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Being a distributor means optimizing costs while providing high customer satisfaction.
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What is ChangingThe Indian RetailerIndia Retailer values Margin but also Service &
ConvenienceComparison of service level of paints & welding
Indian Retailer is slowing beginning to understand the ‘Velocity of Sales ‘ conceptMake 2% but on a brand which sells faster vs. 5 %
on brand that takes long time
Increasing Retail Penetration makes it important to retain customers and increase service levels
Growth in retail in semi-urban and rural Needs distribution infrastructure & market
development
What is ChangingIndian LogisticsRadio Frequency Identification (RFID)
technology where everything that moves can talk to everyone, everywhere all the time. Cartons of milk, bottles of wine, clothes, wallets,
tyres, cars, pets and people sending out radio signals about what they are, where they are, and possibly what they are doing
GPRS controlled trucksInvestment in Road & Railway InfrastructureMore Organized Third Party Logistic Providers
What is ChangingIndian Tax RegimeGST will make ‘India’ a single market
Most important tax reform in India since 1947Eliminate the cascading impact of multiple taxes
Remove irrecoverable taxes such as CST, complex documentation of inter State movement of goods, entry barriers at State borders -long transportation times & entry taxes and octroi
Benefit states that propagate consumption since the final tax would be enjoyed by state that helped sell to the consumer.
Goods across states would be flowing with more ease
Distribution topology should hence be purely transportation and logistics led than taxation led
What is Not Changing
Relationships Matter. Even More
Distribution is much more than trucking & storing
Fulfillment of changing customer needs at optimal cost
Sustainable, Distribution in Changing Times
High Customer Satisfaction & Low Cost
To Achieve High Satisfaction & Low Cost
4 Cs for Sustainable Distribution
Coverage
Capability
Cost Control
Communication
CoverageService LevelWe need to benchmark against the best in our
channelAsian Paints ’s service level is more than 85 %
whereas that of other large paint companies falls between 50 and 60 percent
High Service Level (Availability of All Sizes & Products)
Zero Stock-outs: Every Stock-out gives an opportunity for competitor to come inWould a customer wait for a day to get company
brand?Would he travel an extra KM?
CoverageContinuous ImprovementSemi-urban and rural areas need to be priority
marketIncreasing coverage in the current markets is a
continuous activityThe more we increase our coverage, the less
the power unorganized and cheap brands
Bringing more & more dealers in direct retail will decrease power of wholesalers and un-organized brands
Cost Control
Need to Balance High Service Level with Distribution Cost ControlEffective inventory management
How many inventory days of stocks you keep ?
Effective control of credit outstandingHow many days of credit , how much interest
cost paid to banks., proportion of Cash/DD to cheque ?
Better Sales Forecasting leads to better cost management
Analyze past trends to arrive at a 90 per cent accurate sales forecast. Sales statistics by month, salesman, market, region and dealer.
Capability People ManagementHow do you assess performance. How can a Salesman say I had a good day or a
bad day ? Roles & Responsibilities ?How do you incentivize your sales force?
Besides money what do you think will motivate the sales force
Need for high quality training and recruitment of staff
How do you balance territories & cut travel time.
Are you satisfied with number of customers contacted every day
CapabilityHow Do You/Salesmen Spend Time ?
CapabilityEffective MerchandisingHot-Spot act as a CONSTANT SALESMAN and
provides incentives to buyDisplaying related items together builds
impulse salesShaving Cream & Shaving Razors
The best selling area on any display is between belt and eye level : 40” to 72”
Better export box packing presents attractive merchandising opportunity
Communication
Communication builds relationship. Communication improves channel management
Basic Software to do a small customer relationship managementSend dispatch details after the material dispatchSMS on birthday & marriage anniversary Orders received through SMS Payment reminders after 7/14 daysCommunicate price and other market information
Measures for High Customer SatisfactionHigh Shelf AvailabilityHigh Shelf Visibility High Reach Higher ‘Share of Business’ of OutletImproving Sales
Measures for Low CostLow Logistics CostLow Total Inventory Low Total Credit Days High Staff Productivity
To know more about us visitwww.mastersungroup.com
WRITE TO sarvajeet@theadiva.com+91 9920803060
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