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CASE: Distributor Sales Force Performance Management

Q1. The decision maker in this case is the EVP Sales, Nestle India Objectives of the decision maker were in line with the Big Leap strategy and they were: 1. 2. 3. 4. Aggressive Market Development (Page 312) Market Leadership Market Development Improving the systems by appropriate training and development of its members.

The CDs and DSs of the company were going to be very important for Nestle in its mission to achieve the Big Leap Objectives. Q2. The problems afflicting Nestle India were: 1. Steep Increase in the Distributor Salesman (DS) turnover, especially the ones with experience of three to five years making the distribution less effective. Reason: Page 301 (Two Reasons given) The problem was compounded because of the presence of an equally large number of very experienced DSs who were resistant to adopt and possibly incapable of implementing the new strategies of distribution management like sales force automation, aggressive network expansion plans which were on the anvil. Also, Earnings (Exhibit 6, Less than Industry Average), Monotony, Conflicting Parties can also be taken into account (Page 313-314). 2. Lack of sufficient conviction about products to make an impact on the retail level. (Page 319) 3. Lack of sensitivity and need to gather competitive information across DSs. (Page 319) Attention: Symptoms need to be identified? Q4. Examples of Impact of Environmental factors on Sales Management The environmental factors can be broken down into two parts: 1. External Environment Factors: Factors in the external environment are beyond the control of the individual manager. The sales manager must take the environment as it exists and adapt strategies to fit it . Variables in the external environment that affect sales and marketing may be grouped into five broad categories: (1) economic, which includes competition; (2) legal and political; (3) technological; (4) social and cultural, focused on ethics; and (5) natural.

Examples of impact of external environmental factors on SM: i. Economic: Growth of Indian Economy: This meant an increase in employment opportunities for the employees of Nestle, in FMCG and especially in sunrise businesses like telecommunications, credit card sales etc. Impact: an increase in turnover of DS for Nestle. Increase in competition with introduction of new products in the market. Impact: This meant that there was aggressive fight for the market share through tactical moves like attractive promotions. ii. Political: Government policies like FDI: Emergence of Organized Retail, which impacted the sales of the retailers negatively. Impact: These large format retail sales were managed centrally by the Nestle team and were beyond the purview of the CD or the DS. The retail outlets had limited space, time and interest and support to offer which increased their negotiating power. Technological: New strategies of distribution management like sales force automation (SFA) Impact: Resistance by Experienced DSs to change and adopt to new strategies. Social/ Cultural: The EVP Sales of Nestle India knew that every country has its own culture which impacted the sales behaviour. (Indian Distribution Format; Page 312) Impact: Greater importance to be given to the Dss by closely looking at their present status, work environment and level of ownership in sales operations.



2. Internal Environment Factors: The policies, resources, and talents of the organization also make up a very important part of the marketers environment. The variables in the internal (organizational) environment can be grouped into six broad categories: (1) goals, objectives, and culture; (2) human resources; (3) financial resources; (4) production and supply chain capabilities; (5) service capabilities; and (6) research and development and technological capabilities. 1. Objectives: Big Leap Objectives The CDs and the DSs of the company were going to be very important for Nestle in its mission to achieve the Big Leap objectives. (Page 319) 2. Human Resources: Increase in turnover due to Earnings and Monotony and Company Incentive Structure. Q5. Best Practices HUL Practice 1: Practice 2: Practice 3: Practice 4: Practice 5: Procter & Gamble Practice 1: Practice 2: Practice 3: Practice 4: Practice 5: Cadburys Practice 1: Practice 2: Practice 3: Practice 4: Practice 5: