Benchmarking Retail

Operations
By: Akarsh Prasad
IMI, Delhi
Project Guide: Sangeeth E.K
Introduction
Methodology
onducted !ersonal inter"ie#s #ith retailers to
understand the ser"ice and deli"ery o$ other %MG
!layers
onducted !ersonal inter"ie#s #ith sales&en and
distri'utors o$ di(erent co&!anies to get insights into
the #orking o$ their distri'ution syste&, technology in
use, incenti"es gi"en to di(erent channels, MIS re!orts
and other in$or&ation related to their o!erations
Bench&arking
)etail *!erations
Objectives

Increase the retail !resence o$ Per$etti "an Melle

Deter&ine ho# di(erent %MG co&!anies ha"e e"ol"ed

in ter&s o$ their o!erations

Identi$y i$ any ne# syste&s and !rocesses 'een

&astered in the o!erations o$ other %MG co&!anies
Suggest ne# !lans on incenti"i+ing "arious channels
Distributors Visited in
Hyderabad
Distributors Visited in
Bangalore
Progress
Distributor urnover
,--
.-
/-
01,
02-
3-
3,
,-
3,
.,
3.
0-
03
0,-
0- 04
3--
.,
0 . 4 2 , 3 1 / 5 0- 00 0. 04 02 0, 03
Distributor urnover Per Month
6urno"er 7In 8akh )s9 6urno"er 7In 8akh )s9. 6urno"er 7In 8akh )s9.
echnology
!ompany "ame echnology in #se
:;8 <uantu&
I6 %oru&
Pe!si SAM=A
Britannia ;daan
GSK %oru&
ad'ury >ino&kar
=estle SDS
Da'ur Drishti
Godrej DIS:A
Marico Midas
I! $ %orum
&'( ) %orum
I!
G ) 0 7 4 . 2 , ? 9
A a s h i r " a a d A a t a
S u n $ e a s t B i s c u i t s
M i n t @ * % r e s h
S a l t
a n d y & a n
= o o d l e s a n d P a s t a
G ) 0 7 4 . 2 , ? 9
A a s h i r " a a d A a t a
S u n $ e a s t B i s c u i t s
M i n t @ * % r e s h
S a l t
a n d y & a n
= o o d l e s a n d P a s t a
G). 72..?9
%ia&a Di >ills
Ai"el Di >ills
Essen+a Di >ills
Su!eria
Engage Deo S!ray
G). 72..?9
%ia&a Di >ills
Ai"el Di >ills
Essen+a Di >ills
Su!eria
Engage Deo S!ray
G)4 74.2,?9
BingoB Mad Angles
BingoB 6angles
BingoB 6edhe Medhe
BingoB Cu&itos
G)4 74.2,?9
BingoB Mad Angles
BingoB 6angles
BingoB 6edhe Medhe
BingoB Cu&itos
G ) 2 7 0 . 2 , ? 9
i g a r e t t e s
G ) 2 7 0 . 2 , ? 9
i g a r e t t e s I6
I6
I!
*O+,*+
PRO&R,
M
-ligibility. I$ a retailer !urchases stock #orth )s
0-,--- or &ore across Gr0 7eDce!t Aata9, Gr. and
Gr4, then he is eligi'le to 'e a !art o$ this !rogra&
!lassi/cation o0 Outlets
&old $ Purchases above Rs 123222
'ilver $ Purchases above Rs 453222
Bron6e $ Purchases above Rs 423222
I$ )s 0--- #orth Aata is !urchased,
A &old retailer #ould get 4 point
A 'ilver retailer #ould get 2785 points, and
A Bron6e retailer #ould get 2752 points
Si&ilarly, i$ )s .,- #orth Bingo is !urchased,
A &old retailer #ould get 4 point
A 'ilver retailer #ould get 2785 points, and
A Bron6e retailer #ould get 2752 points
Recommendation 4
For slow moving products or unseasonal products, the points offered can
be 1.5 to 2 times the existing points
! l a s s i / c a
t i o n o 0
O u t l e t s

% o r e 9 a m p l e 3

, ! l a s s $ P u r c h a s e s : o r t h R s ; 2 2 2 p l u s

B ! l a s s $ P u r c h a s e s b e t : e e n R s 4 5 2 2 a n d R s ; 2 2 2

! ! l a s s $ P u r c h a s e s : o r t h l e s s t h a n R s 4 5 2 2
P o i n t s
' t r u c t u r e

, ! l a s s $ % o r e v e r y R s 4 2 2 p u r c h a s e $ 1 p o i n t s < R s 1
o =

B ! l a s s $ % o r e v e r y R s 4 2 2 p u r c h a s e $ 4 7 5 p o i n t s < R s
4 7 5 2 o =

! ! l a s s $ % o r e v e r y R s 4 2 2 p u r c h a s e $ 4 p o i n t < R s 4
o =
Recommendation 4

I n c r e a s e t h e d r o ! s i + e o $ t h e e D i s t i n g o u t l e t s

> i l l e n c o u r a g e t h e r e t a i l e r t o ' u y s l o # & o " i n g

o r u n s e a s o n a l ! r o d u c t s

> i l l e n c o u r a g e h i & t o ' u y & o r e o $ P e r $ e t t i E s

! r o d u c t s t h a n t h a t o $ c o & ! e t i t o r s E
BeneFts
o$ the
8oyalty
Progra&
Discount
*(ered
Dro! Si+e
Increases
)educes
o&!etition
Increases
Market
Share
Introduce SMS 'ased ordering syste&
Recommendation 1
emplate o0 the 'M' emplate
=a&e o$ the *utlet
8ocation
)eGuire&ent 7In no o$ jars9
enter %resh S!ear&int H )s 0,3 7013 !ieces9 H I
enter %resh S!ear&int H )s .,4 7./, !ieces9 @ I
enter %resh *cean H )s 044 70,- !ieces9 H I
Al!enlie'e S!icy H )s 0-- 700, !ieces9 H I
enter %ruit H )s 044 70,- !ieces9 @ I
Mentos H )s 044 70,- !ieces9 @ I
Ju+t Jelly H )s 044 70,- !ieces9 @ I
Al!enlie'e H )s 044 70,- !ieces9 @ I
:a!!ydent H )s 044 70,- !ieces9 @ I
hocolie'e H )s02. 703- !ieces9 @ I
hoco Moon+ H )s 0,1., 73- !ieces9 @ I
BeneFt
s
6he retail and
#holesale outlets that
ha"e a steady de&and
$or Per$ettiEs !roducts
6he outlets #here the
distri'utor is una'le to
reach and the
#holesaler is too $ar
$ro& the retail outletEs
location
6he outlets #here the
o#ner is not a"aila'le
to !lace the order
6he stores that are
closed
Introduce a Scratch ard Syste& $or )etailers
Recommendation ;
Figure 1: HUL Scratch Card Coupon
Scratch ard
:igher
Purchases
Increases 8ines
!er Store
Increases
Market Share
Gi$ts can include
Gi$ts can include

)s , o(

)s 0- o(

A BoD o$ hoco
Moon+ %ree

A Jar o$ Al!enlie'e
S!icy %ree

8ucky #inner can

get a 0 g& Gold
Figure 2: Screen Capture of HUL's Quantum Technology
'martphone based
Ordering
Figure : Screen Capture of !a"ur#s !rishti
Technology
Figure $: Focus %rand pops up on his ta"
e&ery time a salesman "oo's orders( This
constantly reminds him a"out the o)ers on
the product and he pushes them accordingly
Introduce S&art Phone Based *rder Booking
Recommendation >
"o billing problems
Outlet :ise argets
'alesman?s Productivity
All the !ro&otional sche&es, discount
!er di(erent outlet, AA6, $ocus 'rand,
etc #ill 'e stored in the !hone
6he di(erent lines, SK;s and a &ini&u&
"alue target to 'e achie"ed 'y the store
can 'e set
>ith the hel! o$ GPS, the sales&an can
'e tracked and can 'e &onitored at all
ti&es in the &arket
MIS re!orts can hel! hi& understand his
target "s achie"e&ent
Recommendation 5
;sing %oru&, these
re!orts can 'e created
to ensure greater
!roducti"ity
Pro"ision to "ie# these
re!orts on the
sales&anEs
s&art!honeKta'let
MIS )e!orts
Indi"idual Sales&an Producti"ity )e!ort
=u&'er o$ *utlets o"ered
=u&'er o$ Bills ut
=u&'er o$ 8ines Sold
=u&'er o$ SK;s sold
BeatK)oute #ise Producti"ity )e!ort
losing Stock #ise )e!ort
Product #ise )e!ort
Pri&ary 6arget "s Achie"e&ent
Secondary 6arget "s Achie"e&ent
Brand "s Pack Penetration
=u&'er o$ *utlets #ith Aisi'ility ;nits
6argets achie"ed 'y such *utlets
Varying Retailer Margins
274
274>
274;
2741
2745
271
274
)etailer Margins

274;
274 274
2741
274>
272@
274
)E6AI8E) MA)GI=S

Introduce )eFll Packs
Recommendation A
)educe
&argins
on
Lagshi!
!roducts
Increase
&argins
on slo#
&o"ing
!roducts
At a
lo#er
!rice
*r at
higher
&argin
s
Display Discounts
Figure *: HUL !iscounts +)ered to !i)erent
+utlets
Dis!lay
Discounts
*(ered 'y
o&!anie
s
Britannia H )s 0.--
H )s0/--
I6 H ;!to )s 0---
Da'ur H )s 5--
=estle H )s ,-- H )s
0---
ad'ury H 2? M 0?
o$ total !urchases
:ein+ H .? o$ total
!urchases
4M H .? o$ total
!urchases
Recommendation 8
Pro"ide Dis!lay ;nits to )etailers
Figure ,: - &ery inno&ati&e !isplay Unit "y
Snic'ers
A lass and B lass outlets
&ust 'e !ro"ided #ith
dis!lay units
6argets can 'e set !er
outlet and i$ targets are
&et, discounts #ould 'e
!ro"ided
Promotion 'cheme !harts
Figure .: /S0's monthly promotional schemes
Figure 1: !a"ur's monthly promotional schemes
Figure 2: HUL's monthly promotional schemes
Recommendation B
'alesman?s 'alary and Incentive
'tructure
5.,
/.4/ /.,
1.,
5
04
1
5.,
5 5
3.,
5
0-
5
1 1
5.,
/
4.,
4.,
0.,
0.1
0./
2
.
2
.
4
2
4
.
4
-
3
..., ,
0
.
4
2
,
3
1
/
5
0-
00
0.
04
02
0,
03
01
0/
Basic 'alary C Incentives o0 'alesmen
Sales&an A"g Basic Salary 7In --- )s9 MaDi&u& Incenti"es 7In --- )s9 MaDi&u& Incenti"es 7In --- )s9
H#* 'alesman?s 'alary and Incentive
'tructure
&rade o0 'alesman 'alary
O=ered
Incentives D#pto Rs ;852E
&rade ! D42C years e9pE )s 00,1-- Aalue 6arget
I$ 0--? achie"ed @ )s 1,-
I$ 0-4? achie"ed @ )s 0.,-
%irst 0-, .- and 4- days target
I$ 4-? target is achie"ed in Frst 0- days H )s ,--
I$ 3-? target is achie"ed in Frst .- days H )s 1,-
I$ 3-? target is achie"ed in Frst .- days and 0-4?
achie"ed o"erall H )s 0,--
*utlet >ise 8ines Sold
=u&'er o$ lines to 'e sold !er outlet H )s ,--
Per$ect Day
I$ the targeted nu&'er o$ lines sold !er day is
achie"ed $or 1-? days o$ the &onth H )s ,--
Per$ect Stores
I$ 3,? o$ the !er$ect storesE targets are &et H )s
1,-
Poster
I$ !osters are dis!layed in /-? o$ the stores H )s
,--
&rade B DPer0ormance
BasedE
)s 5,,--
&rade , D "e: FoineeE )s /,.--
Ta"le 1: HUL's Salesmen Salary and 3ncenti&e Structure
I! 'alesman?s 'alary and Incentive
'tructure
Ta"le 2: 3TC's Salesmen Salary and 3ncenti&e Structure
Basic 'alary. )s 4--- to )s ,---
ravel and Daily ,llo:ance. )s 04, !er day NO )s 441, 7%or ., days9
Incentives
Value arget. I$ 5- H 0--? o$ target achie"ed H )s 1,-
I$ 0-- H 00-? o$ target achie"ed H )s .---
I$ 00-? M target achie"ed H )s 4---
Bills !ut. I$ /@00 'ills cut !er day H )s 4K'ill
I$ 0. M 'ills cut !er day H )s 3K'ill
I0 a ne: product needs to be pushed in the market3
I$ 0-@0. 'ills cut !er day H )s 2K'ill
I$ 04@02 'ills cut !er day H )s 3K'ill
I$ 0,M 'ills cut !er day H )s /K'ill
&o &reen Reduce Rate D&&RRE. I$ Cello# turns to Green H )s .-Koutlet
I$ )ed turns to >hite H )s 0-Koutlet
Basic Salary: )s 1--- to )s 5---
%uel Allo#ance: )s 1- !er day
Incenti"es
I$ Aalue 6arget o$ )s 0., lakhs achie"ed H )s 0---
I$ Aalue 6arget o$ )s . lakhs achie"ed H )s 0--- M )s 0,--
%ocus Product H 0, cases H )s ,--
.- cases H )s 1,-
., cases H )s 0---
Recommendation @
Existing Salary and ncentive Structure
&rade o0
'alesman
'alary
O=ered
%uel
,llo:ance
Incentives D#pto Rs >222E
&rade ! DAC
years e9pE
)s 5,-- )s 1- !er day Value arget
I$ 0--? achie"ed @ )s 1,-
I$ 00-? achie"ed @ )s 0.,-
%irst 423 12 and ;2 days target
I$ 4-? target is achie"ed in Frst 0- days H )s
,--
I$ 3-? target is achie"ed in Frst .- days H )s
1,-
I$ 3-? target is achie"ed in Frst .- days and
00-? achie"ed o"erall H )s 0.,-
Outlet Gise *ines 'old
=u&'er o$ lines to 'e sold !er outlet H )s ,--
Per0ect Day
I$ the targeted nu&'er o$ lines sold !er day is
achie"ed $or 1-? days o$ the &onth H )s ,--
"umber o0 Bills !ut
)s .K 'ill cut
&rade B
DPer0ormance
BasedE
)s /,.-- )s 1- !er day
&rade , D "e:
FoineeE
)s 1,--- )s 1- !er day
Recommendation @
Recommended Salary and Incentive Structure
Buddy Salesman: n addition to the above, in case a salesman is absent, a
bac!up salesman can perform his duty for the day
He will be given Rs 5 per outlet covered