Johnson and Johnson Sales and Distribution

Profile of the interviewee

We interviewed Mr. Ratan Rao who is Area Sales Manager in Kolkata Metro in
J&J.
Factual Description of the organization/Industry/Product Category
Johnson & Johnson started its operations in India 67 years ago. Today it is
3,000 people strong and is organized into three business segments:
Consumer Healthcare, Medical Devices and Pharmaceuticals.
Consumer-Healthcare
Comprises of products in baby-care, feminine hygiene, facial skincare, wound
care, cough & cold, oral care among others through brands such as Stayfree,
Clean & Clear, BAND-AID, Benadryl and Listerine.
Medical-Devices
The Medical Devices business segment produces a broad range of products
and solutions, in the fields of Orthopedics, Cardiovascular Disease, Coronary
Artery Disease, Peripheral Vascular and Obstructive Disease, Neurovascular
Disease, Arrhythmias, Diabetes Care, Bariatric and Metabolic Surgery, Cancer
Surgery, Vision Care, General Surgery, Urologic Surgery, Hernia Surgery and
Infection Prevention.
Pharmaceuticals
Janssen, the pharmaceutical division of Johnson & Johnson, is dedicated to
addressing and solving unmet medical needs of our time in India in oncology,
immunology, neurosciences & analgesia, dermatology, infectious diseases
and metabolic diseases in India.
The product categories we are focusing on are in the consumer healthcare
sector especially in baby-care, women hygiene, facial skincare and oral-care.

Overview of sales and distribution structure in the organization

Facts and Figures

Manufacturing Units: 2 J&J owned plants and 3 rd

Hyderabad and 22 3rd party manufacturing plants
Central Distribution Centers: 2 in India
C&FA: 28 in India

is coming up in

Sales Force Management

Compensation Structure: Not very fixed starting from 40 K and it goes up to
90K. It depends on number of years of experience and then incentives are
another 10-15K
Non-Monetary Benefits: None
Trainings Given:
For sales force there is a module which most of the companies use called
captain training. 6 calls of how to do a store call describing how to go in a
store and sell. As you go up in the ladder you need to have different trainings
like shopper marketing, trade marketing, market analysis customer behavior.
No fixed duration of the trainings
Metrics for SO Selection

Performance metrics - Bills, clients, sales while when looking for them
you generally look for sales knowledge.
Ability to go in the field and sell.
Cultural fit with the company
Company defined metrics like, Numbers - Percentage - Retailers billed Monthly Billed - Retail growth - Whole sale growth - Small outlet
growth - Top outlet growth

Distribution Management
Two kinds of distribution channels are used

Direct Distribution: Used in towns which give more than 5 lakhs of

business. Goods reach the Central Distribution Centers from the
manufacturing units, which are further connected to the C&FA. Direct
distributors place orders directly to C&FA's. In direct distribution
products are sold from RDFSM (Salesmen). Salesmen are generally on
distributor's payroll and are incentivized by the company

Indirect Distribution: Also known as the super-stockist channel. A

super stockist like any other distributor takes goods from C&FA and he
disperses goods to sub stockist who are basically retailers in the small
town. They are not directly involved with the company. They order from
J&J distributors. These sub-stockists then send goods to towns. Indirect
channels products are sold by PSR (Pilot sales representatives). They

generally go to these towns and sell the products. This is same for all
companies across towns and across India.

Insights from Discussion

1. Factors for choosing distributors:
Investment - The distributor should have enough money to invest.
Generally the norm is that if monthly business is around 50 Lakhs
then you should invest 50 Lakhs.
Involvement - Distributor should be involved in the business. Sales
should be the distributors priority and not the companys priority
Infrastructure - The distributor should provide adequate
infrastructure in terms of proper man-power, machinery system and
transportation to the retailer point.
2. Reaching Distributors: Contacts and networks in other FMCG firms are
used to reach distributors and not tenders. Distributors can stock
multiple products, there is no exclusivity.
3. Disputes and Challenges
Conflicts on storage, investment, salesman issue and transport
issues
Territory disputes are strictly not tolerated in J&J. Responsibility of
the ASM to put his foot down. These vary from person to person and
company to company
Product Recall: company policy that it will recall all damaged/expiry
goods from the retailer and reimburse them. Most companies have
similar policies. Not a major issue most of the time. If it is greater

than 2% of month's sale then approval from seniors need to be taken

Service Issues: Distributor changes are very frequent in FMCG industries.
SO gives feedback and if not satisfied by the 3 Is, distributor is changed.

4. Organization Structure
The sales organization structure MD India -> VP India -> 2 GM
Sales(North and east)(south and west). Both GSM have 3 RFM heads. 6
RFMs for 6 regions. Under RFM there are ASMs for specific roles and
under ASM there are SOs. Under SO's there are third party payroll
persons known as RSR. The SO's who have huge regions to handle

have RSR's who aren't on J&J payroll but third party payrolls. It is very
region specific. Almost 30-40% regions of India have RSR