PRICING, PAYMENTS, MARGINS

At every level there is a margin of 10%-12%. for ciggarttes that have less sale the margin is
more. If a retailer buys from the distributor he gets a margin of 10% whereas, wholesaler gets
a margin of 12%. This is because the wholesaler buys in bulk that he has to further sell to
retailers in the market whreas, a particular retailer buys less stock as he is purchasing only for
his store.

Let us take an example of Classic ciggarettes that is one of the brand of ITC Ltd. the print
price is Rs. 330 for a 20 piece packet at which consumers buy it from retailers. The retailers
get it for Rs. 300 if they buy from the distributor directly who delivers the stock at his shop,
whereas if the retailer goes to the ditributor to get the stock he will get it for Rs.299. If the
retailer buys from wholesaler he will get it for Rs. 298 for which he will have to go to the
wholesaler to get the stock and also bear the transportation costs.

The following table shows the prices of some of the popular brands of ITC Ltd.
Name of brand distributor wholesaler retailer consumer
Gold flake 267 268-270 300
Classic 297 298-300 330
Benson & Hedges
India King

TERRITORY DESIGN FOR SALESFORCE

Territory design of salesforce depends on the size of the city, its population and demand for
ciggarettes. Larger the size, population and demand, more will be distributors, wholesalers,
sales managers, sales executives and retailers and vice versa. For example- Delhi is divided
into four main areas- North, South, East, West which will have 4 ASMs. Then under them
there will be various wholesalers and retailers.

If we take the example of Dehradun for territory design it is as follows:-

The main areas in Dehradun are

 Rajpur road
 ISBT
 Sahastradhara Road
 Race Course
If we look at Rajpur Road, it is covered over a stretch of 30kms. The sales manager of Rajpur
Road has a number of sales executives under him which are covering a particular area.

 Starting from Ghanta Ghar to St. Joseph’s Academy

 From St. Joseph’s Academy to Dilaram Chowk
 Canal road
 Dilaram chowk to Rajpur

These are 4 main outer areas of Rajpur Road that are being covered by 4 sales executives.
The remaining inner areas are covered by remaining executives.

ROLE OF ASM, RSM, ETC.

Following are the roles of Area Sales Manager and Regional Sales Manager:-
 Managing demand and supply of ciggarettes.
 Handling damaged products and taking responsibility of replacement
 Keeping a check on availability of products
 Handling disputes and conflicts, if any
 Analysing the performance of various ciggarettes in the market
 The ASM also has to be vigilant if the sales executives are visiting the retailers or not
regularly
 ITC Ltd. (Manufacturer)

Bangalore (factory) Saharanpur (factory) Kolkata (factory)

GSM (company)

RSM (North) RSM (South) RSM (East) RSM (West)

Distributors

ASMs

Sales executives

Retailers Wholesalers

Retailers