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ASP/SALES/04

Can You Tune the Channel?


Same time the ad they aired was projecting the macho characteristics of individual, who is adventures, take risks in his life, help others, thereby creating image for him. This combination does not jell well. Added to that they have consumer promotion offer, the Fruit jam, which often get damaged, invited so many difficulties in handling the 'combipack'. Above all, if the damages were found in the free promo offers, company normally, does not allow to replace it; sometimes, the stockiest would not have stock of the free stocks, like Biscuits, Jam, Face powders etc., as they normally don't deal those lines. Surprised Sriram," do you mean to say that whatever be the damage, is it the company job to replace it? Retailers must handle it with lot of care. In extra ordinary situations, the damages may be replaced. But I could not understand really that whether there are any idea of modifying the image of the brand, which is already created! Rather I viewed this idea as allocation of risk to various segments so that any attack on this segment may not very severally pull down the volume". "O.K., Eventhough I am not fully convinced, I will put another point in the same case. Before introducing the promotion scheme, they must get to know what is the closing stock of each stockiest. Because, the same point of time, I will have both consumer promotion (C.P.) as well as non-C.P. stocks. I really don't know which I have to sell. I cannot push the old stocks as

Mr.Sendhil, who is a stockiest for the Beverages division of the Multinational FMCG giant, Bharat Products limited, frustrated about the various practices followed by the company in the recent past on the promotional aspects. " Look at the way they organize things; I really don't know, how they so far succeeded in the game: whatever be the scheme they worked in the recent past, very badly backfired". His friend, Mr. Sriram, who is a freelance consultant, close researcher on promotional aspects followed in the marketing arena, keen to know various practices of the company from his close friend. He probed" do you mean to say, they have taken without prior study?" "Know doubt, just they are taking decision as scalp arrangement; not based on any long term perspective". Mr. Sriram questioned, "how did you come to such a conclusion, do you have facts, or incidents, that leads you to arrive such a conclusion?" "Not based on single incident, plenty of such things happened in the recent past as well as the status quo continues" replied frustrated Sendhil. Some time back, If I remember correct, during the Dewali time, they offered a 100g fruit jam pack worth Rupees five for every 100g of 'Supreme Star' tea, whose selling price was Rs 19/- The brand is fastest moving one, doesn't require any promo exercise. Actually they have tried to convert the household segment, which normally try competitor brands, and break the image that this brand is meant for "Tea shops". But the

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my counterpart in the neighboring town/or in the same town, if it is big town, is going to liquidate the promotional stocks as quickly as possible. I cannot keep the old one also, as they are nearing the expiry date." Sendhil added fuel to the fire. " No, this is very simple, you must have good MIS work for you" Sriram replied very causally. "Let me give one more incident; during the same period, we have come up with the scheme of for every three kilograms of purchase made on 'Supreme Star' and 'Four Square' the retailer will get a B.K. 100g globe jamun mix free. This time we worked our strategy through the retail chain. It failed miserably because, during the festival time, the B.K. itself offered schemes to retailers, and retailers under pressure because they unable to meet their targets. The retailers' quantity purchase schemes had several lucrative offer than just even though they got it free from us, results in our defeat without much of noise". Sendhil started cited more points to strengthen his side. "Look at Sendhil, you cannot wait until others shut their door. It is part and parcel of the game" replied Sriram. "I am not asking the company to wait until others close their schemes, I asked them to work the strategies very carefully. Eventhough, the offer seems to be worthy one, the execution time, was not conducive to do so: to give you surprise, we have done better with this same B.K, sometimes ago" Sendhil trying to put something to argue his case. Now we have for our brand, 'Deluxe Taster', an array of schemes with us; for every 500g pack, we have 'STG Rasam Mix', for every 200g pack, 'STR Vermicelli' and for every 100g 'special papad' from the same company.

" No Sendhil, all these schemes are very attractive one; look at most of the FMCG companies do not offer any such schemes: you are really lucky enough to push the volumes. "Sriram, finally you forget two important points, diluting the brand equity of the brand and retail shelve space. An array of scheme would create a negative image about the brand. Some of the customers/neighbors questioned why there are so many schemes for 'Deluxe Taster'? Above all the advertisement with one of the famous film actress, whose is well known for her homely characters try to project herself as a macho character, who can handle pressures just like in her job relax with our brand, really not boosted any impact to the brand". One of a film director used to conduct a 'sponsor programme' on every Sundays, certain extends really created some amount image for the product, but these two programmes are really very contra in nature: Now the retailers are running out of shelve space to accommodate more and more of such an array of scheme, as many companies trying for the same space. But this is a simple ball game, Sriram, we tried all these because there was a price reduction of raw material, which we do not want to directly reflect in the retail price". This is very genuine problem Sendhil, Sriram finally agreed upon something. "Sriram, to be very frank with you, whatever the 'Display Offer' we planned ultimately resulted in chaos in the market" "Now you are moving the coin though display", Sriram laughed. " Not

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Sriram, this is very tricky issue, be serious about this, frustrated Sendhil expressed. We use to offer lot of display contest for various brands. Normally, these schemes, will be something like, " The retailer has to purchase 3-5 Kgs. and put it in the display for a period of 8-10 weeks. Then we should take the photographs of the displays and sends it to the Sales Officer or Area Sales Manager. Based on the photographs, the company official visits the shop and evaluates the display. All the participants will get consolation prizes. The prize money will be given to them in total after a period of 12 weeks, if everything goes well." "Sendhil, this is suppose to be a good one. Just like to find faults with the practices, don't think everything is wrong, I really could not find any thing bad in 'this scheme' ". No Sriram, you have taken the intricacies very lightly. Look at the practices at Britannia, Nestle, where at the time of purchase, they use to dispose the prize money, so that the retailer is immediately getting the reward in his hand, and happy with that rather than endless waiting as in our case. Moreover, most of the stockiest normally try to 'convert the 'display scheme' to 'budget' and thereby indirectly encouraging the 'undercutting' or 'trading of the brand'' the price in the market. In total, we are moving branded sales to commodity market; I may be not surprised even we may land up in the same old barter transactions". Sendhil, this is really a new dimension of how the game is getting shaped in the FMCG segment, surprised Sriram replied. "But Sendhil, in my perspective, the

methodology used here is better one: I would like to evaluate the 'display' before I dispose the prize money: you people misused the scheme. It is only matter of fact how we perceive the importance of such display contest. I still remember the beautiful display of 'Britannia Little Hearts'". Sriram, this is only few of the practices in the market. I have lot such stories: some of the stockiest use to get abnormal price discounts on the 'primary' they are taking, and converting them as 'budget' and resulting lot of chaos in the market. "In the recent times, the Non-Business packs (NBS) i.e., the bulk packs like 2 Kgs, 1 Kgs, and 500g packs, which are directly sold, to 'Hot Tea Shops', to push the volume, we introduced some of the schemes, without much to be added to it, they are not upto the expectations. For example, we have another array of schemes like for every 2 Kgs of NBS pack, you will get one Kilogram of 'sugar', for every one Kg pack, half kilograms of sugar etc. For such activities, the stockiest has to incur the expenses and latter he has to claim it back from the company. This process normally will take two months; hence I will get back my money only after 2 months. I find it very difficult that on an average my investments somewhere around 40-50 thousands get locked with the company, without any returns from it and to patch up the requirements, I am borrowing the shortfalls, from the local market. These kind of practices really I don't know how they are just like working" Sendhil drives the conversation to central theme of the business i.e., returns. " Sendhil, this is something very crazy, I have already known that

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your company had 'negative working capital'. "Sriram, even we tried to change the practices of 'business market' and failed miserably". Tried to change the practices? What you mean? I really could not get anything; perplexed Sriram left without any guess. During the last quarter, we introduced for every 2 Kgs of 'Supreme Star' or 'Four Square' the 'Hot Tea Shop' will get One liter of condensed milk as free. I did not know whether any prior study had been conducted in this regard. You cannot change the attitude of business buyer over night. A person who is using the 'conventional milk' for a long period will not appreciate any 'just like that' substitute offered to him even though it may come to him free cost. "Sendhil, really all this measures are not arrived just like that sitting across the table, and evolved one, lot of thinking undergone in arriving all these schemes. Whatever so far I have heard, really thrilled me", Sriram reacted. Not only on promotional aspects, even we failed to make any impact in our recent re-launch our most popular brand 'True'. "This is something very different Sendhil" Sriram is ready for another episode. Sometime back, they have relaunched their famous instant coffee "True". Nothing went in favor of it so far. Part of promotional campaign, some of the Bus Stops in the Capital City were reconstructed with new signboards, which were not very attractive. Most of the people, nowadays, not at all looking the sign boards, unless they are very attractive. 'Lancer' placed car itself as part of promotional campaign in the signboard. Of course, lots of water heater

products followed the suit soon. Nowadays, they started putting glow sing boards, in place to attract or get more OTS for the boards. This is one of the areas, where we failed to make expected impact. Of course, the ad campaign is good one. But the scheme, they have worked out for this time is very horrible. I really could not in a position to convince my retailers to get volumes. " Do you have any survey to tell this boards are not that much attractive?" Sriram questioned. Of course not, Sendhil replied. "So let us be very objective in evaluating those scheme with based on the data with us " Sriram was very specific this time. "The schemes after re launch, something like for every 200g pack will get Rs. 40/worth of 'Chocolates' free and for every 100g pack will get a 'Nutrition diet drink' pack as free did not push the volumes" Sendhil's arguments seems to never end. Sriram, after a big yawning, "Sendhil, some of the schemes are really good one: but you, the channel partners have a complete aversion on all these schemes, is really a million-dollar question for me". Case material prepared by R.Venkateshkumar as a basis for classroom discussions. Cases are not designed to present illustration of either correct or incorrect handling of administrative problem.

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