Sales Force Management.

Sales Force Management.

Kashish MehrotraManvi JainIsha YadavArush SharmaDeeksha Kavita

Our Business.

2About us.Godfrey Phillips India Limited is the leading company of K.K Modi Group.Second largest players in the domestic cigarette industry after ITC.The Company with an annual turnover of approx. INR 4011 cr.(2012-13) A collaboration between Modi Group and PMI.

Sales Management.Sales Management means the planning, direction, and control of personal selling including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to personal salesforce. American Marketing Association The objectives of sales management are sales volume, contribution to profit and continuing growth. We recognize that selling only works when everything is right for the customerwhen we deliver value. Rick Makos .

Distribution strategies

Distribution Channel

FACTORY

CNF

WHOLESALE DISTRIBUTOR

WHOLESALE DEALER BASE

RETAILER

Distribution No. of distributors depends on the demand. They provide warehousing for the goods. Handle volumes of up to Rs. 5-6 Crore /Month. An Assistant Manager along with 1-2 sales assistants on the payroll of GPI are present. Sales teams are paid and managed by the distributors. All transactions are cash and carry.

Organizational structure/hierarchyRetailersSmall Retailer (Pan Shop)Sells 15-20 packs a dayMakes a margin of about Rs.10-18per packProcures cigarettes from a sub-whole seller on daily basis

Large Retailer Gets his goods from the company distributors directly The goods come to his shop via the sales team Cash and Carry Point of Purchase displays

Super stores and Hypermarts Sell larger packs. A very new concept in India.

Sales QuotasQuotas are fixed to every distributor to ease the sales to the point of retailers.Quotas have a time frame and change with in a month or year.Quotas in Cigarette industry are quantity based.The evaluation of a Asst.Sales manager depends upon achievement of quotas.Least role of marketing to pull demand, thus huge pressure on the sales team.

Type of quota used by the companySales Volume Quota.The stress is on how much quantity is to be pushed in a time frame of a month.They are geography centric.Unit sales is what is aimed for.Our target one billion sticks

How volume Quotas are set?Territory potential- North and west vs South and East part of country.Past sales experience.Sales person set their own quotas in south and east part of country.

Duties of Asst. Sales ManagerManage sales in the geographic territory.The performance of the sales rep is evaluated weekly .Their daily sales order is evaluated by the area executive.Each sales rep is given a geographical territory but sales potential is not considered and they are expected to cover at least 30 outlets daily and are provided with a beat/journey plan .Uses TPS software which tells them about the stocks available , details , client details and easy billing.

Selling ProcessForecasting ITC aims at forecasting system peaks using the following method.-A sales forecast is derived . ( demand estimation- collaborative forecasting (with dealers) and is based on last months sales )A load factor is modelled which tells the usage of the product.thus, peak demand= average demand/ load factor

Break down methodForecast is divided by average sales per person.It is best used when a organization wants to achieve certain sales volume.

Forecast sales Avg. Sales PersonSales force appraisalInput measures No. of days worked, Service calls, distributor meetings, Product sampling.Outcome method Sales volume generated, No. of new retailers approached,.19GPI SALESMAN PROFILE

70% motorized; 30% on bicycleMakes an avg. of 60 calls/day42% of retailers receive 2 calls daily Sell on an average 8,000 sticks a dayReceives limited credit facility from GPI WDcredit extended by WD only during launch periodSalesman offers daily credit to top end trade40+ % illiterate

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WHOLESALE CHANNEL SITUATION ANALYSIS:

58% of industry volume is driven by wholesale channel, 68,000+ nationally

PassiveLimited ability to expand Low margin product Cash based limited, no credit facilityPoor handling Trader mentalityNot motivated new brands

% Volume generated through wholesaleWholesale universe IPM handling coverage

Source: GPI/IPM estimate

21WHOLESALE CHANNELISSUE:

Low numeric and weighted distribution for Marlboro at retailGPI currently cover 36% of retail universe in 3 cities, 117K outlets rely on Wholesale Sizeable retail universes drive reliance on wholesale channelWholesale channel issuesHandling levelsOOS

AdultConsumerPUSHPULLIssueNo IssueIPMGPIWholesale Handling OOSRetail Handling OOS Handling OOS Handling OOSSource: Nielsen 22WHOLESALE CHANNEL B class1,349 wholesalersC class453 wholesalers28% of universe deliver 52% vol.72% of universe deliver 48% vol.A class705 wholesalers3 Focus Cities

Source: GPI/IPM estimate Hidden23ISSUE:Low numeric & weighted distribution at retail for Marlboro

SITUATION ANALYSIS:GPI direct retail coverage is only 36% of the universe within the 3 focus cities117k outlets rely on alternate product sourcing methods (wholesale, pherriwallas)IPM weighted distribution 37%, Numeric distribution 20%Industry has little knowledge of Pherriwalla modus operandi

ALTERNATE DISTRIBUTION CHANNEL - PHERRIWALLA Source: Nielsen24 POPULATION & INDUSTRY VOLUME - 2013Source: GPI; India Census 2010 PopulationCig VolNorth30%21%South22%46%East28%17%West20%16%GPI market strengths - North & WestHidden25GPI COVERAGE - 2013Source: GPI / ACNielsenGPI STRONG HOLDGPI PRESENCEGPI NO PRESENCELarge geographical area but only 53% of Industry Volume2010 Coverage : 673,000 DelhiGPI SOM % by State/City 45%82%16%65%35%2%35%30.5%75%17%HyderabadChennaiJaipurSrinagarDehradunShimlaPuneBhopalPatnaCochinLucknowAhmedabadChandigarhMumbaiBangaloreKolkataBhubaneswar6%2%7%26.1%Hidden26COVERAGE & VOLUME - 2012/13/14CITY201220132014COV.VOL.VOLUME CONTR. %COV.VOL.VOLUME CONTR. %COV.VOL.VOLUME CONTR. %DELHI21,52619538%22,53726938%23,49535539%MUMBAI20,66417534%22,82426237%23,85031935%PUNE5,039306%5,539446%6,039617%ROI32,02211622%32,02214120%32,02217219%TOTAL79,251517100%82,922717100%85,406907100%26RF MGA & KRETEK - Volume breakdown done in DELHI, MUMBAI & PUNE as per current secondary contribution.272010 BRAND AMBASSADOR PROGRAMProgram commenced on trial basis with 14 brand ambassadors in 2010

PERSONALIZED

Brand Ambassadors

Informal interactionConnecting/sampling to adult smokers in LA partiesCustomized eventsLarge reach, low costLow impact/WOMLow reach, very high costHigh impact/WOMInviting LAS friends to exclusive events only for them Key challenges in scaling up program: Right profile of people to be ambassadors and managing supervision/logistics Creating greater experience/WOW factor with program greater Word of Mouth

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