IIPM

Desk Project On
Critically analyze the sales & distribution strategy of Cavin Care and Marico

Subject: Sales Management

Submitted To:
Ms.Poonam Gurbaxani IIPM,Ahemedabad.

Submitted By:
Bhavin.V.Rayka FW/9-11/ISBE/FIN

OVERVIEW

Sales management is a business discipline which is focused on the practical application of sales techniques and the management of a firm's sales operation. It is an important business function as net sales through the sale of products and services and resulting profit drive most commercial business. These are also typically the goals and performance indicatore of sales management. Sales management can involve any of the followingactivities: (1)formulationof salestrategy throughdevelopment of account management policies , sales forcecompensation policies, sales revenue forecasts, and salesplan, (2) implementation of sales strategy through selecting, training, motivating, and supporting the sales force, setting sales revenue targets, (3) sales force management through development and implementation of sales performance, monitoring, and evaluation methods, and analysis of associated behavioral patterns and costs.

Selling is the most important and the most difficult function in any organization. Without the sales function, a firm cannot stay in business for long. Therefore, managing sales in an organization is a critical activity. A sales manager needs to ensure that the salespeople are motivated to perform the selling function in a way that will help the organization attain its goals. The industrial revolution brought about a dramatic change in the sales scenario and gave rise to modern sales and marketing practices. The setting up of industries led to mass production of goods and the opening of a large number of showrooms and sales offices. Advancements in transport and communication technology in the form of the railways, the postal system, the telegraph, etc., further revolutionized the selling process across the world. Over the years, substantial changes have taken place in the selling environment, sparking more changes in the sales function.

In addition to helping an organization achieve its business goals, the selling function performs various other roles as well, such as that of enhancing knowledge about both the internal and external environments, such as customers, suppliers, distributors, employees and other people; developing a positive relationship with the customers, suppliers and distributors; and negotiating with customers to sell the company's products profitably. The sales team of an organization can play these roles effectively only when it receives the required support from other departments. All the roles of the sales team are interdependent and the success of one role depends upon the success of the others.

Cavinkare

COMPANY PROFILE
Success is a journey not a destination. CavinKare began with a young mind choosing the road less taken. In 1983 with a single product, CavinKare started out as a small partnership firm.The Company that began its journey as Chik India Ltd was renamed as CavinKare Pvt. Ltd(CKPL) in 1998. With innovative Entrepreneur C.K. Ranganathan at the helm, CavinKareemerged into a successful business enterprise. In November 2003, the Chennai-based CavinKare Pvt Ltd. (CavinKare), the Rs 2.64 billion (bn) hair, skin and personal care company, announced the acquisition of the Andhra Pradesh-based Ruchi Agro Foods' pickle brand, 'Ruchi,' for Rs 150 million (mn). Smart marketing and clear product positioning not only ensured CavinKare's growth but alsohelped the company broaden its product portfolio

extensively. The company now markets tenmajor brands. Over the years, CavinKare has achieved a competitive edge with soundunderstanding of mass marketing dynamics. The company offers quality Personal care (hair care, skin care, home care) and Food products borne out of a keen understanding of consumerneeds and keeping up company's the values of innovation and customer satisfaction.

CavinKare's strategy of outsourcing manufacturing activities was a major reason for its success. It helped the company to keep the costs low and allowed it to focus on marketing and distribution. Commenting on this, Ranganathan said, "The concept of exclusively outsourcing our manufacturing operations resulted in lower overheads, while ensuring all the advantages of in-house manufacturing operations. We associate with people of similar wavelength in thinking - who will definitely take care of quality first and foremost - and besides, we have a strong system of quality monitoring. This is part of our strategy. Today, CavinKare, having established a firm foothold in the national market, is increasing itspopularity in the international arena. A dedicated Research & Development center, equippedwith latest equipment and technologies, constantly supports the various divisions in theirendeavor. The Company, which primarily relied on contract manufacturing for many years, has now set up its own world class plant at Haridwar to cater to the demand of both domesticand international market. CavinKare Group has crossed a turnover of 8819 million INR in 20092010. The Companyhas employee strength of 576, an all India network of 1300 Stockiest catering to about 25 lakh outlets nationally. CavinKare's astute professionalism, innovative products and consistentquality are results of its significant corporate practice. The other group companies of Cavinkare Packaging India Private Limited (PPIL), andCavin Plastics and Chemicals Private Limited (CPL) have also established a firm foothold inthe market with their innovative packaging products and trunkey services.

"To succeed we believe that we need total commitment and highest standard of ethical andcorporate behaviour in order to provide the best for our consumers, stakeholders andemployees".

Corporate Vision
"We shall achieve growth by continuously offering unique products and services that wouldgive customers utmost satisfaction and thereby be a role model."

Distribution strategy

Apart from unconventional method, the company hired professionals for sales and distribution and expanded its network beyond South India.

CavinKare has its offices in Chennai, Pondicherry, New Delhi, Mumbai and Kolkata along with 2000 stockists, which supply to six lakh outlets. Apart from the service charges Cavinkare also gave retailers a Chik Sachet free for every 15 empty sachets they get from the consumer.

They give special gift if dealer sale more products in a particular season.

They also give discount on bulk purchasing.

Chennai, March 16 The Chennai-based FMCG major CavinKare Pvt Ltd has set up its own distribution arm under a group company called Hemalatha Enterprises Pvt Ltd with over 700 people on its rolls. However, the company will not totally move away from the existing traditional distribution system. The new set-up will run only as a parallel distribution system in the market, said Mr C.K. Ranganathan, Chairman and Managing Director of CavinKare.

The company has developed an exclusive software for the purpose and has invested in other logistics support systems such as transport and manpower. It has recruited over 700 people from rural and semi-urban areas and trained them in the system. As this would involve heavy investment, some of their existing

distributors are not willing to upgrade. So, They had to create the new distribution outfit on their own to run as a parallel system in big cities and towns such as Chennai, Pondicherry, Kadalur, Dindivanam, Coimbatore, Erode and Madurai,

Marico
Overview

Marico Ltd. (Marico) a leading Indian business group in consumer products and services, posted a sales revenue of Rs.19 billion in the year 2007-08. The group had been able to achieve success by following a path of differentiation in all its product and service offerings. In addition to the domestic market, Marico's products were sold in Bangladesh, the Middle East, Egypt, and South Africa. The group's products included food products (including edible refined oils), hair oils, post wash hair care, anti lice treatment, coconut oil, and fabric care products. In the skin care solutions, Marico was present through Kaya Skin Clinics (Kaya) and the Sundari range of Spa skin care products. In the food products, the company had the Saffola range of products. Marico's portfolio of hair oils comprised Parachute, Hair & Care, Nihar, and Shanti Amla hair oil. Saffola was one of the first brands in the country to equate health consciousness with cooking oil. It leveraged on heart problems and positioned itself as an edible oil which lowered the risk of a heart attack by reducing

cholesterol. In order to stay in tune with the changing tastes and preferences of the customer, Saffola came in three variants, Saffola Gold, New Saffola, and Saffola Tasty Blend. The Saffola brand was extended to salt and sugar management and cholesterol management products. The focus across all the food products was on health and wellness and it was this focus that the company used to differentiate itself from the competition.

Marico established Kaya skin care clinics to take advantage of the opportunities presented by the the Indian beauty industry, which stood at US$3 billion as of 2007. Starting with 11 clinics in the year 2005, the number of clinics had multiplied to 65 (56 in India and 9 in the Middle East) by 2007. According to analysts, Kaya had filled a void in the country for skin clinics and helped make people look good. Kaya had also expanded its services through 'Skin Zones', which were information kiosks located at shopping malls that offered skin care counseling. Experts attributed Kaya's success to the personalization of services for the customer and the holistic solutions offered. Kaya's popular services were laser hair reduction and acne scar and pigmentation reduction. Kaya had also started selling a range of hypoallergenic products for sensitive skin. In 2007, Kaya Life was launched to provide holistic weight loss solutions.7 The weight loss solutions centered around lifestyle counseling, meal planning, exercises, and body shaping. In 2003, Marico acquired the Sundari range of luxury ayurvedic skin products. Sundari was an established brand in the US and consisted of 20 products that sold at spas, high end stores, and on the Internet. In 2006, Marico acquired Hair Code and Fiancee in Egypt and the two brands gave it a market share of more than 50 percent in the Egyptian hair care market.In the same year, Marico acquired Manjal, a herbal bath soap brand established in Kerala, and the brands Camelia, Magnolia, and Aromatic in Bangladesh to enter the Bangladesh market.

In 2007, Marico acquired the consumer division of Enaleni Pharmaceuticals, a South African business firm present in hair care. Marico was also a dominant player in the hair oil segment in India with its brands Parachute and Nihar. In 2003, Marico entered the shampoos market and positioned itself on the 'naturals' platform. It also introduced shampoos for children in the age bracket 4 to 12 years. According to analysts, Marico had emerged as a proactive organization by recognizing the needs of the market and capitalizing on the opportunities, whether it be in the edible oils, skin care, or hair care segment. It was ranked among one of the eight companies in Standard & Poor's list of Global Challenger companies in the year 2007.

Distribution network
It has a large distribution network all over India which includes a wide rural market reach. Marico's distribution width and penetration is acknowledged as one of the best in the industry and is a leverage able strength. Every month, 56 million consumer packs are sold to about 1.8 million households through 1.6 million retail outlets spread across the country. Marico's distribution network covers almost every Indian town with a population of over 20,000. Thus, 1 out of every 10 Indians is a Marico consumer.

Distribution Alliance:

Maricos distribution strength has been recognised by Indo Nissin Foods Ltd. through their association with it for the distribution of Top Ramen products on a national basis.

Rural Sales & Distribution: Marico's parallel rural sales and distribution network ranks among the top three in the industry and contributes 24% to the company's top line. Its infrastructure comprises direct distributors, super distributors, catering to many small stockists and van markets. A dedicated team of Territory Sales Executives and Pilot Sales Representatives distribute Marico's as well as alliance brands through this vibrant network.

Supply Channel

Sales Capacity:

They have made significant progress in the areas that enhance sales capacity. Quality of our distributors Quality and number of the distributor field force upgradation in the role of the company's front-line sales force.

Technology (IT) in Sales: Marico has been making investments in IT to ensure: y Supply Chain efficiencies y Availability of the SKU at the right distributor point, at the right time in right quantities y Timely availability and reliability of Sales y MIS, which help in taking prudent decisions on a real time basis. In order to reap maximum benefits from its sales and distribution network, Marico embarked on an internet-enabled application - MI-Net - to establish a network between Marico and its distributors through a web interface. This project is aimed at providing real time information on the status of various business operations between Marico and its distributors. This initiative is expected to provide business benefits in the form of increased penetration by the sales force, reduced communication costs, reduced working capital requirements, etc.