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Sales and distribution management at coca cola
The document outlines the sales and distribution management process of Coca-Cola India. It discusses Coca-Cola's company overview, product specifications, business model, market segmentation, sales organization structure, sales force motivation, forecasting, distribution model, performance comparisons to Pepsi, logistics, performance management, promotional schemes, margins, financials, and recommendations. Key aspects covered include Coca-Cola's franchised bottling system, sales force training programs, incentive structures, forecasting approach, direct and indirect distribution networks, RED performance management tool, and distributor margins.
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Sales and distribution management at coca cola
- 1. Sales and DistributionManagement Group 7 LBSIM, New Delhi
- 2. Flow of Presentation Company Overview Product Specifications Business Model Market Classification, Segmentation Sales Organization Structure Sales Force Motivation Forecasting, Distribution Model Coke vs. Pepsi Logistics, Product Flow Performance Management Promotional Schemes Margins & Financials Recommendations
- 3. Company Overview Cokere-entered India in 1993 Coke India comprises of: Coca-Cola India Hindustan Coca-Cola Beverages Franchisee bottling operations Coke globally serves 500 brands in 200 countries @ 1.7 billion servings per day Operates a franchised distribution system 1889 Market Cap: $167.25 Billion (Global) Revenues: $46.542 Billion (Global) Employees = 25K direct & 150K indirect (India)
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- 6. Promotional Schemes Soft drinks: 600ml 1case + 2x500ml soda free 600ml 2case + 5x500ml soda free 2 litre 1case + 2x500ml soda free 1.25litre 1case + 1.25litre Limca free (1.5litre out of stock) Juice: 1.25litre 1case Mazaa + 1.25litre Mazaa free Water: 5box (15x5) + 1box free Energy drink: 1box (24pcs) + 4pcs free
- 7. Business Model Manufactures& distributes Concentrates Syrups Bottlers make the final beverage through COBO FOBO Each bottler has an exclusive territory Actual formulations are tightly held trade secrets
- 8. Business Model Coca-Cola India Manufactures Concentrate, Beverage base and Syrup Regional Bottlers Manufactures finished COBO/FOBO Bottles/Cans/Fountain Syrup Customers Consumers
- 9. Market Classification Geographical InternationallyCoke segments its product Country & region wise Variations as per tastes & income Competition Presence of players such as: Pepsi RC Cola
- 10. Segmentation Model Outlet Type Channel Clustering Based on Consumption Occasion Grocery Restaurant Based on Income Level Market Clustering Outlet Clustering of Locality Convenience Outlet Volume G Di Si l Br ol am ve on d r Lo ze on w d <200 200-499 500-799 >800 M ed Consumer i Hi um g Choice h
- 11. Organizational Structure Chair Person G.M. Marketing Manager Accounting Dept. Shipping Deptt. Factory Manager Marketing Manager Production Manager Quality Mechanical Control Engineer Sales Manager O/S Sales Manager (Base) Shipping Manager Sales Officer Sales Officer Shipping Officer Shipping Sales Supervisor Sales Supervisor Personnel Manager Sales Man Sales Man Distribution Officer
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- 13. Recruitment & Selection Coca-Cola recruitment process is well established, they give ads in newspaper, company’s website, institutions,etc. Coca-Cola recruits MT’s from premier B schools. They mostly offer PPO’s to the Summer Interns. SELECTION PROCESS INVOLVES: Group Exercise Interview Presentations Psychometric tests Situational Exercises
- 14. Training Coca-Cola Indiapartners with Indian School of Business (ISB) to launch the Coca-Cola – ISB Retail Academy The ‘Parivartan’ program – Training small town retailers. Coke’s new strategy involves training retailers (around 6,000 of them) in a program launched by the Coca-Cola University
- 15. Performance Ratings Exceptionalperformance –EP Contributions significantly exceed the stated objectives in terms of quality, quantity and timeliness Successful performance – SP Contributions meet and sometimes exceed the objectives, which are based on challenging goals Developing performance – DP Contributions meet some / most but not all of the objectives and performance improvement is necessary No Performance – NP Contributions frequently do not meet the stated objectives
- 16. Sales Force Motivation Incentives based on quarterly performance No. of units and/or total revenue, work as a base for incentives Every executive needs to add new outlets every year to get UNIT incentives Target achievers are recognized by giving: TV, Fridge, etc. Certificates / trophies Lunch / outing with senior management, etc. Foreign trips for managerial level & above
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- 18. Forecasting Combination oftop down and bottom up approach Forecasts based on factors such as: Historical data Economic parameters Seasonal variation Festivals, ceremonies, etc. Weekly reviews to adjust monthly forecasts Forecasts are region-wise, they are further broken down into cities, towns and villages by sales managers
- 19. Distribution Distribution Routes Key Accounts Examples: Clubs, fine dine restaurants, hotels, Corporate houses etc. Future Consumption Examples: Departmental stores, Super markets etc. Immediate Consumption Examples: Small sized bars and restaurants, educational institutions etc. General
- 20. Distribution Area wisedistribution & promotion schemes Focus on high traffic locations Railway stations Bus stand Coke India distributes using 2 routes Direct Indirect
- 21. Cont. 3 COBORegions – 27 COBO units 1 FOBO Region – 12 FOBO units } COBO Company owned bottling operations FOBO Franchisee owned bottling operations
- 22. Distribution Structure Direct Indirect
- 23. Manufacturing Plant COBO Primary Direct FIFO Company Owned Depot 3 Day Inventory On Order Secondary Home Delivery Agent & Ready Retailers (Diamond / Gold / Bronze) Stock Tertiary Customers
- 24. Distribution Structure Direct Indirect
- 25. FOBO Manufacturing Plant Indirect Secondary Requirements to Distributors Distributors become distributor: cover: • Capacity to hold 5 Secondary days stock 500-600 outlets • FDA license Retailers (Diamond / Gold / Bronze) • Shop establishment certificate Tertiary • Electricity bill • Address proof Customers • Bank statement
- 26. Pepsi India COMPANY COBO FOBO WAREHOUSE C&F DISTRIBUTOR SALESMEN SALESMEN WHOLESALER SLUMS RETAILER RETAILER CUSTOMER CUSTOMER
- 27. Delhi-NCR Full Coverage -59 No return Routes Retailers’ Loss Owned & contracted vehicles 56 – Owned Vehicles Transporting Vans Retailer Handling 1 Driver + 2 Loaders 45– Pre- sellers
- 28. Distributors Functions PARAMETER Bulk Breaking Depends upon location Warehousing Storage & safety Transportation Distributor to retailer Market Information Customer Intelligence Competitor Intelligence Sourcing Consumer tastes & preferences Maintaining a) Signage a) Visual Merchandising b) Interior ambience b) Banners, posters, etc. c) Overall environment Problems faced by distributor • From company : discounts/incentives given at the end of the month • From retailer : bad debts/run away
- 29. Logistics PARAMETERS 1) Average order size a) Distributor to company Based on Demand, Season b) Retailer to Distributer 2) Order placement a) Distributor to company Phone b) Retailer to distributer Distributor Representative 3) Transit Time 2 Days 4) Order frequency Daily
- 30. Logistics PARAMETERS 5) Inventory Maintained 1 day 6) Unsold/Damaged Replaced Merchandise a) A/C Keeping 7) Technology b) Stock keeping c) Complaint Handling 8) Mode of Transportation Company vehicle (company to distributor) 9) Transportation Expenses a) Company to Distributor Company b) Distributor to retailer Distributor 10)Warehousing a) Storage Capacity Minimum 30 m2 b) Ownership Owned / Rented 11) Stock keeping responsibility Stock keeper
- 31. Flow of TheProduct On a tablet or Blackberry
- 32. Contd. Only cash Cannot except for a take more few than order
- 33. Performance Management REDStrategy – Right Execution Daily Tool to measure the performance of the distributor in the outlet by setting some standard or parameter of execution. RED Check Visi-Cooler Management Availability of the product in the outlet Check the activation in the outlet Market Developer checks 25 outlets a day and report to HCCBL on the score of 100.
- 34. Margins Margins percrate (comprising 24 bottles of 300 ml each) is Rs 20. On the 200 ml pack size, margin is Rs 16 per crate. Sales of the more affordable 200 ml pack size account for about 60 per cent of its total carbonated soft drink (CSD) sales. Non-CSD business accounts for 15 per cent. Outsourced distribution so that trucks and other equipment needed for the purpose are no longer owned by the company.
- 35. Financials Coco-Cola Profit Margin a) To distributors 1-1.5% b) To retailers 2-3% Advance payment a) to company 1,00,000 b) for refrigerators 5,000 Credit terms and policies i) Credit amount a)Company to distributor N/A b)Distributor to retailer Can provide. ii) Credit period One month(for retailers)
- 36. Learning’s The realtime order processing system through use of technology helps reduce the lead time 24hrs working i.e. the loading cases in the night saves valuable time Recommendations Pre-sellers shouldn’t be looked at as an extra cost. On the contrary, since their inception sales have risen Order devices at Diamond outlets can facilitate quicker order placement
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Editor's Notes
- #15 The company calls this the “parivartan” program (meaning “Change” in English). Shop owners (traditional retailers) are given training on displaying and stocking products well. The goal of the innovative training program is to provide traditional Indian retailers with the skills, tools and techniques required to succeed in a constantly changing retail scenario. Presentations (including audio/visual technology) in local Hindi language help small retailers (with stores less than 200 square feet in average size) to better understand the concepts involved. Each retailer also receives a Coca-Cola “Certified Retailer” certificate at the conclusion of the program
- #20 Key Accounts: The customers in this category collectively contribute a large chunk of the total sales of the Company. It basically consists of organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month. Examples: Clubs, fine dine restaurants, hotels, Corporate houses etc. Future Consumption: This route consists of outlets of Coca-Cola products, wherein a considerable amount of stock is kept in order to use for future consumption. The stock does not exhaust within a day or two, instead as and when required stocks are stacked up by them so as to avoid shortage or non-availability of the product. Examples: Departmental stores, Super markets etc. Immediate Consumption: The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored for future use instead, are exhausted on the same day and might run a little into the next day i.e. the products are consumed at a fast pace. Examples: Small sized bars and restaurants, educational institutions etc. General: Under this route, all the outlets that come in a particular area or an area along with its neighboring areas are catered to. The consumption period is not taken into consideration in this particular route.