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Case Study-Blow Plast India Limited : Eastern Zone Sales

Submitted By:
Shivangi Jharkharia () Supratim Bose (2011201) Urvika Saxena ()

Sales & Distribution Management


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Vinamra Kumar (2011227) Neer Prajapati (2011239) Sheetal Saxena ()


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Contents
Brief Background of the Firm .......................................................................................................................... 3 The Situation: Territory Reorganization in the Eastern Zone .......................................................................... 4 The Issues......................................................................................................................................................... 5 Reorganization of the Territories..................................................................................................................... 6 Maps of the territories..................................................................................................................................... 6 Tables ............................................................................................................................................................... 9 Recommendations ......................................................................................................................................... 12

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Brief Background of the Firm

Blow Plast India Limited initially started its business as a manufacturer of moulded plastic for household usage and subsequently shifted to the moulded luggage segment. They presently manufacture moulded briefcases, beauty cases, and furniture and luggage carriers for large families and executives. Blow Plast has traditionally been a strong brand in the Indian market selling finished goods through franchising retail outlets for exclusive products such as trolleys, luggage carriers, and make-up boxes. It is the market leader in the moulded luggage category in India, with a wide networking covering major cities and state capitals and its sales network is well supported by strong dealer network. They face stiff competition from few national and multinational players in the Indian market. Apart from manufacturing, the company also sells moulded plastic to manufacturers who in turn were making consumer products such as buckets, toys, and other household accessories and selling to the final consumers. This arrangement was done in order to utilize the companys plant to the optimum level. The sales force was paid a salary plus an annual bonus based on the performance of the territory and the achievement of the sales quota for that territory. Travel expenses according to the company norms were reimbursed to the sale staff and each sales officer was supplied a company car for travel.

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The Situation: Territory Reorganization in the Eastern Zone


Mr. Reetinder Wadhwani, VP (Sales), wanted to reorganize the eastern zone sales. Presently the area was divided into two sales territories with one sales manager Soumyaranjan, covering the southern half of the territory and another sales manager, Subhomaya, covering the northern territory. The southern territory covers Andhra Pradesh, Orissa, and a part of south Bihar, whereas the northern territory covers the states of West Bengal, north Bihar, Tripura and all other northeastern states. Note: In this case Jharkhand is taken to be a part of Bihar

However, market growth suggested that they need four salespeople. Company policy stated that when sales in a area exceeded Rs. 2,5,00,000 per territory, the territory needed to be divided into smaller segments. Sales in this territory was currently running at Rs. 7,5,00,000 per year. Mr. Reetinder wanted to create four compact territories in this part of the country that would be similar in terms of sales potential and workload. Reasons for Establishing or Revising Sales Territories Sales territories are set up, and subsequently revised as market conditions dictate, to facilitate the planning and control of sales operations. More specifically there are five reasons for carrying out the revision exercise (as in this case):1. Providing Proper Market Coverage Sales management has to match selling efforts with sales opportunities effectively. If sales territory design has been made intelligently and if assignments of sales personnel to them have been made carefully then it is possible to achieve proper market coverage. Design of the territories should permit sales personnel to cover them conveniently and economically. There should be reasonable workloads and all prospects who are potentially profitable can be contacted. It should help the sales personnel reduce time spent on travelling and spend more time with the clients building relationships, providing solutions to their problems. 2. Controlling Sales Expenses Here the focus should be not on minimizing selling expenses but on obtaining the best relation between selling expenses and sales volumes. The long term perspective should take precedence
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over short term result. The intention is to ensure that selling expense amount is used to the best advantage. 3. Assisting In Evaluating Sales Personnel Selling problems vary geographically and the impact of competitor differs widely. When the market is divided into territories, analysis reveals the companys strengths and weaknesses in different areas and appropriate adjustments can be made in selling strategies. Through analysing the market territory by territory and pinpointing sales and cost responsibility to individual sales personnel, management has the information it needs to set quotas and to evaluate each salespersons performance against them. 4. Contributing To Sales Force Morale Well-designed territories are convenient for sales personnel to cover; they represent reasonable-sized workloads, and sales personnel find that their efforts produce results. They are also aware what the management expects of them. Good territorial design plus intelligent salesperson assignment help each person to be as productive as possible and makes for higher success, confidence, and job satisfaction. Morale is high because there are few conflicting claims of sales personnel to the same accounts. 5. Aiding in Coordination of Personal Selling and Advertising In most situations, personal selling, personal selling or advertising alone cannot accomplish the entire selling task efficiently or economically. By blending personal selling and advertising, management takes advantage of a synergistic effect and obtains a performance greater than the sum of its parts.

The Issues
Locating salespeople at the home state is complex as majority of sales happened in a few selected major cities of the area. The north-east is well spread with lesser market potential in certain states of the region. States seemed to be the most logical control unit for building new territories but the size and market potential of the states in the territory were very diverse.

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Reorganization of the Territories


The present territories should be divided in to four territories. There are four steps:1. Selecting a Basic Geographical Control Unit 2. Determining Sales Potential in Control Units 3. Combining Control Units into Tentative Territories 4. Adjusting for Coverage Difficulty and Redistributing Tentative Territories Here the states have been considered as the basic control unit. Only in case of the north-eastern states excluding Assam, all the state capitals have been collectively taken as a single control unit.

Maps of the territories

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Tables
City Number Number of retail of firms stores Value added by firms (in lakhs) Power Index (BPI) Number Eastern of eastern zone zone sales customers (000's) Square miles

Sales Territory Bihar Patna Gaya Muzzafarpur Kissanganj Darbhanga Samastipur Bhagalpur Munger Biharsarif Nawada West Bengal Medinapur Khadagpur Bankura Total 1485 567 653 453 546 387 290 267 321 129 421 76 69 54 53 34 26 53 41 19 67 43 34 52 18 14 23 31 16 23 0.012 0.005 0.007 0.006 0.005 0.004 0.005 0.003 0.002 0.003 85 32 21 32 21 23 12 21 9 4 980 657 34 48 71 45 34 29 28 24 396 282 143 154 134 231 301 231 127 234

659 569 248

85 73 54

51 54 45

0.006 0.004 0.004

32 34 22

56 59 34 2099

341 328 236 3138

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City

Number Number Value of retail of firms added stores by firms (in lakhs)

Power Index (BPI)

Number Eastern of eastern zone zone sales customers (000's)

Square miles

Sales Territory Orissa Bhubaneswar Cuttack Puri Balasore Bhadrak Sambalpur Bolangir Rourkella Berhampur Koraput Jaipur Few States of A.P Vijaywada Vishakhapatnam Total Sales Territory Rest of A.P Khamam Hyderabad Secunderabad Cuddapah Guntur Nellore Raichur Mehboobnagar Total 342 2180 2359 275 305 298 236 327 65 426 570 54 46 45 85 34 41 76 43 12 21 34 12 34 0.0034 0.15 0.176 0.034 0.029 0.004 0.002 0.004 5 47 54 32 24 10 5 10 67 1230 245 23 21 98 59 87 1830 328 876 998 342 236 245 325 431 3781 1786 678 321 343 254 323 210 320 375 287 673 98 43 54 24 28 19 51 54 43 69 54 37 51 19 20 16 52 34 21 0.11 0.09 0.005 0.004 0.003 0.005 0.006 0.004 0.003 0.005 97 43 23 31 10 12 7 40 32 21 760 435 46 35 43 41 84 57 49 34 450 345 351 342 237 126 126 132 143 147

560 642

71 45

34 43

0.006 0.009

54 34

59 123 1766

341 236 2976

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City

Number Number Value of retail of firms added stores by firms (in lakhs)

Power Index (BPI)

Number Eastern of eastern zone zone sales customers (000's)

Square miles

Sales Territory West Bengal Kolkata Burdwan Haldia Barhampur Darjeeling Krishnanagar Balughat Assam Guwahati Dispur Tezpur Bangaigaon Dibrugarh Kokrajhar North-eastern states Agartala Aizwal Imphal Kohima Itanagar Grand Total 3752 498 459 543 231 654 348 679 562 342 187 438 237 689 34 76 46 43 71 39 76 82 48 19 43 34 179 43 61 39 34 76 53 34 24 27 19 17 23 0.179 0.004 0.005 0.004 0.003 0.006 0.003 0.001 0.001 0.001 0.001 0.001 0.001 85 12 32 21 12 25 12 34 32 16 5 23 13 1256 67 65 54 45 43 37 34 45 27 18 34 19 985 342 321 267 311 452 186 432 231 195 184 165 149

123 321 541 342 127

24 45 38 42 19

21 12 11 13 11

0.002 0.001 0.001 0.001 0.001

10 5 2 12 8

32 21 23 27 19 1866

127 98 76 65 93 4679

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Recommendations
We have tried to equalize the sales potential of all the sales territories and maintain a balance between the sales potential and the geographical spread. From the calculations we see that the sales potential of the states are very diverse. Thus we have to take some regions from a state and assign them to another territory. Regions lying in the vicinity of the border between two states have been transferred from one state to be included in some other territory. The entire North-East i.e. Assam and the other states have a large geographical spread and have very low sales potential and Buying Power Index compared to the other states. Thus we have included these states, West Bengal sans the south-west part (comprising of Khadagpur, Medinapur, Bankura) into a single territory. The second territory formed is Bihar along with Khadagpur, Medinapur, Bankura. The third territory comprises of Orissa and two regions from Andhra Pradesh- Vijaywada and Vishakhapatnam. The fourth territory comprises of the rest of Andhra Pradesh. Thus we have four territories:1) Assam, other north-eastern states and West Bengal sans the south-western part 2) Bihar and south-west West Bengal 3) Orissa and northern Andhra Pradesh 4) Southern Andhra Pradesh

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