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BAJAJ CORP LTD.Presentation on Sales trainingPory Medhi

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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 themarket 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 for99 yrs from 2008.

3rd largest on overall hair oils segment.

Almond Drop Hair Oil- 50% in light hair oils, highest per unit pricesdue 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

President

OperationsMr. Apoorv Bajaj

CFO

Mr Dilip Maroo

Director Sales

& MarketingMr. Sunil Malhotra

GM- Sales

Mr. Sudhir Taneja

GM-Marketing

Mr. Gurpreet S. Amrit

GM- HR

Mr. S Chatterejee

ViceChairmanMr. R F Hinger

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Brands Worked OnADHO is the market leader in the

LHO category with 55% MS

Main competition from HimamiNavratna (Market leader, 39% MS),

Himgange, Jagat etc

Dabur Amla is the market leader with67% MS

ADHO sachets and 500 ml PET bottlewere the focus brands

KPTT expected to grab 3% MS byyear end

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NPD Strategy

Strategy was to increase the product portfolio and reduce thedependency on ADHO

Cooling hair oil segment is the fastest growing by volume in overall hairoil category.

In FY11 it grew by 16.2% on YoY basis against overall hair oil industrygrowth rate of 12.3%.

Only one national player i.e Navratna by Himani with market share of39% unlike Bajaj ADHO, which has 55% market share in LHO categoryand Dabur Amla with 67% market share in Heavy Amla category.

The category is in nascent stage in most of the states in India except forUP, Bihar, Jharkhand and Chattisgarh while Bajaj Corp has decentdistribution 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-1Third Party HP-1, Raj-1

Central Warehouse-1

Regional Distribution

Centre (C/F) 32

URBAN

Stockist

Retailer

RURAL

Stockist

Wholesaler

Retailer

The company reachesconsumers through 1.95 millionretail outlets serviced by 5653direct distributors and 9900wholesalers

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Sales Process

Hierarchy

GM Sales

INDIA

AGM Sales

2-3 REGIONS

Regional SalesManager

1 REGION

Area SalesManager

1-2 DISTRICT/CITY

Sales officer

5-10 TOWNS

ISR

1 TOWN

AGM ModernTrade

2-3 REGIONS

Terminology

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 productivecalls/day Repeat after 15 days LPC/BPC

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Sales Planning Process

Infrastructure Planning- Deciding the beats, routes and noof ISRs needed

Production Planning AOP/ QOP

Forecasting is done bottom up based on past trends andcompetitions performance

Target Planning- Given in the no. of cases. Target for2011-12 is 48001 cases

KP Target forecasting: Net loss of 7 crores, 6% marketshare to break even next year

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Flow

Paper flow-Credit notes are given to stockists by thecompany to meet expenses which include godown cost,delivery cost, ISR salary etc. Invoices are made for everyorder.

Material flow- Material flows from Factory to hub to C&F tostockist and to retailer.

Damaged goods are either replaced or payed for againstclaims made as asked by stockist.

Cash flow- Orders given by stockists and payments madein cash/DD.

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Sales ProcessProspect

Approach (OpenDialogue)

Need Assessment

Demonstration

Meeting Objections/Handling Complaints

GainingCommitments

Follow up

Sales Kit: DSR- Daily Sales

Report Product Folder

AdvertisementSchedule ADHO, KP Sachets-

Ready Stock Sampling Bottle- KP

POP Material- KP Calculator Diary

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Sales CyclePrimary

Companysells to theStockist

Secondary

Stockistsells toRetailer

Offtake

Retailer toConsumers

(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 month12



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SKU Pricing & PackingBRAND/SKU

3ml 20ml 50ml 75ml 100ml 200ml 300ml

ADHOPc/ Case

MRP:Re 11600

Rs 10144

Rs 2560

Rs 3640

Rs 4640

Rs 8525

Rs 11016

KPTT MRP:Re 11600

Rs 25120

Rs 4860

Rs 8236

BAHO MRP:Re 11000

Rs 18120

Rs 3460

Rs 6536

Rs 9024

BASHO Rs 12120

Rs 2360

Rs 3936

JHO Rs 18

120

Rs 34

60

Rs 65

36

*Note: Company recently launched a 500 ml PET bottle for ADHO and tryingto gauge the response of the consumers towards plastic bottles

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MRP Calculation

Company Billing Rate

VAT @ 12.5 %

Landed Cost toStockist

Stockist Margin @5%

VAT Credit byStockist

Billing by Stockist

Landed Cost toRetailer

Retailer Margin @10%

MRP

83.71*

10.46

94.17

5.18

0.65

99.35

100

10

110

* Pricing illustrated for 300 ml

ADHO

Stockist Margin = 5%Retailer Margin = 10%

Additionally,Cash Discount = 1.25%(Stockist)

Trade scheme for 300mlADHO:

Billing Qty =46Scheme Qty = 2% scheme = 4.30%

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Trade Schemes

Primary Scheme:

I. Scheme passed directly in the bill, it can increase sales upto1.05-1.75 times.

II. It changes from month to month.

Eg: 3 cases free on a bill of 100 cases of 100ml ADHO

Secondary Scheme:

I. Scheme reimbursed to the stockist for doing secondary sales, itcan increase sales upto 1.45-1.5 times.

II. Offer once in 6-12 months.

Eg: 3% of the value of secondary sales done is reimbursed

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Incentives

ISR

I. Bill Cut incentive- Rs 3/ bill of Rs 150 for KP

II. Sales incentive- Rs 500/ 15 Cases for KP

RSM

I. Top 2 to achieve targets get Rs 15000/ Rs 10000

Stockist

I. Target Based Incentive- Trip to Thailand for 10000 cases

II. Turnover Based Incentive- Quaterly: 0.7% of turnover

Annually: 0.4% of turnover

Wholeseller

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

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Competition Pricing


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BRAND/SKU

3ml 20ml 50ml 75ml 100ml 200ml 300ml 500 ml Scheme

ADHO Re 1 Rs 10 Rs 25 Rs 36 Rs 46 Rs 85 Rs 110 Rs 185

KPTT Re 1 Rs25 Rs 48 Rs 82

Navratna Re 1 Rs 27 Rs 50 Rs 85 Rs 115 Rs 195 6%

Himgange Re 1 Rs 25 Rs 47 Rs 78 Rs 185

BAHO Re 1 Rs 18 Rs 34 Rs 65 Rs 90

Dabur Amla Rs 17 Rs 34 Rs 67 Rs 95 3%

Keo karpin Rs 15 Rs 35 Rs 65 Rs 90 3%

H&C Rs 20 Rs 35 Rs 64 Rs 92 2%

BASHO Rs 12 Rs 23 Rs 39

Shanti Amla Rs 10 Rs 20 Rs 34 Rs 60 3%

JHO Rs 18 Rs 34 Rs 65

Parachute

Jasmine

Rs 15 Rs 31 Rs 59 Rs 85 2%

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Sales Promotion

Consumer Offer: Colgate Active Salt Toothpaste free with200 ml ADHO

KPTT activation exercise: Standees outside Barber Shopsand distribute free KP sachets to clients coming formassages

POP Material: Danglers, Flags, Dispensers, BackingSheet, Poster, Hangings, Gondolas etc

TV Ads

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Observations

Cooling hair oil sales are highly influenced by demographics andseasonality

Navratna has very strong brand recall due to celebrity endorsementsby Mr Amitabh Bachchan, Mr Shahrukh Khan etc

Retailers are not to happy with the margins offered by Bajaj, ask forschemes 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 ofKP

Prompt delivery of orders

Highlight the benefits of placing orders directly with the companyrepresentative 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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