Sales & Distribution Report

The Indian Institute of Planning & Management

Project Trimester (Spring Summer 2008-10)

Sales and Distribution Management “Sales and Distribution” Effectiveness: A Comparative Study of Tata Sky & Airtel DTH.

Submitted by: (GROUP NO.HR263)Gaurav Soni (16) Kumar Deepak (24) Sanya Gulati (49) Saurabh Mishra (51)

DTH industry

Group No. - HR-263

EXECUTIVE SUMMARY

Over the years back as we all know cable TV was everywhere, but the two three years back a new technological revolution happened and direct to home satellite television came into existence and as days passes by DTH sector in India has developed with the availability of more brands, better quality products and better service. Our research facilitates designing an overall sales and distribution management strategy for a DTH sector after an in-depth study and analysis of two established brands in the DTH business sector: Tata Sky and Airtel DTH (India). The objective of our research was: • To compare the sales and distribution effectiveness (Quantitative Research). • To carry out a detailed study of “Logistics Network” • To design a comprehensive sales system. The data collected for the research involves the use of both primary and secondary sources. Primary data is based on the findings from the company personnel with the use of tools like questionnaires and discussions. This data is further substantiated by the

use of

appropriate secondary sources like internet and books.

TATA SKY & AIRTEL DTH

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DTH industry

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In this project we went through interviewing the retailers, distributors and management officials of Tata Sky and Airtel DTH covering most of the regions of Delhi and NCR.

After all the research and analysis work done during the course time of this project we came to the conclusion that Tata Sky sales is more effective than that of Airtel DTH, but even then there is a great room for improvement available for them.

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DTH industry

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ACKNOWLEDGEMENT We would like to express our gratitude to all the dealers, distributors and the corporate officials of Airtel DTH and Tata Sky for their kind support and assistance while furnishing the required information’s.

We also express our gratitude and thanks to Prof. Maninder Singh for their invaluable co-operation, continued support and guidance as well as healthy criticism throughout resulting works. Their able guidance, encouragement and valuable suggestion led our way pass easily through most difficult period during this Sales Project. We would also like to thank the faculty and staff of IIPM because without their help this project would not have been completed.

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TABLE OF CONTENTS S No.

Topics

Page No.

1.

Methodology …………………………………..………………...5

2.

Company Background ………………………………..…………8

3.

Findings Data Analysis and Conclusions ………………….….. 14

4.

Recommendations ……………………………………………....32

5.

Sales Reporting System………………………………………….33

5.

Bibliography …………………………………………………….35

6.

Annexure………………………………………………………....36

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DTH industry

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METHODOLOGY Business Sector: In order to study the sales and distribution effectiveness of two organisations we decided to take the ‘DTH Industry’.

Organisations identified for the study: Under the ‘Footwear Industry’ the two organisations which we are going to study are:  Tata sky  Airtel DTH

Objective: TATA SKY & AIRTEL DTH

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The main objective of the study can be divided into following heads: • To compare the Sales and Distribution Effectiveness (Quantitative research). • To carry out a detailed study of ‘Logistics Network’: Mode/s, Costs and Monitoring Systems. • To design a comprehensive sales reporting system for the chosen business sector.

Data Collection: Data collection will be done from both Primary as well as Secondary sources.

Primary data collection: It will be collected by In-Person Interviews as well as Telephonic Interviews of various personals/managers working in the organisation and dealer’s/retailer’s etc.

Secondary data collection: From newspaper, magazines, libraries and websites.

Research Design: The research is descriptive type and accordingly the design is formulated so that precise and relevant information may be gathered.

TATA SKY & AIRTEL DTH

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DTH industry

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Data Collection tools: •

Structured Questionnaires

Sample design: The research will be conducted by interviewing various Organisational officials and the Dealer’s, Retailer’s and Franchisee’s. •

Sampling: Simple random and Convenient.

•

Method Adopted: Personnel Interviews

•

Field: Delhi and NCR regions.

.

Sample Size: The target will be to interview at least 4 distributor of each company and as many official’s as possible.

Data analysis tools and technique: TATA SKY & AIRTEL DTH

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. •

Graphical method (Bar Graph).

COMPANY BACKGROUND

Tata Sky History: Tata Sky, an 80:20 joint venture between Tata Sons and the Star group, provides satellite television services to Indian viewers. The company was incorporated in 2004 and offers a range of media and entertainment options to customers. The TATA Group is one of India’s largest and most respected business conglomerates. It comprises diversified businesses in sectors such as materials, engineering, services, energy, information systems & communications, consumer products and chemicals. The Group and its enterprises have been steadfast and distinctive in their adherence to business ethics and their commitment to corporate social responsibility. This is a legacy

TATA SKY & AIRTEL DTH

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DTH industry

Group No. - HR-263

that has earned the Group the trust of many millions of stakeholders in measure few business houses anywhere in the world can match Areas of business Tata Sky's direct-to-home satellite platform delivers more than 100 television channels, movies and interactive services for games, learning, recipes, news, chat rooms, etc. It has state-of-the-art digital infrastructure and a retail network that covers more than 4,500 towns in India. Location Based in Mumbai, the company has three call centres (Pune, Chandigarh and Hyderabad).

Airtel DTH History: The businesses at Bharti Airtel have always been structured into three individual strategic business units (SBU's) - Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services and has recently launched a Direct-to-Home (DTH) service, Airtel digital TV. The company provides endto-end data and enterprise services to the corporate customers.

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Findings, Data Analysis And Conclusions

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DISTRIBUTION SYSTEM AIRTEL DTH DISTRIBUTION SYSTEM A proper distribution system is very important for every company because now a days the customer wants full service without any pain. Airtel has a deep penetration in the market due to its cellular services and it has provided them a advantage in the market. I have also seen in the market the happy faces of customers and retailers of Airtel because of the easy availability of Airtel DTH retailers.

BENEFITS OF GOOD DISTRIBUTION SYSTEM 1. Easy availability

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2. Satisfied customers 3. Competitive advantage 4. Better market reputation 5. Saves time

DISTRIBUTION SYSTEM OF AIRTEL 1. Organisation (C&FA's) 2. Distributor 3. Retailer 4. Customer

Organisation C & FA

Distributior TATA SKY & AIRTEL DTH

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Group No. - HR-263

DTH industry

Several FOS FOS

Different retailers

FOS

Different retailers

FOS

Different retailers

DISTRIBUTOR

Channel Structure: AIRTEL DTH Manufacturing unit

Warehouses

Distributors

Exclusive Showrooms

Demo at shopping malls

TATA SKY & AIRTEL DTH

Exclusive Retailers

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Group No. - HR-263

Product Area Distributor

Dealer

Retailer

Customer

Tata Sky DTH

Manufacturing Unit Warehouses

Distributors

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DTH industry

Dealer

Exclusive Showrooms (Experience Zone)

Group No. - HR-263

Corporate sales

Retailer

Customer

Criterion and Condition for selecting Channel Members: The criterion followed for the selection of channel members is almost same in case of both Airtel DTH and TATA Sky DTH. The various conditions based on which the members are selected are:

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1.

Group No. - HR-263

Financial Capacity: The financial condition of the member must be sound and

he should posses a neat and clean past market record. 2.

Market Reputation: He should have a good reputation in the market and also

with the customers. 3.

Space and Location: In case it is a distributor the factor taken into

consideration is -Space and in case of retailers it is location. 4.

Experience: He should have been in the field for a minimum period of 5 years.

Average Inventory Size:

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Airtel DTH: The average inventory size kept by airtel is of almost 15 set-top box for each set of set-top box sold.

Tata Sky: The average inventory size in case of tata sky is of 20 set-top box for each set of set-top box sold.

LOGISTICS:

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Airtel DTH: Order processing time in case of Airtel is 1 day. Although airtel follows a special logistics for any urgent demand.

TATA Sky DTH: In case of TATA sky the order processing time is 2 days. The modes of transportation adopted are basically Road and Rail, but in certain urgent cases it may be sent through Air. The order processing of Tata Sky is same as that of Airtel.

Performance Appraisal

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Group No. - HR-263

Airtel DTH: The performance appraisal of channel members in case of airtel is done on half-yearly basis. The major criterion for appraisals is the net increase in terms of sales compared to that of last time .the incentives provided varies from gifts to free foreign trips.

Tata Sky: In case of Tata sky the evaluation is done on a quarterly basis and the appraisal is provided annually. The reason for high satisfaction of the channel members of tata sky can be understood from this, as they are duly appraised on a regular basis and their problems are duly solved.

Assigning of targets: Airtel DTH: In Airtel DTH the targets are assigned to the sales personnel’s based on the following criterions: i. Population of that area. ii. No. of distributors in that area. iii. Potential available in that territory. iv. Back history of individual sales personnel.

Tata Sky: In TATA Sky the targets are assigned to the sales personnel’s based on the following criterions: i. Total area to be covered. ii. Past performances of the individual. iii. No. of distributors in that region.

LIMITATIONS OF THE STUDY TATA SKY & AIRTEL DTH

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DTH industry

Group No. - HR-263

While working on this project I have to face some difficulties while conducting the survey. People were not interested in giving their actual information about their family income and airtime, as they were extremely scared about the income tax some people have difficult to take them in confidence so that they can give correct information. Some of the limitations are: •

Not at home

•

Refusal to co-operate

•

Respondent bias

Market Research: Airtel DTH: They do market research through questionnaires which they ask to fill from their customer after they install their set-top box.

Tata Sky: They do not conduct any individual market research but they get the desired information from the same method as they ask customer to fill a questionnaire during the installation of the product.

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DTH industry

Group No. - HR-263

SALES SYSTEM On the basis of data collected from the retailers, distributors, etc. an approximated comparison of the two is shown below:

Overall Effectiveness

Airtel DTH

TATA SKY & AIRTEL DTH

TATA Sky

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DTH industry

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Quality maintenance:

Quality Maintainence

Airtel DTH

TATA SKY & AIRTEL DTH

Tata Sky

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DTH industry

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Customer Orientation:

Customer Orientation

Airtel DTH

TATA SKY & AIRTEL DTH

Tata Sky

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Delivery Time:

Delivery Time 48 47 46 45 44 43 0 Tata Sky

TATA SKY & AIRTEL DTH

Airtel DTH

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DTH industry

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Promotional activities:

Promotional Activities

Tata Sky

TATA SKY & AIRTEL DTH

Airtel DTH

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DTH industry

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Services of the sales persons:

Salesmen services

Airtel DTH

TATA SKY & AIRTEL DTH

Tata Sky

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Ease & flexibility of ordering:

Order flexibility

Airtel DTH

TATA SKY & AIRTEL DTH

Tata Sky

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Transporters Behavior:

Transporters Behaviour

Airtel DTH

Tata Sky

After going through the above values it can be concluded that Tata Sky sales and distribution system is more effective than that of Airtel.

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Recommendations 1.

Airtel should focus more on their promotional activities in more

innovative manner so that they can provide more competition to their competitors. 2.

As Tata Sky Plus is targeting a niche market, it should make its products

like provogue more widely available in the market. 3.

The availability of DTH is still lacking in the rural.

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DTH industry

Group No. - HR-263

Bibliography For our project we have referred to the following places for information:

• www.tatagroup.com/tatasky • www.airteltv.in www. Indiantelevision.com • Sales and Distribution Management – by F.L.Lobo

• Marketing Management – by Philip Kotler Times of India, Hindustan Times

•

"Bharti Airtel set to foray into India's DTH market, to launch Airtel Digital TV from Oct. 9". International Business Times (08 October 2008). 8 October 2008.

http://in.ibtimes.com/articles/20081008/bharti-airtel-digital-dth-service-satellitetelevision.htm. Retrieved 2008-10-13.

•

"ADAG & Bharti gearing for massive on air war".

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Annexure

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Questionnaire (Sales and Marketing department) 1)

Which brand of Direct to home do you own? Airtel-DTH TATA Sky

2)

Which kind of subscription do you use? Yearly Six Monthly Quarterly Monthly

Two Year

3)

How did you get to know about this brand? Newspapers Magazines Friends & Relatives Retailers Others (Specify)

4)

From where did you purchase the connection? Authorized dealer Exclusive Shoppe Dealer nearby you A Known Dealer

Reason__________________________________________________________________ ______ 5)

What percentage of discount you get from the dealer? 5% 10% No discount Vouchers offered

6)

Have you ever faced any problem in your DTH regarding the following? Maintenance Servicing Manufacturing Defect Others Others

: 7)

8)

Rank the following: 1-Most Important 2-Important 3- Necessary 4-Least Important 5-Not Necessary Price Brand After Sales Service Reach of Showroom Availability of Product Discount/Scheme offered What kind of After Sales Service do you use? Company Service Other than Company TATA SKY & AIRTEL DTH

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Group No. - HR-263

DTH industry

9)

Rate the services of the after sales person on the basis of following; CRITERIA YES NO Responsiveness 10) How much time taken by the Availability company to solve your problem Helpfulness completely? Capability 24 hours 2-3 days Week More

1

11) a) How many times you have lodged a complaint regarding a particular product? 1 time 2-4 times More b) If yes, on how many calls have you been attended by an executive? Readily available 2 – 3 times 4-7 times

More

12) 11) Tick the efficiency of the Sales Person to make your buying more comfortable? Very efficient Efficient Sharp/rude Less knowledgeable Less efficient Less knowledgeable

Knowledgeable but Less effective

Convince you to buy other brand 14)

How the product has reached to your home? You yourself have taken Dealer has provided you with a service

15)

Tick one of the following: DEGREE

PRODUCT

COMPANY

Fully Satisfied Partially Satisfied Not Satisfied If Not Satisfied, which brand in future you would like to buy and why? _______________________________________________________________________ _________ NAME:_________________________________________________________________ ________ OCCUPATION: SERVICE BUSINESS OTHERS (Specify) _____________________

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DTH industry

HOUSEHOLD INCOME: 6Lakhs

1.5 – 3Lakhs

3 – 4.5Lakhs

4.5 –

Above 6Lakhs

THANK YOU

Questionnaire (For Dealer’s/Retailer’s/Franchisee) CHANNEL MEMBER 1) a) What are the Terms and Conditions set by the Company for the Channel Members? ____________________________________________________________________ _________ ____________________________________________________________________ _________ b) What are the average sales per month? _________________________________________________________________ _________ c) How much is the average sale for refrigerator per month? _________________________________________________________________ _________________________________________________________________ __________________ 2) Are you Happy with the sales targets set by the Company? _________________________________________________________________ _________________________________________________________________ __________________________ 3) Do you get any credit period from the company? Yes_______ No_______ If Yes, What is the credit period you get? i) Upto 15 days 4)

ii) 15-30 days

iii) >30 days

What is minimum reorder level?

_______________________________________________________________________ ___

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5) What are the margins that you get from the company? _________________________________________________________________ _________ 6)

What is the average order cycle time taken by the company? i) < 5 days

ii) 5-10 days

iii) > 10 days

7) Where would you rank the services/assistance provided to you by the company/s Services

Very Good Good Satisfactory Poor

Very poor

Delivery Time Quality Maintenance Incentives Promotional activities Condition of Product Commercial Terms Services of Sales Persons 8) How will you rate the efficiency of your sales persons? a) Very Good

b) Good

c) Satisfactory

d) Poor

e) Very poor

9) How the Company does help you to assist the Product to the End Consumers? Yes______ No______ If Yes, Do you face any problems in the Distribution Network of the Company? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ __________________________________________ 10) Do you face complains? Yes______ No______ If Yes, what are the kinds of Complains? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ ________________________________________________________ 11) How do you manage them in the given span of time? _______________________________________________________________________

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_______________________________________________________________________ _______________________________________________________________________ __________________________________________ Person Contacted: ____________________________________________________________________ Name of dealer: _____________________________________________________________________ Address: _____________________________________________________________________ Tel. No.: ______________________________________________________________________

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COMPANY REPRESENTATIVE 1) What is the Sales Turnover of the Company? ------------------------------------------------------------------------------------------------------------------------------2) a) In how many Zones is India Divided? ______________________________________________ b) On what basis Delhi – NCR is divided? _____________________________________________ c) Number of showrooms India____________ Delhi – NCR___________ 3) a) What is the Company Sales Organization Structure for HONDA? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------b) What are the profiles of the Members involved in the Structure? ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------c) Who Monitors the entire Sales Process? In what ways does it serves as an effective tool for the company. -----------------------------------------------------------------------------------------------------------------------------

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----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------4) a) What are the formats opted by HONDA for the Distribution of its product? ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------b) On what basis does the Company chooses its Channel Members? ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------c) What are the Criteria to Appraise the Channel Members? -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------d) How does the Company responds the different distribution Flaws faced during the process? --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------5) What is the product range? --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------6) a) How many warehouses do you have? India____________ Delhi – NCR___________ b) How are Orders Processed among the Channel Members and the Company Level? ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------7) How the Logistics Network Works including: a) Importing of the product ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ _______________________________________ b) Distribution of the Product ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ _______________________________________ 8) What is the Basis on which Incentives are given to various Channel Members? --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------9) a) How many Service Centers does the Company have? India____________ Delhi – NCR___________ b) How the Complain Cell does bring about the Effectiveness of its Service Centers regarding the Channel Members and its Consumers? --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------10) Is there any kind of Marketing Research done by the Company with respect to Channel Members and Consumers? ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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