To study the sales and distribution chain from wholesale distributor point to the retailers for Bingo to analyze

sales gap and the expectation of retailers towards ITC distributors

Submitted in partial fulfillment of the MBA degree at IBS , HYDERABAD

Project Mentor : Samir Sikroria ,Area manager , Ganesh Maurya , Area executive, Marketing , ITC Ltd., Gurgaon. Prof. Satya prasad IBS , HYDERABAD Submitted by: Abhishek Pathak

Presentation Plan

Understanding the Sales And Distribution Chain Dynamics involved in a Sales negotiation Tracking Sales loss Across South Delhi Methodology implemented

Findings
Recommendation

Understanding the Sales And Distribution Chain (PHASE -1)

AE

ITC - WD link Leads Supervisor & DS Team

Wholesale Distributor
AE

Supervisor

WD - DS link Stock , Route , Sales Planning , DS Training & Development

Supply Chain
Salesman

WD - Channel link Sales , Merchandising

Channels
Grocery , Bakery , Chemist ,Fancy Stores , Consumption Centre Convenience , Hawker, ,HORECA , Wholesale

Salesman

Supervisor

Salesman

Processes in the chain

Wholesale Distributor
AE

Sales Call Close

Planning & Preparation

Supply Chain
Salesman

Channels
Grocery , Bakery , Chemist ,Fancy Stores , Consumption Centre Convenience , Hawker, HORECA , Wholesale

Sales Call Process

Merchandising Stock Check & Presentation

Supervisor

Salesman

Sales and Billing

Planning & Preparation

Load Adequate Stock , Merchandising Material Carry Pending Bill , Rack Cleaning Material , Bill Book

Coverage

Stock Check & Presentation

Check Stock On Hand , Expiry Stock , DND Inform Previous week sales , Suggest Purchase Quantity

Quality of Service

Sales Value/Volume

Sales and Billing

Confirm Order , Cut the Bill Deliver Order Clean Rack , Rotate new stock on rack , Hang Ladis Exchange DND .

Sales Deliverables

Line Cuts

Productivity

Merchandising

Bill Cuts
4

Inefficiencies in Loading
Loading Sale Negotiate Merchandising DND Collection

Delivered

Stock at hand Supplies Reserve Stock Cash at hand

Stock with DS

Stock at WD point Route Demand Carrying Capacity

Stock at WD

Dynamics involved in a Sales negotiation

DND Collection

Loading

Sale Negotiate

Merchandising

DS pushes available stock Maximize sale value , bill cuts, lines cut Retailers capacity to pay
SKUs Available
Retailers Push

Prefers high selling SKUs Prefers more credit & variety Induces Sales Cannibalization
SKUs Demanded

Demand
Salesmans Push

Supply

Inefficiencies in Merchandising
Loading Sale Negotiate Merchandising DND Collection

Stock Check Hanging Ladis Arranging on rack New Stock Rotation on rack

Expired stock Air out Packets Unsold / Obscured packets in stores Lost visibility

Tracking the Sales Loss

1551000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 1227182 1470000 1171624

323818

298376

Average Daily Actual Sales of Rs. 6917 Low Billed Outlets Coverage 30.71% Across 90 routes , 2000+ outlets , 2 WD points Expected Daily Sales of Rs. 8616 per DS High Average Daily loss of Rs. 1798 per DS Huge Demand Supply Mismatch Stock Unavailable Stock out 0.01% Sales loss of 20.5%

Routes covered
Avg daily actual sales 10000 8000 6000 4000 2000

BIN TU 8 7468

Routes Avg daily actual sales

GA UR AV 8 8024

DE EPA K 6 8687

PR AD EEP 9 10 8420.2 8579.1

LU CKY

SAT ISH 7 9102

WD Avg. 48 8380.1

Hybrid distribution model SHAKUJA SONS HIGHLIGHTS Two routes clubbed together in one day Alternate day cycle of Order Day (OD) and Supply Day(SD) Visibility of DS is just doubled per route No of outlets covered increased in one day. 14 day average : Inc Sales , inc bill cut HYBRID MODEL WEEKLY PLAN
DAY 1 ORDER BOOKIN G DAY 2 DELIVER Y DAY 3 ORDER BOOKING DAY 4 DELIVERY DAY 5 ORDER BOOKING DAY 6 DELIVERY HAUZRA NI KHIDKI EXTENSI ON KHIDKI EXTENSIO HAUZRANI N SEKH SARAI SEKH SARAI HAUZKH AS HAUZKH AS

SAKET

E A R L I E R AV G . B I L L C U T 17 BILLS/ROUTE BILL CUTS IN MODEL 24 BILLS/ROUTE

SAKET

AV G D A I LY 22/ROUTE AV G D A I LY 38/ROUTE,

OUTLETS OUTLETS

COVERED COVERED

MALVIY A NAGAR MALVIY A NAGAR

Retailers expectation and satisfaction level ( phase -2) Sampling Method field work 900 + retailer stores covered 72 respondents Data collection Primary data: Questionnaire. Observation and Interview technique.

Secondary data: Information is collected through company websites, various Bingo advertisement and marketing websites. From various text books. Journals and magazines.
10

Brand visibility and sales assessment

80 70 60 50 40 30 20 10 0 Lays Bingo 8 100% 95.80% 11.10% Bala ji No. of stores 20.80% Parles wafers 45.80% Yellow diamond crax 63.80% Uncle chips 80.50% Others 15 33 46 72

11
69 58

Percentage (%)

sales assessment
60 50 No of stores 40 30 20 10 0 Lays Percentage (%) No of stores 70.83% 51 Bingo 26.38% 19 Bala ji 0 0 Parles wafers 0 0

Yellow diamond crax 2.77% 2

Uncle chips 0 0

Merchandising activity of ITC distributors

12

Merchandising activity
35 30 No of stores 25 20 15 10 5 0 No. of retailers Percentage (%) Excellent 4 5% Good 35 49% Fair 29 41% Poor 4 5% Very poor 0 0%

In comparison to other brands merchandising activity of ITC distributor is good enough

Contribution of ITC products to the total sales

7%
17%

13

Contribution in sales
Less than 5% Between 5-10% Between 10-20%

32%

44%

More than 20%

Choice of stocking depends on?

Choice of stocking
100 90 80 70 60 50 40 30 20 10 0 No. of retailers Percentage (%)

No. of retailers

Demand 51 70.80%

Margin 10 14.20%

Shelf space 6 8.30%

Schemes and offers 5 8.70%

Advertiseme nt 0 0

TOTAL 64 100

Retailers satisfaction with schemes and discounts offered by distributors

14

Satisfaction rating
40 35 No of stores 30 25 20 15 10 5 0 Percentage (%) No. of Retailers Highly satisfied 5% 3 Satisfied 54% 39 Neutral 30% 22 Dissatisfied 11% 8 Highly dissatisfied 0 0

Hypothesis testing
1. Issue: Contribution of ITC products to the total sales of retailers. 15 H0: Contribution of ITC products to the total sales of more than 50% retailers is below 10%. H1: Contribution of ITC products to the total sales of more than 50% retailers is more than 10% Using Z test can prove this Computation of Z value Z= P-P/ sigma P P=0.50 q = (1-P) =0.50 N=72 (N-1) =71 Where P= X/N = Respondents favoring Ho Total sample size P=44/72=0.61

Sigma P= P (1-P)/ (N-1) Z= (0.61-0.5)/.059 Z = 1.86 k0.05=1.64 (table value of Z)

= 0.059

k0.05 = 1.64
Acceptance region

Rejection

2. Issue: Availability of ordered stock

16

H0: More than 70% of retailers are satisfied with the availability of ordered stock. H1: Less than 70% of retailers are satisfied with the availability of ordered stock Using Z test can prove this Computation of Z value Z= P-P/ sigma P P=0.70 (1-P) =0.30 N=72 (N-1) = 71 Where P= X/N = Respondents favoring Ho Total sample size P=39/72=0.54 Sigma P= P (1-P)/ (N-1) = 0.054 Z= (.54-0.70) /0.00406 Z = - 2.96 K=1.64 (referring table value of Z)

Findings of the project

17

Dissatisfaction with the schemes and discounts in collection of feedback and list out the queries of retailers Many of the retailers are not satisfied with the sales representative

Most of the retailers are expecting schemes and offers for retailers and they are dissatisfied with their margin. For a great margin they sometimes purchase the product from the local wholesalers which might cause to generate sales loss.
Most of the outlets are satisfied with the merchandising activity. It has been found that most of the retailers place the order every week and once in 15 days .It shows that many of the retailers frequently place the order i.e. means the products are market viable.

Recommendation
18

Retailers viewed that display of the products has influenced their sale and many people in some areas recognize the product not by its name but by its external appearance. As it is suggested that merchandising activity should be extended to all General retailers. Modernization and standardization of retailers network must be carried out in order to exchange ideas on successful selling strategies and identifying areas of improvements Sales through Services and a Retailer Development Program must be carried out. It is likely to advise to the sales representative, to give an opportunity to retailers to put their point of view during visit. Still few of the retailers choice of stocking depend upon the factors like margin, schemes, discounts and offers. It attracts bulk orders to distributor. Distributor must be taking care of satisfaction of retailers in respect to above given factors. Distributor should maintain stock of all ITC products. General discount and incentive from the company. periodically review the performance of their retailer

19