The document discusses the role of incentives for salesmen in the fast-moving consumer goods (FMCG) industry, highlighting how monetary benefits, particularly incentives linked to performance, drive salesmen's efficiency. It outlines various incentive parameters used by companies to ensure transparency and motivation among salesmen, including metrics like 'perfect store' and 'must stock list'. The competitive nature of the FMCG market necessitates constant evolution of these incentive schemes to address both sales targets and the challenges salesmen face.

1. 1
Source: Informal discussion with company salesmen and executives
Incentive Parameters for Salesmen in leading FMCG Companies
The Fast Moving Consumer Goods (FMCG) industry is one among the fast growing industries
with consumers everywhere. Fast Moving consumer goods or consumer packaged goods are
products that are sold quickly at relatively low cost. Though the absolute profit made on FMCG
products is relatively small, they are generally sold in large quantities, and so the cumulative
profit on such products can be substantial.
Salesmen play a critical role in any FMCG industry; and for that matter in any industry, a
salesman’s role is critical. The efficiency of the product is useless if the salesmen are inefficient.
This calls for energetic salesmen whoare efficient. The average qualification of salesmen are
limited to schooling. Most of the salesmen are school dropouts. Unlike the well qualified, with
these salesmen the demand for ambience, infrastructure and a conducive work environment are
the least preferred. Monetary benefits are the driving force.
The monetary benefits include salary, allowance and incentive. Out of these, only incentive is
the most critical and variable factor. The incentive being linked to the salesmen’s performance
and the attractive incentive provided by these FMCG giants, is the only reason why most men
still stick on to a salesman’s job. The salesmen put in their heart and soul to achieve their targets
and thereby get more incentive. At a point, the companies identified that the salesmen are being
manipulated either by their company executives or the distributors.
To overcome this, toget closer to the salesmen and to give him a sense of belongingness with the
company, FMCG companies started making the incentive structure transparent. And to keep
track of the salesmen’s performance, the incentives were linked to parameters that help both the
salesmen to work efficiently and the company to progress.
Various companies use different incentive parameters. These parameters have evolved into a
more structured approach. Though the names of the parameters and their weightage differs, they
more or less have the same meaning. Working with a few leading FMCG companies, the
following incentive parameters for salesmen are the most commonly practiced.

2. 2
Source: Informal discussion with company salesmen and executives
Incentive Parameters
1. Perfect Store
All the product lines are highlighted in the palmtop against the particular store have to be
placed in the store for it to become a perfect store.
2. Perfect Day
When all the stores visited in a day are made perfect, the day becomes a perfect day.
The perfect store and perfect day parameters are based on the AC Nielsen survey data.
Companies have a tie up with a consulting firm to provide them with data about the stores
with regard to their company products
3. Lines
Product lines are given as targets depending on the month’s focus product and launch
product
4. Must Stock List
Must stock list or the MSL compliance is where the salesmen are instructed to
compulsorily stock a particular product line at particular stores or all the stores depending
on the requirement
5. Focus Products
As discussed above, the focus products may or may not accompany the ECO parameter.
More than one product can be given as a Focus
6. Effective Coverage
Effective coverage ensures both the effective outlet coverage and the effective product
line coverage. The effective coverage or ECO parameter may or may not contain a focus
product/s depending on the month’s objective

3. 3
Source: Informal discussion with company salesmen and executives
7. Distributor Retail Coverage Plan (DRCP)
The DRCP or simply the salesmen beat travelled everyday is a parameter that provides
for expanding the number of retail outlets. Through this specific parameter the company
ensures the addition of new outlets and the retention of the older outlets
8. Value
Value targets are fixed based on the value of the month in the previous year plus 25%
percent growth
9. Lines
Product lines are given as targets depending on the month’s focus product and launch product
Apart from these, the companies lay more empahsis on communicating these parameters to
the salesmen. Gone were the days where salesmen carried notebooks and pen; as the saying
goes, “you become obsolete if you are not updated”, the companies have sought to palmtops
and smart phones / android phones for taking orders, scheme communications and other
related functions.
With many companies entering into the market everyday, FMCG industry is becoming a very
competitive environment. And with the products having a very limited shelf life, the
products have to be sold at the earliest. For sales, it is madndatory for the product to be
placed in the outlet. This job falls on the salesmen. And incentives are the key element
driving the salesmen. Hence, the companies must constantly evelove new incentive schemes.