Marketing channel selection

1. LAUNCHING OF SMALL BUSINESS

2. ??? P’S of MARKETING

3. The STP process is an important concept in the study and application of
marketing. The letters STP stand forsegmentation, targeting, and positioning.
The STP process demonstrates the links between an overall market and how a
company chooses to compete in that market. It is sometimes referred to as a
process, with segmentation being conducted first, then the selection of one or
more target markets and then finally the implementation of positioning. The goal
of the STP process is to guide the organization to the development and
implementation of an appropriate marketing mix, as highlighted in the following
diagram.

5. Market segmentation is the process of dividing an overall market (as
defined by the firm;) into sets of consumers that have similar needs or similar
characteristics.
In simple terms, market segmentation means categorizing consumers into
similar sets, where each group consists of consumers who are similar to
each other in some way.
Each of these groups of consumers is then referred to as a market segment,
or a piece of the market. Please note that, at this stage, the firm has not
evaluated nor selected which market segments that they will target (or
market to).
Once a firm selects specific market segments for their marketing and
strategy purposes, these chosen market segments will then be referred to as
target markets.
Therefore, there should always be more market segments than target
markets, as firms will typically choose to focus their efforts on a few specific
market segments only. There are many reasons for adopting this focused
approach..

6. SEGMENTATIO
N BASE
DESCRIPTION OF EACH MAIN CONSUMER
SEGMENTATION BASE
Geographic
segmentation
Segmenting by country, region, city or other geographic basis.
Demographic
segmentation
Segmenting based on identifiable population characteristics,
such as age, occupation, marital status and so on.
Psychographic
segmentation
This segmentation approach involves an understanding of a
consumer’s lifestyle, interests, and opinions.
Benefit
segmentation
This approach segments consumers on the basis of specific
benefits they are seeking from the product, such as
convenience, or status, or value, and so on.
Behavioral
segmentation
Segmenting the market based on their relationship with the
product or the firm. Examples include: heavy or light users,
brand loyal or brand switchers, and so on.

7. TYPE OF FIRM SEGMENTATION BASE POSSIBLE MARKET
SEGMENTS
Banking Demographic segmentation Young couples, young families,
older families, pre-retirement,
retired
Mobile phone carriers Benefit segmentation Highly social, work-oriented,
safety contact, status symbol
Frozen food
manufacturers
A broad mix is used here:
•Demographic segmentation
•Psychographic segmentation
•Behavioral segmentation
Single households, diet-
conscious, family dining,
parties, budget-conscious,
variety seekers
Toothpaste Benefit segmentation Teeth whitening, sensitive
teeth, fresh breath, cavity
protection, tartar control
Restaurant Behavioral segmentation Regulars, special occasion,
business lunch, quick spot

8. TYPE OF FIRM SUITABLE
SEGMENTATION
APPROACH
RATIONALE
Cosmetics and
perfumes firms
(such as L’Oreal)
Demographics
(gender, age)
OR
Benefit
Cosmetics and perfumes firms could
effectively use a variety of segmentation
variables. For example, males and females
would have different needs, as would younger
and older consumers.
Benefit segmentation could be used (some
possible could include: skin repair, remove
wrinkles, glowing skin, acne reduction,
attractive look, social status, celebrity
identification).
Car manufacturer Psychographic
(social class)
OR
Geographic
Segmenting by social class makes sense for
this product category, as cars are often a
reflection of a consumer’s lifestyle and used
as a social symbol of success.
Geographic segmentation (such as urban
versus rural) could also be an effective
approach
T

9. As can be seen in the following model of the
full STP(segmentation, targeting and positioning)
process, the selection of target markets occurs after a
number of important steps.
•Firstly the organization defines the product/market that
they are interested in,
• they then group consumers into different market
segments using a variety of segmentation
bases/variables.
•After the segments have been validated, segment
profiles are developed.
• Then, using the information in the segment profile the
target potential target markets are evaluated and
selected, most likely by using an established model or
other set of minimum requirements.

11. The following table outlines the main
factors that are considered when
evaluating potential target markets.
It is likely that many organizations
will have slight variations to these
factors, but the table provides a
good generic guide to the key
issues.

12. Segment size What is the size of the segment
(mainly in terms of unit and
revenue sales)? And is this
substantial enough for the firm
to consider entering?
Each firm is likely to have
minimum size requirements for
a market segment to be
considered financially viable.
Obviously larger firms have
higher requirements.
Segment
growth rate
At what rate is the segment
growing (or perhaps declining)?
What is its future outlook?
Segments with strong growth
rates are more attractive as
firms can gain market share
from primary demand (as
opposed to needing to win
business from established
competitors).
Profit margins Is this a high profit margin
segment or one that is price
competitive?
Pursuing new target markets
typically requires significant
marketing investment, so target
markets with higher profit
margins are always more
attractive

13. Competitors How dominant are the established
competitors? What degree of
competitive rivalry exists? Are there
significant indirect competitors (or
close substitute products)?
Generally firms do not want to
compete in markets where there
are dominant market leaders, as
they tend to be quite aggressive to
new competitors. Therefore, target
markets with a fragmented
competition position are often
preferred. Obviously the lower the
level of competitive rivalry the
better with limited in direct
competition.Note: Porter’s five
forces model could be used to
assist this style of analysis.
Distribution
channels
How easy would it be to gain
access to the appropriate
distribution channels? What level
of new investment would be
required in this regard?
Strong relationships between the
current firms in the distribution
channel would be of concern. The
ability to establish suitable channel
relationships needs to be evident

14. Strategy How well does the
proposed target market fit
with the firm’s strategic
direction and growth
goals?
As part of the firm’s
mission and strategy
statement, a clear
direction of the future of
the organization is
generally understood and
planned out. Therefore,
the target market needs to
contribute to the firm’s
strategic future.
Goals What does the firm have
high or low growth
expectations
The firms with higher
growth goals are more
likely to adopt a multiple
target market strategy and
will, therefore, be more
willing to enter new
markets.

15. Resources Does the firm have the financial
position and staff resources to
successfully enter in this segment?
Firms seek target markets where they
can enter with a comfortable level of
investment, in terms of: financial
investment, staff time, and the
potential disruption to the balance of
their business.
Capability Does the firm have the capability to
develop appropriate products in a
supportive marketing mix
Firms will naturally seek target
markets where they can leverage
their existing skills, capabilities, and
technologies.Target markets that
require the firm to develop new
expertise are generally best avoided.
Role of brand Would the firm be required to create
a new brand, or could an existing
brand be leveraged into the new
target market, or is brand relatively
unimportant?
Establishing a new brand requires
time and money, so that requirement
reduces the attractiveness of a
segment. As does the risk to a brand
of leveraging in into a lower status
segment, such as when targeting
budget conscious consumers.

16. Growth
options
What is a range of other
opportunities available for
growth to the firm
Market development (new
target markets) is simply
one growth. An organization
could also consider market
penetration, product
development, and even
diversification or
acquisition. Therefore,
given the growth choices
available, is the new target
market the best option at
this time?

17. Positioning (or product positioning) is how the product is designed to be perceived
in the marketplace by the target market against its main competitors. In other
words, it’s basically how consumers understand the product offering and how it
differs from similar competitive offerings.
Positioning is built by the organization designing and promoting their product by
highlighting various product features, benefits, and/or other competitive
advantages. Ideally, firms like to create a clear and distinct product positioning. If
they can achieve this positioning goal, then their product becomes the ‘product of
choice’ for certain target markets or consumer needs.
Positioning is the final main phase of the overall STP process (which stands
for segmentation, targeting andpositioning). Positioning is typically more important
in cluttered and competitive markets, particularly for low-involvement purchase
decisions
“Positioning is not what you do to the product; it’s what you do to the mind of the
prospect. It’s how you differentiate your brand in the mind. Positioning
compensates for our over-communicated society by using an oversimplified
message to cut through the clutter and get into the mind. Positioning focuses on
the perceptions of the prospect not on the reality of the brand.”

18. “Positioning can be defined as how a product or a
company’s offer appears in the mind of the target
customer with respect to other brands in the
market. Positioning is critical to brand building
because it is responsible for projecting the brand
identity and creating the perception and image of
the brand in people’s mind.”

19. MARKETING STRATEGIES
• Product
• Price
• Promotion
• Place
• Packing
• Positioning
• People
• P.R

20. MARKETING STRATEGIES
PRODUCT OPC BLENDED-
PPC/PSC SPECIAL
PRICE COST+
DEMAND
SUPPLY
RELATED
Ex
FACTORY/DELIV
ERED
PLACE Ex
FACTORY Ex DEPOT
DELIVERED
PROMOTION

21. ATTITUDES OF MARKETING PERSONNEL

22. MARKETING VALUES
 Deliver ‘WOW’ through service
 Be passionate about customers
 Act with speed and agility
 Perform at high levels of achievement and contribution
 Pursue growth and learning
 Build open and honest relations ships with communication
 Build a positive team and family spirit
 Do more with less
 Conduct business with uncompromising integrity
 Achieve results with team work
 Have trust and respect for the individual
 Be humble

23. Territory Managers

24. KEY DUTIES/RESPONSIBILITIES
OF TERRITORYMANAGERS
Manage your department
• Make every effort to maximize both present and long term sales and gross
profits
• Keep face to face contact with your sales people on a regular basis and
stay current on financial data and inventory
• Set objectives
• Plan, organise, direct and control your sales staff to meet the objectives.
• Use these objectives to help your sales people maximize their potential
• At the beginning of each month, counsel with each sales person to
establish realistic sales objectives for the month and action plan.
• Achieve forecasted sales by following(and if necessary, adjusting) your
written plan of action.
• Monitor each salesperson’s daily performance and compare it with that
months objective

25. • Review financial data that affects areas profit
• Review the entire inventory daily
• Use effective displays and select appropriate options which are attractive
and attention getting to maximise sales
• Assist the sales persons in the selling process whenever needed.
• Involve in customer follow up
• Constructively handle (or supervise the handling of) all customer
complaints
• Prepare in advance and conduct Sales meetings
• Review the performance of your sales people and to motivate and stimulate
them to even greater achivements
• Constantly strive toward continuing professional growth
• Work to improve your sales skill, managerial skills and product
knowledge.

26. • Prepare a variety of status reports including activity, follow up and
adherence to goals
• Ensure effective internal communication both within the sales team and
across the organisation
• Facilitate links with professional and commercial organisations.
• Monitor, analyze sales and market trends.
• Report daily to the boss even if you are working independently and meet
him, minimum once per month
• Report weekly to the Head of Sales

27. KEY DUTIES/RESPONSIBILITIES
OF SALES OFFICERS
• Meet monthly and annual Sales Targets
• Maintain company’s contact management data base with accurate, up-to-
date contact details
• Identify and make contact with potential customers
• Respond to sales requirements from existing and potential customers
• Prepare action plan and schedules to identify specific targets and to project
the number of contacts to be made
• Deliver presentation of product at customer meets, customer sites and at
conferences.
• Deliver advertisement materials and make sure the banners and other POP
materials or prominently displayed.
• Identify and resolve customers concerns.
• Handle customer complaints on priority.

28. • Communication and information:
• Prepare a variety of status reports including activity, follow up and
adherence to goals
• Ensure effective internal communication both within the sales team and
across the organisation
• Facilitate links with professional and commercial organisatioss.
• Report daily to the Area Manager and meet the Area Manager minimum
once per month
• Report weekly to the Head of Sales
• Financial:
• Utilize the resources of Sales Department for the cost effective delivery of
sales to company
• Follow up for collection of payment and report daily to HO the details of
deposits and payments forwarded.

29. • Market Research:
• Monitor and report on the activities of competitors and potential
collaborators and to identify business opportunities and threats.
• Understand the market and how our product is used within that market
• Identify new markets, both geographical and by industry sector for or
product
• Any relevant information pertaining to our trade or general trade, some
times even gossips also to be communicated to concerned authorities

30. ATTITUDES TOWARDS WORK
“Attitudes are generally positive or
negative views of a person, place, thing, or
event.”
Customers are lost, friction and conflicts
occur, stress increases, employees report
sick, performance at work gets affected,
productivity goes down – alldue to a
negative mental attitude.
.
.

31. TIPS FOR POSITIVE ATTITUDE
• Be humble and polite to your co-workers and others.
• Do not criticize anyone. That is not your job.
• Always be professional and do not take any thing personal.
• Do not break the client dress code. It is not a good idea to go to the office
in jeans and sneakers even if they have a casual dress code.
• Light cologne is fine but do not use strong perfume.
• Do not talk loudly when you talk over the phone or to your colleagues.
Talk in a soft and clear voice. .
• Wear fresh and neat clothes.
• Always be punctual.
• Complete your assigned task within the time frame. Do not postpone it.

32. EXAMPLES OF BAD ATTITUDE
• Talking about the boss
• Gossiping
• Clocking in late, Calling in sick often
• Breaking rules
• Lying
• Abusing the telephone
• Refusing to help a coworker or Making fun of coworkers
• Criticizing the work of others
• Using bad language
• Dirty clothes
• Back talking
• Comments on your attitude and Customer complaints

33. • Do not talk about politics and religion in the office premises.
• If you are invited for a happy hour party or any party try to attend it at least
for some time. That is the best place to know more about your colleagues.
• Do not play music loudly.
• Be as easy going. Do not get the "tough guy" label.
• Attend meetings regularly.
• Be enthusiastic.
• Try to be helpful to your co-workers.
• Be a good listener. Do not interrupt when someone else is talking.
• Discuss but do not argue.
• Do not lose your credibility

34. P E R S P E C T I V E
• One evening a Swamiji of Sri Ramakrishna Mutt was addressing the
participants of an MNC company on the concept of work culture. One of
the participants asked the following question to the Swamiji: I am a senior
manager of Materials Department and I joined an organization 25 years
ago as an Engineer Trainee and over the last 25 years I have gone through
every experience in the organization and I am now the senior manager
looking after the material function independently.
• During the initial part of my career, the job was very challenging and
interesting. Every day was exciting and I looked forward to each day with
lot of interest. However, all those exciting days are gone since I do not find
my job any more interesting because there is nothing new in my job. As I
have seen and handled every conceivable situation there is no more
challenges in my work. I am now feeling bored because I am doing a
routine job. However, Swamiji, I am living in the same house for over
forty years, I am the son for the same parents for over forty five years, I am
the

35. • father for the same children for the past ten years and the husband for the
same lady for the past twenty years. In these personal roles I do not feel
bored and the passage of time has not taken away the zeal from me. Please
tell me why I am bored of the routine in the office and not in the house?
• This was a very interesting question and we were all very anxious and
curious to know what the Swamiji had to say. The response from him was
very interesting and convincing. He asked the executive the question:
Please tell me for whom does your wife and the mother of children cook ?
The executive replied that obviously my wife cooks for all of us -the
family. Then the Swamiji said that because the wife ''Serves'' others and
because of this service mindedness, she is not feeling tired or bored.
Similarly when you are at Home you are not perceiving your role as the
necessary work. But in an office, we ''Work'' and not ''Serve''. Anything we
consider, as service will not make us feel bored. That is difference
between Serving and Working. He asked the executive to consider his
work as service and not merely a work

36. PRODUCT MIX

37. PRODUCT STRATEGIES
• SINGLE PRODUCT ALL MARKETS-OPC/PPC
• SPECIFIC PRODUCT FOR SPECIFIC MARKETS – OPC / PPC
• MULTIPLE PRODUCT SAME MARKET
• OPC PREMIUM vs OPC COST INCREASE

39. STATUTORY INFORMATION
PRINTED ON EACH BAG
Following Statutory information is always printed on each cement bag;
S. No Description
1 BIS Monogram
2 IS Code Number
3 License No. of Manufacturer
4 Type and Grade of Cement
5 Brand of Cement
6 Address of Manufacturer
7 Week No. & Year
8 MRP of bag
9 Net mass of cement
10 Customer care contact details

40. QUALITY STANDARDS

41. QUALITY CONTROL
• Fully equipped lab
• Monthly testing to compare
with competitors brands
• Properties are much higher
than BIS Specifications
• Higher values of Lime
Saturation Factors (LSF) ratios
and lower values of free lime
content in our clinker indicate
good quality cement.

42. QUALITY CONTROL VS QUALITY
ASSURANCE
• CONTROL ASSERTS
MEETING SPECIFICATION OF
END PRODUCT
• INSPECTION IS POST
PRODUCTION ACTIVITY TO
REJECT PRODUCT NOT
MEETING SPECIFICATION
• CUSTOMER ASSURED OF
QUALITY BY
IMPLEMENTATION OF
PROCEDURES LAID DOWN
BY MANAGEMENT FROM
RAW MATERIAL TO
DELIVERY OF FINISHED
PRODUCT

43. CUSTOMERCOMPLAINTS &
CUSTOMERS PSHYCE
• Immediate response to complaints
• Protect long term & short term interest of organization
• Educate customer before complaints arise
• Immediate attention on war footing
• Look for ways of convincing customer logically
• Remove the disputed bags from the site as early as possible. May be to a
different site where cement meets requirement
• Get approvals for replacement/refund immediately
• Convince customer about limitation of company’s responsibility to cement
and not consequential damages

44. CUSTOMER FEED BACK AND
RATING
• Application
• Quality
• Packing
• Service

46. PRICING STRATEGIES
• COST PLUS NOT POSSIBLE IN A DYNAMIC MARKET WHERE
SUPPLY DEMAND EQUATIONS CHANGE RAPIDLY FROM
MARKET TO MARKET
• “GO WITH THE CROWD” PRICING
• BRAND POSITIONING FOR RETAIL PRICING IN SPECIFIC
MARKETS

47. EX FACTORY REALISATION-Rs/MT
Rs. Per Bag Rs. Per ton
CUSTOMER RETAIL
PRICE 200 4000
RETAILER MARGIN
5 100
DEALER DISCOUNT
5 100
TRANSPORTER FREIGHT
30 600
EX FACTORY-BEFORE
TAXES
160 3200

48. NAKED CEMENT REALISATION-Rs/MT
Excise duty ED-10%
MRP+3%on ed
16.5
/bag
330/MT
Sales Tax VAT@14.5% 28 480
Packing cost Bag,packing 10-15 200-300
Service Tax
Multiple Handling C&F,Secondary
Transportation
7.5-
15
150-300
EX-FACTORY 102

49. LOGISTICS AND DISTRIBUTION

53. LOGISTICS-TRANSPORTATION
FACTORY
RAIL ROAD SELF
RAIL HEAD
DEPOTS
CUSTOMER
CUSTOMER DEPOT
CUSTOMER
PRIMARY
AGENCY SECONDARY
RAIL
RAILWAYS &
C&F AGENTS
ROAD
TRANSPORT
CONTRACTOR ROAD

54. DISTRIBUTION STRATEGIES
• MAXIMISING EX FACTORY REALISATIONS
• MARKET SPREAD TO RETAIN BRAND RECALL
• MODE OF TRANSPORTATION
• DELIVERY OPTIONS- EX FACTORY VS DOOR DELIVERY

55. FACTORY
CUSTOMER
MARKETING
DEPARTMENT
TRANSPORTER
DOs
INVOICE WITH MATERIALORDER
/PAYMENT
ORDER TO DESPATCH
CYCLE

56.  Nature and importance of
channels
 Channel behavior & organization
 Channel design decisions
 Channel Management decisions

57. Most businesses use third parties or intermediaries to bring their products to
market.
They try to forge a "distribution channel" which can be defined as “All the
organizations through which a product must pass between its point of
production and consumption“
Why does a business give the job of selling its products to intermediaries?
The answer lies in efficiency of distribution costs. Intermediaries are specialists
in selling. They have the contacts, experience and scale of operation which
means that greater sales can be achieved than if the producing business tried to
run a sales operation itself.

58. For example,
A Toyota dealer depends on the Motor company to design cars that meet
consumer needs.
In turn, Toyota depends on the dealer to attract consumers, persuade
them to buy Toyota cars, and service cars after the sale.
The Toyota company also depends on other dealers to provide good sales
and service that will uphold the reputation of Toyota and its dealer body.
In fact, the success of individual Toyota dealers depends on how well the
entire Toyota distribution channel compete with the channels of other
automobile manufacturers.

59. Horizontal conflicts occurs among firms at the same level of the channel.
 For example, some Ford dealers in Chicago complained about other
dealers in the city who stole sales from them by being too aggressive in
their pricing and advertising or by selling outside their assigned territories.
Vertical conflicts refers to conflicts between different levels of the same
channel.
 For example, General Motors came into conflict with its dealer some
years ago by trying to enforce service, pricing, and advertising policies.
Solution : “For ensuring good performance of the channel, each channel
member’s role must be specified and channel conflict must be managed.”

60.  Analyzing customer needs
(a) Lot size (b) Waiting and delivery time (c) Spatial convenience
(d) Product variety (e) Service backup
 Establishing channel objectives
Channel objectives should be stated in terms of targeted service output levels.
Channel design must take into account the strengths and weaknesses of different
types of intermediaries.
 Identifying major channel alternatives
A channel alternative is described by three elements : (a)the types of available
business intermediaries, (b) the number of intermediaries needed, (c) and the terms
and responsibilities of each channel member.
 Evaluating major channel alternatives

61. (a) Lot size :
 In buying cars for its fleet, Hertz prefers a channel from which it can buy
a large lot size.
 A Household wants a channel that permits buying a lot size of one.

63.  The degree to which the marketing channel makes it easy for customers to
purchase the product.
 Example : Chevrolet offers greater spatial convenience than Cadillac, because
there are more Chevrolet dealers.
 Chevrolet’s greater market decentralization helps customers save on transportation
and search costs in buying and repairing an automobile.

64.  The assortment breadth provided by the marketing channel.
 Normally, customers prefer a greater assortment because more choices
increase the chance of finding what they need.
 United Spirits Limited (USL) is the largest spirits company in the
world by volume, selling 114 million cases for the fiscal ending March
21, 2011.

65. • The add-on services are the credit, delivery, installation, repairs and
others provided by the channel. The greater the service backup, the greater
the work provided by the channel.

66.  Channel objectives are a part of and result from the company‘s marketing
objectives that need to be stated in terms of targeted service output levels.
 Profit considerations and asset utilization must be reflected in channel
objectives and the resultant design.
 It should be the Endeavour of the channel members to minimize the total
channel costs and still provide with the desired level of service outputs.
 For example,
1.Perishable products require more direct marketing because of the dangers
associated with delays and repeated handling.
2.Products requiring installation and/or maintenance services are usually sold
and maintained by the company or exclusively branches dealers.
3.Custom-built machinery and specialized business forms are sold directly by
company sales representatives because middlemen lack the requisite
knowledge.

67. Three Elements of Channel Alternatives :
1.The type of business intermediaries  Company Sales force,
prospects in the area, Manufacture’s Agency, Industrial Distributors..
2. The number of intermediaries  Intensive Distribution & Exclusive
Distribution.
3. Terms and responsibilities of each channel participants  price
policies, conditions of sale, territorial rights and specific service to be
performed by each party.
 Companies can choose from a wide variety of channels for reaching
customers from sales forces to agents, distributors, dealers, direct mail,
telemarketing, and the internet.

68.  Economic criteria :- Each channel alternative will produce a different level of sales
and cost.
 Example : Company sales representatives are better trained to sell the company’s
products..
 A Sales agency could comically sell more than a company sales force due to more sales
guys and better knowledge of the geographical area..
 Control criteria :- Channel evolution has to include control issues. Using a sales
agency poses a control problem.
 Example : The agent might not master the technical details of the company’s product or
handle its promotion materials effectively.
 Adaptive Criteria :- Each channel involves some duration of commitment and loss of
flexibility.
 Example : A manufactures seeking a sales agency might have to offer a five year contact.
During this period, other means of selling such as direct mail might become more effective,
but the manufactures is not free to drop the sales agency

69. Channel management warrants :
Selecting channel members :
characteristics of intermediaries  channel member’s length of
business, other lines carried, growth and profit record, cooperativeness and
reputation.
Motivating individual channel members :
Positive motivators  higher margins, special deals, premium,
cooperative advertising allowances, display allowances and sales contests.
Negative motivators  threatening to reduce margins, to slow down
delivery, or to end the relationship altogether.
Evaluating their performance over time :
Evaluating standards  sales quotas, average inventory levels,
customer delivery time, treatment of damaged and lost goods, cooperation in
company promotion and training programs and customer service.

70. For example,
when IBM first introduced its PS/2 personal computers, it re-evaluated its
dealers and allowed only the best ones to carry the new models .
Each IBM dealer had to submit a business plan, send a sales and service
employee to IBM training classes and meet new sales quotas.
Only about two-thirds of IBM’s 2,200 dealers qualified to carry the PS/2
models.

71. DEALER NETWORK

72. DEALER NETWORK
MANUFACTURER
WHOLESALER DIRECT RETAILER
DISTRIBUTOR
/SUPER STOCKISTS
RETAILER 1 RETAILER2

73. DEALER APPOINTMENT
• SELECTION
• APPOINTMENT
• TERMS AND CONDITIONS
• REVIEW
• ASSESSMENT

74. SELECTION CRITERIA
• REASON FOR APPLICATION
• REPUTATION
• CREDIT WORTHINESS
• FINANCIAL CAPABILITY
• CUSTOMER BASE
• CONFLICT OF INTEREST
• TERRITORIAL CONSTRAINTS
• RELATIONSHIP WITH EMPLOYEES

75. DEALER APPOINTMENT PROCEDURE
 Obtaining Stockist Application Form and Agreement in
the company prescribed format. (Territory to be mentioned)
 Partnership Deed/Incorporation certificate, Memorandum
and articles of association (if applicable)
 Prescribed Security Deposit.
 Copy of Registration Certificate (VAT/CST) and PAN Card
 Photos
 Copy of the bank account with the last 3 months details or
Bank introduction letter
 Blank cheque in favour of the company
which should be replaced every year

76. PROCEDURE FOR CREDIT LIMIT
 Copy of IT Returns of previous two years
 Credit Application Form
 Recommendation of Credit Limit by the Sales officer
 Evaluation and recommendation of credit limit by the Area
Manager
 Basis of Assessment for Credit Limit
 Letterheads duly signed by dealer.

77. APPROVAL FOR CREDIT LIMIT
• APPROVING AUTHORITY
Up to the value of one load against security deposit - Sales Officer
Above the cost of one load and up to Rs. --- lakhs - Manager
(All the above approvals should be made with intimation AGM/GM)
Above Rs. ---- lakhs and up to --- lakhs - AGM/GM
Above Rs.--- lakhs - MD
Note: All the credit limits to be reviewed and renewed at the
beginning of every financial year. The credit period is 15 days from
the date of supply i.e. the collection should be made within 15 days for
every supply
• RENEWAL AUTHORITY
• Up to Rs. --- lakhs - AGM/GM
• Above Rs. ---- lakhs - MD

78. DISCOUNTS AND INTEREST
• Interest on Security deposits will be paid as detailed below:
SECURITY DEPOSIT RATE OF INTEREST
Rs. 72000 8% P.A.
• The dealers who lift a minimum of 6 loads per annum only will be eligible
for interest on security deposit.
• Dealer who lift a minimum of one load per month will be eligible for an
Annual Discount of Re. 1/- per bag for the total quantity lifted during the
year.
• Cash discount of Rs. 3/- per bag will be given for the orders received
along with advance payment. The accounts which doesn’t have any debit
balance only will be eligible for cash discount.
• No request for refund of security deposit will be entertained for one year
from the date of receipt of security deposit

79. COLLECTIONS
• Payments should be by way of RTGS/NEFT/DD/Cheque payable to
xxxxxLtd.
• Details for RTGS/NEFT remittance
i) Name of the Account:
ii) Bank Account number:
iii) Name of the Bank:
iv) IFSC CODE:
• Daily statements of deposits and payments forwarded should be mailed
• NO CASH COLLECTIONS

80. Typical documentation of a Marketing Organisation

81. Order Booking Procedure
• Sales officer will collect orders from dealer with the following details
1. Grade
2. Quantity
3. Price-ruling-Ex Factory or Delivered Price
4. Payment details
5. Consignee details
• Transmit to HO for release of Delivery Order(DO)
• DO will be released by HO if credit limit exists and will be sent to
factory for despatch.
• DO Number should be obtained by field staff and intimated to Dealer

82. CONTENTS IN DELIVERY ORDER
• Party Name with code number
• Price will be captured from price list master
• Basic price will be back calculated
• Destination
• Consignee-Unloading address if different
• Quantity
• Grade
• Ex/FOR
• Tax Details VAT/CST and Service tax
• Name of the Transporter
• In case of Direct orders obtained through agents, the agent name and the
commission per MT will be specified

83. DESPATCHES
• Despatch clearance for dispatch against pending orders should be given
by sales officers to the HO on a daily basis considering:
1. Credit Limits
2. Daily plan of the factory
3. Dealers Requirement
• Transporter will place trucks and factory will raise invoice cum DC

84. INVOICING
• Invoice will accompany lorry
• Invoice will be at List price as on the date of dispatch
• In case of orders placed by dealers with advance if original DO price is
lower that will be considered. However this will be effective for the first
price escalation only.
• Cash Discount will be shown in the Invoice
• Any other discounts will be given later, by way of credit notes
• Statement of daily Invoices will be sent by mail to all SOs
• SMS messages will be sent to dealers mobile phone as soon as invoice is
generated
• Invoice will be at DO prices only in case of Direct customers. However if
there is any increase or decrease in duties or taxes the same will be charged
to customers account.

85. SO YOU NOW HAVE SELECTED THE MARKET AND DISTRIBUTION
CHANNEL