LAUNCHING OF SMALL BUSINESS

??? P’S of MARKETING

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.

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..

SEGMENTATION 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.

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

 

TYPE OF FIRM SUITABLE SEGMENTATION APPROACH

RATIONALE

Cosmetics and perfumes firms

(such as L’Oreal)

Demographics (gender, age)ORBenefit

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)ORGeographic

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

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.

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.

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

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

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.

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.

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?

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.” 

“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.”

MARKETING STRATEGIES

• Product

• Price

• Promotion

• Place

• Packing

• Positioning

• People

• P.R

MARKETING STRATEGIES

PRODUCT OPC BLENDED-PPC/PSC SPECIAL

PRICE COST+DEMAND SUPPLYRELATED

Ex FACTORY/DELIVERED

PLACE Ex FACTORY Ex DEPOT

DELIVERED

PROMOTION

ATTITUDES OF MARKETING PERSONNEL

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

Territory Managers

KEY DUTIES/RESPONSIBILITIESOF 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

• 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.

• 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

KEY DUTIES/RESPONSIBILITIESOF 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.

• 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.

• 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

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.

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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.

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

• 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

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

• 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

PRODUCT MIX

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

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

QUALITY STANDARDS

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.

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

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

CUSTOMER FEED BACK AND RATING

• Application

• Quality

• Packing

• Service

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

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 FREIGHT30 600

EX FACTORY-BEFORE TAXES

160 3200

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

LOGISTICS AND DISTRIBUTION

LOGISTICS-TRANSPORTATION

FACTORY

RAIL ROAD SELF

RAIL HEAD

DEPOTS

CUSTOMER

CUSTOMER DEPOT

CUSTOMER

PRIMARYAGENCY SECONDARY

RAILRAILWAYS &C&F AGENTS

ROADTRANSPORT CONTRACTOR ROAD

DISTRIBUTION STRATEGIES

• MAXIMISING EX FACTORY REALISATIONS

• MARKET SPREAD TO RETAIN BRAND RECALL

• MODE OF TRANSPORTATION

• DELIVERY OPTIONS- EX FACTORY VS DOOR DELIVERY

FACTORY

CUSTOMER

MARKETING DEPARTMENT

TRANSPORTER

DOs

INVOICE WITH MATERIALORDER/PAYMENT

ORDER TO DESPATCH CYCLE

Nature and importance of channels

Channel behavior & organization

Channel design decisions

Channel Management decisions

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.

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.

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.”

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

(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.

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.

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.

• 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.

Channel objectives are a part of and result from the company‘s marketingobjectives 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.

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.

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

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.

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.

DEALER NETWORK

DEALER NETWORK

MANUFACTURER

WHOLESALER DIRECT RETAILERDISTRIBUTOR

/SUPER STOCKISTS

RETAILER 1 RETAILER2

DEALER APPOINTMENT

• SELECTION

• APPOINTMENT

• TERMS AND CONDITIONS

• REVIEW

• ASSESSMENT

SELECTION CRITERIA

• REASON FOR APPLICATION

• REPUTATION

• CREDIT WORTHINESS

• FINANCIAL CAPABILITY

• CUSTOMER BASE

• CONFLICT OF INTEREST

• TERRITORIAL CONSTRAINTS

• RELATIONSHIP WITH EMPLOYEES

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

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.

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

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

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

Typical documentation of a Marketing Organisation

Order Booking Procedure

• Sales officer will collect orders from dealer with the following details

1. Grade2. Quantity3. Price-ruling-Ex Factory or Delivered Price4. Payment details5. 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

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

DESPATCHES

• Despatch clearance for dispatch against pending orders should be given by sales officers to the HO on a daily basis considering:

1. Credit Limits2. Daily plan of the factory3. Dealers Requirement• Transporter will place trucks and factory will raise invoice cum DC

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.

SO YOU NOW HAVE SELECTED THE MARKET AND DISTRIBUTION CHANNEL