Presentation - Sales & Distribution at ITC
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This document provides an overview of ITC Limited, an Indian conglomerate company. It discusses ITC's business divisions, vision, mission and diversified product categories. It then outlines the objectives and problems in ITC's sales and distribution management. Specifically, it notes a lack of training for distributors' salesmen and inefficient sales strategies have led to issues like poor product recall and low motivation among sales staff. The document further details ITC's sales hierarchy, recruitment process, training programs, compensation structure and performance evaluations. It maps out ITC's distribution channels and provides recommendations to improve sales management, such as enhancing training and incentivizing adding new outlets.
Presentation - Sales & Distribution at ITC
- 1. 1 By: Group 11 (DoMS, IIT Roorkee) Saurabh Paul 12810073 Saurav Kumar 12810074 Shailendra Shankar Gautam 12810075 Sharad Srivastava 12810076
- 2. Company Profile: ITC was established on August 24, 1910 Indian public conglomerate company headquartered in Kolkata, West Bengal, India ITC's gross revenue for FY2013 stood at Rs. 43044 crores and market capitalization of Rs. 244245 crores The company is currently headed by Yogesh Chander Deveshwar (Chairman) It employs over 25,959 people (as on 31st March 2013) at more than 60 locations across India. Among India's Most Valuable Companies by Business Today. 2
- 3. About ITC Ltd. (Contd.) Vision • 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 3
- 4. About ITC Ltd. (Contd.) FMCG Hotels Agri- Business Packaging Paper Boards IT Diversified Product Categories: 4
- 5. Objective To create, communicate and deliver superior value to consumer though effective sales and distribution management. 5
- 6. Problem Statement Causes: – Lack of proper training to distributor’s salesmen. – Poor Infrastructural support (TPS software not updated on regular basis). – Inefficient sales strategy (territory allotted to salesmen doesn’t consider sales potential of region). Effect: – Problem of product recall by salesmen. – More focus on sales target rather than business expansion. (Salesman focuses more on large outlets which purchases in large volume). – Poor level of motivation among sales staff. 6
- 7. Context Time Context: 2010 Viewpoint: Y C Deveshwar 7
- 8. Background 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 customer—when we deliver value.” – Rick Makos (President, NCR-Canada) 8
- 9. Strength Strong brand recognition Experienced Management Diversified Product Portfolio Well established distribution network Weakness Dependence on tobacco revenues Negative Connection of Tobacco Low export levels 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 SWOT Analysis 9
- 10. Presence of ITC Ltd.. NORTH Division EAST Division SOUTH Division WEST Division 10
- 11. Sales Hierarchy of ITC Sales Trainee Area Executive Area Manager Assistant Manager Branch Manager Regional Branch Manager Division Manager 11
- 12. Recruitment • Assistant under Training (AUT)Top B- Schools • Sales Trainee Other B- schools • Lateral Recruitment (for the post of AE) by BM and HRM Employee References and Consultancy 12
- 13. 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 1 CV Short listing Interview round 2 13
- 14. Training and Development Induction Training On Job Training Internal Training Competency Development 14
- 15. Training and Development (Contd.) Sales Trainee Duration: 1 week Place: HO Induction Training: 15
- 16. Training and Development (Contd.) 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: 3 days On Job Training: 16
- 17. Training and Development (Contd.) For Sales Trainee and AUT Duration: 1 month In Branch office Internal Training: 17
- 18. Branch Manager recommends AE and AM for training Location: Head Office Duration: 6 Days Training and Development (Contd.) Competency Training: 18
- 19. Compensation (Contd.) Position CTC (in Rs. 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 Variable salary is decided on the basis of performance and target met by sales personnel 19
- 20. 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 20
- 21. STAR WARS: Quiz Motivation Updated Performance evaluation of sales personnel 21
- 22. Wholesale Distributor (WD) WD Salesmen Supervisors Delivery Boy Driver/ Thelawala 22
- 23. 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: 23
- 24. 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 employees: Recruitment and Compensation 24
- 25. 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 25
- 26. 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 26
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- 29. Channel Type Company Wholesale Distributor Wholesaler Retailers Consumer Company Wholesale Distributor Wholesaler Consumer Company Wholesale Distributor Retailers Consumer 2 -level Distribution Channel: 3-level Distribution Channel: 29
- 30. Distribution Type Exclusive (Textile) Selective (Paper Boards & Cigarettes) Intense (Other FMCG Products) 30
- 31. Physical Distribution/Logistic Mother Hub/Factory Warehouse Service Provider WD Godowns Outlets Central Warehouse 31
- 32. Effective Working of Channel Members 32 Performance is measured on following broad parameters: Distribution Health (Outlet coverage, availability, visibility levels, etc) Business Health (Sales Performance benchmarked to relevant Circle)
- 33. 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% 33
- 34. Essentials Check Bands Follow up action Not Qualified Non Performing Replace 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 Actionable basis for WD evaluation: Effective Working of Channel Members (Contd.) 34
- 35. Alternate Choices • Change in salesforce structure • Improvement in sales management 35
- 36. Improve Management • Proper training should be provided to salesmen. • Salesmen should be regularly informed about the changing offers and schemes on the products. • 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 . 36
- 37. Thank You 37