ITC's sales force structure, supply & distribution study by CIMP's student
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Transcript of ITC's sales force structure, supply & distribution study by CIMP's student
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Group:04Alok Kr.Amrita KumariBalram Kr.Deepti ManishaMayur KhandeliaPriya KumariRaushan Kr.Shourya SumanVikash Kr.Ved Prakash
A project on the study of sales & distribution of Sunfeast (ITC)
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About ITC Ltd.
Company Profile:
ITC was established on August 24, 1910
Indian public conglomerate company headquartered in Kolkata, West Bengal, IndiaITC's annual turnover stood at $7 billion and market capitalization of over $34 billionThe company is currently headed by Yogesh Chander Deveshwar (CEO)It employs over 29,000 people at more than 60 locations across India and is listed on Forbes 2000ITC Limited completed 100 years on 24th August 2010
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About ITC Ltd. (Contd.)
Vision
• To sustain ITC’s position as one of India’s most valuable corporations through world-class performance, creating growing value for the Indian economy and the Company’s stakeholders
Mission
• To enhance the wealth generating capability of the enterprise in a globalising environment, delivering superior and sustainable stakeholder value
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About ITC Ltd. (Contd.)
Food ( GR 1)
Personal Care
(GR 2)
Cigarettes( GR 3)
Bingo (GR 4)
Paper Boards(GR 5)
Diversified Product Categories:
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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
Objectives of the study
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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 retailersResearch tool• Questionnaire• Onsite observationSampling method: Convenient samplingSample size: 100 retail outletsAnalysis tool: M S Excel-2007
Approach for study
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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
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Strength Strong brand recognition and product portfolio Experienced Management Diversified Product PortfolioEstablished Research & DevelopmentGlobal market reachWell established distribution network
Weakness Dependence on tobacco revenues Negative Connection of TobaccoLow export levelsBrand Proliferation
Opportunity Low per capita consumption of personal care products Untapped rural Market Collaboration with foreign playerse-retailing
Threat Competition both Domestic & International Ban on smoking Competition from unbranded productsHigh competition from established companies
SWOT Analysis
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INTERVIEW OUTCOME
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Presence of ITC Ltd..
North (NDO)
East(EDO)
South(SDO)
West (WDO
)
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EDO Branches
Patna
Bhubaneswar04/10/2023 11
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Sales Hierarchy of ITC
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Recruitment
• Assistant under Trainee Top B-
Schools
• Sales Trainee Other
B- schools
• Lateral Recruitment (for the post of AE) by BM and HRM
Employee References and
Consultancy
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Level 5
Quality of hire
Level 4
Level 3
Level 2
Recruitment (Contd.)
Written Test - 3 sections. Total of 55 questions. Numerical - 15, Analytical - 20, Verbal - 20 questions.
Group Discussions / Business Plan Competition
Interview round 1st Round
Level 1CV Short listing
Interview round 2
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Training and Development
Induction Training
On Job Training
Internal Training
Competency Development
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Training and Development (Contd.)
Sales Trainee
Duration: 1 week
Place: HO
Induction Training:
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Training and Development (Contd.)
On Job TrainingDistributor’s Sales Person &
SupervisorTop distributors
3 Salesman are selected
New Entrant (S. Trainee & AUT)
Duration: 3days
New Sales Personnel
Training Through NIS
Process
On Job Training:
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Training and Development (Contd.)For Sales Trainee and AUT
Duration: 1 month
In Branch office
Internal Training:
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Branch Manager recommends AE
and AM for training
Location: Head Office
Duration: 6 Days
Training and Development (Contd.)
Competency Training:
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Compensation (Contd.)
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
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Performance evaluation of sales personnel
•Monthly Sales Target•Visibility Target
Monthly Target
•Sales Volume for each product category•Market share growth rate
Performance of the branch
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STAR WARS:
Quiz
Motivation
Updated
Performance evaluation of sales personnel
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Wholesale Distributor (WD)
WD
Salesmen
(Salary: 5-6
K)
Supervisors(Salary: 8K)
Driver/ Thelawala
(Salary: 3.5-
4k)
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WD employees: Recruitment and 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
Recruitment:
The salespersons of distributors are appointed by the distributor himself in consultation with ITC officials
Compensation:
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Salesmen Evaluation and Compensation
• The compensation received by salesmen depends upon the target achieved by them
• Targets under consideration:1. Monthly sales target2. Product wise sales target3. Category wise
WD employees: Recruitment and Compensation
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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
WD employees: Recruitment and Compensation
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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
WD employees: Recruitment and Compensation
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Distribution Channel
FACTORY
CNF
WHOLESALE
DISTRIBUTOR
WHOLESALE DEALER
BASE
RETAILER
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Channel Type
Company
Wholesale
Distributor
Wholesaler
Retailers
Consumer
Company
Wholesale Distributor
Wholesale
r
Consumer
Company
Wholesale Distributo
rRetailers Consume
r
2 -level Distribution Channel:
3-level Distribution Channel:
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Distribution Type
Exclusive (Textile)
Selective (Paper Boards & Cigarettes)
Intense (Other FMCG Products)
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Physical Distribution/Logistic
Mother Hub/Factory
Warehouse Service Provider
WD Godowns
Outlets
Central Warehous
e
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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)04/10/2023 33
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Effective Working of Channel Members (Contd.)
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%
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Essentials Check Bands Follow up action
Not Qualified Non Performing Replace with NSA
Not Qualified Bronze On Notice
Not Qualified Bronze Star/ Silver On NoticeBM to revert with
follow up plan
Qualified Non Performing On Notice
Qualified Bronze On NoticeTime bound action
plan
Qualified Bronze Star/ Silver Encouragement for further improvement
Actionable basis for WD evaluation:
Effective Working of Channel Members (Contd.)
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RETAIL SURVEY OUTCOME
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Companies rated best in service by retailers
HUL P&G Britannia ITC Pepsico Parle Nestle0%
5%
10%
15%
20%
25%
30%
35%
40%
45% 43%
18%
7%5%
7% 6%
14%
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Retailer’s reson for purchase from stockist’s
65%
35%
Easy access Attractive schemes
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Salesperson conveying about the products, rates and
schemes correctly
78%
22%
Yes No
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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
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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
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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
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