Assignment Booklet MBA III semester

Submitted by:-RAHUL SINGH RAJPUT

Sec-C

Sales & Distribution Management

Internal components -

1. Written Test 1 (7.5)-

Q.1 what do you mean by Sales Management? Explain the various function of Sales
Management.

Ans:

Sales management is the process of handling all aspects of a sales team's activities to ensure
that company goals are met. A sales manager is responsible for many functions, including
creating effective plans to meet company goals, selecting and managing a sales team, and, of
course, troubleshooting.

function of Sales Management.

GOAL SETTING

PLANNING, BUDGETING, AND ORGANIZING

IMPLEMENTATION

CONTROLLING AND EVALUATING

ENVIRONMENTS AND STRATEGIES

REGULATION
GOAL SETTING

Goal setting is usually based on a company's overall sales goals, modified by the mix of
products to be moved. Overall sales goals must be met, of course, but balance must also be
maintained. A company that makes three different types of boats, for instance, of which the
highest-priced model has the highest profit margins but the lowest-priced boat is easiest to
sell, the goal will be structured to move as many of the highest-priced models as possible.

PLANNING, BUDGETING, AND ORGANIZING

After goals are set, the sales manager may accept, or be required to modify, the general
approach to sales in the current year. Both ongoing patterns and new ones require budgeting
and, occasionally, changes to the organization. Fundamental structural issues are involved
such as the distribution channel, the forces to be deployed, and the sales program (incentives,
pricing schedules, cooperative advertising programs, etc.) that will be used. A company, for
instance, may be engaged in making a transition from direct sales using its own sales
branches as distributors to using independent distributors.

IMPLEMENTATION

Implementation of the plan will have different emphases depending on whether the operation
is up and running or required to be built or rebuilt. Recruiting, training, and setting
compensation are primary implementation activities of start-ups or expansions. So are
designing sales territories and assigning sales goals to each.

Recruiting

Recruiting salespeople ideally requires understanding of the customers and the market, not
least its physical aspects, travel time needed to reach targeted points, and the type of selling
involved. Experienced sales managers typically bring such skills to the job or, if brought in
from a different field, will make some preliminary field trips to get a feel.

Training

After recruiting a suitable sales force, the manager must determine how much and what type
of training to provide. Most sales training emphasizes product, company, and industry
knowledge. Only about 25 percent of the average company training program, in fact,
addresses selling techniques. Because of the high cost, many small businesses try to limit the
amount of training they provide.

Compensation

After the sales force is in place, the manager must devise a means of compensating
individuals. The ideal system of compensation reaches a balance between the needs of the
person (income, recognition, prestige, etc.) and the goals of the company (controlling costs,
boosting market share, increasing cash flow, etc.), so that a salesperson may achieve both
through the same means.

CONTROLLING AND EVALUATING

After the sales plan has been implemented, the sales manager's responsibility becomes
controlling and evaluating the program. During this stage, the sales manager compares the
original goals and objectives with the actual accomplishments of the sales force. The
performance of each individual is compared with goals or quotas, looking at elements such as
expenses, sales volume, customer satisfaction, and cash flow.

ENVIRONMENTS AND STRATEGIES

The goals and plans adopted by the sales manager will be greatly influenced by the
company's industry orientation, competitive position, and market strategy. The basic industry
orientations available to a firm include industrial goods, consumer durables, consumer
nondurables, and services. Companies that manufacture industrial goods or sell highly
technical services tend to be heavily dependent on personal selling as a marketing tool.

REGULATION

Besides markets and industries, another chief environmental influence on the sales
management process is government regulation. Indeed, selling activities at companies are
regulated by a multitude of state and federal laws designed to protect consumers, foster
competitive markets, and discourage unfair business practices.
Q.2 what are the duties and responsibility of Sales Manager?

Ans:

DUTIES AND RESPONSIBILITIES OF SALES MANAGER

The following are some of the most important duties and responsibilities of Sales Manager in
an organization.

1. One of the most important duties of a Sales Manager is to plan and organize market
research.

2. He should establish proper proper sales policy based on the market research.

3. Sales manager has to advise the board of directors about the location and the layout of the
sales office, opening or closure of branch offices, the sales policy to be adopted and all other
matters relating to the business of the firm.

4. He has to assist the firm in product planning by suggesting improvements in product

design, style, size, attributes, etc.

5. He should forecast sales accurately or scientifically.

6. Sales manager has to prepare sales budget.

7. He has to arrange for advertising, publicity and sales promotion.

8. Sales manager has to arrange for careful selection and appointment of the salesmen.

9. He has to arrange for the training of the sales force.

10. He has to allocate the sales territories and fix sales quotas for salesmen.

11. He has to devise the best method of remunerating the salesmen and motivating them to
give their best to the firm.

12. He must create a team of competitive and efficient salesmen by effective supervision and
control.
13. A sales manager must make a careful study of the competitors, products and sales
policies and alter the products and the sales policies accordingly.

14. He has to decide about the proper channels of distribution.

15. He has to be in constant search of new and profitable markets.

Q.3 Explain the Steps of Personal Selling?

Ans:

Personal selling can be defined as "the process of person-to-person communication between

a salesperson and a prospective customer, in which the former learns about the customer's
needs and seeks to satisfy those needs by offering the customer the opportunity to buy
something of value, such as a good or service."

The Personal Selling Process

The personal selling process is a consecutive series of activities conducted by the
salesperson, the lead to a prospect taking the desired action of buying a product or service
and finish with a follow-up contact to ensure purchase satisfaction.

Step One
Prospecting - the first step in the personal selling process
The process of looking for and checking leads is called prospecting or determining which
firms or individuals could become customers.
Up to 20% of a firm's customer base can be lost for reasons such as transfer, death,
retirement, takeovers, dissatisfaction with the company and competition. A steadily growing
list of qualified prospects is important for reaching the sales targets.
Qualifying a prospect: A lead is a name on a list. It only becomes a prospect if it is
determined that the person or company can benefit from the service or product offered. A
qualified prospect has a need, can benefit from the product and has the authority to make the
decision.
Step Two
The Pre-approach
This stage involves the collecting of as much relevant information as possible prior to the
sales presentation. The pre-approach investigation is carried out on new customers but also
on regular customers. Systematic collection of information requires a decision about
applicability, usefulness and how to organise the information for easy access and effective
use.

Step Three
The Approach
The salesperson should always focus on the benefits for the customer. This is done by using
the product's features and advantages. This is known as the FAB technique (Features,
Advantages and Benefits).
* Features : Refers to the physical characteristics such as size, taste etc.
* Advantages : Refers to the performance provided by the physical characteristics eg it does
not stain.
* Benefits : Refers to the benefits for the prospect. Eg. Saves you 20% on replacement cost.

Step Four
The Sales Presentation
After the prospects interest has been grasped, the sales presentation is delivered. This
involves a "persuasive vocal and visual explanation of a business proposition". It should be
done in a relaxed atmosphere to encourage the prospect to share information in order to
establish requirements. Some small talk may be necessary to reduce tension but the purpose
always remains business.

Step Five
The Trial Close
The trial close is a part of the presentation and is an important step in the selling process.
Known as a temperature question - technique to establish the attitude of the prospect towards
the presentation and the product.
Step Six
Handling Objections
Objections are often indications of interest by the prospect and should not be viewed with
misgiving by salespeople. The prospect is in fact requesting additional information to help
him to justify a decision to buy. The prospect may not be fully convinced and the issues
raised are thus very important. It also assists the salesperson to establish exactly what is on
the prospect's mind.

Step Seven
Closing the Sale
This is the last part of the presentation. Many salespeople fear the closing of a sale. Closing a
sale is only the confirmation of an understanding. Fear will disappear if the salesperson truly
believes that the prospect will enjoy benefits after the purchase of the product.

Step Eight
The Follow-up
The sale does not complete the selling process. Follow-up activities are very important and
are useful for the establishment of long-term business relationships. It is important to check if
the products have been received in good condition, to establish the customer is satisfied etc.

Q.4 Describe the concept of Distribution Management?

Distribution management refers to the process of overseeing the movement of goods from
supplier or manufacturer to point of sale. It is an overarching term that refers to numerous
activities and processes such as packaging, inventory, warehousing, supply chain,
and logistics.

Distribution management is an important part of the business cycle for distributors and
wholesalers. The profit margins of businesses depend on how quickly they can turn over their
goods. The more they sell, the more they earn, which means a better future for the business.
Having a successful distribution management system is also important for businesses to
remain competitive and to keep customers satisfied.
Understanding Distribution Management

Distribution management is critical to a company's financial success and corporate longevity.

Executing it successfully requires effective management of the entire distribution process.
The larger a corporation, or the greater the number of supply points a company has, the more
it will need to rely on automation to effectively manage the distribution process.

Q.5 Importance of Channel Management?

Ans:

Definition: The term Channel Management is widely used in sales marketing parlance. It is
defined as a process where the company develops various marketing techniques as well as
sales strategies to reach the widest possible customer base. The channels are nothing but
ways or outlets to market and sell products. The ultimate aim of any organization is to
develop a better relationship between the customer and the product.

Description: Channel management helps in developing a program for selling and servicing
customers within a specific channel. The aim is to streamline communication between a
business and the customer. To do this, you need to segment your channels according to the
characteristics of your customers: their needs, buying patterns, success factors, etc. and then
customize a program that includes goals, policies, products, sales, and marketing program
(1). The goal of channel management is to establish direct communication with customers in
each channel. If the company is able to effectively achieve this goal, the management will
have a better idea which marketing channel best suits that particular customer base. The
techniques used in each channel could be different, but the overall strategy must always
brand the business consistently throughout the communication

(2). A business must determine what it wants out of each channel and also clearly define the
framework for each of those channels to produce desired results. Identifying the segment of
the population linked to each channel also helps to determine the best products to pitch to
those channels.
 2. Written Test 1 (7.5)-

Q.1 Explain the Role of Sales Manager.

Ans:

1. Product development:

Product development, otherwise known as merchandising, is the foundation for successful

marketing. It covers a wide variety of activities of planning and development such as
introduction of new products, bringing home new uses or applications for existing products;
modification of existing product by style, colour, design; elimination of obsolete products;
standardization of products as to quality, size, design, packaging; observation of competitive
products for self improvement in terms of cost performance, name and the like.

2. Sales planning:

Sales manager is to set sales objectives and determine the sales and advertising activities
necessary to attain the established goals. Relying on marketing research, he decides of sales
quantum, type, sales efforts, time and costs.

3. Marketing research:

Sales manager is accountable for gathering, recording, analysing and interpreting the facts
about the character, quantity and trend of demand through marketing research. Marketing
research also covers sales analysis and research, statistical studies of sales by products,
territories, distributors, seasons, salesmen, costs and expenses.

4. Physical distribution:

Though it is the responsibility that is shouldered by traffic and shipping departments,

physical distribution of products is the basic responsibility of the sales manager. Here, the
sales manager coordinates the sales with the traffic on problems concerned with physical
handling of products from the points of plant to the points of consumers.
5. Sales policies:

Framing and administration of sales policies is a major responsibility of every sales manager
by very nature. Sales policies are the guidelines set up by the management within which the
company is to seek to reach its personal selling objectives. These sales policies can be
broadly classified into three areas namely, product, distribution, and price.

6. Sales personnel:

Sales manager is responsible for recruiting, selecting, and training the sales-force, its
compensation, supervision, motivation and control. Sales manager determines the extent of
salesman’s territories and aids them in covering their areas more effectively and better
utilizing their time and energy.

7. Financing the sales:

Sales of the organisation are sure to take two forms namely, cash and credit. Of late, credit is
forming the lion’s share of the total transactions. This necessitates the sales executive to
appropriate the funds for marketing in conjunction with the treasurer or the credit and finance
department.

8. Sales-promotion and advertising:

Advertising and sales- promotion activities are of paramount importance’s that assist in
strengthening the hands of sales-force. Therefore, the sales manager is responsible for
advertising and sales-promotion to create maintain and extend the consumer demand and to
aid the salesmen and the middlemen selling the company products.

9. Distributor and Dealer relations:

Cooperation, trust and goodwill of distributors and dealers are of grass-root importance in
successful sales efforts undertaken by the sales organisations. Sales manager, along with
public relation department, tries to establish, maintain and extend sound relation with dealers
and distributors.

10. Mechanical services:

Those sales organisations that sell mechanical products that call for after-sale services such
as installation repairs and maintenance they should have adequate and satisfactory
arrangements for such mechanical services.

Q.2 What is Sales Force Management? Explain the recruitment and selection process of
Sales Force.

Ans:

Sales force management is the soul of the company. ... The Sale Force is the FACE of the
Brand or the Product. A very important aspect of marketing that yields business is the
efficient and effective use of sales force management and companies are always looking for
better ways to complete this task.

Recruitment:

Recruitment means searching for prospective candidates and inspiring them to apply for the
post. Recruitment ends on the last day/date of receiving applications. Salesmen can be
recruited through a number of sources.

Sources of Recruiting Sales Force:

1. Advertisement

2. Other firm

3. Middlemen

4. Personal recommendations

5. Recommendation of existing staff

6. Special recruitment agencies

7. Private training institutes

8. Colleges and academic institutes, etc.

Selection:

Selection means selecting the fixed number of suitable candidates from those who applied for
the posts. Selection process starts as soon as recruitment ends. Recruitment considers all
applications received in a due date while selection considers only the required number of
most suitable candidates

Steps in Selection Process:

Systematic selection process consists of following steps:

1. Receiving applications

2. Screening applications

3. Preliminary interview

4. Written tests

5. Final interview

6. Medical examination

7. Final selection

8. Appointment and induction

Q.3 Explain the Importance and Types of Distribution Channel.

Ans:

The products we are using in our day to day life like laptops, cars, mobile phones, watches
etc. were made in different parts of the world. But we are simply purchasing them from our
home or from a very near place. This is possible because of the distribution channels. The
new trends and technologies in supply chain managements makes it easier than before.
 There are different types of distribution channels according to the necessity, nature of
product, business size, brand image and the method of operations. There are two major types
of distribution channels. One is direct channel and the other one is indirect channel.

1. Direct channels
2. Indirect channel

Direct channel:
In the direct channel method, the manufacturer directly sell the goods to the customers. There is
no involvement of intermediaries in this distribution. This is also called as zero level distribution.
The manufacturer distribute their products mainly by setting up retail outlets and internet selling.
To adapt this method, the manufacturer has to recruit field sales team and the sales
representatives are responsible for the sales. This distribution gives a company control over
relationships with the customers.

Indirect channel:

Indirect distribution channel has divided into 3 types according to the usage of intermediaries or
channel methods. They are one level, two level and three level channel. In one level channel
manufacturer sells the goods directly to a retailer. Mostly this channel is used by expensive
watches and FMCG products. In the two level channel, the manufacturer sells the goods to a
wholesaler, the wholesaler to a retailer and then to the customer. The wholesales purchases large
volumes from the manufacturer and then distribute them to retailers in small volumes. This
channel is mainly used to sell soaps, sugar, cigarette etc. In the three level channel, one more
level is added to two level channel in the form of agents. This agents reduce the distance between
the manufacturers and wholesaler. This is suitable for very big companies like Toyota, Pepsi etc.

Importance of distribution channels:

Manufacturers may always do not always need distribution channels. As discussed, it depends on
several factors. Some of the importance’s are

1. They create exchange efficiency by reducing the number of contacts needed.

2. The distribution channels can perform many functions like transportation, storage,
selling, scale of operation and advertising better than the manufacturers.
3. Large manufacturing companies can reduce their costs and time required to reach their
products with the help of distribution channels.
4. These can offer promotion and financial support.

Q.4 What is Sales contests?

Ans:

A sales contest is a motivational program in which rewards are offered to sales people based
upon their sales and/or results. There are three types:

 Direct competition — the sales people compete against each other and there is one
winner

 Team competition — there are teams which are rewarded collectively for winning.

 Goal — rewards are given for achieving goals which may be won by more than one
person

A sales contest is a short-term incentive program designed to motivate sales personnel to

accomplish specific sales objectives. In general, sales contests are used by firms to stimulate
extra effort for obtaining new customers, promoting the sales of specific items, generating
larger orders per sales call, etc.

Q.5 Define the concept of Channel Management? Why it is essential for the company?

Ans:

Definition: The term Channel Management is widely used in sales marketing parlance. It is
defined as a process where the company develops various marketing techniques as well as
sales strategies to reach the widest possible customer base. The channels are nothing but
ways or outlets to market and sell products. The ultimate aim of any organization is to
develop a better relationship between the customer and the product

Channel management and the importance of communication

Effective channel management involves a partner relationship management (PRM) solution

with a holistic viewpoint of the organization.

Channel management involves managing channels associated with reaching and satisfying
the customer, managing partners who help with the distribution process and managing
vendors who keep your internal controls working smoothly. Channel management
successfully gains and maintains the cooperation of various organizations by aligning the
enterprise as a whole with customer needs in mind. Each department and flow of information
has the potential to impact customer service, affecting your entire organization and your
reputation.

Develop sales and marketing programs for each channel to meet their needs, not what you
think their needs are. Communication is vital to success and increased profits. Create
a channel management system through enterprise alignment. Incorporate partner
relationship management as an integral part of your organization.
 3. Assignment against Presentation (3)-

“Training and Compensation structure of sales force of any Organization “

Ans:

SALES FORCE MANAGEMENT PRACTICES IN LIC

Introduction:

Marketing stresses the importance of satisfying customer needs and wants through a process
of exchange. Marketing occurs in virtually every aspect of life. Marketing and selling are
directly related to each other. However, a new philosophy concerning the relationship
between marketing and sales is emerging, with both functions being carried by the same
person. Sales management plays an important role in marketing, especially for firms of
insurance. Sales Management is generally acknowledged to be the backbone of marketing.
Brech defines it as “the overall management of sales and it refers to only a specialized
application of the process of management as a ‘whole.” According to the American
Marketing Association “the planning, direction and control of the personal selling activities
of a business unit include recruiting, selecting, training, assigning, rating, supervising, paying
and motivating; as these tasks apply to the personal sales force.” The ultimate objective of
the sales management is to influence the consumer of the target market to get sales orders.
Personal selling is the most frequently used promotional technique in business markets and
management of the sales force is an important quality component of any selling effort. A
sales force serves as a company’s personal link to customers.1 The company’s sales force is
one of its most important assets and it is the major component of the firm’s promotion mix.
Sales force plays a deciding role in deciding the company’s fate because the firm’s revenues
are derived from sales. Very frequently its effectiveness to the large extent determines to
extent to which overall marketing objectives will be achieved this is especially true for firms
in which the sales forces is a major element or various kinds of services (for example,
insurance) or those that sell directly to the consumers.

Objectives of Sales Force

Companies must define the specific objectives they expect their sales force to achieve. The
old idea was that the sales force should “sell, sell, and sell”. Later, the idea arose that sales
representatives should know how to diagnose a customer’s problem and propose a solution.
Salespeople do not try to sell a specific product initially. Rather, they show a customer-
prospect how their company can help the customer improve its profitability. The sales force
ofa firm plays a very crucial role and they cover some ofthe objectives.

1) To keep and maintain continuous contact and business relationship with both existing and
potential customers.

2) To understand and collect regularly information about customer needs and wants and send
reports to the departmental head.

3) To book orders and help supply or deliver goods and services to all members of
distribution channel without any bias and maintain regular relation and motivate them.

4) To meet their sales targets and maintain or follow sales policy, credit policy and pricing
strategy.

5) To keep tracking customer satisfaction and take action as deemed fit

Training sales force

Sales training is the effort an employer puts forth to provide salespeople job-related culture, skills,
knowledge, and attitudes that should result in improved performance in the selling environments.
Training can be defined as the development, of skills and faculties, to do a particular job in the given
way through systematic teaching and guidance. It involves showing, doing and checking the way it is
being done. According to Edwin B. Flippo, ‘Training is the act of increasing knowledge and skill of
an employee for doing a particular job”.

Compensating sales force

Compensating salesmen for their services is also an important managerial task. Through a
compensation plan management of a company co-relates efforts, results and rewards to
salesmen, controls them and builds, develops and stabilizes the sales force so as to ensure
satisfied consumers. However, a compensation plan to be effective should be simple, fair,
flexible economical and should ensure a living wage and attainment of the sales objectives.
In order to develop an appropriate compensation plan, management has to formulate the job
description, evaluate the job, determine the industry structure and compensation level and
components, identify special company needs, decide methods of compensation and then test
and install the plan. The level of compensation in a company depends on the quality of their
salesmen, level of advertising, intensity of training, bargaining strength, and company’s
financial strength. In a company compensation may be composed of fixed salary, variable
commission or bonus, reimbursement of expenses, and other fringe benefits. It may be paid
in the form of a straight salary straight commission or a combination of salary and
commission. Besides, salesmen may also be rewarded by provision of different incentives
such as bonus and profit sharing.

Sales Force in LIC

In LIC there are two types ofsales force is taken place they are:

1. Development Officers

2. Agents

Training methods ofAgents

The training programmes will be held at Divisional Training Centers, Sales Training
Centers, Zonal Training Centers for a period of 2 to 3 weeks. The training will be given in
the areas of up-gradation of knowledge, skills and personality development. The agents will
be trained aggressively and professionally in the areas of personal selling. The training
programme will be of 100 hours duration. Out of these 100 hours 85 hours training will be
given by the Divisional office, 10 hours by the branch office, 5 hours by the Development
Officers.

Compensation for Agents

The Corporation offers an attractive compensation to the Agents. The compensation offered
by the LIC would be in the form of commission. The rates of commission vary from policy to
policy and plan to plan. These are the components of commission. The higher commissions
stimulate the greater efforts of agents. Sales compensation plan is integrated to the
motivational aspects. The compensation plan provides a fair living wage and related to
performance. It provides a mechanism to integrate the Agent’s personal goals and
corporation’s goals. Pay is linked to productivity. Commissions increase with increase in
sales. These plans are useful when selling is more important than non-selling tasks. 89
Commissions are very powerful incentives to exert harder. Commissions provoke
nonperformers to leave.

4. Case Evaluation1st(2)-

Case Study 1

Marketing and Distribution of Mushroom

Sachin and Virag are two enterprising youth. They have passed out from IIM,

Bangalore. They thought instead of doing a job, they will launch fresh vegetables in

Indian markets. Having learnt of the future conventional foods, they decided to

Venture into cultivation of mushrooms.

Mushrooms are known to be the best alternative food for vegetarians. For Sachin and

Virag fund raising was a serious handicap for mass production. However, the first

Trial batch of mushrooms that they produced was bought by Star Hotel in Bangalore.
Further, the hotel placed orders for supply of 20 kgs every day.

Now mushroom industry is run by small entrepreneurs, like Sachin and Virag.

Another big player M/s Ashtavinayak Mushrooms, equipped with cold storage

Facility was more interested in the export market.

Sachin and Virag have set their sights high. They aim to sell mushrooms in a very

Big way all over India. Mushrooms have a great market potential and is a perishable

Food.

Questions

A. How will you advise Sachin and Virag, as how to increase the consumer?

Awareness about this new food?

Ans:

• Consumer awareness can be created by test marketing. Through sales persons and customer
response to the product.

• Samples can be distributed in big malls and Variety stores.

• Awareness can also be created through outdoor publicity such as wall hoardings, banners,
insertions in news papers etc.

Targeted Customers:

* Hotels

* Household sector

* Restaurants

* Industrial canteens
• Brand name of the company along with the product can also be highlighted to the customer
by using the concept of event marketing.

• For different kinds of selling modes they can target different customers Institutional sale:
Hotel / Restaurants/Industrial canteens Individual sale: Household

• Approach to hotel industry can be made and product benefit can be shown to convince the
customer. Mushroom related recipe booklet can be given to them for use.

• Can approach the T.V programs for Khana Khazana to show different recipes of
Mushrooms in their shows.

• Dealer push through sales promotion campaign.

• Press meetings can be a way to consumer awareness. Editors, journalists of newspapers

having maximum circulation can be contacted and samples to be distributed to them (such as
250 gm or 100 gm packs).

• Packaging should be attractive.

B. What would be your suggestions for distribution channel for mushrooms?

Ans:

Distribution network:

• Product having being perishable, company should go for faster and effective distribution
network having cold storage facility.

• Distribution through company delivery vans in local market and distribution through rail or
road transport to urban markets.
 Case Study 2

Indian Refrigerator Market

India's Refrigerator market estimated at Rs. 2750 Cr. is catered mainly by 10

Brands. The annual capacity is estimated at around 4.15 million units is running

Head of demand of 1.5 million.

As there is a demand and a surplus supply, all the manufacturers are trying out for

New strategies in the market.

Times have changed and also the buying behavior of the customer. Earlier it was

Cash and carry system. Now dealers play an important role in selling; now the

Systems is exchange for old “bring your old refrigerator and take a new one with

Many gifts”.

A new company by name Electrolux has entered the market which has acquired

Allwyn, Kelvinator and Voltas brand.

Researchers have revealed that urban and city sales are declining and hence all

Manufacturers are trying to concentrate on rural markets.

Electrolux strategy is customization of market, with special attention to the

Northern and Southern India markets, while Godrej the main player thinks that

Dealer network in rural market for sales and service will be beneficial and is trying

To give more emphasis on dealer network, whereas Whirlpool has adopted the

Strategy of increasing the dealer network by 30%.

The market shares of the major players are as follows:

• Godrej 30%

• Videocon 13%

• Kelvinator 12%

• Allwyn 10%

• Voltas 5%

• Whirlpool 27%

• Daewoo 1%

• L.G 1%

• Others 1%

Questions

1. Could the refrigerator market be segmented on geographical base planned by

Electrolux?

Ans:

The main justification for Electrolux strategy would be Electrolux is amalgamation of 3

companies, Kelvinator, Voltas and Allwyn. Allwyn is popular in South Indian market, while
Kelvinator is famous in North India Market. Electrolux wants to cash in on the popularity of
the respective brands. It is not possible to segment according to North or South Indian
Market, once a company's name becomes a logo, then the reason for buying for customers for
other brand depends upon price, quality, usability and features of the product. The storage
pattern of foods in North India and South India is same. Same is the case of rest of India, so it
won’t be possible to segregate the market according to the geographical base.
2. What would be the marketing mix for rural market?

Ans:

The rural market is small but significant as far as refrigerator is concerned. Moreover, the
cost of selling of dealer in the rural market should also be justified. The type of food the rural
people consume should also be taken into account; they prefer to have more of natural foods
and less of derived food products like Ice-creams, butter, cheese etc. The cost of the
refrigerator should be less attractive to buy. The size and material should be so adjusted that
the cost price would be reasonable. The capacity of the refrigerator should be 100 l - 300 l.
Much more space has to be given for storing vegetables. Other important factor to be taken
into consideration is the Power supply which is not so good in rural areas. To avoid the
voltage fluctuations in built stabilisers will be the selling features in the rural areas.

3. Would 125 L and 150 L models be an ideal choice to launch in rural market?

Ans:

The chances of selling of 125 l and 150 l refrigerators are high because the prices of the
refrigerators would be less. This would be a major factor. The second aspect would be they
don’t have many items to store. They would prefer a small refrigerator, also the space in their
homes are not very big wherein a small refrigerator would serve their needs.