V/S

Impact of retail and internet on distribution and promotional support

given is analysed.
Insights into the service organization and various areas for conficts
providing concrete solutions in each case.
Channels for rural and institutional sales for both Samsung and
Nokia.
Information on distribution channels, trade margins ofered to the
dealers.
Promotional policies and sales force methods.
Skill sets required by the sales staf, recruitment and selection,
various training methods and compensation structure.
Sales organisation and territory design

Executive
Summary

Consumer Durable
ConsumerIndustry
durable industry is
growing at a healthy rate recorded
at a CAGR of 10% over Financial
Year 2003-12 and is expected to
have a CAGR of 13% over FY 03-15.
Consumer durables revenue was
USD 7.3 billion in FY 12 and is
expected to have USD 12.5 billion
in FY 15.
Growth which was expected in FY
14 was around 20%.
Consumer durables market is
expected to double at 14.7% CAGR
to USD 12.5 billion in FY 15 from
USD6.3 billion in FY10.
Demand from rural and semi-urban
areas is expected to grow at a

Share of Consumer
Durable Market in
India

Trend in Consumer Durable Sector

Sales of Mobile Phones by Category: Volume

2008-2013

Sales of Mobile Phones by Category: % Volume

Growth 2008-2013

Forecast Sales of Mobile Phones by Category:

Volume 2013-2018

Forecast Sales of Mobile Phones by Category: %

Volume Growth 2013-18

Sales of Mobile Phones by Rural vs Urban: % Retail

Volume 2008-2013

Smart Phone vs Feature Phone

market share in India

Fluctuations in the market shares of Smartphone

in and after 2013

Source: http://www.statista.com/statistics/269487/top-5-india-Smartphone-vendors/

Samsung Nokia Trend Analysis With Forecast for next 3 Years

Samsung

32.7

Nokia

Micromax

35

32.9

29
26

24

22

19

18.8

18

17.1
13

20

22

21.48

20.97

20.47

18

17.49

17

16.51

15

12
5.9

5
Q1 2013

5
Q2 2013

Q3 2013

4
Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

2015

2016

2017

Tablet Industry

Source: http://www.statista.com/statistics/371138/india-tablet-vendors-market-share/

Samsung was the market leader but Quarter 4 of 2014

shows that iBall now has the lead and Nokia and Microsoft
are not amongst the major players and hence shown in

Major changes in the target market

Initially launched as sophisticated product for the high end
customers, but the evolution of technology make it available as
low cost product and cheaper call rates opened the
gateways for these handsets to rural markets of India.
Companies focused on the competitive feature phones with
emphasis on ease of using to cater the rural market in India.
From feature phones companies are now more focused on the
budget
smart
Major
Changes
In phones.
Consumer Behaviour
Continuous increase in disposable income; there has been
a radical shift in the attitude and aspirations of the consumers.
Mobile phones are now an essential part of personal and
business life.
With a fast growing younger demographic and rapidly
expanding economy, the countrys smartphone numbers are

SAMSUNG & NOKIA

SALES

SAMSUNG - Sales organisation and territory design

Samsung divides Sales Setup in 3 trade zones which are General Trade,
CEO
Organized Trade and Modern Trade
CEO
Nationa
Nationa
ll Head
Head
Regional
Regional
Sales
Sales
Manager
Manager
Zonal
Zonal
Sales
Sales
Manag
Manag
er
er
Area
Area
Sales
Sales
Manag
Manag
er
er
Sales
Sales
Supervis
Supervis
ors
ors
20-25
20-25
Promoter
Promoter

General Trade

Head
Head
Office
Office

13
13 Regional
Regional sales
sales
Manager
Manager in
in India
India
Zonal
Zonal
Sales
Sales
Manag
Manag
er
er
Area
Area
Sales
Sales
Manag
Manag
er
er

Zonal
Zonal
Sales
Sales
Manage
Manage
rr
Area
Area
Sales
Sales
Manag
Manag
er
er

Zonal
Zonal
Sales
Sales
Manage
Manage
rr
Area
Area
Sales
Sales
Manag
Manag
er
er

Span
Span of
of
control
control
Few
Few
Promoters
Promoters

Regional
Regional
Office
Office
Zonal
Zonal
Sales
Sales
Manag
Manag
er
er
Bran
Bran
ch
ch
Offic
Offic
e
e

Chain
Chain of
of
Comman
Comman
d
d

Consum
Consum
er
er
Electroni
Electroni
cs
cs
Mobile
Mobile
Communicati
Communicati
on
on

IT
IT &
& Mobile
Mobile
communica
communica
tion
tion

Device
Device
Solutio
Solutio
ns
ns

Netwo
Digital
Netwo
Digital
rk
Imaging
rk
Imaging
Busine
Busine
ss
ss
Regional
zones

Corporate
Corporate
Managem
Managem
ent
ent

Key Analysis:

based
13 diferent
on Geographic & Value based
Regional Managers Span of
Control 5
Area Sales Managers Span of
Control 4
Area Sales manager has generally
50-60 promoters under him
20-25 promoters report to a Sales
executive/ Supervisor

SAMSUNG - Sales organisation and territory design

Organized
Trade
Regional
Regional
Sales
Sales
Manager
Manager

Separate
Separate
RSM
RSM for
for
Organized
Organized
Trade
Trade

Key
Key
Account
Account
Manager
Manager

Key
Key
Account
Account
Manager
Manager

Area
Sales
Manage
r

Area
Sales
Manage
r
Span
Span of
of
control
control

Croma,
Croma,
MobileStore,
MobileStore,
HotSpot
HotSpot
Catering
Catering Sales
Sales
Executive
Executive

Key Analysis:
Separate Regional Sales Manager under
whom there are 2 Managers who are called
the Key Account Managers
Span of Control reduces to 2 in Organized
Trade
Reliance Trade
They have a separate structure for trading
with Reliance Digital and Stores as per the
reliance requirement
Reliance has a Separate Regional Sales
Manager (RSM).
Do they
have
Separatebased
Rural /division
Institutional
have
Customer
as in
They
Sales Team
the case of Reliance.

Sales Force is
different for
general and
modern trade.

NOKIA - Sales organisation and

territory design

Sales force for general trade is geographic and size driven.

i. Based on the no. of counters are divided to each salesperson.
Where he visits approximately 25 counters in a day depending
on the size of the market.
National Head
ii. RSM holds a Regional Office and Branch office is allotted to ASM
from where he operates and handles the sales team.
Regional G M ( one iii. No specific division for the rural region at present. No. of
each for N , S ,W
counters visits per day is approximately 10 as compared to 25
& E)
in urban regions.
Separate sales force for modern trade like Croma, Reliance digital
Regional Sales
etc.
manager (3 to 4)
They have separate regional managers and below them they have 2in every region
3 key account managers who control the sales force.
. Sales force division is based on number of accounts rather
Area Sales
than geographic division in the general trade.
Manager
. Each salesperson handles 5-15 accounts based on the size
of the accounts.
. Like in general trade, specific monthly targets are also there
Sales Force
for these sales people.

Ranking of skill sets required for sales staff by

supervisors and sales staff to see whether they match and
the Recruitment and selection process?
Education: Graduation is must to join the team as a Sales
Representative.
Body Language: Subtle body language; make the customer
comfortable in interaction.
Relational: Representative has to be in touch with Distributers
and various retailers and to handle their issues.
Assertiveness: Being while making negotiations, Nokia seeks this
quality in its sales representatives.
Presentation and Communication Skills: Good communication
skills are necessary in order to interact with customers in the best
possible manner.
Attention to detail: With the availability of number of mobile
phones and tablets in the market with minor diferences in the
NOKIA -

SAMSUNG - Ranking of skill sets required for sales staff by

supervisors and sales staff to see whether they match and the
Recruitment and selection process?

Recruitment for a Sales Executive or promoter : tier 2-3 Graduate colleges

(BBA/BA)
Recruitment For a Area Sales Manager : Tier 1-2 colleges (Post Graduation
Degree)
3rd Party interviews for Sales trainee
Desired Skill Set for a Promoter or a Sales Executive:
Interpersonal skills:
Education: Graduation
Street Smart Skills
Relational: to be in touch with Distributors and various retailers and to handle their
issues.
Judged By: evaluating the responses according to a Fake Situation
provided.
SAMSUNG - Judging the effectiveness of different induction and training
Domain
Knowledge:
consumer
generally
more knowledgeable
methods
for (sales
staffin
aturban
frontarea
lineisand
supervisory
level)
and has knowledge
of brand and its competitor products.
Attention to detail: Must be able to diferentiate in the minute specifications
diferences in various mobiles , tablets.

3 Phase Training

SAMSUNG - Judging the effectiveness of different induction and training

methods for (sales staff at front line and supervisory level)

Refresher Training and Certifications

Refresher training at regular intervals.
All the promoter or sales executive has to give some internal certification
exams and have to clear it in 2/3 attempts else they are resent to training.
They have a strict rule of even firing the executives who fail the certification
twice no matter how well he performs in the field.

SAMSUNG - Compensation Structure

Area Sales Manager
Variable component is a %of the basic pay
Maximum is 150% of basic for 120%
target achievement.
Beyond this no raise is given.
% of Basic
Pay

% Target
Achievement

110%

100%

80-70%

80%

50%

60-70%

Promoter or a sales executive

Commission per piece sold up-to a maximum
of Rs 10,000
Incentive is fixed but is based on target
% of Incentive
Number of Pieces Sold
achieved
80%

1000 (example)

100%

2000-3000(1:2/1:3 ratio
based on area)

120% MAX

5000 (1:5 ratio)

Sales representative of the quarter and year

are given the company mobiles or coupons

SAMSUNG - Method of prospecting and reporting with degree of

sales force automation?
Area Sales Manager:
The number of promoters and sales supervisor is allocated by company based
on Value of Sales (dealer/retailer) and type of Stores (Big or Small).
Sales-force Automation is minimal.
Sales representative are tracked by calls and payment is still based on post
dated cheques. They do have a problem of cheque bouncing.

SAMSUNG - Sales force evaluation methods

Evaluation : based on the target achievement.
It is also based on bringing the payment on time from the dealer
which is based on relationship
Area Sales Manager also has a Credibility Matrix according to which he
marks for the sales executives or promoters and finally have a ranking
matrix to rank them.
SAMSUNG - Additional Info
Meetings are done on a weekly basis
Promoter has to visit each dealer atleast once every 3 days to built relationship and cater to
his problems
While selling the dealer he has to ensure the ratioVaries
of 1:5 Region
for Tablet
: Smartphone for big
to region

SAMSUNG & NOKIA

DISTRIBUTION

SAMSUNG vs NOKIA - Tracing the route back from retailer to

manufacturer to determine levels and intensity of
distribution at each level.
SAMSU
NG

EB
O

NOKIA

Focus on the general trade rather than

online sales.
Goods are delivered directly from the
company to distributor to dealers and then
to sub dealers.
The brand shops are the exclusive Samsung

NORT
H

SOUT
H

NORT
H

SOUT
H

Nokia Chennai
factory
Nokia Mother
Warehouse,
Gurgaon

EAST

WEST

HCL
Distributor
Re-distribution
Stockist Supplier
(RDSS) DELHI NCR
REGION

EAST

WEST

Retailers

SAMSUNG VS NOKIA - Trade margins and other discounts for

general trade, Modern retail and the Internet.
SAMSUNG
Diferentiated as per the types of
phones
MBOs -3% for the feature phones and
6% for Smartphone. Display schemes,
festive ofers, and time to time special
discounts as well.
EBOs - 2% less margins as that of the
normal retail outlets and display
discounts, financial schemes.
Samsung also provides the salesman
to these EBO's
Sub dealers- 2% for feature phones,
4% for the Smartphone. No special

NOKIA

NOKIA

HCL
Infosystem

Margin not
declared

18% margin

Redistributio
n Stockist
Supplier
2% margin

Dealers

6% margin

Microsoft
owned
Retailer
Stores

8% margin

Concept
Stores

NOKIA- Major changes in the distribution policies and their

impact
Distribution network :-HCL Infosystems
Over 1, 00,000 retail
outlets
800 direct distributors
12,400 channel partners
across 15,000 towns and
Microsoft
Authorised
664 districts
.

Distributors
Redington India Ltd.
Ingram Micro India Limited
Compuage Infocom Ltd

Microsoft Authorised Distributors provide

licenses for resale.
Merits by purchasing through a Microsoft
Authorised Distributor :
Access to dedicated sales representatives
Online
product
information
and
availability
Marketing Support
Pre-sales and post-sales training
Direct delivery for the products you
want to resell
Credit services
Licensing experts that can help you
configure even the most complicated
license solutions for your customers.

SAMSUNG -Are there any

separate channels for rural?

NOKIA -Are there any

separate channels for rural?
Yes, there are separate channels

To
have
high
market
for rural.
penetration
HCLI had an excellent wide Maintains a separate channel
reaching distribution channel and
for the rural market to reach
support centres.
maximum people
Partnership helped Nokia to
Distribution is more focused on
have a focused approach towards
the feature phones.
increasing penetration to Rural &
Only general trade is catered
Semi-urban areas
by the Samsung mobile in rural
Improvement in market share
NOKIA
and no SAMSUNG
franchise is and
given
in the Policies for canteen store
across the country.
departments
rural i.e. no EBO
Canteen stores department do not cater to the mobile segment for
Nokia or Samsung.

SAMSUNG VS NOKIA FRANCHISE MODEL

SAMSUN
TheG franchisees
are
provided by the Samsung
in retail sales- "Retail
Partners".
The land is owned by
the
franchisee.
To
become the retail partner
of the Samsung and they
have to deposit the
franchise fee and a
security deposit.
The franchise is only
available
till
tier
III
towns, not below that.
Samsung
provides
3

NOKIA

SAMSUNG FRANCHISE MODEL REQUIREMENTS

Samsung Smart
Cafes

Samsung Brand
Store

Minimum required
carpet area, between
450 600 sq.ft.
Single Plate on Ground
Floor.
Minimum ceiling height
required, 10.5 ft.
Minimum Frontage
required, 14 ft.
Located in a good Retail
market.
Metros and Tier I, II and
III cities can apply.
Following product
categories available for
retailing-Mobiles,
Tablets, Laptops,
Cameras and
Accessories.

Minimum required
carpet area, 1100 sq.ft.
Single Plate on Ground
Floor.
Minimum ceiling height
required, 10.5 ft.
Minimum Frontage
required, 14 ft.
Only for shops located
in A+ markets and malls
in Metro cities.
Following product
categories available for
retail-Mobiles, Tablets,
Laptops, Cameras, and
Accessories

Samsung Digital
Plaza
Minimum required
carpet area, between
1100 2400 sq.ft.
Preferably Single Plate
on Ground Floor
Not more than two
levels with entrance
from the ground foor.
Minimum ceiling height
required, 10.5 ft.
Minimum Frontage
required, 14 ft.
Located in a good retail
market.
Metros and Tier I, II and
III cities need apply.
All product categories
available for retailing.

SAMSUNG - MBO V EBO

MBO
6% margin on Smartphone
No Insurance on the
products
Finances for the products
worth Rs.50,000
They get some display
schemes from time to time
Free to choose any product
they want

EBO
2% less margin as
compared to MBOs
Free Insurance on the
products
Finances for the products
worth Rs.3,00,000
Additional discounts
subjected to the display
They get trained salesman
with high product knowledge
Have to keep all the
Samsung Mobiles
Some special schemes only
for EBOs

SAMSUNG IMPACT OF
NOKIA IMPACT OF MODERN
INTERNET
RETAIL
Lower Prices
Nokia assists priority dealers by assisting
Non authentic product
in the payments for the retail element part of
Fraud cases
their stores Dealer --takes care of the
Bills not accepted at the expenditure incurred on the services other
service
centres for than the retail element.
maintenance
The service charge payments for the retail
Illegal work
element --'core' and 'additional' elements,
Isnt fazed by the deep with dealers paying pro-rata with for only
online discounts
those services they all have use of, and an
SAMSUNG - Additional Info
additional element for any extras.
Totally depends on the dealer that: He may have 2 sales people from
Samsung to further train his sales person on a regular basis Or He may
not ask for the sales people but may ask for a similar amount of
promotion/ discount scheme.
MotiBaghMK Electronics ---5% processing---24% interest rate--Rs3000-4000 higher priced. Thus, credit card holders enjoy more

SAMSUNG - PROMOTIONAL
SUPPORT
Samsung uses multiple forms of promotions.
Pulls customers---advertising and pushes product as well---sales
promotion
Marketing vehicles across the year covering festive season as well as
non festive time.
NOKIA - PROMOTIONAL
Many ofers and discounts to its trade partners.
SUPPORT
Schemes: Mobile recycling --first introduced by Nokia, multiple
schemes to push sales ---added cash bonus of Rs.300-1500/ set for selling
a 5 specific lagging set in 4 days.
Sales Collaterals: They regularly send in posters and pamphlets of
latest releases, updated brochures and handset fact-sheets to assist
dealers in closing the sales.
Training the dealers: Nokia sends in its executives to dealers to
train them on the features and selling points of new launches and
handset models not performing to their potential.

NOKIA- Areas of horizontal and vertical conflicts

and solutions
Conflict areas:

Low Credit period :just 7 days compared to

15 days ofered by Samsung and LG
Low Margins
The damage piece policy
No pressure by Nokias executives
Poor after Sales Service
Solution:

Review the margins and the credit period

Have a multiple complaint channels
Push sales executives
Provide better purchase centric schemes
to the dealers.

Thank You