Sales and Distribution

Network of AIRTEL
PART I

Section B, Group B8

Harsha Muzumdar 09P082

Shreyas Parvate 09P099
Rinshul Pruthi 09P110
Shantanu Verma 09P114
Shikohi Agarwal 09P116
 Table of Contents

Table of Contents...................................................................................................2

Sales & Distribution Strategies..............................................................................3

Introduction........................................................................................................ 3

Second degree distribution network:..................................................................5

Third degree distribution network:.....................................................................5

Reasons for having two degree and three degree networks:..........................5

Sales Force......................................................................................................... 6

Responsibilities of FOS:...................................................................................6

Urban Distributors:.............................................................................................6

Responsibilities of Urban Distributors:............................................................7

Rural Supers:...................................................................................................... 7

Responsibilities of Rural Supers:.....................................................................7

Rural Distributors:...............................................................................................8

Retailers:............................................................................................................ 8

Responsibilities of retailers:.............................................................................8

Company support and monitoring of sales and distribution networks................9

Responsibilities of CSD....................................................................................9

Margins of Channel Members...........................................................................10

Main issues/ challenges faced by the company................................................10

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 Bharti Airtel Ltd.
Sales & Distribution Strategies

Introduction
Airtel is the Market leader in Indian telecom market with a market share of all
India mobile subscribers at 23.4%. It is India’s largest integrated and the first
private telecom services provider with a footprint in all the 23 telecom circles.

Airtel has set-up a multi-regional marketing and sales team that is responsible
for building two types of sales channels –

1. Direct sales channels

2. Indirect sales channels

The 23 circles have been divided into regions or territories and the Regional
organizations are responsible for the designing the sales & marketing strategies
for their respective areas.

Airtel has a network of personnel who take care of marketing and sales plans of
their regions by capitalizing on the opportunities in their geographic region.
These teams build both direct customer relationships as well as indirect channels
(through handset manufacturer, Network Solutions Provider, etc.)

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The distribution strategy of Airtel includes second and third degree distribution
network. As shown below, Airtel makes transactions only with Urban Distributors
(UDs) and Rural Supers (RS). These transactions generally are invoices of SIMs,
GSM Pay Phones etc.

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Second degree distribution network:
The second degree network includes the urban distributors, who collect the
above items from Airtel and distribute them to the retailers. These distributors
also transfer easy balance through FOS(Field Officer Sales) SIM to the retailer,
according to his/ her demand. Since this set up includes only two channel
members, it is a Second Degree network and is suitable for catering to the need
of urban areas, where reaching the retailers is easier due to well established
road and transportation facilities.

Third degree distribution network:

This network includes Rural Supers (RS) who distribute the above items to Rural
Distributors (RDs). In this case, the RS transfers easy balance into Rural
Distributors. Rural Distributors then take the items to the retailers and transfer
easy balance through FOS SIM to the retailer, according to his/ her demand, from
easy balance of Distributor SIM. This three level distribution is makes it easier for
the company to reach the sub urban and rural areas, where retailers are few and
widely located.

Reasons for having two degree and three degree networks:

• Second Degree network suits the urban areas well since these areas are
usually densely populated, and have very high demands for Airtel’s
products and services. It becomes important for the company to supply
the products and services as quickly as possible. As the distributor (UD)
gets the products directly from Airtel, therefore, the products, services
and promotional materials can reach the retailers in shorter span of time.

• Three degree distribution suits the sparsely (or less densely) populated
areas, where retailers are spread over large geographical areas. Due to
less demand for company’s products and lack of proper infrastructure in
rural areas, Airtel has established a three level distribution network

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Sales Force
These are the manpower of distributors. They are referred to as Field Officer
Sales (FOS). They sell SIM,RCVs, Easy Balance etc. on behalf of the distributor to
all retailers assigned to his beat.

Responsibilities of FOS:
• All secondary sales assigned under his beat

• Collection of PEFs, payments against billing by retailer

• Promotion material distribution as instructed by TM.

• Communication regarding schemes, incentives, new offers from the

company to the retailers

• Resolving retailer complaints using the FOS helpline

• Escalation of unresolved complaints and claims to the distributor and TM.

Urban Distributors:
Known as UD, they distribute products, easy balance, services and promotion
material to retailers in their designated (urban) areas of a district. They are
responsible for achieving targets of SIM activation and recharge without
encroaching on other territories.

The retailers’ Lapu SIMs are mapped to the corresponding FOS’ SIM which is
mapped to the particular UD SIM. The flow of Easy balance starts at the UD SIM
and ends at the Lapu SIMs through the FOS SIMs. The UD gets certain discount
on his SIM’s billing and has to pass a certain percentage of this discount to the
retailers. They make DD payments to the company for primary sales twice a
week.

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Responsibilities of Urban Distributors:
• Distribution of SIM, Easy Recharge, PEF, RCV, GSM Pay Phones, FOS SIM,
Lapu SIM according to the retailers’ requirement within its territory only.

• Activation of customer SIMs within its territory after proper checking of

POI, POA and error free PEF.

• Collection of PEFs and other documents from retailers and sending them
to respective Circle Head Quarter.

• Distribution of promotional materials among the retailers according to the

allocation of TM/ZSM, received from company.

• Maintaining distributor health report, secondary details regarding retailers,

SIM activation details and stock of RCVs and Easy Recharge for 10 days.

• Proper circulation of communication from the company to retailers.

• Escalation of retailers’ claims and complaints to TM/ZSM.

Rural Supers:
These are the rural counterparts of UDs. Their roles and responsibilities are
similar to the UDs. However, being part of a third degree distribution channel,
they have certain conditions and some added responsibilities.

One Rural Super (RS) can have a maximum of 12 Rural Distributors (RD) under
him and he may have a maximum turnover of Rs. 1 crore. This is to limit the
bargaining power of the RS and to exercise more control over the rural
distribution channel.

Responsibilities of Rural Supers:

• All responsibilities of UD

• Collection of money for invoices to RDs and ensuring adequate supply to

RDs.

• Have to maintain required stock of RCVs and recharge for 7 days.

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Rural Distributors:
They are known as RDs and are located at blocks and towns as compared to the
UDs and RSs who are located at District HQ. There has to be an RD for every
population block of 5000. Their roles and responsibilities are the same as the UD.

Retailers:
Retailers are strategically located shops from where customers can buy products
and services e.g. mobile handset shops, phone booths, convenience stores etc.
Retailers get a 3% margin by way of discounts on all its sales. This discount is
extended by the RD/UDs. Select retailers get Lapu SIMs mapped to their
respective FOS for Easy Recharge facilities. Other retailers are provided with
RCVs.

Responsibilities of retailers:
• Fill error free PEFs and verification of supporting copy for POI and POA of
the customer with originals before activating the SIM.

• Proper utilization and display of promotional materials.

• Proper communication about the schemes, new offers and benefits to

customers.

• Selling products and services to customer at right price.

• Serving the customers’ requirements with the available stocks of SIM, RCV
and easy balance etc. and

• Not creating artificial shortages.

• Purchasing RCVs, SIMs and Easy Balance from respective distributor’s FOS
only.

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Company support and monitoring of sales and
distribution networks
Reports from RSs and UDs are the basis on which territory managers and ZSMs
monitor the sales and distribution networks entrusted to them. There is a
customer service division (CSD) which helps in resolving complaints and also
provide valuable support in the sales and distribution monitoring.

Responsibilities of CSD
• Resolving general complaints of customers.

• Providing helpline to retailers and FOS.

• Providing helpline to territory managers and helping them resolve

escalated retailer issues and FOS issues.

• Communicating all service related messages to retailers, FOS, distributors,

TM and ZSM.

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Margins of Channel Members
No. of Retailers Distributors
Activations

On Revenues On Activation On Recharge On Activation

1-5 Flat 2.25 % on Rs. 10 Flat 1% Flat Rs. 8 for

revenues every
5-25 Rs. 20
activation
26-50 Rs. 40

50 above Rs. 50

• Margin to retailers on activation is dynamic and changes every month. The

figure above is for the current month.

Main issues/ challenges faced by the company

Mainly two important issues are being faced by the company in their sales and
distribution system. These are:

 Problem of service gap: Cases have been there where the retailer has run
out of its recharging balance and the balance has not been refilled by the
distributor timely. This may be caused because of the time lag, or because
of the no credit policy of the distributor.

 Competition: Due to large number of players, now the retailers have to

keep competitors product as well. But they are unwilling to make extra
investments.

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