About Eicher Motors

Eicher Motors, was founded in 1982 to manufacture a range of reliable, fuel-efficient commercial vehicles of contemporary technology. The unit manufactures and markets commercial vehicles with Gross Vehicle Weight (GVW) ranging from 5-25 tons. Today, Eicher Motors is one of the leading manufacturer of commercial vehicles in India with a 33% market share in the 7T-11T segment. The success and growth of this unit is a result of various customerdriven strategies. The manufacturing facility is situated in Central India – Pithampur, Madhya Pradesh. Eicher Motors has stepped into the Heavy Commercial Vehicle segment with its state-of-the-art HCV, the "Eicher 20.16", the first commercial vehicle designed and developed indigenously. Eicher Motors functions through a strong three-tier service network consisting of authorised distributors, service centres and company trained private mechanics. The vehicles are sold and serviced through a network of over 576 Authorized Contact Points all over India, supported by service centres and over 4500 company trained private mechanics, who are close at hand on all major highways throughout India to provide initial "first aid" to the vehicles if required. In 1986, Eicher Motors entered into a technical and financial collaboration with Mitsubishi Motor Corporation of Japan to manufacture the Canter range of vehicles. The technical assistance agreement with Mitsubishi ended in March ‘94 after successful transfer of technology and on achieving total indigenisation with only a few parts sourced globally. Eicher Motors has acquired formidable expertise in designing and developing commercial vehicles. It has a world-class R&D centre manned by a team of brilliant engineers and equipped with latest Computer Aided Design (CAD) and Computer Aided Engineering facilities like NASTRAN, FEM analysis packages. Leveraging its in-house expertise, this unit has successfully developed a wide range of commercial vehicles to meet varying customer needs. The product range includes Trucks : Eicher 10.50, Eicher 10.75, Eicher 10.90, Eicher 11.10, Eicher 20.16 & 30.25; Buses: Eicher Skyline, Eicher Cruiser and Eicher School Bus range of buses. Besides the basic models, it offers over 85 models of ready-to-use custom-built vehicles for various specialised applications. Eicher Motors’ products have been well accepted in the market. This is also demonstrated by significant sales of its commercial vehicles in export markets where the company competes with reputed international brands.

East & West National Sales Head In Parallel the marketing team has Product managers responsible for different products of the company. But Regional manager will be same and All India sales head will be same. In the sales organization some of the key structural points are as following:  Territory Manager and Area managers for different products might be different also.SALES MANAGMENT I. South. Sales Organisation On a broader level Sales Organisation for Eicher is structured (in order of reporting) as following: Dealers & Sales Persons Territory Managers Area Managers Regional Managers – North. For example Eicher makes 3 kinds of product lines – o Light Trucks o Heavy Trucks & o Buses So territory manager and Area managers will be different for each of these 3 products. Besides the above mentioned structure there are support staff also which handle the following work areas o After Sales o Repairs  .

travelling time and comfort etc.II. East & West Within that will be states Depending upon the industry or market size the state is divided into dealerships Thumb of rule followed is that for 1000 industry size there should be a dealer.e. Territory Allocation Following are the steps of how EML defines its territories: The whole country is divided into 4 regions North. per 1000 units of sales in an area there is a designated as one dealership Territory is designed is such a way that each TM gets 2-3 dealerships for handling depending upon factors like distance. Now there sales representatives under each TM but they are not employees of EML. i. . South. but of Dealers. They in a way also report to the TM because they do actual sales and TM is only looking after how and what amount of sales has been achieved.

But note that this flexi salary is fixed only and it is called flexi because it is reimbursed by employees as payment against various heads.1984. For example employees who are senior but not MBA have higher salaries because of their overall experience. Performance Evaluation System Overview   Introduced in 1977 and Reviewed in 1979. 1986 & 1991 Executives : o Reviewed by Career Development Groups (CDG) o Under Annual Development Review (ADR) Process o At the beginning of the year target / KRAs (Key Result Areas) are set  Features of Present Appraisal System for Executives : o Customer Orientation  Expectations of internal & external Customers .  Then there are incentive plans which are variable and linked to performance. Structure    Variable salary is 10% Rest all is fixed Basic salary is very less – only 10%. Rest all is a flexi structure where in you can declare the balance salary under various heads to save tax.20 -25 lacs per annum All India Sales Head – 30-40 lacs per annum Then there are bands for salary decisions. Compensation Structure Compensation ranges for various position in EML are as broadly as following:     Territory Manager – 7-8 lacs per annum. IV. Area Manager – 12-15 lacs per annum Regional Manager . 1981.III.

(If an employee fails to reach Level1 then the rating is 0 and no hike is given. Presentation & Clarity of expression 5. Sincerity and willing to work 2. Those who exhibit higher competencies are given a monthly bonus ranging from 5K to 15K. Review will be based on on the job and off the job development requirement. Dynamism. bonuses and pay hikes. Intelligence and Grasping power 3.  It is measured whether an employee has achieved their annual targets or not.) Competency Measurement: Every role and position in EML has a set defined level of competency. Attendance & Initiative 6. Association. Assessment Centre: EML started this in 1984 to undertake promoting staff to executive positions . This is a performance based evaluation and it is about 10% of salary. Here again there are levels defined of how one exhibits competencies in comparison to the expected competency for that position. o Emphasis on Potential development   Acceptances of more responsibilities Individual Potentiality Following 6 Points Rating Factors are used for evaluation of Non-Executives: 1. Discipline Based on the above factors an employee’s performance can fall into 3 levels: o Level1: Meeting the KRA o Level2: More than what was defined in the KRA o Level3: Extraordinary performance entitling to promotions. Knowledge 4.

workmen & Jr.Sr.Staff Sr.Skill development International Exposure . Staff Executives 23 Organisation's perception as Individual need Organisational Need .for all level Functional Training .to deal with customers Training Schools . Training and Development EML conducts both internal and external training programs for its employees. staff Training for Dealers .for all level Multi-Skill Training . Following are the various types of training that are available to EML employees:        Behavioral Training .for all level Potential Related Training .V. Level Executives to establish TQM Following data shows the feedback of EML employees for the trainings they receive: 100 90 90 81 80 70 70 60 50 50 50 90 92 88 76 Received any Training at Eicher Individual needs 58 48 44 39 40 30 20 10 0 Workers Jr.

During a nine month long training program. Recruitment and Induction EML does not hire. IT. legal and taxation. which typically lasts for six months. personnel. quality control and assurance for entry level and experienced candidates.VI. Engineers are hired as graduate engineer trainees. internal audit. but VE Commercial Vehicles and Royal Enfield are employers. They offer exciting career opportunities in manufacturing.in management and engineering colleges. the candidate is inducted in the company as an employee Induction process is not very elaborate –   Management graduates are hired as management trainees and put through a customised induction program. materials. During the training phase. At Eicher Motors Ltd. Lateral Recruitment where experienced people from the Auto Industry they come. candidates are given on the job training and after successful completion. Recruitment is done via two methods – 1. 2. administration. . The positions are generally filled by conducting campus recruitment drives across India . product development. In sales fresher are hired who are Engineer & MBAs. marketing. a candidate is put through various business units in order to understand Eicher's various business processes.

for example. II. Exclusivity is also a barrier considering not many dealers would want to commit to just one company/channel. As a result there is no conflict of interest because the dealer is selling only vehicles of Eicher. meaning that a channel will sell only EML vehicle and that too of a category. 2-S Channel Spare Service & . The challenge is to find a dealer who is willing to be a part of such an exclusive channel. Secondly it involves a heavy capital investment. 3-S structure Spare Service & Sales 2. Channel Environment & Strategy Channel environment at EML is exclusive owing to the fact that dealerships are also exclusive.CHANNEL MANAGMENT I. Channel Structure & Design EML has three types of channel structure: 1. a channel will sell only trucks made my EML. So it is a dedicated channel much like cars.

Only Sales outlet While selecting channel members following characteristics are considered by EML:      Years in business Size of dealer Growth and profit record Cooperativeness and reputation Location Note: These are ideal parameters but EML does not strictly go by these III. 1-S Channel – These are retailers who sell spares only. 3. Managing the channel members and conflict Conflict is normal among channels as each member of the channel has a specific goal that is generally unique from the channel member preceding or following it.The 2-S channel is used if there is a very big territory and adequate no. . The goal of the manufacturer is different than the goal of the distributor/retailer. At EML there are mainly 2-3 types of conflict that happen between channel members. of vehicles are not sold but vehicles are supplied in those areas then only service and spare is required (The dealer is not authorized to sell). Resources are generally money and each channel member is trying to maximize their efficiency and many times that means reducing costs for the individual channel member even if that means increased cost for other channel members.

Then there are Gallop survey scores.  Some other management principles used to resolve conflicts are as following: o Diplomacy o Mediation o Arbitration o Managing and motivating channel members o Partner relationship management (PRM) for long-term partnerships o Software available to coordinate members o Check channel performance of:     Sales Customer delivery Promotion and training Customer service IV. So such surveys are run and numbers are awarded based on the survey results obtained. It has different types of head like market share target. For discount related conflicts it is difficult to be very strict as those are not easy to prove. Then there are territory infringement leading to conflicts. Evaluation of Channel Members EML maintains dealer scorecard. sales target etc.  Second type of survey is Dealer engagement survey which measures how much are the dealers engaged to EML. These scores are sent on a regular basis from by Area offices and are finally compared on national level. Then there are sales dealer audit scores.  Gallop is an international organisation which helps companies conduct customer engagement surveys. The penalties can be monitory and sometimes warning is enough also. These are again handled via penalties.   One is on discount part and is normally taken care by penalties. . The company strict decisions in case of conflicts like territory infringement. These are conducted every year.

in the sense that they don’t have much money. Problem with Channel Management:  The biggest problem with EML channel management was at the time of selecting a channel member. higher incentives and dealer discounts.e. They would make anyone a dealer and their criteria’s were not too high for the selection. EML really lacks lot of big dealers who have good amount of money (and this kind of business does require heavy capital investment and is a long term business from returns point of view). So in that way the channel selection is pretty weak or poor at EML.. .  EML has lot of small dealers. As channel is ultimately the last end which interacts with the customer. so if that is not strong losses are bound to happen. So that resulted in everything – Poor channel selection leads to poor sales.All these score lead to a final balance scorecard which is used for final evaluation. Poor sales lead to poor growth and smaller market share.    Tata being the number one attracts most of the dealers and no one want to be associated with number 2 or 3 player. All these results are than tallied on all India level and annual rewards are also given out to top performers. i. To get bigger dealer EML is not a in a position to offer a bigger carrot.

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