Dna

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Dna

  1. 1. “DNA” Team<br />St. Petersburg State University<br />Graduate School of Management<br />NadezhdaKomarova<br />Evgeniya<br />Osina<br />Denis<br />Skolota<br />Mikhail<br />Pleshakov<br />
  2. 2. “Restructuring the <br />Sales Department”<br />
  3. 3. Agenda<br />
  4. 4. FMCG Industry Specifics<br /><ul><li>Two types of customers: </li></ul> 1st level type consumers (distributors, retailers) <br /> 2nd level type consumers (end customer)<br /><ul><li>Two types of trade: </li></ul> Modern type & traditional<br /> Russia (75%-traditional / 25%-modern)<br /> Developed countries ( 25% traditional / 75%-modern)<br /><ul><li>High level of competition among key players:</li></ul> Necessity of quick decisions<br />
  5. 5. Russian Market Trends<br /><ul><li>Disposable income growth:</li></ul> Disposable income CAGR is forecasted to reach 7% by 2014<br /><ul><li> Retail sales growth: </li></ul> According to Rosstat, retail food sales in Russia grew by <br /> 9,78% in 2010, in absolute values.<br /><ul><li>Organized retail growth:</li></ul> Share of major retail chains is forecasted to reach 46% by<br /> 2014<br /><ul><li>Organized retail growth penetration in low population</li></ul>density areas<br />
  6. 6. Growth Drivers<br />
  7. 7. UNILEVER’S Field Sales division<br />
  8. 8. Analysis of Existing Organizational structure <br />Regional Sales Manager<br /><ul><li>Coaching and developing TSM;
  9. 9. Appointment/termination of distributors
  10. 10. Identification of external threats;
  11. 11. Promotion strategies development;
  12. 12. Creative idea development;
  13. 13. Regular communication with trade channels.</li></ul>Territory Sales Manager<br />CME<br />Customers Market Executive<br /><ul><li>Production the strategy for each city of the Sales Area;
  14. 14. Generation and evaluation customer options;
  15. 15. Price policy in region;</li></ul>CDAE<br />Channel Development Activating Executive<br />MTAE<br />Modern Trade Activating Executive <br />MTE<br />Modern Trade Executive<br />DS<br />Distributional Supervisor<br />CSS<br />Customers Sales Supervisor <br /><ul><li>Conduct efficient price reductions;
  16. 16. Control over channel activation budget
  17. 17. Optimization of exclusive sales representatives;
  18. 18. Analysis of sales data;
  19. 19. Monitor distributor payment position;
  20. 20. Control price policy by distribution;
  21. 21. Implementation of launch plans;
  22. 22. To arrange control over promotion;
  23. 23. To work out the schedule of field visits;
  24. 24. Implementation of launch plans;
  25. 25. To arrange control over promotion;
  26. 26. Coordination of Service Agencies work;
  27. 27. Execution of MTE agreements;
  28. 28. Negotiation with distributors;
  29. 29. Constant contact with MTE;</li></li></ul><li>Diagnosis and Setting Goals <br />Shortcomings defined from diagnosis:<br />Centralized marketing program: regions are followers;<br />Ambiguous role of Customers Market Executive;<br />Unpractical division;<br />Duplicate functions: Food/HPC divisions, repeated staff responsibilities;<br />Fuzzy functions’ division; <br />Lack of communication among the regions;<br />Customer sales supervisor structure is excessively complex.<br />Topical Necessity of Restructuring<br />GOAL Set from Head-office:<br />To double Sales in 3 years<br />
  30. 30. Assigning Project group<br />Restructuring Plan<br />
  31. 31. Strategy development and project of restructuring <br />
  32. 32. Main Criteria underlying geographical division:<br />Population density<br />Economic areas of the country<br />Consumption activity of population within each region<br />
  33. 33. Suggested Regional Division<br />Sales Areas: 17<br />2<br />1<br />2<br />4<br />2<br />3<br />3<br />The main criteria: TO BE CLOSER TO CONSUMER and TO THE MARKET!<br />
  34. 34. Strategy development and project of restructuring <br />
  35. 35. Getting over other shortcomings<br />HPC<br />Food<br />1) Combination of units<br />2) Simplification of structure<br />3) Reduction of double work<br />4) Developing of efficient communication <br />
  36. 36. Strategy development and project of restructuring <br />
  37. 37. Headquarter Marketing Department<br />Field Sales Department size:<br />7 RSM, 16 TSM, 7RMM<br />Food + HPC<br />RSM<br />Regional Sales Manager<br />RMM<br />Regional Marketing Manager<br />TSM<br />Territory Sales Manager<br />TTAE<br />Traditional Trade Activating Executives<br />MTAE<br />Modern Trade Activating Executives <br />DS<br />Distribution Supervisors<br />CSS<br />Customer Sales Supervisors<br />Sales Representatives<br />HPC<br />CSS<br />Customer Sales Supervisors<br />Food<br />
  38. 38. Project of restructuring <br />Preparation of positions’ descriptions and Key Performance Indicators <br />Work with employees:<br /><ul><li>Evaluating number of employees required
  39. 39. Unilever’s employee policy
  40. 40. Reassignments
  41. 41. Clarifying the situation and presenting the plan (prevention of law suits)
  42. 42. Benefitsplan
  43. 43. Trainings for personnel</li></ul>Work with other stakeholders<br /><ul><li>IT
  44. 44. Media and Press
  45. 45. Marketing Department</li></ul>Communication plan!<br />Meetings plan<br />Principles of Decision making <br />Implementation plan<br />Identifying threats (Environmental)<br />
  46. 46. Project of restructuring<br />Roles description and key performance indicators <br />Regional Sales Managers: 6+1(regional-territorial)<br />Location: in regions; in key SA <br />Key performance indicators: turnover per capita (regional), turnover per employee in the region, compound growth of sales in the region<br />General Responsibilities: Strategic decisions, appointment/ termination of distributors, value credit limits, sales forecast, price changes, coaching of TSM, identification of threats and weaknesses, communication with CMD and subordinates;<br />Regional Marketing Managers: 7<br />Location:Moscow with business travels to regions<br />Key performance indicators: Market share per segment<br />General Responsibilities: Development and implementation of Trade marketing plans, communication with Head Marketing Department, analysis of region specifics in order to adapt the head marketing campaign to it, promotion strategy development, establishment of efficient communication. <br />Territorial Sales managers by Sales Territory: 16<br />Location: SA <br />Key performance indicators: turnover per capita (SA), turnover per employee in the SA, compound growth of sales in the SA<br />General Responsibilities: Strategic development for each SA, implementation and control of the price policy, to ensure timely payments by Partners within SA, communication establishment, control function.<br />
  47. 47. Project of restructuring<br />Roles description and key performance indicators <br />Work with Retailers<br />Traditional Trade Activating Executives:<br />Location: in SA <br />Key performance indicators: turnover per capita (regional), turnover per employee in the region, compound growth of sales in the region<br />General Responsibilities: work with traditional channels, control installation and efficient usage of promotion materials, conduct efficient Temporary Price Reduction (TPR),analysis of results of work with TT, arrange the implementation of the special channel specific POS / shelf blockers / floor displays to be executed in the best places in the POPs<br />Modern Trade Activating Executives:<br />Location: in SA <br />Key performance indicators: turnover per capita (regional), turnover per employee in the region, compound growth of sales in the region<br />General Responsibilities: work with modern channels, control installation and efficient usage of promotion materials, conduct efficient Temporary Price Reduction (TPR),analysis of results of work with MT, arrange the implementation of the special channel specific POS / shelf blockers / floor displays to be executed in the best places in the POPs, establishment of relations with potential Key Accounts<br />
  48. 48. Project of restructuring<br />Roles description and key performance indicators <br />Work with Distributors<br />Distribution Supervisors:<br />Location: in SA <br />Key performance indicators: turnover per capita (regional), turnover per employee in the region, compound growth of sales in the region, dynamics of purchase volumes <br />General Responsibilities: Communication, control the distributor’s stocks and analyze potential orders, control over price, organization of sales representatives work, negotiate an investment expansion of Distributor.<br />“Control of implementation” function<br />Customer Sales Supervisors:<br />Location: in SA <br />Key performance indicators:turnover per one employee, quantity of sales outlets covered, secondary sales, innovations<br />General Responsibilities: control over stock availability (SKU), minimization of sales lossses, organization of efficient merchandising system, control over price (permanent analysis of dynamics of our and competitor prices), promotion in the field (explanation of advantages, control and implementation of agreements)<br />Sales Representatives (employed by staffing agencies)<br />Key performance indicators: Permanent availability of stock <br />
  49. 49. Project of restructuring<br />Number of employees required<br />1) Number of required staff in Sales Area:<br />(Calculations based on SPb Sales Area headcount)<br />Traditional (TTAE)= 3<br />Modern (MTAE)= 5<br />Distributor Supervisor (DS) = 2<br />Customer Sales Supervisor (CSS) = 10<br />Total=20<br />2) Number of Staff per 1% of Total Sales in Russia<br />Number of Staff per Sales Area based on their Sales volume<br />3) Step-up coefficient for Regions in the European part of Russia (higher density of population): 1,2 <br />4) Total number of employees required: 427<br />
  50. 50. Project of restructuring<br />Work with employees<br />Unilever’s employees policy<br /><ul><li>Care about its staff
  51. 51. Integrity
  52. 52. Law-obeying
  53. 53. “Trust and respect” atmosphere
  54. 54. Committed to healthy and safe working conditions
  55. 55. Care about Values of Staff</li></ul>Reassignments: promotion or rotation <br /><ul><li>Based on Performance matrix used by Unilever (Inmarko case)
  56. 56. Give a chance to each employee
  57. 57. Selection process to new regions and territories</li></ul>Preventing law suits<br /><ul><li>Transparency Policy</li></ul>Benefits plan<br /><ul><li>Benefits for achieving and beating target sales and</li></ul>Training of personnel: dealer employees are trained in selling the product; employees are trained how to understand values of customers and requirements of the market; additional trainings for underperforming employees<br />
  58. 58. Project of restructuring<br />Work with other Stakeholders<br /><ul><li>IT
  59. 59. Media and Press
  60. 60. Marketing Department</li></ul>Project of restructuring<br />MEETING PLAN:<br /><ul><li>Agenda for every meeting
  61. 61. Outcome:
  62. 62. Participants: TAE+ MSAE +MTAE, TSM+ DS
  63. 63. Frequency: once a month
  64. 64. Format: meeting( face to face), on-line conferences</li></ul>COMMUNICATION <br />PLAN!<br />Interrelations are very important!<br />PRINCIPLES OF <br />DECISION-MAKING<br />
  65. 65. Implementation plan and Timeline<br />Implementation: 5 years (3)<br />Immediate measures<br /><ul><li>Ensure results
  66. 66. Ensure liquidity</li></ul>Project Management<br /><ul><li>Clear responsibilities
  67. 67. Tight scheduling</li></ul>Action Management<br /><ul><li>Control implementation
  68. 68. Control effects</li></ul>Change Management<br /><ul><li>Manage changes, incl. corporate culture</li></ul>Stage I: 2-6 weeks<br />Stage II: 6-12 month<br />The specifics of implementation campaign:<br />1. First quarter is the best period to start: the worst sales season. <br />2. Analysis of current situation, forming of project group, development of implementation plan.<br />3. Development of staff reorganization and movement: bonus program, promotion programs, selection of new hires;<br />4. Gradual introduction of new sales areas, with the maintenance of old structure for the first time.<br />5. The expected period of first step implementation – 1 year – building solid foundation for further development<br />6. Gradual development after the first year<br />
  69. 69. Increasing sales through Marketing<br />Sales via Emerging modern trade channels<br />Supporting of sales by additional tools:<br /><ul><li>organizing discounts
  70. 70. bulk sales
  71. 71. free samples tests
  72. 72. loss leader: the price of a popular product is temporarily reduced in order to stimulate other profitable sales</li></li></ul><li>Measuring results of restructuring<br />Restructuring costs:<br />Unilever will have to anticipate the restructuring costs over the next years, that will be approximately 2,5% of sales.<br />Unilever is looking to make growth its number one priority.<br />The company probably will have to increase prices for its brands to combat rising commodity costs and further lift profitability during the restructuring campaign.<br />Assumptions:<br />1. Recovery of real customer consumption after crisis period: 5% in 2010 and 2011.<br />2. Gradual growth of disposable income: from 2003 to 2011: CAGR = 20%.<br />3. Gradual effect of implementation.<br />4. Deceleration of sales growth rate of Unilever in accordance wit the market tendency<br />
  73. 73. Scenario Analysis<br />

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