SALES MANAGEMENT & BUSINESS DEVELOPMENT

(MKT 401)

Term Assignment
On

“A STUDY OF SALES PRACTICES”

AT

POSTGRADUATE DIPLOMA IN MANAGEMENT

(Term-IV;2020-21)

Under the guidance of: Submitted By:

Dr. Deepak Singh Group 1:
Gaurav Khatri PGFA1918
Grishma Batra PGFA1919
Harsh Gupta PGFA1920
Diksha Kumari PGFB1919
Khyati Singh PGFB1928
FMCG Industry
 When it comes to gross value added FMCG stands at the fourth largest sector in India.
 From US$ 840 billion in 2017, India's retail market is forecast to cross US$ 1.1
trillion by 2020, with modern trade projected to rise at 20-25 percent per annum,
which is likely to raise FMCG companies' revenue.
 In FY18, FMCG industry revenues reached Rs 3.4 lakh crore (US$ 52.75 billion) and
are expected to reach US$ 103.7 billion by 2020.
 In 2020, the FMCG market is projected to rise by 9-10 percent.
 The rural area contributes about 36% of the total expenditure of FMCG.
 The urban FMCG segment saw an 8% growth rate, while the rural segment increased
by 5% in the quarter ended in September 2019.

 THE Indian FMCG sector can be divided into 3 parts:

o Health Care
o Food and Beverages
o Household and Personal Care

Health Care, Food and Beverages, Household and Personal Care comprises 31%, 19%, and
50% respectively.

Major Segments

19%

50%

31%

Food and Beverages

Health Care
Household and Personal Care
About the company:
Britannia Industries Limited is an Indian company that deals with food and beverages.
Established in 1892 and headquartered in Kolkata, it is one of the oldest established
businesses in India. Being a part of the Wadia group it is now headed by Nusli Wadia.
The company was established in 1892 with an investment of Rs. 295 by a group of British
businessmen. Biscuits were made initially in a small house in central Kolkata. Later, the
company was purchased and run under the name "V.S. Brothers" by the Gupta brothers,
primarily Nalin Chandra Gupta, a lawyer. In the year 1918 C. H. Holmes, a Kolkata-based
English businessman, was taken on as a partner and founded The Britannia Biscuit Company
Limited (BBC).
The last 5-year sales and profits have been given below:

Mar-16 Mar-17 Mar-18 Mar-19 Mar-20

Sales (in ₹ cr.) 8,397 9,054 9,914 11,055 11,600

PAT (in ₹ cr.) 1,220 1,304 1,518 1,768 1,844

Sales PAT
14,000 2,000
12,000
1,600
10,000
In ₹ crores

In ₹ crores

8,000 1,200
6,000 800
4,000
400
2,000
0 0
Sales PAT

Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20

 The company has shown a CAGR of 8.41% for 2016-18 in revenue.

 The company has shown a CAGR of 10.87% for 2016-18 in PAT.

Market Share:
Considering the Biscuit industry Britannia is currently the market leader with 33% of the
market share. Followed by Parle with 31% then third is ITC with 13% and then comes Kraft,
Priya Gold, Horlicks, and others.

Emerging Trends Affecting the Roles of Sales Person

Sector composition where firstly industry is focusing more on the rural market. As small
towns and mid-density cities are emerging to create a new FMCG market.
Secondly, growing of E-commerce demand, where the FMCG industry is tying up with
delivery companies like big-basket, online FMCG market has emerged. Britannia company
has also tied up with Swiggy and Zomato. And in recent times during the outbreak of the
COVID-19 pandemic the industry has shifts online sales. As has gained revenue through
online sales.
The company has gained market share and thereby narrows up with No.1 player due to the
COVID-19 outbreak.
With comparison to industry, the company is focusing on “Distribution expansion” in which
they are expanding in their categories and distribution, through which the company is gaining
profit as well as helping in brand building.
To increase the depth of the distribution
It is expanding into the rural sector to increase their sales, focusing more on the rural market
the, building relationships with the distributors and retailers, selling style of the salesperson
has moved to the person selling.
Organization Structure
Selling Style used At Britannia
In current times where consumers are smarter, to convince them towards buying a product
only insights selling style works where a high level of research and problem-solving
approach involved. On the other hand, for a company like Britannia which is part of the
FMCG industry, it is still the sales-oriented technique that is driving it towards success.
Though the company keeps tabs on its consumers through analysing data on taste and
preference of consumers, strategies are formulated keeping in mind the sales volume and
sales target to be met. Therefore, we drive the following chart to study the sales style

followed by Britannia industries:

Britannia’s Selling style falls under (5, 5) quarter, as it gives equal consideration to concerns
for its customers as well as sales of company products. Britannia uses research data where its
studies consumer behavior pattern and usage pattern, but the data derived from such sales is
only used to make improvements in an already existing product or towards launching a new
product but not for strategizing for sales. Thereby, Britannia is considered as the company
purely indulged into a sales-oriented technique as its selling style. Selling strategies
formulated keeping in mind the target volume that the company wants to sell and what
number of consumers it wants to reach through these targets are also strategized. Britannia
always anticipates the profits it wants to reach through these sales and keeps on forecasting
these revenues along with forecasting sales figures to lay down future strategies.
Product/Service Category (Focus on Category of Choice)
Britannia Industries is one of the market-leading companies in the FMCG industry. It has
been able to set strong roots without having a larger variety of product lines but only through
its bakery and dairy products, it holds a strong position in the market. Britannia’s Product
includes:

The product portfolio of Britannia industries includes 4 categories in the Bakery segment
(Cakes, Bread, Rusk, Biscuits) and the 5 categories in the Dairy segment (Milk, Butter,
Cheese, Ghee, Dahi), etc. Its product mix constitutes: Product length = 9 and Product width=
2.
The field visit focussed on bakery products of Britannia industries, where the company has
envisioned, segmented, and positioned bakery items from the following perspective.
1) Cakes- Gobbles and tiffin fun has been specially introduced for kids or younger
generation as moms usually pack tiffin fun for school for their kids. Nut and Raisin
romance cakes are focussing on young adults and adults.

2) Bread-Britannia had launched usual wheat bread and brown bread just like its
competitor: Amul. Whereas taking a step forward the company launched oats bread
and multi-fiber to cater to fitness freak consumers and also launched varieties in these
segments like honey and oats, Multi-fibre oats bread, etc.

3) Rusk- Britannia focussed on breakfast lover consumers by lunching Rusk and all
those who love to have a little snack with their tea and coffee for their evening snack
breaks.
 4) Biscuits- Britannia is known as the dominating company in biscuits. The company
achieved this segment as it was tremendously successful in segmenting and targeting
its market before launching any of its biscuit brands. Britannia’s biscuit segment
categorized into 4 segments:

a) Luxury biscuit segment- Pure Magic, Good-day, Britannia Cookies, Jim-Jam

biscuits, Treat Fruit Cream. Average price range up to- Rs 50 for a small pack.
b) Kids segment-Tiger Crunch biscuits, Milk Bikis, etc. The average price is Rs 20
c) Snack biscuit segment-Britannia 50-50, little hearts, Bourbon, Timepass, etc.
d) Adult health- Nutri-choice, Nutri-choice crackers, oats biscuits, etc.

Negotiation Strategy Used by the Britannia Company

The negotiation for Britannia in the case of B2R is done between the Distributors of Britannia
and retailers of Stores/ Kiran Stores/. And the negotiation strategy used by Britannia is Well
in Dry and Reunion.
Well in Dry: -
In this type of Negotiation strategy, the company does not negotiate and there is no
negotiation done by the negotiator. In the case of Britannia, a fixed margin is given to the
retailer and further increase in margin is not negotiable in the urban region. While in the
Rural region also fixed margin is given to the retailers but further increase in margin can be
allowed to some retailers by the company.
The company has also launched some programs for rural region retailers and in which they
reach the top retailer of the territory and offer them the choice to participate in the company’s
program. This program for retailers is called KATs (Key Account Territory).

In KATs the retailers have to fulfill some criteria and if retailers fulfill these criteria, they
will get some extra margin on the products. For Example
 Criteria 1: If the retailer achieves the target given by the company to the retailer then
the retailer will get an extra margin.
 Criteria 2: If the retailer provides some shelf space for the Britannia products then
they will get some extra margin.
 Criteria 3: If the retailer provides some window display in his outlet for the
company product then again, the retailer will get some more margin.

These are some of the criteria that are given by the company.
The same type of program is introduced by the Britannia Company for the wholesaler of the
products. This program is called LAKSHYA.
Business Development Procedure/Plans- For New Product Launch
Any business development manager would focus on getting new business opportunities for
the company to drive the Company’s growth. Drafting a Business Development procedure for
the FMCG industry is crucial and quite pain striking for any BD manager as it is not an easy
task to convince retailers and wholesalers to accept your product, especially where products
with fewer prices needs to be launched as it gives fewer margins to distributors. In Britannia,
the Business Development Manager is in charge of drafting sales presentations for the newly
launched product but he is dependent upon the company internal strategic team to assess and
forecast the performance of the new product and anticipating what percent of target
customers may end up buying.
The product strategic team anticipates upon the following points:
1) Products suitability to no. of countries where Britannia has a distribution network.
2) Product acceptability by no. of consumers
3) What percent of taste and preference of consumers have been met?
4) Expected sales within 6 months of launch
5) The expected period of covering the cost of production and earning profits.
The following projected numbers are shown to clients if the company needs investment in the
project. Whereas if no external investment is needed then the Business development manager
directly connects with retailers and wholesalers to request shelf space for the product.
In the FMCG industry launch of new product is taken care across borders for which business
development follow the following approaches:
Product visibility through Shelf space:
a. Ascertaining the segment under which the product falls, for example: if belongs to the
bread or biscuit segment then it caters to which type of customer, it may cater to
health freak consumers or consumers influenced by prices, etc.
b. After deducing the segment, the business development team searches for suitable
regions that are showing higher sales in that particular segment.
c. Retailers and distributors and wholesalers of that region are approached and requested
for shelf space.
d. Distributors may also be negotiated for distribution contracts for these products and
profit margins are set.
Product visibility through advertisement
a. Television ads and brand ambassador programs, charitable programs, etc.
Senior Business Development Manager reports to RSM and he is responsible to keep tabs on
consumer’s footprints across new product launch, the initial 4 months of the launch are
crucial for nurturing of the new product. During these 4 months, he is responsible to look
after the freshness of the product and the right visibility of the product in the market.
RECOMMENDATIONS
 1. Add sugar-free cakes in their cake segment for diabetic people and a senior citizen or
fitness freak who avoid sugar cakes.
2. Add more varieties in the Britannia rusk segment.

Britannia’s forecasting Technique:

Britannia uses a top-down forecasting approach. The sales-related data is collected by the
higher management of the company and then the forecasted quantity is divided as targets of
the sales teams.
For quantitative forecasting 2 data are used:
1. The sales data of the particular SKU for the last 3 years of that particular month.
2. The sales data of the particular SKU for the last month.
After getting this data the trend for the last 3 years is analyzed and the last month’s sales data
is analyzed for any irregularities and the forecast is done.
After the forecast is done the data is compared to Nelson’s reports to check the performance
of the products.

Sales Territory Design: -

A sales territory consists of a geographical area assigned to an individual salesperson or a
particular task force. While designing a Sales territory some factors should be kept in mind
and some of those factors are.
Nature of Product: -
As we are focusing on Britannia Bakery Products so most of the bakery products that are
produced by the Britannia are Sami- Perishable goods and can be stored for at least a month
except for bread. Bread is perishable and can only be stored for a few days. As most of the
bakery products are of the products are Semi-Perishable then the size of territory will be of
medium size.
The density of population: -
For the Bakery Product of Britannia, there should be 1 - 2 salesperson for every 1, 00,000
families or a population of 2.5 lakhs to 7.5 lakhs. In the case of a territory population larger
than 7.5 lakhs then at least 3 – 4 salespeople of the company are required. Then for the areas
where there are a mix of both Rural and Urban Areas at least 2 salespeople should be allotted
for territory. In case the territory is a district of a population of 10 – 12.5 lakh then a
maximum of 2 salespeople is required to cover the territory. If the territory is spread out then
fewer sales force will be required.
The procedure of creating a territory design: -
 Select a Geographical Control Unit: -
The management has to select a geographical control point. The central point can be
classified based on states, cities, areas, and districts.
 Find Location and Sales Potential: -
The next step is to define the requirements for the location and the location's sales
potential. In a geographical area, the area can be identified from the past success of
the organization and its future sales prospects.

The next step is to estimate the future sales of each geographical location after
collecting and sorting the data. The sales management forecasts the number of sales
anticipated by the company in subsequent years. In finding the spot, several variables
can help like competition, advantages of the company in a particular geographical
location.

 Estimation of work analysis: -

This can be done with the help of two approaches – Breakdown and Buildup

Breakdown method of Territorial designing

Buildup Method of Territorial Design

 Routine Planning: - In the first three steps, the sales manager works on the
geographical control units, now they have to combine these locations and convert
them into territories.
 At Britannia, the wedge shape routing plan is used as it is suitable for the territories,
which contain both the urban and non-urban areas. As Britannia products are Sami-Perishable
products and are also FMCG products. The territories for the company products consist of
both Urban and Rural areas. The radius starts from the most populated urban center. Wedges
can be divided into many sizes and the travel time can be maintained by balancing between
the calls of urban and non-urban areas.

SALES QUOTA AND QUOTA TECHNIQUE: -

A sales quota is a sales target, or minimum sales level that the sales entity aims to achieve at
a particular time. A sales entity can be an individual, a team, and a region. The sales quota
provides a target that a sales force has to achieve or a region has to achieve this helps in
increasing the productivity of the company. The objective of the sales force is to achieve
efficiency, they give a baseline and they help to identify the goal of the company, helps in
increasing inspiration, and help in monitoring the performance of the sales force.
TYPES OF SALES QUOTA:
According to the numerous and evolving requirements of the company, there are different
ways of setting revenue goals. The sales quota is divided into four distinct categories based
on the difference between the preparation and cost management process, marketing goals,
business conditions, and strategic decision-making process.
1. Sales and volume quota: “this sales quota majorly focus on the allocation of the
sales volume for salespeople and regions to achieve the maximum revenues by selling more
and more volume.”
2. Financial and Budget quota: this sales quota majorly focuses on the cutting of the
expenses and the cost to achieve the maximum profit generation.
3. Activity quota: this sales quota: majorly focus on the activities performed by the
sales force to achieve a particular target at a particular time. So in this organization sets
activity quota for the sales force to achieve the organizational targets.”
4. Combination Quota: the sales quota majorly focused on the combination of two
quotas which is sales volume and the sales activity to increase the sales in a particular
period.”

QUOTA TECHNIQUE FOLLOWED BY Britannia:

Britannia follows a trend that is traced to the previous sales record of the company,
essentially to set the sales target of the company. Thus, the business uses the previous
approach of sales experience to set the organization’s sales target.
Based on the revenues of the previous year, the formula for past business experience
measures the sales number. Organization administrators set this up by increasing a certain
percentage from the organization's past revenue record.

Most commonly, management uses an average of several years as a reference line for the
measurement in the technique for greater precision. It is quick to execute this technique and
does not take much time.

Salesforce motivation and compensation

Today’s one of the difficult tasks that all the sales manager faces are the motivation of
salesforce. Many companies use international salesforce which adds more competition to
motivation challenges. To maintain the other complexities of selling a sales manager should
see that their salespersons are strongly motivated. Motivated sales people will help the
company to achieve goals as well as help company to achieve its targets.
Britannia uses its salesforce motivation as primary motivation (that helps in achieving all the
physiological needs). Company uses same as Maslow’s need hierarchy.
which acts as a guiding force behind motivation
I. Physiological needs- the physiological needs include the basic physiological needs
like hunger, thirst, shelter so the company also gives this basic need to its salesperson
II. Safety needs where it pertains to protect from physical and emotional harm
III. Safety needs, where it gives the job security to its salesperson
IV. Social needs are given to the salesperson in the form of recognition
V. Self-actualization needs, where the salesperson is motivated to relate that they have
potential to achieve the target.
The managers are given a high task to motivates their sales team, so when they are motivated
in such a way so that they can be rewarded if the sales person is rewarded for its good work
then they get motivated to work even more better. So, these are the factors used by the
Britannia to motivate its salesperson, they are in the forms of promotional opportunity, sense
of accomplishments, incentives etc.
There are basically two types of rewards given to them one is in the form of financial
motivation and another one is the form of non-financial motivation.

 financial Motivation: It is associated with money, if the salesperson has exceeded its
target given to them like generating new clients, making this amount of sales as target
so they motivated if they are rewarded. It includes wages and salaries, fringe benefits,
bonus, retirement benefits etc

 Non-financial Motivation: Basically, in this the motivation is not associated with

monetary rewards, (like salary, bonus). Here company uses intangible incentives like
ego satisfaction, self-actualisation, safety need, responsibility. Company also gives
other non- financial motivation like give job security to the sales team, recognition,
personal growth opportunities.

Compensation plan:

It gives a push to Salesforce efforts, toward achieving desire goes. This has an impact on
other organisational function too. It influences the quantity of production, cash flow and the
training needs of sales personnel. There for the sales manager should study the characteristics
of the compensation plan before going into the finer aspect of deciding on the type of
compensation or the proportion of variable and fixed components. Any compensation plan
should fulfil certain criteria. As they are main to motivate, there should be equality and
compensation to all cells personal. The design should have flexibility to enable sales
managers to modify it at times of changing emphasis in Salesforce

 Commission, Britannia uses to adopt a standard commission rate for achieving fixed
sales levels, for the product mix. It has a variable commission rate for the Salesforce
to calculate profitability or the progress of strategic objectives.
 Bonus are also given to the salesperson which acts as a lump sums payment to sales
personnel for achieving sales objectives in a particular time period. The first involves
payment on reaching designated sales volumes, while the second is depends on aspect
such as sailing to certain key accounts. It may also be related to a customer
satisfaction survey
 Fringe benefits, these are benefits given to sales personnel in the form of medical
reimbursement, pension scheme, group insurance and other benefits
 Sale force expenses: It includes reimbursement of expenses incurred by sales
personnel as part of their selling activities. These include travel and lodging expenses,
daily allowance.

Sales Audits
 The sales data form the sales performed in the field in collected.
 Now the data collected is compared to the sales report of the industry by Nelson.
 Based on the performance of the product is determined.
 Weather the product is performing well or not is judged.
  Based on the products performance management decision on product, price, place
and promotion are taken.
The data required for sales audit are:
 Field sales report by the company for every product.
 Industry report by Nelson.