Asst. Manager, Sales, Kerala (Philips)
Savita agencies with eight stores is the leading chain in the city of Cochin. Savita and Philips share a strong relationship; Philips with Sales of Rs. 3.5 Crores for the calendar year 2007 would contribute almost 20% of the total sales of the chain.
Issue at hand
The Management at Savita was very strongly focused on getting ‘bargain’ deals. This was the unwritten store policy that was practiced with Philips as well as the other companies. As the Assistant Manager – Sales for the territory of Cochin I felt that the single minded ‘bargain deals’ focus was not healthy for the relationship and business prospects Savita and Philips share with each other. I had a hunch that somehow I had to play by their rules still work out a win-win solution. However, I was unable to work out a concrete strategy to break the deadlock.
A workshop on Direct Dealers Management, I attended in the month of May 2007, gave me the tools to work out what we had to get done. A section of the workshop dealt with ‘understanding the customer through his business drivers’. This theory helped me decode and slot the exclusive focus that Savita management brought to the table. I could see that their focus was solely ‘percentage contribution to the margin’. I felt that instead of this focus, if I got them to look at our transaction from a ‘Cash flow — Inventory Rotation’ perspective I could bring about a shift in the relationship. Knowing what had to be done, I realized I had to work in a lateral way to achieve the objective.
The end result
This is a sample of the movement that this initiative has had across counters; Color television sets sales have moved from 100 nos. per month to 300 numbers per month; DVD sales have moved from 150 nos. per month to 350 nos. per month; speaker sales per month today are almost five times the earlier levels. With these results on our side I have been able to convince the store management to look at the Philips transaction from a ‘Inventory Rotation’ and hence a ‘Return on Investment’ perspective, instead of the earlier ‘bargain focus’.
At Savita we are now, number one across counters!
Branch Manager, Bangalore (Whirlpool)
During 2008-09, Bangalore as a branch was de-growing across channels, territories and categories, whereas industry was growing by more than 20%. The most affected was the DC category which was at 14% market share. With respect to DC as a category, 70% of industry contribution comes from up country and the rest from Bangalore city. The market share of Whirlpool DC category was more than 20% in the city and only 12% in Upcountry locations.
Issue at hand
Sriram was confident that DC category has the potential to contribute significantly to the branch growth especially the low end SKUs which have high selling potential in the upcountry distribution market. He took up the challenge of increasing the market share of DC to18%. It was quite difficult since it requires the category to grow by more than 35% to gain the expected market share. The 3 critical challenges faced by him were:
• Inconsistent and weak distribution in Bangalore city, North Karnataka, Mangalore and Hubli territory which had low reach, product placements and extraction, thereby having a very high dependency on the Chain Stores where the payout / retention requirements are extremely high
• Refusal from the upcountry sub dealers for doing business since they were highly critical with earlier experience of our Service operations.
• The product and pricing gap in DC across Chain Stores accounts against stiff competition.
With these thoughts in place Sriram guided and led his team with the following action plan:
• Appointed 2 Distributors at Bangalore. One for the low end DC models for expansion and penetration (Numeric Reach gain). Within this the focus was on mix (180 fusion) which helped the branch to improve the mix and profitability of DC category in the upcountry distribution.
• Conducted Sub Dealers meet twice in a span of 6 months to evaluate the progress and take corrective actions. This helped in regaining the confidence in Distribution.
• To tackle the service, issue regular visits were made along with the Branch Service Manager to sort out any service issues which resulted in improving the trade confidence.
• Tactically focused upon the models where Whirlpool has an edge over competition. They promoted Fusion model which competition does not have. 8y this, they could overcome the Product/Price Point gap in Chain stores.
• Schemes of other high performing models which the TPS were driving very aggressively were linked to DC model as well. • Deployed additional RE’s at various outlets to focus upon DC model.
• Ensure effective communication of daily stock update to key counter RE’s which ensured that they focus on available models to overcome the problem of stock shortage. This helped the branch to avoid loss of sale which might have occurred due to the unavailability of the stock.
The end result
Sriram has achieved 38% growth in DC Category and gained a Market Share to 18%. Achieved a volume of 10629 nos in Sep-Dec 2009 as against 7730 * 2008 for the same period with a growth of 39%.