BAJAJ CORP LTD.

Presentation on Sales training

Pory Medhi DraftFCB+Ulka

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Company Background
Bajaj Corp Ltd is one of Indias leading FMCG company with major

brands in Hair care category, with brands that have been in the market for eight decades. Part of Bajaj group (Sugar, Consumer Goods, Power Generation and Infrastructure Development). Subsidiary of Bajaj Consumer Care Ltd. BCL is the exclusive licensee of brands owned by BCCL, licensed for 99 yrs from 2008. 3rd largest on overall hair oils segment. Almond Drop Hair Oil- 50% in light hair oils, highest per unit prices due to premium positioning. New product- Kailash Parbat Thanda Tel.

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Industry Overview

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Organisation Hierarchy
Chairman
Mr Kushagra Bajaj

Vice Chairman
Mr. R F Hinger

President Operations
Mr. Apoorv Bajaj

Director Sales & Marketing

Mr. Sunil Malhotra

CFO
Mr Dilip Maroo
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GM- Sales
Mr. Sudhir Taneja

GMMarketing
Mr. Gurpreet S. Amrit

GM- HR
Mr. S Chatterejee

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Brands Worked On
ADHO is the market leader in the LHO category with 55% MS

Main competition from Himami Navratna (Market leader, 39% MS), Himgange, Jagat etc
Dabur Amla is the market leader with 67% MS ADHO sachets and 500 ml PET bottle were the focus brands KPTT expected to grab 3% MS by year end
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NPD Strategy
Strategy was to increase the product portfolio and reduce the

dependency on ADHO Cooling hair oil segment is the fastest growing by volume in overall hair oil category. In FY11 it grew by 16.2% on YoY basis against overall hair oil industry growth rate of 12.3%. Only one national player i.e Navratna by Himani with market share of 39% unlike Bajaj ADHO, which has 55% market share in LHO category and Dabur Amla with 67% market share in Heavy Amla category. The category is in nascent stage in most of the states in India except for UP, Bihar, Jharkhand and Chattisgarh while Bajaj Corp has decent distribution network all over India. High gross profit margin at ~55% similar to ADHO. The management expects the product to break even by achieving 6% market share in second year from launch.

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Distribution Process
Factory Own HP-2, UK-1 Third Party HP-1, Raj-1

Central Warehouse-1

The company reaches consumers through 1.95 million retail outlets serviced by 5653 direct distributors and 9900 wholesalers

Regional Distribution Centre (C/F) 32

URBAN

RURAL

Stockist

Stockist

Retailer

Wholesaler

Retailer

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Sales Process
Hierarchy
GM Sales INDIA AGM Modern Trade
2-3 REGIONS

Terminology

AGM Sales
2-3 REGIONS

Regional Sales Manager 1 REGION Area Sales Manager

1-2 DISTRICT/CITY

Sales officer
5-10 TOWNS

PJP and DRCP Mumbai- 360 beats Each ISR- 12-15 beats Each Beat- 40-50 shops 40 shops- short beat 50 shops- long beat One day- 50 shops Atleast 25 productive calls/day Repeat after 15 days LPC/BPC

ISR 1 TOWN

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Sales Planning Process

Infrastructure Planning- Deciding the beats, routes and no

of ISRs needed Production Planning AOP/ QOP Forecasting is done bottom up based on past trends and competitions performance Target Planning- Given in the no. of cases. Target for 2011-12 is 48001 cases KP Target forecasting: Net loss of 7 crores, 6% market share to break even next year

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Flow
Paper flow-Credit notes are given to stockists by the

company to meet expenses which include godown cost, delivery cost, ISR salary etc. Invoices are made for every order.
Material flow- Material flows from Factory to hub to C&F to

stockist and to retailer. Damaged goods are either replaced or payed for against claims made as asked by stockist.
Cash flow- Orders given by stockists and payments made

in cash/DD.
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Sales Process
Prospect Approach (Open Dialogue)

Need Assessment

Demonstration

Meeting Objections/ Handling Complaints Gaining Commitments

Sales Kit: DSR- Daily Sales Report Product Folder Advertisement Schedule ADHO, KP SachetsReady Stock Sampling Bottle- KP POP Material- KP Calculator Diary

Follow up

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Sales Cycle
Primary Secondary Offtake

Company sells to the Stockist

Stockist sells to Retailer

Retailer to Consumers

(Opening Stock + Primary) Secondary = Closing Stock Primary Depends on: Opening Stock Running Rate Seasonality Offers/Schemes/Incentive/Bonus Manpower strength *Primary Cycle 10th, 20th, 30th of each month (each Deek) Secondary Cycle 6th-15th, 16th-25th, 26th-5th of each month

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SKU Pricing & Packing

BRAND/ SKU 3ml
MRP:Re 1 1600

20ml
Rs 10 144

50ml
Rs 25 60

75ml
Rs 36 40

100ml
Rs 46 40

200ml
Rs 85 25

300ml
Rs 110 16

ADHO Pc/ Case

KPTT

MRP:Re 1 1600 MRP:Re 1 1000

Rs 25 120 Rs 18 120

Rs 48 60 Rs 34 60

Rs 82 36 Rs 65 36 Rs 90 24

BAHO

BASHO
JHO

Rs 12 120
Rs 18 120

Rs 23 60
Rs 34 60

Rs 39 36
Rs 65 36

*Note:

Company recently launched a 500 ml PET bottle for ADHO and trying to gauge the response of the consumers towards plastic bottles

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MRP Calculation
Company Billing Rate VAT @ 12.5 % Landed Cost to Stockist Stockist Margin @ 5% VAT Credit by Stockist Billing by Stockist Landed Cost to Retailer Retailer Margin @ 10% MRP 14 83.71* 10.46 94.17 5.18 0.65 99.35

* Pricing illustrated for 300 ml ADHO

Stockist Margin = 5% Retailer Margin = 10%

Additionally, Cash Discount = 1.25% (Stockist)

Trade scheme for 300ml ADHO: Billing Qty =46 Scheme Qty = 2 % scheme = 4.30%

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Trade Schemes
Primary Scheme: I. II.

Scheme passed directly in the bill, it can increase sales upto 1.05-1.75 times. It changes from month to month. Eg: 3 cases free on a bill of 100 cases of 100ml ADHO

Secondary Scheme: I. II.

Scheme reimbursed to the stockist for doing secondary sales, it can increase sales upto 1.45-1.5 times. Offer once in 6-12 months. Eg: 3% of the value of secondary sales done is reimbursed

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Incentives
ISR I. II.

Bill Cut incentive- Rs 3/ bill of Rs 150 for KP Sales incentive- Rs 500/ 15 Cases for KP

RSM I.

Top 2 to achieve targets get Rs 15000/ Rs 10000

Stockist I. II.

Target Based Incentive- Trip to Thailand for 10000 cases Turnover Based Incentive- Quaterly: 0.7% of turnover Annually: 0.4% of turnover

Wholeseller I.

Royal Bajaj Club- Bronze, Silver, Gold, Platinum, Diamond, Directors Club, Debit card, Laptop etc.

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Competition Pricing
BRAND/ SKU ADHO KPTT
Navratna Himgange

3ml
Re 1 Re 1 Re 1 Re 1

20ml
Rs 10

50ml
Rs 25 Rs25 Rs 27 Rs 25

75ml
Rs 36

100ml
Rs 46 Rs 48 Rs 50 Rs 47

200ml
Rs 85 Rs 82 Rs 85 Rs 78

300ml
Rs 110

500 ml
Rs 185

Scheme

Rs 115

Rs 195 Rs 185

6%

BAHO
Dabur Amla Keo karpin H&C

Re 1

Rs 18
Rs 17 Rs 15 Rs 20 Rs 12 Rs 10 Rs 18 Rs 15

Rs 34
Rs 34 Rs 35 Rs 35 Rs 23 Rs 20 Rs 34 Rs 31

Rs 65
Rs 67 Rs 65 Rs 64 Rs 39 Rs 34 Rs 65 Rs 59

Rs 90
Rs 95 Rs 90 Rs 92 3% 3% 2%

BASHO
Shanti Amla

Rs 60

3%

JHO
Parachute Jasmine

Rs 85

2%

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Sales Promotion
Consumer Offer: Colgate Active Salt Toothpaste free with

200 ml ADHO
KPTT activation exercise: Standees outside Barber Shops

and distribute free KP sachets to clients coming for massages

POP Material: Danglers, Flags, Dispensers, Backing

Sheet, Poster, Hangings, Gondolas etc

TV Ads
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Observations
Cooling hair oil sales are highly influenced by demographics and

seasonality Navratna has very strong brand recall due to celebrity endorsements by Mr Amitabh Bachchan, Mr Shahrukh Khan etc Retailers are not to happy with the margins offered by Bajaj, ask for schemes and offers Inspite of the KP ads, the demand has not increased The new ADHO 500 ml PET bottle does not have a proper cap lock KP not kept with category or within line of sight On occasion orders have been placed but not delivered

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Recommendations
More demonstrations to retailers and near barber shops to induce trial ISR should highlight all the Points of Parity and Points of Difference of

KP Prompt delivery of orders Highlight the benefits of placing orders directly with the company representative wrt damaged goods replacement Do not dump products Ensure proper placement within correct category and visibility Proper merchandising and POP material

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THANK YOU

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