SALES AND DISTRIBUTION MANAGEMENT PROJECT ON

COLGATE-PALMOLIVE INDIA

25/9/2017
Company Overview (1/2)

• Founded in 1806 by William Colgate

• An American company headquartered in New York, USA
• Colgate Palmolive India Limited was incorporated in 1937, with its headquarters in Mumbai
• Colgate-Palmolive India Ltd (CPIL) is a 51 per cent subsidiary of Colgate-Palmolive Company
(CPC), USA
• Main business is manufacturing and marketing of oral care products, personal care, and
shaving products
• Four Manufacturing Factories located in Baddi, Aurangabad, Hyderabad and Goa
• Branch Offices situated in Delhi, Mumbai, Chennai and Kolkata
Company Overview (2/2)

Market Leader in Indian Oral Market

Market Position 51% 48% 30%
Toothpaste Segment Toothpowder Segment Toothbrush Segment

Rs. 4520 Crore Rs. 705 Cr.

Financials
Annual Turnover of CPIL Profit in 2016

2.7 Million 8,00,000 1800

Distribution Total Retail Company Serviced Stockists, Super
Outlets in India Outlets in India stockist and other field
force

Source: https://www.ibef.org/download/ColgatePalmolive.pdf
Product Basket

Oral Care Personal Care Home Care From the Dentist

• Toothpaste • Body Wash • Surface Care • Gingivitis Treatment

• Toothbrush • Liquid Hand Wash • Sensitivity Treatment

• Toothpowder • Shave Preps • Tooth Whitening

• Mouthwash • Skin Care • Fluoride Therapy

• Hair Care • Mouth Ulcer Treatment
• Specialty Cleaning
Toothpaste Segment of Colgate-Palmolive (1/2)

Colgate® Strong Teeth with Colgate MaxFresh® Power Colgate MaxFresh® Spicy Colgate MaxFresh® Spicy Colgate MaxFresh®
Calci-lock Protection Freeze Toothpaste Fresh Toothpaste Fresh Toothpaste Peppermint Ice Toothpaste
Toothpaste

Colgate® Active Salt Neem Colgate® Active Salt Healthy Colgate Total® Charcoal Deep Colgate® Active Salt
Toothpaste Neem Toothpaste Clean Toothpaste Colgate Total® Advanced
Toothpaste
Whitening Toothpaste

Colgate® Sensitive Plus Colgate® Sensitive Plus Colgate Total® Advanced

Toothpaste Colgate Total® Pro-Gum Colgate® Herbal Natural
Enamel Repair Toothpaste Health Toothpaste Health Toothpaste Toothpaste

Colgate Sensitive® Original Colgate Sensitive Clove Colgate® Cibaca Toothpaste Colgate® Cibaca Vedshakti Colgate® Maximum Cavity
Toothpaste Toothpaste Protection
Toothpaste Segment of Colgate-Palmolive (2/2)

Colgate® Kids Toothpaste Colgate® Kids Toothpaste

Colgate® Kids Toothpaste

Colgate® Kids Toothpaste

Colgate® Barbie Toothpaste Colgate® Spider Man Toothpaste

Colgate® Visible White Colgate® Visible White Plus

Toothpaste Shine Toothpaste
Types of Channels

1. Stockist
•Contracted service providers who receives
supplies from the company against firm orders
and arrange distribution of products amongst
all outlets at required frequencies

Channels
2. Wholesale
•Wholesale is an important middlemen, the
difference is that they are not contracted but
are independent middlemen Stockist Wholesale Direct
•They service indirectly covered retail
environments

3. Direct
•CP Products are directly served to big
customers
Market Segmentation

• 27 Metro Towns • 360 towns

• Population greater • Population between
than 10 lac 1 lac and 10 lac

Middle
Metro
India

Rest of
Urban Rural
(ROU) • Villages and Rest of
• Urban Towns with the towns
population less than
1 lac
Channel Structure Details

LEGENDS
MET : Metro
MI : Middle India
ROU : Rest of Urban
WS : Wholesale
RE : Retail Environment
SSTK : Super Stockist
RDST: Rural Distributor
IRSTK: Indirect Rural Stockist
Retail Environment

Retail Environment

Kirana General Medical Cosmetic Whole- Modern

Pan Shop
Store Store Store Store Sale trade
Process Flows in Colgate-Palmolive

We would be discussing the below processes incorporated at Colgate Palmolive India

Limited:

1. Business Planning Process (BPP)

2. Vendor Managed Inventory (VMI)
3. Order Frequency, Supply and Payment Flow
4. Communication through Review Meetings
Business Planning Process (BPP)

Month Inputs Past Averages

• Helps minimize time spent on billing
and use it more productively in the
market and for sales planning SKU wise Retailing
• Helps ensure availability of all stocks
SKU wise Opening Stocks
and enables to focus on selling and
distributing all SKUs
SKU wise Billing
• Helps in planning standard orders
with the Stockist and also in doing
business evenly across the month Week wise Phasing

Standard Orders/ VMI order

Process Flowchart
 Vendor Managed Inventory (VMI)

• VMI is a means of optimizing Supply Chain

performance in which the manufacturer is
responsible for maintaining the distributor’s
inventory levels.
• The manufacturer has access to the
distributor’s inventory data and is responsible
for generating purchase orders.

Stock Replenishment Cycle of Stockist

Day 1 Day 2 Day 3

VMI Process
Order Frequency, Supply and Payment Flow

WHOLESALERS
[Cash and Carry]
[Frequency-Weekly once]
No pre-set targets by
Distributor

DISTRIBUTOR
SUPERMARKETS
COLGATE PALMOLIVE Advance Full Payment
[7-15 days Credit]
[RTGS only]
[Warehouse] [Frequency-Weekly once]
[Frequency-Weekly Twice]
Targets set by Distributor
Target Set by CP

RETAILERS
[7-15 days Credit]
[Frequency-Weekly once]
Targets set by Distributor
Communication through Review Meetings

• Communicate reasons for key changes

• Priorities for the Quarter • Discuss & Address customer / field issues
• Use this forum to Recognize & Reward • Align teams on important things in the Branch
Activation Team
individuals
Meeting Meetings

• For the Instore CDOs

• Instore Manager & Field team
• Monthly review of Instore performance
• Monthly Stockists Meetings
/Activities
Instore Instore • Make Stockists work independently
• Set timelines on implementation
Meeting Meeting

• For the channel CDOs

• Discuss key priorities of the week
• Stockist’s performance is reviewed
Area • Set time lines on implementations Stockists, Salesman • Address store wise issues & find resolution
Meeting Weekly
Meetings

Internal Meetings Other Meetings

Communication through Review Meetings

Monthly Area Monthly Review Meeting Weekly Review Meetings

Details
Meetings with Stockist with Salesman
Period 30th/31st of every At the beginning of the Immediately after
month month cut off dates
(7th,14th,21st ,28th)
Conducted By Area Manager CDO CDO
Venue As informed by Area Stockist Point Stockist Point
Manager
Participants All CDOs of the area Stockist All Stockist and salesmen
Objective of the Meeting • To finalize BPP for • To finalize KPIs • To motivate/train salesmen for
next month • To finalize salesman achieving KPIs
• To set KPIs wise targets • To review salesmen wise
• To plan week wise • To plan channel wise performance
billing/retailing business • Channel wise business analysis
phasing • To firm up week wise • Any other dealer related issues
billing/retailing phasing • Maintenance of required reports
Trade Promotions

• Promotional offers and volume discounts vary based

on the demand.
• The wholesalers get a volume discount of 1%-2%,
regularly on all products over the retailers, which was
reflected in the margins. Over and above that they
get an additional 1%-2% on specific products,
enabling them to pass on the same to their retailers.
• The supermarkets and retailers get 1% - 2% volume
discounts on fast moving sizes of 100gms, upon
purchase of 100 or more units. This keeps rotating
over varied products.
Conflicts

Price difference of Products Margin Difference

• Retailers complaint of price

difference of product in other • Retailers complaint that whole
channels sellers are getting more
margin
• High end product such as
Colgate sensitive ,charcoal are • Retailers sell product on MRP
pushed through cash and carry while whole sellers sell on less
while general product are than MRP so they get more
pushed through retail margin
environment
Motivating Channel Members

• Monthly Incentive Program for exclusive CP SSM.

Hero No. 1 • Different parameters for local towns and VAN.

STEP • Quarterly Incentive Program for VMI Stockiest.

(Stockist Excellence • For Urban stockiest, Payout is 0.5%
• For Rural/WS stockiest, 0.3% payout
Program)

PDS • Quarterly Wholesale Loyalty Program.

(Phir Dil Se) • 0.5 % on overall value purchase.

DD • Inputs provided to Wholesalers for redistributing

(Distribution our products to ICREs (where direct coverage is
not feasible)
Driver)
Roles and Responsibilities of Sales Force

Distribution Instore Developing and Relationship

Functions Market Reporting
Management Management Training Building
•Ensuring sales call •Compile reports
•Stockist •Coordination •Maintain trust and
•Secure and draw efficiency and information
Management understanding in
Area insights for new •Self-assessment as per
•New Product working with
Manager products, •Ensure that all requirements
•Trade launches stockist and trade in
activities, systems. CDOs in his team communicated by
Management general.
are trained RM
•Secure and draw •Compile reports •Maintain trust and
•Train and develop
•Trade •Priorities insights from any and information understanding in
CDO salesmen
management accounts for competitive as per working with
Customer •Coach and
•Ensure sales call maximum impact information requirements stockist and trade in
Management motivate salesmen
efficiency through visibilities available in public communicated by general, especially
to perform well
domain AM partner
Roles and Responsibilities of Sales Force

Distribution Instore Relationship

Functions Market Reporting
Management Management Building
•Maintain trust and
•Compile reports and understanding in
•Observe & share •Secure and draw
•Trade management information (hard working with stockist
feedback for all in- insights from any
copy) as per and trade in general,
Salesman store executions competitive
•Ensure sales call requirements especially
information available
efficiency communicated by partner with key
•Ensure compliance in public domain
CDO CM wholesalers to drive
business
Roles and Responsibilities of Sales Force

• PSR: Pilot Sales Representative is a Colgate’s representative for rural areas.

• PSR supports and implements activation plans and operations in rural areas.
• Key roles and responsibilities for PSR includes:

Implementation Increasing Business

Communication Relationship
of Key Activities Coverage Planning
• Activation of key • Identification of • New promotional • PSR must • Meeting monthly
activities for the feeder schemes to the maintain good commitments
month as slated wholesalers retailers as well as working
wholesalers • Ensuring
in the monthly • By identifying relationship with availability of
• Should also guide
meetings new villages stockists, optimum stocks
them on utilization
of schemes to retailers, and
generate higher trade in general
volumes
Margins

Retailer’s Margin
• For high end toothpaste variants like Colgate Sensitive, Advanced White, the retailers
are given a margin of 15%
• For other toothpaste variants, the margin is 10%

Distributor’s Margin
• Distributors are given 5% margin
• Extra .25% for ullage
• And .70% for tax paid on profit
• Total distributor margin is 5.95%
Role of IT in Managing Channel

• Distributor fill a predefined E-order sheet

and send that to warehouse.
Warehouse
• Warehouse generates bill trough SAP based
application and dispatch.

• Sales man takes orders from retail stores

through company provided palm top that is
connected to servers .
Retail
• On the basis of order from sales man Distributor
Environment
,distributor generates the bill through SAP
application and dispatch the order.

• CP official can see the stock movement

through the SAP application
THANK YOU