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Sales and distribution management at coca cola

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Sales and distribution management at coca cola

  1. 1. Sales and Distribution ManagementGroup 7LBSIM, New Delhi
  2. 2. Flow of Presentation  Company Overview  Product Specifications  Business Model  Market Classification, Segmentation  Sales Organization Structure  Sales Force Motivation  Forecasting, Distribution Model  Coke vs. Pepsi  Logistics, Product Flow  Performance Management  Promotional Schemes  Margins & Financials  Recommendations
  3. 3. Company Overview Coke re-entered India in 1993 Coke India comprises of:  Coca-Cola India  Hindustan Coca-Cola Beverages  Franchisee bottling operations Coke globally serves 500 brands in 200 countries @ 1.7 billion servings per day Operates a franchised distribution system 1889 Market Cap: $167.25 Billion (Global) Revenues: $46.542 Billion (Global) Employees = 25K direct & 150K indirect (India)
  4. 4. Product Specifications
  5. 5. Contd.
  6. 6. Promotional Schemes  Soft drinks:  600ml 1case + 2x500ml soda free  600ml 2case + 5x500ml soda free  2 litre 1case + 2x500ml soda free  1.25litre 1case + 1.25litre Limca free (1.5litre out of stock)  Juice:  1.25litre 1case Mazaa + 1.25litre Mazaa free  Water:  5box (15x5) + 1box free  Energy drink:  1box (24pcs) + 4pcs free
  7. 7. Business Model Manufactures & distributes  Concentrates  Syrups Bottlers make the final beverage through  COBO  FOBO Each bottler has an exclusive territory Actual formulations are tightly held trade secrets
  8. 8. Business Model Coca-Cola India Manufactures Concentrate, Beverage base and Syrup Regional Bottlers Manufactures finished COBO/FOBO Bottles/Cans/Fountain Syrup Customers Consumers
  9. 9. Market ClassificationGeographical Internationally Coke segments its product  Country & region wise  Variations as per tastes & incomeCompetition Presence of players such as:  Pepsi  RC Cola
  10. 10. Segmentation Model Outlet Type Channel Clustering Based on Consumption Occasion Grocery RestaurantBased on Income Level Market Clustering Outlet Clustering of Locality Convenience Outlet Volume G Di Si l Br ol am ve on d r Lo ze on w d <200 200-499 500-799 >800 M ed Consumer i Hi um g Choice h
  11. 11. Organizational Structure Chair Person G.M. Marketing Manager Accounting Dept. Shipping Deptt. Factory Manager Marketing Manager Production Manager Quality Mechanical Control EngineerSales Manager O/S Sales Manager (Base) Shipping Manager Sales Officer Sales Officer Shipping Officer Shipping Sales Supervisor Sales Supervisor Personnel Manager Sales Man Sales Man Distribution Officer
  12. 12. Sales Organization Structure
  13. 13. Recruitment & Selection Coca-Cola recruitment process is well established, they give ads in newspaper, company’s website, institutions,etc. Coca-Cola recruits MT’s from premier B schools. They mostly offer PPO’s to the Summer Interns.SELECTION PROCESS INVOLVES: Group Exercise Interview Presentations Psychometric tests Situational Exercises
  14. 14. Training Coca-Cola India partners with Indian School of Business (ISB) to launch the Coca-Cola – ISB Retail Academy The ‘Parivartan’ program – Training small town retailers. Coke’s new strategy involves training retailers (around 6,000 of them) in a program launched by the Coca-Cola University
  15. 15. Performance Ratings Exceptional performance –EP Contributions significantly exceed the stated objectives in terms of quality, quantity and timeliness Successful performance – SP Contributions meet and sometimes exceed the objectives, which are based on challenging goals Developing performance – DP Contributions meet some / most but not all of the objectives and performance improvement is necessary No Performance – NP Contributions frequently do not meet the stated objectives
  16. 16. Sales Force Motivation Incentives based on quarterly performance No. of units and/or total revenue, work as a base for incentives Every executive needs to add new outlets every year to get UNIT incentives Target achievers are recognized by giving:  TV, Fridge, etc.  Certificates / trophies  Lunch / outing with senior management, etc. Foreign trips for managerial level & above
  17. 17. Rewards at Coke
  18. 18. Forecasting Combination of top down and bottom up approach Forecasts based on factors such as:  Historical data  Economic parameters  Seasonal variation  Festivals, ceremonies, etc.  Weekly reviews to adjust monthly forecasts Forecasts are region-wise, they are further broken down into cities, towns and villages by sales managers
  19. 19. DistributionDistribution Routes  Key Accounts  Examples: Clubs, fine dine restaurants, hotels, Corporate houses etc.  Future Consumption  Examples: Departmental stores, Super markets etc.  Immediate Consumption  Examples: Small sized bars and restaurants, educational institutions etc.  General
  20. 20. Distribution Area wise distribution & promotion schemes Focus on high traffic locations  Railway stations  Bus stand Coke India distributes using 2 routes  Direct  Indirect
  21. 21. Cont. 3 COBO Regions – 27 COBO units 1 FOBO Region – 12 FOBO units } COBO Company owned bottling operations FOBO Franchisee owned bottling operations
  22. 22. Distribution Structure Direct Indirect
  23. 23. Manufacturing Plant COBO Primary Direct FIFO Company Owned Depot 3 Day InventoryOn Order Secondary Home Delivery Agent & Ready Retailers (Diamond / Gold / Bronze) Stock Tertiary Customers
  24. 24. Distribution Structure Direct Indirect
  25. 25. FOBO Manufacturing Plant Indirect Secondary Requirements toDistributors Distributors become distributor: cover: • Capacity to hold 5 Secondary days stock 500-600 outlets • FDA license Retailers (Diamond / Gold / Bronze) • Shop establishment certificate Tertiary • Electricity bill • Address proof Customers • Bank statement
  27. 27. Delhi-NCRFull Coverage - 59 No return Routes Retailers’ Loss Owned & contracted vehicles 56 – Owned Vehicles Transporting Vans Retailer Handling 1 Driver + 2 Loaders 45– Pre- sellers
  28. 28. Distributors Functions PARAMETERBulk Breaking Depends upon locationWarehousing Storage & safetyTransportation Distributor to retailerMarket Information Customer Intelligence Competitor IntelligenceSourcing Consumer tastes & preferencesMaintaining a) Signage a) Visual Merchandising b) Interior ambience b) Banners, posters, etc. c) Overall environmentProblems faced by distributor• From company : discounts/incentives given at the end of the month• From retailer : bad debts/run away
  29. 29. Logistics PARAMETERS1) Average order size a) Distributor to company Based on Demand, Season b) Retailer to Distributer2) Order placement a) Distributor to company Phone b) Retailer to distributer Distributor Representative3) Transit Time 2 Days4) Order frequency Daily
  30. 30. Logistics PARAMETERS5) Inventory Maintained 1 day6) Unsold/Damaged ReplacedMerchandise a) A/C Keeping7) Technology b) Stock keeping c) Complaint Handling8) Mode of Transportation Company vehicle (company to distributor)9) Transportation Expenses a) Company to Distributor Company b) Distributor to retailer Distributor10)Warehousing a) Storage Capacity Minimum 30 m2 b) Ownership Owned / Rented11) Stock keeping responsibility Stock keeper
  31. 31. Flow of The Product On a tablet or Blackberry
  32. 32. Contd. Only cash Cannot except for a take more few than order
  33. 33. Performance Management RED Strategy – Right Execution Daily Tool to measure the performance of the distributor in the outlet by setting some standard or parameter of execution. RED   Check Visi-Cooler Management  Availability of the product in the outlet  Check the activation in the outlet Market Developer checks 25 outlets a day and report to HCCBL on the score of 100.
  34. 34. Margins Margins per crate (comprising 24 bottles of 300 ml each) is Rs 20. On the 200 ml pack size, margin is Rs 16 per crate. Sales of the more affordable 200 ml pack size account for about 60 per cent of its total carbonated soft drink (CSD) sales. Non-CSD business accounts for 15 per cent. Outsourced distribution so that trucks and other equipment needed for the purpose are no longer owned by the company.
  35. 35. Financials Coco-Cola Profit Margina) To distributors 1-1.5%b) To retailers 2-3% Advance paymenta) to company 1,00,000b) for refrigerators 5,000 Credit terms and policiesi) Credit amount a)Company to distributor N/A b)Distributor to retailer Can provide.ii) Credit period One month(for retailers)
  36. 36. Learning’s The real time order processing system through use of technology helps reduce the lead time 24hrs working i.e. the loading cases in the night saves valuable timeRecommendations Pre-sellers shouldn’t be looked at as an extra cost. On the contrary, since their inception sales have risen Order devices at Diamond outlets can facilitate quicker order placement
  37. 37. thank you