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The company calls this the “parivartan” program (meaning “Change” in English). Shop owners (traditional retailers) are given training on displaying and stocking products well. The goal of the innovative training program is to provide traditional Indian retailers with the skills, tools and techniques required to succeed in a constantly changing retail scenario. Presentations (including audio/visual technology) in local Hindi language help small retailers (with stores less than 200 square feet in average size) to better understand the concepts involved. Each retailer also receives a Coca-Cola “Certified Retailer” certificate at the conclusion of the program
Key Accounts: The customers in this category collectively contribute a large chunk of the total sales of the Company. It basically consists of organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month. Examples: Clubs, fine dine restaurants, hotels, Corporate houses etc. Future Consumption: This route consists of outlets of Coca-Cola products, wherein a considerable amount of stock is kept in order to use for future consumption. The stock does not exhaust within a day or two, instead as and when required stocks are stacked up by them so as to avoid shortage or non-availability of the product. Examples: Departmental stores, Super markets etc. Immediate Consumption: The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored for future use instead, are exhausted on the same day and might run a little into the next day i.e. the products are consumed at a fast pace. Examples: Small sized bars and restaurants, educational institutions etc. General: Under this route, all the outlets that come in a particular area or an area along with its neighboring areas are catered to. The consumption period is not taken into consideration in this particular route.
Sales and distribution management at coca cola
Sales and Distribution ManagementGroup 7LBSIM, New Delhi
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
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)
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
Business Model Coca-Cola India Manufactures Concentrate, Beverage base and Syrup Regional Bottlers Manufactures finished COBO/FOBO Bottles/Cans/Fountain Syrup Customers Consumers
Market ClassificationGeographical Internationally Coke segments its product Country & region wise Variations as per tastes & incomeCompetition Presence of players such as: Pepsi RC Cola
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
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
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
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
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
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
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
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
Distribution Area wise distribution & promotion schemes Focus on high traffic locations Railway stations Bus stand Coke India distributes using 2 routes Direct Indirect
Cont. 3 COBO Regions – 27 COBO units 1 FOBO Region – 12 FOBO units } COBO Company owned bottling operations FOBO Franchisee owned bottling operations
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
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
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
Contd. Only cash Cannot except for a take more few than order
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.
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.
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)
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