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(Managing Sales and Distribution) : Case Study 2 Pi Foods LTD

This document discusses issues with PI Foods Ltd's sales and distribution system. The regional sales manager learned that some distributors were experiencing shortages and some C/D class retailers were not receiving products. The area sales managers had not informed him of these problems. The company's salespeople prioritized higher-volume A/B retailers and only visited smaller C/D retailers if time allowed. As a result, some smaller retailers were not receiving regular visits. To resolve the issues, the area sales manager suggests having telemarketers service smaller retailers and implementing performance policies to better monitor and control salespeople. Addressing these distribution problems is important to maintain sales, market leadership, and retailer satisfaction.

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sushil messi
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67 views

(Managing Sales and Distribution) : Case Study 2 Pi Foods LTD

This document discusses issues with PI Foods Ltd's sales and distribution system. The regional sales manager learned that some distributors were experiencing shortages and some C/D class retailers were not receiving products. The area sales managers had not informed him of these problems. The company's salespeople prioritized higher-volume A/B retailers and only visited smaller C/D retailers if time allowed. As a result, some smaller retailers were not receiving regular visits. To resolve the issues, the area sales manager suggests having telemarketers service smaller retailers and implementing performance policies to better monitor and control salespeople. Addressing these distribution problems is important to maintain sales, market leadership, and retailer satisfaction.

Uploaded by

sushil messi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CASE STUDY 2

PI FOODS LTD.
(Managing Sales and Distribution)
Ramesh Kulkarni, regional sales manager, western region, of PI Foods was discussing
with his area sales managers about the complaints of shortage of supplies by some of the
distributors and non-receipts of company’s products by C and D class retail outlets.
These complaints were received by Ramesh directly from the distributors and the retail
outlets. Ramesh expressed his total dissatisfaction that none of the three area sales
managers had informed him about these problems earlier. PI Food’s product-mix
consisted of baby foods, dairy products like milk powder and ghee, chocolates and
confectionery and beverages. For households and individual consumers, the company’s
distribution channel consisted of distributors and retailers, and for business (or
institutional) customers, the company had distributors and its own sales workforce, as
shown in the Exhibit 1.
Exhibit 1. Distribution Channels
For Consumer Markets:

PI Food Ltd.

Distributors

Retailers

Consumers

For Business (Institutional) Markets:

PI Food Ltd.

Business Customers
Distributors

Each distributor’s salesperson was given a geographic area (or a sales territory) to cover
all types (or classes) or retail outlets located in his territory, as per the norms of
frequency of visits shown in Exhibit 2. Exhibit Types/Class of Outlets (Retailers) D
Class C Class B Class A Class Super ‘A’

2. Norms of Frequency of Visits to Retail Outlet Types Sales Potential Frequency of


visits per (Rs. Per Month) week (Numbers) Pan Shop (Less than 1,000) Once in 2/3
weeks Small Shop (1,000-2,500) Once in 2 weeks Midsize Shop (2,500-7,500) 1 Large
Size Shop (more than 7,500) 1 Super Markets, Chain Stores 2 or 3

(more than 15,000) The time taken for A or ‘Super A’ retailers was much more and also
their sales potential was high. Hence, the natural behaviour of the salespeople was to
achieve the weekly and monthly sales targets by spending more time with Super A, A
and B Class retailers. Only if the time permitted, they visited C and D Class retailers, and
therefore, sometimes these retailers were not visited, as per the standard norms shown in
Exhibit 2. Ramesh told the area sales managers that he came to know from C and D Class
retailers that the distributors’ salespersons did not visit these outlets on a regular basis.
He further said that not only it affected the company’s sales and leadership position in the
market, but also the satisfaction levels of retailers. Ramesh asked the sales managers
what they were doing about these problems. The area sales managers responded that
regarding irregular visits of distributors’ salespersons, they would revert after talking to
their sales officers. However, regarding shortage of supplies to the distributors, the main
reasons were incorrect sales forecasting by distributors, factory production constraints
and misallocation of dispatches from warehouses to distribution due to lack of
information on the differences in the estimated or forecasted sales figures and the factory
production figures. The area sales managers and said he could not give more time, as the
issues involved were important and were to be resolved on priority.

Questions:
1. If you were the area sales manager what would be your suggested plan of action to
resolve the problems?
2. Do you agree with Ramesh that issues involved were important and should be resolved
on priority? Give reasons.

Solution:
STRENGTH:
1. Weekly or monthly sales target of the company were achieved by salespeople.
2. Super ‘A’, A and B Class retailers were provided by good sales service by the
company’s salespeople.

WEAKNESS:
1. Lower class retailers were receiving less focus and service by the company’s
salespeople.

OPPORTUNITY:
1. PI Foods Ltd.’s sales on higher class retailers are secured since their salespeople
prioritize them.

THREAT:
1. If the product is not available in small class outlets, it will promote the product of the
competitor in the market.

ANSWERS TO THE QUESTIONS:


1. The retailers with small sales potential (like Class C and D) will be looked after by
telemarketing people or the company’s dealer. And I will set policies on performance
evaluation and control over the salespeople. Also, I will use the outcome-based and
behaviour-based viewpoint to help evaluate the performance of the salespeople of PI
Foods Ltd.
2. Yes, the issues involved were important and should be resolved on priority as it will
not only affect the company’s sale and leadership position in the market, but also the
satisfaction levels of retailers. And if lower class retailers are not given equal priority
with others, there will be a high chance that they would switch to other suppliers.
Furthermore, it will affect the loyalty of the regular customers and they will switch to
another brand.

Submitted By –
Name: SUSHEEL KUMAR S S
Reg. No.: 201286
Section: D Batch: 2020-2022

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