SALES AND DISTRIBUTION PROJECT ON COCA COLA
Submitted to: Prof. JSK Chakravarthi Chakravarthi
Submitted by: Aman Bansal (12BSPHH010088) (12BSPHH010088) Ashish Aggarwal (12BSPHH010211) (12BSPHH010211)
ORGANISATION STRUCTURE:
Chair Person
G.M.
Marketing Manager
Accounting Dept.
Shipping Deptt.
Factory Manager
Marketing Manager
Production Manager
Quality Control
Sales Manager O/S
Sales Manager (Base)
Sales Officer
Sales Officer
Mechanica l Engineer
Shipping Manager
Shipping Officer Sales Supervisor
Sales Supervisor
Sales Man
Sales Man
Distribution Officer
Personnel Manager
Shipping
SALES ORGANISATION STRUCTURE:
GENERAL SALES MANAGER
SALES MANAGER
ASSOCIATE SALES MANAGER
AREA SALES MANAGER
SENIOR SALES EXECUTIVE
EXECUTIVE
SALES OFFICER
TRAINEE SALES OFFICER
RURAL SALES PROMOTER / MARKET DEVELOPERS
RECRUITMENT AND SELECTION IN COCA COLA:
The recruitment process in coca cola is well established. They generally give ads in the newspapers, company’s websites, institutions etc. from where they get a lot of applications to choose from.
Coca cola also recruits management trainees from good B-schools.
The company also offers pre placement offers to many of the interns who are efficient in their work and have shown their ability and skills during the internship.
SELECTION PROCESS INVOLVES:
Group Exercise
Interview
Psycometric tests
Presentations
Situational Exercises
1. Group exercise: In this exercise the groups are made accordingly and they are given a task to perform. This helps the company in analysing the team work of the persons, how they are allocating the jobs to each other, time taken by them, how efficient they are in decision making and all these things which are very necessary.
2. Interview: In the interview basically the knowledge of the person is being tested that how practically he can think and what is his focus in his life. The background of the person is known and also details about the person.
3. Presentations: In this exercise the presentation skills of the person are judged that how are his communication skills, what is the confidence level of the person etc. the matter of the presentation is precise or not, the flow o f the presentation i.e the sequential order.
4. Psychometric tests: It includes
the measurement of knowledge,
abilities
attitudes,
personality traits
educational measurement
5. Situational exercises: In these type of exercises the behaviour of the person is judged as to how he reacts to a particular situation, whether he is capable of handling the tensions or not and how he is able to convert his tensions into more productive work. The decision making power is also judged.
COMPENSATION OF SALES FORCE: Coca cola is adopting the value based compensation model. Coca-Cola began testing value-based models in five markets in 2008 and planned to roll out 35 more markets in 2009. Coke determines the value of the assignment, not the agency. If performance goals are hit, the agency receives 30% profit mark up over initial costs. Long-term, this model should enhance the health of the client/agency relationship, leading to more effective brand building programs generated by the leading agencies and the compensation that rewards such value creation, thereby reversing the commodity doom loop in which the industry currently finds itself. While we can’t control the physics of the pendulum, forays into a brave new world of compensation should benefit all client/agency partnerships, ultimately yielding a more productive equilibrium.
Various rewards given at coca cola are:
Yearly Basis
• Employee salary increment • Grade Jump, Designation change • Annual incentive Plan (AIP) (for business performance, but fixed) • Personal Progress report (PPR) (Annual Appraisal)
Monthly Basis
• Making the move (MTM, sales target achieve) • Monthly turn hall (extraordinary performance)
Quarterl y Basis
• Employee of the Quarter (EOQ, non sales) • Sales Dangle context • Gold Context
Sales force motivation is also done in various ways such as:
no. of units/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 certificates, trophies, luch or outing with senior management, tv, fridge etc
foreign trips for managerial level or above
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.
Non – Performance – NP Contributions frequently do not meet the stated objectives
PERFORMANCE MANAGEMENT:
RED strategy – right execution daily
Tool to measure the performance of 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
SALES FORECASTING IN COCA COLA: The sales forecasting in coca cola is a combination of top down and bottom up approach:
forecast general economic condition
market potential
sales potential
sales forecast
forecasts for zones,regionsetc
company sales forecast zone wise, region combined into territory forecast sales person forecat of accounts
Forecasts are based on various factors:
historical data
economic parameters
festivals, ceremonies etc.
seasonal variations
weekly reviews to adjust monthly forecasts
DISTRIBUTION CHANNEL: The distribution channel of coca cola is quite simple. It has a manufacturing plant where the product is manufactured and sent to the warehouses from where it has two routes
one is directly to reach the customer
the other is through the distributors.
Direct Route Plant
Market
Warehouse Indirect Route
Distributor
Market
the main focus of the company is on the high traffic locations:
railway stations
bus stands
3 COBO regions- 27 COBO units
1 FOBO region- 12 FOBO units
DISTRIBUTION STRUCTURE: 1. Direct 2. Indirect
Segmentation
Grocery
200-499
Restaurant
Bronze
Convenience
Diamond
Silver
<200
Gold
500-799
CALCULATION OF ROI (RETURN ON INVESTMENTS) FOR DISTRIBUTORS: • The deposit of 1500 cases at the rate
of Rs200 per case = 3, 00,000
• Liquid Value on an average including all mini, 300 ml, half litre and 2 litre =2, 00,000 • Godown deposit = 20,000 • Vehicle = 4, 80,000 Therefore the total investment is Rs10, 00,000 Now to calculate the ROI = ({Volume X Case rate} – Expenses) / Investment If a distributor has 50,000 volume, Rs11 per case and Other Expenses 35,000 then 50,000 X 11 =55,000 – 35,000 =20,000 Therefore ROI = 20,000 /10, 00,000 = 0.20 = 20% Hence the ROI is favourable Therefore from the above calculations we can see that the return on investment is favourable, so the distributor will operate efficiently as he is getting a good return on investment.
SALES TERRITORIES: Territory It is the segment of the market for which a salesperson is responsible. Territory assignments may be exclusive, meaning no other salesperson can sell in that territory, or nonexclusive. Territories may be defined in terms of geographic or market segments, product or product lines, size of customer or by specific target customers or prospect.
The reason for setting up or reviewing sales territories in Coca Cola Company • Increase their coverage • Control the selling expenses specially travel expenses. • Better evaluation of sales force performance • Improve customer relation. • Improve sales force effectiveness
The process of designing sale territory is as follows
Select control unit
Find location and potential customer
Decide basic territory
We have two type of decide basic territory
Break down method/Build up method territory
Coca cola forms its sales territories on the basis of two aspects: 1. On the basis of prospective consumers 2. On the basis of dealers and distributors
Conclusion: For example coca cola has followed extensive distribution strategy. So it targets high traffic areas such as railways, bus stands etc. recently it has sold its some distribution territories to independent bottlers so as to:
Cut costs
Reap local knowledge
Community connections
outstanding commercial capabilities of a strong local bottling system
These new territories will include some of the largest cities in the geographies that border these bottlers’ existing territories, allowing each bottler to better service local customers and provide more efficient execution.
SALES PERSON CONTRIBUTION IN MARKETING ACTIVITIES: Recently most of the top 500 Forbes companies such as coca cola, kraft etc. are following marketing mix modelling in which sales force input is of critical importance in formulating marketing approach.
1. MARKETING INTELLIGENCE Although salespersons represent a unique and important channel of information, few of them contribute efficiently to marketing intelligence. This research aims to understand how salespeople's motivation and effort to gather and transmit marketing intelligence to management may be influenced by individual (organizational commitment, desire for upward mobility) and managerial (control system, participation in decision making, feedback, recognition) factors.
2. CUSTOMER RELATIONSHIP MANAGEMENT: The marketing department keeps stressing sales force to maintain good customer relationship to acquire consumption patterns, behaviour, perception of the consumers regarding the existing products and feedback for further improvements in the products.
So the sales people contribute to the marketing activities by the way of customer relationship management and marketing intelligence by following marketing mix modelling.
PARAMETER ON WHICH COCA COLA FIXED THEIR QUOTA: Planning the sales quotas involves identifying the right quota depending upon several factors and assigning them to the sales representatives. We know that sales representatives of each region or territory may not be assigned the same sales quota. Let us understand the list of factors which help in setting the sales quotas to sales representatives. Some of the parameter given below:
1. MARKET SIZE AND POTENTIAL For each territory or region the market size and potential must be analysed by COCA COLA. The market potential can be known by the forecasting techniques which were discussed earlier.The once the existing market size is determined, quotas have to be planned accordingly so that the market potential is fully utilized to achieve the maximum productivity levels. It must be remembered most of the times that the sales quotas would be proportional to the size and potential of the market. The quotas would not only depend upon the size and potential because various other factors have to analysed which will be discussed in this section.
2. LEVEL OF COMPETITION Even if the market size and potential is huge, the sales quotas may not be high due to the level of competition. For example, if the potential for the COCA COLA in a particular region is 5 million, then you cannot assign quotas to grab that 5 million. Quotas must be realistic in nature taking the account of competition. If there are 6000-7000 customer then assigning the quotas to generate 30 – 40 percent of the potentials practical. Again the quotas depend upon another factor current position of the organization in that region.
3. CURRENT POSITION OF THE ORGANIZATION In the previous example, gaining a 30-35 percent market potential is a practical task if the COCA COLA is the top players in that region. But if the COCA COLA is a low level player or an entrant, then getting 10 percent of the potential also would be a huge task. Hence the sales quotas have to be planned accordingly based upon the current position of the organization.
4. SKILLS OF THE SALES PERSON All the employees within the company may not be able to generate huge number of leads. Hence, setting same quotas for all the employees may not be achievable and may become a de-motivating factor. The sales manager has to plan the quotas according to the skill of the sales manager and may increase it in future. The new employee may need to have a different sales quota while compared to the already existing employee. If the quotas are not achievable, sometime should be given by the sales.
CONCLUSION: Since coca cola uses extensive distribution strategy so as to boost its sales, profitability and market share with competitors as pepsico and other local players so its main focus would be on sales volume quota and budget quota. Since the products in which they deal is not technical so it would not require activity quota which is generally used in IT industry, automobilies industry etc.
CHANNEL MEMBER OPINION: The main focus of the channel member were: 1. Profit margin 2. Compliance with delivery schedule 3. Channel conflicts
As discussed above with selling of some of the sales territories to the independent bottling units the company has succeded to reduce the cost and increase the consumer coverage, so the channel members are also positive about this decision of the company as it helps in reducing the level of inventory due to the compliance of delivery schedule. On the other hand the major disadvantage for the channel member is that there is channel conflict or lack of co-operation among the channel members because of the selling of distribution territories to the independent bottling units. So they feel that the channel design and the distribution strategy should be more uniform and defined.
REFERENCES: 1. WWW.COCACOLA.IN 2. WWW.SCRIBD.COM 3. WWW.SLIDESHARE.COM 4. WWW.DOCSTOC.COM 5. http://www.sciencedirect.com/science/article/pii/S0167811606000644 6. www.wikipedia.com
