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EXECUTIVE SUMMARY

� The Project has been carried out in Mercedes Benz India for the purpose of analyzing better measures for effective sales planning

� The first part of the project gives an idea about the product profile and the depth of different line extensions of the company

� The second part gives an overview of the Indian luxury car Industry, company’s comparisons with its competitors and a SWOT analysis for Mercedes Benz under the present market scenario

� Further the report contains the importance of sales planning and its purpose and scope in MB India which can be summarized in the following way-

1. Purpose of Sales Planning & Order Processing –

1.1 The Purpose of ‘Sales planning’ is to ensure that requirements for a product, market demand and customer are defined properly to result in the right time in right quantities

1.2 The purpose of ‘order processing’ is to ensure that the orders are checked for completeness, and that the process is carried out as per company and government policies.

2. Scope - 2.1 The sales planning and order processing procedure is applicable for all passenger cars manufactured and sold by Mercedes Benz India.

� The report discusses about the “2020 growth strategy” and the “build up” approach adapted by the company for the purpose of sales planning. It gives an idea about the current methods and situation present for sales planning, the report also analyses the hindrances that prevail while in the way of executing a perfect “build up” method in sales planning

� The job taken under this project was to understand the new process, identify the loop holes, and suggest corrective measures

� The observations while carrying out the project was lack of proper planning and analysis tool which could help the company and the dealers to assist each other while forming the future plans and targets

� The outcome of the project was an automated excel mechanism that the dealers and the company which could assist them in overall past and present pipeline information which could be used for forming future plans of actions.

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About the company & product

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About the company-

Mercedes-Benz is a multinational division of the German manufacturer Daimler AG, and the brand is used for automobiles, buses, coaches, and trucks. Mercedes-Benz is headquartered in Stuttgart, Baden-Württemberg, Germany. The name first appeared in 1926 under Daimler-Benz but traces its origins to Daimler's 1901 Mercedes and to Karl Benz's 1886 Benz Patent Motorwagen, widely regarded as the first automobile.

Mercedes-Benz traces its origins to Karl Benz's creation of the first petrol-powered car, the Benz Patent Motorwagen, patented in January 1886 and Gottlieb Daimler and engineer Wilhelm Maybach's conversion of a stagecoach by the addition of a petrol engine later that year. The Mercedes automobile was first marketed in 1901 by Daimler Motoren Gesellschaft. The first Mercedes-Benz brand name vehicles were produced in 1926, following the merger of Karl Benz's and Gottlieb Daimler's companies into the Daimler-Benz company. Mercedes-Benz has introduced many technological and safety innovations that later became common in other vehicles. Mercedes-Benz is one of the most well-known and established automotive brands in the world, and is also the world's oldest automotive brand still in existence today.

The Three Pointed Star of Mercedes signifies the company’s extension of its Automotive Expertise in the fields of “Aviation”, “Water”, and “Road Transport”.

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Companies Product -

The first car of the world

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1. Passenger Vehicles Mercedes Benz India deals with the following car models in India

� C – Class The C – Class is a compact executive car produced by Mercedes Benz. It was first introduced in the year 1993. The C- Class is an entry level in Mercedes Benz India lineup.

� E – Class The E – Class is a range of executive cars manufactured by Mercedes Benz. The E initially stood for Einspritzmotor which means fuel injection engine in German. The E- Class cars are known for their size and durability and used for many special purposes.

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� S – Class The S – Class is a series of luxurious sedans produced by Mercedes Benz. It was first introduced in the year 1972. They are driven by latest driven technology, innovation, safety norms etc. � ML – Class

The ML – Class is a luxury sports utility vehicle which was first introduced in the year 1997. It is well known for its initial sales success in the United States and Mexico. � GL – Class

The GL – Class is a full size crossover SUV built by Mercedes Benz in the year 2006. It is known for extra ordinary large size appearance.

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High Performance cars

The Mercedes-Benz SLS AMG is a luxury grand tourer automobile developed by Mercedes-AMG to replace the Mercedes-Benz SLR McLaren. The car is the first Mercedes automobile designed in-house by AMG and is described by Mercedes-Benz as a spiritual successor to the Mercedes-Benz 300SL Gullwing.

The Mercedes-Benz G-Class or G-Wagon, (or cross-country vehicle), is a four-wheel drive vehicle / sport utility vehicle (SUV) produced in Austria. The G-wagon is characterized by its boxy styling and body-on-frame construction. It utilizes three fully locking differentials, one of the few vehicles to have such a feature. The G-class was developed as a military vehicle and latter offered as a civilian version in 1979.Is being used as a military vehicle in nearly all the European countries.

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2. Trucks and Buses

� Trucks

Trucks are manufactured and sold by Mercedes Benz in India under the Brand name “Bharat Benz “. The first truck was sold by Gottliab Daimler in the year 1886.

� Buses

Mercedes Benz also produces buses in India under the brand name “Bharat Benz”. The first factory producing buses was built in Argentina during the WW2 time.

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INDUSTRY INFORMATION

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The luxury car market in India has registered a fair amount of growth in the last few years and is growing at the rate of 25% per year. A luxury car is a luxuriously styled automobile which is designed to give satisfaction and comfort to its owner.

The luxury cars generally come against a high price due to various factors affecting their market. Due to this in the early years the demands for luxury cars were very less due to high price consciousness among customers in India. But in the last few years the high development in the Indian economy has led to various favorable factors that have increased the demand of luxury cars. The various reasons for the growth of the luxury car market in India are:

• The economy is rising in the country which has given the people more disposable income which they are spending in buying luxury cars.

• Various loan schemes have been launched by the automobile manufacturers and the financial institutions. This has made it very easy for the people to buy luxury cars and this has boosted the luxury car market in India.

• With the IT boom in the country many youngsters are earning high pay packages which enable them to buy luxury cars. And this have further given boost to the market of luxury car in India.

• The government have formulated many polices such as the relaxation of equity regulations and the reduction of import tariffs pertaining to the automobile industry. These have helped to reduce the prices of the luxury cars, which in turn have led to the growth of the luxury car market in India.

The current scenario of the market shows nearly about 35000 units of cars are being sold every year in India.

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Competition- As like the whole world the Germans have always ruled the Indian luxury car market with Mercedes Benz being the first entrant in the Indian Market in 1994, followed by BMW and then Audi. Holding the “numero uno” position in the Indian market for nearly 15yrs Mercedes lost this position to BMW with its aggressive marketing and targeting the unexplored young customer segment, then in the year 2011 Audi took over the second position. Other luxury brands are also trying to explore the growing market in India like Jaguar has already registered its presence after being taken over by Tata motors. Big companies like Toyota are planning to launch their luxury brand “Lexus” which is already a known Brand in the company. So the following Statistical figure shows the current luxury market situation in India -

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SWOT Analysis for MB India

STRENGTH

� Oldest Automotive company of the word with vast experience in the field

� Word class product with “best in its category” features

� Enjoys a high level of brand equity with great amount of brand awareness in the market

� Holds the “top of the mind slot” in the decision process of a customer

� Holds a position in the top 100 trusted brands in the word

� Association of “class” & “royalty” with the brand name

� As compared to other luxury players MB India has the maximum numbers of dealership throughout the country

WEAKNESS

� Less aggressive in the market � Weak marketing strategies � Very less new products in the pipeline � Myopic towards market condition and

trends � Dealerships not very user-friendly

towards customers � No regular follow-up of the prospects � Prices very high as compared to

competitors

OPPORTUNITY

� The rising Indian Economy holds a great potential of fetching more customers in long run

� With increasing propensity to consume the disposable income of Indian customer is rising resulting a bigger market for luxury market

� With largest network in the whole luxury car industry (31 dealerships across 31 cities) the company has high opportunity of penetrating and entering the unexplored market of the country

� Peoples perception of associating the brand with achievement and accomplishment can be capitalized

� The young customers which are growing at a great rate can be attracted by new stylish and sporty products

THREAT

� Main competitors Audi and BMW are very aggressive in the market and stealing away customers of MB

� Too much of competition coming up in the future in the form of “Jaguar”, “Porsche”, “Lexus”, “Mini” which could further reduce the market share of the company

� Economic instability in the country can effect its market in India Temporarily

� Customers dissatisfaction from the dealership behavior may compel them to switch to other brands

� The youth market is more inclined towards Audi & BMW

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SALES PLANNING & ORDER PROCESSING

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Why Sales Planning – In an organization the most important function is “Sales”, because it’s the function that makes money for the organization and “earns profit” which is most important for an organization to survive in the long run. So it is very important that sales should be properly planned so that the results are favorable and effective. Sales Planning can be defined as the process of analyzing the current market situation, Demand, company potential and resources available and then formulating strategies and objectives to achieve overall organizational goals. Sales Planning may also involve assigning roles of different personnel regarding their job and focus while in the process of sales. Elements of sales planning are –

1. Situation (What’s going on?)

• Targets. (Who are my target companies) • Environment. (Is the industry hot or cold?) • Competitive landscape. (Who’s the competition? Do they have an advantage

because of market share, informed sales people?)

2. Sales mission.

• This is an explanation of what you plan to accomplish.

3. Execution . (This is where the rubber meets the road.)

• Concept of the Plan (Understanding line item 1 how are you going to position yourself?)

• Coordinating instructions. (What marketing campaigns are being executed that can be leveraged? What features are being released? Create a starting point.)

4. Support. (Who’s going to help you?)

• General. (Who do you report to and how do you close the deal?)

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• Material and Services. (What tools do you have available?) • Personnel. (Do you have product marketing or engineers to back you up?)

Sales planning and order processing in MB India - 1. Purpose of Sales Planning & Order Processing –

2.1 The Purpose of ‘Sales planning’ is to ensure that requirements for a product, market demand and customer are defined properly to result in the right time in right quantities

2.2 The purpose of ‘order processing’ is to ensure that the orders are checked

for completeness, and that the process is carried out as per company and government policies.

2. Scope -

2.1 The sales planning and order processing procedure is applicable for all passenger cars manufactured and sold by Mercedes Benz India.

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1. PREAMBLE Mercedes-Benz India Private Limited (MBIL) is in the business of manufacturing and marketing wide product portfolio of cars through the network of dealerships present all throughout India. Part of the cars marketed by MBIL is assembled from CKD kits received from the parent company Daimler A.G. Germany. The remaining portfolio of cars sold in India is imported as Completely Built Units (CBUs) which are manufactured in worldwide plants of Daimler AG in Germany, USA and other locations. The cars are retailed through the dealership network. Time-to-time in order to facilitate sales of the cars with dealerships, MBIL announces incentive & discount schemes. This is in form of cash & noncash benefits extended to dealers. The dealers avail and extend these benefits to the customers and claim these back from MBIL. This guideline has been formulated to give an idea of CKD Business Process. The main elements of this guideline are – � CKD Sales Model � Sales planning/ Production Prioritizing � Order Processing & Transportation 2. PROCESS OWNERSHIP Sales Services (MSS) department would be responsible for any changes in the CKD Business Guideline. Other departments like Sales, Production & Logistics have shared ownership and will support Sales Services dept to execute this guideline.

3. PROCESS a. SALES PLANNING � Based on the various inputs received including part sales trend, new products / models, market & competitive activities & trends, the annual / quarterly / monthly sales volumes across type class, models are finalized. Sales planning process is done to cover the sales volume planning across various MBIL models to be sold in a certain time frame. � Sales Planning is done in line with the KUFRI guidelines from DAG and also directions from Dept. Director – Sales & Marketing. Once the Sales plan is prepared, and approved by DD-MS, GM- Sales, GM- Sale Planning, GM- Product Management and GM- Marketing Communication under the 4 EP and SoD principle. � after approval the CKD Sales Plan is shared with Production Logistics (PLI) department who prepare the demand for kits in form of the CKD Packing / Shipment plan for current and next year.

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DAG uses this information and grants allocations of CKD kits in order to fulfill MB India sales volumes. These CKD Kits are ordered in monthly orders each month giving details of model/line/upholstery and shipment schedule. These are shipped by DAG in line with the shipping schedule. b. PRIORITIZING & OFFERING– � from the monthly bucket of kits available, Sales give the priorities of cars to Sales Services who in turn communicate it to the Production Logistics dept for scheduling the production accordingly. These are communicated to Sales dept and further to dealerships. � These cars along with others cars available in the Finished Good (FG) stock are offered for allocation across dealerships. c. WHOLESALE PURCHASE ORDER -

� The monthly allocations are communicated to the dealerships and as and when the cars are ready, these are offered to them for wholesale invoicing. � Dealer raises a Wholesale Purchase Order (WPO) specifying the configuration for e.g. Model, Upholstery, and Color of the car required via e-dealer. � Based on the allocation commission no. of the cars are allocated in e-dealer against the WPO by Regional Sales Manager (RSMs). The GM-Sales moderates this process with RSMs under 4EP principle. � The dealership then authorizes the WPO which comes to MBIL for invoicing. This process is currently facilitated by the RSM who interacts with the dealership as well as Order Processing team. d. CUSTOMER ACCOUNT OPENING :

� The name and address for bill to and ship to are created in the SAP in advance based on the signed customer account opening form provided by either Network Development dept (for cars sold to dealerships which happens in >99% of cases) or by Sales Dept (for cases of direct billing to customer). � Based on the new DAG guideline, it is mandatory to provide category of customer (as G1/G2/G3/NR) in the form before it is created in SAP. � Also if the customer accounts to be created is / related to Govt., the form needs signature of CEO & CFO. This flagging of customer accounts enables tracking and reporting of govt. revenue / nongovt. Separately. e. SALES ORDER AND ORDER CONFIRMATION: � Once the WPO is forwarded to the order processing team by the RSMs, a Sales Order is generated in SAP in which all the data including payment terms, discounts etc are entered. Against this Sales Order, an Order Confirmation is generated which is sent to the dealership.

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� The Order Confirmation is signed by GM- Sales Services and Manager- CKD Order Processing. f. RELEASE ORDER (RO) : � A print out of the Sales Order is referred to as a Release Order (RO) and is sent ahead for approval to other departments by Sales Planning department. � RO is first sent to the Finance Dept who checks the credit status of the dealership to whom the car is to be invoiced. If adequate funds or a credit approval is available, GM and Manager- Finance approve the RO and send it to controlling simultaneously clearing the block from SAP.

The Controlling dept verifies the pricing, and discounts and clears the RO with approval from GM and Manager – Controlling and sends it to the Taxation dept after clearance.

Once this delivery block is removed, the taxation dept checks the taxes and a duty charged and prints the invoice, which is sent to Transit Park along with the RO & Form 21/22.

Invoice copies, Form 21/22, DAN are sent along with the dispatched cars to by Transit Park to the dealers.

The RO is returned by Transit Park to CKD order processing dept. Once the car is dispatched. g. INVOICING: Printed invoice is signed by the authorized signatories given to Transit Park who does the Pre-Delivery Inspection and hands over the authorized transporter for loading and transporting the cars from the plant to dealership warehouse. h. TRANSPORTAION/OUTBOUND LOGISTIC: � The dealership takes possession of the car along with documents like invoice and acknowledges on the Delivery Acknowledgement Note (DAN) the date and time of receipt of the goods. � In case of any damages noticed after unloading, the same is noted on the DAN and the concerned MBIL person from Transit Park / Outbound Logistics is informed for necessary corrective actions.

This marks the end of the Sales process

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Sales Model MB INDIA

TURTLE DIAGRAM ORDER PROCESSING

CKD Kits & Parts From

Germany

GERMANY

Shipping/ Custom

Clearance and Arrival

At MB India

M B INDIA

Production /

Assembly At

M B India

Wholesale to

Dealers

Retail to Customers

DEALER

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TURTLE DIAGRAM

ORDER PROCESSING

PROCESS

CKD Order Processing

With What (Matl/Equipment)

• ISP Software • MS Office • Sap/Siebel • Necessary

Hardware

INPUTS

• Current stock situation

HOW

• Methods and Procedure laid by the company

With Whom? (Competence/Skill)

• Resources

(Manpower) • Trained Staff

Sap/Seibel

Outputs

• Order Confirmation

• Release Order

With What Key Criteria

• Release Order for

Invoice Generation

RISKS

• Billing/Sales of Car Stopped • Delay in Dispatch • Commitment to Dealers will be Hampered • Faulty car will reach the Dealer/Customer • Increase in the transporter cost due to improper sales

planning • Increase in Manpower cost

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Sales Planning & prioritizing (Assigning Responsibilities)

Activities Responsibilities Based on the objectives and scope of the activity as agreed by HOD MS with the management, projections of sales for the operative planning years.

Sales Services

Finalization and Approval of the Sales Plan

DD / GM (Sales, Sales Services, Marketing, Product Management)

Preparation of the Production, Packing and Shipment plan based on the approved Sales Plan

Production Logistics

Undertaking Kufri planning for the concerned years and Respective allocations confirmed.

Sales Services

Generation of Monthly Orders for the concerned packing Month.

Sales Services

Sales Services 6 Confirmation of Priority cars to Production Logistics for production scheduling.

Sales & Sales Services

Allocation of cars from the present finished stock together with current month’s work in progress to dealers.

GM and RSM - Sales

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ORDER PROCESSING Activities Responsibilities Dealer to raise Wholesale Purchase Order for a specific configuration based on his allocation in e-dealer & forward the same to MB India - Sales/MSS

Dealer

MBIL to check the configuration & assign Commission number to the Purchase Order after receiving Comm. No. from Sales & forward the same to Dealer for Authorization

Manager Sales/ Sales Services

Mgr Sales Services to check various other statutory requirements & create Sales Order in SAP which leads to generation of Release Order.

Manager Sales Services

Release Order to be authorized by authorized persons in Sales Services and to be forwarded to Finance

Manager Sales Services

Mgr Finance to verify the adequacy of funds and/or credit approval and release the RO

Manager Finance

Mgr Controlling to verify the pricing and discounts, approve the release order. The same to be forwarded to vehicle logistics.

Manger Controlling

Vehicle logistics to identify the car as per the Release Order & take up the same for PDI as per the work Instruction* Release Order to be handed over to Taxation.

Manager Vehicle Logistics

Mgr Taxation to verify the Excise Duty & Sales Tax on receipt of Release Order duly signed by all concerned and prepare invoice as per the invoicing guidelines.

Manager Taxation

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THE PROJECT

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The company’s 2020 growth strategy- After losing the first position to its competitors MB India has planned a complete new strategy to regain its first position by the year 2020. One among the several strategies in the ‘2020 growth Strategy’ the company has to adopted “Build up” approach towards sales planning, according to which the company is involving its dealers while planning the unit sales. According to the kufri Planning the company follows a lead time of 6 months where it takes orders from the dealer 6 months before the requirement month (For e.g.- for the month of July the order from the dealers are received in the month of January). In this planning the dealer is given freedom of choosing his combination of color and uplohostry which he thinks would satisfy the market demand. At the beginning of every month the dealer is sent a template for that ordering month containing the different models and color uplohostry combination, with an analysis done by the company which gives the dealers an idea about which model with which color uplohostry would satisfy the market demand, But the final call is to be taken by the dealer what he wants to order. By adopting the “Build up” approach the dealer can contribute in planning for the company, because he understands his local market, so in this manner a consolidated input from all the dealers can give the overall market trend of the country. These orders from the Dealers are received through software called E-Dealer and then through the same software the allocations are made to the dealers. A screenshot of the E-Dealer and ordering Template can be seen in the next page-

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Observation- Though the company has started involving the dealers in the sales planning, but the involvement is very limited, this restrains the dealers from putting in views while the sales target are fixed, because the targets are fixed by the top level management in a meeting by keeping in mind the different factors affecting the market, but not the dealer views and suggestions. The company is lacking such a mechanism in their system which could give them a clear and instant picture regarding their complete pipeline stock starting from Germany and ending at the retail sale. Lack of such automated mechanism unable the company in having an idea about their pipeline stock, their wholesale stock and the retail stock with their dealers, these factors restrains the company from effectively planning their sales and formulating their strategy, sometimes due to the vague picture of the stocks leads to excess units of stock in the yard which increases the stock-holding costs for the company. The dealer side the scenario is even worst as because they are not having any kind of formulated way of planning their sales and effective way of analysis of their past performances. Due to the large lead time the dealers often carelessly order without following any plan or strategy depending too much upon the Area Sales Manager’s suggestion and views, due to lack of any such formulated method they do not have any past data which they could take in consideration while they plan for the next six months orders. Some Dealers may have past year overall data showing trends of sales of different models, but still these data do not have a month wise break up of sales so the data becomes very ineffective, because past trends may show overall performances but do not give a view of exact figures, monthly wise figure are very useful because in some months your sale may be less in some drastically more due to several schemes like “Petro Card”, “Golf Card” etc given by the company on selective models, if we have past record of month wise breakup of our sale we can easily make out that in which months our sales were high and what schemes have resulted the high sales, this could help in further formulating our strategy for future. Dealers are also not actively involved in the annual or monthly fixation of targets. Though E-Dealer has been started for receiving orders from the dealers, it also lacks such mechanism which could help the dealer in planning their sales, and it’s still in the testing stage where the sale services mangers punch in the orders received from the dealers on behalf of the dealers.

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Conclusion And Recommendations- While in planning your sales you need to have a very classified and clear picture of your sales and available stock, the above tool can be used to plan your future sales and formulate strategies which make sales planning more effective. In the “Build up” approach the dealers should be more involved in overall planning by asking them to use such tools in their dealership and at the end of every year a meeting to be arranged where every dealer would come with their respective data based or extracted from such tool, and give their suggestions and speculations for next year sales plan, and the with the study of these data and suggestion collected from the dealers ,and studying the macro economic factors effecting the market of the luxury cars in India the top management should come up with future targets and sales plans. This would give feeling of pride to the dealer that the company is involving them and also looking after their interest, this will motivate them for working more effectively and efficiently. The tool can also be used by the company in assisting their dealers by making them understand the market scenario and relating it to the current market scenario, for the purpose of helping them in identifying their potential and planning the orders accordingly. A proper knowledge of the pipeline will enable the company in maintaining the proper unit of stocks which will reduce over and under availability of stock. The E-Dealer software used by the company should be made more user friendly as the dealers may face too much problem in understanding and using the complicated software. One wrong template or punching in of orders may lead to wrong allocations of cars or complete redo of the whole job, and mistakes can be very contingent as the cost of single cars involve a huge amount of cars.

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BIBLOGRAPHY The following books and Internet sites have been referred for the preparation of the project-

� Fundamentals of Sales Management for the Newly Appointed Sales Manager;

Matthew Schwartz. The book has been referred to know the importance of sales planning and points to be kept in mind by a new manager while in the process of sales planning

� Mercedes Benz Intranet Data Base.

For further information the following sites have been surfed-

� Team BHP.com

� Top Gear.com

� Mercedes Benz Employee portal

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