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The document discusses sales and distribution strategies for several FMCG companies in India. It analyzes the chemist channel, which is growing rapidly and accounts for 11.3% of FMCG sales. It also discusses Patanjali's disruptive approach, leveraging self-select outlets called Chikatsalayas and a strong supply chain. Further, it provides insights from analyzing salesmen routes and behaviors for UniCharm and Reckitt Benckiser, noting strategies around product bundling, incentive schemes, and focus on maximum selling skus.

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The Go-to-Market RevolutionAUGMENTING VALUE BY RE-IMAGING TRADITIONAL CHANNELS
Making a note of our key expectations Mihir Shah Having experience in MR and IT looking forward to get an insight into S&D with a aim to build a complete profile Honest feed back about the work done and the places I can improve Leveraging channel power and sales force to effectively sell products in different markets Vinay Kasturi Execution of sales at retail outlets & dealing with the competitors Understand approach of different types of market Coordination of various levels in a distribution network Harshit Agrawal Understanding the sales and distribution in ITC Understanding challenges faced during launch of new product Understanding different approaches for different channels
FMCG: A reality check 49 110 0 50 100 150 2015 2020 Total FMCG market size CAGR 14.7% Over all FMCG market to grow at a rate of 14.7% Rural market to grow at a rate of 17.7% CAGR Disposable income to rise at 4.3% CAGR 43% 23% 22% 12% FMCG segment break up F&B Health care Personal Care Household Food and personal care make up 2/3 of the revenues Urban market accounts for 2/3rd of the revenue Growing income augers well for the personal care market Growth Drivers in PCP category: • Rising income levels • Evolving lifestyle • Increasing discretionary spend • Availability • Growth of modern trade • New innovative products • Greater awareness and hygiene • Rural consumption • Government initiatives KeyTrends: • Product innovation • Premiumization • Brand consciousness • Expanding horizons • Backward Integration • Focus on Rural • Third Party Manufacturing • Private Labels • Expanding distribution • Small sized packets • Focus on enhancing presence
Leveraging the chemist channel: The fastest growing traditional retail channel 11.3% of FMCG sales. Expected to grow yoy by 20% Adds $6 billion in FMCG Sales Expected to add $12 billion in sales by 2020 90,000 chemist joined FMCG market in 2014- 2015 most of them in towns less than 10 lakh People trust their neighborhood chemists to choose personal care and healthcare products FMCG majors increasingly relying on them to push their premium products 22% of L’Oreal and 30% of bournvita sales comes through chemist channel
Augmenting value through the chemist channel Creating a winning chemist channel Define and benchmark key competitors Analyze current outlets serviced Identify and add new outlets with potential Rank Outlets Identify and build talent- create a “Winning resource” Create aTrade marketing offer to beat competition Implement a optimized go to market route Outletsranked A+,A,other Type Ease of access SFT AverageTurnover Footfall Shelf Display ITO Benchmarking: Coverage norm in industry No of chemist outlet serviced by competitor Salesmen of competitor Trade Marketing offer of competitor.
Distribution in ITC Factory Warehouse Distributor Market Cash Flow Stock Flow Distribution Cost • Salesman Salary • Supervisor Salary • Vehicle rent WD Infra Salesman, Supervisor, Operator, Godown Incharge, Driver, Cashier Cigarette- Cash & Carry Atta- 7 days PCP- 15-21 days Credit Period Specifics Expected Actual Average number of outlets covered 35 32 Average number of billed outlets 20 15 Average time spent in Market 6 hours 4hours
Voice from the field Savlon has higher demand in urban clusters where consumers are more educated and retailers know the difference between Dettol and Savlon. High demand for 200 ml and 500 ml SKU of savlon among retailers. Chemist from a key part of consumer decision making process.They can influence consumers to substitute Dettol for Savlon. Generic products like Speclon, hixlon sold at 20% cheaper price in markets like Saidabad and Gagula ramaram. Due to pull factor prevalence of Dettol in all markets. If distributor does not service outlet on time prevalence of buying from open market. Ultra pro shampoo available only in one variant while head and shoulders and other competitive brands available in 6-10 variants.The different colour and hanging sachets makes Ultra pro virtually invisible. Many retailers do not have clear understanding of various schemes and these are not clarified by the salesmen hence they have a perception of being cheated. Axe invest heavily in displays and refreshes its inventory on a quarterly basis. Also fogg has a perception of “get more for less”.Axe also bundles its products of different variants into combo packs of 2/3. Due to delivery problems in area order placed on Wednesday reaches on Saturday hence no order placed on next Wenesday Old expired stock of J&J still not taken care of. New stock should be launched with retailer sample pack.
Patanjali: The new age disruptor Patanjali Ayurvedic products limited Patanjali Gram Udyog Divyaa pharmacy Operations divided into four parts Biscuits and foods Vishal Arogya Sampath, TrimulgherryC and F for entireTelengana andAP 110 distributors, 85 Chikatsalay, 285Arogya Kendra inTelengana andAP Product range includes 189 medicines and 380 general products Honey, Ghee, Dant Kanti High sellout velocity handwash, soaps low 17 Cr p/m turnover of super distributor at average margin of 3-4% Cash up front model followed. No return on damaged and DND stocks. Average margins to retailers 14%
Supply Chain Management Warehouse Location Areas Serviced Medchal-9 Cr Sales mst imp KarimNagar 2.5Cr Rajamundry 3.5 Cr Kaddapa 2Cr Hyderabad Warangal East Godavari Nellore Mehubnagar Adilabad West Godavari Prakasham Medak Nizamabad Srikakulum Rayalseema area Rangareddy Vizag Factory and Manufacturing Warehousing Structure and SD infrastructure Order processing and channels Distributorship requirements Key Figures: • 85% order fulfillment • SD margin 3-4%, Distributor-5% Chikatsalaya and arogya Kendra 12-18% • Average monthly turnover 17 Cr Inventory holding 24 Cr • SAP B1 used to match demand and supply and forecasting based on historical data • Out sourcing model followed for various products and operating profit of 20%
Patanjali Chikatsalay: A revolutionary model Self-select outlets, High organization, market research based display,Total modern trade experience with guidance to consumers. • 3 doctors salary between 10,000 to 20,000- Free consultation, 90% purchase of prescribed medicines. Close to 50 Consultations per day. Neatly organized 3x1 feet racks Honey, ghee well stocked 60%, fast selling SKU’s prominently displayed at billing counter • 15+ lakh inventory maintained turnover around 8 lakh p/m also acts as a distributor servicing 6 areas with 1 beat plan each having 30-40 outlets. Many product lines with differential price points Introducing Ayurveda across categories Outsourcing model and strong backward and vertical integration Doctor consultation Induces trials and 90% conversion rates. High visibility, Day to day MIS reporting, Strong relationships
UniCharm: Capturing masses through availability Value Capture through Quality, Large variety of SKU, and incentive schemes change every month. Types of Market: Baby Store, Chemist, Grocery,Wholesale, Convenience, Modern retail Retiler Margins: 15% Distributor Margin:5% Seasonal product 7-8 lakhs monthly sales during rainy season 4-5 lakhs monthly during summer season 1Week credit period, Average 2 to 3 lakh of stock maintained. Retailers prefer Mamy Poko Products % margins on MRP Mamy poko standard 14% Mamy poko Xtra Absorbent 15% Sofy 14% Wipes 15% Leafy 20% Store type Minimum requirement A+ 15000+ A 10000+ B+ 5000 B,C Below 5000 Schemes • 5+1 and 7+1 are the 2 most regular schemes • Display incentive schemes related to displaying stocks and cut outs 500 to 1000 quarterly. • Bandhan scheme: 1gm gold coin or 10gm silver coin based on cartons ordered. • Cash and carry 2% incentive. KeyTargets: Booking value 10000+ minimum Outlets targeted: 40-45 as per company policy 35 but to reach the target 40 Minimum outlets billed: 15
Analyzing the route and sales men behavior 21 11 3 Break up of stores Grocery Chemist Fancy Store 35 4 3 2 Number of stores targeted: 44 Visited Covered by other salesmen of same WD Shut Payment cleared 11 24 Number of Conversions: 31.5% Converted Not Converted Day 1 Route Ramnagar Time spent on route 165 mins Average time spent in each store 3.28 mins Time ofTravel 50 mins Average productive time 1.14 mins Unproductive time 75 mins Sales Achieved 12-13k Mp- 10000 sofy- 800 wipes 800 leafy 700 50 75 40 Time Spent: 165 mins Travel Unproductive Productive
Analyzing the route and sales men behavior 9 14 2 Break up of stores Grocery Chemist Fancy Store 25 4 Number of stores targeted: 29 Visited shut 13 12 Number of Conversions: 52% Converted Not Converted Day 2 Route KavidaGuda and Bholakpur Time spent on route 123 mins Average time spent in each store 2.12 mins Time ofTravel 28 mins Average productive time 1 mins Unproductive time 70 mins Sales Achieved 12.5k 28 70 25 Time Spent: 123 mins Travel Unproductive Productive
Reckitt Benckiser: Gleaning insights from a leader Seprate pharma channel post Paras pharma takeover effective product bundling Types of Market: Grocery, Bakery, Super Market,Convenience, Pan Shop, Cosmetic stores, Gift Stores Retiler Margins: 11% Distributor Margin:5% Service weekly once all outlets visited. Order placed weekly-30%, Forghtnightly- 30% and monthly- 40%. 15 days credit period in market focus on MSL Schemes • Uddan: Flexible scheme, No compulsory KPI and targets lesser incentive compared to vison. • Vison: 3% incentive which is higher compared to udaan. • 2 windows paid quarterly. 2 non paid windows. • Target to bill SKU once a month forced to stock MSL Key Observations: Mid size sku’s 210,500 ml doing well in the market. Bundeled reckitt display at POS mostly with Moov. Benefits by high brand recall high POS with savlon lacks POD. Grocery Silver Gold Platinum Entry slab 13k 30k 50k Visibility 200 500 1000 Additional discount 20% KPI 1% MSL Incentive 0.5% Qualifier 2 category dressing Pharma Silver Gold Platinum Entry slab 7.5k 15k 30k Visibility 200 500 1000 Additional discount 20% KPI 1% MSL Incentive 0.5% Qualifier 2 category dressing
R and B Distribution: Gleaning insights from a leader Supply Chain Serviced by C&F Kompally 3rd party order placed 3 to 5 days. Service area- 35km 8 sales men 48 routes Vehicle- paggio- 3 vehicle observed average loading 40- 60%. Sales and Margin 1.5 Cr business p/m 15 days inventory 2.5 Cr to 4 Cr inventory value. Criteria for distributorship 2000 sqft space, 50 lakhs of business, Distributor infra. Technology used Stocky: Between company and distributor. Handles: Billing, reports, Account ,holding and inventory. Zoom:All salesmen have this app. Only syncing required for connectivity. Future Goals 20%YOY growth. Each region monitored by overall country sales. Aggressive ATL, BTL,Trade marketing, numeric distribution to reach target. Priyadarshani Enterprise 1600 outlets Order placed weekly-30% Forghtnightly- 30% Monthly- 40% 1400 grocery and others 200 Chemist
HUL 4 Divisions: Detergent, Brookbond, Personal Products, Food Fast Selling : Surf Excel Bar,Wheel; Red Label(100g); F&L; Axe, Clinic Plus Shampoo, Huggies(wonder pant) Retailer Margins: 8- 15% Distributor Margin:5.75% 1-2Week credit period Products % margins on MRP Detergents 8% Personal Products 10% Brooke bond 10% Huggies 15% Store type Minimum requirement A 100000 B 50000 C 10000 D Below 5000 Distributor info: • C&F: Medchal • Total Number of Outlets served: 2370(Uppal to Nampally) • Medical Outlets: 300 • Number of Salesman: 54 • Has to come to WD for dinking orders and takes orders for next day • Cash payment incentive 2%. Outlets targeted:Wholesale: 15 Retail Outlets: 25 Minimum outlets billed: 10 MonthlyTurnover: 6 crores Margin: C&F- 2% Stockist – 4%
P&G Sriven Corp is the biggest Distributor in Telangana Fast Selling: Laundary Category(Airel & Tide) Retailer Margins: 8-20% Distributor Margin:6% 1-2Week credit period, Average 50lakh of stock maintained. Products % margins on MRP Detergents 8% Paper category 10% Vicks 20% Pampers 15% Store type Minimum requirement A 135000 B1 100000 B2 80000 C1 50000 C2 35000 Distributor info: • MonthlyTurnover: 35-40 crores(10% Pharma, 8% Ecommerce) • Cash payment incentive 2% • Every 3 months the have schemes for a particular product. • Current scheme: 2% if retailer takes 3 pcs of each SKU of OLAY. Outlets targeted:Wholesale: 8-10 Retail Outlets: 35 • Minimum billing amount: 1000 • Number of Salesman: 183 • Number of hours spent in Market: 6 hrs • Vehicle used:Ape with 1 tonne capacity
Adding new outlets with potential: Navya Marketing Navya Marketing: Balanagar Total number of outlets in list 62 Outlets added 29 Outlets shut 24 Outlets not interested 5 Outlets not located 4 New outlets added not in the list 4 Key observations Small shops, no ease of access, Limited stocking ability,Variable operating hours, Low awareness. High “Fungibility” an advantage to ITC Goods bought from open market and common salesman Lack of proper display, tempory infrastructure as tendency to switch business quickly Bigger shops in the area not in the list not serviced on time problem in order taking and delivery Most Chemist shops have a clinic associated with them goods sold on doctors prescription 29 24 5 4 4 Break up of 66 outlets Outlets added Outlets shut Not intrested Not located New Outlets
Adding new outlets with potential: Navya Marketing 23 6 Types of outlets Predominantly Chemist Chemist+others 3 31 Categorization of outlets A others 25 5 4 Shelf display Small Medium Large Average SFT: 160 Average Turnover: 1100 Average footfall: 50-60
Adding new outlets with potential: MRL Trading MRLTrading : Malakpet WD Total number of outlets in list 93 Outlets added 50 Outlets shut 15 Outlets not interested 13 Outlets not located 10 Already Serviced 4 New outlets added not in the list 5 Key observations Many outlets in a concentrated area High “Fungibility” an advantage to ITC Goods bought from open market and common salesman Good potential for the products, need good follow up for good results Complaints regarding the supply of the ordered products Many stores with good infrastructure and potential 50 15 13 4 10 5 Break up of 97 outlets Outlets added Outlets shut Not intrested Already serviced Not located New Outlets
Adding new outlets with potential: MRL Trading 56 42 Types of outlets Predominantly Chemist Chemist+others 30 53 Categorization of outlets A others 35 33 13 Shelf display Small Medium Large Average SFT: 150 Average Turnover: 1100 Average footfall: 70-80
Adding new outlets with potential: S&S Distributor (Sanath Nagar) Total number of outlets in list 76 Outlets added 31 Outlets shut 10 Outlets not interested 10 Outlets not located 16 Others( Pharmacy, Already Taking from Distributor) 9 New outlets (not in the list) 45 Key observations Many outlets were complaining about late deliveries and salesman not visiting these outlets Salesman are not explaining various products and schemes properly Goods bought from open market: (Metro, Pawan Gen Store Erragadda, Thakur Begum Bazar, Bhavani, Padma in Koti) Many medical outlets are interested in keeping Food products of ITC as well. Irregular opening and closing time Lack of proper display because of size constraint 31 10 10 169 45 Break up of 76 outlets Outlets added Outlets shut Not intrested Not located Others New Outlets
Adding new outlets with potential: S&S Distributor (Sanath Nagar) 24 7 Types of outlets Predominantly Chemist Chemist+others 25 5 4 Shelf display Small Medium Large Average SFT: 140 Average Turnover: 2 lakhs Average footfall: 80-100
Building people and talent readiness: Benchmarking against competition Company Basic salary Maximum salary Dabur 7500 16000 Marico 6500 10000 Godrej 7000 9300 J&J 8000 13500 P&G 8000 18700 HUL 12000 15500 Incentive DABUR Target Others Individual target 4100 Focus brands 1000Stockist target 3900 MARICO Incentive Individual Target 1000 Quarterly Bonus 2000* (% of target achieved) Incentive GODREJ Target Focus brands 600 Individual target 2800 Active outlet productivity 1000
Salary Structure GSK Basic 10k fix + 2k PF Target Completion 6k Salary Structure J&J Basic 7.5k Incentives 7k – 10 k Salary Structure P&G Basic( Based on seniority) 8k, 10k, 11k PF 2k Target Completion 5k Salary Structure HUL Basic 12k Incentive 3.5k ValueTarget 1750 Perfect Day 700 Perfect Assortment 1050
Building people and talent readiness: Proposed model Name Company Experience Phone number Srikant Emami 2 xxxxxxxxxxxx Naresh johnson 2 Xxxxxxxxxxxx Ramesh private pharma 1 Xxxxxxxxxxxx LingamYadav GSK 5 Xxxxxxxxxxxx Srinivas Reddy Ayurwin 1 Xxxxxxxxxxxx parmeshwar reddy private pharma 1 Xxxxxxxxxxxx Suresh Unicharm 1 xxxxxxxxxxxx ITC (Proposed model) Individual Target 2000 Focus 500 DRCP 500 Service Star 3 star-1500 5 star-2000 7 star-2500 Perfect Day 500 ServiceStar-15 Secondary Sale- 5 Width target- 2 Focus-3 Perfect day-2 DRCP-1 Field Capability -2 Service star score= 5*%Target achieved + 2* (No of weeks achieved/4)+ 3* % of focus target+ 2* (Perfect day/30)+ 1* (If more than 2 stores added)+ 2* (no of days field capable/30) Service star computation: 5-8  3 Star 9-12 5 Star 12-15 7 Star
Implementing a separate chemist channel at KVB translating strategy to action: Analysis Key Observations: • PG Road, Diamond Point, Bowenpally are routes with high potential. • High education among retailers and consumers and retailers amenable to product activation. • 196 stores initially identified order taking with low SKU count can be serviced by the same truck which service other channels. 27 40 129 StoreType A+ A Other 116 80 Types of outlets Pure Chemist Chemistc + Other
Implementing a separate chemist channel at KVB translating strategy to action: Implementation TSP Problem:The distance covered by a salesmen assuming he starts from one point and covers all the location and returns back to the same point.We have modified theTSP problem slightly to start at point A and end at point B. Also since the sum of distance is minimum the sum of individual parts will also be minimum. Σ(A,B,C,D,E,F)= Minimum  Σ(A,B) , Σ(C,D) , Σ(E,F) all are minimum Route Route 1 Route 2 Route 3 Route 4 Route 5 Route 6 Route 7 Route 8 Route 9 Route 10 Route 11 Route 12 Route 13 Route 14 Route 15 Route 16 Route 17 Route 18 Route 19 WD 0 6.2 3.1 7 8.1 4.2 9 6.2 3 4 7.3 2.3 3 1 3.2 4.2 3.3 5 3.5 Route 1 6.2 0 4.6 3.8 6.6 2.4 4.4 1.7 5.6 5.5 8.4 2.8 4.3 4 1.8 6.5 4.6 1.6 3 Route 2 3.1 4.6 0 3.9 2.1 2.7 1 5.5 5.8 1.9 3.8 2.7 4.2 3 3.1 6.4 0.8 5.7 2.2 Route 3 7 3.8 3.9 0 5.5 3.3 2.9 5.2 7.1 5.4 7.4 4 5.5 5 2.1 7.7 4.1 6.1 2.5 Route 4 8.1 6.6 2.1 5.5 0 4.5 2.6 7.3 7.6 2.4 1.9 4.5 6 4.5 5.1 7.9 2.6 7.9 4.1 Route 5 4.2 2.4 2.7 3.3 4.5 0 3 3.2 4.1 3.1 6.1 0.7 2.5 2.1 1.4 4.7 2.5 3.5 2 Route 6 9 4.4 1 2.9 2.6 3 0 5.4 6.5 2.9 4.5 3.4 4.9 3.7 3 7.1 1.7 5.6 1.7 Route 7 6.2 1.7 5.5 5.2 7.3 3.2 5.4 0 6.3 5.9 8.9 3.3 4.8 4.4 3.2 7 5.3 0.2 4.3 Route 8 3 5.6 5.8 7.1 7.6 4.1 6.5 6.3 0 6 7.9 3.5 2.1 3.1 5.5 0.65 5.4 6 5.6 Route 9 4 5.5 1.9 5.4 2.4 3.1 2.9 5.9 6 0 3.4 3.2 4.7 3.2 4 6.5 1.8 6.4 3.7 Route 10 7.3 8.4 3.8 7.4 1.9 6.1 4.5 8.9 7.9 3.4 0 6.1 7.7 6.2 7 7.8 4.3 9.9 6 Route 11 2.3 2.8 2.7 4 4.5 0.7 3.4 3.3 3.5 3.2 6.1 0 2.1 1.8 2.1 4.3 2.7 3.9 2.6 Route 12 3 4.3 4.2 5.5 6 2.5 4.9 4.8 2.1 4.7 7.7 2.1 0 1.5 4.1 3.2 4.2 5 4.1 Route 13 1 4 3 5 4.5 2.1 3.7 4.4 3.1 3.2 6.2 1.8 1.5 0 3.6 3.1 2.8 4.6 3.6 Route 14 3.2 1.8 3.1 2.1 5.1 1.4 3 3.2 5.5 4 7 2.1 4.1 3.6 0 5.9 4.7 3.6 2.3 Route 15 4.2 6.5 6.4 7.7 7.9 4.7 7.1 7 0.65 6.5 7.8 4.3 3.2 3.1 5.9 0 4.6 6.3 4.5 Route 16 3.3 4.6 0.8 4.1 2.6 2.5 1.7 5.3 5.4 1.8 4.3 2.7 4.2 2.8 4.7 4.6 0 5.4 2.6 Route 17 5 1.6 5.7 6.1 7.9 3.5 5.6 0.2 6 6.4 9.9 3.9 5 4.6 3.6 6.3 5.4 0 4.6 Route 18 3.5 3 2.2 2.5 4.1 2 1.7 4.3 5.6 3.7 6 2.6 4.1 3.6 2.3 4.5 2.6 4.6 0 11 5 10 17 3 7 4 15 2 18 8 6 12 13 9 16 14 1 19 1.9 2.4 1.8 0.8 1 2.9 2.1 1.8 1.6 0.2 3.2 0.7 2.1 2.1 0.65 3.1 1 3.5 0 DAY 1 DAY 2 DAY 3 DAY 4 DAY 5 DAY 6 Route 10 Route 15 Route 13 Route 11 Route 17 Route 3 Route 4 Route 2 Route 1 Route 5 Route 7 Route 12 Route 9 Route 8 Route 6 Route 12 Route 16 Route 18 Route 14 Final Routing
Tackling the delivery problem Factory CFA Superstockist/ Hub Supervised/Unsupervised Substockist/ Spoke Retailer in low potential market Consumer Lack of consistent operating hours Less order from a particular area lack of profit for distributor Low ITO so accounts not important to distributor Difficulty in servicing outlets which fall in “other” category Outlets not discovered located Reasonsfordeliveryproblem Supervised model High level of control by the company on substockist Substockist monitored by company officials designated for this specific job Billed through Sify. Unsupervised model The Superstockists are generally charged with the job of appointing substockists and the company supervision ends at the Superstockist level itself. Billed and monitored at superstockist
Tackling the delivery problem: Special FC outlet Special FC incentive Basic incentive 2.5% of amount delivered Monthly fixed 4*50 Loyalty bonus 5% of annual delivery Sub distributors considered as Special FC outlets: Billed under current distributor as Special FC outlets. Additional Incentive to perform 4 deliveries per week. Monitored by ASE stores serviced by sub distributor active outlets on sify Outlets Register for special FC ASM selects the best possible outlet Salesmen takes order and updates special FC on deliveries Deliveries performed by special FC outlets Performance monitored by ASE and salesmen Requirements 400 Sft area Mode of transport Easy connectivity Fixed operation hours
Pharma Flexi sitara Entry slab 1k Visibility 100 Additional Discount on monthly target achieved 2% MSL Incentive 0.5% Display criteria 1 category dressing Monthly loyalty bonus 1% Creating a Trade marketing offer to beat competition Monthly Loyalty Bonus : Outlet has to cut at least 10 lines for 4 consecutive weeks to achieve additional benefit of 1% Increase the visibility of brands by providing a flexible plan for Phama outlets Pharma 3 Stars 5 star 7 star Entry slab 2.5k 5k 7.5k Visibility 250 +1.5% on turnover 500+1.5% on turnover 750 + 1.5% on turnover Additional discount on target 3% MSL Incentive(2 brands) 0.5% Display criteria 2 category dressing Monthly loyalty bonus 1% Sitara plan for pharma retailers Sitara plan Targeting established chemist outlets in urban clusters. Higher incentives based on fixed target achieved. Provides credit card to 5 star and 7 star outlets retailers can buy ITC products against the incentive accumulated with a additional 1% discount. Flexi Sitara plan Targeting smaller chemist outlets in low potential clusters. Flexible scheme where incentive will be disbursed according to percentage of target achieved.
Other General Recommendations Product Activation • Short term, high powered activation blitz by means of live project for MBA students • Activation at FC stores, ISS andA+ outlets ShunTheBurn campaign for savlon and Engage:More for deodrants • Use innovative methods like snapchat geofilters, twitter, Instagram to Engange:More IT recommend ations • Use simple dashboards like tableau • Minimal cost, Information available universally using a single link. Auditor • Audit of routes on a monthly random basis to access AVF criteria. • Audit to be done by a specially appointed auditor/AE. Incorporating Retailer suggestion • Smaller SKU in savlon 200, 500 ml. • Shower to Shower ”Beat the Heat” cap with 150 gm. Active addition of new outlets • Distributor retail coverage plan incentivizes addition of new outlets and service outlets not serviced within a particular route. • Outlets should be proactively added to sify and billing started promptly.
Other General Recommendations Effective communication • Better communication of products/schemes and incentives. • Pre communication of gift, gift slabs and qualifications. • ITC messages in local language. Building sales competencies • Buddy program where 7 star salesman andAE mentor regarding various aspects of sales. • Outlets where sales men spent more than 3 mins in conversation with the retailer resulted in 80% conversion rates.
References Reports • B. Joseph Pine, James H. Gilmore,The Experience Economy, Published by Harvard business press • Three rules for building the modern retail organization- BAIN & COMPANY • How retailers can improve promotion effectiveness- Boston Consulting Group • Emerging Consumer Demand- Nielsen • Re-Imaging Retail in India- BCG and CII • Conceptual Framework for designing a Rural Distribution Model for FMCG products in India:A Situational Guide • Demand Spotting: Rise of the Indian Chemist-Nielsen • FMCG industry analysis by- Indian Brand Equity Foundation • The Indian FMCG sector:The innovation imperative- PWC • Rethinking consumer product distribution in developing countries: ATKearney
References Books • Research Methodology - Naresh Kumar Malhotra • Retail Management – Ogden • Marketing Management by Philip Kotler • Sales and distribution Management by Venugopal • Retail Management by SC Bhatia Websites • www.Itcportal.com • www.itcindia.com • Wikipedia • Scribd • HUL website • R&B website • Patanjali website • Unicharm website • CMIE • Slideshare • Idea Make Market

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ITC_final_ppt

  • 1.
    The Go-to-Market RevolutionAUGMENTING VALUEBY RE-IMAGING TRADITIONAL CHANNELS
  • 2.
    Making a noteof our key expectations Mihir Shah Having experience in MR and IT looking forward to get an insight into S&D with a aim to build a complete profile Honest feed back about the work done and the places I can improve Leveraging channel power and sales force to effectively sell products in different markets Vinay Kasturi Execution of sales at retail outlets & dealing with the competitors Understand approach of different types of market Coordination of various levels in a distribution network Harshit Agrawal Understanding the sales and distribution in ITC Understanding challenges faced during launch of new product Understanding different approaches for different channels
  • 3.
    FMCG: A realitycheck 49 110 0 50 100 150 2015 2020 Total FMCG market size CAGR 14.7% Over all FMCG market to grow at a rate of 14.7% Rural market to grow at a rate of 17.7% CAGR Disposable income to rise at 4.3% CAGR 43% 23% 22% 12% FMCG segment break up F&B Health care Personal Care Household Food and personal care make up 2/3 of the revenues Urban market accounts for 2/3rd of the revenue Growing income augers well for the personal care market Growth Drivers in PCP category: • Rising income levels • Evolving lifestyle • Increasing discretionary spend • Availability • Growth of modern trade • New innovative products • Greater awareness and hygiene • Rural consumption • Government initiatives KeyTrends: • Product innovation • Premiumization • Brand consciousness • Expanding horizons • Backward Integration • Focus on Rural • Third Party Manufacturing • Private Labels • Expanding distribution • Small sized packets • Focus on enhancing presence
  • 4.
    Leveraging the chemistchannel: The fastest growing traditional retail channel 11.3% of FMCG sales. Expected to grow yoy by 20% Adds $6 billion in FMCG Sales Expected to add $12 billion in sales by 2020 90,000 chemist joined FMCG market in 2014- 2015 most of them in towns less than 10 lakh People trust their neighborhood chemists to choose personal care and healthcare products FMCG majors increasingly relying on them to push their premium products 22% of L’Oreal and 30% of bournvita sales comes through chemist channel
  • 5.
    Augmenting value throughthe chemist channel Creating a winning chemist channel Define and benchmark key competitors Analyze current outlets serviced Identify and add new outlets with potential Rank Outlets Identify and build talent- create a “Winning resource” Create aTrade marketing offer to beat competition Implement a optimized go to market route Outletsranked A+,A,other Type Ease of access SFT AverageTurnover Footfall Shelf Display ITO Benchmarking: Coverage norm in industry No of chemist outlet serviced by competitor Salesmen of competitor Trade Marketing offer of competitor.
  • 6.
    Distribution in ITC Factory Warehouse Distributor Market CashFlow Stock Flow Distribution Cost • Salesman Salary • Supervisor Salary • Vehicle rent WD Infra Salesman, Supervisor, Operator, Godown Incharge, Driver, Cashier Cigarette- Cash & Carry Atta- 7 days PCP- 15-21 days Credit Period Specifics Expected Actual Average number of outlets covered 35 32 Average number of billed outlets 20 15 Average time spent in Market 6 hours 4hours
  • 7.
    Voice from thefield Savlon has higher demand in urban clusters where consumers are more educated and retailers know the difference between Dettol and Savlon. High demand for 200 ml and 500 ml SKU of savlon among retailers. Chemist from a key part of consumer decision making process.They can influence consumers to substitute Dettol for Savlon. Generic products like Speclon, hixlon sold at 20% cheaper price in markets like Saidabad and Gagula ramaram. Due to pull factor prevalence of Dettol in all markets. If distributor does not service outlet on time prevalence of buying from open market. Ultra pro shampoo available only in one variant while head and shoulders and other competitive brands available in 6-10 variants.The different colour and hanging sachets makes Ultra pro virtually invisible. Many retailers do not have clear understanding of various schemes and these are not clarified by the salesmen hence they have a perception of being cheated. Axe invest heavily in displays and refreshes its inventory on a quarterly basis. Also fogg has a perception of “get more for less”.Axe also bundles its products of different variants into combo packs of 2/3. Due to delivery problems in area order placed on Wednesday reaches on Saturday hence no order placed on next Wenesday Old expired stock of J&J still not taken care of. New stock should be launched with retailer sample pack.
  • 8.
    Patanjali: The newage disruptor Patanjali Ayurvedic products limited Patanjali Gram Udyog Divyaa pharmacy Operations divided into four parts Biscuits and foods Vishal Arogya Sampath, TrimulgherryC and F for entireTelengana andAP 110 distributors, 85 Chikatsalay, 285Arogya Kendra inTelengana andAP Product range includes 189 medicines and 380 general products Honey, Ghee, Dant Kanti High sellout velocity handwash, soaps low 17 Cr p/m turnover of super distributor at average margin of 3-4% Cash up front model followed. No return on damaged and DND stocks. Average margins to retailers 14%
  • 9.
    Supply Chain Management WarehouseLocation Areas Serviced Medchal-9 Cr Sales mst imp KarimNagar 2.5Cr Rajamundry 3.5 Cr Kaddapa 2Cr Hyderabad Warangal East Godavari Nellore Mehubnagar Adilabad West Godavari Prakasham Medak Nizamabad Srikakulum Rayalseema area Rangareddy Vizag Factory and Manufacturing Warehousing Structure and SD infrastructure Order processing and channels Distributorship requirements Key Figures: • 85% order fulfillment • SD margin 3-4%, Distributor-5% Chikatsalaya and arogya Kendra 12-18% • Average monthly turnover 17 Cr Inventory holding 24 Cr • SAP B1 used to match demand and supply and forecasting based on historical data • Out sourcing model followed for various products and operating profit of 20%
  • 10.
    Patanjali Chikatsalay: Arevolutionary model Self-select outlets, High organization, market research based display,Total modern trade experience with guidance to consumers. • 3 doctors salary between 10,000 to 20,000- Free consultation, 90% purchase of prescribed medicines. Close to 50 Consultations per day. Neatly organized 3x1 feet racks Honey, ghee well stocked 60%, fast selling SKU’s prominently displayed at billing counter • 15+ lakh inventory maintained turnover around 8 lakh p/m also acts as a distributor servicing 6 areas with 1 beat plan each having 30-40 outlets. Many product lines with differential price points Introducing Ayurveda across categories Outsourcing model and strong backward and vertical integration Doctor consultation Induces trials and 90% conversion rates. High visibility, Day to day MIS reporting, Strong relationships
  • 11.
    UniCharm: Capturing massesthrough availability Value Capture through Quality, Large variety of SKU, and incentive schemes change every month. Types of Market: Baby Store, Chemist, Grocery,Wholesale, Convenience, Modern retail Retiler Margins: 15% Distributor Margin:5% Seasonal product 7-8 lakhs monthly sales during rainy season 4-5 lakhs monthly during summer season 1Week credit period, Average 2 to 3 lakh of stock maintained. Retailers prefer Mamy Poko Products % margins on MRP Mamy poko standard 14% Mamy poko Xtra Absorbent 15% Sofy 14% Wipes 15% Leafy 20% Store type Minimum requirement A+ 15000+ A 10000+ B+ 5000 B,C Below 5000 Schemes • 5+1 and 7+1 are the 2 most regular schemes • Display incentive schemes related to displaying stocks and cut outs 500 to 1000 quarterly. • Bandhan scheme: 1gm gold coin or 10gm silver coin based on cartons ordered. • Cash and carry 2% incentive. KeyTargets: Booking value 10000+ minimum Outlets targeted: 40-45 as per company policy 35 but to reach the target 40 Minimum outlets billed: 15
  • 12.
    Analyzing the routeand sales men behavior 21 11 3 Break up of stores Grocery Chemist Fancy Store 35 4 3 2 Number of stores targeted: 44 Visited Covered by other salesmen of same WD Shut Payment cleared 11 24 Number of Conversions: 31.5% Converted Not Converted Day 1 Route Ramnagar Time spent on route 165 mins Average time spent in each store 3.28 mins Time ofTravel 50 mins Average productive time 1.14 mins Unproductive time 75 mins Sales Achieved 12-13k Mp- 10000 sofy- 800 wipes 800 leafy 700 50 75 40 Time Spent: 165 mins Travel Unproductive Productive
  • 13.
    Analyzing the routeand sales men behavior 9 14 2 Break up of stores Grocery Chemist Fancy Store 25 4 Number of stores targeted: 29 Visited shut 13 12 Number of Conversions: 52% Converted Not Converted Day 2 Route KavidaGuda and Bholakpur Time spent on route 123 mins Average time spent in each store 2.12 mins Time ofTravel 28 mins Average productive time 1 mins Unproductive time 70 mins Sales Achieved 12.5k 28 70 25 Time Spent: 123 mins Travel Unproductive Productive
  • 14.
    Reckitt Benckiser: Gleaninginsights from a leader Seprate pharma channel post Paras pharma takeover effective product bundling Types of Market: Grocery, Bakery, Super Market,Convenience, Pan Shop, Cosmetic stores, Gift Stores Retiler Margins: 11% Distributor Margin:5% Service weekly once all outlets visited. Order placed weekly-30%, Forghtnightly- 30% and monthly- 40%. 15 days credit period in market focus on MSL Schemes • Uddan: Flexible scheme, No compulsory KPI and targets lesser incentive compared to vison. • Vison: 3% incentive which is higher compared to udaan. • 2 windows paid quarterly. 2 non paid windows. • Target to bill SKU once a month forced to stock MSL Key Observations: Mid size sku’s 210,500 ml doing well in the market. Bundeled reckitt display at POS mostly with Moov. Benefits by high brand recall high POS with savlon lacks POD. Grocery Silver Gold Platinum Entry slab 13k 30k 50k Visibility 200 500 1000 Additional discount 20% KPI 1% MSL Incentive 0.5% Qualifier 2 category dressing Pharma Silver Gold Platinum Entry slab 7.5k 15k 30k Visibility 200 500 1000 Additional discount 20% KPI 1% MSL Incentive 0.5% Qualifier 2 category dressing
  • 15.
    R and BDistribution: Gleaning insights from a leader Supply Chain Serviced by C&F Kompally 3rd party order placed 3 to 5 days. Service area- 35km 8 sales men 48 routes Vehicle- paggio- 3 vehicle observed average loading 40- 60%. Sales and Margin 1.5 Cr business p/m 15 days inventory 2.5 Cr to 4 Cr inventory value. Criteria for distributorship 2000 sqft space, 50 lakhs of business, Distributor infra. Technology used Stocky: Between company and distributor. Handles: Billing, reports, Account ,holding and inventory. Zoom:All salesmen have this app. Only syncing required for connectivity. Future Goals 20%YOY growth. Each region monitored by overall country sales. Aggressive ATL, BTL,Trade marketing, numeric distribution to reach target. Priyadarshani Enterprise 1600 outlets Order placed weekly-30% Forghtnightly- 30% Monthly- 40% 1400 grocery and others 200 Chemist
  • 16.
    HUL 4 Divisions: Detergent, Brookbond,Personal Products, Food Fast Selling : Surf Excel Bar,Wheel; Red Label(100g); F&L; Axe, Clinic Plus Shampoo, Huggies(wonder pant) Retailer Margins: 8- 15% Distributor Margin:5.75% 1-2Week credit period Products % margins on MRP Detergents 8% Personal Products 10% Brooke bond 10% Huggies 15% Store type Minimum requirement A 100000 B 50000 C 10000 D Below 5000 Distributor info: • C&F: Medchal • Total Number of Outlets served: 2370(Uppal to Nampally) • Medical Outlets: 300 • Number of Salesman: 54 • Has to come to WD for dinking orders and takes orders for next day • Cash payment incentive 2%. Outlets targeted:Wholesale: 15 Retail Outlets: 25 Minimum outlets billed: 10 MonthlyTurnover: 6 crores Margin: C&F- 2% Stockist – 4%
  • 17.
    P&G Sriven Corp isthe biggest Distributor in Telangana Fast Selling: Laundary Category(Airel & Tide) Retailer Margins: 8-20% Distributor Margin:6% 1-2Week credit period, Average 50lakh of stock maintained. Products % margins on MRP Detergents 8% Paper category 10% Vicks 20% Pampers 15% Store type Minimum requirement A 135000 B1 100000 B2 80000 C1 50000 C2 35000 Distributor info: • MonthlyTurnover: 35-40 crores(10% Pharma, 8% Ecommerce) • Cash payment incentive 2% • Every 3 months the have schemes for a particular product. • Current scheme: 2% if retailer takes 3 pcs of each SKU of OLAY. Outlets targeted:Wholesale: 8-10 Retail Outlets: 35 • Minimum billing amount: 1000 • Number of Salesman: 183 • Number of hours spent in Market: 6 hrs • Vehicle used:Ape with 1 tonne capacity
  • 18.
    Adding new outletswith potential: Navya Marketing Navya Marketing: Balanagar Total number of outlets in list 62 Outlets added 29 Outlets shut 24 Outlets not interested 5 Outlets not located 4 New outlets added not in the list 4 Key observations Small shops, no ease of access, Limited stocking ability,Variable operating hours, Low awareness. High “Fungibility” an advantage to ITC Goods bought from open market and common salesman Lack of proper display, tempory infrastructure as tendency to switch business quickly Bigger shops in the area not in the list not serviced on time problem in order taking and delivery Most Chemist shops have a clinic associated with them goods sold on doctors prescription 29 24 5 4 4 Break up of 66 outlets Outlets added Outlets shut Not intrested Not located New Outlets
  • 19.
    Adding new outletswith potential: Navya Marketing 23 6 Types of outlets Predominantly Chemist Chemist+others 3 31 Categorization of outlets A others 25 5 4 Shelf display Small Medium Large Average SFT: 160 Average Turnover: 1100 Average footfall: 50-60
  • 20.
    Adding new outletswith potential: MRL Trading MRLTrading : Malakpet WD Total number of outlets in list 93 Outlets added 50 Outlets shut 15 Outlets not interested 13 Outlets not located 10 Already Serviced 4 New outlets added not in the list 5 Key observations Many outlets in a concentrated area High “Fungibility” an advantage to ITC Goods bought from open market and common salesman Good potential for the products, need good follow up for good results Complaints regarding the supply of the ordered products Many stores with good infrastructure and potential 50 15 13 4 10 5 Break up of 97 outlets Outlets added Outlets shut Not intrested Already serviced Not located New Outlets
  • 21.
    Adding new outletswith potential: MRL Trading 56 42 Types of outlets Predominantly Chemist Chemist+others 30 53 Categorization of outlets A others 35 33 13 Shelf display Small Medium Large Average SFT: 150 Average Turnover: 1100 Average footfall: 70-80
  • 22.
    Adding new outletswith potential: S&S Distributor (Sanath Nagar) Total number of outlets in list 76 Outlets added 31 Outlets shut 10 Outlets not interested 10 Outlets not located 16 Others( Pharmacy, Already Taking from Distributor) 9 New outlets (not in the list) 45 Key observations Many outlets were complaining about late deliveries and salesman not visiting these outlets Salesman are not explaining various products and schemes properly Goods bought from open market: (Metro, Pawan Gen Store Erragadda, Thakur Begum Bazar, Bhavani, Padma in Koti) Many medical outlets are interested in keeping Food products of ITC as well. Irregular opening and closing time Lack of proper display because of size constraint 31 10 10 169 45 Break up of 76 outlets Outlets added Outlets shut Not intrested Not located Others New Outlets
  • 23.
    Adding new outletswith potential: S&S Distributor (Sanath Nagar) 24 7 Types of outlets Predominantly Chemist Chemist+others 25 5 4 Shelf display Small Medium Large Average SFT: 140 Average Turnover: 2 lakhs Average footfall: 80-100
  • 24.
    Building people andtalent readiness: Benchmarking against competition Company Basic salary Maximum salary Dabur 7500 16000 Marico 6500 10000 Godrej 7000 9300 J&J 8000 13500 P&G 8000 18700 HUL 12000 15500 Incentive DABUR Target Others Individual target 4100 Focus brands 1000Stockist target 3900 MARICO Incentive Individual Target 1000 Quarterly Bonus 2000* (% of target achieved) Incentive GODREJ Target Focus brands 600 Individual target 2800 Active outlet productivity 1000
  • 25.
    Salary Structure GSK Basic 10kfix + 2k PF Target Completion 6k Salary Structure J&J Basic 7.5k Incentives 7k – 10 k Salary Structure P&G Basic( Based on seniority) 8k, 10k, 11k PF 2k Target Completion 5k Salary Structure HUL Basic 12k Incentive 3.5k ValueTarget 1750 Perfect Day 700 Perfect Assortment 1050
  • 26.
    Building people andtalent readiness: Proposed model Name Company Experience Phone number Srikant Emami 2 xxxxxxxxxxxx Naresh johnson 2 Xxxxxxxxxxxx Ramesh private pharma 1 Xxxxxxxxxxxx LingamYadav GSK 5 Xxxxxxxxxxxx Srinivas Reddy Ayurwin 1 Xxxxxxxxxxxx parmeshwar reddy private pharma 1 Xxxxxxxxxxxx Suresh Unicharm 1 xxxxxxxxxxxx ITC (Proposed model) Individual Target 2000 Focus 500 DRCP 500 Service Star 3 star-1500 5 star-2000 7 star-2500 Perfect Day 500 ServiceStar-15 Secondary Sale- 5 Width target- 2 Focus-3 Perfect day-2 DRCP-1 Field Capability -2 Service star score= 5*%Target achieved + 2* (No of weeks achieved/4)+ 3* % of focus target+ 2* (Perfect day/30)+ 1* (If more than 2 stores added)+ 2* (no of days field capable/30) Service star computation: 5-8  3 Star 9-12 5 Star 12-15 7 Star
  • 27.
    Implementing a separatechemist channel at KVB translating strategy to action: Analysis Key Observations: • PG Road, Diamond Point, Bowenpally are routes with high potential. • High education among retailers and consumers and retailers amenable to product activation. • 196 stores initially identified order taking with low SKU count can be serviced by the same truck which service other channels. 27 40 129 StoreType A+ A Other 116 80 Types of outlets Pure Chemist Chemistc + Other
  • 28.
    Implementing a separatechemist channel at KVB translating strategy to action: Implementation TSP Problem:The distance covered by a salesmen assuming he starts from one point and covers all the location and returns back to the same point.We have modified theTSP problem slightly to start at point A and end at point B. Also since the sum of distance is minimum the sum of individual parts will also be minimum. Σ(A,B,C,D,E,F)= Minimum  Σ(A,B) , Σ(C,D) , Σ(E,F) all are minimum Route Route 1 Route 2 Route 3 Route 4 Route 5 Route 6 Route 7 Route 8 Route 9 Route 10 Route 11 Route 12 Route 13 Route 14 Route 15 Route 16 Route 17 Route 18 Route 19 WD 0 6.2 3.1 7 8.1 4.2 9 6.2 3 4 7.3 2.3 3 1 3.2 4.2 3.3 5 3.5 Route 1 6.2 0 4.6 3.8 6.6 2.4 4.4 1.7 5.6 5.5 8.4 2.8 4.3 4 1.8 6.5 4.6 1.6 3 Route 2 3.1 4.6 0 3.9 2.1 2.7 1 5.5 5.8 1.9 3.8 2.7 4.2 3 3.1 6.4 0.8 5.7 2.2 Route 3 7 3.8 3.9 0 5.5 3.3 2.9 5.2 7.1 5.4 7.4 4 5.5 5 2.1 7.7 4.1 6.1 2.5 Route 4 8.1 6.6 2.1 5.5 0 4.5 2.6 7.3 7.6 2.4 1.9 4.5 6 4.5 5.1 7.9 2.6 7.9 4.1 Route 5 4.2 2.4 2.7 3.3 4.5 0 3 3.2 4.1 3.1 6.1 0.7 2.5 2.1 1.4 4.7 2.5 3.5 2 Route 6 9 4.4 1 2.9 2.6 3 0 5.4 6.5 2.9 4.5 3.4 4.9 3.7 3 7.1 1.7 5.6 1.7 Route 7 6.2 1.7 5.5 5.2 7.3 3.2 5.4 0 6.3 5.9 8.9 3.3 4.8 4.4 3.2 7 5.3 0.2 4.3 Route 8 3 5.6 5.8 7.1 7.6 4.1 6.5 6.3 0 6 7.9 3.5 2.1 3.1 5.5 0.65 5.4 6 5.6 Route 9 4 5.5 1.9 5.4 2.4 3.1 2.9 5.9 6 0 3.4 3.2 4.7 3.2 4 6.5 1.8 6.4 3.7 Route 10 7.3 8.4 3.8 7.4 1.9 6.1 4.5 8.9 7.9 3.4 0 6.1 7.7 6.2 7 7.8 4.3 9.9 6 Route 11 2.3 2.8 2.7 4 4.5 0.7 3.4 3.3 3.5 3.2 6.1 0 2.1 1.8 2.1 4.3 2.7 3.9 2.6 Route 12 3 4.3 4.2 5.5 6 2.5 4.9 4.8 2.1 4.7 7.7 2.1 0 1.5 4.1 3.2 4.2 5 4.1 Route 13 1 4 3 5 4.5 2.1 3.7 4.4 3.1 3.2 6.2 1.8 1.5 0 3.6 3.1 2.8 4.6 3.6 Route 14 3.2 1.8 3.1 2.1 5.1 1.4 3 3.2 5.5 4 7 2.1 4.1 3.6 0 5.9 4.7 3.6 2.3 Route 15 4.2 6.5 6.4 7.7 7.9 4.7 7.1 7 0.65 6.5 7.8 4.3 3.2 3.1 5.9 0 4.6 6.3 4.5 Route 16 3.3 4.6 0.8 4.1 2.6 2.5 1.7 5.3 5.4 1.8 4.3 2.7 4.2 2.8 4.7 4.6 0 5.4 2.6 Route 17 5 1.6 5.7 6.1 7.9 3.5 5.6 0.2 6 6.4 9.9 3.9 5 4.6 3.6 6.3 5.4 0 4.6 Route 18 3.5 3 2.2 2.5 4.1 2 1.7 4.3 5.6 3.7 6 2.6 4.1 3.6 2.3 4.5 2.6 4.6 0 11 5 10 17 3 7 4 15 2 18 8 6 12 13 9 16 14 1 19 1.9 2.4 1.8 0.8 1 2.9 2.1 1.8 1.6 0.2 3.2 0.7 2.1 2.1 0.65 3.1 1 3.5 0 DAY 1 DAY 2 DAY 3 DAY 4 DAY 5 DAY 6 Route 10 Route 15 Route 13 Route 11 Route 17 Route 3 Route 4 Route 2 Route 1 Route 5 Route 7 Route 12 Route 9 Route 8 Route 6 Route 12 Route 16 Route 18 Route 14 Final Routing
  • 29.
    Tackling the deliveryproblem Factory CFA Superstockist/ Hub Supervised/Unsupervised Substockist/ Spoke Retailer in low potential market Consumer Lack of consistent operating hours Less order from a particular area lack of profit for distributor Low ITO so accounts not important to distributor Difficulty in servicing outlets which fall in “other” category Outlets not discovered located Reasonsfordeliveryproblem Supervised model High level of control by the company on substockist Substockist monitored by company officials designated for this specific job Billed through Sify. Unsupervised model The Superstockists are generally charged with the job of appointing substockists and the company supervision ends at the Superstockist level itself. Billed and monitored at superstockist
  • 30.
    Tackling the deliveryproblem: Special FC outlet Special FC incentive Basic incentive 2.5% of amount delivered Monthly fixed 4*50 Loyalty bonus 5% of annual delivery Sub distributors considered as Special FC outlets: Billed under current distributor as Special FC outlets. Additional Incentive to perform 4 deliveries per week. Monitored by ASE stores serviced by sub distributor active outlets on sify Outlets Register for special FC ASM selects the best possible outlet Salesmen takes order and updates special FC on deliveries Deliveries performed by special FC outlets Performance monitored by ASE and salesmen Requirements 400 Sft area Mode of transport Easy connectivity Fixed operation hours
  • 31.
    Pharma Flexi sitara Entryslab 1k Visibility 100 Additional Discount on monthly target achieved 2% MSL Incentive 0.5% Display criteria 1 category dressing Monthly loyalty bonus 1% Creating a Trade marketing offer to beat competition Monthly Loyalty Bonus : Outlet has to cut at least 10 lines for 4 consecutive weeks to achieve additional benefit of 1% Increase the visibility of brands by providing a flexible plan for Phama outlets Pharma 3 Stars 5 star 7 star Entry slab 2.5k 5k 7.5k Visibility 250 +1.5% on turnover 500+1.5% on turnover 750 + 1.5% on turnover Additional discount on target 3% MSL Incentive(2 brands) 0.5% Display criteria 2 category dressing Monthly loyalty bonus 1% Sitara plan for pharma retailers Sitara plan Targeting established chemist outlets in urban clusters. Higher incentives based on fixed target achieved. Provides credit card to 5 star and 7 star outlets retailers can buy ITC products against the incentive accumulated with a additional 1% discount. Flexi Sitara plan Targeting smaller chemist outlets in low potential clusters. Flexible scheme where incentive will be disbursed according to percentage of target achieved.
  • 32.
    Other General Recommendations Product Activation •Short term, high powered activation blitz by means of live project for MBA students • Activation at FC stores, ISS andA+ outlets ShunTheBurn campaign for savlon and Engage:More for deodrants • Use innovative methods like snapchat geofilters, twitter, Instagram to Engange:More IT recommend ations • Use simple dashboards like tableau • Minimal cost, Information available universally using a single link. Auditor • Audit of routes on a monthly random basis to access AVF criteria. • Audit to be done by a specially appointed auditor/AE. Incorporating Retailer suggestion • Smaller SKU in savlon 200, 500 ml. • Shower to Shower ”Beat the Heat” cap with 150 gm. Active addition of new outlets • Distributor retail coverage plan incentivizes addition of new outlets and service outlets not serviced within a particular route. • Outlets should be proactively added to sify and billing started promptly.
  • 33.
    Other General Recommendations Effective communication •Better communication of products/schemes and incentives. • Pre communication of gift, gift slabs and qualifications. • ITC messages in local language. Building sales competencies • Buddy program where 7 star salesman andAE mentor regarding various aspects of sales. • Outlets where sales men spent more than 3 mins in conversation with the retailer resulted in 80% conversion rates.
  • 34.
    References Reports • B. JosephPine, James H. Gilmore,The Experience Economy, Published by Harvard business press • Three rules for building the modern retail organization- BAIN & COMPANY • How retailers can improve promotion effectiveness- Boston Consulting Group • Emerging Consumer Demand- Nielsen • Re-Imaging Retail in India- BCG and CII • Conceptual Framework for designing a Rural Distribution Model for FMCG products in India:A Situational Guide • Demand Spotting: Rise of the Indian Chemist-Nielsen • FMCG industry analysis by- Indian Brand Equity Foundation • The Indian FMCG sector:The innovation imperative- PWC • Rethinking consumer product distribution in developing countries: ATKearney
  • 35.
    References Books • Research Methodology- Naresh Kumar Malhotra • Retail Management – Ogden • Marketing Management by Philip Kotler • Sales and distribution Management by Venugopal • Retail Management by SC Bhatia Websites • www.Itcportal.com • www.itcindia.com • Wikipedia • Scribd • HUL website • R&B website • Patanjali website • Unicharm website • CMIE • Slideshare • Idea Make Market