Sales and Distribution of HUL v/s RB

Sales and Distribution Project Report Hindustan Unilever v/s Reckitt Benckiser

Submitted To:

Prof. Subhashis Ray Submitted By: Subhranshu Sekhar Mandal (110) Sujit Kumar Sahoo(111) Swarup Kumar Kar(112) Sweta Sah(113) Thendral (115) Udaya Bhanu Satapathy(116) Vibhav Kumar(117) Vikrant Krishan Mahajan (118) Zubair Jiwani (120)

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Contents

Contents..........................................................................................................2

Product Portfolio and Distribution overview for RB...............................................................5

Sales Force Structure......................................................................................6 Sales Force Recruitment ..................................................................................8 Recruitment of Territory Sales In-charge ..............................................................................8

Sales Force Compensation..............................................................................8

Measurement of sales force productivity and distribution efficiency at RB........................ 10

Budgeting and Target Setting.......................................................................12 Annual budgeting and Target setting at RB....................................................................... 12

Channel Conflict............................................................................................13 Conflict 1: Conflict because of unequal members in distribution chains............................. 13 Conflict 2: Modern trade selling to retail outlets................................................................. 14

Automation in Sales Force.............................................................................14













Product Portfolio for HUL...............................................................................15













Reckitt Benckiser (RB) Organizational Background Reckitt Benckiser India Ltd (RBIL) is a fully owned subsidiary of Reckitt

The company has sales of over £ 6.6 Billion consistently growing ahead of













Product Portfolio and Distribution overview for RB

Source: Strategm Case study Document,2009













Source: Strategm case study document, 2009

Sales Force Structure The national sales department of RB has divided India into four zones

On the other hand, for the channel involving modern trade, the sales force is



























Sales Force Recruitment The following points outline the sales force recruitment procedure for RB:

Recruitment of Territory Sales In-charge Territory Sales In-Charge has the responsibility of one territory under him.

Executives.

Distributor Sales Representatives (DBSR) Distributor Sales Representatives are employed by the distributor to escort

Company Sales Person Company sales persons are experienced people recruited from the sales force of competitors and other FMCG companies.

Area Sales Manager ASMs are recruited from the campuses of reputed B-schools of India. Both experienced and non-experienced people are given due consideration.

Sales Force Compensation The pay structure for the company is a combination of fixed and variable













In-charge gets 85% fixed pay and 15% in the form of incentives. In the same

Sales Force Training Quarterly workshops and training sessions are conducted on a regional basis

Measurement and Appraisal of Sales Force Productivity Measuring sales force productivity is valuable because these measures

1. How much time the sales force actually spends selling. 2. Database techniques 3. Sales force structure













data can be used to focus the sales force on the most important customers

The leverage of various technologies—such as laptop computers, pervasive

The productivity can be improved by Breaking down the selling process into

Territory Allocation The eastern zone has been divided into 7 territories based on geographical

Measurement of sales force productivity and distribution efficiency at RB At RB, the appraisal of the sales force is done on the following parameters: •

Sales Force Productivity: Sales Force productivity is defined as the













ASM and subordinate sales force focus on increasing the top line, RSMs and people above them focus on the bottom line. •

•

•

Market Coverage: Market coverage and penetration both in terms of types and percentage of possible retail outlets covered is an important parameter for measuring sales and distribution efficiency. Brand Salience: Brand salience for one or more brands of RB also impacts the sales efficiency. Other Key Performance Indicators: Stock outgo















Budgeting and Target Setting In order to bring an objectivity to evaluate the performance of a salesperson,

•

Sales volume quotas













The annual budgeting and target setting exercise takes place at RB during

Channel Conflict Conflict 1: Conflict because of unequal members in distribution chains One kind of channel conflict occurs in RB because of price undercutting

Channel 1:













Conflict 2: Modern trade selling to retail outlets Modern trade includes organized retail chains like Big Bazaar, Metro etc.

Solution The schemes are different in case of modern trade and other channels. Thus,

Automation in Sales Force The degree of automation in the sales force for RB is very low. Order booking













Hindustan Unilever Limited Organization Background Formerly known as Hindustan Lever Limited (renamed in late June 2007) HUL

The Brands endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.13,718 crores. 35 Power Brands The operations involve over 2,000 suppliers and associates. HUL's distribution network, comprises about 2,500 redistribution stockists,







































HUL

has

a

robust

distribution

HUL’s Sales Break‐up different channels:

model

through

which

comprises

of

C&FAs,













diamond represents the profit‐center based sales team. In the bottom of

The channel flow for HUL is

























manager receives 25% in the form of incentives and 75% is received as fixed

HUL also has annual reward process under which it recognizes the top

Sales Force Training















This kind of matrix is used to ensure that productivity is not attained at the













Automation in Sales Force The use of palmtops in various regions by the ground level sales force at HUL













Let us now break up each of the critical components and have a direct comparison between the two giants HUL and RB The following graph shows the Advertising Expense as a percentage of sales.

























of its sales in boosting its distribution channel. HUL strength is its distribution















Sales and Distribution of HUL v/s RB

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