TOPIC: Sales Territory Design by a FMCG company SUBMITTED TO

Sir Saeed ur Rehman

SUBMITTED BY:Syed Rehan Ahmed Muhammad Idrees Khan

April 13th , 2010 Mr. Saeed ur Rehman Professor of Sales management Institute of Business Management, Karachi. Respected Sir, This is the term report on “Territory design of an FMCG company”. This report consists of the literature research, the company and competitor analysis, internal company resources, strategic analysis. The report has been completed after the perpetual hard work, determination and devotion of last two weeks. If you have any additional questions, we would be pleased to answer them. Thanking you. Sincerely,
Muhammad Idrees Khan Syed Rehan Ahmed Shahbaz Aslam Samreen Uzair Sameera Idris Osama Mehboob

We would also like to thank Mr. 2010 Dear Reader. 2010.LETTER OF AUTHORIZATION April 13th . The preparation of this term report required us to perform a thorough analysis of the Distributor industry of Pakistan. We would like to thank our course instructor Mr. We are students of Sales Management at IoBM and have been authorized by Mr. Sincerely.Khalid khan (Regional Sales Manager (south) M&P for providing us thorough support and cooperation in making this report by sharing information regarding our topic and by providing us useful data and facts for our report. Saeed ur Rehman for such practical knowledge that he gave throughout the semester and all such practical exercises that help us to enable the skills of professionals. Saeed ur Rehman to prepare a term report on “Territory Design of FMCG company” which is to be submitted on April 13th . Muhammad Idrees Khan Syed Rehan Ahmed Shahbaz Aslam Samreen Uzair Sameera Idris Osama Mehboob .

These objectives are achieved by designing strategies and specific tactics and at last they implement their plan and control it thus following the territory management model. .EXECUTIVE SUMMARY: M&P is a multinational company in the business of distribution and it is established in Pakistan’s region of south Asia since 1912. M&P design its territories by analyzing its channels and business potential of an area and set its objectives according to the feasibility.Khalid Khan (M&P) explained us the territory design of their company and how it operates. In every zone there are cities which in turn divided into depots and these depots consist of territories. Karachi is a city with four depots and 160 territories. M7P divided Pakistan into three region and four zones. The area manager Mr.

Ltd is now a division of the Getz Corporation.A.) Ltd.. Perfetti Van Melle Export Far East Ltd. It has its distribution in 3M Pakistan (Pvt. Ever since its inception. and Ray Pharma Pvt. Novo Nordisk Pharma (Pvt.) Ltd. Miller & Phipps operates in three business units namely: Pharmaceutical Distribution.) Ltd. Its distribution operating models are designed to deliver fast track services to the customers. Its highly motivated sales and delivery staff has maintained a more than the industry growth rate for the past several years. It has customer-friendly approach and innovative IT infrastructure supported by HHT (Hand Held Terminals) that provides first hand information at grass-root level essentially required to make strategic decisions in the era of stiff competition.. Medics Laboratories. it has been devoted to provide outstanding service to its Principals and Customers.. Pharmatec Pakistan (Pvt.INTRODUCTION Muller & Phipps commenced business operations in Karachi in the year 1912. Peridot Products Private Ltd. Nutricia Cow & Gate. Muller & Phipps is able to obtain a vast reservoir of knowledge. U. MITCHELL'S Fruit Farms Ltd.) Ltd... FMCG distribution and Hospital and health care marketing and distribution division Through Pharma Division it currently represents ten companies out of which four are ranked in the top twenty companies of Pharma industry in Pakistan. Bristol-Myers Squibb Pakistan (Pvt. Nestle Pakistan Limited. and today has the distinction of being one of the largest and oldest distribution networks in the country. By maintaining a sales and delivery team of nearly 500 personnel divided in to three groups we directly cover more than 26. hygiene and personal care. and resources. concentrated mainly in the Asia-Pacific region. Muller & Phipps Pakistan Pvt. M&P Consumer Product Division offers distribution infra-structure for diversified range of products that meet everyday need for nutrition.500 customers in 671 towns on a frequency of six days cycle. Through its association with Getz. Roche Pakistan Ltd.) Ltd. Pepsico International (Pvt) Ltd. Getz Pharma (Pvt. Getz is based in San Francisco and has a world-wide network of offices operating through 23 subsidiaries and associate companies. Ltd.. Martin Dow Pharmaceuticals (Pak) Ltd. Each of its eight businesses enjoys dominant market presence as well as un-matched brand equity. experience. and Unilever Pakistan Ltd. It represents Becton Dickinson Pakistan (Pvt.) Ltd..S.. Europe and USA. Merck Sharp & Dohme of Pakistan Ltd.. .

) Ltd. Proton Healthcare. by marketing and distributing following world renowned Heathcare Companies. intensive care units . Diabetic Care Centers. Jhonson & Jhonson Pakistan (Pvt. HEIRARCHY CEO \ MD GM sales NSM BDM RSM\ ASM RSM\ ASM BM BM FMs S/Os Delivery men = MR Kamran Nishat = Mr Asif M Alavi = Mr Iftikhar Ahmed = Mr Ghazanfar Qadri (principle coordinator) = Mr Khalid Khan = Mr Amir Shahzad = Mr Adnan Gul = Mr Mehboob Khaliq . healthcare & consumer products. A vision to keep time on your side and improve on services offered benefited M&P in becoming business associates of many valued principals. in being a good corporate citizen. We aggressively exploit new business opportunities by drawing strength from our corporate image and by promoting a culture that encourages initiative and decision-making at all levels. leading in nationwide distribution and marketing of pharmaceutical.. FZE and Rudolf Medical Gmbh. However. Plastic Surgery and Orthopaedics departments. MISSION STATEMENT We are a customer oriented service organization. cardiology. We derive our strong corporate image from our innovative approach to business. Burn Units. anesthesia. competent staff. dedication and loyalty of its ancestors towards principals are the core values of M&P which has allowed it to grow steadily. We take pride in adhering to ethical business practices. It caters the vital needs of the healthcare segment throughout Pakistan with products for operation theatre. In 1912 the camel cart wheel started moving cargo to the then lesser developed markets. the high level of commitment. extensive distribution experience.Hospital Care Unit was started more than 20 years back. Even today M&P’s heritage plays a vital role in growth and sustaining business.. and we recognize our responsibility to stakeholders and society. It provides distribution of products of ConvaTec Ltd. M&P is in the business of distribution since 1912 years. well equipped establishments and a vast operational network.

000 tons of merchandise every year across the country.  Financially sound.  Large infrastructure and network. BUSINESS PERFORMANCE M&P move more than 100.  Diverse portfolio of clients.  Convenience of one window operation creating contractual efficiency.M&P ADVANTAGES  Nation-wide Coverage.  Analytical IT support and extensive reporting capabilities. weight and volume is moved from Karachi to its sales locations through containers & trucks that is then dispatched to various markets by special M&P operated vehicles. stocks.  Nation-wide reach to meet distribution needs. Stocks of all sizes.  97 years of distribution experience and expertise.  Robust and timely feedback on sales. Performance chart • • .  Motivated and passion driven team. sales related statistics and batch recall.

Pepsico International (Pvt) Ltd.• PRODUCTS OFFERED BY M&P: M&P serves all the large and middle size businesses in Pakistan by offering its extensive distribution services. Nutricia Cow & Gate Nestle Pakistan Limited.. MITCHELL'S Fruit Farms Ltd. Perfetti Van Melle Export Far East Ltd. The list below contains few of the major names that M&P caters in FMCG industry. 3M Pakistan (Pvt. Peridot Products Private Ltd Unilever Pakistan Ltd.) Ltd. .

technology and telecom products as well. It has got 61 offices in PAKISTAN and is engaged in diversified (products) distribution including FMCG. In Pakistan major players in the business of distribution are following. IBL is one of the major competitors of MnP and has following companies’ products in their distribution • • • • • • • • HABITT Dunkin Donuts Gillette Imperial Paints & Varnish Works Mead Johnson Nutritionals USA Mobilink Procter & Gamble PTCL • • • • • • • SARA LEE Searle (Pharma & Consumer) Mars Confectionary (Chocolates) Master Food (Ice Cream) Canderel Kellogs Shezan Wrigley's ( Chewing Gums ) I .COMPETITORS: Distribution of product plays an important role as it provides end user with the product they demand and on the other hand serve manufacturing companies to in selling their products to its customer. pharma. • Muller & Phipps • International Brands Limited • Ali Gohar Pakistan • BERC Now we provide an introduction of M&P’s major competitor IBL and its comparison with M&P. sales and distribution of various products. INTERNATIONAL BRAND LIMITED (IBL): IBL is a diversified business house engaged in a wide range of business activities in Pakistan including international trading.

MULLER AND PHIPPS commenced business operations in Karachi in the year 1912. And has strong presence in consumer goods and pharmaceutical industry.S. IBL also has HABITT (FURNITURE PRODUCTS). TERRITORY MANAGEMENT AT Has divided its distribution into 3 business units • Pharmaceutical distribution .DUNKIN DONUTS and many more companies including ice cream. SHEHZAN. On the other hand M&P has consumer market giant NESTLE and UNILEVER along with MICHETTLES. since its inception. MERCK. Through its association with Getz. Ltd is now a division of the Getz Corporation. Pakistan Pvt. CONSUMER PRODUCTS In FMCG products the competition is close. KIWI. LAYS. concentrated mainly in the Asia-Pacific region.3M and many others. There is intense competition between 2 in this industry. experience. is able to obtain a vast reservoir of knowledge. Europe and USA. Pharmaceutical M&P has the strongest hold in pharma distribution and this industry contributes most in their revenue (Rs 10 billion in 2009) IBL has SEARLE ‘s products while M&P has 10 companies including fastest growing GETZ. and today has the distinction of being one of the largest and oldest distribution networks in the country.A. IBL has got maximum products of GILLET. while M&P has hospital care products of multinationals in their product mix.ANALYSIS OF IBL and M&P IBL competes directly with M&P because it both the companies have diversified products in their product mix. ROCHE. paints and varnish products and telecom products (PTCL cards. P&G. also strong hold in pharmaceutical than IBL gives company strong competitive edge on IBL. and mobilink) in their product mix which is absent in M&P and gives IBL edge over M&P. Getz is based in San Francisco and has a world-wide network of offices operating through 23 subsidiaries and associate companies. JOHNSON & JOHNSON. M&P has advantage over IBL in this industry. confectionary. U. and resources. CANDEREL. Ever has been devoted to provide outstanding service to its Principals and Customers.

KHYBER Each zone (province) consists of cities therefore M&P has further divided the zones into cities . Bhawalpur . Cities are further divided into DEPOTS and each depot has got territory in it. ISLAMABAD \ RAWALPINDI .PAKHTOONKHAWA. Larkana etc Teer 2 towns = Tando Adam . Mir pur Khas . LAHORE Teer 1 towns = Hyderabad.BALUCHISTAN Z3.PUNJAB Z4. These zones are divided according to the provincial boundaries of Pakistan i. M&P has divided Pakistan into following zones: Z1. sukkur . Sales Volume vise classification of towns: METRO TOWNS = KARACHI .Currently the company has 35 offices in 24 cites. tando allah yaar etc ILLUSTRATION OF TERRITORY ZONE (consists of 4 zones) CITIES DEPOTS .• • FMCG distribution Hospital & Health care marketing and distribution division TERRITORY DIVISION: For dividing Pakistani market into territories the Pakistani market M&P has divided Pakistan into 4 zones.SINDH Z2.e. quetta . each province represents a single zone.

Each office is responsible for supplies to the area under its jurisdiction. this zone is further divided into cities and Karachi is one of them. next Karachi is divided into 4 depots and these 4 depots are divided into territories.TERRITORIES belts. a/c. key a/c etc) (territory consists of EXAMPLE OF TERRITORY DESIGN Karachi lies in zone 1 (Sindh). M&P has 35 offices in 24 cities in Pakistan. So the smallest unit accountable in territory design is “territory” and zone is the largest accountable unit at M&P. These cities includes KARACHI HYDERABAD LARKANA SUKKUR NAWABSHAH RAHIM YAR KHAN BHAWALPUR MULTAN SAHIWAL FAISLABAD LAHORE GUJARANWALA SIALKOT JEHLUM RAWALPINDI ISLAMABAD ABBOTABAD MINGORA MARDAN PESHAWAR BANNNU SARGHODA D I KHAN D G KHAN QUETTA PESHAWAR . Karachi in all has 160 territories.

Distribution Flow at MULLER AND PHIPPS .

Key account 4.e. Thus in order to execute the business efficiently every type of company has some objectives same is the case of M&P as their objectives are defined in following manner. Thus it is called principal defined objectives as primary objective of distributor is the secondary objective of Principal.So this is a chain of actions in which objective of one serves as the pre-requisite of other’s objective. Institutions HOW M&P DEFINE ITS OBJECTIVES: M&P is a distribution house which serves as an intermediary between manufacturer and end user.CHANNELS: Channels are defined as ways through which products of the company reach to the customers. M&P. to sale the product to different channels . • PRINCIPAL DEFINED OBJECTIVES: Principal is the manufacturing company it sold its products to distributor like. retailer etc) whereas the secondary target of Principal becomes the primary target of M&P i. Wholesale 2. 1. Following are different forms of channels that M&P uses. M&P uses a combination of these channels in order to get 100 % successful sales transaction and to provide end users the product that they demand. International model trade (IMT) 5. Small distributors 6.It has its own objectives like primary objective of principal is to sell the product to M&P and its secondary objectives are to push the product in different channels (wholesaler. Retail 3. • HIERARCHICALLY DEFINED OBJECTIVES: .

They use two aspects in designing geography of territory which are. .Objectives in side M&P are also defined according to hierarchy. TERRITORY DESIGN: M&P design its territories using three different techniques together which are listed below. They are few in an area and serves as a place where a large chunk of shops present. • • • Geographically Product vise Logical outlet GEOGRAPHICALLY: Geography is the terrestrial boundary that is used to identify the area of influence of an individual or group. Like objectives of NSM are the prerequisite of area sales manager’s objectives and they serve as the corner stone in the definition of Branch manager’s objective so on and so forth. Objectives of national sales manager (NSM) define the objectives of overall hierarchy down the stream. • • Account vise Belt vise ACCOUNT VISE: M&P define accounts as the shops in an area which are located inside and do not have exposure to main road of an area. In the situation of M&P geographical aspect serves as an important tool in its territory design. BELT VISE: Belts as the name indicate a long straight line of shops along the road.

A Clifton Defense Societies Gulshan B Gulistan-e-jauhar Shah faisal F.Geographically it has divided its areas into 3 classes according to their sales potential and contribution in the city. A class areas contribute maximum in sales volume and requires special set of sales force to operate and handle customers where as B and C class areas also require different selling skills according to the nature of the customers present in the areas. LOGICAL OUTLET: . PVM and etc.B area North nazimabad Nazimabad C Korangi Orangi Landhi Malir Baldia New Karachi North Karachi PRODUCT VISE: It is another technique which M&P uses in territory design. Doritos(CPI). SPECIAL CATEGORY: It is a separate category which is dedicated to only one product line i. 3M . They classify products into three main categories which are. Nestle. and Saralee(kiwi) etc.In M&P there is a separate sales force for 3M scotch. CATEGORY B: In category B they have products like Kernel pop.e. • • • Category A Category B Special Category CATEGORY A: In category A they have products like Colgate.

New business potentials must also be considered. Logical outlets. TERRITORY MANAGEMENT MODEL: • ANALYSIS In analysis part we simply check channels. geography. • OBJECTIVES: . These are the potential accounts which are the targets of the company. belt. trade and depots. Proper analysis of these channels and territory area is very important.This is the term that is used in M&P for all those shops which keep its products. to check this they will check the whole area and then sub-divisions of that area. and servicing requirements. Established and new accounts have servicing requirements that are based on both their past volume with the company and their unique needs and problems. M&P will simply go through that what channels are available to reach geography i. From this information. So in designing territory you also consider logical outlets as they can serve in increasing the business of the company. market. or the share of an account’s business that the firm can reasonably expect to attract. The analysis component deals with three key concerns: account load. and which area has more potential. account potentials. Sales records provide a reasonable potential of each account’s total purchase volume in a certain product category. The term ‘account load’ refers to the number of actual and potential customers assigned to a given salesperson.e. the territory manager can project account potential. the means of reaching a particular retailer or wholesaler.

in bulk quantity and avails the discount of bulk buying. worth (potential &output). These frequencies depends on the type of customers. or monthly.Quarterly target achievement. it means that means through which our finish product will reach to our end users. and Return on Investment factor. as I mentioned it depends on the customer. we need wholesalers. • STRATEGY They define strategies as: • • • • Call frequency should be weekly. Capturing new customers for M&P is not a big deal. men power. they will now look that is it feasible. For this division.M&P will make all the possible measures that have been discussed in strategies part to achieve its quarterly targets. it should provide top potentials and output should be productive. the return should be lucrative enough to keep the business going. These are the aspects on which the distributor can rely and make his sales target achievable. By this the mean that after they have gone through analysis of all the key features of designing a suitable territory. and as added by Mr. The place or territories that they have sorted out in analysis part are lucrative enough. mapping. i. in Gulistan-e-Johar. . Then he sells his bulk quantity in segments to the small shopkeepers. size of territory.e. they do achieve there quarterly targets and there sales is growing every quarter. it shouldn’t be too big or too small i.M&P looks in defining objectives they look for its feasibility. they should get profit on selling it. once the product has been bought by distributor (M&P). sugar in a cup of tea should not spoil the health nor should it make him feel tea without sugar. It is very important for a Sales Rep that his sales grow. International model trade (IMT) and small distributors. And return on Investment is considered to be the boss of all the objectives of M&P.e. for example: Pakistan Super Rice Store. Lets get back to the call frequencies. Division of channels. Like wholesaler is the person who buys different products from the distributor. The marketing of products. some customers get feed up with too frequent calls and some need to be treated frequently. TACTICS: How to bring the strategies in practice is known as tactics. key accounts. retailers.Intensity of territory and coverage and the minimization of nonproductive time come under tactical issues. how much is there return on investment and how much growth have they made. Then comes distribution of areas to the respective sales force but before that the man power and area potential is taken into consideration and decision is made accordingly. fortnightly. Size of territory should be appropriate. quality of products and price makes its customers at its own. by this he can judge his success. Their targets are month vise. and van power. this is just a piece of cake for them. Khalid Khan. I mean won’t it result in wastage of potentials of the company. At the end of the month they make measurements of their sales and in this way they evaluate that where do they stand.

DAILY PERFORMANCE REVIEW AND IMPLEMENTATION SELFMANAGED CHART . This is the way they implement their sales design and they work in the way described by the charts below. now we implement our game plan.• IMPLEMETATION: As we have studied the whole scenario.

EVALUATION: Evaluation is like checking that the recipe has provided us the food with delicious taste or more ingredients and required to add deliciousness. • SALES TEAM: Individual assessment and group assessment. are they resulting good for the company? And M&P does evaluation on following grounds. Periodic Check: It is on Daily. Weekly. Monthly. companies make check that whatever tactics they have implemented.) under that area sales manager will be checked for their productivity. has been achieved or not? And after this the individuals enrolled (Sales Rep. and Annually basis. In this phase of selling process. Quarterly. M&p will check that the tasks allocated to a particular Area Sales Manager. All the • .

For every depot there is a person who is accountable and under him there is a team who is responsible for particular region of that depot. • Territory Check: M&P checks whole of its territory. feedback and controlling the huge number of outlets becomes easier. Khan told us that in Karachi they have for depots and under those four depots there are 160 outlets. In this way task allocation. Mr. . The things which require prompt attention are checked on daily basis and things that are part of long term plans are taken into consideration according to their allocated time.essential things are checked accordingly and appropriate measures are timely taken by M&P to overcome the mishaps.

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