Business - Market Dynamics undergo a sea change

It was a familiar sight at most grocer outlets. A man carrying a large ledger book scanning the shelves and making entries. On eight-out-of-ten occasions, the retailer would try to fend off the excess stock that the ledger-man , otherwise called a sales representative , was pushing down his shelves.Called ‘Maal Thokna’ , in local parlance, salesmen are renowned to try and push more than is possible, offering fancy credit terms to retailers, just to offload stock and hit that magic monthly target. One can’t really blame them, though. Compared to the flashy marketing function, sales has often been looked upon as a poorer cousin. Right from remembering the numbers of SKUs to be sold, to making a new product sales pitch to planograming (the art of product display), and of course, taking copious notes in that dog-eared ledger, salesmen have had to be there, and expected to do that. Now, for most salesmen, that’s a postcard from the past. The ledgers have been replaced by PDAs (personal digital assistant). Even before they enter the shop, the salesmen have a finger on the pulse of the store. A few clicks on the PDA and the salesman knows the transaction history of the store. He knows what’s selling , how much he has sold and his target. While the sales person still has the onerous task of selling to the retailer, the PDA is his force multiplier, feeding vital information for the ensuing negotiations. It’s technology to the rescue for people who form the first line of offence for companies. As we talk, more and more companies are undertaking efforts to automate the sales force and improve the efficiency of the sales function. Yet, automation is just one part of the story. The other side is about how the changing retail landscape is forcing companies to take a real hard and close relook at the sales function. While automation is still the starting point, the changes being undertaken touch each and every aspect of selling — right from the distributor and stockist, to the shopkeeper. Over the last few years, most FMCG companies invested in creating IT backbones and central servers. Now, they are linking upto the front end. The link-up enables the sales force to access relevant information related to catchment, product offtake and total sales. Take consumer goods major Hindustan Unilever (HUL) as an example . Sanjiv Kakkar, ED - sales and customer development , HUL says that the next big leap is at the front end, where 9,000 HUL’s distributor sales representatives in urban markets have been provided hand held devices (HHDs). “The HHDs facilitate not just electronic order booking, but also helps the sales representatives to make a far more disciplined sales call,” says Kakkar, adding that the device can leverage database usage for a more intelligent sale. Similarly, Marico, the makers of Parachute and Saffola, which began prototyping the use of intelligent PDAs for its sales force in Mumbai last year has now taken the initiative to seven major metros across India.On auto pilot The PDAs connected to the central IT backbone is used by the sales force to access real time data instantly and take decisions quickly, says B Sridhar, head - sales, Marico . “The PDA is a decision support system which has made the sales call scientific and sharply focused,” explains Sridhar. It’s not just the PDAs which is the front end device provided to the sales force. Companies like Ruchi Soya and even toy maker Mattel have provided laptops to their sales force. Sanjay Luthra, MD, Mattel Toys India, says, “The sales force today has to become an information power house. One needs to know more than the customer. Technology helps to do that,” explains Luthra. That’s because the market scenario is vastly different from what it was a decade back, when a single trade channel and lower number of SKUs did not make a compelling case to improve efficiency. Currently , with segmentation of trade channels, large number of SKUs and new product launches, upgrading the skillsets has become necessary to survive in an open market . “The average retailer has seen an explosion of categories, categories within categories and segments within categories. As a result, space at the general retail format is now coming at a premium. Hence retailers are trying to maximise the return on investment from the limited display space,” says Kakkar of HUL. Sridhar of Marico seconds the thought. “A distributor or retailer today has to see value in how the DSR (daily sales representatives) meets his needs. With such a large number of SKUs, technology enables the DSRs to drive multiple brands across various channels,” he says. “We are able to do an analysis of weaker performance areas and thereby take immediate steps to improve. Our credit mechanism has improved a lot and we have absolute control over our debtors. We can keep a check on billing to our debtors and lock their billing if necessary,” says Aditya Agarwal , director, Emami Group on the benefits. Given the fragmentation of channels, it’s also become imperative for marketers to have their ears to the ground on aspects like replenishment cycles. Luthra of Mattel cites the instance of Food Bazaar for its toy cars. He says the stocks are supplied twice a day within a gap of two hours. “So while the replenishment cycle has shortened, the plans on how much returns is the product generating has become a long term play,” he says. Sarvesh Shahra, head of foods division , Ruchi Group believes that automation has helped ensure that right SKUs are available both at depot and plant location to service the market. “Earlier, the sales forecast previously was mostly done on gut-feel of the regional manager. But with automation processes he goes down the detail of arriving at the sales forecast for his region with all the likely factors taken into consideration and with historical trends available,” says Shahra, adding that the efficiency of projection has improved from around 60 % to more than 90% now. It’s not just efficiency of sales projections and stock replenishments where technology is lending a helping hand. Kakkar says that efficiencies on promotional costs can also be tracked using technology, on what’s working and what promotions are not delivering. “It’s dramatically helped us relook at what promotions we run and how many we do run in a month. It has helped us bring down our level of expenditure on wasteful promotional expenditure and bring science and efficiency to promotions.” Similarly, in Marico, the PDA is also being used by the sales person to show TVC’s / films during brand launches to the retailer making the entire process of the sales call more engaging, says Sridhar. Technology is also coming of use when it comes to planograming within the store. Mattel has provided a planograming tool to its sales staff to make a visual presentation of how the product will look on the shelf particularly for the organised retail channel. “The three-dimensional visual tool combines the dimensions of both the product and retail store shelf to a give a virtual display ,” he says, adding that with such a tool, it becomes easier for the company to visually display how the balance stocks on the shelves looks. “It makes the case convincing and selling becomes easier.” There are other examples of how initiatives at the frontline are also leading to changes in the entire cycle of sales and distribution . Godrej Sara Lee has realised the importance of tapping the entrepreneurial abilities of its sales force and initiated the ‘intrapreneurship’ concept for its sales employees. “The concept of intrapreneurship was visualised to generate excitement among sales professionals,” says A Mahendran , MD, Godrej Sara Lee. On the other end of the spectrum is CavinKare which is employing people from rural areas as a part of its rural sales force to push brands like Chic shampoo and Fairever into the hinterland. “A sales person from the urban areas will be all-at-sea managing the rural market. A native will reach the market using any mode of transportation,” says CK Ranganathan, chairman, CavinKare This horse-for-course strategy is enabling CavinKare to deploy its sales force optimally, depending on the channels . Shahra of Ruchi group says that during ‘Manda’ and ‘Teji’ , the availability of the product at the right time is of utmost importance . So to achieve this, co-ordination between sales and distributors also becomes critical, as the sales has the information which is passed on to the distributors to enable replenishment. “The turn around time at the factory for a truck was 3-4 days and in some cases it extended to 5-6 days as well, but a process reengineering has been done for the truck movement in the factory and now the turnaround time for the truck is reduced to 24 hours,” he says. Moving from a manual system of studying sales trends, targets and discussion, it’s now a continous replenishment system, where stock levels are captured at each distributor , order automatically generated and stocks are despatched. Kakkar says that an additional 33 per cent of the sales field force time has moved to the front end and is devoted to customer facing issues rather than manning internal company processes or managing the interface with distributors. As the market evolves and the scenario becomes more competitive, every penny saved by tweaking the system will add to the bottomline of brands. It’s clearly evident that the re-engineering of the sales function is well underway in India and technology is playing a crucial role. One can therefore expect more initiatives which enables companies to drive sales better and faster. As Kakkar puts it, “The next frontier will be to see what we can do with the ubiquitous mobile phone. But that’s still in a stage of infancy.” This idea, however, might be just a step away from adulthood.