Executive summary: Muller & Phipps was established in Pakistan in 1912, it is one of the oldest & largest distribution companies of Pakistan. The company has maintained its top position through the use of different strategies which give him competitive edge over its competitors. The company is trying their best to maintain their sales, excellent performance, and market share in spite of all the difficulties faced by the distribution and logistics firms in Pakistan. They are using modern technologies in their business operations which not only benefit them but also helping their customers. The report focuses only on the sales practices of the firm. The report also discusses the issues faced by company’s sales force, their sales strategies, their feedback mechanism, their sales targets & different action plans used by the firm to maintain & improve their performance. The SWOT analysis of company’s sales operation is also done in the report.
History of the firm: Muller & Phipps commenced business operations in Karachi in the year 1912, and today has the distinction of being one of the largest and oldest distribution networks in the country. Muller & Phipps Pakistan Pvt. Ltd is now a division of the Getz Corporation; U.S.A. Getz is based in San Francisco and has a world-wide network of offices operating through 23 subsidiaries and associate companies, concentrated mainly in the Asia-Pacific region, Europe and USA. Through its association with Getz, Muller & Phipps is able to obtain a vast reservoir of knowledge, experience, and resources. Ever since its inception, Muller & Phipps has been devoted to provide outstanding service to its Principals and Customers.
In 1912 the camel cart wheel started moving cargo to the then lesser developed markets. After the partition, the company was acquired by Elvi Family. Today the company not only provides distribution & logistic services but also warehousing & import facility to some customers as well. However, the high level of commitment, dedication and loyalty of their ancestors towards principals are the core values of which have allowed them to grow steadily. A vision to keep time on your side and improve on services offered benefited Muler & Phipps in becoming business associates of many valued principals. Even today Muler & Phipps heritage plays a vital role in growth and sustaining business. Today, Muller & Phipps stand at the top of distribution & logistics firms in Pakistan with an annual turnover of Rs. 20Billion. They have principals (accounts) like Unilever, Pepsi Snacks, Mitchells & 3M etc in consumer section only; the principals of Pharmaceuticals & Health Care units are other than that.
Customers (Principals): Muller & Phipps has categorized their principals (customers) into three types: Consumer. Hospital Care Unit. Pharmaceuticals. Consumer M&P Consumer Product Division offers distribution infra-structure for diversified range of products that meet everyday need for nutrition, hygiene and personal care. Their distribution operating models are designed to deliver fast track services to their customers. Their businesses enjoy dominant market presence as well as un-matched brand equity. We have customer-friendly approach and innovative IT infrastructure supported by HHT (Hand Held Terminals) that provides first hand information at grassroot level essentially required to make strategic decisions in the era of stiff competition. Some of the principals in their consumer section are listed below:
3M Pakistan (Pvt.) Ltd. Unilever Pakistan Ltd. GumCorp Pvt Ltd. Mitchell's Fruit Farms Ltd. Nutricia Cow & Gate. PepsiCo International (Pvt) Ltd (Potato & non potato chips only). Perfetti Van Melle Export Far East Ltd. Peridot Products Private Ltd. Wesley International. HOSPITAL CARE UNIT
Muller & Phipps started their Hospital Care Unit more than 20 years back, It caters the vital needs of the healthcare segment throughout Pakistan with products for operation theatre, anesthesia, intensive care units , cardiology, burn units, diabetic care centers, plastic Surgery and orthopedics departments, by marketing and distributing following world renowned Companies.
ConvaTec Ltd.
Johnson & Johnson.
MP Gloves Malaysia.
Plastod Italy.
Rudolf Medical Gmbh.
Nutricia Cow & Gate.
PHARMACEUTICALS Muller & Phipps Pharma division currently represent following companies out of which five are ranked in the top twenty companies of Pharma industry in Pakistan. Their highly motivated sales and delivery staff has maintained a more than the industry growth rate for the past several years. They maintain a sales and delivery team of nearly 500 personnel divided in to three groups & directly cover more than 28,000 customers in around 700 towns on a frequency of six days cycle. Some of their principals in Pharma category are as under:
GSK Pakistan (Pvt.) Ltd.
Getz Pharma (Pvt.) Ltd.
Roche Pakistan Ltd.
Bayer Healthcare Diabetes Care Pvt. Ltd.
Ray Pharma Pvt. Ltd
Novo Nordisk Pharma (Pvt.) Ltd.
Martin Dow Pharmaceuticals.
Medics Laboratories.
OBS Pakistan (Pvt.) Ltd.
Pharmatec Pakistan Ltd.
ORAGNIZATIONAL HIERARCHY
SWOT ANALYSIS STRENGTHS:
Nation wide coverage in 27 Cities & 700 small towns through more than 80000 outlets.
98 years of experience of Business & Market.
Strong Financial Backings.
Convenience of one window operations for principals.
Highly Motivated Sales force.
Diverse portfolio of clients.
Access to bills even to the Principals through Strong IT system.
Highly growing firm in terms of revenue. WEAKNESSES:
High-tech Global Positioning System (GPS) is not available in distribution vans & Trucks.
Consumer products warehouses needs to be updated. OPPURTUNITIES:
Expansion of distribution & Warehousing network.
Addition of Foreign principals (clients).
Expansion of existing portfolio. THREATS:
Increasing price of petroleum products.
Day by day worsening Law & order situation.
Market’s inability to produce good Human Resource.
Increasing cost of Human resource &Materials.
SALES & DISTRIBUTION NETWORK Muller & Phipps has an extremely effective & extensive distribution network across the country. They are covering almost 700 small towns & cities nationwide. They have a total of around 80000 outlets in all its
division i.e. Pharma, consumer & Hospital care. They have categorized their sales personnel & distribution services according to the needs of these divisions. As the needs for each principal & division is quite different. Some of the highlights of their distribution system are as under: Division
Towns
Outlets
FMCG
300 +
50,000 +
Pharma
700 +
28,000 +
HCU
450 +
7000 +
Above are some of the pictures of the company’s distribution & ware houses. Central warehouse, 43 depots & 4 sales offices: Their coverage is wide spread that includes supermarkets, chemists, general stores, cosmetic stores, pan shops, kiryana outlets & bakeries. Their computerized sale branches keep track of inventory and ensure that all outlets are serviced regularly. They are increasing their outlet base and are in the process of developing new channels to cater the market with increased efficiency. FLOW OF DISTRIBUTION: The company’s flow of goods takes place like this: Principal Central warehouse Retailer/Wholesaler.
Depots
Distribution Vans
In small towns the distribution of Muller & Phipps takes place like this: Principal Central warehouse Depots Vans/Qing chi Retailer/Wholesaler.
Sub distributors
Distribution
ORDER SYSTEM: The company takes order through their distribution vans & salespeople on motorbikes. It depends upon the business generated by the wholesaler/retailer that how the order is taken from them. Orders are taken through state of the art Hand Held Terminals (HHT), so that time is saved & real time order can be seen by the sales department of the company.
OPPURTUNITY & ISSUE ANALYSIS ANALYSIS OF OPPURTUNITIES: Muller & Phipps analyze different opportunities present in market through its highly dedicated & seasoned sell force. Business heads of respective potential divisions are asked to look at the past performance of the potential principal Business Feasibility report is made for any potential principal & then the seasoned individuals & business head for particular division takes the decision to move forward or not. After all the process is done, a SOI Form is filled out & sent to the regional head of Muller & Phipps International.
ISSUES FACED: Same as the other distribution firms, Muller & Phipps are also facing different issues at their business operations. Although for Muller & Phipps it is of great joy that the issues are external, on which the firm has almost no & little control. Some of the important issues faced by the firm are as under: Law & Order: The most threatening issue to the business community is law & order situation of the country. Increasing Cost of doing business: Another important issue is the cost of distribution is increasing, as it is directly related to petroleum prices in the country. Similarly, the cost of materials & technology used in operations are also increasing. Unannounced & Unscheduled vacations: Number of holidays & vacations announced by the governments are increasing making it difficult for the business community to plan & act according to it. Stagnant Human Resource: Quality of Human resource coming out in the market is also a common issue faced by the firms operating especially in the sales business. Robbery & Theft: It is one of the major issues faced by the sales vans & vehicles of the company but the company can not do anything about it. They can tackle it. But it is the responsibility of the government to look after this issue. TACTICS used to tackle the issues: Alternate arrangements: Muller & Phipps are making alternative arrangements like operating on Sundays & in late hours in weekdays to cope up with the issue of unannounced holidays & closure of markets incase of Law & order situation. Keeping Guards with delivery vans: Muller & Phipps are keeping guards in their delivery vans to cope up with the issue of robbery & theft, although it is costly, but the only way to deal with the situation. Outsourcing: Muller & Phipps is extensively using third part system & outsourcing process to cope up with the issue of increasing fuel prices. In this way they also save the cost of maintaining the fleet for distribution. RESULTS of steps taken:
Muller & Phipps are still meeting the targets, in spite of all the difficulties. Although the cost has increased a bit, but the overall business performance is maintained by the company. It should be kept in mind that Muller & Phipps is a distribution & logistics based firm, which is totally dependent on the operations of market, hence they are still at the top.
MAJOR COMPETITORS Abu Dawood group (IATCO). Premier Group. Northern Print Distribution (NPD) Ltd. Ali Gohar & Company (AG&C) (pvt) Ltd. Major Edge over Competitors: Below here are some of he strategic advantages that Muller & Phipps has over their Competitors: Established Relationship in market. Highly extensive & integrated Infrastructure. Their IT support system is matchless. In business for around a century. Highly Compatible & motivated Sales force. Dedication & commitment with principals. Diverse & Market leaders Portfolio. Access to every single bill of principals for them through highly developed IT support system.
SALES FORECAST & ACTION PLANS Well, the method used by Muller & Phipps for forecasting sales is “executive opinion” & mathematical techniques like past performance Analysis is also done. Past performances of different portfolios are considered to make the forecast for the coming year, month & weeks. However, Muller & Phipps being a distribution company, More than 80% of sales forecasts & sales target are provided by the Principals
(customers). It is the responsibility of the principals to assign sales target to the company. Although Muller & Phipps sales force & the company itself let their principals know the true potential of different territories. But still is the principal who decide the sales targets. ASSIGNMENT OF SALES QUOTAS: Muller & Phipps cascade their annual sales target into Quarterly, monthly, weekly & even daily targets. Similarly, the National sales targets are sub divided into Regional targets, then regional targets into Depot targets & then finally depot targets are further divided into Van/vehicle targets. The sales quota assignment is done on the basis of volume previously generated by each distribution van. Some information regarding the bifurcation of sales targets into zone & Depots are given below:
Four Zones: The whole country is divided into four (4) sales zones by Muller & Phipps.
More than Fifty Depots: There are more than fifty (50) Depots in the whole distribution network of Muller & Phipps. Depots are established at each Major town & cities.9 Depots in Karachi & 7 in Lahore.
More than thousand Hand Held Terminals (HHT): More than 1000 Hand Held Terminals are given to the sales force for filling out sales order from the retailers & Wholesalers.
MONTORING OF SALES FORCE: Muller & Phipps continuously track their sales force performance & make necessary changes needed to rectify the short comings & problems. Some of the Monitoring tools Muller & Phipps used to monitor their performance are as under:
Target–Monitoring System is used to track daily, weekly & monthly sales performance & sales force is made aware about how far or ahead of their targets
Random Visits by High-ups: The Company’s field manager often visits different territories not only to track the sales force performance but also for the feedback purpose in different territories. Sometimes the Managing director of the company also visits the sales territory.
HST Billing: It not only enables the sales department of Muller & Phipps to track the sales bills generated on daily basis but also make it possible for their principal to track how much distribution is made to the retail outlets.
MOTIVATIONAL TOOLS:
Muller & Phipps is very keen to retain its sales force, as their extremely passionate sales force provides them competitive edge over their competitors. Muller & Phipps is a performance driven firm, so it is necessary for employee to perform better & get rewarded by the company. The key factor that helps the company retain their employees is their congenial & professional work place environment. Apart from it, the company gives different incentives to their sales force which are as under:
Slab wise Incentives: If the sales person crosses a particular slab of sales, he will receive incentives in form of extra pay, dinner buffets, bonuses etc.
Bonuses: Bonuses are rewarded to different sales people if they achieve their sales targets & show good performances.
Annual trips: Sales force is also sent on annual trips if they keep on showing excellent sales performances & meet their sales targets on regular basis.
Foreign Trips: Sales leaders & sales heads are also sent on foreign trips to motivate them towards higher performances.
FINANCIAL PERFORMANCE: Muller & Phipps has shown an extremely good performance down the years. Not only their sales turnover is increasing but also their principals are also increasing. The sales turnover shown in the following is showing their total revenues as well as the individual contribution of each division. Only in a period of four years their sales revenues have almost doubled, in spite of the economic turmoil going on in Pakistan’s economy during last two-three years.
MILESTONES Well in 2012, Muller & Phipps will make century mark, as far as their business operations in Pakistan are concerned. This is a great achievement for any firm operating in any business. Since 1912, The Company has achieved several milestones; some of them are listed below:
1912
• Muller & Phipps founded.
1935
• First company to introduce international top brands in the country.
1965
• Started pharmaceutical distribution.
1975
• First company to service out station customers through their own vans. • First distribution company to start multi-coverage system.
1985
• First distribution company to be automated.
1995
• Re-establishment of FMCG division & entry into new venture of contract marketing for hospital & healthcare division.
2005
• Implemented state of the art sales force automation system.
Some of the pictorial highlights of company’s commencement of operations are shown below:
FUTURE PLANS: The company is very much optimistic about the business opportunities present in the market. The company wishes to expand their client base & add more portfolios to their business. They also wished to expand their distribution network as they have done in recent past. Adding foreign accounts in their business is the prime future focus of the company. Expanding distribution network. Long-term relationship with existing accounts.
Adding foreign accounts to their portfolio. Introducing high tech Distribution facilities.
FEEDBACK MECHANISM Some of the feedback tools used by Muller & Phipps are as under:
Direct feedback from customers & principals on Telephone & e-Mail. Different appraisal systems for employees. One-one random calls by sales department for feedback from retailers, wholesalers & Principals.
Different coordination committees who remain in talks with employees to listen their grievances & also takes feedback from customers.
