SALES AND DISTRIBUTION MANAGEMENT ASSIGNMENT 3

SALES AND DISTRIBUTION

AUDIT

Submitted by: Group 10

Aman (66)
Ankit Pithwa (68)
Santosh Kumar (99)
Sushil Parashar (108)
Akash Singh (116)
Sourabh Maheshwari (117)
 CONTENTS

1. Company Overview&Commercial Vehicles Segment Overview

2. Sales Organization Structure

3. Sales process for Commercial Business

4. Distribution Network

5. Channel Design and Structure

6. Channel Gaps

7. Territory Management Practices

8. Conclusion
1. Company Overview & Commercial Vehicles Segment Overview

Tata Motors is a $45 billion organization. It is a leading global automobile manufacturing

company. Its diverse portfolio includes an extensive range of cars, sports utility vehicles, trucks,
buses and defense vehicles. It is the country’s largest and original equipment manufacturer (OEM)
which offers extensive and innovative mobility solutions to its consumers.It also holds a historical
memoir of being the first company from India's engineering sector to be listed in the New York Stock
Exchange (September 2004), and it gradually emerged as an international automobile company.
Through various entry mechanisms such as subsidiary, Tata Motors has operations in the Spain, UK,
South Korea and Thailand. It had also recently acquired Jaguar Land Roverin 2008 after it
acquired the Daewoo Commercial Vehicles Company.

Tata has been actively worked to diversify and strengthen its competencies through
international acquisitions and joint ventures. It purchased Daewoo Commercial Vehicles in 2004,
invested in Spanish bus and coach manufacturer Hispano Carrocera (2005), a joint venture with
Brazilian bus and coach manufacturer Marcopolo and with Thailand’s Thonburi Automotive
Assembly Plant Company (2006).

Commercial Vehicles:Tata Motors is the country's market leader in commercial vehicles and among
the top three in passenger vehicles. It is also the world's fifth-largest truck and fourth-largest bus
manufacturer. Tata Motors commercial and passenger vehicles are being marketed in several
countries in Europe, Africa, the Middle East, South Asia, South East Asia, South America, CIS and
Russia. It has franchisee / joint venture assembly operations in Bangladesh, Ukraine and
Senegal.Tata Motors manufactures a variety of light commercial vehicles, including pickup
trucks and small commercial vehicles. This includes the Tata Ace, India’s first indigenously
developed mini-truck, with a 0.75ton payload with different fuel options, the Super Ace, with a 1-
ton payload, the Ace Zip, with a 0.6ton payload, including a CNG variant launched in Fiscal
2015, the Magic and the Magic Iris, including an electric variant, both of which are passenger
variants for commercial transportation developed on the Tata Ace platform, and the Winger. In
addition, the company introduced a new generation of Ultra LCV trucks, including the Ultra
narrow cab, in Fiscal 2015.

The company also manufactures a variety of medium and heavy commercial vehicles, which
include trucks, tractors, buses, tippers, and multi-axled vehicles, with GVWs (including payload) of
between 8 tons and 49 tons. In addition, through Tata Daewoo Commercial Vehicles Co. Ltd., or
TDCV, it manufactures a wide array of trucks ranging from 215 horsepower to 560 horsepower,
including dump trucks, tractor-trailers, mixers and cargo vehicles. The Prima line of trucks is
aimed at its customers in India and South Korea, and have extended the Prima line by offering
Prima LX and multi-axle truck variants. The company expects to gradually export our Prima
products to other countries such as South Africa, Russia, the other South Asian Association for
Regional Cooperation countries, the Middle East and various countries in Africa.
 2. Operating Hierarchy

Chairman

Commercial Vehicle Division Engineering Research centre

Passenger Car
Business Unit

Business Development

VP

DGM
Dealer development & commercial planning
GM DGM GM
Sales Sales Service

Regional Manager South

Regional Manager West
Regional Manager Regional
East Manager North

Dealer Accounts Manager

Dealers Dealers Dealers

3. Sales Process of Commercial Vehicles

The sales process of commercial vehicles is quite different from that of conventional passenger
vehicles. Instead of the passengers coming to the dealerships to view and select the vehicle, the
dealership executives have to go around their respective territories in to search for potential
customers and sell their vehicles.

Dealerships for commercial vehicles are set generally at the outskirts of cities. The general
manager looks after the overall day to day operations of the dealership. He has a set of Dealer
Sales Managers under him that isresponsible for handling different product portfolios.So for a
Tata Motors commercial vehicle dealership there will be DSM(P1) for Light Commercial
Vehicles (LCV’s),DSM(P2) for Intermediate Commercial Vehicles(ICV’s) and DSM(P3) for Medium
and Heavy Commercial Vehicles (M&HCV).Each of the DSMs will have a set of Dealer Sales
Executives under them who will be assigned specific products under the respective product
portfolios.The DSEs play a pivotal role in the sales
process of commercial vehicles since they act key touchpoint between the company and the
customers. The DSEs are allotted micro markets within the territories along with a set of
specified targets for the months. The Territory Sales Managers of Tata Motors also work in
synchronization with the DSEs and DSMs to ensure that the market coverage is being done
properly. In Tata Motors dealerships the targets are defined are as follows.

C0:The number of customers enquired by the DSEs through phone/in person for selling the products.

C1:The number of customers that walking the dealerships to view the products (successful C0s)

C2:The number of customers who submit their papers for KYC to the financial banks through
the dealerships.

C3:The number of people who buy the vehicles.

Depending upon the company’s targets and the total industrial volume of the territory the DSEs
are assigned C0,C1,C2 and C3 targets for every month.Therefore the sales process starts with the
DSEs covering their C0 targets and ends with the conversion of C0 to C3.

4. Distribution Network

Dealership Operational
Hierarchy

4. Distribution Network

The distribution network for TATA motors is very simple. There is no C&F agent involved.
Afterthe production the vehicles are directly transported to the dealers in the different regions.
The transport is done through TATA itself. TATA has its manufacturing units in Jamshedpur, Pune
and Lucknow. After the dealer has placed his order to the company through a request form the
cars are allotted to them and loaded in the trailers to be sent off the dealers.
The dealers are chosen by the company on the basis of their capacity to invest, experience, existing
line of business and most important of all their reputation in the market. The dealers’ location
also is a major factor for their selection for a TATA dealership.

There is a major misconception that TATA asks for a security deposits from its dealers. TATA motors
do not ask for any security deposit from its dealers instead they ask them to take a Working
Loan. This loan amount can vary from dealer to dealer depending on their location.

The dealers are normally assigned targets based on their area of operation and their sales based on
the corresponding month of the previous month. The sales targets are not only assigned
keeping in mind the region but also the festive season and not to forget the financial year.
During the festival season the company assigns little higher targets because this time of the
year is considered very auspicious and people buy cars in this season. In the month of March
the company expects the dealers to sell high volumes because all the allocation of the budget is
done in this month and the company wishes to capitalize on it.

All the dealers are equipped with a fully-fledged service center.However, the company has about
450+ service networks which include 152 dealers and about 300 TATA service centers and TATA
service point. The basic difference between TATA service center and TATA service point is that a
service center can give a guarantee whereas a service point cannot. The service point is not that
well equipped and can only handle emergency cases like in a highway.

On a broader level Sales Organization for Tata Motors is structured (in order of reporting) as following
In the sales organization some of the key structural points are as following:
 Territory Manager and Area managers for different products might be different also.
For example for product lines –
o Light Trucks
o Heavy Trucks &
o Buses
Territory manager and Area managers will be different for each of these 3 products.
But Regional manager will be same and All India sales head will be same.
 Besides the above-mentioned structure there are support staff also which handle
the following work areas
o After Sales

SALES MANAGMENT
o Repairs

II. Territory Allocation

Following are the steps of how Tata Motors defines its territories:
Channel Environment & Strategy
Channel environment at Tata Motors is exclusive owing to the fact that dealerships are also
exclusive; meaning that a channel will sell only Tata Motors vehicle and that too of a category,
for example, a channel will sell only trucks made my Tata Motors. So, it is a dedicated channel
much like cars. As a result, there is no conflict of interest because the dealer is selling only vehicles
of Eicher. The challenge is to find a dealer who is willing to be a part of such an exclusive
channel. Exclusivity is also a barrier considering not many dealers would want to commit to
just one company/channel. Secondly it involves a heavy capital investment.

5. Channel Structure & Design

Tata Motors has three types of channel structure:

1. 3-S structure

2. 2-S Channel
The 2-S channel is used if there is a very big territory and adequate no. of
vehicles are not sold but vehicles are supplied in those areas then only service and
spare is required (The dealer is not authorized to sell).

3. 1-S Channel – These are retailers who sell spares only.

While selecting channel members following characteristics are considered by EML:

 Years in business
 Size of dealer
 Growth and profit record
 Cooperativeness and reputation
 Location

6. Territory Management Practices

The territory sales managers of Tata Motors Ltd have the responsibility of managing the sales of
commercial vehicles in the territory which is in turn done by managing the resources of the
dealerships under them effectively. The TSMs Have to Manage and Drive channel partners in
specific territory to achieve Business Results i.e. Volume and Market Share for a specific Line of
Business.Also the TSMs have to be involved in Sales Forecasting and planning to achieve
targeted Volume and Market Share in the assigned territory. The territory sales managers along
with the dealer sales executives and managers are also involved in planning and implementing
channel and marketing activitiesbased on an understanding of competitor product portfolio, market
trend, and customer segment.Some of these activities include conducting live fuel trials for
competition customers, organizing service camps at strategic micro markets and calling out for
key customers meet. The TSMs again ensure tracking of Competition information and working
counteraction to ensure targeted Volume and market Share with the help of DSMs and
DSEs.TSMs act as a Liaison with Financers and are responsible for Retail finance management by
monitoring liquidation of stock at assigned dealerships to ensure timely payment by financiers
and channeling of funds back into the system.
A key aspect of a TSMs role involves Manpower Availability & Training. They must ensure that
Manpower, Infrastructure and processes at dealerships follow TML norms parallel ensuring
Quality Manpower and availability. The Dealer Sales must be effectively trained on pre-sales
and sales processes, new product features / modification etc.Tata Motors makes sure that in the
beginning of each month it conducts a Dealer Review meeting known as DRCD. The entire agenda
for the meeting is to assess the last month’s sales deals and map out the strategy for the current
months. All the activities that are to be conducted by the DSEs for their respective LOBs are
decided in the meet. The CO,C1,C2 and C3 targets are set owing to the volume and competition
in the micro market allotted. Also in order to retain the top talent and keep the executives
motivated incentives associated with meeting/exceeding the targets are discussed. An additional
assessment handling check is conducted by the TSM to check the learnings and progress made by
the DSEs.The sheet contains basic questions about the products and the customer segments. The
following is the Activity Assessment sheet for one of the DRCDs conducted.

Activity Checklist Learning

Session Dealer Name:

1. List down 10 activities which are used to approach customers

2. How many of the above activities have you done in the past (Say yes against Sl. No.)
3. What is the purpose of organizing activities (tick applicable ones)
o To showcase TML vehicles and other facilities on offer
o To address any customer concerns
o To increase the reach of TML vehicle across more customers
o To improve relationships with financiers, body builders, drivers and mechanics
4. Identify correct order of activity planning for customer meet (mention serial order on left)
1. Budget Approval 6. Identify customers to invite
2. Fix Venue & requirements 7. Identify dealer and TML people to invite
3. Arrange brochure/collateral 8. Arrange for vehicle during event
4. Invite customers 9. Identify data to be recorded during event
5. Remind customer and confirm 10. Circulate data with stakeholders
5. Match most important data to be captured with associated activities (write Sl. No. On left)
o Market Combing 1. Fleet size & Composition
o Financier Engagement 2. Geographic/dealer allocation
o Mobile Service Van 3. Past service history
o Demo 4. Purchase plans
o Fuel Trial 5. Price of Diesel per Ltr
o Association Meet 6. Member list and contact details
6. Match the right kind of customers/objective to activities (write Sl. No. On left)
o Complaining of low mileage 1. Mobile service van
o Having immediate purchase plan 2. Launch
o Having service issues 3. Financier Engagement
o New TML truck model 4. Driver Training
 o Increase live deal visibility 5. Fuel Trial
o Complains drivers don’t want TML 6. Demo
7. Important things to do a day before a demo are (Tick applicable ones)
o Confirm with customers
o Make sure vehicle is available
o Check for Budget approval
o Check for Fuel approval
o Note kilometer reading
8. Important things to do during a fuel trial are (Tick applicable ones)
o Note and take picture of odometer reading for both vehicles
o Make sure that vehicles are equally loaded
o Tell the drivers to maintain better fuel economy
o Make sure that TML fuel economy is always better
o Fuel tank is full before and after the demo
9. What is to be done after an activity is completed (Tick the most appropriate one)
o Inform DSM
o Inform TSM
o Inform teammate
o Inform DSM and TSM with a copy of the record/data form and photos
10. What is the most important aspect to good activity adherence (Tick the most appropriate one)
o Being present during activity
o Having product brochures
o Taking pictures during activity
o Planning the activity well in advance

7. Channels of Distribution and Gap Analysis

Tata Motors have adopted dealership method of distribution of its products. The dealers buy
products from the Co. at a price after negotiation. Then, the Company fixes the MRP. and the
dealer gets the profit within the fixed prices. Tata Motors have contracts with the Government of
India and it provides buses and passenger vehicles to them.

Physical Distribution

The CVBU units are in Jamshedpur, Lucknow, Pantnagar and Dharwad. From the plant, the
finished product reaches the dealerships. The country-wide dealership, sales, services and spare
parts network consists over 2,000 touch points.

GAP ANALYSIS

 Tata Motors has an impressive network of dealers and service stations across the
country for Medium and Heavy Commercial Vehicles (M and HCV) as compared to their
competitors. Most of these service stations are on the inter-city routes. This network
should also be replicated for Small Commercial vehicle segment as well.
  In Commercial Vehicle business, the uniqueness of customer experience is largely driven by
the efficacy of the support network. Vehicle is at the heart of the transport business and
hence responsive after-sales service is critical. Reducing downtime calls for a service
network that is highly responsive and easily accessible. Besides, they should also

1. Introduce mobile service units for Commercial Vehicles that can respond to customer
calls anywhere within a given city.
2. Treat "Services" as a profit center. Hence, the company should "productize" annual
maintenance contracts.

 Tata Motors has invested in IT systems to network its countrywide service network. This
aids them to maintain high spares parts availability at their service stations and reducing
the downtime.

8. Conclusion

The company must focus on combining its unique strengths, as it looks to replicate its recent
successes in new segments and across new geographies. Apart from product reliability, the
most important determinant of future success would the company's ability to bolster its sales
and distribution network. It will catapult the company to the forefront of creating a unique
customer experience, but also help in discovering new revenue streams. The future presents
challenges and opportunities for the company in equal measure both domestically and
internationally. While pitfalls are many, Tata Motors looks well positioned indeed to capitalize on
these opportunities and take on the world.