SDM

Project
ITC
Group 1
Shahrukh Khan – MBA/07/048
Arpit Rajpoot – MBA/07/072
Kartik Mathur – MBA/07/140
Abhishek Modhave – MBA/07/18
Mohit – MBA/07/214
 Sales Strategy
Vision : Sustain ITC’s position as one of India’s most valuable Mission: To enhance the wealth-generating capability of the

corporations through world-class performance, creating growing enterprise in a globalizing environment, delivering superior

value for the Indian economy and the Company’s stakeholders and sustainable stakeholder value

What to sell? How to sell? Who to sell?

A short line policy to scale up proven
megabrands, leveraging adjacencies
through horizontal brand extensions
and nurturing new platforms with
innovative differentiated products
Leveraging technology across entire
supply chain to compete in
enhanced competitiveness in FMCG
sector through a multi-channel
distribution strategy
Focus on selling to consumer via a
combination of whole seller and
retailer channels by evaluating sales
volume potential and distribution
costs to optimize net profitability
 Salesforce Structure
Rationale for the structure
Branch Manager
• Salesforce format is line organisation wrt product

ASM ASM categories

(specific for a (specific for a
product category) product category • ASMs act as link between ITC and the distributors

• ITC’s objective is to cover maximum retail outlets

Area Executive (4- Area Executive
5 per product (4-5 per product directly through distributors so that maximum product
category) category)
push can be achieved

Distributors Distributors • ITC decides which retail outlet to be covered through

(6-7 in number) (6-7 in number
distributor so that it can keep a check on its overall costs

• The sales executives are responsible for direct selling

Sales Executives Sales Executives
where they are given convenience delivery model
 Recruitment, Selection, and Training of Salesforce
• Sales Trainee will work under an Area Executive who
will guide him about all the system and the processes of
the job such as working with ground level salesmen,
Recruitment
visiting retailers and stockists, and understanding the
sales process. Sales Trainee is selected by 3-4 rounds of
interview process which includes Resume Screening,
Lateral Hiring
Campus through Group Activity, Technical Interview, and HR Interview.
Hiring Website or • Management Trainees are selected by 4 rounds of
Referrals
rigorous process. They are taken through a corporate
induction programme wherein they are introduced to the
Management Sales Trainee
Any position various Businesses and functions. They undergo training
Trainee Profile Profile from
apart from
from Premier non-Premier for a period of 6 to 9 months and in a period of 1 year,
Trainee Profile
Institutes Institutes
they are confirmed as Assistant Managers.
• Lateral hires are also trained about the products and
business processes through training and onboarding.
 Compensation Structure

Branch Manager Average base pay of 32 LPA

Assistant Branch Salary ranges from 22-25 LPA

Manager
Area Sales Salary ranges from 18-20 LPA
Manager

Area Executive Salary ranges from 8-10 LPA

Sales Officer Salary ranges from 5-6.5 LPA

Sales Trainee Salary ranges from 4-5 LPA

LPA stands for Lakhs Per Annum. Salary structure comprises of variable pay of around 10-20%.
Variable pay includes commission, cash bonus, stock bonus, etc .
 Performance Evaluation

Broad Parameters

Distributio Business
n Health Health
• Outlet Coverage • Closed Opportunities

• Visibility Levels • Win Rate

• Availability • Conversion Rate

Performance Evaluation
Sales Personnel
Monthly
Monthly Sales Target; Visibility Target
Target
Performance
Sales volume for each product category;
of the
Market share growth rate
Branch

Wholesale Distributors
Performance and work is evaluated by Weekly
company’s officials weekly Control
Daily sales order monitored by Area Daily
Executive Check

At least visit 30 outlets a day Beat Plan

 Performance Evaluation
Bands Score Bands Action
Platinum >95% Non Performing Replace
Gold 85-95% Bronze On Notice
Silver 80-85% Bronze Star On Notice – Time
bound action plan
Bronze Star 75-80%
Silver Encouragement for
Bronze 60-75%
further
Non Performing <60% improvement
Gold Encouragement for
further
improvement and
other perks
Platinum Encouragement for
further
improvement and
other perks
 Distribution Network

1 ITC
Consumer 5

2
Distributo
1
r 5 2

4 3 Retailer 4

3
Wholesale
r
Distributor
General Profile
• Exclusive distributor (no other brands carried); exclusive territory
for each distributor up to 4-5 KM
• Stocks all ITC FMCG items
• Presence of ITC IT system that classifies retailers & wholesalers
• Selection standards (for the distributors) : Investment capacity,
market standing, and market service capacity
Economic
•
s
A distributor's margin on food and personal care products is 3%,
while that on cigarettes is 1.45%
• 25-30% is the average ROI for a distributor
• ITC extends no credit to the distributor, but the distributor offers
credit to wholesalers and retailers
• Distribution expenses such as salesperson salaries, van fuel
costs, etc. are initially borne by the distributor and subsequently
reimbursed by the company.
Responsiblities
• Distributing to Retailers and Wholesalers
• Achieving annual objectives set by the ASM
Wholesaler
General Profile
• Independent wholesalers - unrestricted in their ability to sell
diverse product lines and brands
• Multiple wholesalers in a particular area, with no exclusivity
• Wholesalers serve to expand the market share of ITC products
Economic
s
• Receives all product categories – Personal care, Food, and
Cigarettes – from ITC distributors at a price that is 1% less than
what the distributor charges retailers
• The wholesaler's selling price is not fixed; therefore, they can sell
at any price (even below his purchase price – Loss leader)
• Credit terms offered to the wholesaler, if any, may depend on the
distributor serving him, and the wholesaler may or may not
extend credit to retailers
Responsiblities
• Wholesalers supply products to retailers, but as independent, non-
exclusive businesses, they have no obligation to achieve a certain
level of sales
• Sales at the wholesaler level are primarily driven by the products'
pull
Retailer
General Profile
• Beedi shops, mom-and-pop shops, and so on
• They engage in personal selling and product display.
• They calculate consumer demand and provide wholesaler and
manufacturer information about the same
• Mitigate risk by assuming ownership of the product
• Offer storage, advance ordering and delivery acceptance.
Economic
•
s
Depending on product category, gross margins vary between 9 &
15%
• Payment method:- Cash, Cheque, Online transaction
• Display and promotional schemes
• ITC uses FIFO method to reduce the wastage  of goods due to
expiry

Responsiblities
• Maintaining accurate inventory levels, proper display of ITC
products, and end-user product knowledge
• Retailers must return expired or damaged products within six
months after the date of expire.
 Challenges and Solutions

Challenge Solution
Impact due to emergence of modern Effective management and redefined
trade format product mapping

• Distributors are not able to meet sales • Effectively monitor the modern trade
targets due to the emergence of the modern channels ensuring that they do not drop the
trade channels prices below a certain level

• Retailers demand lower prices from the • In order the avoid the channel conflict ITC
distributors in order to compete with modern should come up with some SKUs specific to
trade channels certain store formats

• Parallel channels in terms of cash and carry • Effectively monitor the prices and the
stores and distributors both offering similar services which the cash and carry stores
products to the retailers results in price offer to the retailers
cutting by both the channel members
 Challenges and Solutions

Challenge Solution
Issues with Personal care category Selective stocking and using a pull
strategy

• The personal care category does not enjoy • Instead of pushing the products in this
similar market reception like cigarettes and category efforts should be concentrated
foods towards creating a pull for the products

• Persistent pressure from the company on • Selective stocking of products should be

channel members to meet their targets done according to the category of the retailer

• Company reduces prices to push products

in this category but this causes some
retailers with old unsold stock to bear losses
to match prices with other retailers
 Challenges and Solutions
Challenge
Frequent new product launches
• ITC launches new products very frequently
in the market to remain competitive. At times
new products are not well accepted by the
market and hence a lot of capital of channel
members is blocked
Solution
Use of attractive incentive structure
and increasing visibility
• Additional incentives like extended credit
period or additional margins to be provided
for limited periods until the product is well
accepted in the market
• ITC should spend on increasing the visibility
during the new product launches
• Focus should be on creating pull for the new
products rather than focusing on push
Thank You