8/30/2013

Company Profile:
ITC was established on August 24, 1910 Indian public conglomerate company headquartered in Kolkata, West Bengal, India ITC's annual turnover stood at $7 billion and market capitalization of over $34 billion The 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 2000 ITC Limited completed 100 years on 24th August 2010
8/30/2013 2

About ITC Ltd. (Contd.)

Vision
To sustain ITCs position as one of Indias most valuable corporations through world-class performance, creating growing value for the Indian economy and the Companys stakeholders
8/30/2013

Mission
To enhance the wealth generating capability of the enterprise in a globalising environment, delivering superior and sustainable stakeholder value
3

About ITC Ltd. (Contd.)

Diversified Product Categories:
Food ( GR 1) Paper Boards Personal Care

(GR 5)

(GR 2)

Bingo
8/30/2013

Cigarettes ( GR 3)
4

(GR 4)

Objectives of the study

1. To make in depth study of recruitment process of sales personnel; their training and development; compensation, evaluation & control by the company 2. To 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 of the company 5. To suggest the proper solution for the inefficiencies and inaccuracy found in the process 8/30/2013

Approach for study

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 companys sales official and retail survey) Methodology followed:a. Structured Interview of companys sales officials b. Survey of retailers Research tool Questionnaire Onsite observation Sampling method: Convenient sampling Sample size: 100 retail outlets Analysis tool: M S Excel-2007
8/30/2013 6

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
8/30/2013 7

SWOT Analysis
Strength
Strong brand recognition and product portfolio Experienced Management Diversified Product Portfolio Established Research & Development Global market reach Well established distribution network

Weakness
Dependence on tobacco revenues Negative Connection of Tobacco Low export levels Brand Proliferation

Opportunity
Low per capita consumption of personal care products Untapped rural Market Collaboration with foreign players e-retailing
8/30/2013

Threat
Competition both Domestic & International Ban on smoking Competition from unbranded products High competition from established companies
8

INTERVIEW OUTCOME
8/30/2013 9

Presence of ITC Ltd..

North
(NDO) South (SDO)

East
(EDO) West (WDO)

8/30/2013

10

EDO
Patna
Bhubaneswar Guwahati

Visakhapatnam

Kolkata

8/30/2013

11

Sales Hierarchy of ITC

District Manager Regional Branch Manager Branch Manager Assistant Manager Area Manager Area Executive Sales Trainee
8/30/2013 12

Recruitment
Top B- Schools
Assistant under Trainee

Other
B- schools Employee References and Consultancy
8/30/2013

Sales Trainee Lateral Recruitment (for the post of AE) by BM and HRM
13

Recruitment (Contd.)
Level 1
Level 2 Level 3 Level 4
Level 5

CV Short listing
Group Discussions / Business Plan Competition
Interview round 1st Round Written Test - 3 sections. Total of 55 questions. Numerical - 15, Analytical - 20, Verbal - 20 questions. Interview round 2

8/30/2013

Quality of hire

14

Training and Development

Induction Training

On Job Training
Competency Development
15

Internal Training
8/30/2013

Training and Development (Contd.)

Induction Training:

Sales Trainee

Duration: 1 week Place: HO

8/30/2013

16

Training and Development (Contd.)

On Job Training:
New Sales Personnel Training Through NIS
Distributors Sales Person & Supervisor On the job training

Process
Top distributors 3 Salesman are selected Duration: 3days
17

New Entrant (S. Trainee & AUT)

8/30/2013

Training and Development (Contd.)

For Sales Trainee and AUT

Internal Training:

Duration: 1 month

In Branch office
8/30/2013 18

Training and Development (Contd.)

Competency Training:
Branch Manager recommends AE and AM for training

Location: Head Office

Duration: 6 Days

8/30/2013

19

Compensation
Position Branch Manager Assistant Manager Area Manager Area Executive Sales Trainee CTC (in Lakhs annually) 18 - 20 12 - 14 8 - 8.5 5.5 - 6.5 2.5 - 2.6 Variable 20% of CTC 20% of CTC 20% 0f CTC 20% of CTC 20% of CTC

Variable salary is decided on the basis of performance and target met by sales personnel
8/30/2013 20

Performance evaluation of sales personnel

Monthly Target
Monthly Sales Target Visibility Target

Sales Volume for each Performance product category of the branch Market share growth rate
8/30/2013 21

Performance evaluation of sales personnel

STAR WARS:
Quiz

Motivation

Updated
8/30/2013 22

Existing distribution system in patna

3SDealership - Amar Jyoti Auto Pvt Ltd. and Magadh Auto Agency
Amar Jyoti Auto Pvt Ltd
Hajipur Mahua Patna city Biharshrif Barh

8/30/2013

23

Wholesale Distributor (WD)

Amar Jyoti Auto Pvt Ltd

Supervisor s (Salary: 5-6 K) (Salary: 8K)

Delivery Boy (Salary: 2.54K)

Driver/ Thelawal

(Salary: 3.5-4k)

Dealer employees: Recruitment and Compensation

Recruitment:
The salespersons of dealer are appointed by the dealer himself in consultation with Bajaj officials

Compensation:
Their fixed salary is paid by the dealer The variable salary of salesmen is decided on his meeting of sales target Travelling expense

8/30/2013

25

Dealer employees: Recruitment and Compensation

Salesmen Evaluation and Compensation

The compensation received by salesmen depends upon the target achieved by them
Targets under consideration:
1. 2.
8/30/2013

Monthly sales target Category wise- Diesel (Rs 1000), petrol (Rs 300)
26

Dealer employees: Recruitment and Compensation

Control mechanism:
The performance and work evaluated by GM of the dealer and company ASM take report from GM. Their daily sales order manage by GM and SM. Sales executive work in their respective route and stand allotted to them. SE should submit daily working report to SM every evening.
8/30/2013 27

Dealer employees: Recruitment and Compensation

Role of Salesmen:
Prospecting- Searching for new customers in auto stand Targeting- Visiting and calling potential customers Communicating- Informing about products and offers Selling to interested customers who are willing to drive for commercial purpose or who are willing to give auto on rent to other drivers Information gathering- About needs/ preferences of customers such as finance, service, etc
8/30/2013 28

8/30/2013

29

Distribution Channel
FACTORY in WALUJ

DEALER
8/30/2013 30

Channel Type
1-level Distribution Channel:
Company

Customer

Dealership

8/30/2013

31

Distribution Type
Exclusive (Textile)

Selective (Paper Boards & Cigarettes) Intense (Other FMCG Products)

8/30/2013

32

Physical Distribution/Logistic
Mother Hub/Factory
Central Warehouse
Warehouse Service Provider

WD Godowns

Outlets
8/30/2013 33

Selection of Channel Members

Product wise Credibility of channel member Fast payment High turnover

8/30/2013

34

Evaluation and control of Channel Members

Business Area wise Evaluation 1. Convenience 2. 3. 4. Grocery 1/3 Grocery 2 WD system & Processes 25 25 25 25 Percentage

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)

8/30/2013 35

Evaluation and control of Channel Members (Contd.)

Score card for Measurement of WD Performance:
Bands Platinum Gold Silver Bronze Star Bronze Score > 95% 85-95% 80-85% 75-80% 60-65%

Non Performing

< 60%

8/30/2013

36

Evaluation and control of Channel Members(Contd.)

Actionable basis for WD evaluation:
Essentials Check Not Qualified Not Qualified Bands Non Performing Bronze Follow up action Replace with NSA On Notice

Not Qualified

Bronze Star

On Notice BM to revert with follow up plan

On Notice On Notice Time bound action plan Encouragement for further improvement
37

Qualified Qualified

Silver Gold

Qualified

Platinum

8/30/2013

RETAIL SURVEY OUTCOME

8/30/2013 38

Companies rated best in service by retailers

45%
40% 35% 30% 25% 20% 15% 10% 5% 0% HUL
8/30/2013

43%

18% 14% 7%

5%

7%

6%

P&G

Britannia

ITC

Pepsico

Parle

Nestle
39

Retailers reson for purchase from stockists

Easy access
35% 65%

Attractive schemes

8/30/2013

40

Salesperson conveying about the products, rates and schemes correctly

Yes
22%

No

78%

8/30/2013

41

Problems in Sales and Distribution system at ITC

Lack of proper training to distributors salesmen Territory allotted to salesmen doesnt 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 market at a time TPS (Sify software) is not updated regularly
8/30/2013 42

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 number of outlets served by them too rather than merely on sales volume
8/30/2013 43

References
Sergio Romn, Salvador Ruiz, Jos 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

8/30/2013

44