A REPORT ON

THE SALES FORCE STRUCTURE

OF ASHOK LEYLAND

Submitted By

GIRISHMA RASTOGI

A report submitted in partial fulfillment of

The requirements of

BBA Program of

Auro University of Hospitality and Management

Prof. Dr. Rohit Singh

Submitted on- 3/10/2015

Organization of Sales Force 1

Acknowledgement

Quality is not a result of accident. It requires severe determination, discipline and the will to learn continuously.

To create a work of quality a student requires high motivation and needs to be inspired from various sources.

This report on Organizing sales structure has been complied by us as a part of the curriculum of Bachelors Degree in Business Administration

A special word of Thanks to the module leader Dr.Rohit Singh for giving this opportunity to do a research oriented project and his guidance throughout the same thereby enhancing the learning experience.

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Index

SR. Number Description Page No.

1 Introduction about Ashok Leyland

1

2 Sales Force Organisation 2

3 Purpose of Sales Force Organisation

3

4 Organisational Structure of Sales Force

4

5 Important issues in starting new sales force from ground

5

6 Customer Relationship Management

6

7 Budgeting and Forecasting 7

8 Compensation and Evaluation

8

9 Recommendation 9

10 Appendix 10

11 Harvard Referencing 11

Organization of Sales Force 3

Ashok Leyland is an Indian based Automobile manufacturing company headquartered in Chennai. It is worlds 4th largest manufacturer of buses and 16th largest manufacturers of trucks globally. Ashok Leyland has net worth of more than US $ 2.3 billion (2012-13) and have their branches in more than 50 countries, it is one of the most fully-integrated manufacturing companies in manufacturing automobiles.

In 1948, Ashok Motors was founded by Raghunandan Saran in association with Austin Motor Company, England and started operations on 7 September for the assembly of Austin cars. In 1950, Ashok Motors and Leyland, UK associated and Ashok Motors permission to import, assemble and pleadingly manufacture Leyland trucks for seven years. In the year 1954, the government approved them for manufacturing commercial vehicles and granted them the license to manufacture one thousand Comets a year. Ashok Motors was named after the son of Mr. Saran, the founder. But in the year 1955, Ashok Motors became “Ashok Leyland” because of equity participation of Leyland Motors, Ltd.

Ashok Leyland is renowned for the continuous innovations that it does in automobile industry. For example in 1967, “Titan”- was the first double decker launched by Ashok Leyland which had almost fifty percent of the components indigenous. They also incorporated power steering on commercial vehicles and designed a thousand number of 6X4 ‘Hippo’ tipper for Indian Army based on its specific requirements.

Ashok Leyland launched India’s first hybrid CNG-plug in bus in the year 2010 which was used during the Commonwealth Games. In the same year, they launched U-Truck platform which had superior level of trucking. After having established themselves in manufacturing of trucks and buses, in 2011 they launched ‘DOST’ which marked their entry in LCV segment. They also launched a new brand – Leyland Dheere which manufactured construction related machines. It won many awards for being most fuel efficient.

In the year 1972, they were granted the license to manufacture ten thousand vehicles a year. And in 1974, for the very first time they experienced turnover of more than Rs 1,000 million. Celebrating their success and launching new products in the market each passing year, they were awarded with ISO 9001 Certification in 1993 making them the first Indian automobile company to receive such an award. They also received a certification to use one of its kind INFORMATION SYSTEM for SECURITY MANAGEMENT. Apart from creating and launching new and varied products, Ashok Leyland also believes in giving back to the society. Back in 1955, they established the first driver training facility in Namakkal, Tamil Nadu. Also, they wanted to keep their environment clean, henceforth in the year 1997 the first ever CNG-powered bus was handed to BEST. Also, in 2008 Albonair, Gmbh was established for the development of technologies which were environmental friendly.

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Sales Force Organization

It refers to the managing and allocation of work to the sales representatives so that the sales objectives as well as organizational objectives are achieved. The type of organization reflects the number of skilled and unskilled labor required, number of product lines, number of units to be manufactured, etc. For example, at Ashok Leyland both skilled and unskilled labor are required because to advance themselves in innovation they need highly qualifies engineers with themselves and unskilled are also equally required in the production of the various products manufactured at their unit. Since, Ashok Leyland has established itself in the market, it hold the capacity to increase its product line and increase the production of those products as well.

An effective sales force organization is where the wastage of resources is minimum because a company has limited resources to put to use, higher selling target with each passing year, employee satisfaction in the organization, employees’ needs fulfilled along with the goals of a company, etc.

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Purpose of Sales Force Organization

Organizing a sales forces is a task. But once it’s formed, the primary purpose of it is to help a company generate income and revenue. Apart from this, the other purpose of sales team is to increase the sales of the company and let people know more about their brand. In addition to this, its other purpose is to build the trust and maintain it with their customers. At all the stages sales representatives engage their customers. New customers need interaction and opportunities to know in great detail about the brand and existing customers require consistent follow up and communication. Sales representatives also work to re-engage their existing customers through promotions, discounts, etc. Building trust throughout the cycle of customer sales, the satisfaction among the customers’ increases.

At Ashok Leyland also the main purpose of the sales team is to help increase its sales of buses, trucks, etc. which are manufactured by them. It is thus their responsibility to market the product so developed once it leaves the manufacturing or purchasing department. The sales representatives at Ashok Leyland very well know the worth of their clients, henceforth, they make sure that all the needs and desires of their clients are met because the sales team there believes in maintaining long-term relationship with their clients. The result of sales department would also depend upon the other departments of the company like human resource, finance, etc.

Apart from these criteria, the sales force at Ashok Leyland also facilitates at bridging the gap between the market and the productive capacity of the firm. As the market changes, the sales functions accommodates itself through adjusting its sales operation. The sales force of the company is so effective and built so aptly that whenever there are shifts in the market size, market operations or market trends or any other environmental factors they are able to change their existing manner of operation This is the mark of an effective sales team because such a team provides scope for growth and adaptability to unpredicted changes.

The Sales team also makes sure that there is an effective line of communication. This is so because the company is a large-scale manufacturer, henceforth, well established lines of communication is required so that the staff at lower level know whom they should report their progress or grievance, if any. Also, it creates the basis of coordination and balance among the department. This is because of the well-defined organizational structure. A good organizational chart is communicating the possible avenues of advancement for the company.

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Organization Structure of Sales Force

At this company all the employees feel that the doors are always open to all of them and they feel very comfortable in giving feedbacks because they know they are being heard. There is no particular hierarchy, which has problems of its own. There is no particular way in which information needs to flow so often there is overlap and data redundancy in the company.

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Important issues in starting the new sales force from ground [1]

“Good salespeople are a rare commodity, effective sales managers are harder to find, and an outstanding sales director is the proverbial needle in haystack.” – Bob Gaudreau, Global Sales Director, Regus

‘Building a sales team from scratch is a task for CEOs. Bringing out revenue through sales, specially as a new venture capital diminishes, can either accelerate or decelerate company’s success.

The important points to be kept in mind before starting to form a sales team are:

1. Hire right: The first step in starting a new sales force is to hire the right people. In the hiring of people, one has to make the candidates pass through two tests. First, a formal questionnaire must be circulated among the candidates and they should be asked to fill in the correct answers whichever they feel is correct and second is to organise an interview with those candidates and grade them. In these two process, one will get to know about the job competency against the description of the job.

2. Induct and train: Second step is induction and training of the employee. The two terms are different. Induction is where an employee is acquainted about the culture of the company that it follows and training is where they are given formal education about the job that they have to perform in the company.

3. Activity over results: Since, the employees are new in the company, their primary task should be getting engaged in the activities and not worry about results. They should be made to answer cold calls or responses from the client and made to experience that situation rather than them focusing on solving the problem.

4. Show me the money: Being a sales representative is not an easy task. One has to face numerous rejections when one starts the career in this field. Hence, it becomes very important for the company to keep their employees highly motivated despite the rejections. The company should make sure that the employees are highly motivated morally as well as monetarily. But monetarily, in such case would prove to be a better factor to work upon.

5. Align with business targets: Sales representatives sometimes work in vacuum. They do not know why they are working, what is purpose behind it. So it must be made sure that they are very well aware about the business targets set by the organization and the representatives also know about it so that the purpose behind their work is clear to them.  

6. Live the product: A quality of a good salesperson which separated him/her from the crowd is that he/she is able to convince the customer in buying the product and making sure that they are liking it. This is possible only when the representatives themselves are “living” the product.

(Ashok Leyland sales grow 36% in January to 10,639 units – Appendix-I)

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Customer Relationship Management

CRM refers to a system where a business can implement to help and measure its sales activities. CRM and sales go hand in hand. And it’s the most required in that field.

CRM helps in easy access to lead intelligence in sales – They are closely linked with each other because sales and customer relationship management are integrated. Automatically the managers will be updated about the needs and requirements of the customers which will benefit them in selling their products intelligently.

Better Sales and Marketing Alignment - Sales and Marketing both have quantitative targets that need to be matched each month, and because they are integrated with CRM it is easier to locate whether the target so set is achieved or no.

Help Sales see what is important -A CRM not merely gives finished visibility into the sales pipeline, but it additionally helps reps prioritize who to call early so they don't miss vital opportunities. After Sales and marketing set up a CRM, they can recognize vital fields and apply a lead scoring system. It will inspire salespeople to prioritize the best opportunities instead of commencing on a disorganized find across a pipeline maximum of leads at assorted periods in the buying series.

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Budgeting and Forecasting

For a company to produce and endure in today's vibrant nature where profit margins are squashed and companies are compelled to work alongside lower prices, budgeting and forecasting are vital commercial areas for company success. The question lies not only designing the budget but also operating within the constraints of the budgets.

Budget refers to a detailed plan, expressed in quantitative terms, that specifies how resources will be acquired and used during a fiscal year or a determined span of time. The flow chart used to build a budget constitutes budgeting system and it has primarily five purposes.

Planning: The very first anf fore most reason of a budget is to give target numbers to a plan of action. The budgeting process pushes individuals who make up an organization to plan ahead. The development of a quarterly budget for Ashok Leyland, for example, forces the managers to plan for staffing and supplies needed to meet anticipated demand for the company’s services.

Facilitating communication and coordination: For any organisation to be effective, each manager throughout the company should know the plans made by other managers. The process puts together the plans of each decision maker in the company.

Allocating resources: An organisation’s resources are limited, and budgets provide useful measures to allocate the money in the right resources.

Controlling profits and operations: A budget is a plan, and plans are subject to change. Nevertheless, a budget serve as a useful benchmark with which actual results can be compared.

Evaluating performance and providing incentives: Comparing actual results with budgeted also helps task force leaders to assess the performance of each employee, their team, regional office and even zones and comapnies. Since budgets are used to evaluate performance, they also can be used to provide incentives for the people to perform well. For example, Ashok Leyland gives incentives for employees to improve profits by rewarding them with bonuses .

Forecasting refers to calculated por predicted estimate of how much sales revenue a country will have next year. It also looks at what one made in last year, and speculate by using statistical tools to see how the perfoermnace will be in the future. It helps in:

Making strategic decisions like when a company should launch a new product in a market so as to have a positive response from its customers,

By forecasting, one can know which time period is the busiest of all in a year so that it retains maximum of its staff at that time,

It also helps in calculating the profitable boom in or der to survive any slump, if any.

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Compensation and Evaluation

Motivation refers to those phenomena which are involved in the stimulation of action towards particular objectives where previously there was little or no movement towards these goals. It is a hypothetical process involved in the determination of behavior in addition to the effect of a stimulus or perceived situation, the processes of learning and certain other factors such as abilities. Compensation and evaluation also acts as motivating factors from sales representatives’ point of view.

According to research only ten to fifteen percent of sales force are self-motivated. Others aren’t motivated at all. Henceforth, motivation plays an important role in sales force organization. Importance of sales people is recognized because financial performance of people depends upon the achievement of sales volume objective.

There are two ways via which Sales Managers motivates its employees. First, monetary factors and other non-monetary factors. Monetary factors are the most important for the salesperson.

Considering all these factors, Ashok Leyland have adopted well developed compensation scheme for their Salesforce. A good compensation plans considers points from company’s as well as salesperson’s point of view. At Ashok Leyland, in order to attract, retain and motivate people the compensation of representatives is both regular and incentive. Incentive income is the bonus that they get on doing the extra work. Also, they have a fair payment plan so as to avoid any discrimination among the people on the same stature.

Evaluation is a technique where the work performed an employee is assessed by them as well as their immediate bosses so as to keep a check on whether the work performed is upto mark or no. This is done to ensure that compensation and other reward reimbursements are consistent and with actual salesperson performance. Also, to know that which employees have to be promoted in near future and to terminate the employment of those people who aren’t working properly and during their termination the evaluation report can act as an evidence of proof with the managers.

Evaluation is also an important job at Leyland. The people who deserve to be given training to improvise them is given to those sales representatives only. And those who lack in their work, counselling sessions are arranged for them. With this, they help human resource manager also in planning more effectively. Evaluation helps them in enhancing the communication between Salesforce and sales manager in clearer way and also help Salesforce be motivated.

Henceforth, compensation and evaluation plays an important role in sales force organization.

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Conclusion

Ashok Leyland provides commercial vehicles with world-class technology which is appropriate and affordable. With their consistent effort of sales team especially, Ashok Leyland has established itself in Indian as well as Global market.

At Ashok Leyland, they realize the worth of the sales team henceforth, they give special attention to their department which is considered next to top authority in chain of department. The present organizational structure followed by the company is highly efficient because during the time of crisis, the employees at lower level can easily contact their supervisor without any second thought. And the structure which they follow has both horizontal as well as vertical communication.

A good sales force is hard to build. It requires lot of effort and time. And now, over more than two decades of their operation in the market they make sure that the people they have in their sales department always help them strengthen their organization. Once, they find those people they make sure to retain them in their organization for longer periods via a good compensation plan.

“Together sales team form the vital link between us and our customers, however distant they may be located offering quality service to derive the best of our products, day after day.” – Vinod K Dasari, Managing Director, Ashok Leyland

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Appendix-I

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Harvard Referencing

[1] 2015. . [ONLINE] Available at:http://www.forbes.com/sites/forbesleadershipforum/2011/11/28/how-to-build-a-sales-team-from-the-ground-up/. [Accessed 30 September 2015].

[2]Ashok Leyland sales grow 36% in January to 10,639 units | Business Standard News. 2015. Ashok Leyland sales grow 36% in January to 10,639 units | Business Standard News. [ONLINE] Available at:http://www.business-standard.com/article/companies/ashok-leyland-sales-grow-36-in-january-to-10-639-units-115020200506_1.html. [Accessed 30 September 2015].

History | Ashok Leyland. 2015. History | Ashok Leyland. [ONLINE] Available at: http://www.ashokleyland.com/history#. [Accessed 30 September 2015].

What Is Sales Force Organization? | Business & Entrepreneurship - azcentral.com. 2015. What Is Sales Force Organization? | Business & Entrepreneurship - azcentral.com. [ONLINE] Available at:http://yourbusiness.azcentral.com/sales-force-organization-5074.html. [Accessed 30 September 2015].

Role of the Sales Force | Chron.com. 2015. Role of the Sales Force | Chron.com. [ONLINE] Available at: http://smallbusiness.chron.com/role-sales-force-763.html. [Accessed 30 September 2015].

Generators in Hyderabad | Diesel Generators in Hyderabad | DG Sets in Hyderabad. 2015. Generators in Hyderabad | Diesel Generators in Hyderabad | DG Sets in Hyderabad. [ONLINE] Available at:http://www.genesisinfra.com/. [Accessed 30 September 2015].

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