Sales & Distribution Management Assignment On

Developing A Sales Plan For A New Product

Submitted To: Submitted By:

Dr. Shantanu Shekhar Aniruddh Tiwari

M S Ramaiah Institute of Management

Product : Fruila Flakes

Product Description:-

Fruila Flakes is a fruit based corn cereal breakfast.

Unlike other corn cereals, Fruila Flakes has real fruit extracts.

It is available in 400 grams carton pack.

The pack has an assortment of 4 fruit based corn cereals.

The four flavors are Mango, Strawberry, Banana & Vanilla.

A clutter breaker from regular corn cereals.

Targeted at young children(influencer) and women in late 20s and 30s

(decision maker). Primarily in the urban areas.

Can be consumed directly or with hot/cold milk.

Competitors:-

Kellogg’s:

Although Kellogg’s is one of the largest players in corn cereal based

breakfast segment, but it’s not a direct competitor to Fruila Flakes as it does

not have fruit based cereal breakfast catagory.

Various regional & local players:

There are a few regional & local players operating in Bangalore region but

they pose a mild threat as they offer plain corn flakes only

Sales ‘Objectives-Strategies-Tactics’ For Fruila Flakes:-

Objective Marketing Strategy Sales Strategy Tactics (Plan Of Action) Penetrate the corn based

cereal breakfast market in

Bangalore region.

Enter the market through

Modern Trade Channel *

Evaluate & decide the

modern trade outlets in various localities of

Bangalore **

1) Negotiate with the

category managers of the

modern trade chains for

product placement and

compensation schemes.

2) Zero in the best possible

shelf space inside the

modern trade outlets.

3) Train & develop

promoters/salesmen who

can visit these outlets on daily basis.

* Since the brand is new and unheard among the target customers and targeted at

urban people, it is best suited that the brand enters the market through modern

trade route. In this way the promotional overheads will be in control and at the

same time it will provide maximum visibility among the target audience.

** It will be wise if the company evaluates the options available at their disposal.

Consider an example: In Bangalore there are more than 2100 modern trade stores.

Most of them are from national players like Future Group, Reliance Group, Aditya

Birla Group etc. Plus there are few regional players like Heritage, Smart etc. Out of

which approximately 75% of the stores are making profit. So it will be wise that

for a perfect product launch & acceptance these 75% of the stores be approached

and finalized. For the comprehension of this study we will consider Mathikere area

of Bangalore.

Estimating The Sales Forecast For Fruila Flakes:-

Generally sales forecast are done through following methods:

1) Qualitative Methods

2) Quantitative Methods

However, since the product is new it will be difficult to forecast the sales through

quantitative methods as these methods require previous years’ sales data to

estimate the future sales.

Therefore qualitative methods will be the most appropriate methods to forecast the

sales. Following can be few qualitative methods:

1) Survey of buyers’ intention method

This can be the most fundamental forecast where the customers preference

and his intention for buying the product can be assessed.

2) Delphi Method

This method can be effective when the company manages to gather expert

opinions from both the ends that is from the company’s management as well

as incorporating the views of the category managers of these modern trade

outlets.

3) Test Marketing Method

This is one of the best forecasting methods for new products. In our case

Fruila Flakes can undergo a full-blown test in the modern trade outlets of

mathikere area where the product acceptance & repurchase intentions of the

customers can be determined.

Once the sales forecast is done, the distribution arm & the promotional team have

to be activated for the proper acceptance of the product among the customers.

Distribution Of Fruila Flakes:-

The distribution of Fruila Flakes has to be so strong that it should be able to

provide the place, time and possession utility to its customers.

This can be achieved by tying up with as many as modern trade outlets as possible

in mathikere area.

Consider the figure on next page:-

Again it is evident that entering into the market through modern trade route

reduces burden on company overheads. The company can directly send its

products to the distribution centers of these modern trade chains where these

distribution centers (DC) ensure that the product is reached to each and every store.

This in turn reduces the dependence on C&FAs / CSAs, Distributors etc. and thus

lot of distribution & freight cost can be saved.

Call Or Beat Plan

As already a lot of distribution cost has been saved, the company can further

reduce the cost by doubling up the salesmen with product promoters. Since

both the jobs require frequent visits to these outlets a single person can

easily accomplish both the jobs.

A promoter’s job is to ensure that his company’s product enjoys maximum

visibility among the competition, the products are orderly arranged in the

shelves, there is no pilferage of the product, are the promotional schemes are

properly executed both – inside and outside the store etc.

Company Warehouse

Distribution Center for

Reliance Fresh Distribution Center for

More Hyper

Reliance Fresh

Outlet 1

Reliance Fresh

Outlet 2

More Hyper

Outlet 1

More Hyper

Outlet 2

Customers

Whereas a salesman’s job is to ensure that proper order cycle of the product

is maintained and orders are coming at regular interval. He is also

responsible for the growth of the business by initializing various

promotional activities. He has to maintain good relation with the category

managers of these modern trade chains.

Thus all of these activities can be achieved only when a proper call or beat

plan is in place. For example the call or beat plan for Mathikere area can be

as follows:

1) On Mondays all the modern trade outlets on new BEL Road should be

covered.

2) On Tuesdays & Wednesdays Mathikere east should be covered.

3) On Thursdays & Fridays Mathikere west should be covered.

4) On Saturdays rounds should be made in less performing areas and KSIs

& CSFs should be monitored & revised.

For devising proper distribution strategy, following aspects should be looked upon:

1) Deciding the level of customer service

2) Once the customer service is decided, distribution objectives should be

defined.

3) Clear steps should be mentioned to achieve the distribution objectives.

4) To execute these steps the distribution channel and workforce should be

properly structured.

5) All the policies and procedures should be clearly defined.

6) Key Performance Indicators should clearly marked

7) Critical Success Factors should be closely monitored and revised on time-to-

time basis.

THANK YOU