cadbury

About Cadbury…

• 1st Factory setup in 1947• Today 3 factories• Name synonymous to “Chocolates” • Major brands include Dairy Milk, Gems, 5 Star,

Bournvita and Perk • Newer products like Celebrations, Bytes, McSwirl,

Chocki, Delite and Temptations

Life full of Cadbury

Brand Personality

• Vibrant

• Fun and Energizing

• Robust and Alive

Strategic Plan

• Setting stretched financial objectives.• Adopting Value Based Management for major strategic

and operational decisions and business systems.• Creating an outstanding leadership capability within

management. • Sharpening company culture to reflect accountability,

aggressiveness and adaptability.• Aligning our management rewards structure with the

interests of employees & shareowners.

Cadbury Today

• Technologically Advanced

• Customer Oriented

• Internal Customer Satisfaction

Infotech@Cadbury

• Effective communication and availability of information 'at the right time and the right place'

• Awards:– SAP Star Customer Award in 1998 for successful

implementation of SAP R/3 for the invaluable support

– SAP Star Installation Award 2001 for innovative use of BW” in sales analysis.

IT Infrastructure

• Wide Area Network of VSATs, Leased Lines & Virtual Private Network (VPN) connects 41 sites across the country, including HO, Sales Regional offices, factories, depots and cocoa operation office.

• SAP R/3 as an Enterprise Resource Planning tool, Business Information Warehousing (BW) as a Data Warehousing tool and Lotus Notes as a corporate collaborative package.

• Data Center set up maintained by IBM Global Services India Pvt Ltd

Benefits

• Centralization of Data - Flexible Sales & Logistics team

• Forward Integration - Access to secondary (Distributor-to-outlet) sales data every week

• Transparency - Free flow of communication, as well as provides higher-end services

• Efficient Supply Chain – Master Schedule Planning • Better Forecasting - Effective & faster planning• Promotions – Need for localized promotions and

bursts be tracked easily

Business Model

Cadbury India Ltd.

Base Business Mass Market

Base Business

Base Business

Base Chocolate

(BC)All Drinks

Mass Market

Mass Market

All Sugar

EP Chocki

Sales Structure

National Sales Manager (NSM)National Sales Manager (NSM)

Regional Sales Managers (RSM) -

East


East


North


North


South


South


West


West

Branch Sales Manager (BSM) – Base Business




Branch Sales Manager (BSM) –

Mass Market

Branch Sales Manager (BSM) –

Mass Market

6 Area Sales Managers (ASM)

6 Area Sales Managers (ASM)

Distribution NetworkFactory

Mother Warehous

e

Depots

Distributor Warehous

e

Retailers

Diamond Stores

Super Stockists

Retailers

Primary Sales

Secondary Sales

Channel Partners

• Factory3 Factories at Malanpur, Thane, Induri. Responsible for production of different products

• Mother-warehouseExists at the Mumbai. Finished products from each of the factories are sent to

this warehouse from where there is direct dispatch to the depots.

• Depots – Around 24 depots throughout the country with an average of one in each state. Responsible for dispatches to all the distributors or super stockists of that particular state.

• Distributors and Super StockistsPoints of primary salesHave their own sales people

• Retailers Come in direct contact with the customers responsible for converting secondary sales to tertiary

sales.More than 30 lakh retail stores being covered

throughout the country.

Intermediaries

Classification of Retail Outlets

• Based upon Coverage

• Based on products being sold

• Based on Size

A. Based upon Coverage

Coverage

Direct Indirect

Direct vs Indirect Direct Retailers

– Covered by the distributors or the super-stockists of the Company

– Are visited directly by the representatives of the distributor. – Get benefits and are eligible for the schemes undertaken by the

Company, including Cash Discounts (CD), as all the sales to them are on cash basis.

Indirect Retailers Ones which are not on the coverage list of the distributor. Catered by the wholesalers. For the Base Business category the number of such outlets is

very low. But for Mass Market products the number is very high.

Exist more in Class D and Class E places. Benefit that these retail outlets get is that they do not need to

pay in cash always. Can also get sales in credit.

B. Based on products being sold

Groceries Confectionary Cosmetic Shops Department Stores Variety Stores Kitchenware Stores Plastic Products Shops Paan-wala

C. Based on Size

Size-based Classificatio

n

Diamond Stores

Normal Outlets

Diamond Stores

• Organized Retail Sector• Big Stores like Nanz, Big Bazaar, etc., • Getting the shelf-space is the main objective of each

company here• Special treatment to such stores in terms of certain

discounts and offers due to the bulk buying • Economies of scale lead to advantage in terms of

the bargaining capacity. • Direct delivery of products from the depot of the

state.

Personal Selling & E - Channel

No Personal Selling

E- Channel exists in International Countries

Territory Management

Personal selling

and advertising efforts

Sales force

morale

Proper market

coverage

Evaluating sales

personnel

Control selling

expenses

Method of Territory Management

Basic Geographical unit

Sales Potential in control units

Coverage difficulty and redistricting

tentative territories

Control units in tentative territories

Outcome

Division of the country into major cities, town, pin codes, metropolitan statistical areas, trading areas

Identifying the urban centers of these geographical units

Measuring the capacity of sales in each of these initially through tentative estimation and then establishing them and using them futures forecasting and suitably redistricting tentative territories.

Territory Classification

Class E(below

0.5 lakhs)

Class D(0.5-2.5 lakhs)

Class C (2.5-5 lakhs)

Class B (5 lakhs above

business)

Class A (Top 23 towns

by ORG report)

India

Class of cities Cities Sales Items

Class A New Delhi, Mumbai, Chennai, Kolkata,Bangalore, Hyderabad, Ahmedabad, Pune,

Chandigarh,

All base products, Mass market items,

all drinks.

Class B Lucknow, Bhopal, Nagpur, Coimbatore, Trivandrum, Bhubaneswar, Jaipur, Kochi

All base products, selected drinks,

mass market items

Class C Allahabad, Nagpur, Guhwati, Surat, Vijayawada

Selected drinks, selected mass

market items, all base products

Class D Agartala, Srinagar, Ludhiana, Vadodra, Kanpur

Selected drinks, mass market & base

products

Class E Durgapur, Meerut, Kakinada Limited base products, mass market &

drinks

City based Sales

Sales Forecast

Top-down approach

Uses Quantitative Technique of Forecasting

3-year Moving Average Method is implemented

Year divided into 12 periods

Seasonality also taken into account

Major Emphasis on last year’s data

Statistical Tools being used

SAP integration

Promotional Offers according to Sales Forecast

Area Sales Manager

Branch Sales Manager

Regional Sales Manager

National Sales Manager

• operate on Certain work force & resources

• Collect information on sales amount and quantity sold

• Information collected for a year over 12 periods

• Software used – SAP

• Reports to Branch Sales manager

Sales Administration

Area Sales Manager




• 3 Branch manager per region

• Collect information on sales amount and quantity sold for different products

• Information collected for a year over 12 periods considering seasonality effect

• Reports to Regional Sales manager


Area Sales Manager




• 4 Regional managers

• Collect information on total sale expenses


• Reports to National Sales manager


Area Sales Manager




• Collect information on expenses of sales, sale amount & quantity sold from 4 regions



Area Sales Manager



National Sales ManagerIn

form

atio

n F

low

Decis

ion

Flo

w

Top – Down Vs Bottom - Up

Selection of Channel Members

Distributor / Super Stockists

Key aspects to ponder while selecting for a distributor.

Market segment - the distributor must be familiar with your target consumer and segment.

Changes during the product life cycle - different channels can be exploited at different points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were sold via a few specific stores.

Producer - distributor fit - Is there a match between their polices, strategies, image, and yours? Look for 'synergy'.

Qualification assessment - Establishes the experience and track record of your intermediary.

How much training and support will your distributor require?

Analysis of the distributors & super stockist:– Exclusive Partner – Cadbury India tries to look for

distributors that are exclusive to it. The Company officials feel that if that does not happen then the partner might not be in a position to do justice to Cadbury. But in small places, especially rural areas, it is not possible. So the super stockists appointed there are the ones that do not carry brands of competitors.

– Proper Storing Capacity – After the worm infestation incident, the Company has made a point to go in for the partners that can provide proper hygienic storing to the product.

– Well-defined Territory – The areas of the distributors are geographically well defined so that no clash of interests takes place.

Distributor / Super Stockists

Retailers

• Importance

– Have a much stronger personal relationship with the consumer.

– Hold several other brands and products. A consumer will expect to be exposed to many products.

– Offer credit to the customer.– Products and services are promoted and

merchandised by the retailer. – Give the final selling to the product.

Retailers• Products are stocked at different outlets depending upon:

– Type of store – This not only includes the type of products being sold at the outlet but also the size of the store is kept in consideration. Based on this criterion it is decided as in what all products could be sold at the outlet.

– Proper Infrastructure – Need to analyze the storing capability of the store. A store in Jodhpur cannot store chocolates if there is no provision for cooling.

– Proper Storing Capabilities – Must have a safe and hygienic place to store the products. This clause is kept in mind considering the worm infestation issue.

• As far as the selecting criterion is concerned for the diamond outlets, no condition is laid because at all these stores the bare minimum requirements are automatically met in the process of giving better ambience to the customers.

Motivation

Monetary – Margins / Profits

Visi-coolers – Retail outlets are given Cadbury visi- coolers to stock the chocolates. Available to the shopkeepers on various schemes and agreements like EMI, cost-sharing.

Discounts – At different times of the year, the Company gives discounts to the outlets on purchase. Retailers get Cash Discounts of around 2% for cash sales.

Competitions – Various contests are run for the retailers in for decorating the shop with the banners, hangers or other below-the-line promotions. The Company gets exposure for its products and an opportunity to satisfy the retailers. Re-purchase – Expired or spoiled goods, by no fault of the partner, there is a provision to replace the goods. This value proposition has been introduced by the Company only after the incident of worm infestation as a part of Project Vishwas. This is yet another way of establishing trust among the intermediaries.

Motivation

Monetary

Channel Intermediary Margin

Distributor / Super Stockist 5-6%

Retail Outlet 10-12%

Diamond Outlet 12-13%

Project initiated by the Company after the controversy of worm infestation. An outcome of the discussion conducted with the customers, channel partners and Food & Drug administration in Maharashtra. Internationally accepted HACCP (Hazard Analysis and Critical Control Points) is also followed to ensure the quality of products. Periodic checks are made to different distributors as well as the retailers to ensure that proper storing standards are being followed. Any questionable stock is immediately replaced and any guilty partner is black-listed. Harsh measures are not to harass the partners but a step to keep the end-consumer healthy. No other check is required due to the transparency in the entire system. Evaluation means to praise and reward the intermediaries.

Evaluation: Project Vishwas

Channel Conflict

• At best, channel conflict can result in tension among trading partners.

• At worst, retailers, wholesalers, and even the internal sales force can retaliate, using such tactics as:

– Reducing the manufacturer's retail shelf space

– Decreasing marketing support for the manufacturer's products

– Providing additional shelf space or marketing support for a competing brand

– Promoting the retailer's or wholesaler's own private-label brand

– Dropping the manufacturer's product line

Conflicts

No major conflict in Cadbury India Lack of multi-channel in case of the Indian subsidiaryNo sales through electronic means in India Minor tussle exists between the two retail types.

• Organized vs Unorganized retail stores. Reasons

• Benefits given to the organized stores in terms of better margins and bargaining power of these diamond stores.

Resolving Conflict

• Proper measures by compensating traditional partners by providing benefits in the form of

Visi-coolers Discounts Competitions & Rewards Re-purchase Cash Discounts

• Cadbury has so far been very successful in striking the equilibrium and keeping the interests of both the types of partners.

Thank You

cadbury

Documents

area sales

regional sales

branch sales

regional sales

mass market

mass market

worm infestation

sales amount