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ON

SALES AND MARKETING STRATIGES


OF VADILAL

For the partial fulfillment of


Master of Business Administration
Submitted to:
Ms.Roli Mishra

Submitted by:
RAVENDRA KUMAR GANGWAR
M.B.A. IIIrd-SEM
Roll No. 1475770045

UTKARSH COLLEGE OF MANAGEMENT AND


TECHNOLOGY
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PREFACE
Sales Department is the only revenue generation Center for the organization. Other
departments are considered as expense centers for the organization. In todays,
competitive parlance the selling activity is very critical. It requires lots of
brainstorming to occupy the mind share and heart share of the customers or
end users.
In most of the Indian companies the sales and marketing activities are carried out
together to have better results. Sales executives participate in and are jointly
responsible for formulating strategies on product line, on pricing, physical
distribution, marketing channels and promotional activities. The primary
responsibility is to manage the sales team & maintenance of the relationship with
distributive organizations.
More or less Ice cream is having seasonal demand and it requires continuous sales
efforts from the organization. Distribution system, which is prime concern for the
Ice cream manufacturers, as it is low involvement and perishable product. Vadilal
is a market leader in the branded Ice cream market in Ahmedabad. Due to highly
competitive structure of market, Vadilal is continuously doing sales and
promotional activities to boost the sales and retain leadership.
We are given opportunity by the Vadilal Industries Limited to fill the gap between
classroom study and practical application.

ACKNOWLEDGEMENT
For successful completion of this project, we owe a great deal to many people. We
convey our gratitude to VADILAL INDUSTRIES LIMITED for giving us
opportunity to do project with them. In allowing us to visit the organization and
study the various sales & distribution aspects, they have provided us valuable
information. We are thankful to Mr. A.K Saxena For spending time from his busy
schedule. We are thankful to office staff for their kind cooperation.
We take this opportunity to thank our H.O.D. Dr. Manish Aggarwal we are
grateful to Miss. Roli Mishra who helped us to elevate our insight and knowledge
of sales and distribution and giving us guidance throughout the project.
Last but not least, we are very thankful to all those persons who directly or
indirectly helped us in preparing this project.

INDEX
Preface
Acknowledgement
Chapter 1: Introduction
Chapter 2: Sales Management
Chapter 3: Sales Related Marketing Policies
Chapter 4: Competitive Structure and Policies
Chapter 5: Sales Department Relations
Chapter 6: Sales Force Management
Chapter 7: Sales Budget, Quotas, Assigning territories, Claim settlements
Chapter 8: Logistic Systems
Chapter 9: Analysis of Distributors
Chapter 10: Findings and Suggestions
Bibliography

Chapter 1: Introduction
1.1 About Vadilal Group
1.2 Organizational Structure

1.1 ABOUT VADILAL GROUP


VADILAL GROUP had its humble beginning, more than 95 years ago, when its
founder, late Shri Vadilal Gandhi, started manufacturing Ice cream with a hand
cranked machine.
Today it is a diversified Business Group with major interests in Ice creams, Food
Processing, Real Estate Development and Specialty Gases.

Head Quartered in Gujarat, the most industrialized State in India, the Group had a
turnover (1998-99) exceeding Rs.1500 million. Major companies of the Group are
listed in several Stock Exchanges of. India. The Group has a large investor base
and its brand name "Vadilal" commands an excellent equity.
The "Vadilal" philosophy of providing its customers with quality products and
services at affordable prices has resulted in the brand being a household name in
India.
I
ICE-CREAM DIVISION:
VADILAL the name conjures up images of ice cream laden bowls and a plethora
of new flavours. Starting from one man show with a hand cranked machine in
1926 as a small retail outlet, the ice cream division now has a production capacity
of 1 lac ltrs/day at 3 sophisticated plants, located at Ahmedabad, Pundhra and
Bareilly. These ISO 9002 certified plants for Pundhra and Bareilly are established
in such a way that they are in consonance with the market expansion strategies of
the division.

Vadilals ice-cream manufacturing facility at Pundhra is one of the most modern


facilities in country. With the eye on the export market the company is maintaining
hygiene as per international standards in procuring milk directly from the farmers
to improve the microbiological quality. A wide range of products in all segments
like premium ice cream, regular ice creams and frozen desserts are being
manufactured at this plant.
Vadilal has one of the largest cold chain networks in India, comprising of 12 C&F
agents, 250 distributors and 16,000 retailers. The network is kept alive by a large
fleet of refrigerated vehicles. Refrigeration equipments and retail freezers are
sourced from world leaders in the technology so as to deliver quality products to
the consumers, which is a commitment at Vadilal.
Vadilal has 25% of the Indian ice cream market as its share. But that's no surprise
considering that the group has the largest range of ice creams in the country in a
variety of flavours, packs and forms. The group has a product matrix of over 200
SKUs comprising of cones, cups, candies, family and party bricks and bulk packs.
Vadilal introduced the concept of "flavors of the month" under which the company
develops and markets one new flavor every month for its customers delight.
PROCESSED FOOD DIVISION:
Vadilal has entered in the horticulture processing industry in May 1991.
Keeping in view the tremendous export potential for processed foods, Vadilal has
set up a manufacturing unit having an installed capacity of 5,400 tons per annum.
About 80% is exported to USA, Middle & Far East Asia.
Vadilal has also been awarded with ISO 9002 quality certificate, by M/s
Underwriters Laboratories Inc. USA. Vadilal was also awarded the certificate if

merit fir excellent exports performance by APEDA (Agriculture and Processed


Foods Export Development Authority).
FOREX ADVISORY SERVICES & FFMC DIVISION:
Vadilal has entered in this business in April 1996, offering non-banking financial
services. The main activities are:
Forex Advisory and Forex Exposure Management to Importers and
Exporters.
Bullion informative service on Gold Silver. A complete useful guidance to
bullion traders, importers and jewelers.
LME-Metal informative service ibn base and Scrape metals. A complete
useful guidance and information to metal traders, importers, and Metal
scrap indenting agents.
RBI authorized full-fledged moneychanger FFMC related transactions:
Sale/Purchase of foreign currency and travellers cheques coffee, pepper
rice, and tea informative service reports.

1.2 AN ORGANIZATIONAL STRUCTURE OF THE FIRM


Vadilal is mainly divided in two parts.
VADILAL

VIL
Vadilal Industries Limited

VEL
Vadilal Enterprise Limited

VIL:
Vadilal industries limited are one part of Vadilal, which is manufacturing division
of Vadilal. Along with manufacturing, it also looks after the Quality Control,
Research and development, Dispatch, and storage related activities.
VEL:
The Sales and Marketing related activities has been performed by the Vadilal
Enterprise Limited. VEL is liable to handle the relationship with the C&F agents
(Clearing and Forwarding Agents), Distributors and Dealers.

Chapter 2: Sales Management


2.1Organizational Structure of the Sales Department
2.2Responsibility and Authority of Individual at different hierarchy level

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2.1 ORGANIZATIONAL STRUCTURE OF THE SALES


DEPARTMENT

General Manager
(Sales and Marketing)

Senior Sales Manager

Regional Sales Manager

Dy. Regional Sales


Manager

Area Sales Manager

Sales Executive

Joint Sales Executive

Sales Coordinator

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2.2 RESPONSIBILITY FUNCTIONS AND AUTHORITY OF


INDIVIDUALS AT DIFFERENT HIERARCHY LEVEL
General Managers Responsibilities and Authority:
Sales Administration
Advertising and Media
Product Management
Recruitment and Selection at higher Authority level
Designing Sales promotional Programs
Responsibilities and Authority of Senior Sales Manager, Regional Sales
Manager and Area Sales Manager:
Generate Sales
Assigning targets to SE, JSE, and SC
Recruitment
Maintaining relationship with distributors and C&F Agents
Assisting in designing of Promotional Programs
Responsibilities and Authority of Sales Executives, Joint Sales Executives
and Sales Coordinators:

Appointing Distributors/Dealer

Provide Machines

Handling Dealer/ Distributor complaints

Give the promotional tools to the Dealers and Distributors

Dealer/distributor Communication

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Chapter 3: Sales related Marketing Policies


3.1 Product line
3.2 Promotional Measures Taken By Vadilal
3.3 Pricing Policies
3.4 Marketing Channel
3.5 Distribution Intensity
3.6 Types of Power in Channel

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3.1 PRODUCT LINE OF THE FIRM


Vadilal offers two types of Products. One is Ice cream and another is Frozen desserts.
Vadilal has the maximum range of ice-cream products in India i.e. over 200 SKUs. It
has preference for tastes as per budgets. There are rich creamy ice creams for the
connoisseurs and low fat frozen desserts for the health conscious. There are plain
favorites, chocolate ecstasies, romantic ripples, nutty delights, fresh fruit fantasies and
are guaranteed to spark your taste buds. Vadilal has priced its products on the principle
of real value for money.
Product range offered:
Cones, Candies, Cups, Family packs, Party-packs, Bulk packs, Chocobar, Juices,
Candies in 3 flavors, Sundaes, Kulfies, Frozen Deserts, Fresh fruit Ice-cream, Ice-cream
pizza

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Quality
At Vadilal, commitment to Quality is an Attitude. Vadilal Ice Creams contains only
the best ingredients, be it cashew nuts, almonds, pistachio chocolate or fresh fruits.
Great pains are taken to find the finest ingredients from around the globe. State-ofthe art-technology ensures that each scoop is dense, rich and filling, with no extra
air or ice-flakes. Special care is taken during packaging, storing, transit and
delivery so that consistency in quality is maintained. This is why when the end
product reaches the customer, he is convinced that quality shines through in
everything the group does.

3.2 PROMOTIONAL MEASURES TAKEN BY VADILAL DURING


THE YEAR
Vadilal has run promotional schemes throughout the year. Different promotional
schemes for Customers, Dealers and Distributors are as below.
Promotional schemes for Dealers:
Vadilal had offered scheme for purchasing of Deep Freezers for dealers on
occasion of Diwali.
Company

Capacity

Price (Rs.)

Free Ice-cream

Western/Carrier
Western/Carrier
Voltas (3 Doors)

300 ltrs.
400ltrs.
400 ltrs.

19,000*
23,000*
24,000*

(Rs.)
5,000*
6,000*
5,000*
*Condition applied

Promotional schemes for customers:

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1) One scheme, which Vadilal is running for the entire year, is offering
ComboPack. Combo pack is the package of two Party Packs. Customers
are getting two party packs by paying price for just one party pack. One
party pack is absolutely free. Vadilal get tremendous response of this
scheme and that is why they have decided to run this scheme for the entire
year. Under this scheme sometimes Vadilal offers two different flavors at
price of one.
For example:
Purchase Ice-cream
Free Ice-cream
Price (Rs.)
Vanilla
Vanilla
65
Kaju-Draksh*
Kaju-Draksh*
100
Butter scotch*
Butter scotch*
100
Fresh Strawberry*
Fresh Strawberry*
100
Fresh Litchee*
Fresh Litchee*
100
Black Current
Strawberry*
100
Fresh Sitafal
Real Vanilla*
100
Swiss Cake
Chocolate sundae*
100
Khandala special
Mango Ripple*
100
Fresh Orange
Fresh Mosambi*
100
Above party packs are available in 900ml and Sundae is 500ml
*Frozen desserts

2) Vadilal had launched Diwali Special scheme. Under this scheme Vadilal
had offered two choices to the customers:
PanchRatna Ice-cream + Cellos hot lunch Tiffin = Rs. 225/Rs. 140/-

Rs. 285/-

= Rs. 425/-

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BadamBahar Ice-cream + MILTONs 4 container set = Rs.125/(900 ml)

3) Chocolate Sauce with Vanilla: The consumer scheme of 50g Chocolate


Sauce Free on Purchase of one liter party pack of Super Vanilla became a
Trendsetter scheme in the market. The response to this offer was enormous.

Promotional tools:
Promotions only through paper advertisements such as in daily
newspapers.
Promotions provided to dealers through Wall painting, Freezer painting,
Hoardings, Acrylic boards, Glow sign boards, Attractive boards for the
newly introduced flavors or schemes.

3.3 PRICING POLICIES OF THE FIRM


The pricing policies followed by the Vadilal are as below.
1) Policy on pricing relative to Costs:
Vadilal follows Full-Cost/Cost Plus pricing, for the states where their
manufacturing plants are situated. Under Full-Cost pricing, no sale is made

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at a price lower than that covering total costs, including the variable costs
and allocated fixed costs.
For Example:
X

cost of production

X+Y

cost of goods sold to VEL

X+Y+6%

cost of goods sold +Distributor margin

X+Y+6%+(12% to 20%)

Dealer margin added to above

= MRP

(Consumer Price)

2) Geographical Pricing:
Vadilal charges extra penny as Geographical pricing from the states where
the manufacturing plants are not located. Here, the margin of the C & F
agent is added to the MRP of the Ice Cream. Also the distribution cost is
higher for such states so these states have to pay somewhat higher charges
for the Vadilal Ice-cream.
Example:
X+Y+Z

Cost of goods sold + C&F agents margin

X+Y+6%+Z+(12% to 20%) Cost of goods sold + C&F agents margin


Distributors margin + Dealers margin

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3.4 CHANNEL STRATEGY

MANUFACTURER

VIL
C & F AGENTS

DISTRIBUTORS

DEALERS/RETAILOR

VEL

CUSTOMERS

The above channel strategy defines the channel members and whether they are
part of VIL or VEL. As shown the Manufacturers and C&F agents are handled by
the VIL, whereas serving the Distributors, Dealers and Customers are the
responsibility of the VEL.

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3.5 DISTRIBUTION INTENSITY


There are basically three types of distribution intensity.
1. Selective Distribution: Selective distribution means selecting only those
outlets/retailers that can best serve the manufacturers interest.
2. Exclusive Distribution: Exclusive distribution means distribution of
manufacturers product or products within particular area is to be confined
solely to the retailer/outlet with whom the manufacturer has made written
or oral agreement of distributing the product/products.
3. Intensive Distribution: The manufacturer following the policy of mass
distribution or intensive distribution aims for maximum sales exposure by
securing distribution through all those outlets from which customers might
expect to purchase the product/products.
Vadilal has adopted the intensive distribution to have maximum sales by availing
Ice cream at the nearest location to the customers. This way Vadilal is getting
maximum business. The manufacturer using this distribution strategy needs
several marketing channels. The channel strategy followed by Vadilal is as shown
below.

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3.6 TYPES OF POWER IN CHANNEL RELATIONSHIP


Vadilal is using Coercive Power with dealers. Vadilal forces dealers, to not
to keep other brands Ice cream in their freezers.
Vadilal uses Reward Power, to offer intermediaries(C&F agents,
Distributors, Dealers) extra benefits in the form of incentives, discounts,
tours etc. for achieving targets and for better performance.
Vadilal uses Reward Power, to customers by providing attractive product
offerings like free schemes.
Vadilal uses Expert Power in developing new flavors of Ice-creams and
that way to help Dealers/Distributors for better sales.
Vadilal has very strong brand image in the Ice-cream market. People are
getting good reference from customers. This way it uses Referent Power.

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Chapter 4: Competitive Structure & Policies


4.1 Competitive Position Of The Market
4.2 Promotional Assistance Provided by Manufacturers
4.3 Advertising
4.4 Distribution

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4.1 COMPETITIVE POSITION OF THE MARKET


CHANGES IN THE LEVEL & KIND OF COMPETITION:
Consumer, who used to have a particular brand of ice cream no matter whenever it
is available, now has changed his preferences as per the changing economic
circumstances. The competition is more towards the prices of the product. Today,
with the entry of loose ice cream manufactures, the branded ice cream
manufacturers had to reduce its prices to such an extent that now the price of an
ice cream more or less equals to the price of a soft drinks and in some cases even
lesser. This has not only tremendously increased the sales of the company, but also
has diverted the preference of consumers from soft drinks to ice creams to be
served at any delighted occasion.
The distributors are also benefited as per the areas provided to them for the
distribution of stock.
The competitive structure of the Indian Ice-cream market is as below
Brands
Kwality walls
Amul
Vadilal
Others

Market shares (%)


35
30
25
10

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Market share of Ice-cream companies


in India
vadilal
25%

others
10%

Amul
30%

Kwality
Walls
35%

The above graph reveals that the Kwality walls is the national number one
player having 35% of the total market share. Vadilal is having the 25% market
share and giving tough competition to major brands like Kwality Walls and
Amul.
MARKET SHARE OF ICE CREAM MANUFACTURERS IN GUJARAT:
Brands
Vadilal
Amul
Havmor
Others

Market shares (%)


52
25
13
10

market share of Ice-cream companies


in Gujarat
Amul
25%
vadilal
52%
others
10%

Havmor
13%

The graph shown above depicts that in Gujarat Vadilal stands at the first place with
52% of the market share followed by Amul and Havmor with market share of 25%
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and 13% respectively. The market share reveals the strong position in the mind
and heart of the people.
MARKET SHARE OF ICE CREAM MANUFACTURERS IN AHMEDABAD:
Brands
Vadilal
Havmor
Amul
Kwality walls
Loose ice creams

Market share (in %)


35
25
20
5
15

Source of information: www.indiainfoline.com

Market share of Ice-cream companies


in A'bad
Kwality
Walls
5%

Amul
20%

vadilal
35%

others
15%

Havmor
25%

If we see the scenario of the Ahmedabad Ice cram market then we find Vadilal at is
at first position having market share of 35%. However, number one national player
Kwality Walls is having just 5% of the total market share.

4.2 PROMOTIONAL ASSISTANCE PROVIDED BY THE


MANUFACTURERS

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The promotional assistance provided by the manufacturer has improved and


increased as compared to 3 years before. The promotional assistance is given to
the distributors to deliver the same to their dealers. The posters, glow sign boards,
posters for newly launched flavors or schemes, wall paintings are provided to the
dealers at the beginning of their business. The same is supplied even whenever
demanded by the dealers themselves. Thus the supply of such POP displays have
been done free of charge to all the dealers, but sometimes too small dealers may
not be given all the available promotion as depending upon his sales. The
promotional assistance also depends upon the annual sale of a dealer, the location
of his shop and the market he covers.
PROMOTIONAL MEASURES TAKEN DURING THE YEAR:
1. Schemes introduced by Havmor
Scheme throughout year:
Purchase Ice-cream
Bonanza (1000ml)
Butter Scotch (1000ml)

Free Ice-cream
Pista (1000ml)
Vanilla (1000ml)

Price (Rs.)
100
100

Scheme for Diwali festival:


Madhumalti Ice cream + Asean companys 4 = Rs.299/(1000ml)

container Tiffin box

2. Schemes introduced by Amul:


Amul has also introduced the Combo Pack schemes to attract the
customers/consumers against the competitors. The schemes are as
under:

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Combo Pack
SantraMantra +Vanilla
Fruit Bonanza + Vanilla
Alphonso Mango + Vanilla
Butter Scotch + Vanilla

Price (Rs.)
100
100
100
100
Flavor contains 900ml each

Amul was selling the Vanilla Party Pack (900ml) at just Rs.40 and
Party Packs (900ml) of Kaju Draksh and Butterscotch at just Rs.60
each.

EFFECTS OF SCHEMES ON SALES:


The disturbed situation in Ahmedabad since last 3-4 years plays a major role in
decreasing of the sales. But due to the introduction of schemes, the sales have been
maintained and has supported remarkably. The schemes have increased the sales to
a considerable level that has benefited all the intermediaries.
Increase in sales
Year
2001-02
2002-03

Sales
Average/below Average
Increased by 50%

Market Reaction to Vadilal's activities


The recent promotional schemes have a tremendous response from the consumers.
Consumers have been writing letters with requests for the extension of the scheme
period. The growth in sales during the scheme period was ten times over the
normal sales.

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4.3 ADVERTISING
The advertising is done mainly through 2 ways.
Television
Newspaper
Since last two years, the Television advertising share has been abased and
Advertising through Newspaper has been spurted. The reason is that nowadays,
Companies are coming with different promotional schemes in different states. So
the Newspaper is the easier and cheaper way to convey the promotional schemes.

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4.4 DISTRIBUTION
All the competitors have adopted the Intense distribution policy.
The no. of retail outlets served by is shown in the below table.
Competitors

Approximate increase in the retail

Appro.%

outlets in the last 3 years

Increase or
decrease

Vadilal
Amul
Havmor
Kwality walls
Loose ice cream parlors

June01
1600
800
380
160
60

June02
2000
1100
450
50
100

60% inc
50% inc
45% inc
70% dec
50% inc

Vadilal has been serving approximately 2500 retail outlets in the current year.
NUMBER OF DISTRIBUTORS FOR EACH BRAND OF ICE CREAMS:
Number of distributors of the leading brands of ice cream in Ahmedabad
as on June 02
Brands
Vadilal
Amul
Havmor
Kwality walls

Number of distributors
9
7
Doesnt have any distributor
5

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Chapter 5: Sales Department Relation


5.1 Relationship With Other Departments
5.2 Sales Department External Relations
5.3 Relations with Customers

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5.1 RELATIONSHIP OF SALES DEPARTMENT WITH OTHER


DEPARTMENTS
Synergy amidst the different departments is required to improve the performance
of any organization. To have synergy, coordinating the activities of all departments
so that maximum progress is made toward overall company objectives is top
managements responsibility.
Although the primary responsibility of top sales executives is to manage the sales
department, they know the operations of other departments. There are basically
two interdepartmental coordination methods:
Formal Coordination Methods
Informal Coordination Method
Vadilal prefers and follows Informal Coordination method. In practice, we do not
find very good relationship between Sales Department & Production department,
and Sales Department & Finance Department. But the condition is that much
adverse in Vadilal industries. However, the top managements are succeeded in
maintaining good relations amongst the above three departments.
1. RELATIONSHIP OF SALES WITH ADVERTISING:
Coordination must be required between sales department and advertising
agency for achieving an optimum promotional mix. Whenever, Vadilal
launches new schemes that time the advertising agency provides the
promotional materials like p-o-p, glow sign boards, select the media to convey
the scheme, purchase media time and design the schemes. If there is no
coordination between these two departments then the launched schemes may
get failure.

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2. RELATIONSHIP OF SALES WITH SERVICE:


The relationship of sales with the service is very vital. As far as service is
concerned, Vadilal makes a contract with the service contractors for repairing
the Freezers that Vadilal has provided to the Dealers and Distributors by
charging some annual fix amount.
3. RELATIONSHIP OF SALES WITH PHYSICAL DISTRIBUTION:
Proper packing, accurate freight rate quotation, promptness in delivery are the
activities carried down by Physical Distribution. Timely delivery is something,
which is very vital in the perishable products like Ice cream. Packaging is also
a factor, which is considered into account when Ice cream has been sent to
different states from the three manufacturing plants.
4. RELATIONSHIP OF SALES WITH PRODUCTION DEPARTMENT:
Manufacturing department is continuously assisting the sales department in
launching the schemes. As per the scheme launched manufacturing department
keeps ready the stock of that particular flavor to fulfilling the demand
generated due to the schemes.
5. RELATIONSHIP OF SALES WITH R&D:
Vadilal has committed to launch new flavor every month for the consumers.
This required strong R&D and thus R&D stimulates the demand and helps
Sales to achieve the targets and eat the major pie of Ice cream market.

5.2RELATIONSHIP OF SALES DEPARTMENT WITH EXTERNALS


By following the standards which government has recommended for the food
products for the societal concern.
Vadilal has also maintained good relationship with external bodies like Industry
members, Educational institutions, and media.

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5.3 RELATIONS WITH CUSTOMERS


Expectation of customers in a present channel:
Vadilal fulfills the need and requirements of the customers time to time.
Vadilal offers more than 200 flavors in the present product line.
Vadilal also takes care about the pack size of the Ice cream. It offers Ice
cream in the packing of 50ml, 100ml, 150ml, 500ml, 1 litter party pack,
bulk packs.
PREFERANCE FOR THE BRAND:
The changes in the preferences of various branded as well as loose ice creams
were known for the last 3 years. The choice of the consumers were fluctuating
with that of the changes in the various features of ice creams such as prices,
quantity quality, flavors and product range.
Rank as per the brands

Change in preferences of the ice

1
2
3
4

cream brands in the last 3 years


June 02
Amul
Havmor/Vadilal
Loose ice creams
Kwality Walls

While as per students, we do prefer branded ice creams provided by


Vadilal, but now with the introduction of souffls, mousses, sundaes &
desserts which we get at dairy den is more preferred . Today, most of the
young consumers prefer to have low fat as well as less sweet ice creams,

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due to increasing health consciousness. They also prefer to have diet ice
creams if provided with good taste.
Though the market conditions worst affected in the city of Ahmedabad, still
there is a demand for quality products especially among the young
population. There is a noticeable demand for expensive sundaes, puddings
or Souffls, though if generally a cost around Rs.30 to Rs. 60, but the
young generation orders it as easily as they order for a glass of water.
PREFERANCE OF CONSUMERS FOR VARIOUS ATTRIBUTES IN
CHOOSING AN ICE CREAM:
A consumer figures out various attributes before choosing a particular brand of ice
cream. These attributes decide the preferences that the consumer gives to each
brand according to his convenience of choice.

Preferences of attributes
Attributes
Price
Quantity
Quality
Flavors
Brand

%
30
25
20
15
10

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Chapter 6: Sales Force Management


6.1 Choice Of Basic Selling Style
6.2 Determine Sales Force Size
6.3 Recruiting, Selection, and Training
6.4 Performance Evaluations, Compensation, and
Motivation Program

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6.1 CHOICE OF BASIC SELLING STYLE


The Basic selling style adopted by the Vadilal is Trade selling. The salesperson is
known as Trade Salesperson.
Reason: Vadilals salespersons develop and maintain long-term relations with
stable group of Dealers and Distributors. Vadilal applies this selling style for wellestablished Ice-cream market. Advertising and other form of promotions are more
vital to overall marketing strategy then is personal selling.
One important responsibility of the trade salesperson is to help customers build-up
their volume through providing promotional assistance.

6.2 DETERMINE SALES FORCE SIZE


Following are the methods to determine the sales force size.
Work Load Method
Sales Potential Method
Incremental Method
Vadilal does not use any such formal method to determine the sales force size. The
factors they are considering for appointing sales force are
Market size
Requirement to cover the geographical area

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6.3 RECRUITING, SELECTION, AND TRAINING


1. Recruiting and Selection:
Vadilal has a separate Human resource department, which looks after the
Recruiting and selection process.
Human resource department gives advertisements or consult the different
consulting agencies, once the top authorities, sales manager, and territory
incharge have decided the required sales people.
Vadilal receives the bio-data from incumbent and scrutinizes the eligible
candidates and conducts the personal interview with these candidates. Finally
they select the potential candidate who best suits their requirements.
2. Training and Supervision:
After selecting the sales force, Vadilal provides mostly the On Job Training as
per the requirement.
The supervision of the sales people has been conducted as per the previously
defined hierarchical structure of the Sales Department.

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6.4 Performance Evaluations, Compensation, and


Motivation Program
1. Performance Evaluation:
In Vadilal the performance has been evaluated yearly basis.
In Vadilal the evaluation pattern is somewhat different as below:
The person evaluates
Himself/Herself
Head of the department or immediate supervisors
Without knowing to the concerned person one can evaluate that person
and it is kept confidential
2. Compensation and Motivation Programs:
Vadilal motivates the sales force by
Cash Rewards
Distributing certificates to achievers
Giving incentives to achievers
Sometimes gives more 20% of the total incentive
Sponsoring tours to outstanding performer

38

Chapter 7: Sales Budget, Assigning Territories,


and Claim Settlement
7.1 Sales Forecasting And Devising Budget
7.2 Assigning Territories
7.3 Claim Settlement

39

7.1 SALES FORECASTING AND DEVISING SALES BUDGET


Vadilal considers following factors for forecasting the Sales:
Observing Market trends
Past figures related to consumption pattern
Deciding the future strategy
Using the above factors, Experts in the sales field use their expertise and give
their opinion for the next years sales. Thus Vadilal use Jury of Expert
Executive Opinion.
After deciding the Sales forecast, they are devising the Sales Budget. They
allocate budget for promotional schemes, for incentives to the sales people,
advertising etc.

7.2 ASSIGNING SALES TERRITORIES


Vadilal considers factors for assigning sales territories are as under:
Market Potential
Future Growth
Vadilal has decided 13 different territories for their operation.
1) Gujarat
Central
South
North
Saurashtra
2) Rajasthan
Udaipur

40

Jaipur
Jodhpur
3) Madhya Pradesh
4) Uttar Pradesh
Eastern U.P. ( Meruth, Noida, Faridabad)
Western U.P.
5) Uttaranchal, Dehradun
6) Delhi
7) Haryana, Punjab, Chandigadh, Himachal pradesh
8) Jammu & Kashmir, Nepal
9) West Bengal
10)Orrisa
11)Chattisgarh
12)Tamilnadu
13)Bihar, Jarkhand

7.3 CLAIM SETTLEMENT


Damaged Goods:
The distribution company follows from the company clearing & forwarding
agents distribution dealers. The distribution channel has to be well managed
as unlike any other product the problem actually stars when the product
leaves the factory and passing through distribution channel reaches the
consumer.
The company has been co-operative in the complains, if any, for the
replacement of the damaged goods. If a distributors receives damaged

41

goods then a QCD Department in charge is called for detection to check


the quantity and the level of damages. There is a normal paperwork
procedure for the replacement of goods, which has not been changed since
last 10 years. If there are any damages found by the dealers, then the same
has to be equally borne by the dealers and the distributors. But generally the
changes of damages are one in 50 orders, and it hardly happens due to a
well-managed distribution channel.
Due to technically advanced freezers & cold storages, the changes of
damages to such products is least as per the sale personnel.
Schemes for Discounts:
Claims for the discounts offered to the Dealers/Distributors are settled
Monthly, Quarterly, Half yearly, and yearly.
Driver Advance
Van Expenses
Miscellaneous Expense (all expenses done for the company by
Dealer/Distributor)
Claims by Sales Force:
Quarterly incentive policy
Conveyance (monthly)
Touring
Payment terms and conditions:
Vadilal is providing the credit of 45 days to the Distributors. Some times they also
give some more credit period depending upon the situation and type of Distributor.
The payments of the dealers are the responsibility of the Distributors.

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Chapter 8: Logistic Systems


8.1 Warehousing
8.2 Order Processing
8.2 Inventory
8.3 Transportation

43

8.1 WAREHOUSING: As Ice cream is a perishable product and it must be kept


in cool place to maintain its quality for few days, Vadilal has Cold storages at
different ends. These ends are Factories, C&F agents, Distributors, and Dealers.
The temperature kept in these storage houses is as low as 45 degree centigrade.

8.2 ORDERS: Vadilal has defined MOQ (Minimum Order Quantity) for the
distributors to make order to the company. As far as order of the dealers are
concerned that is the headache of the distributors. Here, the job of the Vadilals
sales staff is to assist the distributors in selling the Ice cream. Vadilal is having
MIS system installed in the organization. MIS helps Vadilal to know the status of a
certain Distributors.

8.3INVENTORY: For the raw material Vadilal keeps the inventory and do not
follow the exact JIT. The biggest problem Vadilal facing right now, is inventory of
raw material. Vadilals purchase department is always trying to keep the inventory
as low as possible but they are not achieving significant success in this matter.
The inventory of the packaging material is kept as low as possible and according
to the demand forecasted and growth rate of the market.

8.4 TRANSPORTATION: Ice cream requires very low temperature in terms of


45 degree centigrade, so the Van used for the transportation are having the
chillers.

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Chapter 9: Analysis Of Distributors

45

FINDINGS FROM THE SURVEY OF DISTRIBUTORS


1. THE LEVEL OF MARGIN OFFERED TO THE DISTRIBUTORS:
Company
Vadilal
Amul
Havmor
Kwality Walls

Level of margin (%)


6%
5%
No distributor
5%

% Profit Margin Provided by different Brands


8%
6%
4%
2%
0%

6%

5%

5%
0

vadilal

Amul

Havmor

Kwality
Walls

Interpretation:
The distributors margin has not been changed since last 8 years. The distributors
have been given the same margin even if there would be any increase or decrease
in the price of ice cream. Infect, they are the most benefited though their margin
has not increase since last 8 years. As the cold storage room is fully utilized due to
schemes introduced on various packs as well as there is increase in sales for the
same.

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2. THE LEVEL OF MARGIN OFFERED TO THE DEALERS: Table


Company
Vadilal
Amul
Havmor
Kwality Walls

Level of margin (%)


15%-20%
20%
18%-20%
20%

% profit margin provided by different


Brands
25%
20%
15%

20%

18%

20%

Amul

Havmor

Kwality
Walls

15%

10%
5%
0%
vadilal

Interpretation:
Above Graph depicts that the profit margin provided by different brands to the
dealers is almost equivalent. Vadilal is providing least profit margin to its Dealers
but Dealers are satisfied with it because of high sales. As the Freezers are fully
utilized due to schemes introduced on various packs as well as there is increase in
sales for the same.

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3. Overview of the investment made by the distributors:


Criteria

Changes in the investment made by a distributors of

Investment

Vadilal ice creams on various criteria


June 02
20-25 Lakh

Areas covered
No. Of dealers covered
Expenses
Sales

(3 times increased)
7-8
130-140
20-25%
Approx. 1.2 cr. increased by 35% (due to schemes)

4. Sales as per the area covered by the distributors:

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Preferences of packs as per the area and type of population as per a Vadilal
Areas

ice creams distributor


Types of area
Types of

Preferences of

population

packs as per

Naranpura,

Well developed

Middle class &

population
All even the one

Navrangpura,

but have many

higher middle

which are expensive

Paldi.

loose ice cream

class as well as

like Rollcut, Rajbhog

Satellite,

parlours
Developing

rich class
Middle class,

and even novelties


All types of packs in

higher middle

demand but

class as well as

especially take-

rich class

aways such as party

Majority lower

packs
Generally low priced

class & middle

ice creams such as

class but also very

candies sticks cups

few higher middle

cones and chocobar

class found
Majority lower

with schemes.
Generally low priced

class & middle

ice creams such as

class

candies sticks cups

Thaltej

Juhapura,

Developed

Nava Wadaj

Sabarmati,

Developed

Ranip.

cones and chocobar


with schemes.

5. Analysis based on only ice cream parlors:


Analysis on only ice cream parlours of Vadilal ice creams in Ahmedabad
Annual sales
Proportion of ice No. of outlets
Other products stocked
cream in the

in their outlet
49

Company outlets

whole business
95%

10

(annual sales of at
least 7-8 lakh)
Above s lakh
1-5 lakh
50000-1 lakh

Soft drinks, snacks


mineral water

70%
60%
55%

150

Soft drinks, snacks

230

mineral water
Soft drinks, snacks

160

mineral water
Stocks almost all dairy
of major brands,
products and other

50000-250000

40%

500

eatables
Stocks almost all dairy
of major brands,
products and other

Below 25000

25-35%

800

eatables
Stocks almost all dairy
of major brands,
products and other
eatables such as Soft
drinks, snacks as well as
ice creams of other
brand.

LOCATION OF AN OUTLET:
During last 3-4 years the policy of keeping a minimum distance of 500 meters
between the outlets seems to no more exist, as now in many parts of the city one
can find 5 to 6 outlets at a stretch, which hardly have a distance of 200 meters.
This probably provides consumers with the best availability of the product, but it
may create a problem for small dealers who have competition next door.

50

51

Happenings
New Launches

Recently the group has launched Fresh Fruit Icecream with ripples under
the Fantasy range viz. Fresh Orange Fantasy, Fresh Mango Fantasy, Fresh
Strawberry Fantasy and Fresh Black Currant Fantasy.

Three new Koolfi's have hit the market. Namely Mango Koolfi, Mava
Koolfi and Pista Koolfi, these koolfis priced at Rs.10/- is a big hit in the
market place.

Two new Sundaes ---- Chocolate Sundae & Strawberry Sundae at Rs. 10/each have been introduced.

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Happinezz Parlour
Vadilal introduced exclusive ice cream parlours under the name "Happinezz
Parlours" to meet the expectations of our valued customers.
Happinezz provides cozy, nice & cool ambience where one can enjoy world-class
ice creams, ice-cream sundae, shakes and other various ice cream concoctions to
his heart's content.
Presently Vadilal has 23 such parlours in India and it expects to increase its
number very soon. To open a Happinezz parlour following requirements have to
be met.

Operational Requirements
1. A place at a prominent location with at least 15' frontage and at least 400
sq.ft. Area reserved for ice creams only.
2. Minimum two-display dispensers- one storage deep freezer unit and one
soda fountain freezer unit as equipment are required.
3. Proper space for sitting or standing for serving ice creams.
4. Inside parlour walls should be clean and may have product display to
enhance the general mood and give feeling of excitement.
5. Translate of products with their prices and attractive photograph should be
displayed properly to create the right ambience in the parlour.

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Chapter -7 Conclusion

54

Conclusion
The prices of the packs have increased hardly by 15-20% but the quantity offered
has almost doubled, as per the schemes.
There has been a touch competition among the branded ice cream manufacturers
& the loose ice cream makers regarding the price of the product.
Ice cream manufacturers came out with a concept of specially designed store to
sell only ice cream or dominantly ice cream, which was given a lable of ice cream
parlours.
The parlour was characterized by the preference of a display machine through the
glass panes of which the stock flavours were visible.
The recent trend among the young generation is towards sundaes & desserts,
which are prepared at the very moment as per the taste & preference of the
consumer. Vadilal has its happinez parlours situated on few of the citys most
happening areas: it has an advantage of serving the consumers from its own outlets
to serve varieties of desserts and sundaes. Ice cream served with a combination of
sauce of different flavours can be a big hit in the market.
These parlours do serve sundaes & desserts or even souffls but it is mixed with
artificial flavored sauce & fruits, which is less preferred as compared to fresh frit
flavor. As the consumers views have also been known as a part of the survey, they
do not prefer ice cream which are more sweet, which the company serves through
happinez parlours by adding canned fruits and that too, sweet. Thus it could be
profitable as per the demand of consumers to serve less sweet & fresh fruit sauce
in sundaes or desserts.

55

BIBLIOGRAPHY
Books:
1. Business Research Methods
By Donald R. Copper & Pamela S. Schindler
Tata McGraw-Hill Publishing Company Ltd.
New Delhi, 2002 Edition
2. Marketing Research
By Naresh K. Malhotra
Pearson Education, Inc.
New Delhi, 2004 Edition
1. HandBook For Writers & Editors
By S. Srinivas Rao
Ahmedabad Management Association
Ahmedabad, 2002 Edition
Websites:
www.vadilalgroup.com
www.indiainfoline.com
www.google.com
www.amul.com

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