL to reach consumers in remote villages across the country while enhancing livelihoods of rural women. Growth Drivers HUL has been launching new products and brand extensions, with investments being made towards brand-building and increasing its market share. HUL is also streamlining its various business operations, in line with the ‘One Unilever' philosophy adopted by the Unilever group worldwide. Introduction of premium products and addition of new consumers via market expansion will be HUL's growth drivers. Continuous Innovation- 1) Project Shakti- Changing Lives in Rural India  Need-HUL realized that although it was enjoying a greater penetration in the rural market when compared with its competitor such as Nirma and ITC, its direct reach was restricted to only 16%. The FMCG giant was desperate to increase this share. HUL saw its dream fulfillment in the vast Indian rural market. As competition is increasing day by day, it’s difficult to maintain the leader position & to further strengthen the distribution network HUL made a project called project SHAKTI.  Structure-This group of usually 15 members contributed a small amount of money to a common pool and then offered a micro-credit to a member of the group to invest in a commonly approved economic activity.  Social Side- The social side of the Project Shakti was that it was aimed to create income- generating capabilities for underprivileged rural women (targets small villages with population of less than 2000 people or less.), by providing a sustainable micro enterprise opportunity, and to improve rural living standards through health and hygiene awareness through the Shakti Vaniprogramme, and creating access to relevant information through the iShakti community portal. Most SHG women viewed Project Shakti as a powerful business proposition and are keen participants in it.  Coverage- Partnering with these SHGs, HUL Started project Shakti in 2001. Shakti has already been extended to about 135000 plus villages in 15 states.  Training & Support- HUL offered a wide range of products to the SHGs, which were relevant to rural customers. HUL invested significantly in resources that work with the women on the
  • 43. “Growth Avenues for GSK in Himachal Pradesh” 2012 39 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in field and provide them with on-the-job training and support. HUL provided the necessary training to these groups on the basics of enterprise management, which the women need to manage their enterprises. For the SHG women, this translated into a much-needed, sustainable income contributing towards better living and prosperity. Armed with micro- credit, women from SHGs become direct-to-home distributors in rural markets. 2) Sustainable Living Plan- Unilever launched Sustainable Living Plan in on November 15, 2010 at London, Rotterdam, New York and New Delhi simultaneously. The Unilever Sustainable Living Plan has three major goals, which Unilever aims to achieve by 2020:  Help more than one billion people improve their health and well-being  Halve the environmental impact of their products  Source 100% of their agricultural raw materials sustainably The plan also sets out over 50 social, economic and environmental targets. Apart from this HUL launched many programs which are running successfully. Some of them are- 3) India Water Body- an initiative aimed to address the challenge of water scarcity in India. 4) Plastic Recycling Project-to promote plastic recycling among consumers in the National Capital Region (NCR) in 2011. Consumers were encouraged to bring empty plastic bottles and pouches, for which they were given discount coupons in return. 5) Creating Financial Inclusion- joined forces with the State Bank of India (SBI) to introduce banking services to people from low-income groups in rural areas. The project was piloted in the states of Maharashtra and Karnataka. HUL also renders services to the community, focusing on health &hygiene education, empowerment of women, and water management. It is also involved in education and rehabilitation of underprivileged children, care for the destitute and HIV-positive, and rural development. HUL has also responded to national calamities, for instance with relief and rehabilitation after the 2004 tsunami caused devastation in South India. 6) Shakti Entrepreneur- Recruits village women as sales persons called Shakti Amma and train them to communicate and sell HUL products in villages. The idea is to be able to reach those villages which do not have good road connectivity and where the penetration of media is poor.
  • 44. “Growth Avenues for GSK in Himachal Pradesh” 2012 40 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in 7) Shaktimaan- Through the Shaktimaan initiative, men in the Shakti Amma families distribute HUL products to villages adjoining the respective Shakti village. Through the GIS (Geographical Information System), villages around the 'Shakti' families are tracked and based on this they are allotted five to six villages. They go to these villages and sell HUL products. The Shaktimaan have also been given bicycles to ensure smooth travelling between villages. HUL now has over 26,000 Shaktimaans (through the Project Shakti network) across the country now. The revenue earned by the Shaktimaan further augments the household income of the 'Shakti' family. etc. Marketing Initiatives Some of the marketing initiatives include 1) Khushiyon Ki Doli- Through this initiative more than 10 million consumers were contacted directly in more than 28,000 villages across three states UP, AP and Maharashtra. Through this initiative, the company also reached out to 170,000 retailers in these villages and engaged with 25 million rural consumers in media dark areas in 2011. Various personal care and home care brands of HUL have participated in this initiative including: Wheel, Surf Excel, FAL, Sunsilk, Vim, Lifebuoy and Close-up. The module follows a three-step process- I. Starting with awareness-The first step of spreading awareness is achieved through a team of promoters who head to each village and invite the villages to what is known as ‘Mohallas’ to make them aware of the company and its products. In every village, there are about 4-5 teams that conduct these events in local language for small focused groups so that it allows for greater engagement and involvement for the consumers. During this activity, brands are introduced with the help of TVCs that are played continuously. And the promoters by way of ‘live’ demonstrations bring alive the hygiene benefits of using such brands and improving the quality of daily life. II. Moving on to consumer engagement -To increase the ‘fun’ element and enhance involvement, promoters also conduct simple quizzes and games around the brands and daily hygiene habits. As part of this activation, the company offers schemes both for the participating consumers and also local retailers for generating trial among consumers as well enhancing availability at retail. Post the ‘mohalla’ activity, the promoters go
  • 45. “Growth Avenues for GSK in Himachal Pradesh” 2012 41 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in home to home and conduct consumer home visits to generate trial where they offer attractive promotions to the consumers. III. Retail contact-Similarly, there is another team which visits all the shops in the village which ensures improved availability and visibility of HUL brands. Technology has been used to highlight the benefits of HUL’s brands in a simple and engaging manner. At the same time, traditional symbols have also been used to create more acceptance. For example, the brand films and hygiene messages are shown to the consumers through the use of Palki. 2) Lessons In Marketing Excellence- The company tied up with CNBC TV18 in 2009 to launch a television show titled, ‘Lessons in Marketing Excellence’ a marketing case-study competition for management students in India. 3) Perfect Stores- The ‘Perfect Stores’ initiative was launched by HUL in May 2010 with the aim to improve the availability and visibility of its products in retail stores across the country. In May 2010, four thousand HUL employees from across functions launched the initiative through ‘Project Bushfire’ and created 16,000 ‘Perfect Stores’ in 130 towns in India in a span of 6 days. The employees not only laid out various products on the stores’ shelves but also dusted them, thereby transforming the whole look of the stores. The company is constantly increasing the number of stores it covers under the Perfect Stores programme. Technology has played a key role in this initiative. The company’s salesmen have been provided with a hand held terminal called iQ, which gives customized recommendations for each store – which products to sell, when to sell them and in what quantity. The salesman just has to sync the iQ device when visiting the distributor and download data from the center to retrieve information on the market. To strengthen this initiative, HUL launched POPeye - an initiative that puts the power of iQ in the hands of the employees. When an HUL employee visits an outlet and finds the company’s product out of stock, he can log stock calls either by logging on to the POPeye site or report the information by phone or email.
  • 46. “Growth Avenues for GSK in Himachal Pradesh” 2012 42 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Colgate Palmolive Colgate Palmolive is a well-reputed company with a large series of its well-known products having different varieties in terms of flavor. Colgate Palmolive is the world leader in oral care industry. They cater the need of different segments by offering innovative products. In the oral care product segment following Colgate Palmolive are the toothpaste available in Indian market: Products Detail Sr. No. Brand % Share in Revenue Total Sales (HP) 1 Colgate Dental Cream 92% 70-80 Lakh 2 Colgate Total 12 3 Colgate Max Fresh 4 Colgate Kids Tooth Paste 5 Colgate Fresh Energy Gel 6 Colgate Herbal 7 Colgate Cibaca Family Protection 8 Colgate Active Salt 9 Colgate Maxwhite 10 Colgate Sensitive 8% 11 Colgate Sensitive-Pro-Relief Others 92% Colgate Sensitive Category 8% % Share Of Colgate Sensitive Category in Total Sales
  • 47. “Growth Avenues for GSK in Himachal Pradesh” 2012 43 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Organization Structure Salary Structure of PSR (Primary Sales Rep) - Colgate Salary Component Breakup Basic 5500 HRA 0 Mob 0 PDR 1500 Gross 7000 PF @ 12% of basic (EE) 660 ESIC @ 1.75% of Gross 123 NTH 6217 PF @ 12% of Basic (ER) 660 EDLI & PF Admn@1.61% of Basic (ER) 89 ESIC @ 4.75% of Gross (ER) 333 Bonus 293 CTC with Bonus 8375 Contract for 1 year VP (Sales) Branch Manager (BM) RSM Area Manager (AM)- [1 for Himachal & Haryana] Sales Officer (SO) Primary Sales Rep. (PSR)
  • 48. “Growth Avenues for GSK in Himachal Pradesh” 2012 44 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Sales and Distribution Colgate Distributors Company Warehouse (Morind) Company Warehouse (Parwanoo) C&F Agent Super Distributor Re-Distributor (Indirect Rural Stockiest) Retailer Consumer Wholesaler Retailer Consumer Direct Distributor Retailer Consumer
  • 49. “Growth Avenues for GSK in Himachal Pradesh” 2012 45 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Total No. Distributor Type Place Distributor Coverage 2 Super Parwanoo Mukul Enterprises Parwanoo, Rampur, Sungra, Peo, Jubbal Super Damtal Sourav Enterprises Chamba, Dalhousie, Damtal 6 Direct Baddi Jain Enterprises Nalagarh, Baddi Direct UNA Auro Sales Corp. Kangra, UNA Direct Shimla Lotus Sales Corp. Contact No.-9418140700 Shimla, Theog, Rohru Direct Solan Geeta Sales Agency Solan, Sirmor Direct Nalagarh Direct Chintpurni BalakramBhagatram 60+ Sub-D Others Rest of the HP Tooth paste Brush Distributor Margin 5.75% 5.75% Retailer Margin 15.00% 40.00% Consumer Scheme Original 40gm. MRP 45- Rs. 7 off org.80gm. 80-Rs.10 off pro 80gm. 130-Rs. 31 off Retailer Scheme 6+1pc. Rs. 10 extra on every Rs. 250 sale Transportation NA Credit Period Advance Payment Place Colgate Sensitive Sales (case/month) Original Pro Rapid Brush 40gm. 80gm. 40gm. 80gm. Pc. Total Himachal 80L - 1 Crore total Mandi 2 case 2 case 15-20% of total sale 6-8 case NerChowk 3-4 case 1 case 6-7 case Shimla 7 lakh Total 2 lakh
  • 50. “Growth Avenues for GSK in Himachal Pradesh” 2012 46 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Analysis ofHimachal Population and Geography Some important considerations from Population Census-2011  Approx. 90% of Himachal population lives in villages.  Shimla district has highest urban population- 24.77% and Solan is at 2nd No.-17.70%  Shimla, Hamirpur, Chamba, Mandi and Bilaspur districts have highest literate population (in that order)- more than 92%. Himachal’s overall literacy rate is 83%  Kangra District has highest female population- 758,664 and also highest child population between 0-6 years age - 160,865 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Kangra Mandi Shimla Solan Sirmau r Una Chamb a Hamirp ur Kullu Bilaspu r Kinnau r Lahul & Spiti Population 1,507,2 999,518 813,384 576,670 530,164 521,057 518,844 454,293 437,474 382,056 84,298 31,528 Percentage Share 21.98% 14.58% 11.86% 8.41% 7.73% 7.60% 7.57% 6.63% 6.38% 5.57% 1.23% 0.46% 1,507,223 999,518 813,384 576,670 530,164 521,057 518,844 454,293 437,474 382,056 84,298 31,528 21.98% 14.58% 11.86% 8.41% 7.73% 7.60% 7.57% 6.63% 6.38% 5.57% 1.23% 0.46% Population District wise population HP - 2011 census Rural Population 89.96% Urban Population 10.04% Himachal Population (2011 census)- Total - 6,856,509 Rural - 6,167,805 (89.96%) Urban - 688,704 (10.04%)
  • 51. “Growth Avenues for GSK in Himachal Pradesh” 2012 47 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Map of Himachal Pradesh
  • 52. “Growth Avenues for GSK in Himachal Pradesh” 2012 48 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Analysis of sales on “Per Capita” and “Per Outlet” basis It becomes very necessary for this research project to find out the per capita income and the sales per outlet for GSK products. The reason for this is that we need to find out the areas where the potential for growth is very high, and the areas which could be turned into potential ones with a little effort from the company. The per capita sales is calculated by dividing Sales Revenue per month by the area’s population. This shows the Average Revenue Per Consumer for GSK products. The per outlet sales is calculated by dividing Sales Revenue per month by Total No. of outlets in that area (who are selling GSK products). This shows the revenue generated per outlet.
  • 53. “Growth Avenues for GSK in Himachal Pradesh” 2012 49 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Analysis of sales on “Per Capita” and “Per Outlet” basis Relation among GSK- Distributors, Population and Sales Sr. No. Place Distributor Drug License Dist. Type Population No. Of Outlets GSK Sales/month Per Capita Sales Sales Per outlet Himachal Pradesh 56 6,850,000 2,000 ₹6,500,000 ₹1 ₹3,250 1 Mandi, KulluBilaspur (USR-Mr. Aman-2) - 12 Towns Sundar Nagar 1.Gupta Sales Corp. N Sub-D 25,000 50 ₹40,000 ₹2 ₹800 2.Durga Remedies Y Sub-D ₹20,000 2 Mandi Gourav Sales Corp. Y Sub-D 28,000 150 ₹200,000 ₹7 ₹1,333 3 NerChowk MahajanBidi N Sub-D 3,500 25 ₹30,000 ₹9 ₹1,200 4 Bhuntar Mahalaxmi General Store Y Sub-D 4,500 90 ₹80,000 ₹18 ₹889 5 Manali BM Enterprises N Sub-D 7,000 100 ₹30,000 ₹4 ₹300 6 Ghumarvin 1.Natraj General Store N Sub-D 6,000 40 ₹35,000 ₹6 ₹875 7 2. Shankar Medical Y Sub-D ₹100,000 8 Bilaspur 1.Abhi Medilinker Y Sub-D 37,000 25 ₹30,000 ₹1 ₹4,0009 2.Surya Medical Y Sub-D ₹30,000 10 3. Gupta Sales N Sub-D ₹40,000 11 Kullu Kailash Sales Y Sub-D 20,000 40 ₹150,000 ₹8 ₹3,750 12 SarkaGhat Laxmi Medical Y Sub-D 4,000 100 ₹100,000 ₹25 ₹1,000 13 Paprola Kailash Store N Sub-D 500 40 ₹60,000 ₹120 ₹1,500 14 Chontra Ajay Medical Y Sub-D 5,000 35 ₹150,000 ₹30 ₹4,286 15 Bali Chowki Himachal AushadhiBhandar Y Sub-D 1,500 20 ₹30,000 ₹20 ₹1,500 16 District- Chamba, Una, Hamirpur, Kangra (USR- Mr. Sanjeev-3) - 19 Towns Palampur Amarbharat Store Y Sub-D 5,000 35 ₹100,000 ₹20 ₹2,857 17 Maranda Rishi Sales Corp. N Sub-D 4,000 25 ₹30,000 ₹8 ₹1,200 18 Nagrota Shriram Medical Y Sub-D 6,000 40 ₹200,000 ₹33 ₹5,000 19 Kangra 1.Malhotra Traders N Sub-D 10,000 43 ₹100,000 ₹10 ₹2,326 20 2.New Ratna Remedy Y Sub-D ₹25,000 21 Dharamshala Chadha General Store N Sub-D 15000 70 ₹200,000 ₹13 ₹2,857 22 Giroh Sachin Enterprises Sub-D 5000 25 ₹30,000 ₹6 ₹1,200 23 Jassur 1.Manoj Traders Y Sub-D 5000 25 ₹60,000 ₹12 ₹2,400 24 2.Kumar Pharma Y Sub-D ₹40,000 25 Damtal New Ratna Medical Y Super 10000 25 ₹100,000 ₹10 ₹4,000 26 Dalhousie KasturiLalMahajan N Sub-D 8,000 30 ₹70,000 ₹9 ₹2,333 27 Chamba 1.Climex Confessionary N Sub-D 15,000 30 ₹60,000 ₹4 ₹2,000 28 2.Sukhdayal Y Sub-D ₹30,000 29 Hamirpur 1.Gupta Medical Y Sub-D 18,000 35 ₹60,000 ₹3 ₹1,714
  • 54. “Growth Avenues for GSK in Himachal Pradesh” 2012 50 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in 30 2.Hakimraj Hansraj Sub-D ₹25,000 31 Nadon Walia Medical Y Sub-D 5,000 25 ₹40,000 ₹8 ₹1,600 32 Bhota Laxmi Medical Y Sub-D 2,000 23 ₹250,000 ₹125 ₹10,870 33 Amb Harekrishna Medical Y Sub-D 5,000 25 ₹35,000 ₹7 ₹1,400 34 Gagret Simran Medical Y Sub-D 3,500 26 ₹35,000 ₹10 ₹1,346 35 Chintpurni BalakramBhagatram N Sub-D 5000 25 ₹30,000 ₹6 ₹1,200 36 Teras Rakesh Agencies Sub-D 3000 25 ₹30,000 ₹10 ₹1,200 37 Daliara Jai Bharti Medical Y Sub-D 5000 30 ₹35,000 ₹7 ₹1,167 38 Dharampur Rahul Medical Y Sub-D 4,000 25 ₹40,000 ₹10 ₹1,600 39 District- (Usr- Mr. Sandeep Sharma-1)- 16 Towns Shimla Lotus Sales Corp. Y Direct 170,000 250 (150 local) ₹400,000 ₹2 ₹2,667 40 Baddi Kaushal Medical Store Y Sub-D 23,000 80 ₹175,000 ₹8 ₹2,188 41 Rampur Ram KishanJeeva Ram N Sub-D 6,000 30 ₹100,000 ₹17 ₹3,333 42 Narkanda Kedar Nain Pradeep Kumar N Sub-D 1,000 15 ₹15,000 ₹15 ₹1,000 43 Theog Bimla Agencies N Sub-D 4,000 20 ₹15,000 ₹4 ₹750 44 Karsog Premji Remedies Y Sub-D 5,000 20 ₹25,000 ₹5 ₹1,250 45 Rohru Krishna Trading Co. N Sub-D 7,000 25 ₹50,000 ₹7 ₹2,000 46 Solan Deffodil Associates Y Sub-D 35,000 90 ₹200,000 ₹6 ₹2,222 47 Dharampur 1.Medisales Y Sub-D 21,000 50 ₹120,000 ₹6 ₹2,400 48 2.Dhingra N Sub-D 49 Kunihar ChamanlalMalhotra N Sub-D 1,000 15 ₹15,000 ₹15 ₹1,000 50 Parwanoo Him Stores Y Super 9,000 25 ₹50,000 ₹6 ₹2,000 51 Nalagarh Jagdish Ram Sharma Y Sub-D 10,000 20 ₹225,000 ₹23 ₹11,250 52 Ponta Sahib Veer Singh Surjeet Singh Y Sub-D 20,000 35 ₹100,000 ₹5 ₹2,857 53 Nahan Naval KishorDharamParkash Y Sub-D 27,000 35 ₹100,000 ₹4 ₹2,857 54 Mehetpur Puri Trading Co. N Sub-D 9,000 20 ₹35,000 ₹4 ₹1,750 55 Una 1.Yogsons Trading Co. Y Sub-D 16,000 60 ₹125,000 ₹8 ₹2,083 56 2. Himachal Medical Agencies Y Sub-D ₹50,000
  • 55. “Growth Avenues for GSK in Himachal Pradesh” 2012 51 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Analysis of per capita sales in HP To be more precise in analyzing the per capita sales and the potential for growth, the following table shows the per capita sales arranged in ascending order. Analysis of per capita sales = (Avg. sales per month/population) Sr. No. Place Per Capita Sales Sr. No. Place Per Capita Sales Himachal Pradesh ₹1.00 24 Baddi ₹7.61 1 Bilaspur ₹0.81 25 Una ₹7.81 2 Sundar Nagar ₹1.60 26 Nadon ₹8.00 3 Shimla ₹2.35 27 NerChowk ₹8.57 4 Hamirpur ₹3.33 28 Dalhousie ₹8.75 5 Nahan ₹3.70 29 Kangra ₹10.00 6 Theog ₹3.75 30 Damtal ₹10.00 7 Mehetpur ₹3.89 31 Gagret ₹10.00 8 Chamba ₹4.00 32 Teras ₹10.00 9 Manali ₹4.29 33 Dharampur ₹10.00 10 Karsog ₹5.00 34 Jassur ₹12.00 11 Ponta Sahib ₹5.00 35 Dharamshala ₹13.33 12 Parwanoo ₹5.56 36 Narkanda ₹15.00 13 Solan ₹5.71 37 Kunihar ₹15.00 14 Dharampur ₹5.71 38 Rampur ₹16.67 15 Ghumarvin ₹5.83 39 Bhuntar ₹17.78 16 Giroh ₹6.00 40 Bali Chowki ₹20.00 17 Chintpurni ₹6.00 41 Palampur ₹20.00 18 Amb ₹7.00 42 Nalagarh ₹22.50 19 Daliara ₹7.00 43 SarkaGhat ₹25.00 20 Mandi ₹7.14 44 Chontra ₹30.00 21 Rohru ₹7.14 45 Nagrota ₹33.33 22 Kullu ₹7.50 46 Paprola ₹120.00 23 Maranda ₹7.50 47 Bhota ₹125.00 Observations-As it is clear from the above tablethat we have a share ofapprox. Rs. 1/month of consumer’s pocket in Himachal Pradesh. This is also clear that per capita sale is very low at places 1-5. The places highlighted in green (Bilaspur, Sundar Nagar, Hamirpur, Manali, Ponta Saheb, Parwanoo, Baddi and Damtal) have more potential of salesbecause these places have high population and large No. of outlets. Places highlighted in Red (Shimla, Chamba, Solan, Mandi and Dharamshala) are the places which have extremely high potential. Because these places have  High population – above 5000 (especially tourist population)  Higher number of outlets
  • 56. “Growth Avenues for GSK in Himachal Pradesh” 2012 52 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in So we should focus more on increasing per capita sales at these places by giving more consumer offers and discounts. Analysis ofsales per outlet in HP Analysis of sales per outlet and potential for growth in them is also equally important as per capita sales and its potential for growth. The following table showssales per outlet arranged in ascending order. Analysis of sales per outlet = Sales/Total no. of outlets selling our product Sr. No. Place Sales Per Outlet Sr. No. Place Sales Per Outlet Himachal Pradesh 3,250 24 Mehetpur 1,750 1 Manali 300 25 Chamba 2,000 2 Theog 750 26 Rohru 2,000 3 Sundar Nagar 800 27 Parwanoo 2,000 4 Ghumarvin 875 28 Una 2,083 5 Bhuntar 889 29 Baddi 2,188 6 SarkaGhat 1,000 30 Solan 2,222 7 Narkanda 1,000 31 Kangra 2,326 8 Kunihar 1,000 32 Dalhousie 2,333 9 Daliara 1,167 33 Jassur 2,400 10 NerChowk 1,200 34 Dharampur 2,400 11 Maranda 1,200 35 Shimla 2,667 12 Giroh 1,200 36 Palampur 2,857 13 Chintpurni 1,200 37 Dharamshala 2,857 14 Teras 1,200 38 Ponta Sahib 2,857 15 Karsog 1,250 39 Nahan 2,857 16 Mandi 1,333 40 Rampur 3,333 17 Gagret 1,346 41 Kullu 3,750 18 Amb 1,400 42 Bilaspur 4,000 19 Paprola 1,500 43 Damtal 4,000 20 Bali Chowki 1,500 44 Chontra 4,286 21 Nadon 1,600 45 Nagrota 5,000 22 Dharampur 1,600 46 Bhota 10,870 23 Hamirpur 1,714 47 Nalagarh 11,250 Observations-We can see from the above table that places highlighted in Green show the places which have extremely low per outlet sales but havevery high potential. And the places highlighted in Blue show the placeshaving average per outlet sales but more potential for growth. (This growth assumption is based on the market size and population of these places.)
  • 57. “Growth Avenues for GSK in Himachal Pradesh” 2012 53 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Cost cutting in transportation expenses Analysis of existing transportation expenses The company paysa flat 1% to the super distributors as transportation expenses. This means on a case of Horlicks (costing approx. Rs.4000), the company pays Rs. 40 as transportation expenses. Whereas on a case of Crocin Analgesic Tablets (costing Rs. 40000), the company pays Rs. 400/case as transportation expenses. The viability of this process has to be verified. Some points to consider before analysis- 1. Super distributors are currently getting a margin of only 1.7%. So, any reduction of transport allowance from the current 1% will cause a strain on the super distributors’ margins. Because in that case they will have to part some of their margins as transportation cost. Hence the Super distributors will not have any motivation to work with GSK. 2. Analysis of actual cost of transportation in Himachal Pradesh. There can only be two options of transportation for distribution in Himachal, which have to be analyzed before taking any decision. Distributor’s own/ hired vehicle- The transportation cost structure will be as follows. [Drivers’ salary (Rs.10000/month approx.) + Vehicle rent + Maintenance Charges + Fuel Charges (Diesel @ Rs. 40/Lt.)] A vehicle can carry approx. 100 cases in a round. The mileage of vehicle is 15 Km. /Lt. And a distributor supply average 1000 cases/month. Hence the transportation costswill not be any less than Rs. 45-50 /case Through Transport Companies- A snapshot of the actual quotation of a transport Company for both floating and fixed rates is shown below. Transport quotation (at floating rate) Transport quotation @ floating rate-Following is the quotation of Shimla Mandi Transport Co. from Parwanoo to other places in Himachal @ floating rate.
  • 58. “Growth Avenues for GSK in Himachal Pradesh” 2012 54 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in
  • 59. “Growth Avenues for GSK in Himachal Pradesh” 2012 55 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Transport Quotation @ fixed rate This quotation is showing the transportation cost from Parwanoo to all the places in Himachal at fixed rates. Analysis From the above two quotations the actual transportation cost in Himachal is as follows Rs. 40/case (from transport to transport). + Rs. 50 (ST form charges per consignment) + Rs. 30 (GR charges per consignment) + Freight charges (on each case - from transport office to distributors’ office) Hence the combined cost of transportation cannot be below Rs. 50/case in any case. So the transportation charges should be maintained at 1% of sales. Another alternative could be the use of hybrid cost structure [Fixed (per case) + Variable], but this method will result in increase oftransportation cost and complicate the process. Hence the actual transportation cost in Himachal is not less than 1% of sales and it should be maintained at the current level.
  • 60. “Growth Avenues for GSK in Himachal Pradesh” 2012 56 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Scope for cost cutting in transportation As seen from the above analysis there is no scope of cutting transportation expenses that are being paid by the company to the super distributers. So the best stage for cost cutting in transportation would be when the goods are transported from the company warehouse (Zeerakpur) to the super and direct distributors (Parwanoo, Shimla and Damtal). The reasons for this are-  The actual cost of transportation from Zeerakpur to Parwanoo is – Rs. 15/case (Chamba Shimla Transport Co. and Sood Transport Co.)  But according to the old contract we are paying – Rs. 40/case (Chamba Shimla transport co.)  So we can save Rs. 25/case by revising the contract. This would be a huge cost saving for the company because on an average more than a 1000 cases are supplied toParwanoo every month. And hence we can save more than Rs. 25000 (every month) in transportation cost from Zeerakpur toParwanoo alone.  At present the company supplies goods from Zeerakpur to only three locations(Parwanoo, Damtal and Shimla). But according to the old contract with the transport company, the fixed rate was decided because the transportation was to be done in the entire state of Himachal. So our contract with the transport Co. should be modified with floating rates. That would mean huge savings in transportation cost tothe Company.
  • 61. “Growth Avenues for GSK in Himachal Pradesh” 2012 57 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Visibility Analysis POS material- These are the only two sign boards that were found in Mandi andSundar Nagar among the 25-30 places visited. Apart from these two, there were no other POS material (Standees, Wall strips, Danglers, Posters, Displays, etc.) even at major places like near Govt. hospitals, Schools, or highly crowded markets. The reason for this could be- Company sends POS material to super and direct distributors. They distribute it further down along with the distribution of goods. After that nobody cares about displaying the POS material. This means the POS materials are reaching the retailers but the retailers are not using them. They either throw the POS material or sell it as waste. Recommendation - Company should appoint a few merchandisers in Himachal Pradesh who can monitor and take care of the POS and hence a better visibility of the brands. The lack of merchandisers, results in POS material going waste without any benefit to the company. In Store Visibility To measure the effectiveness of the marketing initiatives and the customer awareness about the GSK products, visibility analysis is important because it directly impacts the sales of the company. Following are some pictures taken from selected retail outlets.
  • 62. “Growth Avenues for GSK in Himachal Pradesh” 2012 58 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in ENO Foodles & Biscuit Horlicks& Boost
  • 63. “Growth Avenues for GSK in Himachal Pradesh” 2012 59 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in
  • 64. “Growth Avenues for GSK in Himachal Pradesh” 2012 60 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Iodex Sensodyne Visibility of other brands Bournvita Colgate Nestle Observations-These pictures are taken from selected retail outlets. If we achieve this kind of product placement everywhere than the company’s growth target can be crossed very soon. One more thing to consider is - our competitors Colgate, Bournvita, Complan, are not doing much for visibility. We should take advantage of this and become 1st in the race.
  • 65. “Growth Avenues for GSK in Himachal Pradesh” 2012 61 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in SKU Analysis Horlicks Analysis of competitors’ products (Malt Drinks) Bournvita Product Variants SKU Case Lot MRP USP Distributor Margin Retailer Margin Scheme Bournvita Standard 200gm. 30 ₹77.00 Tan Ki Shakti, Man Ki Shakti 4.5% (under super)/ 6% (super) 9% 2-4% occasionally/ 5% QPS on 200gm./ 2% CD/ 500gm. (Jar) 15 ₹171.00 500gm. (Pouch) ₹163.00 1 Kg. ₹295.00 5 star magic 80gm. (Pouch) 160 ₹25.00 200gm. 30 ₹77.00 500gm. (Pouch) 15 ₹163.00 Lil Champs 200gm. 30 ₹105.00 For 2-5 years old. With D (DHA) & W (WHEY) formula Rs. 100 on every Rs. 1000 purchase500gm. 15 ₹205.00 Comments- Bournvita launched refill (pouch) pack in 500gm. Its price is also less than our 500gm. Jar. But the price of Bournvita Lil Champs 500gm. is higher than ours.
  • 66. “Growth Avenues for GSK in Himachal Pradesh” 2012 62 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Complan Product Variants SKU Case Lot MRP USP Distributor Margin Retailer Margin Complan PistaBadam 50 gm. ? ₹25.00 Complete Planned Food In Drink For Growth 5% 10% 175gm. 12 pc. ₹112.00 400gm.(Jar) 12pc. ₹240.00 Standard (Chocolate) 200 gm. (Jar) 12 pc. ₹117.00 200 gm. (refill) ₹109.00 400gm. (refill) ₹210.00 450 gm. (Jar) ₹218.00 KesarBadam 400gm.(Jar) 12pc. ₹240.00 Memory Charger Choco Badam 200gm. 12 pc. ₹117.00 5 Memory chargers in 23 vital nutrients 400gm. ₹218.00 Ceramal 200gm. 12 pc. ₹117.00 400gm. ₹218.00 KesarElaichi 200gm. 12 pc. ₹218.00 400gm. ₹227.00 NutriGro Strawberry 400gm. (Tin Pack) 12pc. ₹227.00 Complete Planned Food In Drink For Growth (For 2+ to 4years) 5% 12%Chocolate ₹227.00 Ceramal ₹227.00 Comments-Complan’s prices are much higher than us. The quantity they are giving is 400gm. (as compared to our 500gm.) for higher price. Also they have many variants of product which are selling well in the market.
  • 67. “Growth Avenues for GSK in Himachal Pradesh” 2012 63 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Nestle Cerelac Product Variants SKU Case Lot MRP USP Distributor Margin Retailer Margin Nestle Infant Serial with Milk Lactogen 1-(age under 6 months) 450gm. ₹239.00 Infant Serial with Milk 5.80% 8.00% 2- (6-12 months) ₹238.00 3 - (12-24 months) ₹237.00 4 - (24 months & above) ₹204.00 Infant Cereals Rice Vegetables 450gm. 24pc. ₹161.00 5.80% 8.00% Wheat mixed Fruit ₹165.00 Wheat mixed vegetable ₹162.00 Multi grain 5 fruits ₹180.00 wheat ₹144.00 Rice ₹139.00 Wheat Honey ₹166.00 Wheat Apple Cherry ₹164.00 NAN Pre Nan 400 gm. (Tin) $375.00 For less than 6 months age 5.80% 8.00%Pro 1 Nan 450gm.(R) $370.00 Greater than 6 months age Pro 2 Nan 400gm.(Tin) 348 Greater than 12 months age Comments- Nestle has specialized in Infant and child food for nutrition. They have placed the product very well in the market (with different variants and categories).
  • 68. “Growth Avenues for GSK in Himachal Pradesh” 2012 64 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Research results Product Variants Availability Horlicks ST 66% CH 76% El 46% PCH 18% Observations-  All retailers I visited are aware of Horlicks as a brand (which is obvious).  73% of the retailers themselves used Horlicks sometime. But Horlicks is 1st choice of only 18% of the retailers. Bournvita is the first choice of 64% of retailers (hence stands at no.1). They will suggest Bournvita, if they need to. The reasons are higher margin and better retailer schemes in Bournvita.  82% retailers say that consumer asks for Horlicks – which is a good sign for us. But 18% retailers say that they help consumer in choosing the product in Malt drink category.  We should incentivize the consumer by giving him more schemes and discounts on Horlicks.  Horlicks Pouch was available at 18% of the total retail outlets I visited. The retailers don’t want to keep pouch at their shop. The reason is - Pouch is destroyed by the mouse. Himachal is a tourist place, and pouch can be sold more if place it as a use and throw SKU. 0% 20% 40% 60% 80% 100% Aware Used Customer Asks Retailer Suggest Retailer's 1st choice 100% 73% 82% 18% 18% Horlicks- Rank 2
  • 69. “Growth Avenues for GSK in Himachal Pradesh” 2012 65 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Women & Mother Horlicks Target Market As it is clear from the above chart that Kangra, Mandi, Shimla and Solan these 4 districts have highest No. of female population. So our focus should be more on selling Women and Mother Horlicks at these places. Availability Product Variants Availability Women Horlicks CH 38% CR 30% The availability of women Horlicks was less than average. So we should focus more placing this SKU at each retail store (Even if they only keep 1 piece of each variant) 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Kangra Mandi Shimla Solan Chamba Una Sirmaur Hamirp ur Kullu Bilaspur Kinnaur Lahul & Spiti No. of Females 758,664 502,731 388,898 270,508 257,996 257,516 253,363 237,551 213,154 189,229 37,934 15,073 % Share in total 50.34% 50.30% 47.81% 46.91% 49.73% 49.42% 47.79% 52.29% 48.72% 49.53% 45.00% 47.81% 758,664 502,731 388,898 270,508 257,996 257,516 253,363 237,551 213,154 189,229 37,934 15,073 50.34% 50.30% 47.81% 46.91% 49.73% 49.42% 47.79% 52.29% 48.72% 49.53% 45.00% 47.81% FemalePopulation Female population in Himachal-2011 census
  • 70. “Growth Avenues for GSK in Himachal Pradesh” 2012 66 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Junior Horlicks Availability Target Market Observation-As it is clear from the above chart that 4 districts (Kangra, Mandi, Shimla and Chamba)have highest child population of the age group 0-6 years. So our focus should be more on selling Junior Horlicks in these areas. Product packaging comparison Junior Horlicks Bournvita Lil Champ 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Kangra Mandi Shimla Chamba Sirmaur Solan Una Kullu Hamirp ur Bilaspur Kinnaur Lahul & Spiti Child Population 160,865 109,963 80,778 69,409 67,958 66,349 58,200 50,041 47,708 41,612 7,987 2,994 % share in Total 12.29% 13.31% 11.78% 15.10% 14.92% 13.27% 13.32% 13.84% 12.28% 12.58% 11.88% 11.03% 160,865 109,963 80,778 69,409 67,958 66,349 58,200 50,041 47,708 41,612 7,987 2,994 12.29% 13.31% 11.78% 15.10% 14.92% 13.27% 13.32% 13.84% 12.28% 12.58% 11.88% 11.03% ChildPopulationofage0-6 Child Population in HP (0-6 years age)-2011 census Product Variants Availability Product Variants Availability Junior Horlicks 1 ST 56% Junior Horlicks 2 ST 38% CH 42% CH 26%
  • 71. “Growth Avenues for GSK in Himachal Pradesh” 2012 67 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Boost Research results Product Variants Availability Boost ST 50% PCH 22%  Everyone is aware of Boost as a Malt Drink brand. So our advertising and product placement are effective enough.  45% of the retailers actually used it sometime. But their first choice is Bournvita, Horlicks is at No.2  3 out of 4 times consumer asks for Boost. And less than 1 out of 5 times retailer suggest the consumer, about Boost.  We are already giving consumer offer (sipper) on Boost. So there is no need to do more. But in future we should continue giving consumer offers on Boost.  Availability of Boost pouch was less than average in Himachal. Himachal is a tourist place. So our pouch should be available and sold at more retail outlets. Aware Used Customer Asks Retailer Suggest Retailer's 1st choice 0% 20% 40% 60% 80% 100% 100% 45% 73% 18% 9% Boost- Rank 4
  • 72. “Growth Avenues for GSK in Himachal Pradesh” 2012 68 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in ENO Analysis of competitors’ products Gas-O-Fast Product Variants SKU's Case Lot MRP USP Distributo r Margin Retailer Margin Scheme Gas-O-Fast (Mankind) Tab. (2) 24*2 Tab. Rs. 10.24 Quick relief from Gas, Heartburn, & Indigestion 10% 20% 5+1 Box Sachet Regular 5 gm. 40 Box Rs. 6 Lemon 5 gm. 40 Box Rs. 6 Comments- Product was available at each medical store I visited. They have placed the product very well. And it is capturing the market slowly. In consumers and retailers opinion this product is effective. Fast Melt Product Variants SKU's MRP USP Distributor Margin Retailer Margin Scheme Fast Melt (Digene) Jeera Black Current 5gm. Rs. 5 Melts in the mouth, For cool, Instant Relief from Acidity (No Water Required) 8% 20% 3+1 Box Mausmi Comments- The product’s response is extremely poor. The product is not effective enough. The only noticeable thing in their product is their USP- “No water required” Pepfiz Product Case Lot MRP USP Pepfiz (Ranbaxy) 25*2 Tab. Rs. 10 Quick relief from Gas, Heartburn, & Indigestion Comments- The product is a tablet rather than powder. They are also doing Tv ad.
  • 73. “Growth Avenues for GSK in Himachal Pradesh” 2012 69 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Product Packaging comparison ENO Gas-O-Fast Pepfiz Fastmelt Research Results  Everyone is aware of ENO as a very old and leading brand in Digestives.  ENO lemon was available at approx. all the outlets I visited. Cola was also available at more than half of them. Orange was available at less than 30% of the retail outlets.  91% of the retailers say that they themselves used ENO sometime and also it’s their 1st choice if they need to suggest to consumer.Among all the brands available in the market (in this product category), ENO is 1st choice of 82% of retailers.  4 out of 5 times consumer asks for ENO. And 1 out of 5 times consumer asks for Gas-O-Fast.  Gas-O-Fast is the product of Mankind. They have placed the product well,product was available at almost all the medical stores, and many grocery shops. They are also promoting it through TV advertisement. The product is effective, and capturing the market slowly. 0% 20% 40% 60% 80% 100% Aware Used Customer Asks Retailer Suggest Retailer's 1st choice 100% 91% 82% 18% 82% ENO - Rank 1 Product Variants Availability ENO ST 42% LM 98% OR 28% CO 60%
  • 74. “Growth Avenues for GSK in Himachal Pradesh” 2012 70 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Sensodyne Toothpaste Analysis of competitors’ products Colgate Sensitive Product Variant SKU Case Lot Scheme MRP USP Colgate Sensitive Original 40gm. 144 pc. Rs. 7 off 45-Rs.7Off=38 Clinically proven sensitivity relief/ Fast Relief, Fresh Breath80gm. 72 pc. Rs. 10 off 80-Rs.10 Off= 70 Pro Rapid 40gm. 72 pc. No No Rapid & Lasting Relief 80gm. 48 pc. Rs. 31 off 130-Rs.31 off=99 Comments-Colgate is coming into price war. The cells highlighted in red are showing their price reductions last month in sensitive toothpaste category. Packaging Comparison Comments- Colgate Sensitive Pro Relief’s packaging is much better than us. The packaging is a kind of display in itself. Sensodyne Toothpaste Colgate Sensitive
  • 75. “Growth Avenues for GSK in Himachal Pradesh” 2012 71 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Research Results Availability Product Variants Availability Sensodyne Toothpaste FG 60% FM 38% RR 40%  Everyone is aware of product.  36% of the retailers themselves used the product.  There is a tie between No. of times consumer asking for the product, and retailer suggesting the product. So we should increase the schemes and retailers margin in this product.  64% of the retailers 1st choice is Sensodyne toothpaste rather than Colgate Sensitive. The retailer’s comments wereSensodyne is more effective than Colgate Sensitive.  All the variants were not available at most of the retail outlets. So the product availability should be increased for all the variants. 0% 20% 40% 60% 80% 100% 120% Aware Used Customer Asks Retailer Suggest Retailer's 1st choice 100% 36% 45% 55% 64% Sensodyne Toothpaste- Rank 1
  • 76. “Growth Avenues for GSK in Himachal Pradesh” 2012 72 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Sensodyne Brush Competitor product detail Product Variant SKU Case Lot Scheme MRP USP Toothbrush Brush Original 1 pc. 48 pc. 6+1 pc. ₹40.00 Healthier whole mouth clean Pro Sensitive 1 pc. 69-Rs.14 off= 55 Ultra soft for sensitive teeth Comments- Like toothpaste Colgate has decreased the price of Pro-sensitive. They are also giving better schemes than us. Product Packaging Comparison Comments- Colgate pro sensitive’s packaging is very good. And they are providing a Brush stand with a dozen pack. This stand is good for product visibility.
  • 77. “Growth Avenues for GSK in Himachal Pradesh” 2012 73 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Research results  Product awareness is good. Our ad campaign is effective enough.  45% of the retailer have actually used Sensodyne brush.  Most of the times retailer suggest the consumer about this product. So there is need to incentivize the retailer. Colgate is giving better retailer schemes (6pc.+1pc.) than us. Because of their scheme most of the retailers don’t even want to keep our product at their stores.  In sensitive brush category most of the retailers’ 1st choice is Colgate sensitive brush. This is due to better product packaging and better schemes. 0% 20% 40% 60% 80% 100% Aware Used Customer Asks Retailer Suggest Retailer's 1st choice 90% 45% 27% 64% 36% Sensodyne Brush- Rank 2
  • 78. “Growth Avenues for GSK in Himachal Pradesh” 2012 74 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Iodex Analysis of competitor products Moov Product Variants SKU's Case Lot MRP USP Distributor Margin Retailer Margin Scheme Credit Moov (ParasPharma) Cream (Tube) 5gm. 120 ₹10.00 The pain specialist- with the power of "Nilgiri Oil" 6% (super) 15% 3.5% TD or 24 +1 pc. 7 days 15gm. 240 ₹32.00 25gm. 240 ₹45.00 50gm. 120 ₹75.00 Spray 35gm. 72 pc. ₹70.00 100gm. ? Volini Product Variants SKU's MRP USP Distributor Margin Retailer Margin Scheme Expiry Credit Volini(Ra nbaxy) Cream (Tube) 5gm. ₹10.00 Real Pain relief (Low back pain, Joint Pain, Muscular Pain, Sprain) 6% 20% 11+1 pc. 18 months 7 days or less 15gm. ₹36.00 30gm. ₹69.00 50gm. ₹99.00 Spray 15gm. 35gm. ₹75.00 55gm. ₹109.00 100gm. Product packaging comparison-
  • 79. “Growth Avenues for GSK in Himachal Pradesh” 2012 75 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Research Results  Most of the retailers have actually used the product.  Most of the times consumer asks for the product. As we are already selling well and this is seasonal product, we can’t do much about this.  In this category most of the retailer’s and consumers 1st choice is Moov or Volini because both of them have launched spray variant of their product. 0% 20% 40% 60% 80% 100% Aware Used Customer Asks Retailer Suggest Retailer's 1st choice 100% 73% 91% 9% 27% Iodex- Rank 2
  • 80. “Growth Avenues for GSK in Himachal Pradesh” 2012 76 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Crocin Tablet Analysis of competitor products Disprin Product Variants SKU's Case Lot MRP USP Distributor/ Retailer Margin Distributor Scheme Retailer Scheme Expiry/ credit Disprin (Reckitt Benckiser) Standard 10 Tab. 10 Tab* 12 Stripes* 48 Box ₹3.8 6 Dissolves away pain fast 4% (super)/ 15% 40 case+ 1 case 6% TD or 23+2 Box (48+2 Box in Solan) 3 years/ 7 days Saridon Product Variants SKU's MRP USP Retailer Margin Scheme Expiry Saridon (piramal Healthcare Ltd.) Standard 10 Tab. ₹13.75 Sirf 1 Seridon, or sir dard se aaram 15% 28+2 Box 2 years Packaging Comparison
  • 81. “Growth Avenues for GSK in Himachal Pradesh” 2012 77 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Research Results  As this is the medical product, most of the times consumer asks for the product.  Most of the Retailers 1st choice is either Disprin or Saridon. We are at No. 3 in this category. 0% 20% 40% 60% 80% 100% Aware Used Customer Asks Retailer Suggest Retailer's 1st choice 100% 55% 73% 27% 18% Crocin Tab.- Rank 3
  • 82. “Growth Avenues for GSK in Himachal Pradesh” 2012 78 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Horlicks Foodles Analysis of competitor products Maggie Product Variants SKU's Case Lot MRP USP Maggie (Nestle) Masala 40gm. 144 ₹5.00 "Taste Bhi, Health Bhi" 85gm. 96 ₹10.00 160gm. 48 ₹20.00 320gm. 24 ₹40.00 570gm. 9 ₹60.00 680gm. 9 ₹80.00 Aata 80gm. 96 ₹17.00 320gm. 24 ₹65.00 Damdar 41gm. 144 ₹6.00 81gm. 96 ₹12.00 324gm. 24 ₹45.00 Curry 87gm. 96 ₹14.00 Tomato 81gm. 96 ₹14.00 Multi Grain 80gm. 96 ₹15.00 Capsicum 80gm. 96 ₹14.00 Comments- Maggie has launches many variants but most selling variants are Aata Noodle and Masala Noodles. Distributor Margin Re-distributor Margin (Direct Dist. Keep 1.8%) Retailer Margin Scheme Transportation Maggie 5.80% 4% 9.00% NA Approx. Rs.12- 15 Per Case Yippee Noodles Product Variants SKU's Case Lot MRP Distributor Margin Retailer margin Yippee Noodles (ITC) Classic Masala 40gm. 144 ₹5.00 3% 11% 80gm. 96 ₹10.00 160gm. 48 ₹20.00 Magic Masala 40gm. 144 ₹5.00 80gm. 96 ₹10.00 160gm. 48 ₹20.00
  • 83. “Growth Avenues for GSK in Himachal Pradesh” 2012 79 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Comments- ITC’s “yippy noodles” is also selling well in the market. They have not launched many variants yet, but their sale is good. For example they are selling 80 case/month in Bilaspur only. I found Yippy Noodles mostly at big retail stores only. The product was not available at all the grocery shops. Packaging Comparison Horlicks Foodles Nestle Maggie Sunfeast Yippee Knorr Soupy Noodles Research Results  Though there are many players but Maggie is market leader in this category. The reasons are the oldest brand, their innovative marketing campaigns etc. Reason of product failure 1. Taste was not good. 2. When there was heavy ad on Tv (as a result high demand), there was no supply of product. But when there was supply there was no ad. 0% 10% 20% 30% 40% 50% 60% Aware Used Customer Asks Retailer Suggest Retailer's 1st choice 54% 18% 36% 27% 9% Horlicks Foodles
  • 84. “Growth Avenues for GSK in Himachal Pradesh” 2012 80 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Horlicks Biscuit Research Results  Britannia is market leader in this category.  Though our product’s taste was very good and people still demand the product at some places, we could not do well I this category. The reason of product failure is again the same as Noodles- “When there was heavy ad on Tv (as a result high demand), there was no supply of product. But when there was supply there was no ad.” 0% 10% 20% 30% 40% 50% 60% 70% Aware Used Customer Asks Retailer Suggest Retailer's 1st choice 63% 45% 36% 27% 9% Horlicks Biscuit
  • 85. “Growth Avenues for GSK in Himachal Pradesh” 2012 81 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Analysis of USR’s job satisfaction level Table showing job satisfaction score of USRs Sr. No. Factors Scale (From 1 to 7) Score Scale-1 Scale-7 USR-1 USR-2 USR-3 1 Satisfaction with the salary Not satisfied at all Extremely satisfied 3 3 3 2 Satisfaction with the incentives Not satisfied at all Extremely satisfied 3 2 2 3 Consider targets as burden Extreme burden Not burden 5 2 3 4 Motivation Factor Highly Demotivated Highly motivated 4 3 3 Total Job Satisfaction Score 15 10 11 Maximum possible 28 28 28 Note- Data present in this table is purely out of observation by the author. These numbers by any means does not aim to demean or offend any individual or group. USR’s names are intentionally coded. The table is showing that total job satisfaction score of USR is below average. Recommendations 1. The salary structure of USR’s should be (Fixed + Variable). Fixed pay is some fixed monthly amount paid to them and the variable pay consists of their travel and other expenses and allowances on actual basis (with some maximum cap). 2. Each USR has a monthly target of Rs. 20L and visit around 15-20 towns per month. So the company should think about providing Palm-Tops to USR’s. The following will be the benefits of providing palmtops-  Real time report and updates  Fast process and increased efficiency  Elimination of unnecessary processes like sending itenary and using DSR in printed format.  We can keep track of the places USRs actually visit each month.  This will also help us in making expense detail for USRs  We will get data of Retailer sales each month and further work on that data. 3. There are some towns which particularly need to be focused because they have very high potential of growth. These towns are Solan, Dharamshala, Mcleodganj, Mandi and Shimla etc. An additional USR should be appointed to take care of these major towns where potential of growth is very high. This will not only decrease the work load on the existing USR’s and increase their job satisfaction level but also help in growing the business in an effective and focused manner.
  • 86. “Growth Avenues for GSK in Himachal Pradesh” 2012 82 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Van Operations (Ready Stock Model) Only two companies Cadbury and Pepsico are doing Van operations in Himachal. Cadbury – They are doing Van operations in Dharamshala area for chocolate and confectionary items. Cadbury is paying 500 Rs./round (1% of expected sales) to the distributor for Van distribution. They are expecting the sale of Rs. 50000/round. But the actual sale is Rs. 20-25000 per round. So there Van model is not very successful till time. Pepsico-Pepsico is doing Van operations in Himachal for Chips and Beverages items. Pepsico is not paying anything for distribution. Actually they are doing it for perishable items only which has very high demand and very high frequency of sales. Vehicle hiring cost (for Door to Door supply) – I tried to find out the actual cost of distribution of PepsiCo and P&G. This is the kind of cost structure I found out while talking to the drivers who supply for P&G and PepsiCo. Observations- Though very few companies are doing Van Operations in Himachal but this model is not very successful till date. We can relaunch this model with better marketing and more retailer incentives. As 90% of Himachal population lives in villages, Van operations can be a better way to cover those areas. Base- Kangra (D2D supply) Place Jeep Hiring Charges in Rs. Dharamshala 550 Mcleodganj 650 Palampur 800 Gaggal 300 Shahpur 500 Nurpur 750 Jasoor 800 Damtal 2000 Dalhousie 2400 Chamba 3200 Nagrota 550 Chintpurni 1200 Amb 1600 Nadoun 750 Hamirpur 1700 Bhota 2000 These are the approximate jeep hiring charges for Door to Door distribution. There is more space for concession. Also if we go route wise, than these charges will be much lesser. The another cost structure for jeep hiring is as follow- Rs. 8 per Km. (In 35-40 Km. radius from Kangra) Or Rs. 9-10 per Km. for more distance. (Minimum 200 Km.) Or Rs. 400 + fuel charges for half day supply (Door to Door). Or Rs. 800-1000 + fuel charges for full day supply (Door to Door) Note- Jeep capacity is 90-100 cases of Horlicks.
  • 87. “Growth Avenues for GSK in Himachal Pradesh” 2012 83 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Analysis of 2nd Base for Super Distributor Comparison (of distance to cover) among Kangra, Palampur&Damtal- Base- Kangra Base- Palampur Base- Damtal Route Major Areas Covered Distance in Km. Route Major Areas Covered Distance in Km. Major Areas Covered Distance in Km. 1 Dharamshala 18 1 Dharamshala 53 Dharamshala 90 Mcleodganj 22 Mcleodganj 57 Mcleodganj 94 Palampur 40 2 Kangra 40 Palampur 119 2 Gaggal 9 Gaggal 39 Gaggal 80 Shahpur 22 Shahpur 52 Shahpur 67 Nurpur 60 Nurpur 90 Nurpur 29 Jassur 70 Jassur 110 Jassur 26 Damtal 90 Damtal 119 Kangra 90 3 Dalhousie 115 3 Dalhousie 145 Dalhousie 85 Chamba 126 Chamba 156 Chamba 108 4 Nagrota 16 4 Nagrota 21 Nagrota 98 Chintpurni 56 Chintpurni 94 Chintpurni 85 Amb 71 Amb 107 Amb 90 5 Nadoun 48 5 Nadoun 69 Nadoun 127 Hamirpur 76 Hamirpur 65 Hamirpur 150 Bhota 84 Bhota 78 Bhota 163 As it is clear from the above table that if compare these three places as 2nd base for distribution, Kangra will be most suitable base in terms of shortest distance to cover for distribution. The places highlighted in Green are showing the shortest distance and cell highlighted in Red are showing the maximum distance to cover, for distribution.
  • 88. “Growth Avenues for GSK in Himachal Pradesh” 2012 84 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Other Observations and Recommendations Increasing the product portfolio If we want better growth, better sales and distribution, increased volumes, and reduced expenses in Himachal Pradesh, we should focus on increasing our product portfolio. Foodles, Glucose, Horlicks Biscuits, Cookies are the products which should be relaunched after proper market research and better marketing plans. Also company can think about including Cleaning products like Colin, Antiseptic products like Dettol, antiseptic cream etc. in its product portfolio (As we focus more on Health factor in every product). This will be great idea in increasing our volumes with sales, and reducing our costs like (Transportation cost, Staff salary etc.). Because than these expenses will be allocated into larger product portfolio. Many big FMCG companies like Nestle, HUL, P&G, and ITC etc. are working with this methodology. Following table is showing the amount of total sales of these big companies in Himachal Pradesh, No. of products and No. of brands (Product portfolio) they are selling. Product Portfolio Company No. of Products No. of Brands Total Himachal Sales/month GSK (Foodles, Biscuits, Glucose and Breath Right not included) 12 6 60-70 L Nestle 50-60 30-40 8 Crore HUL 90-100 60-70 5 crore P&G 90-100 40-50 4.5 crore ITC 60-70 30-40 Colgate 35-40 10.-15 70-80 L Cadbury 40-50 20-30 The above table is showing the approx. number of products and number of brands these major FMCG companies are handling.
  • 89. “Growth Avenues for GSK in Himachal Pradesh” 2012 85 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Joining hands with culture Major Fairs & Festivals in Himachal Pradesh Month Fairs & Festivals Place January Sheet RituMahotsva Manali LohariMahotsva Pragpur (Kangra) February ShivratriMela (International) Mandi&Baijnath (Kangra) Ski Championship Manali&Narkanda (Shimla) March State Level HoliMela TeeraSujanpur (Hamirpur) ChessuMela Riwalsar (Mandi) April VasantUtsav LalchandPrarthi Kala Kendra (Kullu) RohruUtsav Rohru (Shimla) May DoongriMela Near Hadimba temple (Manali) Grishmotsav Dharamshala and Riz (Shimla) June ShooliniMela Solan Golf championship Naldehra (Shimla) July SaairUtsav Arki (Solan) Shravan Maas Mela Naina-deviji (Bilaspur) August MinjarMela Chamba LaadrachaMela Sphiti KaajaMela Kaaja (LahoulSphiti) October KulluDashehra Kullu November Laavimela Rampur (Shimla) Him-Skating Championship Him Skating Maidan (Shimla) Himachal is a place of fairs and festivals. Above is the list of major fairs and festivals of Himachal Pradesh. This can be great opportunity to advertise at these places. This way we can connect more with people and culture of Himachal and also improve our marketing and sales. We should keep a stall at these places where Horlicks recipes will be served. The visibility should also be taken care of at these places because at these places more visibility can be achieved at lesser cost.
  • 90. “Growth Avenues for GSK in Himachal Pradesh” 2012 86 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Recommendations (Schemes for SKUs) Product Recommendations Comments Horlicks  Retailer margin should be increased to 9%  Need to buy shelf space for better visibility (As our competitor Bournvita is having much better visibility than us) As Bornvita is giving more margin and better schemes to retailers, it is necessary for us to keep our margins at least equal to Bournvita, so that retailer do not hesitate in pushing our product. Women and mother Horlicks  A small Horlicks recipe book free with 500gm. pack  This recipe book will be advertised through POS material Especially for Kangra, Mandi and Shimla district because these areas have highest women population Junior Horlicks  A series of “ChotaBheem / Shingchain and Doremon” toys free with 500gm. pack  2.Scheme should be advertised through POS material and TVC Especially for Kangra, Mandi and Shimla district because these areas have highest child population Boost  Limited edition action toys (can be based on upcoming Hollywood action and animation movies)  A small toy in the Boost pouch ENO  Price should remain at Rs. 5 with a little quantity decrease in pouch Retailers are having problem of money change as the price is Rs. 6 per pouch so they end up selling competitor’s product in Rs. 5 Sensodyne Toothpaste  Give exactly same schemes as of Colgate Sensitive  Product packaging should be more attractive (at least at par with Colgate sensitive pro relief, which is a display in itself) Sensodyne Brush  Give exactly same schemes as of Colgate Sensitive (eg. 6+1 for retailers)  A useful plastic stand for brush to each retailer. Iodex  A small Rs.5 easy to carry pack should be launched.  Sale can be much better if company launch IODEX spray also. Crocin Tablet  Promotion completely based on TVC
  • 91. “Growth Avenues for GSK in Himachal Pradesh” 2012 87 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Summary of Growth Avenues The Growth Avenues discussed in the previous pages of this report can be summarized as below for an overall view of the potential growth scenario.  Major areas to focus: Based on the market size, number of outlets, tourist population, local population, current sales, competition, surrounding rural markets Solan, Shimla, Mandiand Dharamshala (specifically McLeodganj) are the regions where GSK needs to focus more with respect to product availability and visibility. These regions have immense potential and a very high inventory turnover.  SKUs to focus: Through better visibility and availability of competitors' products, display schemes, reduction of prices and better offers for both consumers and retailers from competitors and competitors' products being retailers first choice they are capturing the market share rapidly. Based on these data the major SKUs to focus are Sensodyne Toothpaste and Brush, Junior Horlicks, Crocin Tablet.  An additional USR should be appointed to take care of only major towns where potential of growth is very high. Also, palm tops/hand held devices should be provided to USRs.  A team of merchandisers should be appointed in Himachal Pradesh, which will periodically visit the major towns, and increase the company visibility.  Company should launch a display scheme for Himachal Pradesh as its product displays and visibility are very minimal in number. Also, competitors are increasingly focusing in this area.  Company should provide sufficient POS materials of better quality and having a long life. And merchandisers will have to make sure that these materials are used properly.  Regular campaigning is highly required in Himachal Pradesh for better growth.  For ENO, Horlicks, Boost and IodexGSK should give more consumer offers because these products are sold through pull strategy (most of the times consumer asks for these products). For Sensodyne Toothpaste and Sensodyne Brush both consumer and retailer offers should be given as it sold almost equally through push and pull strategy. For Crocin TabletGSK should increase the margin and schemesfor retailers’.  Transportation expenses paid to Super distributors should remain as it is but Contract with Transport Company (from Zeerakpur) should be revised(it should be based on floating rates).
  • 92. “Growth Avenues for GSK in Himachal Pradesh” 2012 88 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Campaign Ideas 1. Campaigning in children schools There are many ways of doing this a) Giving Cultural Knowledge (about our Upanishads and Vedas- only practical and doable things) through stories and drama in schools. And at the end of this session giving knowledge about our company and products for 10 minutes. There will be more focus on visibility during this event. b) There is an organization which teaches children, the extremely important lessons of life through interesting and simple games & activities. Which increases their motivation level and practical knowledge about relations, group behavior and ethics, This organization can do good marketing for GSK. c) We can also organize small quizzes at the schools and distribute our products as free samples and as rewards to the participating members and others. The idea is to involve as many children as possible. d) The general observation is that during summer, the sale of Horlicks goes down. An innovative idea would be to have some recipes which are made from Horlicks, Horlicks Biscuits and Foodles. These recipes are very simple and are made of normal ingredients which are easily available at home. There are many recipes which are suited for summer season. So through this idea, consumers get the reason to use Horlicks and other products even in the summer season. We can also make posters of these recipes, and design and promote them so well (by garnishing the recipes, pictures showing them as extremely delicious) that everybody will feel compelled to try it at least once. e) We can organize recipe (made out of Horlicks and Horlicks biscuits) making competition in schools. And place our campaign as – “Even a child can make these dishes which are simple, delicious and full of health”. Along with this,the children could also be given nutritional training, which will help them in getting better health and score better grades. Also with this activity there will be a lot of involvement of staff and children. Different teams(children) will make the recipes and teachers will taste them and select the winners. 2. Online promotion through free promotion websites. Our social presence should be more on social networking wesites like Facebook, Twitter, Orkut and Google + etc. 3. Calling a meeting for Doctors(Pediatrician and Dentists) and persuading them to recommend GSK’s products which are highly nutritional, effective and good for health.
  • 93. “Growth Avenues for GSK in Himachal Pradesh” 2012 89 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in Learnings  To remain profitable, consumer products manufacturers must find ways to optimize their supply chains. They need to better their marketing promotions and avoid disappointing consumers with no-stock situations in the store.  When the consumer reaches the shelf, it is a critical moment because if the product he desires or could have bought is unavailable, then the consumer usually moves on to buy a rival brand’s product.  After consumers have moved to other brands, it becomes very hard to persuade them to return to buying the initial product when they go shopping again.  If the retailers make wrong demand forecast and order wrong volumes, the manufacturer will not be aware of the problem immediately.But, at the end of the day, both the manufacturer and the retailer are losing on the volumes and additional costs.  If manufacturers cannot deliver the product on time, the company will lose all the growth that could have been generated by their marketing promotions when the demand is high.  A research in P&G’s hasshown that retailers lose 11% of sales due to out-of-stocks, and that same-brandsubstitutions win back less than 25% of those lost sales for a manufacturer.
  • 94. “Growth Avenues for GSK in Himachal Pradesh” 2012 90 Report by: Maneesh Garg – Jindal Global Business School 11jgbs-mgarg@jgu.edu.in References  Case study on Procter & Gamble: Building A Smarter Supply Chain by Gartner-G2  Analysis of P&G by Brian Gaudet.  www.nestle.in  www.HUL.co.in  www.pg.com  www.wikipedia.org  www.colgate.co.in Disclaimer [This report contains confidential information and is intended only for the persons addressed to. This exercise (Growth Avenues for GSK in HP) was carried as a part of 8 week summer internship (11th May, 2012 to 10th July, 2012) at GlaxoSmithKline Consumer Healthcare in Himachal Pradesh, India. The data present in this report is purely out of observation by the author at the retail outlets visited and based on the discussion with retailers and distributors at various places in Himachal Pradesh. The references for all the facts and company information are provided in the references section. The logo of GSK used at various places in this report is the property of GSK. This report by any means does not aim to demean or offend any individual, group or company.]

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