JAYPEE BUSINESS SCHOOL

NOIDA

Project

On

“Sales and Distribution of Zydus Wellness”

SUBMITTED TO: SUBMITTED BY:

Dr. Vandna Ahuja Gaurav Singh Rana (13609071)Faculty of Marketing Neha Chakraborty (13609083)

Shivika Chandel (13609045)Priya Singh (13609034)

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ACKNOWLEDGEMENTS

I am sincerely thankful to Dr Vandana Ahuja (Project Faculty Guide), under whose guidance we have

successfully completed this project and time spent with her had been a great learning experience. I

think her constant encouragement, warm responses and for filling every gap with valuable ideas has

made this project successful. She made it possible for me to put all my theoretical knowledge to

work out on the topic: “Sales and Distribution of Zydus Wellness”

A mammoth project of this nature calls for intellectual nourishment, professional help and

encouragement from many people. We are highly thankful to all of them for their help and

encouragement. We wish to acknowledge our great debt to all of them whose ideas and

contribution influenced me to complete the project work.

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TABLE OF CONTENT

1. TITLE PAGE

2. ACKNOWLEDGEMENT

3. INTRODUCTION

4. COMPANY OVERVIEW

5. PRODUCT LINE

6. OBJECTIVES

7. APPROACH FOR STUDY

8. INDIAN HEALTH AND WELLNESS INDUSTRY

9. SWOT ANALYSIS

10. BUSINESS MODEL

11. SALES

12. SALES DISTRIBUTION

13. DISTRIBUTION CHANNEL

14. SALES QUOTA

15. RECRUITMENT

16. TRAINING AND DEVELOPMENT

17. CONCLUSION

18. REFERENCES

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Introduction

The world around us is changing fast and so is our life and our lifestyles. Given the kind of active lifestyles we are leading the concern for health and making healthier choices has become even more critical. Today, we all are on lookout for newer, healthier and more wholesome options to lead healthier lives.

Zydus Wellness combines the best of healthcare, nutrition and cosmeceuticals to bring to you an array of the best wellness products to enrich your life. Our products - Sugar Free, Nutralite, Everyuth and Actilife will help nourish and nurture your life and making healthier and better you.

At Zydus Wellness we are always working towards newer, healthier and more wholesome options to lead healthier lives

Zydus Wellness Limited (Zydus Wellness) is an India-based company. The Company operates in the Consumer Products segments. The company sells its products in India. The Company’s brands in the healthcare include Sugar Free, EverYuth, Nutralite and Actilife, which was launched during the fiscal year ended March 31, 2012 (fiscal 2012). ActiLife is a nutritional milk additive for adults. The Company’s business consists of manufacturing and marketing of consumer wellness products in India. During the fiscal 2012, the Company’s Ever Yuth entered into the male skincare market with the launch of EverYuth Menz. The Sugar Free product includes two product types in its portfolio: Sugar Free Gold and Sugar Free Natura. Nutralite offered by the Company is an alternative to butter. The Company supplies Nutralite in both retail, as well as institutional segments.

Vision

We bring Wellness to your Life.

"We will create new experiences by our products that will nourish, nurture and energies your life We shall lead the way through innovation ".

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Company Overview

Zydus Wellness Ltd.

Listed as Asia’s 200 ‘Best under a Billion’ company by Forbes

With growing health awareness and wellness revolution among consumers, a definite shift in consumer preferences and attitudes across India is being witnessed. Continuously increasing pursuit of healthier lifestyles and rising willingness to spend more on fitness and well-being has resulted in a surging demand for products that provide additional health and nutritional benefits. This has created a promising market, with health conscious consumers willing to try better alternatives and make informed choices.

Zydus Wellness Ltd. (ZWL) spearheads the Zydus group’s presence in the fast growing consumer healthcare market. The company was listed as Asia’s 200 ‘Best under a Billion’ by Forbes (2010). With iconic brands like Sugar Free, EverYuth and Nutralite, the company has a strong brand equity in niche segments of sugar substitutes, skincare and table spreads. In fact ‘Sugar Free’, the largest selling sweetener brand in the country with over 93% market share, has now become more of a lifestyle brand rather than just a sugar substitute for diabetics. The skincare range of products sold under the umbrella brand ‘EverYuth’ has been able to retain its leadership position despite increasing competition and an influx of international brands. ‘Nutralite’, India’s largest selling table spread, was added to its portfolio through the acquisition of Carnation Nutra Analogue Foods Ltd. in 2006-07. It has gained widespread consumer acceptance as a healthier substitute to butter.

Zydus Wellness’ product, Everyuth Naturals 3 in 1 Neem Face Pack and Nutralite Yummy Spread bagged the Product of the year Award 2014 in their respective categories. The Product of the Year Award is an internationally recognized certification that celebrates and rewards the best innovations in consumer products and services.

With a continuous thrust on strengthening its brands portfolio, ZWL plans to reach out to more consumers by launching newer variants within the existing categories and exploring possibilities of entering newer categories in the wellness domain.

In 2013-14, ZWL registered sales of Rs. 4,296 million.

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Product Line

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ZYDUS WELLNESS

EVERYOUTH

SUGAR FREE

NUTRALITE

ACTILIFE

FACE WASH, SCRUB, FACE PACK, SOAP, PEEL-OFF MASKS,

FOOT-SCRUB

SUGAR FREE GOLD, SUGAR FREE NATURA

BUTTER, MAYONNAISE LITE

PROTEIN SHAKE

Everyuth

The face is a reflection of one's inner health. Keeping this in mind, Zydus Wellness Ltd. introduced a range of specialty skincare products under the brand name of Everyuth Naturals. These skincare products have been designed to work from within the skin to reflect a clear, beautiful & healthy skin outside.

While having the advantage of being a 'skincare brand from a healthcare company', Everyuth Naturals has always come up with products that are designed keeping in mind the different needs and skin types of women. These products are fortified with the power of natural ingredients that are known for their efficacy and skin nourishing properties. As a result, the brand promises nature's goodness along with the benefits of proven scientific research.

We are present in the following categories:

Face washFacial Masks (peel off, packs)ScrubsSun blocksWinter care - (body lotion and cream)Cleanser and TonerSoaps Men skin care - (face washes, sun block, moisturizer, & scrub)

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Sugar Free

Sugar Free, a name synonymous to the sugar substitute category, is the leader in India with 94% Market Share.

It's a nutritious, safe and ideal low calorie sugar substitute, giving you the sweetness and taste of sugar but with negligible calories to worry about! Each teaspoon of sugar gives you 20 calories without any nutritive value. Sugar Free gives you the same taste of sugar but with negligible calories. Wherever you think of sugar, think Sugar Free.

Our Brand Portfolio:

Sugar Free Gold: Your healthier sugar alternative, is made from Aspartame - a protein derivative. Sugar Free Gold can be added to tea, coffee, milk, cornflakes, nimbupani, fruit juices etc. So now you can enjoy sweetness and also keep a tab on your calorie intake. It’s ideal for health conscious, overweight and diabetics.

Sugar Free Natura: Made from sugar, tastes like sugar, without the useless calories of sugar. It contains Sucralose, the latest international zero calorie sweetener. You can now replace sugar virtually in any preparations from table top applications to desserts, sweets, mithais like gajar halwa, mixed fruit custard, ice cream, kheer etc.

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Nutralite

Nutralite : Keeping in line the idea of promising health along with fitness, Zydus Wellness offers Nutralite, which is a healthy alternative to butter. Nutralite is a premium table spread which is cholesterol free and does not contain hydrogenated fats. It also has PUFA (poly unsaturated fatty acids) and MUFA (mono unsaturated fatty acids) which are known cholesterol fighters. So, while Nutralite tastes like butter, all of these advantages make its profile healthier. Today, it is widely accepted as a healthier substitute to butter.

Nutralite Yummy Spread : A unique combination of good taste and good health! Now your family can indulge in its good taste, while you can provide them with the promise of good health! Eat all you can because it comes at a pocket-friendly price. Available in selected cities of North India only.

Actiife

Actilife: Daily nutrition for active lifeYou have got only one life, so whatever you do, do it actively! However Today’s hectic lifestyle and irregular eating habits make it tough for You to do so. Introducing Actlife-Nutritional Health drink for adults, especially formulated as per the guidelines by National Institute of Nutrition – ICMR, For Indian adults (males and females above 18 years of age). Actilife is low on fat and is Enriched with prebiotic ActiFibres that improve digestion, reduce cholesterol and improve overall immunity. It has got stress relievers – 100% RDA of Vitamin C and Vitamin B complex (B1, B2, B3, B5, B6, 7B, B8, B9, and B12) – to keep you active throughout the day. Have Actilife Twice a day to bring about an active change in your life.

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Objectives

To make in depth study of recruitment process of sales personnel; their training and development compensation, evaluation & control by the company.

Develop proper insight about distribution management involving channel member selection; effective working monitoring and control of logistics and channel strategy.

To study the sales quota of the company. To identify the problem in sales effort, sales administration and sales and distribution

management strategy developed of the company. Suggest the proper solution for the inefficiencies and inaccuracy found in the process.

Approach for study:

Methodology followed:-

1. Secondary Data ( Research Papers and companies websites)• Finding the factors which improve the sales efficiency if sales force• Identifying the ways for designing effective distribution channel

2. Primary Data (Interview of company’s sales official and retail survey)Methodology followed:-a. Structured Interview of company’s sales official. b. Understanding the role of Zydus wellness in retail market.

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Indian Health & Wellness industry

Valued at over INR 590 bn, growing at CAGR of 18% - 20% p.a.

Growth expected to continue.

Industry growth being driven by: Increasing per capita spend on wellness from Rs.300 in 2008 to more than Rs. 480 in 2012.

Rapid urbanization

Improvement in overall standard of living though with a compromised quality of life

Mounting health problems attributed to high pressure lifestyle

Growing health consciousness and aspiration for a better life

Increasing willingness to explore new solutions and make informed choices

Zydus Wellness – A niche in itself

Making Indians healthier since 1988

Advocating ‘healthy living’ and anticipating the emerging day-to-day need for health foods and healthy personal care

Present in niche segments with strong brands A healthier alternative to sugar - leading the market with over 94% share in share of the

sugar substitutes category Skincare range - market leader in facial scrub and facial peel off and a strong presence in

face-wash

India’s largest selling table spread - a healthier alternative to butter First Nutritional drink fortified with Prebiotic Actifibres that help manage cholesterol,

improve digestion and build immunity. Direct reach to all 50k+ population towns through strong field force

Endeavouring to improve quality of life through continuous innovation

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Sugar Free- Largest Selling Low Calorie Sweetener

Leadership positions in variants of :-

Aspartame with Sugar Free Gold

Sucralose with Sugar Free Natura Present in several forms like pellets, liquid sachets, powders and tablets to enhance consumer experience and offer wider choice

Strategic initiative of driving consumption by

A new theme campaign, starring famous Bollywood celebrity Akshay Kumar, that integrates all products on one platform.

Presence at key health care professional events

For the future our focus is on driving growth by bringing in new users given the low household penetration of sugar substitutes

Everyuth – Celebrating Youth leadership position in facial peel-off and facial scrub despite a hypercompetitive landscape.

Presence in highly competitive face wash category

A powerful new marketing program to support the re-launch with well known actress Nargis Fakhri signed on as the brand ambassador.

Extended the brand into premium soaps

Expect to drive the business by focusing on

an expanded portfolio and

improving distribution reach to consolidate our position further

Nutralite – ‘Health first , taste always’12

Cholesterol Free and has no trans fats or hydrogenated fats

Largest brand in the margarine category in India

Business conditions remained challenging with local players and new entrants vying for market share

We expanded our presence in the retail segment through the launch of a premium variant, Nutralite with Omega 3 and an additional flavor variant with Cheese. Both products are free of trans fats and are fortified with Vitamins A, D and E.

Nutralite with Omega 3 has also been voted as “Product of the Year 2013”.

Actilife- Nutrition for adults

In 2011, forayed into nutraceutical space with launch of ActiLife, a nutritional milk additive for adults

Formulated based on guidelines of the National Institute of Nutrition, ICMR for Adults (men and women above 18 years of age)

Low on fat, enriched with prebiotic ActiFibres that improve digestion, reduce cholesterol and improve overall immunity.

Has stress busters such as 100% RDA of Vitamin C and Vitamin B complex to keep a person active throughout the day.

We face the usual challenges associated with category creation and are taking a measured approach

Continued efforts to increase distribution reach and tap new accounts to widen the customer base.

With Indian consumers adopting healthier lifestyles, Nutralite shall continue enjoying a distinct position of being a ‘Good for the heart and health’ brand

SWOT ANALYSIS:

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STRENGTH:-

Zydus wellness has a well-built image of excellence and innovation. It has a well logistics and distribution channel network. High brand image of Zydus in the market. Offering new products to the customers continuously.

WEEKNESS:-

Trade schemes and margin of some competitors are better. No regular audit of the distributors. No training schedules for training of distributors salesman. Equal importance is not given by distributors to all retailors. Lagging much behind in advertisements and promotional activities.

OPPORTUNITIES:-

There is a phenomenal scope for value addition in innovations in product development, packaging and presentation.

By solving the replacement problem they can maximize the attention of retailors about selling the product.

THREATS:-

Cut throat competition in the market. Amul focuses more on advertisement, as ads can be seen often. Customer are brand loyal , Customer are not well informed.

Finanacial

Consolidated Financial Position as at 31st Mar ‘13 Rs. Mio. Net Worth : 2,565

Net Fixed Assets : 943

Net Current Assets : 1,564

Cash & Bank Balance : 1,908

Capex in FY13 : 25

COMPETITORS IN THE INDUSTRY:

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AMUL

BRITANNIA

MARIGOLD

VEELITE

NUTDELIGHT

NUTRELLA

Strategies for growth momentum

New Products: Line extensions and upgrades of existing brands will ensure continued consumer relevance. We are also evaluating new categories that fit our business philosophy.

Explore relevant acquisitions that complement the current business with scope to enhance sales and bottom line

Innovative communication and promotion strategy to ensure superior visibility of all the brands across the media

Continuous category creation through unconventional media apart from mainline business building strategies

Distribution: Widening brand reach to fuel consumer demand and capitalize untapped opportunities

Business Model

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B2B Business to business model is followed in Zydus wellness to generate sales and earn high profit.

1. Market based activityProduct Display on retail shopPosters, banners in whole sale market

2. Promotions and SchemesFor e.g.:- Buy 5 Face wash get 1 free

3. Gift SchemeRetail bonanza: - 2 percent of discount on each bulk buying with assured gift

4. Cash Discount

Amount/volume Discount Discount price Net price1000 2% 20 9805000 2% 100 490010000 2% 200 980050000 2% 1000 49000

5. Promotions by different medium such as :-

TV Commercials, News Paper, and Magazine: - all are covered in marketing expenses.

6. Field force availability of product to retailer.7. To make aware about the product to retailer8. Telling about various offerings, schemes, gift, coupons etc.

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Sales hierarchy

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Vice President

Sales Manger

Zonal Sales Manager

Territory Manager

Marketing Executive

Distribution Network

7 manufacturing hub 22 CFA’s 2200 stockist 50000 Retail store

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Zydus Wellness

Manufacturing Hub

CFA’s

Stockist/ Dealers

Manufacturing Hub

Retailers

Zydus Wellness distribution in India has witnessed a paradigm shift. Before 1990, pharmaceutical companies established their own depots and warehouses. Now they have been replaced by clearing and forwarding agents (CFAs).

CFAs: These organizations are primarily responsible for maintaining storage (stock) of the company’s products and forwarding SKUs to the stockist on request. Most companies keep 1–3 CFAs in each Indian state. On an average, a company may work with a total of 25–35 CFAs. The CFAs are paid by the company yearly, once or twice, on a basis of the percentage of total turnover of products.

Stockist: is the distributor, who can simultaneously handle more than one company (usually, 5–15 depending on the city area), and may go up to even 30–50 different manufacturers. They pay for the products directly in the name of the pharmaceutical company after 30 to 45 days.

The retail Store obtains products from the stockist or sub stockist through whom it finally reaches the consumers (patients).

Typical Supply chain structure

Margin Structure in Distribution

Margins are represented as % on the MRP (Maximum Retail Price) A sample cost structure is shown for a product with MRP of INR 100

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Plant Warehouse

Direct Route Market

Indirect Route Distributor Market

DISTRIBUTION TO MODERN RETAIL STORES:

Modern Retailing in India

In a sharp contrast to the Retail sector in developed economics, retailing in India though large in terms of size is highly fragmented and unorganized. With close to 12 million retail outlets the country has one of the highest retail densities worldwide. Retailers include street vendors, supermarkets, department stores, restaurants, hotels .Where the ownership and management rest with one person are classified as traditional or unorganized retail outlets. These formats typically require employees with low skills and account for around two-third sectors output.

TRADITIONAL FORMATS:

Kirana stores Grocery Exclusive/Multiple Brand outlet Bakery shops

MODERN FORMATS:

Supermarkets Hypermarkets Departmental Stores

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Channel Design

Zydus Wellness has two types of channel selling ‐

i. Regular (traditional) retail channel, ii. Direct Selling Channel in the name of Zydus Wellness Network .

Zydus Wellness has a well-entrenched high distribution model which comprises of C&FAs, Redistribution Stockists, wholesalers and retailers (as shown earlier). Zydus Wellness distribution network is recognized as one of its key strengths. Its focuses on Product availability, Brand communication, and higher levels of brand experience.

Channel Structure (Special Focus is on NCR)

Typically, the goods produced in each of the ZYDUS WELLNESS's 40 factories are sent to a depot with the help of a carrying and forwarding agent (C&FA). The company has its depot in every state of the country. The C&FA is a third party and gets servicing fee for stock and delivery of the products. In each town, there is at least a redistribution stockist (RS) who takes the goods from the C&FA and sells them to retail outlets.

Redistribution Stockists:

The ZYDUS WELLNESS management realized certain problems with the existing sales model. First, the model was not viable for small towns with small population and small business. ZYDUS WELLNESS found it expensive to appoint one stockist exclusively for each town. Secondly, the retail revolution in the country has changed the pattern the customers shop. Large retail self-service shops are becoming commonplace.

Total number of RS in NCR = 3 (at Gurgaon, Delhi, Ghaziabad). This is going to be reduced to only one with effect from next month of this year.

Sales Margin: 4.76% which includes cash discount, unloading expenses from depot, distribution expenses to retailers, incentive schemes & other incidental expenses.

Modes of transport used: Rickshaw, tempo, truck.

Incentive schemes: Before 2000 holiday packages and tours but after 2000 no non monetary‐ incentive for RS.

Software systems and Information System: UNIFY 8.3 (Developed by IBM & CMC). This software needs to be synchronized daily and the system updates any information/ incentive schemes / sales figures etc to and from the common shared platform.

Areas of Operations: Marked for each of the RS.

Selling Operations: RSs sells the goods to Wholesaler (gets 1.5 % max. discount from RS) ‐

Retailers (gets 1.0% max. discount from RS)

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Wholesaler:

Gets cash discounts and other schemes promoted by ZYDUS WELLNESS

Retailers: Total retailer base in NCR: Approximately 570. Sales Margin: Depends on the product Face wash 8% on MRP ‐ Sugar free 10% on MRP ‐ Nutralite 8% on MRP ‐

Incentive schemes: Company programs (Scheme Discounts + Cash Discounts) TPR schemes based on Sales (1 % to 4 %)

Field Sales Force:

To meet the ever changing needs of the consumer, ZYDUS WELLNESS has set up a distribution‐ network that ensures availability of all their products, in all outlets, at all times. This includes, maintaining favourable trade relations, providing innovative incentives to retailers and organizing demand generation activities among a host of other things. The important activities that ZYDUS WELLNESS field sales force does are (i) target chasing and (ii) reporting on a daily basis. Account information is maintained on palmtops given by ZYDUS WELLNESS. During our research and informal survey of ZYDUS WELLNESS field sales force, we came to know that for the last two years, training is not being given at all to the sales force. ZYDUS WELLNESS has limited the network channel selling to categories of Home & Personal Care with exclusive brands for this channel. That is, these particular brands (products) are all exclusive to specifically developed for the Direct Selling channel, and not available in the retail channel. The general trade comprises grocery stores, chemists, wholesaler, kiosks and general stores. Hindustan Unilever services each with a tailor made mix of services. ‐

Initiatives taken to improve the Distribution Network

Zydus Wellness has taken the following initiatives to improve its distribution network:

1. Setting up of full scale sales organisation comprising key account management and‐ activation to impact, fully engage and service modern retailers as they emerge.

2. Servicing Channel partners and customers with continuous daily replenishment.

3. Leveraging scale and building expertise to service Modern Trade and Rural Markets.

4. Delayering of sales force to improve response times and service levels.

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5. Revamping of its sales organisation in the rural markets to fully meet the emerging needs and increased purchasing power of the rural population. ZYDUS WELLNESS’s distribution network in rural India already directly covers about 50,000 villages, reaching about 250 million consumers

6. Implementation of supply chain system that connects stockists across the country, and also includes a back end system connecting suppliers, all company sites and stretching right up to‐ stockists. IT tools have been deployed for connectivity across the extended supply chains. Backend processes have been combined into a common Shared Service infrastructure.

7. Launching of Project Shakti through which the company is able to extend its operations in villages. ZYDUS WELLNESS has also included several NGOs and state governments as the initiative helps rural women to improve their financial position.

8. Launching of ZYDUS WELLNESS Network to leverage the channel of direct selling by presenting customised offerings in 11 home and personal care and food categories. Started in 2003, it already has a base of 300,000 consultants across the country.

9. Finding out Innovative ways to reach out to its consumers, particularly in rural areas by

leveraging non conventional media like wall paintings, cinema vans, weekly markets (haats),‐ fairs and festivals.

10. Initiating the concept of Super Value Stores (SVS) in urban areas to partner traditional stores

to provide a range of services ranging from managing their inventory to setting up POS (point of sale) banners. In addition to this, to boost up traditional retail in the face increasing in roads made by large, modern retailing chains like Spencer’s, Reliance Fresh etc (where‐ ZYDUS WELLNESS is squeezed harder for discounts), ZYDUS WELLNESS started restructuring some of the selected SVSs into the form of self service retail shops a la modern retails. This‐ is to protect & maintain the competitive advantage that ZYDUS WELLNESS has over its biggest competitors in the other markets (e.g., P&G), with its very deep distribution reach through traditional retail.

11. Launching the several scheme with upmarket pharmacies and retailers to sale its premium

brands.

12. Undertaking several initiatives for traditional channels in order to improve its capabilities at the front end by developing skills for stockists' sales force.‐

13. Launching of several promotional schemes for existing wholesalers and distributors. For

instance, it has started the scheme last year to provide a platform for the wholesaler and ZYDUS WELLNESS to grow the business by earning points and redeeming them.

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Field Force Management

The working cycle of a typical ZYDUS WELLNESS field force member is from 21st of every month to the 20th of the next month. During this period he is given various targets that helps to achieve company objectives and gives him a chance to prove his performance relative to other.

To start with the field force member is given a particular area and his responsibility is to cater to all the retailers in that area. While deciding the area for each member of the field force, the company makes sure that the operating area of each field member doesn't overlap with his other colleagues. There are various methods used by the company to incentivize the field force Monetary and Non-‐Monetary.

Analytical Framework We tried to analyse ZYDUS WELLNESS’s distribution network in the light of 20 most significant variables that affect the distribution part of channel management for any organization in the business of marketing & selling of goods. The variables, their explanations and their impact on the ZYDUS WELLNESS’s distribution network are given below –

1. Number of Consumers

In retail business dominated by traditional stores like Kirana Stores etc (Indian retail business falls in this category), higher the no. of consumers, higher will be the no. of channel intermediaries. The implication of this is that there will be many layers in the channel in such a situation and managing such a complex distribution network by keeping tabs on every player will be a huge task. Moreover, Transport & Logistics (“T&L”) support provided by the organization needs to be well organized.

Implication for ZYDUS WELLNESS

ZYDUS WELLNESS’s key strength lies in managing its distribution network in India. ZYDUS WELLNESS's distribution network comprises about 2,000 redistribution stockists, covering about 4.3 million retail outlets reaching the entire urban population, and about 250 million rural consumers in India. It’s said that ZYDUS WELLNESS is able to touch the lives of about 1 out of every 10 Indian consumers. This achievement is due to the sheer strength of its distribution network (products should be good as always, otherwise they will find no buyers in the long run).

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2. Geographic Dispersion of Consumers

Again, this is closely related with the previous variable, more so in a large, geographically diverse country like in India. With the increase in this dispersion level, more intermediaries and more layers are required in the distribution network so as to effectively reach the length & breadth of the country. Obviously the T&L management for such an organization would be critical to accomplish this.

Implication for ZYDUS WELLNESS

For a country as geographically diverse as India, pan Indian presence & market leadership can‐ only be possible when products reach even the remotest parts of the country. ZYDUS WELLNESS is very successful in achieving and maintaining this reach due to its distribution network.

3. Frequency of Purchase

If the frequency of purchase is high, then transport intensity in “the last mile” (i.e., from distributor to retailers) increases manifold. For FMCG products, as a thumb rule we can take that the mean time between two purchases is ~ 90 days. With the introduction of smaller form factor packaging for FMCG goods (Re.1 / shampoo sachets being a very good example), the transport‐ intensity increased further.

ZYDUS WELLNESS has about 2000 redistribution stockists, who supply to approx. 4.3 million outlets across India. Since manufacturing is done at 40 plants around the country, rationalizing the logistics and planning is a huge task. An innovative step in that regard has been the formation of the Mother Depot and Just in Time System (MD JIT). Certain C&FAs were selected‐ across the country to act as mother depots. Each of them has a minimum number of JIT depots attached for stock requirements. All brands and packs required for the set of markets which the MD and JITs service in a given area are sent to the mother depot by all manufacturing units. The JITs draw their requirements from the MD on a weekly or bi weekly basis and supply to stockists‐ in that area, who, in turn, supply to retailers.

4. Tendency to Postpone Purchase

If the tendency to postpone purchase is lesser, then the product will be easier to distribute. For example, products/services like Fire Extinguishers, Life Insurance etc. are such that though these are needed, the overall tendency for the consumers is to postpone the purchases – these products/services can be termed as “necessary evil”. For this kind of products, regular reinforcement in the minds of consumers becomes necessary, sales field force becomes critical and use of “expert” field force is commonplace.

Implication for ZYDUS WELLNESS

Since FMCG products are used regularly and these products are not “necessary evils”, distribution network of ZYDUS WELLNESS does not require any expert field force to sell its products. Only the recent diversification of ZYDUS WELLNESS into Home Water Purification business (“Pure It” brand) needs dedicated field sales force.

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Sales Quota

Goals set by company for marketing unit for specific period. Marketing unit may be regions, territory, branch, salesperson, a distribution or a dealer. Can be set on sales unit, expenses, profit margin, activity, customer satisfaction etc. Annual sales quota for each unit - broken down to quarterly/monthly.

Objective of sales quota

Making available performance standard:

Act as a tool to measure performance of sales person, act as a goal/target setter. Performance standard set against which actual performance is compared to evaluate

salespersons performance.

Controlling performance:

By setting quotas for special activities, sales volume & selling expenses.

The SM (sales manager) controls performance for e.g.:-10 calls per day i.e. 5 calls of business customer’s indirectly monitors/controls the activities of sales person by setting quotas.

Can keep an eye on wasteful expenditure on customer (travelling, lodging, entertainment & meals)

Control over reporting &can influence sales performance.

Motivating people:

Sales quotas are set by motivating sales people by money.

Performance is recognized by awards/rewards like trips abroad.

Financial compensation/ rewards are called incentives.

o Incentives linked with quotas which are made achievable for sales person. So that he puts in extra effort to achieve his quota.

Identifying strength &weakness:

Actual performance compound respective quotas of difference territories & salespersons.

The SM can identify successful &unsuccessful performance.

o Analysis of causes of poor performance may reveal training program needs improvement, better product quality required to meet customer needs & positioning strategy.

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Types of Sales Quota

1. Sales volume quota2. Activity based quota3. Combination quota

Zydus Well ness use combination quota:-

Sales Volumes Quota

PersonSales Quota

Actual Sales

Volume Difference

Performance Index

A 1000 1100 100 110% 1.10B 1100 1000 -100 91% 0.91C 1200 1300 100 108% 1.08D 900 600 -300 67% 0.67

376% 3.76Average of Performance Index 94% 0.94

Figures are in units

Activity based quota includes:

Explain new products and new applications of both old and new products Product demonstration Call on prospect Generate sales lead Develop new business

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Recruitment and Selection Process

Zydus Wellness recruitment process is well established, they give ads in newspaper, company’s website, Institutions ,etc.

Zydus Wellness recruits MT’s from premier B schools.

They mostly offer PPO’s to the Summer Interns.

Employee references and consultancy includes lateral recruitment.

SELECTION PROCESS INVOLVES:

Group Exercise

Interview

Presentations

Psychometric tests

Training and Development

1. Induction training2. Internal training3. On Job training4. Competency development

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Induction training includes

Internal Training

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Sales Trainee

Duration: 1 week

Place: HO

For Sales Trainee and

AUT

Duration: 1 month

In Branch office

Competency training

Performance Evaluation of sales personnel

Wholesale Distributor Employee: Recruitment and Compensation

Recruitment

The salespersons of distributors are appointed by the distributor himself in consultation with ITC officials

Compensation30

Branch Manager recommends AE

and AM for training

Location: Head Office

Duration: 6 Days

Monthly Sales TargetVisibility TargetMonthly Target

Sales Volume for each product categoryMarket share growth rate

Performance of the branch

• Their fixed salary is paid by the distributor but is reimbursed by the company

• The variable salary of salesmen is decided on his meeting of sales target

Control mechanism

• The performance and work of WD employees is evaluated by company’s officials weekly

• Their daily sales order is monitored by Area Executive

• The salesmen is given a geographical territory which doesn’t consider sales potential

• Salesmen has to cover 30 outlets each day

• They are given a beat plan for each day

• If a WD employee is not performing then the company can sack him

Roles of Salesman

• Prospecting- Searching for new outlets

• Targeting- Visiting potential outlets

• Communicating- Informing about products and offers

• An order taker- As per requirement in retail and convenience outlet

• Selling to retailers and convenience outlet

• Servicing- Removal of damaged/expired(DND)products

• Information gathering- About needs/ preferences of customers

• Allocating- Fixed time to each outlets

• Cash collection

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Role of Brand Manager – Sugar Free

Job description

Manage & consolidate existing business on brand : This will include growing share of the brand, generate brand salience, trial and repeats. Will involve planning of ATL and BTL activities on the brand, packaging, sales promotion and pricing.

Develop and implement brand strategy: Formulation of overall brand strategy as per the current competitive context and growth strategy for the future. Implementing the overall strategy and monitoring it against the against the agreed performance parameters. Work in close co-ordination with the sales team and working with them to understand the retail dynamics and consumer feedback.

Innovation & New product development: Manage the development of innovations and new products in the category. This will involve consumer understanding, leading innovation projects and interaction with the R&D, packaging, regulatory team and other support team.

Developing brand communication: Work in close co-ordination with the creative and media agency, create sharper consumer insights and develop effective brand communication. Develop 360 degree communication approach.

Market research and retail audit: Retail audit analysis of the respective brand wrt to competition and generating other competitive insights to grow the brand. Action consumer research as per the requirement of the brand.

Overall brand health and profitability: Ensure optimization of brand spends and attaining of desired top line results of the brand as per the budgets approved.

Experiential marketing/Digital/ Unconventional communication strategy: Develop and implement brand activation for higher degree of consumer engagement and interaction using unconventional/ non-traditional and experiential strategy to reach out to the TG/potential TG and build up consumer affinity towards the brand.

Sales planning: Sales planning basis the brand initiatives planned and tracking the sales performance of the brand and respective SKU’s on regular basis.

Operational responsibilities: Day today operational responsibilities on the brand to ensure smooth functioning and performance on the brand.

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Conclusion and Recommendation

Launch of Zydus Related Products:Zydus should launch more Nutralite butter and other products, since consumer want more butter related product.

Reward To Good Retailers:Zydus should give the rewards to the good retailers who are giving good sales. The small retailers who are not giving good sales, Achievable targets should be given and should be rewards in terms of gifts on achieving the targets.

Improvement in Supply:Improvement in supply is required as Distribution frequently get stock out from a particular type of butter which is having more sales. This should not be a repetitive condition. The company should send exactly that what is required by the Distributor. Sending some others flavours which are not demanded can reduce the sales of the popular brand lead to decrease in transparency between the Distributor and the Retailers as the Distributor is going to avail the same policy with the retailers as the company is availing with him. Sending proper supply can strengthen the relation of the company. Distributor and the Retailers.

Improvement in Packaging:Packing can be made more attractive by using cartoons to influence the person. As per the consumer survey, the packaging of product related the best.

Should adopt more flexible Replacement policies:The major reason of dissatisfaction among the other retailers was replacement policy of expired products. It was also the reason for many of the closed outlets. The Distributors gets replacement of 1.4% of total sales by the company. This percentage can be increased to provide more flexibility to the Distributor. The Distributer gets replacement from the company twice in a year. The Distributor should get the replacement monthly so that he can also replace expire products of retailers regularly.

Regular Audit of all the Distributors:A regular audit to all the Distributors should be made by the company officials to check the condition of all the supply vehicles so that proper delivery of butter is made to the retailers. It was observed that some of the supply vehicles of the Distributor were not working properly and the supply was made in boxes.

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References

pdf.marketpublishers.com

http://in.linkedin.com/jobs2/view/18190203

www.researchandmarkets.com › Categories › Company Reports

store.globaldata.com/.../zydus-cadila-healthcare-limited-cadilahc-financia...

http://www.zyduswellness.in/

http://www.zyduswellness.in/investor.html

Other Sources:-

CMIE Prowess Database Magazines Journals and Research papers Google scholar

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