IRMA Session: SDM 22/11/19

“Many Questions in my mind” …

Chitiz Gupta has just joined as the Area Sales Manager of West Bengal Branch for Milk Specialities Co a
dairy major of the country. The company is an All India leader in Dairy and related Products selling
categories as given in Annexure 1. The Co was doing a business of Rs 175 Cars per annum in the state. He
was assigned the entire state’s Sales and distribution responsibilities with a field force of 25 Territory Sales
Incharge (TSIs) and large no of Distributors (approx. 400 in no) with presence up to Taluka HQs. Approx.
15-20 Distributors were assigned to each TSI. Distributors had their salesmen under their roes whom the
TSIs supervised. The Distributor Salesmen booked orders using tablets given by Co to Distributor. He also
had Key Account Manager (KAMs) who looked after Modern Trade (MT) and HORECA and allied
Institutional Segments.

His Branch had three OICs (Officer in Charges) one who looked after Dairy Segment, One Frozen segment,
and One MT and Horoeka. The Field TSIs however were same for both Frozen and Dairy segments while
for MT and Horoeka , the KAMs serviced them directly with help of Distributors of MT and HoReCa
segments. Distributors worked in advance payment system and had a healthy RoI of min 23%.

He had separate Distributors for Dairy and Wet Products mostly and separate for MT and HoReCa
segments. Some places he also had exclusive distributors for Wet products depending on market
requirement and Distributor’s competence.

Chitiz took over from a Branch Manager Mr P Saini who was a ranker and was in the company for last 20
years and had recently resigned. The Management found that he was unable to cope up to the new ways
of working (Sales force automation, Distributor automation, Self-working doing effective and quick Sales
analysis using Pivot Tables etc). He was not able to fight the competition s quickly which was getting the
market slowly and steadily.

To get growth, Saini had started pushing stocks to the distributors without a secondary order from the
market. As a result, the stocks started piling up at the Distributor point. About 3 months back, the
company launched a Distributor Management Software (DMS) and gave electronic tablets to all its field
force to book orders. As a result of this whatever was booked in the market by the Field force and supplied
from the distributor only that much stocks got auto billed from company godown to the distributor
keeping a safe margin of inventory at the distributor point which was only 3 days of stock of each product
for Distributors of above 5 lac population towns, 7 days for 2 – 5 lacs towns and 10 days for below 2 lacs
towns. This meant that one had to sell stocks in the market to be able to bill to distributors. The erstwhile
BM coming from an old school felt very constrained in working in this manner and could not manage his
territory effectively utilising technology well. Though he was a competent Sales person and excellent Man
manager, he left the company to join a competitor whose ways of working was still with older ways of
market servicing. Having worked in the company for so long, his departure was painful for both him and
the company.

Chitiz, a young management graduate a domicile of Agra was from a top-rated management school after
his B Tech for NIT had joined the company a year back had been a Management Trainee for 1 year, having
worked 3 months in Delhi market in a TSI role in Frozen Segment reporting to the Delhi BM. Then in similar
roles in Burdwan, a small town of 2.15 lacs population for 3 months and Midnapore a town with Pop of 2
lacs in WB where apart from main town he was also responsible for Rural distribution in smaller pop strata
towns and villages i.e. below 10K population.

In a way Chitiz had exposure of working in all kind of channel partners of diff geographies and with both
the segments (Frozen & Dairy). Though a little premature for him, he was given the role of BM of WB
looking after both Frozen and Dairy segments, a business of almost 50 Crores pm. The Zonal Manager of
East, Mr. S. Naidu, who looked after WB, Orissa, Bihar and NESA called Chitiz and advised him that he was
inheriting a Distribution network and a Field force who are used to a different way of working. They had
a leader who had been in the role for long number of years and was very well respected among the
distributors, Retail Trade, most of the Key Accounts and was much liked and respected by the Field force.
Naidu said that

(1) He would like Chitiz to look at the entire sales and distribution network of WB ab into as if he
was approaching the problem for the first time. While there is set network and an established
demand in the market with most of the products with 70% + market share and Chitiz will have to
see how effectively he can service the market using technology both to increase efficiency as well
as to reduce the cost.

(2) While doing so he also advised that any suggestions to drastically change channel design may
not be a good idea, but the blueprint can be made confidentially as the entire approach has to be
done sensitively as WB had a strong Distributor Association, any changes on Distributor network
or changing any Distributor was almost impossible if not done diplomatically

(3) There was also need also to build the capability of Field Force, some of who were ageing (40+),
to new ways of working. Need to keep in mind that the organisation did not have a culture of hire
and fire. These people may not be technologically savvy but had excellent relationship developed
over years in the market. So, was there an opportunity for him to learn to work with people of
diff generations in Field Force as well as Channel Partners? CHITIZ GUPTA had to basically present
a GTM Strategy to Zonal and All-India Distribution Head on the changes he proposed to bring in
the Sales and Distribution network and Sales Force Management.

Chitiz was excited but, wondered where to start from. Does he start from where his earlier Manager had
left and building on incrementally on what was given to him or should he reconstruct the entire Channel
design, Ways of working without any coloured thinking and biases? While he was excited to do the latter
as it gave some amount of intellectual curiosity and engagement using much of what his Profs had taught
him in his B School , he was well aware that what he was going to present to the Management should be
implementable in the context of a Co which was a market leader with established brands . He wondered
can he make the “elephant dance”?

He basically had three channels of segments through which the products are to be delivered to the
consumers mostly thru Co Distributor  Trade route. In case of some Modern Trade like D Mart, Big
Bazar, Co supplied directly to them from their own warehouse and no Distributor was involved. Even for
Horoeka, co had a specialised Distributor to service them.

 General Trade
 Modern Trade
 Horoeka: Hotel, Restaurants & Canteens, CSD (Army supplies)
The Rural Market were supplied either through an Urban Distributor catering to nearby village markets
through Van coverage or a through a Super Distributor model where the SD supplied stocks through Sub
stockists mostly in tehsil towns who further sold stocks to retail trade in small town and villages. SDs were
however, based in Urban tons but supplied only to Rural markets and not in their base towns

All Urban Distributors and Rural SDs had Co’s billing system (Distributor Management Software) installed
at their stock point which made them work seamlessly with the Co.

TSIs covered outlets mostly as a Supervising Sales person supervising work of Distributor Salesmen’s and
who covered 35 to 40 outlets every day as set beats taking orders in tablets. Orders from tablets directly
flew into Distributors software wherein he made.

While appraising Chitiz of the task ahead of presenting a GTM Strategy for Milk Specialities for West
Bengal, Nair, the Zonal Head told him that he must have adequate information at his end before taking a
decision on his recommendations for which he must ask himself the right questions.

He gave him some hits as regard to what all he wants to be covered in his Presentation and that Chitiz
must show him sets of questions that he should ask himself under each Head so that he is assured he is
right track.

The Subject Heads that Nair give to Chitiz to consider were as follows.

1. How to create a GTM for distribution through General Trade: What channels do we
serve, what geography, what would be key elements of our ways of working with each
segment?
2. How to effectively manage Retail Channels: What types of Store Category, Store location,
Store size, etc. How to make effective Trade marketing for higher through put from
General Trade.
3. Sales organisation, the Nos and Field Structure: What info I require to plan my no of sales
persons and their Ways of working.
4. Effective management of distributive Channel Partners (Distributors)
5. Sales Force Automation: How and where to used technology for efficiency
Technology.
6. Sales Capability Building: How do we build competence and capability of Sale force.
7. Creating a GTM for HORECCA. (Hotels, Restaurants, Canteens and allied Institutions) for
sales of our products.
8. Creating a GTM for Modern Trade: How to make our presence effective in Modern Trade.

Each Group will be given one Subject to think over and present (1) What further questions
Chitiz must ask himself (2) Where will he get get the data to arrive at the most appropriate
solution.
Presentation Time: Max 10 mnts. Grades given to the Group will be the Grade of each member.
 Annexures
Annexure – 1
Product Categories & Ranges

 Dairy Products

 Frozen Products
  Sales Organogram of WB State Branch:

Branch
Manager
(Chitiz)

OIC Dairy OIC Frozen OIC

Key Account
Managers
TSIs (25)

Distributors ( MT, HoReCa

Apprx 400) Distributors

Annexure – 2
POPULATION CLASSIFICATION DEFINITION AND SUMMARY (INDIA and WB))
POPULATION STRATA AND SUMMARY FOR WB STATE:
 TOTAL NUMBER OF DISTRICT-WISE TOWNS, PERI-URBAN, METRO, TOWNS
Urban
Non Metro Peri Urban Rural Total
(Metro)
Towns (
Cities (10 Village (
Metro (40 lac 10 lacs Peri-Urban ( 5
District Name lacs plus Below Grand Total
Plus) to 5 lac to 10K )
till 50 lac 10K )
Lacs)
Paschim Medinipur 16 7604 7620
Bankura 6 3591 3597
Purba Medinipur 22 2935 2957
Barddhaman 2 52 2464 2518
Puruliya 8 2479 2487
Birbhum 21 2242 2263
South Twenty Four Parganas 113 2001 2114
Murshidabad 142 1816 1958
Hugli 47 1873 1920
Maldah 53 1590 1643
North Twenty Four Parganas 79 1549 1628
Dakshin Dinajpur 4 1586 1590
Uttar Dinajpur 22 1462 1484
Nadia 72 1211 1283
Koch Bihar 31 1119 1150
Haora 1 48 734 783
Jalpaiguri 48 710 758
Darjiling 16 629 645
Kolkata 1 1
Grand Total 1 1 2 800 37595 38399

POPULATION IN VARIOUS POPULATION STRATA

Urban
Non Metro Peri Urban Rural Total
(Metro)
Cities Towns (
Metro Peri-Urban Village (
(10 lacs 10 lacs
District Name (40 lac ( 5 lac to Below Grand Total
plus till to 5
Plus) 10K ) 10K )
50 lac Lacs)
North Twenty Four Parganas 6181609 4332279 10513888
South Twenty Four Parganas 2686126 5475835 8161961
Barddhaman 1130434 1927499 4804906 7862839
Murshidabad 2727114 4376693 7103807
Paschim Medinipur 745279 5168178 5913457
Hugli 2174478 3521926 5696404
Nadia 1836456 3370881 5207337
Purba Medinipur 673541 4422334 5095875
Haora 1077075 1639659 2355535 5072269
Kolkata 4496694 4496694
Maldah 1023691 2965154 3988845
Jalpaiguri 1473625 2399221 3872846
Bankura 281303 3315371 3596674
Birbhum 531435 2970969 3502404
Uttar Dinajpur 541557 2465577 3007134
Puruliya 248261 2681854 2930115
Koch Bihar 612287 2206799 2819086
Darjiling 674014 1172809 1846823
Dakshin Dinajpur 373374 1454318 1827692
Grand Total 4496694 1077075 1130434 26351308 59460639 92516150

Annexure – 3
CHANNELS OF DISTRIBUTION
 Annexure – 4
A) Contribution of Sales by Categories:

Contribution to WB State Sales

Milk Powder 64%

Ghee 2%
Dry
79% Condensed Milk 1%
Products

UHT Milk 11%

Cookies 0.5%
Favored Milk 2%

Beverages 5% Butter Milk 0.3%

Lassi 3%
Butter 12%

Cheese 3%
Wet 15%
Chocolate 1%

Shrikhand 0%
Total 100% 100%

B) Contribution of Sales by Pop Strata

 Peri Urban ( %5 ac
Urban ( Metro) Urban (Non Metro) Rural ( below 10 K Pop) Total 100
to 10 K Pop)
Contribution of Business==>> 30% 25% 25% 20% 100%
General Trade
Kirana Stores 22.8% 23.5% 23.0% 19.6%

Food Outlets 15.8% 13.2% 12.5% 12.0%

Frozen O/Ls 3.5% 4.3% 2.8% 2.4%

Modern Trade
Brcick and Mortar O/Ls 4.50% 1.50% 1.00% 0.20%
Horeca
Hotel 2% 0.05% 0.03% 0.01%

Rest 0.9% 0.1% 0.8% 0.05%

Canteens 0.16% 0.03% 0.01% 0.01%

Institutions 0.06% 0.01% 0.01% 0.01%

Outlets are not unique. A single outlet can be considered both under Kirana as well as Food if it sells both segments)

C) Contribution of Sales by Cat of outlets

Urban ( Metro) Non Metro 40 lac Peri Urban (5lac to
West Bengal Rural ( Below 10 K Pop)
Below 40 Lac to 5 lac Pop 20 K pop)

No of Outlets per lac pop ( Outlets are not unique)

General Trade
( Not unique) 145 68 80 50
Kirana Stores 107 54 40 38

Food Outlets 76 36 48 25

Frozen O/Ls 17 12 10 6
Modern
Trade
Brcick and Mortar O/Ls 1 0.07 0.05 0.03

Horeca
(Unique)
Hotel 1 0.1 0.1 0.1

Rest 4 0.4 0.2 0.3

Canteens 1 0.1 0.1 0.03

Institutions 0.3 0.04 0.1 0.03