1. Project 1
Study of A Channel Partner
Sales And Distribution Management
By Prof Rajesh Panda
Group 11
Aakansha Kutariyar UM22321
Pritiparna Panda UM22354
Roshan Aditya UM22359
Sujit Kumar Sahu UM22366
2. Akzonobel India subsidiary of
Akzonobel N.V., a Dutch
multinational company that is
the world’s largest coatings
company and a major producer
of specialty chemicals.
Sectors Serving:
Automotive, Industrial,
Marine, Decorative, Protective
AkzoNobel in Decoratives:
• Revenue: Grew by 24% in
2022 to ₹1,450.5 crore.
• Profitability: 12.5% in 2022,
from 11.9% in 2021.
• Strengthened distribution
network: Opening new retail
outlets and strengthening its
relationships with key channel
partners.
About company
3. Purchasing Emulsion
Paints and Putty from
AkzoNobel
Storing the Products in the
Warehouse
Transporting to Retailers
Giving feedback to
AkzoNobel regarding
product quality,
customer satisfaction,
market opportunities,
and challenges.
Looking for new
retailers to expand the
distribution network
and increase the
market share.
Observing customer
preferences,
competitor strategies,
and demand
fluctuations, and
communicating the
same to AkzoNobel
.
Hiring and training sales
force.
Sales strategy ,target,
relationship
management,
Distributor:
Mr. Chandan Mohanty,
Operating in Northen Odisha ,
in the field since last 20 years
Activites of Distributor
4. Investment
Average Stock 62,71,233.00 No of days stock - 21 days
Computer 10,000.00 Cost of computer
Furniture/Fixture 10,000.00
WDV cost of Furniture and
Fixture
Total 62,91,233.00
Operational Expenses
Salary
2,88,000.00 2 salesman actual salary @12k pm Travelling
allowance of Salesman @ Rs 200 for 25 days
TA
1,20,000.00
Godown Rent
3,24,000.00
Godown rent for 1800 sqft @ Rs 15
BG charges
30,000.00
BG Charges paid to db for banks - 15 Lakhs
Electricity
24,000.00
Rs 2000 pm
Phones
21,000.00
Rs 250 pm across 3 nos + Data - 1K
Stationary
36,000.00
Sationary @ 3000
Freight
12,00,000.00
Basis Route working
Loader/Unloader
2,04,000.00
Salary of Loader/Unloader-8.5K @2
Computer
Operator Cum
Accountant
1,86,000.00
Salary @15.5K
Total
20,25,000.00
Gross Earnings
Fixed Margin from AkzoNobel(on COP) 2%
19,85,112.66
Margin from Retailer(on Sales) 1%
10,00,000.00
ATR (on Target Achievement from
AkzoNobel)
0.50%
4,96,278.17
Total
34,81,390.83
Inventory Days = 21 days
Stock Turnover = 12 X (30/21) = 17 times
Receivable Days = 23 days
Payable days = 14 days
Cash to Cash Cycle = Inventory Days + Receivable Days – Payable Days = 21 + 23 – 14 = 30
Cost of Purchase = Rs 9,92,55,633
Sales = Rs 10,00,00,000
Payables = (COP/365) *Payable Days = (9,92,55,633/365) *14 = Rs 38,07,065.38
Receivables = (Sales/365) * Receivable Days = (10,00,00,000/365) *23 = Rs 63,01,369.86
Gross Margin Percentage = 2%(from company) + 1%( from sales to retailer) + 0.5%(on
completing the target)
Deposit = Rs 25,00,000
Net Profit = Gross Margin – Expenses + Interest from company
Net Profit = 34,81,390.83 - 20,25,000.00 + 6% of Deposit = Rs 16,06,390.83
Return on Investment(ROI) = Net Profit / Investments
ROI = 16,06,390.83 / 62,91,233.00 = 25.53%
Measuring Distributor’s Profitability
5. Exploring additional marketing channels ,
Pull Strategy, participating in industry
events or trade shows
Diversify Marketing Strategies
Asian Paints' marketing and distribution
strategies
Monitor The Competitor
Advertising success stories of
current retailers,
Sharing their journey
Success Stories
Better incentivizing current retailers
Joining schemes for new retailers
strong personal relationships
Strong commitments
Incentives
ATTRACTING MORE RETAILER
6. Investment Strategy
Return On Assets
(ROA)
This measures how
efficiently the
distributor uses its
assets to generate
profits
CASH conversion
cycle (CCC)
ROA = 34,81,390.83/62,91,233.00
= 23.17 %
This is better than the
industry average of 14.7%
(based on data available
on screener.in)
CCC = Inventory Days
+ ReceviableDays
-PayableDays
CCC = 21 Days + 23 Days – 15
Days = 30 Days
Better than the industry
average of 35 days for the
paint industry in India for
2022. (Based on data
available in Moneycontrol)
This measures how quickly the
distributor can turn its working capital
into cash.
7. Ways to improve Profitability
Efficient inventory
management, including
forecasting demand
accurately, avoiding
overstocking
INVENTORY
Increase the Payable days
with Company to better align
with the Receivable days.
PAYABLE DAYS
Accelerating receivable collection
as well as
reducing the credit cycle of the
retailers and offer discounts to
retailers for early payment
COLLECTION
spend on marketing activities
in order to acquire retailers,
retaining customers
RETENTION
8. Distributor’s Performance
Fluctuating since last year
(Festive season did not help as
expected)
And sales force attrition
CUSTOMER
RETENTION RATE
Mr. Chandan’s numeric distribution is
10%, which is 5% below the industry
average
NUMERIC DISTRIBUTION
Performing at par with industry
standard
Service Duration
For the last quarter, Mr.
Chandan Mohanty could
achieve the target but it came
with a lot of difficulties.
SALES TARGET
9. DISTRIBUTOR EXPECTION
The company has set a fixed target for the
distributor, which may not be realistic or
achievable in the competitive market.
NOT SATISFIED
FLEXIBLE
TARGET
Relaxing payment periods and budget for
setting up kiosks , rewarding sales team
NOT SATISFIED
INCENTIVE
The company has increased the sales budget
for the distributor compared to the previous
year
EXPECTING MORE
SALES BUDGET
The company has provided an excellent
feedback mechanism to the distributor
SATISFIED
FEEDBACK
MECHANISM
ASM is approachable and responsive to the
distributor’s queries and concerns, which could
help build trust and rapport between the two
parties.
SATISFIED
ASM
10. WAYS FOR THE COMPANY TO ENHANCE CHANNEL
SATISFACTION
INCREASING SALES BUDGET:
The sales budget should be sufficient
to cover the costs of various channels
and platforms that the distributor uses
to reach potential customers
OFFERING COMPETITIVE
INCENTIVES
More attractive and competitive
incentive schemes to the
distributor and its sales team
INCREASING ADVERTISING
ACTIVITIES
increase its advertising activities to counter
Asian Paints, highlighting the features and
benefits of its products
MARKETING ACTIVITIES
Should increase its above-the-line
(ATL) and below-the-line (BTL)
marketing activities
GOVERNMENT TENDERS
Provide help and support to the
distributor to bag various
government tenders
ALIGNING GOALS AND METRICS
The target should be realistic and
achievable, and reflect the
distributor’s potential and capacity.
