HOW TO DECIDE THE DISTRIBUTOR?

Types of Distribution
Familiarize yourself with distribution channels in specific markets to determine which method is Preferred by local buyers, and whether it is suitable for your product. Will the distributor sell your product exclusively, or alongside competing products? Do you need to maintain your brand in distribution, or will you leverage a distributors brand? Do you want to sell directly to end-users in addition to your agents efforts, or will he/she be given exclusive sales rights?

Create Criteria
Define the specific territory, duties, authority, responsibility, accountability and compensation for your local buyer. Research the market and costs involved in shipping and selling there.

Find Candidates and Identify Prospects

Evaluate each of their strengths and weaknesses: remember that your product must be sold on terms that are agreeable to you. The agreement you sign protects you and your product abroad.

TERMINOLOGY

Buyer: Usually referred to as the end-user of the exporters product, like a retail store owner or a foreign manufacturer Supplier: Another term for the exporter Sales Rep: An appointee of the supplier An individual or agency within the country or in the target market Actions generally do not bind the supplier; not authorized to write contracts Does not buy your product directly (does not take ownership) Helps get the sale by promoting product through in-country sales expertise or knowledge of product Often handles several similar, non-competing, product lines

Paid a commission as a percentage of the export sale; goods are shipped from supplier to the overseas buyer (end-user), not the sales representative Agent: A company representative NOT THE SAME AS A SALES REPRESENTATIVE! Similar characteristics, but can make commitments on behalf of supplier, can issue quotes, and can write contracts Agent agreement specifies if he/she has legal authority to obligate your company

Questions to consider when deciding what type of distribution to use:

(1) Through what channels are similar products sold? (2) Do you have enough capital, and what level of financial risk can you assume? (3) What degree of control do you want to retain over the marketing of your products? (4) When do you want your buyer to take title and physical possession of your products? (5) When, how, and from whom do you want to receive payment for your export sales?

Research Logistics, Tariffs, and INCO Terms

To determine what commission an agent is paid or what price discount a distributor is granted, determine costs affecting the final, in-country price. Some items to consider include distribution/logistics costs, taxes and tariffs, cost of payment instruments like letters of credit and wire transfers. Armed with knowledge of these criteria, you are better prepared to make contact with a prospective buyer and negotiate favorable pricing and/or payment terms.

Determine Method of Reimbursement

As you are selecting an buyer, consider how you will reimburse him/her: If it is at a discount, you must select a discount rate If it is on commission, you must decide upon what value the commission will be based relative to the total value of the commercial invoice. This may include freight, insurance, and freight forwarder handling fees.

Distributor:
An organization that buys directly from the supplier at a discount Stocks and maintains an inventory of supplier product that is re-sold for a profit An individual or a company with a facility/warehouse Much larger in-country distribution than an agent or representative Absorbs the risk of price fluctuations after purchase from supplier Can support product warranty and repair requirements Allows the buyer to receive goods quickly

The exporter has less control over price and branding, but can leverage incountry penetration across full sales, marketing and distribution channels

Dealers Bajaj Auto:

Bajaj Auto has adopted a channel policy approach which is unique in the automobile industry. This policy and its linked initiatives are guided by the requirements of specific sets of the Companys final customers. The Primary Channel : This comprises 408 exclusive two-wheeler dealers, 75 exclusive three-wheeler dealers, and 98 dealers who deal in both product categories. Bajaj Auto has followed a policy of systematic network consolidation, in which the primary dealerships have been given a larger scale and scope to operate based on their strengths. The Secondary Channel : Much of Bajaj Autos recent success can be attributed to policy of rapidly adding to the number of secondary outlets, which provide sales, service and spares support in the vast hinterland of India. These are in the form of 1,500 Authorised Service Centres (ASC), 4,500 Rural Service Outlets (RSO), and 750 Young Engineer Service (YES) centres in the towns and cities. The Rural India Foray : The Company has been aggressively pursuing initiatives to increase two-wheeler penetration in rural India. A large number of rural outlets were added to the network during the year, which not only increased hinterland sales but also gave additional employment in the rural sector. Pro-biking : This initiative sits far away from the rural India play but is no less important. Bajaj Auto believes that young India doesnt pay to buy motorcycles; it pays to buy excitement and exhilaration. The Probiking initiative, which was kicked off with the inauguration of first store in Pune in August 2005, aims precisely at creating this Thrill. Owned and operated by Bajaj Auto, Pro-biking showrooms are now operational in Mumbai, Kolkata, Chennai, Hyderabad and Ahmadabad.

Application Form Of Bajaj Auto For Dealers:

Application for : State : Town : Title Name of principle applicant : Qualification : Age: Business Experience (Years) : Contact details Telephone Office : (Fixed Line) : Residence : Mobile No. : E-Mail . : Postal address Address :
--Select---Select State--

+ 91

City : Pin District : State : Family Background Family Members : (Father / Brothers / Uncles / Cousins) Businesses in family : Name of the firm : Type of Business / Annual turnover Business 1 : Turnover (Rs in lac) : Business 2 : Turnover (Rs in lac) : Business 3 : Turnover (Rs in lac) : Combined Turnover (Rs in lac) : In case of any exsiting automobile business, please give details and the nature of business :

In case of any association with Bajaj Auto Ltd please give details and the

nature of business : Main dealer (Name & town) : ASC / RSO (Name & Town) : Vendor (Name & Town): Role / Position of Applicant in current business : Applicants special achievements in current business: Working capital arrangement
Own Funds ( Rs In Lacs) : Through Bank ( Rs In Lacs) : Location of proposed site : Proposed site : Owned Rental Both Status or condition Open Plot of proposed property : Constructed / Semi-constructed Both Area in sq.mtr : Showroom :

Town :

Town :

Town :

Workshop :
Submit Reset

Understanding the size of territory:

The main distributor of Bajaj auto is situated in Pune-Bajaj. The whole cycle of distributor lobby of Bajaj in India is derived from Pune. The sub distributor within the district of every state is selected which prior takes permission from Bajaj, Pune and further supplies and form the distribution channel within every district. The sub-distributors of Bajaj Auto is within all districts. From this the sub distributor within the districts every dealer of the local regions takes up the dealership and provides the distribution channel. The dealer has to deposit an advance cheque and legal documents specifying the financial statements to the sub distributor of the district. In condition if a person wants to open a Bajaj dealership within the same locality where the previous dealer has been located in such condition the No Objection certificate has to be attained by the person who wishes to obtain the dealership. If the No Objection certificate is not attained by the person the sub distributor cannot obtain the dealership of Bajaj Auto.

Sales Promotion:
Bajaj Auto has announced a special finance scheme for rural customers who wish to buy Bajaj two wheelers. By using this scheme, prospective buyers will be financed by Bajaj Auto Finance even if they have no bank account. Henceforth, customers can pay the installments in cash and need not provide post-dated cheques to avail loan. S Sridhar, Bajaj Auto Motorcycle Business President has said, The loans will be given on the basis of trust and initial verification and there will be no collateral. He added that Bajaj has tried this scheme in select areas and according to him, default rate is much less than in post-dated cheque system. Further he said that the company is reinventing its marketing and distribution strategy to keep up the growth momentum and the key lies in addressing a bigger market. A bigger market will definitely include rural and semi-urban markets that account for the majority of two-wheelers sold in India. Bajaj Auto has appointed 135 dealers in these areas which earlier had only 25 dealers. The second largest two-wheeler maker in the country will commence the operations of the new dealerships by March end. We can

expect 6 out of every 10 Bajaj dealerships in future to be opened in small towns and mini-metros. Besides the new finance scheme, Bajaj Auto is planning a seasonal collection strategy for rural areas. Thinking on this line, instead of the monthly installments, the customers belonging to rural area can schedule their loan repayment to crop cycle as they earn profit only during the harvesting period which takes about 2-3 months from sowing. According to experts, Bajaj Autos rural finance scheme could immediately cause an impact on the companys product sales and this could be as high as 30%. However, trouble still prevails in the form of rising input costs. Currently, Bajaj Auto holds a healthy 27% market share in Indian two-wheelers business, while Hero Honda holds a dominant 54% market share. Since, Hero Honda gets two-thirds of its sales from rural areas, Bajaj is pushing hard to attract two-wheeler customers into their showrooms via various strategies. The efforts havent went in vain so far as the companys popular Discover brand of motorcycles has 45% of its prospective customers in rural India and with the new finance scheme, the sales numbers will increase substantially. The growing economy of the country has pushed the sales of commodities in rural India as most of the farmers have disposable incomes earned through increased crop productivity, high farm prices etc., Lack of proper/reliable public transport infrastructure in many villages and small towns are the main factors for farmers and villagers to opt for personal transportation. Two-wheeler is obviously the most economical personal transportation available today and hence, every two wheeler maker (especially, Hero Honda, Bajaj, TVS, Yamaha and Honda) is making earnest efforts to strengthen their distribution network and grab a significant market share in the ever growing Indian two-wheeler industry.

Query Handling: Bajaj auto has its own website which serves all its customers with the after sale services Direct Booking of Service of bikes E-Bookings Customer Queries

Booking Form of Bajaj Auto Queries:

General

This application works best with IE6.0 and above and 1024 X 768 resolution Service Request Form Fields marked * are mandatory. You're Here For * Complaint Type * Sales Service Spares Customer's Name: * Contact Number: * +91 (Mob.For confirmation via SMS. eg. +91 98504 98504) Or S.T.D.Code Address: Land Line
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E-mail: (For eg. abc@yahoo.com) Product Type * Two Wheelers Model Name Vehicle Number Commercial Vehicle
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State * City *

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Understanding the customer: Customer satisfaction: It has been divided in to three parts: Pre sales During sales period After sales period

Pre sales period:

The duration of this period starts with the likeliness of the customer towards the product. The information related tp the product, core benefits, price distribution etc.

During sales period:

During this phase the conversion of the potential seeker into a potential buyer. This can be achieved by providing the customer with good ambiences, attentive measures, relation his psychology to that of his likeliness towards the product.

After sale period:

Here the conversion of the buyer into a loyal customer is done. Provision of services related to that of the product, correcting the faults in the automobile. Generating the faith of the buyer within the brand. Rules of Bajaj(customer): Commit to Quality services Know your product Know your customer Treat people with courtesy and due respect Dont leave customer in limbo Never argue with customer Assume that your customer tells truth Always provide what you promise Focus on customer not on sales Make it easy to buy New sales opportunity and create customer relationship