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ITC-Sales Force Management
Under the guidance of Dr. Satish Kumar
Submitted By,
Group-5
Ashwin Siddharth
Arko Mukherjee
Shweta Sumal
Neethu Thomas
Muhammed Abdulla NC
COMPANY PROFILE
ITC is one of India's foremost private sector companies with a market capitalisation of US $ 45
billion and a turnover of US $ 7 billion. ITC is rated among the World's Best Big Companies, Asia's
'Fab 50' and the World's Most Reputable Companies by Forbes magazine and among India's Most
Valuable Companies by Business Today. ITC ranks among India's '10 Most Valuable (Company)
Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also
ranks among Asia's 50 best performing companies compiled by Business Week.
ITC has a diversified presence in FMCG, Hotels, Paperboards & Specialty Papers, Packaging, Agri-
Business, and Information Technology. While ITC is an outstanding market leader in its traditional
businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining
market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel,
Personal Care and Stationery.
As one of India's most valuable and respected corporations, ITC is widely perceived to be
dedicatedly nation-oriented. Chairman YC Deveshwar calls this source of inspiration "a
commitment beyond the market". In his own words: "ITC believes that its aspiration to create
enduring value for the nation provides the motive force to sustain growing shareholder value. ITC
practices this philosophy by not only driving each of its businesses towards international
competitiveness but by also consciously contributing to enhancing the competitiveness of the larger
value chain of which it is a part."
ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of
growth anchored on its time-tested core competencies: unmatched distribution reach, superior
brand-building capabilities, effective supply chain management and acknowledged service skills in
hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant
share of these emerging high-growth markets in India.
ITC's Agri-Business is one of India's largest exporters of agricultural products. The ITC group's
contribution to foreign exchange earnings over the last ten years amounted to nearly US$ 5.4 billion,
of which agri exports constituted 56%. The Company's 'e-Choupal' initiative is enabling Indian
agriculture significantly enhance its competitiveness by empowering Indian farmers through the
power of the Internet. This transformational strategy, which has already become the subject matter
of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural
distribution infrastructure, significantly enhancing the Company's marketing reach.
ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd., provides IT
services and solutions to leading global customers. ITC Infotech has carved a niche for itself by
addressing customer challenges through innovative IT solutions.
ITC's production facilities and hotels have won numerous national and international awards for
quality, productivity, safety and environment management systems. ITC was the first company in
India to voluntarily seek a corporate governance rating.
ITC group directly employs more than 31,000 people and the Company's Businesses and their value-
chains generate over 5 million sustainable livelihoods. The Company continuously endeavours to
enhance its wealth generating capabilities in a globalising environment to consistently reward more
than 4, 22,000 shareholders, fulfil the aspirations of its stakeholders and meet societal expectations.
This over-arching vision of the company is expressively captured in its corporate positioning
statement: "Enduring Value. For the Nation. For the Shareholder."
OBJECTIVES OF THE STUDY
1. To make in depth study of recruitment process of sales personnel; their training and development;
compensation, evaluation & control by the company
2. Develop proper insight about distribution management involving channel member selection;
effective working; monitoring and control of logistics and channel strategy
3. To compare the service of competitors with that of ITC
4. To identify the problem in sales effort, sales administration and sales and distribution
management strategy developed of the company.
5. Suggest the proper solution for the inefficiencies and inaccuracy found in the process.
APPROACH FOR STUDY
Methodology followed:-
1. Secondary Data (Research Papers and companies’ websites)
• literature review of existing research papers on different aspects sales and
distribution
• Finding the factors which improve the sales efficiency if sales force
• Identifying the ways for designing effective distribution channel
2. Primary Data (Interview of company’s sales official and retail survey)
Methodology followed:-
a. Structured Interview of company’s sales officials
b. Survey of retailers
Research tool
• Questionnaire
• Onsite observation
Sampling method: Convenient sampling
Sample size: 100 retail outlets
Analysis tool: M S Excel-2007
LITERATURE REVIEW
• Specific training of sales people enhances their performance and produces customer-
oriented selling
• In different circumstances firms might choose an appropriate distribution flexibility
strategy which fits with their distribution environment
• Incentives motivates sales people to perform more effectively
• Many companies today are trying to identify innovative compensation strategies that are
directly linked to improving organizational performance
• Evaluating the performance of sales territories.
SWOT Analysis
Strength
 Strong brand recognition and product
portfolio
 Experienced Management
 Diversified Product Portfolio
 Established Research & Development
 Global market reach
 Well established distribution network
Weakness
 Dependence on tobacco revenues
 Negative Connection of Tobacco
 Low export levels
 Brand Proliferation
Opportunity
 Low per capita consumption of personal
care products
 Untapped rural Market
 Collaboration with foreign players
 e-retailing
Threat
 Competition both Domestic &
International
 Ban on smoking
 Competition from unbranded products
 High competition from established
companies
SALES HIERARCHY OF ITC
RECRUITMENT & SELECTION
Sales Trainee
Area Executive
Area Manager
Assistant Manager
Branch Manager
Regional Branch Manager
District Manager
• Assistant under TraineeTop B- Schools
• Sales Trainee
Other
B- schools
• Lateral Recruitment (for the
post of AE) by BM and HRM
Employee
References and
Consultancy
The interview proceeds through five stages:
1. CV Short listing
2. Group Discussions / Business Plan Competition
3. 1st
Round Interview
4. Written Test - 3 sections. Total of 55 questions. Numerical - 15, Analytical - 20, Verbal - 20
questions.
5. Personal Interview with HR
TRAINING AND DEVELOPMENT
Stage 1: Induction Training:
Step 2: On Job Training:
It is a three stage process.
1. New Sales Personnel
2. Training through NIS
3. The final process
Sales Trainee
Duration: 1
week
Place: Head
Office
Stage 3. Internal Training
For Sales
Trainee and
AUT
Duration:
1 month
In Branch
office
Process
Training
Through
NIS
New Sales
Personnel
On Job
Training
Distributor’s
Sales Person
&
Supervisor
Top
distributors
3 Salesman
are selected
New
Entrant
(S. Trainee
& AUT)
Duration:
3days
Internal
Training
Stage 4: Competency Training:
COMPENSATION
Position CTC (in Lakhs
annually)
Variable
Branch Manager 18 - 20 20% of CTC
Assistant Manager 12 - 14 20% of CTC
Area Manager 8 - 8.5 20% 0f CTC
Area Executive 5.5 - 6.5 20% of CTC
Sales Trainee 2.5 - 2.6 20% of CTC
Branch Manager
recommends AE and
AM for training
Location: Head
Office
Duration: 6 Days
Performance evaluation of sales personnel:
Performance evaluation of sales personnel:
It follows through three stages as the diagram shows. The sales personnel will be evaluated on their
contribution towards the firm and their profile. ITC is always proved to be a good in the performance
evaluation as their techniques are well accepted.
•Monthly Sales Target
•Visibility Target
Monthly
Target
•Sales Volume for each product
category
•Market share growth rate
Performance
of the branch
Quiz
Motivation
Updated
WHOLESALE DISTRIBUTOR (WD)
WD employees: Recruitment and Compensation:
Recruitment:
The salespersons of distributors are appointed by the distributor himself in consultation with ITC
officials
Compensation:
• Their fixed salary is paid by the distributor but is reimbursed by the company
• The variable salary of salesmen is decided on his meeting of sales target
Salesmen Evaluation and Compensation:
• The compensation received by salesmen depends upon the target achieved by them
• Targets under consideration:
1. Monthly sales target
2. Product wise sales target
3. Category wise
WD
Salesmen
(Salary: 5-6
K)
Supervisor
s
(Salary: 8K)
Delivery
Boy
(Salary: 2.5-
4K)
Driver/
Thelawala
(Salary: 3.5-
4k)
Control mechanism:
• The performance and work of WD employees is evaluated by company’s officials weekly
• Their daily sales order is monitored by Area Executive
• The salesmen is given a geographical territory which doesn’t consider sales potential
• Salesmen has to cover 30 outlets each day
• They are given a beat plan for each day
• If a WD employee is not performing then the company can sack him
Role of Salesmen:
• Prospecting- Searching for new outlets
• Targeting- Visiting potential outlets
• Communicating- Informing about products and offers
• An order taker- As per requirement in retail and convenience outlet
• Selling to retailers and convenience outlet
• Servicing- Removal of damaged/expired(DND)products
• Information gathering- About needs/ preferences of customers
• Allocating- Fixed time to each outlets
• Cash collection
CHANNEL TYPE:
3-level Distribution Channel:
2 -level Distribution Channel:
Distribution Type:
Comp
any
Wholes
ale
Distrib
utor
Wholes
aler
Retail
ers
Consu
mer
Company Wholesale
Distributor
Retailers Consumer
Company
Wholesale
Distributor
Wholes
aler
Consum
er
Exclusive (Textile)
Selective (Paper
Boards & Cigarettes)
Intense (Other FMCG
Products)
Effective Working of Channel Members:
Business Area wise Evaluation Percentage
1. Convenience 25
2. Grocery 1/3 25
3. Grocery 2 25
4. WD system & Processes 25
Performance is measured on following broad parameters:
1.) Distribution Health (Outlet coverage, availability, visibility levels, etc)
2.) Business Health (Sales Performance benchmarked to relevant Circle)
Score card for Measurement of WD Performance:
Bands Score
Platinum > 95%
Gold 85-95%
Silver 80-85%
Bronze Star 75-80%
Bronze 60-65%
Non-Performing < 60%
Actionable basis for WD evaluation:
Essentials Check Bands Follow up action
Not Qualified Non Performing Replace with NSA
Not Qualified Bronze On Notice
Not Qualified Bronze Star/ Silver On Notice
BM to revert with follow up
plan
Qualified Non Performing On Notice
Qualified Bronze On Notice
Time bound action plan
Qualified Bronze Star/ Silver Encouragement for further
improvement
PROBLEMS IN SALES AND DISTRIBUTION SYSTEM AT ITC:
• Lack of proper training to distributor’s salesmen
• Territory allotted to salesmen doesn’t consider the sales potential of the areas
• Salesmen hides offers from retailers in ready stock sale model
• Problem of product recall by salesmen
• Salesmen focuses more on large outlets which purchase in large volume
• Billing of new outlets done on the name of other existing outlets
• All the SKU of a product are not brought in the market at a time
• TPS (Sify software) is not updated regularly
SOLUTIONS
• Proper training should be provided to salesmen
• Salesmen should be regularly informed about the changing offers and schemes on the
products
• An apparel containing detail of offers should be given to salesman for ready stock sales
• Apparel should be provided to salesmen to enhance brand awareness
• Territory allotted to salesmen should consider the sales potential and concentration of
outlets in that area
• Salesmen should be provided incentive for adding new outlets
• TPS should be updated regularly to show current stock details
• The incentive of the salesmen should be based on the number of outlets served by them too
rather than merely on sales volume
REFERENCES:
• Sergio Román, Salvador Ruiz, José Luis Munuera, (2002) "The effects of sales training
• Kangkang Yu, Jack Cadeaux, Hua Song, (2012) "Alternative forms of fit in distribution
flexibility strategies", International Journal of Operations & Production Management, Vol.
32 Iss: 10
• Andrew Napier, (1986) "Incentives — A Vector of Improved Sales Performance?",
European Journal of Marketing, Vol. 20 Iss: 6, pp.36 – 51
• Steven H. Appelbaum, Loring Mackenzie, (1996) "Compensation in the year 2000: pay for
performance?” Health Manpower Management, Vol. 22 Iss: 3, pp.31 - 39
• Journal of Marketing; Jan1972, Vol. 36 Issue 1, p31-37, 7p
• www.itcportal.com
@ abdulla.nck@gmail.com

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ITC Sales Force Management

  • 1. ITC-Sales Force Management Under the guidance of Dr. Satish Kumar Submitted By, Group-5 Ashwin Siddharth Arko Mukherjee Shweta Sumal Neethu Thomas Muhammed Abdulla NC
  • 2. COMPANY PROFILE ITC is one of India's foremost private sector companies with a market capitalisation of US $ 45 billion and a turnover of US $ 7 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine and among India's Most Valuable Companies by Business Today. ITC ranks among India's '10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. ITC has a diversified presence in FMCG, Hotels, Paperboards & Specialty Papers, Packaging, Agri- Business, and Information Technology. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman YC Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. ITC's Agri-Business is one of India's largest exporters of agricultural products. The ITC group's contribution to foreign exchange earnings over the last ten years amounted to nearly US$ 5.4 billion, of which agri exports constituted 56%. The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd., provides IT services and solutions to leading global customers. ITC Infotech has carved a niche for itself by addressing customer challenges through innovative IT solutions. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC group directly employs more than 31,000 people and the Company's Businesses and their value- chains generate over 5 million sustainable livelihoods. The Company continuously endeavours to enhance its wealth generating capabilities in a globalising environment to consistently reward more than 4, 22,000 shareholders, fulfil the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the Nation. For the Shareholder."
  • 3. OBJECTIVES OF THE STUDY 1. To make in depth study of recruitment process of sales personnel; their training and development; compensation, evaluation & control by the company 2. Develop proper insight about distribution management involving channel member selection; effective working; monitoring and control of logistics and channel strategy 3. To compare the service of competitors with that of ITC 4. To identify the problem in sales effort, sales administration and sales and distribution management strategy developed of the company. 5. Suggest the proper solution for the inefficiencies and inaccuracy found in the process. APPROACH FOR STUDY Methodology followed:- 1. Secondary Data (Research Papers and companies’ websites) • literature review of existing research papers on different aspects sales and distribution • Finding the factors which improve the sales efficiency if sales force • Identifying the ways for designing effective distribution channel 2. Primary Data (Interview of company’s sales official and retail survey) Methodology followed:- a. Structured Interview of company’s sales officials b. Survey of retailers Research tool • Questionnaire • Onsite observation Sampling method: Convenient sampling Sample size: 100 retail outlets Analysis tool: M S Excel-2007
  • 4. LITERATURE REVIEW • Specific training of sales people enhances their performance and produces customer- oriented selling • In different circumstances firms might choose an appropriate distribution flexibility strategy which fits with their distribution environment • Incentives motivates sales people to perform more effectively • Many companies today are trying to identify innovative compensation strategies that are directly linked to improving organizational performance • Evaluating the performance of sales territories. SWOT Analysis Strength  Strong brand recognition and product portfolio  Experienced Management  Diversified Product Portfolio  Established Research & Development  Global market reach  Well established distribution network Weakness  Dependence on tobacco revenues  Negative Connection of Tobacco  Low export levels  Brand Proliferation Opportunity  Low per capita consumption of personal care products  Untapped rural Market  Collaboration with foreign players  e-retailing Threat  Competition both Domestic & International  Ban on smoking  Competition from unbranded products  High competition from established companies
  • 5. SALES HIERARCHY OF ITC RECRUITMENT & SELECTION Sales Trainee Area Executive Area Manager Assistant Manager Branch Manager Regional Branch Manager District Manager • Assistant under TraineeTop B- Schools • Sales Trainee Other B- schools • Lateral Recruitment (for the post of AE) by BM and HRM Employee References and Consultancy
  • 6. The interview proceeds through five stages: 1. CV Short listing 2. Group Discussions / Business Plan Competition 3. 1st Round Interview 4. Written Test - 3 sections. Total of 55 questions. Numerical - 15, Analytical - 20, Verbal - 20 questions. 5. Personal Interview with HR TRAINING AND DEVELOPMENT Stage 1: Induction Training: Step 2: On Job Training: It is a three stage process. 1. New Sales Personnel 2. Training through NIS 3. The final process Sales Trainee Duration: 1 week Place: Head Office
  • 7. Stage 3. Internal Training For Sales Trainee and AUT Duration: 1 month In Branch office Process Training Through NIS New Sales Personnel On Job Training Distributor’s Sales Person & Supervisor Top distributors 3 Salesman are selected New Entrant (S. Trainee & AUT) Duration: 3days Internal Training
  • 8. Stage 4: Competency Training: COMPENSATION Position CTC (in Lakhs annually) Variable Branch Manager 18 - 20 20% of CTC Assistant Manager 12 - 14 20% of CTC Area Manager 8 - 8.5 20% 0f CTC Area Executive 5.5 - 6.5 20% of CTC Sales Trainee 2.5 - 2.6 20% of CTC Branch Manager recommends AE and AM for training Location: Head Office Duration: 6 Days
  • 9. Performance evaluation of sales personnel: Performance evaluation of sales personnel: It follows through three stages as the diagram shows. The sales personnel will be evaluated on their contribution towards the firm and their profile. ITC is always proved to be a good in the performance evaluation as their techniques are well accepted. •Monthly Sales Target •Visibility Target Monthly Target •Sales Volume for each product category •Market share growth rate Performance of the branch Quiz Motivation Updated
  • 10. WHOLESALE DISTRIBUTOR (WD) WD employees: Recruitment and Compensation: Recruitment: The salespersons of distributors are appointed by the distributor himself in consultation with ITC officials Compensation: • Their fixed salary is paid by the distributor but is reimbursed by the company • The variable salary of salesmen is decided on his meeting of sales target Salesmen Evaluation and Compensation: • The compensation received by salesmen depends upon the target achieved by them • Targets under consideration: 1. Monthly sales target 2. Product wise sales target 3. Category wise WD Salesmen (Salary: 5-6 K) Supervisor s (Salary: 8K) Delivery Boy (Salary: 2.5- 4K) Driver/ Thelawala (Salary: 3.5- 4k)
  • 11. Control mechanism: • The performance and work of WD employees is evaluated by company’s officials weekly • Their daily sales order is monitored by Area Executive • The salesmen is given a geographical territory which doesn’t consider sales potential • Salesmen has to cover 30 outlets each day • They are given a beat plan for each day • If a WD employee is not performing then the company can sack him Role of Salesmen: • Prospecting- Searching for new outlets • Targeting- Visiting potential outlets • Communicating- Informing about products and offers • An order taker- As per requirement in retail and convenience outlet • Selling to retailers and convenience outlet • Servicing- Removal of damaged/expired(DND)products • Information gathering- About needs/ preferences of customers • Allocating- Fixed time to each outlets • Cash collection
  • 12. CHANNEL TYPE: 3-level Distribution Channel: 2 -level Distribution Channel: Distribution Type: Comp any Wholes ale Distrib utor Wholes aler Retail ers Consu mer Company Wholesale Distributor Retailers Consumer Company Wholesale Distributor Wholes aler Consum er Exclusive (Textile) Selective (Paper Boards & Cigarettes) Intense (Other FMCG Products)
  • 13. Effective Working of Channel Members: Business Area wise Evaluation Percentage 1. Convenience 25 2. Grocery 1/3 25 3. Grocery 2 25 4. WD system & Processes 25 Performance is measured on following broad parameters: 1.) Distribution Health (Outlet coverage, availability, visibility levels, etc) 2.) Business Health (Sales Performance benchmarked to relevant Circle) Score card for Measurement of WD Performance: Bands Score Platinum > 95% Gold 85-95% Silver 80-85% Bronze Star 75-80% Bronze 60-65% Non-Performing < 60%
  • 14. Actionable basis for WD evaluation: Essentials Check Bands Follow up action Not Qualified Non Performing Replace with NSA Not Qualified Bronze On Notice Not Qualified Bronze Star/ Silver On Notice BM to revert with follow up plan Qualified Non Performing On Notice Qualified Bronze On Notice Time bound action plan Qualified Bronze Star/ Silver Encouragement for further improvement PROBLEMS IN SALES AND DISTRIBUTION SYSTEM AT ITC: • Lack of proper training to distributor’s salesmen • Territory allotted to salesmen doesn’t consider the sales potential of the areas • Salesmen hides offers from retailers in ready stock sale model • Problem of product recall by salesmen • Salesmen focuses more on large outlets which purchase in large volume • Billing of new outlets done on the name of other existing outlets • All the SKU of a product are not brought in the market at a time • TPS (Sify software) is not updated regularly
  • 15. SOLUTIONS • Proper training should be provided to salesmen • Salesmen should be regularly informed about the changing offers and schemes on the products • An apparel containing detail of offers should be given to salesman for ready stock sales • Apparel should be provided to salesmen to enhance brand awareness • Territory allotted to salesmen should consider the sales potential and concentration of outlets in that area • Salesmen should be provided incentive for adding new outlets • TPS should be updated regularly to show current stock details • The incentive of the salesmen should be based on the number of outlets served by them too rather than merely on sales volume REFERENCES: • Sergio Román, Salvador Ruiz, José Luis Munuera, (2002) "The effects of sales training • Kangkang Yu, Jack Cadeaux, Hua Song, (2012) "Alternative forms of fit in distribution flexibility strategies", International Journal of Operations & Production Management, Vol. 32 Iss: 10 • Andrew Napier, (1986) "Incentives — A Vector of Improved Sales Performance?", European Journal of Marketing, Vol. 20 Iss: 6, pp.36 – 51 • Steven H. Appelbaum, Loring Mackenzie, (1996) "Compensation in the year 2000: pay for performance?” Health Manpower Management, Vol. 22 Iss: 3, pp.31 - 39 • Journal of Marketing; Jan1972, Vol. 36 Issue 1, p31-37, 7p • www.itcportal.com @ abdulla.nck@gmail.com