Final Report On Water Purifiers

Sales and Distribution
Management
Project Report
on Water
Purifiers
SSubmitted to: Prof. Bhalendar Singh Nayyar
Submitted by:
Group 10, SDM-E
Pratik Jain 211099
Rahul Garg 211107
Shreshtha Gupta 211136
Shubham Jain 211138
Varun Arora 211158
Aanchal Mahajan 211160
Lavi Aggarwal 211170
Table of Contents
Part I Industry Scenario ............................................................................... 6
Industry Growth over last five years ................................................................................................... 6
Changing market share of different companies: ................................................................................ 6
Industry growth for next three years.................................................................................................. 6
Method used ................................................................................................................................... 6
Environment Scan of the last two years: ............................................................................................ 7
Pestle Analysis:................................................................................................................................ 7
Political and legal: ........................................................................................................................... 7
Economic: ........................................................................................................................................ 7
Social: .............................................................................................................................................. 7
Technology: ..................................................................................................................................... 7
Environmental:................................................................................................................................ 7
Porters Five Force for the industry: .................................................................................................... 7
Supplier Power: ............................................................................................................................... 8
Buyers Power: ................................................................................................................................. 8
New Entrant: ................................................................................................................................... 8
Threat from substitute: ................................................................................................................... 8
Competitive rivalry:......................................................................................................................... 8
Major changes in target market profile and consumer behaviour ..................................................... 8
Target Market ................................................................................................................................. 8
Shift in target market profile and consumer behaviour ................................................................. 9
Deprived: ......................................................................................................................................... 9
Major Changes: ............................................................................................................................... 9
Aspirers: .......................................................................................................................................... 9
Major Changes: ............................................................................................................................... 9
Seekers: ........................................................................................................................................... 9
Major Changes: ............................................................................................................................... 9
Strivers: ........................................................................................................................................... 9
Global Indians: ................................................................................................................................ 9
Overall Major Changes:................................................................................................................... 9
Part II Sales Organisation .......................................................................... 10

Eureka Forbes Limited ...................................................................................................................... 10
Territory design at EFL .................................................................................................................. 11
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Sales force skill set Analysis .......................................................................................................... 11
Recruitment of EuroChamp .......................................................................................................... 12
Selection of EuroChamp................................................................................................................ 12
Training & Development ............................................................................................................... 12
Training for Leaders ...................................................................................................................... 13
Other Trainings ............................................................................................................................. 13
EFL Compensation Structure......................................................................................................... 13
Prospecting, Reporting & Degree of sales force automation ....................................................... 14
ION Exchange (Zero B) ...................................................................................................................... 15
Recruitment & Selection ............................................................................................................... 15
Training & Development ............................................................................................................... 16
Skill Set Analysis ............................................................................................................................ 16
HUL Pureit ......................................................................................................................................... 16
Sales Organization and Territory Design ....................................................................................... 16
Sales Organization......................................................................................................................... 17
Territory Design ............................................................................................................................ 17
Skill set required for front line sales people ................................................................................. 18
Recruitment and Selection process of the sales people ............................................................... 18
Effectiveness of various training methods for the sales staff ....................................................... 19
Compensation Structure ............................................................................................................... 19
Method of prospecting and reporting with degree of sales force automation ............................ 19
TATA SWACH ..................................................................................................................................... 20
Sales organisation and Territory Design ....................................................................................... 20
Sales Structure for Online Sales: ................................................................................................... 21
Sales Structure for Croma & other Modern Retail outlets: .......................................................... 22
Skill Sets required for Sales Staff by Supervisor:........................................................................... 22
Skills set required for the Area Sales Manager by Zonal Manager: .............................................. 22
Recruitment and Selection Policy for sales people:...................................................................... 22
Training given to the Sales staff and its effectiveness .................................................................. 23
Compensation Structure ............................................................................................................... 23
Method of Prospecting and Reporting with the degree of Sales Force Automation ................... 23
Kent ................................................................................................................................................... 24
Direct sales division (DSAs) - ........................................................................................................ 24
Retail channel sales-...................................................................................................................... 24
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Corporate sales division- ............................................................................................................... 25
Territory design-............................................................................................................................ 25
Analysis of the effectiveness of the current sales strategy: ......................................................... 25
Hierarchy of the organization (Sales division) .............................................................................. 26
Ranking of skill sets required for sales staff by supervisors.......................................................... 26
Recruitment and Selection of sales people .................................................................................. 26
Effectiveness of different training methods for sales staff........................................................... 26
Compensation structure of the sales force................................................................................... 27
Method of prospecting and reporting with degree of sales force automation ............................ 27
WHIRLPOOL....................................................................................................................................... 27
Retail channel sales: ...................................................................................................................... 27
Corporate sales division: ............................................................................................................... 27
Part III Distribution Network ................................................................... 28

Eureka Forbes Limited ...................................................................................................................... 28
Traditional Retail channel ............................................................................................................. 28
Business Partner (Franchisee) ....................................................................................................... 29
New Channels ............................................................................................................................... 29
Rural Channel (described in Changes over last five years) ........................................................... 29
Supply Chain.................................................................................................................................. 29
Retail Channel ............................................................................................................................... 29
Direct Sales Channel...................................................................................................................... 29
Changes in Distribution policies over last 5 years......................................................................... 30
Channel Conflicts .......................................................................................................................... 31
Retail: Pull Strategy ....................................................................................................................... 31
Direct Selling: Push Strategy ......................................................................................................... 31
Trade Margins and Other Discounts ............................................................................................. 32
Impact of Modern Retail on Distribution ...................................................................................... 32
Impact of Internet over distribution ............................................................................................. 32
Ion Exchange(Zero B) ........................................................................................................................ 33
Trade Margins and Other Discounts ............................................................................................. 33
Cooperative Advertisement .......................................................................................................... 33
HUL Pureits ...................................................................................................................................... 34
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Distribution Network .................................................................................................................... 34
Main Impact .................................................................................................................................. 35
RURAL Segment ............................................................................................................................ 35
Service Output demand for Water Purifier Industry:- .................................................................. 35
HUL Pureits SERVICE OUTPUT DEMAND and Its Application:- .................................................... 36
Marketing flows considered important by the customers for the category ................................ 36
Areas of vertical and horizontal conflict and possible solutions .................................................. 38
Solutions to these conflicts ........................................................................................................... 38
Impact of modern retail on distribution ....................................................................................... 38
Trade margins and other discounts .............................................................................................. 38
Impact of internet on distribution ................................................................................................ 39
Supply chain of the industry ......................................................................................................... 39
Level of Cooperative Advertising .................................................................................................. 40
TATA Swatch ..................................................................................................................................... 40
Distribution Network .................................................................................................................... 40
Major Changes in Distribution Policies in past 5 Years ................................................................. 41
RURAL Segment: ........................................................................................................................... 41
SERVICE OUTPUT DEMAND and Its Application............................................................................ 41
Areas of Vertical and Horizontal Conflict ...................................................................................... 43
Trade Margins and other discounts .............................................................................................. 44
Impact of Internet on Distribution ................................................................................................ 44
Supply Chain.................................................................................................................................. 45
Level of Cooperative promotion in Tata Swach ............................................................................ 45
Kent ................................................................................................................................................... 45
Trace the route back from retailer to manufacturer to determine levels and intensity of
distribution.................................................................................................................................... 47
Trace any major changes in the distribution policies over the last 5 years and their impact ...... 47
Identify areas of vertical and horizontal conflict and possible solutions ..................................... 48
Horizontal Conflict ....................................................................................................................... 48
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Supply Chain of the Industry ......................................................................................................... 49
Level of cooperative advertising ................................................................................................... 50
WHIRLPOOL....................................................................................................................................... 50
Sales organization and territory design ........................................................................................ 50
Distribution ................................................................................................................................... 51
Areas of vertical and horizontal conflict and possible solutions .................................................. 52
Possible Solution ........................................................................................................................... 52
Supply chain .................................................................................................................................. 53
Level of cooperative advertising ................................................................................................... 53
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Part I Industry Scenario
Industry Growth over last five years
Year Turnover
2012-13 1650 Crores
2011-12 1400 Crores
2010-11 1142 Crores
2009-10 980 Crores
2008-09 840 Crores
Source: Adi-Media Publication, Economic Times.
Changing market share of different companies:

RO Based water purifiers
% Share value-wise
Aquaguard (EFL) 44.3%
Kent 38.8%
Zero-B 10.3%
Fig. % share of major players in RO based water purifiers (2010-11)
Offline Based purifiers

% Share value-wise
HUL 73.62%
Aquasure (EFL) 17.60%
Kent 8.14%
Fig. % share of major players in Offline Based water purifiers (2010-11)
Inline/UV based purifiers

% share value-wise
Aquaguard (EFL) 65.64%
Aquasure (EFL) 19.77%
HUL Autofill 5.46%
Fig. % share of major players in Inline/UV based water purifiers (2010-11)
The market leader of course is Eureka Forbes brand Aqua guard with 57 per cent share in the RO, 75
per cent in UV and 20 per cent in the storage category (Aquasure). Overall, it has 54 per cent share in
the industry (as of 2012).
Industry growth for next three years
Year Market size(Rs crore)

2013-14 1989.6
2014-15 2387.52
2015-16 2865
Method used
Assumption- Water purifier segment in India will grow at a compounded annual growth rate
(CAGR) of about 20 per cent due to the rising demand for water purifiers and increasing
disposable incomes of the people. We do not take the 25 percent growth due to the high
penetration and stagnation of the RO segment.
Therefore taking the actual industry size of 1658 in 2012-13 and applying the CAGR of 20%, we get
the forecast for the next 3 years.
Formula used FV=PV (1+R/100) ^n
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If we take both the organized and the unorganized sector, the current market size is around 3200
crores and taking a CAGR of 20 percent, the size in the next 3 years for 2013-14, 2014-15, 2015-16
will be Rs 3840crore, Rs4608 crore, Rs5529.6 crore respectively.
In 2013, taking in account RO filters grows at 17% CAGR = 49.28cr
In 2014, taking in account RO filters grows at 16% CAGR so does whirlpool = 57.17cr
In 2015, taking in account RO filters grows at 15% CAGR = 65.74cr
Environment Scan of the last two years:

Pestle Analysis:
Political and legal:
Water Quality Association has taken a step to maintain a minimum quality standard for the
industry, in the back drop of increasing home grown low quality product companies.
The country is going through a politically stable period which is good for the industry.
Economic:
The economic condition is still better as compared to the global condition, although the
growth has slowed down to 5% the water purifier industry is growing at a rate of around 20%
annually.
Countries middle class is still growing and the buying capacity of consumer is increasing.
The value of rupee is falling in comparison to dollar which in turn deterrent for small
companies which imports purifier parts from China and other nations.
Social:
Awareness of ill effects of tap water is increasing among the consumer which in turn is
increasing the sales of water purifier.
Reach of pure water in rural area is less as compared to urban areas which is again increasing
the sales of water purifier.
The consumers are becoming more hygiene conscious and hence water purifiers are becoming
basic necessity.
Technology:
Tata Chemicals has launched a low price water purifier based on Rice Husk technology to
serve the masses.
Eureka Forbes has partnered with Water Security Corporation to launch a low cost purifier
based on NASA technology.
Environmental:
India is rapidly growing with this there is pressure on every natural resource and as such large
scale deterioration is taking place in the quality of water.
Rivers are flooded with industrial waste also the quality of ground water is decreasing with
these high level of harmful content the sales of water purifier is increasing.
Porters Five Force for the industry:
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Supplier Power:
The supplier power is low as the components used in manufacturing of water purifier are basically
commodities which are easily available to all the companies. Also the market is fragmented with no
company having a share of more than 60%.
Buyers Power:
The buyer power of consumers is high in water purifier industry because there are many firms in the
market selling almost similar product with same price tag. Also power of distributors is high as most
of the sales of water purifier takes from this channel.
New Entrant:
The industry is still in its growth phase and as such many new consumer durables have entered the
market and some are still planning to enter the market, also the investment requirement in this
industry is low as compared to returns that are possible and hence we can see many home grown
companies like Kent Ro in the market which are performing well. Hence the treat of new entrants is
high.
Threat from substitute:
Substitutes like boiling water and other methods are still used by the consumers, also as these methods
do not require any additional investment this will be a viable substitute for water purifiers. Lack of
electricity, replacement of batteries, and maintenance requirement of water purifier make the
substitute better for the consumers. But the consumer behaviour is changing and more people are
shifting towards water purifier, hence treat from substitute is medium.
Competitive rivalry:
The industry is growing at a very rapid pace and hence, has seen the entrance of industry giants like
Tata Chemicals, Philips, Videocon etc and also many new players like Kent Ro have come up in the
market. Hence we can see that all the companies are trying to grab as much share in the market by
using their competency like high capital investment capability (Tata Chemical), innovation (Kent Ro),
distribution network (HUL) etc. Hence we can say that competitive rivalry in the water purifier
industry is high.
Major changes in target market profile and consumer behaviour

Target Market
As per 2011 Census, total number of households in India is 246,692,667 (24crore). Out of this Rural
households are 167,826,730(16crore) and Urban households are 78,865,937 (8crore).
Potential target user for EFLs products is any household which does not have access to safe drinking
water. This means a potential target of 40 crore people which is almost 10 crore households.
According to the 11th Five-Year Plan report, there are about 2.17 lakh quality-affected habitations in
the country, and about 66 million people are at risk due to excess fluoride in 200 districts of 17 states.
As of 2012, EFL had a customer base of 9 million households and with the after sales service
demands of the customer these households also form a part of target segment.
EFL follows full market coverage and has a differentiated product offering suiting the needs and
demands of different types of consumers.
Major factor that differentiates the products is whether they are in electrical or non-Electrical
segment. The non-electric segment also called the Inline or Storage based segment is targeted towards
semi urban and rural areas which do not have a regular electric supply. Since regular water supply
is not needed for storage segment, it is suited for areas where water and electric supply is
unpredictable.Since, the water problems are more profound in the Tier II and III cities and rural areas
products have been designed specifically keeping the needs of such areas in mind. Aquaguard Water
shops have been set up in rural areas to educate consumers about the hazards of drinking unclean
water. Certain products like Aquaguard Integra 7 which is a seven stage water purifier was designed
keeping in mind the specific drinking water problems faced in Delhi and neighboring region
(Geographic Segmentation).
The low-cost offering of high-end durables targeted at households in small towns and rural India are
the water purifiers from the house of Eureka Forbes and Hindustan Unilever. Both are becoming
increasingly popular because they are effective and affordable. Also, they do not run on electricity or
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require continuous water supply and, therefore, are ideal for locations where water and power supply
is unpredictable. Other aggressive brands available in the offline category are Kent, Zero B, Bajaj, and
Tata.
Market was divided so as to cater the need of every individual. First segmentation was done on the
basis of Annual Income of the family.
On the Basis of Annual Income Households in Millions

Deprived < Rs 90000/- 85
Aspirers Rs 90,000/- to Rs 200,000/- 135
Seekers Rs 200,000/- to Rs 500,000/- 11
Strivers Rs 500,000/- to Rs 1000,000/- 2.5
Global Indians >Rs 10,00,000/- Less than 1.5 Millions
Source: Adi-Media PublicationEthnic Consumers Consulting, Economic TimesIvey Case Study
Shift in target market profile and consumer behaviour

Deprived: This segment mainly consists of Subsistence farmers and unskilled labourers. These
people are not concerned of taste of the water; these are just concerned about water being not
contaminated and fit for drinking. Since these households are daily-wage earners, so they cannot
afford to miss work. These people lives in rural areas and are deprived of Electricity resources as well.
These people do not have continuous supply of water, they generally stores water in mud-pots or steel
buckets.
Major Changes: Numbers of Deprived are getting reduced because of development and growth.
Aspirers: This segment mainly consists of Small scale shopkeepers, farmers who owns small piece
of land and industrial workers. These people are also not concerned about taste but only health. Many
of these households are not deprived of electricity but they never get continuous electricity and they
also do not get continuous supply of water.
Major Changes: With the development of rural India and schemes for benefitting the deprived
people, many of this segment has risen and are looking for better basic necessities.
Seekers: This segment consists of Young college graduates, Government employees at intermediate
level and owners of small to medium sized businesses. These types of people are not only concerned
about health of the family but also about taste of water and have continuous supply of water and
electricity.
Major Changes: With the increase in buying appetite of these people, this segment has also rising
and falling into strivers segment wherein they look forward for making their life much better.
Strivers: This segment consists of Senior Government employees, owners and managers of
individuals. These people concern about health and taste of water, they also think water purifier as a
style statement.
Global Indians: This segment consists of Senior Executives in Large corporations, owners of larger
businesses, politician and rich farmers with large land holdings. These people are concerned about
health of the family, taste of water and design of water purifiers as they want it to be fully automatic
and sleek in look.
Overall Major Changes: It is reported that groundwater in one-third of India's 600 districts is not fit
for drinking as the concentration of fluoride, iron, salinity and arsenic exceeds the tolerance levels.
With increasing number of people becoming conscious of the risks of drinking contaminated water,
the demand for water purifiers is rising rapidly. The rising prosperity in rural India means people may
be willing to pay more for safe water.
So HUL Targeted each segment by offering water purifiers at all ranges mentioned in the table below:
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Part II Sales Organisation
Eureka Forbes Limited
Sales force at EFL has been grouped into three divisions
Direct Sales division
Retail Sales division
Professional Sales division
Possible reasons for this division can be as follows
Different selling process Professional sales period is typically longer as compared to direct
and retail divisions.
Different selling skills needed by the sales force Direct Sales rep needs to have an in depth
knowledge of the product as compared to Retail Sales rep.
More focused approach to cater to customers Retail and Professional sales divisions posting
strong growth rate (55.75% in retail and 40.38% in Industrial division as of 2006-07).
1. Direct Sales Division

The Direct Sales division comprises of 8000 plus salesmen. To avoid competition with a parallel
Retail sales division, only high end products like Aquaguard Total and Aquaguard Genius are
sold via the direct sales route. This seems logical too because the high end products which are
more expensive and loaded with extensive features need proper demonstration possible only via
door to door demonstrations. Direct Selling is expensive, so it is suited for higher value products.
As of 2012, there are over 200 direct selling centres in over 100 cities commanding a base of
more than 6 million customers (source : Economic Times dated Nov 2, 2012).
2. Retail Sales Division

EFL Water Purifiers have presence in 15000 outlets through which primarily mass market
products priced around Rs. 1600 like non electric resin based purifiers (AquaSure) are sold. The
outlets are spread over 600 Indian cities with a dedicated sales force of over 150 people. (Source:
Economic Times dated Nov 2, 2012).
Decision to shift focus from direct sales to retail was taken because of change in peoples
lifestyles and increased competition. Nowadays, both husband and wife are working, so there is
no one at home and therefore the direct sales force is unable to reach a large segment of people.
As per Mr. MarzinShroff, CEO of direct sales and senior vice-president of marketing, EFL is
selling several models, both premium and mass segment, across national and regional stores
and Canteen Department Stores. Moreover, it is manufacturing certain products only for the retail
channel. However, price of products sold in retail stores is less than those sold by direct route
because customers look for good value for money products in the retail outlets.
3. Professional Sales Division

EFL appointed a fully functional B2B sales division by 1990s. The sales force had to reach the
customer directly and through the distributors. By 2007, the professional sales division grew to a
sales force of 100 salespersons servicing over 9000 workplaces including schools, institutions,
offices etc.
Direct Sales force hierarchy at EFL is as follows

1. National Head
2. General Manager
3. Area Sales Manager
4. Divisional Sales Manager
5. Deputy Divisional Sales Manager
6. Branch Manager
7. Head of location
8. Team Leader
9. Group Leader
10. Customer Sales specialist
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Retail sales force hierarchy at regional level is as follows
1. National Sales Manager
2. Regional Sales manager
3. Zonal Head
4. State Head
5. Area Head
6. Territory Sales Executive
a. ISP Co-ordinator
i. In shop promoter
b. Territory head
i. Field Sales officer
Territory design at EFL

Territories are designed by the upper level management through considering 4 parameters:
1. Selecting a basic geographical control unit
2. Determining the sales potential present in each unit
3. Combining units into tentative territories
4. Adjusting the differences in coverage difficulty
Clover leaf territory shape is used in which customers are located randomly in the territory.
Due to the effective territory design, 10000 plus demonstrations happen in India each day. Over
40000 kitchen visits are done each day by the service team. With the existing territory design, EFLs
direct sales force is able to cover 8 cities and 149 towns in Tier I, II and III. This comprises of 63% of
SEC A& B households.
Off late, a shift has been observed with the territory allocation parameters. Apart from the geography
and sales potential, the local water quality is also taken into account. Salespeople of areas in which
TDS (Total dissolved salts) is less e.g. Mumbai are given the task of selling UV based products and
not RO.
Sales force skill set Analysis

Sales Managers are involved in three key processes: Recruiting, Training and Managing. Sales
Managers therefore have identified some skill sets that they look for while recruiting.
Expectations from Sales Executive (Sales Person) for Direct Sales:
Knocking/meeting prospective customers.
Convincing the customers about the benefits of Aquaguard water purifier and Euroclean
Vacuum cleaner
Writing daily activity report.
Issue of units and clearance.
Depositing payments in Accounts.
Late afternoon commercial knocking.
Product deliveries and collection of payments.
Evening demonstration and sales closing.
Though the company saw a drop in the quality of sales people in 2006-07 as much skilled talent was
being taken away by the other employment sectors offering better income and lifestyle. In 2006, EFL
faced high attrition rate of 40%. But EFL has been able to combat this issue by offering better salaries
and better opportunities to grow in the organization. Now EFL considers its 8000+ sales force as an
asset and consider them to be Solution Providers. To maintain a sales force with great skill sets,
EFL at their annual Eurochamps ceremony send over 1000 performing young salesmen abroad to
places like Phuket, Hong Kong and Macau. EFL now believes that apart from money, their motivation
and appreciation techniques have helped to retain salesmen with appropriate skills and have made
Eurochamps go beyond their roles and raise the bar.
Expectations from Sales Person for Retail
Demonstrate companys world class products
Sell products in high numbers
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Foster Relationships
Grow in organization through the route of professional selling and meeting people one to one.
Put in hard work and enjoy with generous contributions from the company.
Expectations from Institutional Sales Executive:
Sales: achieving revenue targets from the territory.
Generation and business development in the assigned territory.
Proposal submission.
Negotiation.
Payment collection.
New account development and management.
Structured Reporting: Weekly
Recruitment of EuroChamp
Recruitment refers to the process of finding and hiring the best-qualified candidate (from within or
outside of an organization) for a job opening, in a timely and cost effective manner. It is the most
important function because unless the right types of people are hired even the best plan and
organization system would not do much good. Systematic recruitment of salesman leads to greater
productivity. In Eureka Forbes, first of all recruitment policy is established when it is found that there
is a need for a salesman. First, the information is sought about the prospective employees from the
present or former employees of the organization. The evaluation of the information collected is done
and a decision is made to select or reject the prospective salesman. The company also gives
advertisement in local newspaper, journals and magazines. Interviews are held up as per a proper
selection process.
Selection of EuroChamp
Selection is the processes in which candidates for employment are divided into two classes, those who
offered employment and those who are not. While selecting the salesman in Eureka Forbes, following
qualities are taken into consideration:
Physical Qualities
Social Qualities
Mental Qualities
Moral Qualities
The different channels of recruitment at Eureka Forbes:
Friends Get a Friend scheme
Newspaper Advertisements
Recruitment Through Campuses
Employment Exchanges
Apart from all these methods, Eureka Forbes has also started approaching rural and semi urban
communities, through NGOs and people who work in this field especially in the areas like
Maharashtra, Madhya Pradesh. They interact with the rural and semi urban communities, shortlist
people, and conduct training for selected people.
Training & Development

Mix of Training Methods is used like Lectures, Mentoring and Job Instruction.
All the new people are first of all made familiar with the company. They are first of all briefed about
the company in detail. After this they all go through a week long Training Program known as My
First Week.
It comprises of
Orientation on the Company
Selling Skills
This training covers both Soft Skills and the Hard Skills. It is a mix of Classroom training and Field
training. Half of the day is on classroom training and second half on field training in which they all
practice what all they have learnt. This training involves:
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Prospecting
How to make a door entry
How to interact with customers
How to demonstrate the product
How to handle customers objections
How to close sale
Employees practice this on field and come up with doubts next day.
At the end of the training program, test is conducted to check how much they have learnt. In this way
follow up can be easily taken up and required change and improvement can be suggested.
For initial 2-3 weeks, new employees work with the senior executives and learn practically from
them. Once the senior executive think that now employees can handle a call, they are given their
targets.
The problem with this Mentoring Method is
It is not necessary that senior executives have good mentoring skills.
Senior Executives can also take it as a burden.
But on the other hand, this training method leads to optimum utilization of time and is cost effective.
Training for Leaders

EFL has a culture of grooming employees to leaders. They dont recruit people from outside but
groom the present pool of employees.
For this Lecture Method and Role Plays are used.
Training for 2-3 days is imparted on Managerial Skills, Recruitment Skills, and Mentoring etc.
This motivates the employees to perform better and will inculcate the feeling of Pride and Satisfaction
as these training grooms an employee on a personal front.
Other Trainings
Salesmen are sent for MBA so that they can develop managerial skills which can be used in
performing their job in a better way.
Undergraduates are given opportunities to study further and become graduates.
As new product is launched, all the employees are trained about the features and functioning
of that very product.
All this will lead to Employee Satisfaction because of personal development and will lead to a
culture of Continuous learning in organization.
Despite of so many effortand cost involved in training, the attrition rate among Euro Champs is high
due tothe sales target. Compensation is variable and based on the target achieved. As a result people
dont get enough motivation to work and there in these training processes also do not contribute in
motivating employees to work.
Another problem is that the supervisors are many times not comfortable with training or mentoring
the new employees as their focus is solely on meeting their targets and this responsibility of new
employees comes up as a burden.
All the training methods in EFL aim for development of employees and company which helps it
maintaining its market leadership.
EFL Compensation Structure

Compensation Structure: 60% Fixed/ 40% Variable
Eurochamp Group Leader
Income
Fixed Component A (In INR) (in INR)
Basic 3200 4100
House Rent Allowance 800 1150
Leave Travel Concession 200 250
Medical 75 75
Fixed Expenses
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Bike Maintenance 100 100
Bonus 500 700
Provident Fund 250 350
Special Pay or Allowance 250 250
Special Promotion Expenses
Total A 5375 6975
Variable Component B
Holiday Bonus 200 200
Sales/Service related Expenses
Petrol 1000 3000
Quarterly Commission 500 700
Commission (monthly for BM)
Group Commission
Contingency Compensation
Performance Incentive 1600 1500
Productivity Bases Incentive
HCRC Allowance
Friendship Chain 900 600
Total B 3500 6000
Total A+B 8875 12975
Position Monthly Salary Range (INR) Monthly Average Salary

(INR)
Service Coordinator 6687 7285 6900
Team Leader 15000 18000 16800
Territory Head (HCRC) 36300 39000 37250
In its early days EFL followed a compensation structure of 50:50 with respect to its fixed and variable
components respectively, but that structure was subsequently replaced by a 60:40 compensation
structure. This change is in tune with EFLs new found principle of rewarding the process rather that
result. As a result of this structure the Eurochamps are less burdened with the final conversion rate
and are more focused towards the customer satisfaction and problem solving. More over this structure
has greatly reduced the high turnover ratios which EFL was earlier suffering from. Since the
Eurochamps are now greatly rewarded for the various steps they follow during a sales pitch their
overall performance has improved, resulting in improved sales for EFL.
Prospecting, Reporting & Degree of sales force automation

At EFL the prospecting are done in the following ways
a) Customer Enquiry The EFL advertisements generates customers enquiry which is then
converted into prospects by following up on them and telling them about the benefits of the
products
b) Household Knocking The Eurochamps go from door to door in the areas they are allocated
and then do random household knocking asking the people about interest in their products
c) Telemarketing The telemarketing division at EFL gives random calls from yellow pages
and then if any person shows any interest then that interest is converted into prospect.
d) Chain prospecting The prospect who is interested to buy the product or the ones who are
converted into sales are further asked for recommendation for prospects if any of their friends
or family are interested in buying the EFL products.
e) Call Connect System A consumer fills out and submits a lead form online, an automated
process identifies his or her location based on the pin code supplied. The system then
identifies the nearest sales team, makes an outbound call to a salesperson and one to the
customer. The system then connects the two calls -- all with an expected hold time of less
14 | P a g e
than 30 seconds. There is often a lag between a customer filling out a lead form and the team
getting back to him. This system cuts down the lag time drastically. It also works on SMS and
telephone.
f) Leads from Facebook and website EFL currently gets only four to five leads from
Facebook every month. But it manages 35,000 leads a month through organic traffic and an
additional 40,000 leads a month from its brand display campaigns. The conversion of leads
from hits on EFLs own website are high -- 40% to 45% of total leads. Its brilliantly cost
effective. The cost of each lead is the lowest as compared to advertising or door knocks. The
company web-site and call centre (manned by disabled individuals), provides the salesmen
with thousands of referrals every month.
Steps in Prospecting
Identify and qualify prospects
Company qualifies the leads by contacting them by mail or phone to assess their level of
interest and financial capacity
'Hot' prospects are turned over to the field sales force
Warm prospects to telemarketing units
It takes about 4 calls on a prospect to accomplish a business transaction
Eurochamps are then required to learn as much as possible about the prospect before
approaching them
Then the EuroChamp are required to set up call objectives, i.e. to qualify the prospect, gather
information and/or make immediate sale
Eurochamps them initiates the contract by making a phone call to the prospect to take an
appointment for the demonstration
After that the sales person tells the product "story" to the buyer using features, advantages,
benefits and value approach
Handling customer's psychological and logical resistance. To handle such objections the
Eurochamps needs to have positive approach.
Eurochamps are required to negotiate on issues regarding price, contract completion time,
quality of goods and services offered and product safety.
The last and one of the most important parts is closing the sales. This includes closing signs
from buyers i.e., physical action, statements or comments and questions. Eurochamps also
provides buyer with minor choices such as colour or size, or indicate what the buyer will lose
by not placing the order now.
Reporting
Briefing is till 8 o'clock in the morning
8:15am to 11:15am is household knocking
12noon-2pm is reporting including lunch time
2pm-4pm commercial knocking
4pm-5pm is reporting
5pm-8pm demos if any/fresh knocking
Last reporting
The Eurochamps have a cycle of 28days and sets target accordingly and they have a weekly closing of
7 days at the end of which there is again reporting.
ION Exchange (Zero B)

Recruitment & Selection
At ZERO B (ion exchange), the opportunities for the job of sales executive are open for one and all.
The application for the hiring of sales executives is posted on the companys website and also
communicated to many applicants via the existing employees of the organization. The applicants are
required to clear two stages to get the job: the first one is the interview by the Human Resource
15 | P a g e
department of the company. If the applicant clears this interview, he/she moves on to the next step
which is the interview by the Head of relevant department (in this case, Sales). The employees having
prior experience are valued.
The candidate, who clears both the stages, negotiates the salary and is then arranged for a training
period of limited duration to get acquainted with the new job and working environment. The
responsibilities for the job are basically the fulfillment of sales quotas and monitoring and reviewing
of the dealers and customers satisfaction. The company has introduced a system of performance
appraisal against objectives or key result areas, set and reviewed jointly, half-yearly and annually. The
appraisal process is considered important because it helps identify the strengths of a person, the
potential for development and growth, areas of improvement and training required. It also serves as a
tool for long term human resource planning and development.
Training & Development

Zero B focuses on the training of employees on three aspects:
Product Training
Application Training
Functional Training
Most of the trainings are done on-the-Job and through structured group programs. Initially, when
an employee joins the company, 3-4 days orientation training is given so that employee gets familiar
with the organization. Along with that employees are given proper knowledge about the products and
its functioning. Whenever new product is launched, training is imparted to the employees accordingly.
Technical and Managerial Training is imparted from time to time. Such trainings are provided by the
HRD department. Some of the trainings are outsourced to external institutions.
Skill Set Analysis

Expectations from sales executive
To do institutional sales, corporate sales.
To visit Hotels/ Hospitals/ builders/ architecture/ Govt.sector
To handle dealers and pull business through them.
To increase business by generating enquiries
To contact customers, give demonstration and sell range of water purifiers.
HUL Pureit
Sales Organization and Territory Design
Area Sales Business Territory Sales Sales

Manager(North) Developer Officer Representative

Manager(South) Developer Officer Representative
National Sales
Head
Manager(West) Developer Officer Representative

Manager(East) Developer Officer Representative
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Sales Organization
North States Zones Districts
South States Zones Districts

India
East States Zones Districts
West States Zones Districts
Territory Design
The above diagrams show the Sales Organization and Territory design at HUL Pureit. India
geographically has been divided into four regions by the companies which are as follows:
North
South
East
West
Each region comprises of six to seven states and each state is further divided into various zones.
For example-In case of Delhi, the division is such that the entire state is divided into four major zones,
where Noida, Ghaziabad and the whole of South Delhi come under one zone and similarly, the same
is applicable for Gurgaon and Faridabad as well.
Division of the state depends upon not just the population of that state but also the total area of that
state.
For example- big cities like Uttar Pradesh is further divided into two parts and similarly, Rajasthan is
also divided into four parts.
At the same time, interestingly, Delhi, though is relatively a smaller state in terms of area but it is
divided into 4 zones because of its high and growing consumption capacity.
Thus, its not just the population that the company keeps in mind while creating zones for a particular
state, but also its population and hence the consumption capacity.
Territory Area Sales Manager

The number of Area Sales Managers responsible for a particular state is on the basis of its area and
population.
For example- In case of Delhi, there is one Area Sales Manager, who is responsible for the entire sales
and distribution of the state.
Business Developer
Business Developers work under the purview of the Territory Area Sales Managers. They are
responsible for the sales and distribution for particular zones in a state.
For example-In case of Delhi, there are four Business Developers for four different zones in the state,
i.e. North, South, East and West.
Noida and Ghaziabad area are under the same Business Developer who is responsible for Faridabad
and Gurgaon.
Big states like Rajasthan are divided into four parts connecting major cities. Each part comes under
one Business Developer and there are about two to three Territory sales officers who report directly to
Business Developers and are responsible for their particular regions.
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Territory sales officers
They are responsible for one particular region. Although, most of the times, these Territory Sales
Officers come under the purview of the Business Developers, however, in some cases, they directly
report to the Area Sales Manager.
Also, Territory sales officers are in direct contact with the distributors and sales representatives,
which are outsourced to the third parties by HUL.
Pros and Cons of the sales structure and territory are as follows:
Pros:
All the people under Area Sales Managers are not under the payroll of Pureit as it is
outsourced; hence the cost of recruiting and firing is less.
There is normally one Territory sales officer for one distributor, hence the service given to
each distributor is not compromised
Cons:
The Territory sales officers are outsourced; hence the motivation level in them is less.
The Territory sales officers are managed by another company hence there is always a chance
of conflict between Pureit and the outsourced company.
Skill set required for front line sales people

Good communication skills: It is very important for the sales persons at HUL Pureit to have
good communication skills since this ensures clarity of words and thoughts. A salesperson
with good communication skills can very easily explain all the details to the customer well
and similarly, handle all the necessary queries well
Good Negotiation Skills: Good Sales personnel must have good negotiation skills in order to
understand the customer requirement well and make a good decision on the part of both, the
company as well as the customer. At HUL Pureit, negotiation skills play a very important role
at every step of the sales process.
Intellectual Ability: Presence of intellectual ability in sales people cannot be ignored since in
field of sales, speed and consistency matters. It is not only important for the sales person to be
speedy and consistent in his performance, but it is also important to have agility or in other
words to be flexible enough to deal with various kind of customers and work under various
situations.
Prior experience in Sales: It is considered very good to have a sales person who has prior
work experience in the field of sales since this prior experience of the employee helps the
company serve their customers better.
Relevant Experience in Water Purifier Industry: At HUL Pureit, one of the most
important skills required in a sales person is his/her specialized experience in the water
purifier industry. Sales Personnel having such relevant experience are given the first
preference. Since such a sales personnel understands the industry very well, it becomes easier
for the company to put him at work get the desired performance and thereby the results out of
him.
Good in Distribution Management: It is very important for a sales person at HUL Pureit to
handle the entire distribution network under his control efficiently and reliably. Correct and
timely delivery to the customer is always of utmost importance in any company.
Also, at HUL Pureit, past specialized experience in the Water Purifier industry is the most important
factor when it comes to selection of people especially, for the post of Territory Sales Officer and
Business Developers.
Recruitment and Selection process of the sales people

Recruitment of Area Sales Managers, Business Developers and Territory Sales Officers
Recruitment for the above mentioned posts are done through Employment consultancies or through
the organic route, i.e. internal promotion of the employees from within the company.
However, the company is now also focusing on recruiting the Territory sales Officers through on the
campus recruitments at various reputed Business Schools.
Recruitment of sales personnel/Front line sales personnel:
18 | P a g e
HUL basically recruits Male Sales representatives
The recruitment for the front line sales personnel is done through getting them from companies like
Ikea, Mafoi etc. These companies are responsible for generating sales lead for HUL Pureit.
The Process for selecting is through Interview which is a 3 round process
1. In this round, Interviewer makes the interviewee comfortable and asks him to talk as much as
he can.
2. This is the stress round, in which interviewer shows the real face of the market by using harsh
or abusive language.
3. In this round they are asked to compare the products and are strictly told not to say a bad
word about competitor.
Effectiveness of various training methods for the sales staff

Training for front line sales personnel:
Currently the training program at HUL Pueit mainly focuses on the product development abilities for
the front line sales people.
These training programs are usually outsourced to another company, which specializes in conducting
such training programs. In case of HUL Pureit, the training programs are conducted by Hufs.
The training needs are identified and specified by the company to Hufs and on the basis of these needs
and requirements; Hufs creates a tailor-made program for HUL Pureits employees.
This is a three month program in which 15 days is induction, in which company details are shared and
also how a water purifier is made. Then after induction 75 days is field training.
Training for Business Developers and Area Sales Managers:
Interestingly, for the Business Developers and the Area Sales heads, the company designs and
executes an in-house designed program itself.
Compensation Structure
The front line sales people get compensation of around 2 to 3% per product. However, it
varies from case to case.
The salary structure of a sales representative is as follows:
Total Salary = Fixed Salary + Incentive + Commission on every machine.
Commission on Machines is as follows:
For, UV = Rs 480 per Machine * number of machines sold
RO = Rs 680 per Machine * number of machines sold
Pureit offline = Rs 20/40 per Machine (depends on the capacity of the machine) *
number of machines sold
PPL(pureit premier league), which is organized by HUL during the IPL, where they reward
their retailers on the basis of points earned by each retailer through selling HUL pureit
products and at the end of the PPL, HUL calculates points of each and every retailers and
rewards the top 10 retailers with gifts and trips to various places.
Distributors also have a compensation structure based on various preset parameters and points
are given to parameter.
For Distributors and Territory Sales officers, the compensation part is mostly fixed, whereas
for PWE (Pureit Water Expert), it is more of variable rather than fixed.
Method of prospecting and reporting with degree of sales force automation

The channels are basically divided into three sub-channels in HUL to avoid conflicts and to cater
different target customers
1. Symphony Channel:
In this channel, PWE are hired to work at Exclusive outlets and Multi-brand Outlets. This is
done to give demonstration to customers about the product inside the shop.
2. MT Channel:
This channel is called Modern Trade channel; this is basically for Malls and Shopping
Complexes.
3. DTH Channel:
This channel is called Direct to Home channel; this is basically for direct selling.
19 | P a g e
There are two ways of prospecting and reporting with degree of sales force automation, which are as
follows:
Pureit Water Expert (PWE):
One is through PWE (Pureit Water Expert), these people are assigned to each retail outlet of HUL
Pureit and whenever customers enter the outlets, their responsibility is to entertain and attract the
customers by giving them demonstrations and assisting them in purchasing Pureit Water purifier.
These People are given a Samsung Tab by the company, on which Pureit Software is pre-installed.
Thus, whenever a customer buys or makes an enquiry about HUL Pureit, the PWEs responsibility is
to do child entry or in other words, to fill all the necessary information of the customer into the
database through this software and the data is then directly transferred to their Central Database, from
there the technical team traces the customer for changing of filters at appropriate time by generating a
pop up on these PWEs TAB screen so that they can contact those customers and remind them of the
problem.
Also, whenever a customer visits these outlets and assures the PWE of purchasing Pureit after 3 days
then this information is also stored at the central database through these TABs and on the 3rd day a
pop up is flashed on these PWEs screens, so that they can contact the concerned customer.
Ace Channels:
Secondly, it is through their Ace Channels or HUL Pureit Call Centre. Wherein a customer calls to
these center and requests for demonstration and fixes a date for these demonstrations. So Customers
information is stored at the central database, where the company traces their sales representatives,
which are on HUL payroll, whether they have given the demonstration to the respective customer
within 3 days of the call made by the customer or not. If the demonstration has been made the, what
are the chances of selling Pureit Water purifier and if the demonstration have not been made then
what is the reason of not giving demonstration.
Interestingly, PWEs and Team Leaders at every retail outlets are changed every month.
TATA SWACH
Sales organisation and Territory Design
Zonal Sales Area Sales Territory

Technical Staff
Manager(North) Managers Executives

Technical Staff
Manager(South) Managers Executives
National Sales
Head
Technical Staff
Manager(West) Managers Executives

Technical Staff
Manager(East) Managers Executives
Sales Structure of TATA Swach

The above image shows the sales organisation structure of TATA Chemicals for Water Purifier
Division, the organisation is managed by National Sales Head Currently Mr. APS Ahluwalia takes
this post. The whole country is divided into four zones namely North, East, South and West. All zones
are headed by Zonal Sales Managers. Currently North zone is headed by Mr. Manish Gupta. All the
zones are further divided into 4-5 Areas with one Area Sales manager representing each Area. Under
every Area Sales manager (ASM), there are 5-6 number of Territory Executives. Under every ASM,
there are 1-3 Technical Staff. Both the Technical Staff and the Territory Executives are not under the
payroll of TATA Chemicals. Technical Staff is there not to generate orders but to focus on client
20 | P a g e
servicing, demonstrations, return etc. The company is also planning to remove all the technical staff
and open service outlets in the near future, but the decision is pending and also it is not clear if the
technical staff will be placed in the outlets or not.
Pros:
All the people under Area Sales Managers are not under the payroll of TATA Chemicals,
hence the cost of recruiting and firing is less.
The structure has a separate team i.e. combination of Territory Executive and Technical Staff
for returns and hence the conflict during returns of defective units is less.
The sales team basically focus on channel sales and not direct selling; hence the main purpose
of the sales team is servicing distributor and retailers
There is normally one Territory Executive for one distributor, hence the service given to each
distributor is not compromised
The sales force is not direct to the customers hence the cost of the sales force is less as
number of sales person required are less.
Cons:
Due to less number of Sales people, many retailers are not happy with the service of the
company
The Territory Executives (TE) and Technical Staff (TS) are both outsourced; hence the
motivation level in them is less.
Both the TE & TS are managed by another company hence there is always a chance of
conflict between TATA Chemicals and the outsourced company.
The company have no direct sales force to create awareness and demand; more dependent on
the Ads by the company or word of mouth.
Sales Structure for Online Sales:

This section is only explanatory about the online sales, made through TATAs own portal for sale of
water purifiers, and not other e-commerce players
1
Online Sales through www.tataswach.com
2
Sales redirected to regional Distributor
3
Distributor ships the product
4
Distributor is credited with the amount
The sales generated by the companys website are passed to the distributor belonging to the area from
where sales are generated and the distributors deliver the product to the customer. The distributor is
then credited with the amount of rupee which he charges the dealer; hence the distributors are not
affected by online sales. Also the management of online sales is easy from companys point of view.
Advantages:
Absence of channel conflict as the sales through companys website does not affect the
distributors sales.
The company has no extra sales team to manage online sales, hence cost is less.
Distributors are also happy as they get extra sales with no extra efforts.
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Sales Structure for Croma & other Modern Retail outlets:
The company has a separate team for managing the Modern retail outlets which is in Mumbai and also
the sales of TATA Croma. These outlets are not mixed with retail division. The sales of TATA Croma
are managed through ERP Software which automatically generates sales order when the inventory
reduces to a particular level.
Advantages:
No separate team of Sales person in different territories, hence the cost of managing modern
retail is less.
The sales of TATA Swach in modern retail is managed by a separate team, hence the quality
of service is good.
Absence of conflict with traditional retail channel.
Skill Sets required for Sales Staff by Supervisor:

Area Sales Managers manage Territory Executives and also the Technical Staff, both the Territory
Executives and the Technical Staff are not under the payroll of TATA Chemicals. These are hired by
a different agency and also paid by the agency itself.
Different Skill set required for the Sales Staff by the Supervisor are as follows:
Prior Work Experience: It is better to have a sales person who has prior work experience it
also helps them to service the distributors and the customers.
Specialised Work Experience in Water Purifier Division: This is one of the most
important skill required in a sales person, it is definitely not a necessary part to become a
TATA Swach Sales person. The contacted Area Sales Manager informed that a sales person
who have prior experience in Water purifier industry understand the business better and
generally gives better result than a sales man, who has no or experience in other industry
Technical Knowledge of Water Purifiers: The knowledge about the product is must for
every sales person, the company imparts this knowledge during the training period and
explain the functionality of water purifiers and also teaches them how to service these
equipments
Communication Skills: Area Sales Manager always see that the sales person are good in
communication skills, and are they capable in dealing with the distributors and the retailers or
not. English is not important for the Technical Staff and Territory Executives as they basically
deals with retailers and distributors, but definitely good communication is a must for them to
effectively handle the channel partners
Convincing Abilities: As is the communication ability so is the case with convincing ability,
this is also an important ability for a sales person, they ought to have a good convincing
ability to convince the channel partners and generate sales.
Skills set required for the Area Sales Manager by Zonal Manager:
Prior Work Experience of at least 3 years: All the Area Sales Managers are recruited
internally from TATA Chemicals or from referrals, and the first condition for them to hold
this position is a work experience of at least 3 years. This is necessary because an ASM
handles a team of around 20-25 sales person under him, hence if he has no prior experience
he may not be able to effectively utilize the sales people time.
Managerial Ability: This point has similar logic as the above point, managing ability is of
utmost important for ASMs as the sales persons are in the field most of the time, hence to
manage the efforts of all the sales person ASM has to have a good managing ability.
Communication Skill: It is imperative on the part of sales person to have a good
communication skill, he basically deals with the sales staff or the distributors, hence he need
to convince and also make sure all the people under him understand their work properly.
Recruitment and Selection Policy for sales people:

Recruitment of National Sales Head and Zonal Sales manager: The recruitment of National
Sales Head and Zonal sales manager is done by internal sourcing from TATA group itself. It is to be
noted that these post can be filled by other TATA Business Units also and not only TATA Chemicals.
Recruitment of Area Sales Managers: This is done by two methods
22 | P a g e
a) Internal Sourcing from other departments of TATA Chemicals, managers with experience
more than 3 years can be chosen for the post of ASM
b) Employee Referral program in which employee can refer someone who fulfils the
requirement can be recruited for the post. The benefit of this method is that the cost of
recruitment is less and also there is some non-monetary benefit for the employee who refers
Recruitment of Territory Executive and Technical Staff: The territory executive and technical
staffs is not under the pay roll of TATA Chemicals and are hired by another firm and outsource them
to TATA Chemicals. But even then the selection of these sales staffs are done on the parameters
discussed above as the basic skill set required for the sales staff
Issue of Non Performance: The Company handles the issue of non-performance in a manner
so as to reduce the number of terminations. ASM first discuss with the sales person about the
difficulties he/she is facing in the field. Then he clarifies what TATA Chemicals is expecting
from him, after that the sales person is allotted a time in which he has to complete certain
number of sales, generate some new retailers and also handle certain number of customer
inquiries. The company very rarely puts a person out of his job, and sales staff is given every
chance to continue the job. This is a good practice as this increases the employee morale in
TATA Swach, but then it also reduces the competitiveness of sales staff
Training given to the Sales staff and its effectiveness

Training program for ASM: Area sales managers are given a one week induction program in the
Head office were they are introduced to different products, facilities and National Head of Water
purifier division. After the initial training the ASMs are given field training.
Training for Territory Executive and Technical Staff: The training of Sales staff is about a month
long, the training starts with a formal in-office training explaining product portfolio, product features
and industry standards. After the initial training the next 26-28 days sales staffs is trained on-field,
this training is given by the ASM under which he/she shall be posted. ASM gives the sales staff
firsthand knowledge about their roles. During the training ASM also clarifies the expectation of the
company from the sales staff. The training is effective as it clearly defines the roles and responsibility
of the sales staff, also it is basically given on the field where sales person will be posted hence the
sales staff get a chance to understand the work from the perspective of ASM and also from his own
perspective.
Compensation Structure
Compensation structure of ASM: The compensation of ASM is a mix of fixed salary with
travelling allowances; the travelling allowance has an upper limit based on the region and area of the
ASM. The affect of fixed salary is directly seen in the motivation level in the ASMs which is
manifested by the large number of complaints lodged by the retailers about the service level of TATA
Chemicals. The compensation is made of 90% fixed and 10% variable depending on tangible and
intangible metrics administered by Performance Management System (PMS). The PMS takes into
account many things like sales generated, new retail outlets roped in for sales of TATA Swach etc.
The details of weights given to different variables were not available with the ASM and the Territory
Executive
Compensation structure of territory Executive and Technical Staff: The compensation of
Territory Executives and Technical Staff is composite of only fixed component and travelling
allowances. The technical staff is given a salary upwards of Rs. 6000, and territory executives are
given a salary upwards of Rs.10000. The compensation structure is not much motivating but in the
same time it also does not put undue pressure on the sales staff, which may be the cause of low
employee turnover.
Method of Prospecting and Reporting with the degree of Sales Force Automation
Degree of Automation: TATA Chemicals is currently not using any type of ERP software
and/or Sales Automation Applications for the sales force. Hence the sales force is still
collecting the orders in forms. The sales force uses no type of handheld devices to take orders
23 | P a g e
Reporting by Territory Executives: The territory executive reports to the area sales
manager twice daily and also give a formal weekly and monthly report. The morning report
gives the information about the planned activities for the day, whereas the second report gives
the information about the work done through the day. The report also contains the activities
done by the technical staff under the territory executive. The daily reports are usually made
through phone calls and messages.
Reporting by ASM to Zonal Manager: Area Sales Manager reports monthly to the Zonal
Managers, but the Zonal Managers maintains a constant contact with the ASMs and hence the
reporting of the ASM is generally on the points describing the sales and customer inquiries.
The Zonal Manager is also in some contact with distributors to make sure that he/she always
knows and understands the condition of the market.
Kent
Kent RO Systems Ltd is a leading company in manufacturing of health care products like purifiers,
which started its journey way back in 1999. It has a diversified group interest under various categories
with strong presence in selling water purifiers like mineral ROs, gravity purifiers and water softeners.
Pioneer in bringing revolutionary Reverse Osmosis (RO) technology to India for the first time, Kent,
started in 1995 in Noida, India. Despite a humble beginning, today Kent RO Systems Ltd is a strong
organization with offices spread across major cities of India
The sales of Kent water purifiers is done mainly through 3 channels

Direct sales division (DSAs) - This sales division or direct sales agents caters to the demands of
the households and sells them the Kent water purifiers by going to the homes of the customers. The
process of door knocking, cold calling, fixing appointments, giving demonstrations at homes and
selling the product to the customers is handled by this division. This division of sale is more prevalent
in the Delhi/NCR region (which is the major market for the Kent water purifiers) and is not prevalent
in the other cities and towns of India. The company provides free installation and free service for 1
year. Outside Delhi the service is provided by the service franchisees.
For this division the company has 18 branch offices (direct sale offices) in Delhi alone and each
branch office has about 5-6 sales representatives, therefore the total number of sales reps in the
Delhi region which caters to the demands of the households is around 100.
There is a separate sales force that looks after the after sales services. Around 10 sales reps
from the after sales division report to each branch office in Delhi, from where they are sent to
the homes to cater to the queries of the customers.
The company has its warehouses in various parts of Delhi from where the sales reps pick up the
products for selling.
Retail channel sales- This sales division also caters to the demand of the household through
retailers/ dealers. The company has a strong dealer network and sells a lot of water purifiers through
these dealers/retailers. There are a lot of customers who do not buy the water purifiers despite the
demos given by the sales representatives; therefore the customers go these retailers to buy the water
purifiers. The company has distributors in the and the company also appoints its sales reps to handle
the needs of dealer stores. This division of sale is more prevalent in the cities apart from Delhi/NCR
i.e. majority of the sales in India except from the Delhi/NCR is through the retail channel sales.
The company has around 14-15 main distributors in Delhi.The dealers are the electrical shops,
water purifier dealers and the other private dealers.
Recently Kent has set up its own exclusive Kent Shoppes which only sells the Kent water
purifiers. Some of the main distributors have been asked to sell only the Kent products and are
being converted into these exclusive shoppes. The company appoints its own sales reps at these
shoppes. The Kent shoppe can only sell to the consumers.
The company is also selling their water purifiers through the modern retail stores chroma, big
bazaar, next stores, vijay sales, etc. The company has been selling their products in around
6,000 multi-brand and large format stores across the country. The company sends its ISPs
there for the demonstrations to the customers.
24 | P a g e
The company sends its own sales reps or the ISPs (in shop promoters) to the dealers who are
able to sell more than 10-15 Kent purifiers in a month.
Kent also sells its products through the army canteens across the country. There is a different
canteen sales division for this segment known as the Canteen Sales Division mainly managed
through the corporate office. A purchase order is released by the army for requirements of
water purifiers in various parts of the army canteens, the head office takes care of this
requirement and products are released from the head office to these places.
The company has recently also tied up with the HP and Indian oil gas agencies to act as the
distributors of Kent water purifiers.
Corporate sales division- This division caters to the demands of the institutions and companies
which require the Kent water purifiers. There is a separate sales force for the institutional selling
which sells the water purifiers to the schools, colleges, offices, hospitals, etc. The sale force for this
division in Delhi for instance directly goes from the Noida head office to make the sales. The sales
reps of this division are not present in the direct sales offices of the domestic consumers. The
company has to give large discounts to these buyers as the quantity amount is very high. This channel
also takes care of the MBO(multi brand outlets) Big Bazaar, Next, Croma , Vijay Sales etc. with
which company has a tie up .
For the rural regions the sale is made only through the retail channels and there are no direct sales
agents. The company has a good dealer network for the towns and the rural areas and is trying to
penetrate more in the rural areas by the introduction of low cost water purifiers.
Territory design- The Delhi/ NCR region is divided into 4 regions south, west, north and east.
Similar regional division is followed in the other Indian states as well. The states are divided into 4
regions. The area sales managers are responsible for these regional areas, headed by the Regional
manager.
Analysis of the effectiveness of the current sales strategy:

After observing their sales organization and territory design it has been observed that Kent is a major
player in the northern region and their main focus is still in the Delhi-NCR and have setup a direct
sales force in this region. The major products of Kent are their products with RO,UV and UF
membrane products which provide triple filtration. They account for major sales of Kents products.
The company in its product portfolio has around 35 products in gravity, resin, UV and RO range.
Kent Grand has been their star product , recently the launched Kent supreme to reduce the water
wastage which is a major problem with the RO products. Awareness about water purifiers is quite
high among urban population of India. Major. The company should have a direct sales team other
than Delhi to have a stronghold in these major cities of India. Kent has branch offices in all the major
cities to cater to the need of the retail channel. Kent do not have a after sales team outside of Delhi
and they have outsourced their aftersales and maintenance outside of Delhi-NCR which is a cause of
concern, it has been noticed that lots of complaints regarding aftersales have been noticed with Kent
after we did some analysis through secondary sources so they should setup a aftersales team and a
direct sales in major cities where demand is high and cities where ground water is the major .With the
current sales strategy they are able to expand pan India but still real focus is constrained in the Delhi
NCR region although on papers they cover all over India but in reality they really focus in this region
with huge turnover being reported the company should make the most of it and look to expand in all
over India in an effective manner while setting up own after sales team to look into after sales in an
effective manner.
25 | P a g e
Hierarchy of the organization (Sales division)
Chairman
VP sales
General
manager
Deputy general
manager
Regional
manager
Area sales
manager
Branch
manager
Senior sales
executive
Sales executive
Ranking of skill sets required for sales staff by supervisors

While recruiting the sales reps for the company, the company has a priority for the following skill sets
which are necessary for the sales reps to have in order to sell the water purifiers.
Enthusiasm
Confidence/ Motivated
Extroverts and convincing skills
Good communication skills
Less time constraints/ willingness to work stretch
Recruitment and Selection of sales people

The company recruits people who have the willingness to work as the sales executives. The minimum
requirement is graduation for the sales reps and the company recruits by giving advertisements on the
various job sites like Naukri.com. The initial interview is taken by the branch manager and 1 more
interview by the general manager before the final selection. The sales representatives are promoted to
the senior sales officers based on the work performance and experience. The recruitment for the
manager level positions is entirely different and the minimum requirement is post graduation/masters
with relevant work experience. The interviews are taken by the GM of the company.
Effectiveness of different training methods for sales staff

The sales representatives after being interviewed and recruited by the company are sent to the head
office where they are given a minimum 3 day intensive training. This involves the training on the
products sold by the company, the technology used and all product and market related queries. After
the 3 day training programme, the sales representatives have to clear an exam after which they are
permanently recruited in the company. The duration of this training may extend depending upon how
much the executives learn and the test that they clear. After the 3 day training the sales representatives
are sent to the respective branch offices where the branch manager trains the sales reps on the selling
techniques, handling customer queries, demos, sales, etc. The duration is normally 4 days. After this
the sales reps are sent to the field and are constantly monitored by the branch managers. The training
helps the sales reps in getting knowledge about the sales techniques.
26 | P a g e
Compensation structure of the sales force
The sales representatives on being permanently recruited into the company are given a fixed salary of
Rs 10,000 per month while the rest is the variable component which includes some incentives and
commissions. On being promoted as a senior sales officer, the employee is given a fixed salary of Rs
15000 per month.
Variable component of the salary-
1. Rs 150 travelling allowance which is given on every product sold
2. If a sales representative is able to do 10 sales in a month, then after the 10th sale he is given Rs
250 on every product sold.
3. There are also some different slabs for the Kent products for which the variable component
may increase in case the products are difficult to sell or have a low demand.
To motivate the employees the branch managers look after the needs of the sales reps in case
they face any problems regarding conveyance, mobile phones and other problems. The branch
manager further gets help from the regional managers in order to solve the problems of the
sales reps. The sales reps are also given medical benefits in case they fall sick. There is no
such fixed policy of the company regarding the rewards and monthly incentives.
Analysis:
The company recruits graduates from almost any field as long as they willing to work as sales
representatives. Companies major products are RO water purifiers which are costlier products
serving a premium customer base who probably would like to graduates with good
conversation skills and well groomed but this portion is not taken care of much during
training as focus of training is on product knowledge and sales knowledge and diction and
grooming is not a much important part. The fixed component in salary is quite high and
variable component is quite less and sales executives do not seem to be much enthusiastic to
do sales in the market. They are quite content with completing their target of 3
demonstrations of RO products and 3 demonstrations of other products. The variable
component should be increased with experience and point based system need to be
implemented and monitored by the branch manager .The morale of sales representatives seem
to be quite low after a certain period of time as it was noticed after a conversation with a
senior sales executive that even after getting a tag of senior sales executive after working for
2-3 years there was no monetary benefit and prospects of growth after that.
Method of prospecting and reporting with degree of sales force automation

In the Kent purifiers company, each sales rep has to make atleast 6 demonstrations in a day. 3 demos
should be of the RO water purifiers and 3 can be the other water purifiers. The sales reps directly
report to the branch managers about the number of demonstrations, sales done, customer complaints
resolved. The degree of sales force automation is less in the company though the company has an
online system called DRS through which the sales reps can enter the data of the demonstrations and
sales in a day.
WHIRLPOOL
The sale of Whirlpool water purifiers is done mainly through 2 channels:
Retail channel sales: This sales division also caters to the demand of the household through
retailers/ dealers. The company has a decent dealer network and sells a lot of water purifiers through
these retailers. In the present scenario many customers visit the retail shops to buy water purifiers.
The company has distributors in the cities and towns which provide the water purifiers to the dealers
and retailers, which further sell to the consumers. The company appoints its sales reps to handle the
needs of retail stores.
The company sells its product through shops like croma, big bazaar etc.
The retail store on an average has around 8-9 sales reps who sell are goods like refrigerator,
air conditioner and also water purifier.
Corporate sales division: This division caters to the demands of the institutions and companies
which require the Whirlpool water purifiers. There is a separate sales force for the institutional selling
27 | P a g e
division in Delhi for example directly goes to the corporate office in Gurgaon where they enquire
about whirlpool water purifier and gives them order about how many units they want for their
institution. The order will be handled by area sales manager who intimate the sales force about the
latest order and send them to the respective institution.
Share % of
various channels
Corpor
ate
Sale
10%
Moder
n
Retail
20% Retail
Chann
el
70%
Table 1.1: Percentage share of sales of Whirlpool water purifiers in Delhi

The company recruits people who have the willingness and passion to work as the sales reps. The
minimum requirement for selection is 12th class and when you want to move on to higher position
graduation and post graduation are important. The company recruits by giving advertisements on the
various job sites like Naukri.com, through newspapers etc. The interview for the junior post is taken
by senior sales executive and for the senior post the interview will be taken by Area Sales Manager or
by Branch Manager.

The sales representatives on being permanently recruited into the company are given:
Fixed Salary: 9200
Variable Salary (Incentives and commissions): 2000
Variable component of the salary:
Commission on normal days on sale of 1 purifier= 250
Commission on Saturday and Sunday of 1 purifier= 400
If a sales representative is able to do more than 30 sales in a month, then after that his incentives get
doubled. For ex- If he sells the 31st product on a weekend then his commission will increase from 400
to 800.
Part III Distribution Network

Eureka Forbes Limited
Traditional Retail channel
This includes selling through regional general retail outlets. These outlets are small to medium size
consumer shops with limited target customers. Shops involved in this channel are primarily consumer
durable shops like home appliances (ACs, fridge etc.), home furnishing etc. The route is Manufacturer
(EFL) to distributor/dealer to retailer. Some dealers may do both door to door purifier installation and
providing retailers too. EFL Water Purifiers have presence in 17430 outlets, spread over 125 cities
and 400 towns across India through 5,000 strong dealer sales network and 75 Distributors (2012
figures). Traditional retail contributes to 60% of entire durable business (Consumer Division).
28 | P a g e
Business Partner (Franchisee)
In the past, Franchisees comprised of the non-selling division of Consumer Division. The division
takes care of after sale servicing part. They are generally independent business units which specialize
in servicing consumer durables. There are roughly 20 Business partners in Delhi. The servicemen are
trained by Eureka Forbes. However, off late franchisees have started taking sales orders and installing
products door to door with the help of Euro champs. EFL is trebling its franchise partners to 80 from
26 to ensure better sales and distribution of its product -- Aquasure. In total there are 324 Franchisee
operations called Euro Partners. Apart from this there are 402 Franchisee Direct Operations. Together
they provide 1100 service partners and 5800 trained technicians all over India.
New Channels
These are further classified into NC1, NC2 and BPCL. They contribute 22% of entire durable
business.
o NC1 Distributing products to Modern organized retail which consists of organized retail
outlets like Hyper City, home shop etc. These are managed by different managers and
distributors. Contributes to 15% of entire durable business.
o NC2 This is small scale retailer selling. Products are sold through shops other than consumer
appliances like utensils, furniture etc.
o BPCL This division takes care of distribution via BPCL gas network. The delivery people of
BPCL were trained by EFL as salesmen of water purifiers. Some profit percentage was shared
with BPCL.
Rural Channel (described in Changes over last five years)
Supply Chain
Retail Channel
Manufacturer
Regional Warehouses (2)
Distributors (4)
Franchisee (8)
Retailers
Consumers
Direct Sales Channel

Manufacturer
Regional Warehouse
Dealers
Direct Sales
29 | P a g e
Aquaguard brand is sold through Direct Sales as well as Franchisees and Aquasure brand is sold
through retail.
No. Of warehouses in Delhi= 2 (Mayapuri and Badarpur)
The products are manufactured at Aquamall factories. Aquamall Water Solutions Ltd is a 100%
subsidiary Company of Eureka Forbes Ltd. The company has four Manufacturing facilities have been
established at Baddi (H.P.), Bhimtal (Uttarakhand), Banglore (Karnataka) and the Latest & the biggest
in Dehradun (Uttarakhand). Apart from this Eureka Forbes has forged a 50:50 joint venture with UK-
based Waterlogic to develop premium water purification products and solutions.
From these manufacturing units, products are transferred to regional warehouses on the basis of
quotation given by the state heads.
EFL operates in 125 cities and 400 towns across India through 5,000 + strong Dealer Sales Network
and 75 Distributors. Area head and Territory sales-in charge are responsible for the orders taken by
the distributors once the stock reaches the regional warehouse. Distributors distribute the stock
among retailers on the basis of orders and the retailers sell off to the consumers. However distributors
for every category of product are different. There are generally different distributors for electric water
purifiers and non-electric water purifiers.
Dealers are responsible for the direct sales channel. The dealers are given the responsibility of getting
stock from warehouse and maintain the direct sales and distribution
To manage its Distribution Network Business, Eureka Forbes has implemented an in-house software
solution - BAMS. This software captures information related to the day-to-day functioning of the
business. The BAMS primarily handles the following areas
Sales Transactions and related Returns made to the Distributor
Material Purchase & Material receipt by the Distributor
Material Return (Purchase Return) and Credit Notes
Other Claims and Credit Notes etc.
Current Issue
With vigorous growth plans, the company wants to closely integrate its operations with that of the
distributors and simplify operations of its distributors. Many EFL distributors do business with
multiple products and a large section of these distributors use Tally (ERP9 software) to manage their
business operations. EFL wishes to integrate its BAMS application with Tally.
Changes in Distribution policies over last 5 years

1. New Retail channels
EFL started setting up new and alternative retail channels in 2009 to increase penetration of water
purification devices which stands at 9%. Its retail division is now extending its products to chemists,
CSDs (Canteen Stores Department) and general merchandise stores to reach out to households which
do not use water purification devices. Defense personnel stores contribute to 3% of entire durables
business.
2. Shift in focus from Direct Sales to Retail
Eureka Forbes, better known for its sales agents giving demonstrations of products such as vacuum
cleaners & water purifiers at homes, has changed its marketing strategy.
The company, with close to 8,000 door-to-door sales force, largest in Asia, now focuses more on
selling products through retail outlets.
Conversation with senior marketing manager (Delhi/NCR) revealed the change in peoples lifestyles
and increased competition was driving the shift for the company, which till a few years back relied
exclusively on direct sales. Nowadays both husband and wife are working, so there is no one at home
and therefore the direct sales force is unable to reach a large segment of people.
3. Distribution in Rural market via Water Shops
Another change has been observed is the distribution in rural areas via Water Shops. A business
investment of Rs. 50 lakh has gone into rural areas till date. (Forbes India article dated April 1,
2013). Eureka Forbes provides the hardware, the Panchayat provides the land, the state provides the
water, and locals are trained by NGOs to run the plant and sell the potable water. One of the
challenges which EFL is facing is rural areas is the acceptability of the idea to pay for pure water. In
some areas, less than 20 percent of the people pay for RO filtered water even after the water shop has
30 | P a g e
been operational for quite some time. Additionally, disease rates have not gone down because many
continue to cook with the untreated water even though they drink purified water. Eureka Forbess own
research shows that there was no significant fall in diarrhoea cases.
Channel Conflicts
Channel conflict at EFL may arise due to the two different methods of selling being followed i.e
Direct Selling Model vs The Retail Selling Model. This results in Vertical Channel Conflict between
the Manufacturer and a distributor/franchisee/retailer, happening due to poor communication, lack of
role clarity as Sales force of each division feels that they end up competing against one another.
Two separate divisions Retail Sales division and Direct Sales division selling similar products in same
area. In this case, there is sort of channel cannibalization of Direct Sales against Retail sales.
Solutions:
To overcome this conflict EFL adopts the following strategy:-
1. Keeps separate product line for separate channel, for example, Aquasure is sold via retail outlets
and Aquaguard via Direct sales.
2. Different Target Segment for each channel.
The strategies for both the channels are explained as following:-
Retail: Pull Strategy

2003 2012.
Targeting those Urban (B &C category towns) & Rural Markets which have never used water
purifiers before.
Since these places are also suffering from dearth of running water and electricity therefore the
products offered are
1. Storage type
2. Non Electrical, Gravity purifiers
3. Cheap INR 1800 onwards.
4. Do not remove Hardness (caused by heavy metals etc), Pesticides, Arsenic and
Fluoride.
Aimed at increasing the market penetration which is assumed to be as low as 9%.
Retail Selling is more conducive for Multi products selling. EFL has increased its
products from 1 to 30 in the past decade.
Contribution: Retail contributed about 22.7% of all Water Purifiers sales of EFL in 2012.
2013 onwards: Advanced Models of AquaSure.
Targeting working couples at Tier 1 cites and Metros as well as to counter increased
competition from contemporaries and new entrants.
Both electrical as well as non electrical models can be purchased at retail outlets of such
cities.
Prices wary from INR1800/ INR 26,000/-
Direct Selling: Push Strategy

Targeting upper middle class and rich class customers who are looking for highest levels of
protection.
Direct selling is more expensive form of selling, therefore suited for higher value products.
Thus only high end products like Aquaguard Total and Aquaguard Genius are sold via
the direct sales route.
1. Running water type, with 8 10 liters of storage facility.
2. Electrical type, with tempering with taste of water facility also available in some
models.
3. INR 12000 onwards.
4. Proclaims 100% pure water.
Direct Selling Reps are more like Solutions Providers. So they suggest products based on the
users requirements.
Direct selling more conducive for Single Product selling, it gets complicated otherwise.
31 | P a g e
Contribution: Direct Selling contributed about 77.3% of all Water Purifiers sales of EFL
in 2012.
On May 16th 2013 EFL acquired majority stake in Swiss company Lux International to
become the largest home product direct sales company.
Trade Margins and Other Discounts

Trade Margins offered to Distributors by EFL: 4% - 5 %.
Margins offered by Distributors to Retailers: 10% - 12%.
Margins offered by EFL to Franchisees: 12% - 14%.
Impact of Modern Retail on Distribution

Eureka Forbes has been known for its Direct Selling Approach. In the water purification market it
started with Direct Selling of its product in UV segment and became the market leader.
It is still a market leader in this segment. But as the Retail Sector is growing, EFL has shifted its
resources towards this sector and not relying completely on Direct Selling. The major reasons for shift
are as follows:
1. Water Purifier product category is well known to people.
2. Direct Selling creates potential customers which enquire about EFL products at later stage in
Retail stores.
3. India being a vast country, it is very difficult and expensive to cater to whole country through
Direct Selling.
4. Nowadays both husband and wife are working, so there is no one at home and therefore the
direct sales force is unable to reach a large segment of people
5. Increasing competition from retail channel like HUL, Kent, etc.
All this made EFL enter into Retail Channel as well.

Currently, EFL is dealing in 3 categories UV, RO, Resin. UV and RO technology is dealt through
Retail Channel as well as Direct Channel but Resin technology is present only in the Retail Channel.
CURRENT SCENERIO
EFL is dealing in both Retail Channel and Direct Selling. It sells only entry-level products through the
route. All the high end and premium product are under the brand name Aqua Guard are sold through
Direct Selling. These are premium products for high segment that needs personal attention and are fit
for direct selling. Being a premium and flagship product of EFL, people want to get assure about the
benefits of the product by demonstrations before spending money to buy it.
For the Retail Channel, brand of EFL names Aqua Sure. It is available in all the three technologies.
These products are 20 to 30% cheaper than the products which are sold through Direct Channel as in
retail as people are looking for good value for money products. Also, there is a severe price
competition in Retail Channel by companies like Kent, HUL, etc.
In Resin technology, EFL is at poor second position. HUL is the market leader with a large difference.
HUL is having an intense distribution network and to compete with it EFL is concentrating on
developing strong distribution network.
Impact of Internet over distribution

Three routes of selling through internet adopted by the companies:
1. Companys own website
2. E-tailers (Electronic Retailers)
3. Click n Brick Modern Trade Outlets
EFL provides customers with an option to buy from their website as well as from other major e-tailers
and websites of modern trade chains. Through their own website they allow customers to buy
products of Aquaguard brand only whereas through e-tailers and modern trade chain websites, they
sell the Aquasure brand only. It fits perfectly with their distribution strategy. The direct sales team
which is responsible for Aquaguard brand is integrated with their website and hence Aquaguard brand
on their website. Since the main purpose of website right now is customer lead generation, as
according to EFL human interaction can never be replaced with the Internet, the key component of
EFLs digital transition has been its Call Connect System. When a consumer fills out and submits a
32 | P a g e
lead form online, an automated process identifies his or her location based on the pin code supplied.
The system then identifies the nearest sales team, makes an outbound call to a salesperson and one to
the customer. The system then connects the two calls -- all with an expected hold time of less than 30
seconds. Thus Aquaguard brand even after being provided through their website is retained with the
direct sales division only and direct sales distribution network is used for deliveries even for the
purchases made online. The conversion of leads from hits on EFLs own website is high
approximately 40% to 45% of total leads. This can eventually develop as the main selling model, as it
will include home visits for demo purposes, replacing the current direct selling methods.
For major e-tailers such as flipkart, homeshop18 etc. and modern trade outlet websites such as
Chroma, EFL sells only Aquasure brand. With these they have a B2B transaction where all the sales
orders are centralized but distribution however is decentralized and distribution is made to the clients
warehouses in the major cities. The requirement is provided by the clients for particular cities and
Eureka Forbes distributors for retail chains make sure the delivery of water purifiers to warehouses in
their respective cities. In this way Aquasure brand is retained with the retailer division only.
Eureka Forbes Limited has awarded its digital strategies and social media mandate to Digitas India of
the PublicisGroupe.
Digitas will be responsible for an integrated and end-to-end solution to strengthen engagement with
customers across digital platforms like electronic customer relationship marketing (e-CRM), e-
commerce, online relationship management (ORM) and social media. E-commerce will play an
important role in the company's digital strategy as Eureka Forbes is strengthening its presence not
only in direct sales but also retail and B2B space as well.
Ion Exchange(Zero B)
As ion exchange has entered the water purification segment only recently and is therefore a new
player in the concerned segment, it is currently immune to Hassles like channel conflicts. Ion
Exchange currently has a corporate office in Mumbai, and 11 Branch/Regional offices across 10 cities
in India.
Trade Margins and Other Discounts

Trade Margins offered to Distributors: 4% - 5 %.
Margins offered by Distributors to Retailers: 14% - 15%.
More over unlike Eureka Forbes Limited, Ion Exchange does not follow Direct Selling therefore it is
solely concentrating on consolidating its Distributor/Retail Channels.
During our primary research we were constantly reminded of Ion Exchanges newbie status in the
market as it was mighty difficult to locate a Zero B water purifier.
Ion Exchange uses its own websites just to provide details about its complete product range. Though
the company doesnt allow user to purchase directly through website, it just allow customers to ask
for demo or call for more details. It is not leveraging the complete power of internet yet as according
to the company, though there is a huge customer base that checks details online, very few people in
India are comfortable with e-commerce and hence do not purchase online. Thus they are still waiting
for the market to get evolved to start selling online. Since they do not allow purchase of products
through their website, they have not kept a different distribution network for internet. However the
company has made Good Life as its authorized sales partner. Good Life website features many
products including water purifiers of every brand and for them Zero B is just one of the partners. For
Good Life, Ion Exchange operates through B2B distribution network. Good Life maintains the stock
in their warehouses based on the sales and demand forecasts. Ion Exchange products are not featured
on other major e-tailers such as Flipkart, Homeshoppe etc. and also not on major modern trade outlet
websites such as Chroma.
Cooperative Advertisement
At Eureka Forbes the advertisements are mainly done by the manufacturer itself where distributors
and retailers play a very minor role. The cooperative advertisements done by Eureka Forbes
distributors and Retailers are as follows:-
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1. Banners and Posters Eureka Forbes distributes banners and posters through its channel which is
to be displayed by retailers at their store. These banners and posters are being put at the retailers
by the Area Sales Managers (ASM).
2. Consumer Awareness Training The ASM trains the salesmen at the retail outlet regarding the
benefits of the product. These salesmen pass the same knowledge to the consumers thus helping
them to sale the product.
3. Display The ASM visits the retail shops and sets up the display according to their need.
HUL Pureits
Distribution Network
Manufacturers
Depots Depots
Distributors Distributors Distributors Distributors
Retailers Sales Rep Retailers Sales Rep Retailers Sales Rep Retailers Sales Rep
Figure 1
Percentage of sales through different channels

For water purifiers
Retailers--81-84%
Sales Rep--2-3%
Modern Retails-- 14-16%
For Refilling Cartridges

Retailers--72-76%
Call Centre or Service --14-16%
Modern Retails-- 10-12%
There is no fixed number for distributors for Pureit; it all depends on the capacity of the
distributor. For e.g. there is only one distributor in South Delhi while there are 3 in East Delhi.
Retailers and Sales Rep are in direct touch with the distributors of their respective territories, which
are appointed by the company (i.e. HUL in this case)
Above Distributors, there is a networks of Depots (or in simple term Warehouse), from where all the
products are delivered to respective Distributors
And finally above Depots, comes the Manufacturers from where the parts of products are produced
and assembled in their own vicinity as per HUL design and specification related to each categories of
product, which are different for all these three categories of HUL Pureit, which are RO, UV and
Offline one.
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As per A.C Nielson survey some years back on water purifier industry, water purifier was not even
considered as a category or segment to have distribution network.
Level of intensity in distribution is high on the distributors end as they are getting targets, which they
have to fulfill as per decided by the company, which they pass on to retailers. But in case of retailers,
it is not that intense as they are independent entities.
Depots are solely responsible for the delivery of goods or water purifiers on time and to keep check
on the arrival of these finished products from manufacturers and have to maintain their inventory
level.
There is no major change in the distribution policies in this industry in the last 5 years as this is still in
its nascent stage and it is growing tremendously. Only change we can observe is that it was purely
through door to door distribution networks, but now it is more or less through organized distribution
network, which start from Manufacturers, than depots, than distributors and finally retailers or Sales
Rep.
Main Impact of this distribution network is that now a days these water purifiers also get space on
the display counters of the retailers, which was not there previously and companies also understand
the importance of these display counters, so they are offering different scheme to get more space,
which ultimately result in increasing their sales.
RURAL Segment
Pureit has low presence in rural segment as market potential of Tier I, Tier II and Tier III
cities is very high so according to us they might think of getting into rural segment. We were
not able to find any data about it from any of the primary or secondary sources, will make
sure to search more on it and try to cover this in final report.
Service Output demand for Water Purifier Industry:-
As we have seen the demand for water purifiers and selling strategy for HUL, the demand for water
purifiers is high but people buys it once in 5 years because it is a high involvement product. It is a
spatial convenience type of Service output demand as people today considers it as a necessity rather
than style statement. This is high involvement because of cost of the product. Since product is
categorized for different segments and each segment is from different socio-economic class, so cost of
the product matters a lot.
Segment
Service Output Demand
Name /
Product Bulk Spatial Delivery / Assortment Customer Information
Breaking Convenience Waiting Time / Variety Service Provision
Offline High High - Low - Low Low Low-Only
Available customers through outlet
mostly at don't wait
every store
UV Low Low - Medium - Low High - As High -

Available at Customers can customers Customers get
exclusive wait but not are high information
stores or sold too long value since through
through the cost of MBO's, EBO's
direct product is and also
channel very high through Sales
representative
during Direct
Selling.
35 | P a g e
RO Low Low - Medium - Low High - As High -
Available at Customers can customers Customers get
exclusive wait but not are high information
stores or sold too long value since through
through the cost of MBO's, EBO's
direct product is and also
channel very high through Sales
representative
during Direct
Selling.
HUL Pureits SERVICE OUTPUT DEMAND and Its Application:-

This service output demands are analysed below for HULs Pureit
Bulk breaking: - High for Pureit as it is low cost product, so only volume sales will generate
revenue i.e. why it is present in every nook and corner; it is done through extensive
distribution by HUL.
Spatial convenience: - It is low for online products like Marvella RO and since it is high in
cost, people are ready to travel much distance for this but since HUL wants to create an entry
barrier for new players and also because of intense competition, HUL is selling this through
all three distribution networks. But spatial convenience for Pureit is very high.
Waiting or delivery time: - Since competition is very high and revenue is only generated
through volume sales, waiting time or delivery time for HULs Pureit is very low but if
customers are loyal, which is very rare, this can increase.
Product variety and assortment: - Since HUL wants its product to be available at every
store be it Multi-Brand Outlet or a small grocery store, and variety is very less as only three
categories can be seen i.e. Offline, UV and RO so assortment is very less for HUL.
Customer Service: - Very High for Online product but very low for offline products as Profit
per equipment is very low so company cannot borne the cost of customer representative.
Information Provision: - Low for HULs Pureit and information provision is only done
through outlets.
HUL is in three channels of distribution i.e. through Symphony, Modern Trade and Direct to Home,
and due to intense competition the product availability is the major issue. There are factors which are
taken into consideration while choosing a distribution channel
Cost vs Customers willingness to pay and channel profit, since offline product, Pureit is only
profitable if it is sold in bulk and for that availability is very much important for this product.
Competitors aggressive strategy forces HUL to make it available at every nook and corner.
Since product is similar for competitors, its unavailability will create a lot of problem for
HUL.
Ease of entry for new players are there in this segment but since HUL has extensive
distribution channel, it has made a barrier for new players to come.
This service output demand has helped HUL in designing its distribution channel and sales force
structure, only after analysing and understanding the customer and market. It has segregated each of
its distribution channels for customers and has made Pureit available everywhere.
Marketing flows considered important by the customers for the category

S. No Marketing Flow Cost represented
1 Physical possession From Manufacturer to depots and from depots to

distributors, the cost of transportation is incurred by the
company and in this case it is bear by HUL Pureit
Storage cost at depot is bear by the Depot owner as depots
are management by third parties not by HUL in water
purifier case.
36 | P a g e
But from Distributors to Retailers, the cost of transportation
and storage cost at distributor end is bear by distributors.
2 Ownership Inventory carrying cost is bear by the depot owner, when
goods are at depots.
Inventory carrying cost is bear by the distributors, when
goods are at distributors end.
Same apply with the retailers and online portal.
3 Promotion Personal selling through sales rep, advertisement of the
products, Sales promotion, publicity and PR are handled by
the company (HUL Pureit), distributors and Depots owners
are exempted from this activity.
4 Negotiation Mostly Margin level for all distributors across country is
same as a result negotiation on the basis of price is very less
from companys end but in many case when there is a bulk
order company may relax some norms.
There is a separate sales team for negotiation for the stores
like big bazaar, Next , Croma etc.
At distributor level negotiation can be done on the basis of
order as distributor use to give high margin to bulk order it
give high margin to snap deal and other modern retail shop
which deals with distributors.
5 Financing No credit is provided by the company to distributors. All
transactions are on advance payment.
But in case of retailers, credit facilities are given by the
distributors, for which the company is not responsible. It is
totally on distributor risk
There are targets set by the company for the distributors,
which they have to fulfill and for the same company
provide scheme or discount to their distributors.
As Retailers are independent, so there is less pressure on
them to fulfill these targets and also get advantage of this
schemes/discount which is passed on to them by the
distributors from the company.
6 Risking Price guarantees, warranties, insurance, repairs and after
sales service are all look after by the company with the help
of distributors, who takes the damage product from retailer,
who in turn take it from the customers and then distributors
return that damage good to the company, who will replace
it in 15 days time period or repair it as per warranties terms
and conditions.(there is a different department to handle all
these query.)
Neither Distributors nor retailers are at risk of bearing these
addition cost.
7 Ordering Order processing cost through customer care or internet are
bear by the company.
Order processing cost through retailers are bear by the
distributors
8 Payment At company end, products are delivered from depots only
after payment is paid in advance, so there is no problem in
payment collection and no bad debt cost incurred.
At Distributors end, not every transaction took place on
advance payment, as they provide credits to the retailers.
Online portal like snap deal take take products from
37 | P a g e
distributors on a credit of 15-20 days based on their
operating cycle of product.
There is a possibility of bad debt cost with the distributors
as there may be a case when retailers will not be able to
clear the credit amount.
Areas of vertical and horizontal conflict and possible solutions

As seen from their vertical structure, we came to know that maximum part of their distribution
network is outsourced to third parties, from manufacturers to depots and retailers. So the possibilities
of conflict are less among these channels.
But in case of any conflict among the employees in the designing team or team related to specification
or at distributor levels, there is a possibility of Horizontal conflicts among them, which are as follow:
Major reason of conflict is retailers do not get timely delivery of product from distributor.
Coverage area among distributors.
Different scheme for distributors in one region.
There is also a possibility of conflict interest among retailers, but it is handled by the
distributors, not by the company personals.
Solutions to these conflicts provided by the company is through their software Sunrise to
Sunset, where every Friday a team member or employee in the designing department or in the
department related to technical specification can share their feedback, which will be displayed on their
portal and on their internal magazine. They also maintain a website for the same.
There is a dedicated team for taking complaint, whose task is to collect these conflict &
feedback through software and then pass these conflict & feedback to the respective HR
teams, who are responsible for resolving these conflicts. These teams are also responsible for,
in how much time these conflicts are resolved or not.
There is also a help Centre for distributors to register any conflict with the company (Lever
care), they can register complain here online and company people resolve it in the same way
as discussed above.
Impact of modern retail on distribution

Modern retail had helped company in terms of more exposure to customer; more display
space but as such there has not been a major impact on the distributors. Company has
appointed a separate dedicated sales force for the modern retail shop to increase its sales and
better services.
Distributor use to gives more margin to the modern retail shop than to the other retail outlets
which deals with it directly.
There are areas or regions in the country where the population is less or the financial status of
people is not stable, like in the case of Haryana, where no modern retails exist.
In Rajasthan also, due to the above mentioned reason, Modern retails outlets are available
only at Jaipur and Udaipur, but it is absent in rest part of Rajasthan.
Trade margins and other discounts

All types of discounts are given by company to its distributors who finally pass this discount to
respective retailers.
For Distributors
Trade margin for distributor is less
No credits is given to distributors from Company end
Schemes/Discount and benefits are provided to distributors.
As soon as the product reach the Distributor premises, all cost expenditure from here onward
is distributors responsibilities
But Margin also depend on the region and also on the population status of that particular region, for
example in Delhi, the margin for distributors is less as compared to margin for distributors in some
38 | P a g e
part of Rajasthan as the per capita income of the population and population is less scattered in Delhi
as compared to Rajasthan.
Distributor is actually an investor to the company.
For Retailers
Trade margin for Retailers is much more as compared to Distributors.
Credits facilities are provided to retailers from distributors and not from Company.
Schemes/Discount and benefits are provided to Retailers too, such as display scheme wherein
if the retailers will display 6 or more HUL Pureit products for 3 months than they will get
some incentives.
And whatever scheme/benefits given to retailers, are mainly company scheme. In some cases
distributor may give extra scheme to meet its own target.
Impact of internet on distribution

With the advent of technology and internet company processing have improved a lot, Work and leads
are being shared on real time basis. Tracking of the prospect customer and their sales rep has become
very easy.
Smoothing of processes
HUL had a tie up with Snap deal for selling their products through online web portals.
Previously it was also with Fip kart but it had been discontinued now. So here internet
played a major role in increasing their penetration in the market and getting distributor big
clients.
Use of new software best example their Samsung tab given to PWE (pure it water expert)
through which they can share the details and it get registered in the central database
increasing efficiency and productivity.
Even the conflict feedback part improved a lot with the advancement in internet, as all
feedback are placed on the company website and portal, from there all feedbacks are stored at
a centralized database, where the respective teams can collect the data and processed it
further.
Supply chain of the industry

With respect to inventory cost, carrying cost and logistics cost all are bear by company till product is
reached to distributor.
Manufacturer- They are owned by the third party, company just gives their design and
specification of product. It manufacturer responsibility to procure and make number of
quantity demanded by the company.
Company may cancel a lot if the products are not as per specification by the company.
Depots (CFA)- These are also owned by third party on contractual basis, there work is to
keep inventory and transfer of goods on the orderly basis.
Distributors- They receive lots from the depots and responsible to supply and meet the
demand for retailers, modern retail and also for the direct sales product.
There is no Whole Seller in this company.
Retailers- They are the ones who directly deal with the customers company do not have
direct contact with them its distributor who is responsible to deal with them.
Modern retail shop- Big Stores like Big Bazaar, Croma, Next directly deal with the
company and company have separate sales force dedicated to them.
Some other modern retail shops directly deal with the distributor trade margin for modern
retail shop is greater than normal retail shop. These are basically big stores in malls.
Online portal sales If sales order is placed online on Pureit website sales rep will collect
order from distributor and deliver it to the address.
Else, portal like snap deal purchase product from distributor on greater margin mainly on
credit basis of (15-20) days.
39 | P a g e
Level of Cooperative Advertising
At HUL Pureit, the advertising expenses are mainly borne by the company itself. Neither the
distributor nor the retailer bear any expenses related to advertisement.
Sometimes the distributor funds the distribution of pamphlets, stickers, brochures etc. placed
at point of sale or on the roads through banners and posters. The company reimburses the
distributor for these expenses.
Thus the flow of the advertisement goes from the company to the distributor and from the
distributor to the retailer.
These days, HUL has been following a very interesting way of advertising Pureit. The
company offers special schemes to the retailers who stack the Pureit products in the front, just
outside their stores.
These schemes also flow from the company to the distributors and from the distributors to the
retailers.
TATA Swatch
Distribution Network
Manufacturer
s
CFA Depots
Distributors Distributors Distributors Distributors

Crockery division durable division both division both division
Retailers Retailers Retailers Retailers
The route from the retailer to manufacturer is shown above. The diagram shows that there can be
three types of distributors as follows
o Distributors servicing crockery retailers.
o Distributors servicing consumer durables stores.
o Distributors servicing both types of retailers.
The company follow intensive distribution as the retailers are not selected by the company, but are
rather selected by the distributor who gives the product to the retailer under credit terms. The selection
of new retailers is also done by territory executives who collect orders in his/her territory. The average
number of retailers under a distributor is around 80, which may not be large when compared with
FMCG industry but in white goods it is quite a big number.
In case of return sales, the return sales are made to the distributor and the manufacturer has no role to
play in this case.
Whenever a defective unit is to be replaced, the following sets of events are enroute from retailer to
manufacturer:
The communication of the defective unit is made to the Territory Executive of the Retailers
Territory. In some cases, the communication may be made to the distributor.
In both the scenario, the Territory Executives creates a replacement case and sends the unit
back to the distributor.
The distributor immediately delivers the replacement unit to the retailer.
Meanwhile, the Territory Executive performs the requisite documentation. After the closure
report has been documented, the Carry and Forwarding Agent delivers the number of units
replaced by the distributor, at Free of Cost Value.
40 | P a g e
The Carry and Forwarding Agent then processes the return of defective equipment to the
respective vendor.
Major Changes in Distribution Policies in past 5 Years

Tata Swach has been in the water purifier market for a few years.
The company has adopted a static distribution policy over the past few years.
However, recently a change has been introduced.
The Margins of the distributor have been increased from 3.5 % to 8 %.
This is in line with Tata Groups vision of long term relationship with its employees, vendors
and distribution partners.
As a result, it has increased the interest of distributors in the product. Increased margins have
improved the credit schemes for retailers, by the distributor.
Also, recently, online sales through tataswach.com have been withdrawn from distributor and
have been transferred to in-house department.
RURAL Segment:
One of the important Below The Line activities that really helped TATA make inroads to the
households is through Society/School contact Programme. The idea was to create awareness about
water borne diseases among the children. So, under this programme Tata Swatch has its volunteers
going to and conducting contests and essay writing competitions (on topics related to water borne
diseases). This programme really helped Tata Swatch in getting its footing stronger in the market.
Apart from such programmes, the company has been reaching its target consumers through
participation in rural melas, haats, outdoors, activation vans and through road shows. Another
important strategy that helped Tata Swatch to reach more consumers is the companys focus on the
indirect channel to reach consumers. For this, it tied up with NGOs and MFIs to harness the potential
of small level entrepreneurs at the village levels.
SERVICE OUTPUT DEMAND and Its Application

This service output demands are analysed below for HULs Pureit
Bulk breaking: - High for TATA Swatch as it is a low cost product, so only volume sales
will generate revenue still TATA Swatch is not able to penetrate into the market and one can
hardly find TATA Swatch in MBOs as well.
Spatial convenience: - It is very High for TATA Swatch, but since product presence and
visibility is very low, they have long way to go.
Waiting or delivery time: - Since competition is very high and revenue is only generated
through volume sales, waiting time or delivery time for Water purifiers is very low but TATA
fails to understand this and their existing customers are switching to other brands.
Product variety and assortment: - Since TATA has only one product in water Purifiers and
also its presence is very low in the market, so nothing can be commented on this aspect.
Customer Service: - Requires very low service as no company can afford a sales
representative for a low profit margin product.
Information Provision: - This is also Low and is only done through outlets.
TATA is sold through two channels of distribution i.e. through internet and Retailers, and due to
intense competition the product availability is the major issue. There are factors which are taken into
consideration while choosing a distribution channel
Cost vs Customers willingness to pay and channel profit, since offline product, TATA Swatch
only profitable if it is sold in bulk and for that availability is very much important for this
product.
Competitors aggressive strategy does not have any impact on TATA Swatch as it is not
available at every MBO or Grocery Store.
Ease of entry for new players are there in this segment.
This service output demand has little impact in designing the distribution channel and sales force
structure for TATA Swatch.
41 | P a g e
S. No Marketing Flow Cost represented
1 Physical possession From Manufacturer to CFA and from CFAs to distributors,

the cost of transportation is incurred by the company and in
this case it is bear by Tata Swach
But from Distributors to Retailers, the cost of transportation
and storage cost at distributor end is bear by distributors.
2 Ownership The CFA is only given payment on a yearly basis and hence
does not own the product.
The distributor pays for the product in advance; also
inventory carrying cost is bear by the distributors, when
goods are at distributors end.
Although retailers are given a credit depending on their
relations with distributors with average being 1 month, the
retailers bear the cost of carrying of the product.
3 Promotion Advertisement of the products, Sales promotion, publicity
and PR are handled by the company, distributors and
retailers are exempted from this activity. The territory
executive are given the charge of POP branding with
stickers which is done on a weekly basis, cost of boards etc
is taken by the company itself.
4 Negotiation Mostly Margin level for all distributors across country is
same as a result negotiation on the basis of price is very less
from companys end but in many case when there is a bulk
order company may relax some norms.
There is a separate sales team for negotiation for the stores
like big bazaar, Next, Croma etc.
At distributor level negotiation can be done on the basis of
order as distributor use to give high margin to bulk order,
the company also provides lucrative scheme to boost sales.
5 Financing No credit is provided by the company to distributors. All
transactions are on advance payment.
But in case of retailers, credit facilities are given by the
distributors, for which the company is not responsible. It is
totally on distributor risk
There are targets set by the company for the distributors,
which they have to fulfill and for the same company
provide scheme or discount to their distributors.
As Retailers are independent, so there is less pressure on
them to fulfill these targets and also get advantage of this
schemes/discount which is passed on to them by the
distributors from the company.
6 Risking Price guarantees, warranties, insurance, repairs and after
sales service are all look after by the company with the help
of distributors, who takes the damage product from retailer,
who in turn take it from the customers and then distributors
return that damage good to the company, who will replace it
in 15 days time period or repair it as per warranties terms
and conditions.
Neither Distributors nor retailers are at risk of bearing this
additional cost.
7 Ordering Order processing cost through customer care or internet are
42 | P a g e
bear by the company.
Order processing cost through retailers are bear by the
distributors.
8 Payment At company end, products are delivered from CFA only
after payment is paid in advance, so there is no problem in
payment collection and no bad debt cost incurred.
At distributors end, not every transaction took place on
advance payment, as they provide credits to the retailers.
The average credit period is around 1 month.
There is a possibility of bad debt cost with the distributors
as there may be a case when retailers will not be able to
clear the credit amount.
Areas of Vertical and Horizontal Conflict
Areas of Vertical conflict

Targets: Conflict in target numbers. However defined by Tata Chemicals, they may be
unrealistic with respect to a particular area/ product, which lead to conflict between RMs and
distributors. Mostly targets are given to territory executives under distributors which creates
pressure on distributor. In most cases distributors have to carry extra stock just to meet the
quarterly targets. (Tata Chemicals have quarterly targets)
Target Incentives: This is not a conflict between distributor and company rather this occur
between distributor and the retailers as in Tata Swach schemes comes without previous
notification and cannot be extended to past sales even if the difference is of one day, this
creates a tension between retailer and distributors, where retailer blames the distributor of not
notifying. This can be removed by companies (RMs or ASM) directly messaging the retailers
rather than distributor or territory executive.
Institutional Sales: There is a problem with sales generated by ASM or RM in an area as to
no clear policy of the company as to who will handle the order in these cases, so these orders
are sometimes passed to distributors liked by RMs or ASMs, also these orders can be
handled by company directly. This always creates a conflict among the distributors and
between distributor & Company executive. It can be solved by making clear cut operating
rules by the companies, so as to avoid ambiguous situation.
Replacement: Although less common in Tata Swach, this problem still comes out when
return claim of some product is not is found correct by the CFA and CFA return the defective
product to distributor which has to deal with territory executive to who made the claim. This
is less common and hence is not very important as it is resolved between distributor and
territory executive.
Areas of Horizontal Conflict

Area Trespassing: It is a conflict not only between distributor, but also among territory
executive, as the sales of one is taken away by the other distributor. There are many case of
one distributor giving more discount than the distributor of that area, this not only causes loss
in sales but also reduces the future sales and profit of the distributor. This also damages the
market in the long run as other distributor just to replicate this unjust carry this tactic in other
areas thereby causing damage to both the distributors. The company till now has not taken
any steps to curb this practice (according to distributor) apart from writing a mail, although if
territory executive (T.E) complaints than those sales in his area are transferred into his
account only for calculating the quarterly sales figure of the T.E. The company should take
strict action against the distributor who involves in this kind of practice so that companies
name is maintained in the market, also these practices are not good for the company in the
long run.
Channel trespassing: Many a times a distributor of consumer durable division be cross
selling in the crockery division in his territory, this gives rise to conflict between distributors,
43 | P a g e
and the method to sell the product is same as in the above case. The problems arising out of
this practice is also the same. These problems are also yet not dealt with any results
(according to the distributors). The company should take strict action so as to reduce long
term negative impact.

Modern retail is growing in the country and company has worked from the beginning to cater to this
channel in a better way. The company do not service the modern retail through its distributor network
which though extensive might not be able to serve high demands of modern retail, also these modern
retail owning to their huge sales, demand extra discounts which a distributor cannot give. Hence all
the sales of modern retail segment are conducted through a team in Mumbai catering only to modern
retail. Tata is also involved in modern retail through Chroma Stores, which is also served by the
Mumbai team. The sales percentage of Tata Swach from modern retail though not found through
distributor and companies executive, but we can predict that the sales of modern retail will not be
more than 5%. The reason for this prediction is
o The cost of Tata Swach is less and is a product targeted towards middle and lower segment,
which shops more from traditional channel.
o The sale through Modern retail in the country is less than 5% in durables which makes our
prediction quite valid.
Trade Margins and other discounts

The company has recently increased the margins of distributors from 3% to 8%; the company might
have taken this step in the backdrop of low ROI (As told by one of the distributor). This have now
increased the ROI of distributors to around 2% monthly, which is quite good (This was given by two
distributors). The company gives a margin of 20% to the retailers without schemes, but company
keeps around 10% with itself, which the company passes on to retailers in the form of schemes. An
example of current scheme is given below:
o The scheme is for retailers and distributors, which have to be achieved in single billing.
o Buy at least 50 units and of every 15 retailers 2 will be randomly selected and award of a
mobile phone will be given.
o Buy at least 70 units and of every 5 retailers 1 will be randomly selected and award of 1
LED TV will be given.
o Buy at least 100 units and of every 5 retailers 1 will be randomly selected and award of 1
Honda Activa will be given.
By roughly calculating the discount through the last scheme, out of 500 Tata Swach (the base model
of Rs.900), by reducing the margins from the total we get to a figure of around Rs. 315000, if one
Honda Activa cost around Rs.50000 to Tata (assuming bulk purchase price), we can see that company
is giving an extra margin of around 15%.
Impact of Internet on Distribution

Tata Swach is also sold through its website which signifies that its sales strategy have bearing on
internet, also its strategy signifies that company is not leaving any chance to better capture the market.
The exact data about the ratio of sales through internet and tradition retail segment was not found, but
as previous sales through internet was handled by respective distributor, the distributor mentioned that
the sales through internet was less than 3%. But we cannot clearly say that this is true now also as the
move might be taken on the back drop of increasing sales through Internet. Now all the sales through
internet are handled by company itself.
Tata Swach was the first to company to launch online sales of its product in Water purifier segment,
this step might be taken by the company as consumers are becoming more and more techs savvy, also
the reach of internet has increased to a huge percentage of consumers. The search of price by
consumers in the internet is not only easy but also cost effective; hence the company might have
introduced online sales option as people who search for price and product online might buy the
product online as well. Also at first the sales were handled by distributor hence the cost to the
company was low and conflict among the channel did not arise, but now as the sales through online is
predicted to rise company might have changed the distribution channel.
44 | P a g e
Tata Swach distribution channel is also not automated, and the companys sales agent does not make
use of any hand held devices. The only use of internet is to mail the weekly report to higher
executives.
Supply Chain
o The Cartridge or Bulb of the water purifiers in manufactured by the company in its own plant
at Haldia, India
o The body of the purifier is manufactured by Supreme Plastics, at Noida
o The cartridges are assembled onto the purifier at Supreme Plastics, Noida
o Supreme Plastics sends the packaged units to Tata Chemicals Carry & Forwarding Agent
o Carry & forwarding agent delivers the products to each of the distributors
o The distributors deliver the units to retailers
o The retailer sell the units to final consumer
5 CFA
Cartridge Spread Retailer
Tata across the Average 80
Chemicals country Retailers
At Haldia North- under
Plant Ghaziabad Distributor
Body Distributor
Supreme Four
Plastics Distributors
At Noida in Delhi
Tata Swach supply chain is shown above in the diagram, the cartridge which is the core of the product
is made in-house by the company at its plant at Haldia, it outsources the work of body manufacturing
to Supreme plastics at Noida, the final assembling is also done at Noida at Supreme Plant, the product
is then sent to all CFAs which forwards the product to various distributors across the country. The
distributors then deliver the product to retailers across the country.
Level of Cooperative promotion in Tata Swach

The advertisement, PR and on store promotion is all carried by Tata Swach itself and no extra cost is
incurred by the channel partners. The on store branding and promotion is done by territory executives
who have to stick the promotion material in a specified number of stores in their area once every
week. The company also bears the cost of boards this work is outsourced, and no cost or time is given
by the distributors or the retailers in these promotion work. All in all there is no combined promotion
work in the company.
Kent
Kent has a strong distribution network with over 500 distributors spread over the country with
northern states providing most traction. Till 2015, it hopes to increase the number to 1000
distributors.Kent RO Water Purifiers, which enjoys a 40 per cent market share in the RO segment, is
aggressively focusing on tier II and III cities on the back of its ATL and BTL activities with a 360
degree media approach. The company has its warehouses in various parts of Delhi.
45 | P a g e
Share(%) of various channels
12% 2%
Retail Channnel / Distributor

8%
Direct sale
8%
Corporate sale
70%
Modern retail/ CSD
Online
Source- Company head office

Table 1.2: Percentage share of sales of Kent water purifiers in Delhi
Table 1.1 Marketing Flow

Manufacturers:
In case of water purifiers all the promotion activities are handled by the manufacturer, all the
major promotion activities are handled by the manufacturer.
The manufacturer handles all the negotiation part with the distributor, logistics company for
its sustainability in the long term and to generate revenues.
The manufacturer gives the order to the distributor on advance payment basis and no credit is
given so risk part is not quite there and not much financing.
Distributor :
Distributor has to negotiate with the dealer and give order on credit.
According to our interaction with the distributor it is quite evident that there also a risk
involved from the side of the distributor as his gets recovered in 1-2 months from the dealer
and he has to get products on advance payment
Dealer:
Dealer in water purifier has quite a lot of freedom, as there isn't much competition in the
vicinity and generally he sells various brands according to customers pockets and
requirements and as he takes the goods on credit there isn't much risk involved.
The dealer in water purifiers has to do negotiation from the distributors and customer in order
to earn a considerable amount of profit.
Customer:
Customer in water purifier is most particular about the physical possession of the good on
time and proper demo after installation and ownership of the water purifier from the dealer
46 | P a g e
The customer also has a few options according to his requirements so he also negotiates to get
the best deal either from the dealer or from modern retail outlets and finally payment of the
product is an issue.
Trace the route back from retailer to manufacturer to determine levels and intensity of
distribution
The company has a strong dealer network and sells a lot of water purifiers through these
dealers/retailers. The company has distributors in the cities and towns which provide the water
purifiers to the dealers and retailers, which further sell to the consumers. The company also appoints
its sales reps to handle the needs of dealer stores. The distributor- retailer flow is prevalent in majority
of the cities in India apart from Delhi/NCR which also has a direct sales division. In the Delhi region
the company has around 14-15 main distributors. The entire Delhi region is divided into north, south,
west and eastern region and there are about 3-4 distributors in each region in Delhi of the 3 types.
There are 3 types of Kent distributors
Type 1-The distributors of offline water purifiers
Type 2-The distributors of online water purifiers for which the company does a lot of
promotion and high capacity advertisements
Type 3- The distributors of online water purifiers for which the company does not do a lot of
promotion and no high capacity advertisements
For example the distributor in Sarojini Nagar that we visited belonged to the category 3 distributor
having products like Kent Super plus and Kent excel, for which the company was doing less
promotions and the distributors had to do search for the retailers, knock at their outlets and promote
these products in order to sell to the retailers . The category 2 distributors do not have to worry at all
about the promotions as the company is doing a high capacity advertisement for these products.The
intensity of the distribution depends on the market demand. For some distributors the average monthly
sale could go upto 60 products while the sale could also go down to 20 products. The market demand
for water purifiers does not depend on any festival season.
There are no distributors for the modern retail stores and the company directly sends its goods
to the modern retail stores which are replenished as soon as the goods are demanded by the
modern retail stores. Example- The Company sends its goods directly to big bazaar and the
average monthly sale at the Big Bazaar is around 12. If the in shop promoters feel that the sale
is high then the company sends the new stock within 20 days or when required else the stock
comes after a month.
The distribution for the canteen sales division is different. There are no distributors and the
requirements are managed through the corporate office. A purchase order is released by the
army for requirements of water purifiers in various parts of the army canteens, the head office
in Noida takes care of this requirement and products are released from the head office to these
places.
Trace any major changes in the distribution policies over the last 5 years and their
impact
For the first two to three years Kent was only a Delhi-based company. Then it expanded by taking the
distributorship and franchisee model to Haryana, western UP, Punjab and then slowly to the whole of
northern India. Later, it expanded into western India, then eastern, and after a span of 10 years,
expanded in south India. Although there has not been much change in the distribution policy of the
company, some significant changes are-
Some distributors are converted to sell exclusive Kent products and are being converted into
Kent shoppes and the company directly caters to needs of these shoppes.
The company has started giving more focus on the multi brand outlets for the sale of its water
purifiers and has set an online store for the consumers to order and buy online
The company is rapidly expanding into tier 2 and tier 3 cities where the company cannot work without
the distributors, therefore to have a strong retail presence in the future in untapped markets, the
company has to build more relationships with their distributors.
47 | P a g e
Identify areas of vertical and horizontal conflict and possible solutions
Vertical Conflict
Vertical conflict is slightly present in water purifiers as they sell through both retailers and modern
retail outlets. In modern retails products are directly sources from the company whereas in case of
retailers products are sourced from distributors who source it from manufacturers. So distributors
have their margin as well so retailers are not able to have a margin that modern retail.So in order to
sell at competitive pricing at which big bazaar sells retailers have to sufficiently cut their share of
margin and not able to sell at prices offered by Big bazaar.
Due to some instances of vertical conflict between the company and the retailers, the
company also sells its water purifiers directly to the consumers. Example- Few months back,
a dealer in Delhi was selling some local water purifiers to the consumers using the brand
name of Kent. The company got to know about this fraud case. This is one of the reasons why
the company is selling the water purifiers through direct sales also in Delhi as the products
sent directly to the consumers from the company are always genuine and the consumers trust
the Company.
The distributors complaint that the company was very rigid in product replacement and the
retailers and the consumers complained about this.
Horizontal Conflict
Horizontal Conflict is also present in case of Kent but not very prominent , it is mostly present in big
markets where the number of retailers of water purifiers are in close proximity like in Karol Bagh,
Sarojini Nagar , Lajpat Nagar central market where there is pricing war ,with dealers cutting their
margins to give the best price. But the conflict is not very high as almost every retailer sells at almost
the same price range.
The prices offered by the different retailers are different for the water purifiers. The highest
discount is given by the distributors. The retailers tend to compete among themselves as there
are different sales channels like modern retail, dealers, online sales which sell at different
prices. The online price is cheaper than the direct sales from the company.
Solution to this problem can be that company promotes selling their products based on the products
USP rather than on the pricing war. Company should encourage distributors to encourage dealers not
to indulge in price rather focus on selling the product based on its value. The distributor should also
take care that he does not have large number of dealers very close to each other as it is bound to rage a
conflict. In case of a retailer or modern retail outlet giving excessive discount and cutting its margin
hugely just to show higher figures should not be encouraged by the company.

The company is also selling their water purifiers through the modern retail stores such as Croma, Big
Bazaar, Next Stores, Vijay Sales, etc. The company sends its ISPs there for the demonstrations to the
customers.The procurement outlets set up by modern retailers allows the company to deal with fewer
intermediaries and gives a better opportunity for the company to gain better prices for their products.
The company believes that both small and large retailers would continue to co-exist in India.
Distributors and small retailers account for the bulk of retail sales of water purifiers today and will
remain a significant force in the future since growing consumption will itself warrant the growth of
both organized and traditional retail. Traditional retailers will also innovate, upgrade their stores and
enhance value-added services to retain and strengthen relationships with their

Trade margin given to the distributor- 7-8%
Trade margin given to the retailer- 10-15%
The company gives the goods to the distributors in advance (material against payment) while the
distributors sell the water purifiers to the retailers on credit. The credit period may go up to 30-60
days for some retailers.
Example-We visited a big bazaar outlet in Delhi and found out that the highest selling product of
Kent i.e. Kent Grand plus had an MRP around Rs 16,700-17,000 and the company sold the product to
48 | P a g e
the retail store at a price of Rs 14600. The price at which the retailers now sell to the consumers
becomes the margin for the retailer.

A new medium--the Internet and World Wide Web--is changing distribution channels like no other
force since the Industrial Revolution. It is modifying many of the assumptions on which channel
structure is based, and in some cases it is transforming and even obliterating channels themselves. The
internet is also helping the company to advertise its water purifiers on various websites, therefore the
distributors and the retailers dont have to worry much about advertising Kents products as most of
the burden is taken by the company.Kent also has its online store where the consumers can directly
order and buy the water purifier of their choice. The customers can register and have a Kent e-
Shoppe account to login .The company gives the consumers easy payment options, free shipping and
installation facilities and cash on delivery options through its online store, Therefore due to the online
store, it gets convenient for the consumers to get their product ordered online.
Supply Chain of the Industry
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The water purifiers are manufactured at Roorkie and are then transported to the central warehouse in
Greater Noida. The water purifiers are then sent to various parts of India to the regional warehouses.
For Delhi/NCR the 3 warehouses are in Noida, Okhla and Gurgaon. The water purifiers are then sent
to the distributors, then retailers and to the consumers. There are no wholesalers in Kent. For the other
channels like CSD, Modern retail, corporate sales, direct sales the water purifiers are sent directly
from the company though different sales teams.
Level of cooperative advertising

Kent does a lot of advertisements of its water purifiers through posters, banners, T.V ads etc. The
distributors and the retailers of Kent purifiers do not have to worry about the promotions and
advertisements as all the cost of advertisements through banners at the dealer outlets are borne by the
company. The company people come and do the promotions.
WHIRLPOOL
Sales organization and territory design
The sale of Whirlpool water purifiers is done mainly through 2 channels:
Retail channel sales This sales division also caters to the demand of the household through retailers/
dealers. The company has a decent dealer network and sells a lot of water purifiers through these
retailers. In the present scenario many customers visit the retail shops to buy water purifiers. The
company has distributors in the cities and towns which provide the water purifiers to the dealers and
retailers, which further sell to the consumers. The company appoints its sales reps to handle the needs
of retail stores.
The company sells its product through shops like croma, big bazaar etc.
The retail store on an average has around 8-9 sales reps who sell are goods like refrigerator,
air conditioner and also water purifier.
Corporate sales division This division caters to the demands of the institutions and companies
which require the Whirlpool water purifiers. There is a separate sales force for the institutional selling
division in Delhi for example directly goes to the corporate office in Gurgaon where they enquire
about whirlpool water purifier and gives them order about how many units they want for their
institution. The order will be handled by area sales manager who intimate the sales force about the
latest order and send them to the respective institution.
Share % of
various channels
Corpor
ate
Sale
10%
Moder
n
Retail
20% Retail
Chann
el
70%
Table 1.1: Percentage share of sales of Whirlpool water purifiers in Delhi

The company recruits people who have the willingness and passion to work as the sales reps. The
minimum requirement for selection is 12th class and when you want to move on to higher position
graduation and post graduation are important. The company recruits by giving advertisements on the
various job sites like Naukri.com, through newspapers etc. The interview for the junior post is taken
50 | P a g e
by senior sales executive and for the senior post the interview will be taken by Area Sales Manager or
by Branch Manager.

The sales representatives on being permanently recruited into the company are given:
Fixed Salary: 9200
Variable Salary (Incentives and commissions): 2000
Variable component of the salary:
Commission on normal days on sale of 1 purifier= 250
Commission on Saturday and Sunday of 1 purifier= 400
If a sales representative is able to do more than 30 sales in a month, then after that his incentives get
doubled. For ex- If he sells the 31st product on a weekend then his commission will increase from 400
to 800.
Distribution
Whirlpool has an extensive list of retailers for distribution of whirlpool water purifiers in Delhi. Water
purifier segment dont have any distributors. Dealers/retailers get the product directly from the
company and then retailers sell it to the end customers. Therefore they utilize a producer-retailer-
customer distribution channel and a producer-customer distribution channel (For bulk orders). In both
instances, the company transport the products from the warehouses located in Faridabad, Pondicherry
and Pune to the retail stores.
The company has a strong dealer network and sells water purifiers through these dealers/retailers. The
company supplies water purifiers directly to retailers/dealers in the cities and dealers further sell it to
the end consumers. In the Delhi region the company has around 14-15 main distributors but they dont
distribute water purifiers because of limited demand by the customers. They distribute all other
whirlpool products like refrigerator, washing machine, air conditioner and microwave oven. The
dealers get the water purifier directly from the company. The entire Delhi region is divided into north,
south, west and eastern region and there are about 3-4 distributors in each region.
Manufacturing
Unit (Faridabad)
Main
Warehouse
(Faridabad)
Dealer/Retail
er
End
Customer

Trade margin given to the retailer- 10 to15%
Apart from this the cost of promotions, advertisements, banners and posters are all borne by the
company. The retailers do not have to pay any cost towards the promotions. The company also gives
51 | P a g e
more margins to the retailers who are able to sell a certain minimum amount of water purifiers to the
consumers.
Example- I visited a retail outlet called Balaji Electronics in West Delhi and found out that the
highest selling product of whirlpool had an MRP around Rs 15000 and the company sold the product
to the retail store at a price of Rs 13400. The price at which the retailers now sell to the consumers
becomes the margin for the retailer.
Areas of vertical and horizontal conflict and possible solutions

Vertical Conflict- When there is conflict in the channel at different levels in the channel.
Vertical conflict cannot be seen in whirlpool water purifiers as all the local retail stores as well as the
multi brand outlets procure the water purifier directly from the company and there are no
intermediaries.
Horizontal Conflict- The conflict between the channel members at the same level, i.e. two or more
retailers. These conflicts can offer some positive benefits to the consumers. Competition or a price
war between two dealers or retailers can be in favor of the consumers.
Horizontal conflicts does exist when it comes to selling of water purifiers specially with the advent of
modern retail wherein there exist a Balaji Electronics, Better Deals & Croma in the same shopping
mall. So all three stores want the best offer from the company so that they can show that discount to
the consumers to attract them.
Reasons behind horizontal conflicts:
Price-off by one dealer / retailer can attract more customers of other retailers.
Aggressive advertising and pricing by one dealer can affect business of other dealers.
Unethical practices or malpractices of one dealer or retailer can affect other and spoil the
brand image.
Possible Solution
To solve the problem of conflict between various modern retail outlets and other local retailers
company can:
Exchange of persons between channel levels This helps in better understanding. It can
reduce the misunderstanding and conflicts can be reduced substantially through this
communication. Each will grow to appreciate the others point of view and carry more
understanding when returning to their position.
Offer same promotional schemes to modern retail stores as well as to local retailers.

The company is also selling their water purifiers through the modern retail stores such as Croma, Big
Bazaar, Vijay Sales, etc.
There are no distributors for the modern retailers and the company directly sends its products
to these modern retail stores.
The procurement outlets set up by modern retailers allows the company to deal with fewer
intermediaries and gives a better opportunity for the company to gain better prices for their products.
Unorganized retailers in the vicinity of these modern retailers experience a decline in their sale of
Whirlpool water purifiers as the number of people buying the Whirlpool purifiers from the modern
retail stores is increasing in Delhi.

Internet is a new tool to reach consumers. Internet has surely affected distribution in a great manner.
The salesman after selling the water purifier enters the sales data in his/her PDA which is
synchronized with the company warehouse database. This process happens in real time and without
internet this wont be possible. Whirlpool now they have their websites where customers can go and compare
different types of water purifiers having different price points. The potential customers can fill the form online and then
customer care representative will contact you either through phone or through e-mail to make sure your queries and doubts
are solved. Through the internet the consumers are able to search for the information on various
Whirlpool water purifiers and they dont have to depend on the dealers to explain them the functions
and the new technologies used in the Water purifiers. The internet is also helping the company to
52 | P a g e
advertise its water purifiers on various websites like Google, You tube etc therefore the retailers dont
have to worry much about advertising Whirlpool products as most of the burden is taken by the
company.
Supply chain
The industry of Water purifier for Whirlpool follows the below distribution system
The dealers/retailers directly procure the water purifiers from the company itself.
The warehouses are of the company where they store the purifiers.
Modern retail and individual retailers procure the water purifiers from the company on
monthly basis or depending upon the demand and actual sale.
Supply chain of Water Purifiers is not very complicated.
Channel of distribution selection is based on demand by the customers.
Cost effective, due to fewer intermediaries between manufacture and customer.
Also, for industrial selling a separate and direct sales channel is used.
Level of cooperative advertising

The retailers of Whirlpool water purifiers do not have to worry about the promotions and
advertisements as all the cost of advertisements through banners at the dealer outlets are borne by the
company. The company people come and do the promotions also.
53 | P a g e

Final Report On Water Purifiers

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Final Report On Water Purifiers

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Sales and Distribution

Part II Sales Organisation .......................................................................... 10

Part III Distribution Network ................................................................... 28

Changing market share of different companies:

Offline Based purifiers

Inline/UV based purifiers

Industry growth for next three years

Year Market size(Rs crore)

Environment Scan of the last two years:

Porters Five Force for the industry:

Major changes in target market profile and consumer behaviour

On the Basis of Annual Income Households in Millions

Shift in target market profile and consumer behaviour

1. Direct Sales Division

2. Retail Sales Division

3. Professional Sales Division

Direct Sales force hierarchy at EFL is as follows

Territory design at EFL

Sales force skill set Analysis

Training & Development

Training for Leaders

EFL Compensation Structure

Position Monthly Salary Range (INR) Monthly Average Salary

Prospecting, Reporting & Degree of sales force automation

ION Exchange (Zero B)

Training & Development

Skill Set Analysis

Area Sales Business Territory Sales Sales

Area Sales Business Territory Sales Sales

Area Sales Business Territory Sales Sales

North States Zones Districts

South States Zones Districts

West States Zones Districts

Territory Area Sales Manager

Skill set required for front line sales people

Recruitment and Selection process of the sales people

Effectiveness of various training methods for the sales staff

Method of prospecting and reporting with degree of sales force automation

Sales organisation and Territory Design

Zonal Sales Area Sales Territory

Zonal Sales Area Sales Territory

Zonal Sales Area Sales Territory

Sales Structure of TATA Swach

Sales Structure for Online Sales:

Skill Sets required for Sales Staff by Supervisor:

Recruitment and Selection Policy for sales people:

Training given to the Sales staff and its effectiveness

The sales of Kent water purifiers is done mainly through 3 channels

Analysis of the effectiveness of the current sales strategy:

Ranking of skill sets required for sales staff by supervisors

Recruitment and Selection of sales people

Effectiveness of different training methods for sales staff

Method of prospecting and reporting with degree of sales force automation

Recruitment and Selection of sales people

Compensation structure of the sales force

Part III Distribution Network

Rural Channel (described in Changes over last five years)

Regional Warehouses (2)

Direct Sales Channel

Changes in Distribution policies over last 5 years

Retail: Pull Strategy

Direct Selling: Push Strategy

Trade Margins and Other Discounts