Sales & Distribution

Footwear India Limited

Aditya Zutshi
Amit Sarangal
Ambuj Agarwal
Shilpa Gautam
Yash Vardhan Agarwal
Renjith
Case Background
• In early 1990s Footwear India Ltd had a market share of
60% which has recently gone far below 40%.
• Sells Footwear and other accessories with higher profit
margin
• Adopted the strategy of VMS: Corporate and contractual
• Includes Company-owned retail stores and franchise stores
• Has been in lose for last two years-indicates annual
financial results
Issues
Decline in sales
Negative profits for past few years
Less focus on more profit making product
line(accessories)
 year round discount stores dilute the image of the
brand company
Current structure
• Company is solely dependent on the Distribution Network
A structure likely making it more difficult to manage 1500
stores.
• Even the company is making lose its selling other big
brands like Nike, lotto, Reebok, etc further Cut-shorting its
market share.
• Sales person and shop-assistants are paid equally likely
making the sales person de-motivated since shop assistants
are come lower in retail organizational structure.
Distribution Strategy 1/3
Cost of operating channel system
For Network A costs more. So we have to use more of
network B
To reduce the cost/sales of Network A we can increase
the selling of other brands
Explore more channels like shopping malls etc.
Push forward for commission payment system
Verify effectiveness of inventory management
Distribution Strategy 2/3

 Engaging the Customer

Information gathering: Get more data from stores and
sales people to manage the system effectively
Re align STP with changing customer profile
Are we satisfying service delivery needs ?
Waiting time, Variety, place utility?
Distribution Strategy 3/3

Capturing value
Increase the price of the products where necessary
 Focus on High margin accessories more.
Work on both top line and bottom line.
Increase Revenue
 Focus more on the accessories as they give higher margin.
 Assign the shelf space only to its own products to prevent
competition from other brands.
 Selling only own products will increase the margin per
good sold.
 Increase the number of franchise to increase penetration.
Give lucrative offers to the dealers.
 Collect information from visitors to notify them when new
design comes in the store or there is a sale going on.
Sales Force Management
Compensation should be a hybrid of fixed component
and commission.
Decrease the probation period from 12 months to 3
months.
Sales force engagement programmes like salesman of
the month etc.
Decrease Costs
Keep a track of selling expenses and reward store sales
force if they cut the costs down.
Every store management should be evaluated on
sales/expense ratio.
Indentify stores which perform below the minimum level
and remove them.
Optimize inventory in the store
Clearance sale for old/non-selling designs
Promotion
Advertising
Sales Promotion
Direct Selling
Public Relations
Thank You