SALES & DISTRIBUTION MANAGEMENT PROJECT

Submitted by- Group 8

Lekha Choraria-18020841061

Arka Chakraborty-18020841155

Rahul Ranjan- 18020841175

Kishor Todi-18020841216

Samarth Rana-18020841129

Navendu Gautam-18020841200

Subhojit Das- 18020841083

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Sr. No. Topic Page no.

1 Company Information 3

2 Market Analysis 6

3 Sales Forecasting 9

4 Mondelez’ Hierarchy 17

5 Distribution Structure in India 19

6 Sales Productivity 20

7 MRP calculation of Mondelez products 23

8 DTR Calculations 28

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Company Information
One of the world's largest snack companies, Mondelez International owns a pantry of billion dollar
brands such as Cadbury and Milk chocolates; LU, Nabisco, and Oreo biscuits; Trident gum; and Tang
powdered beverages. The company's portfolio includes global, national, and regional brands, many of
which are more than 100 years old. Biscuits (cookies, crackers, and salted snacks) and chocolate
account for most of the company's sales. Mondelez, which operates worldwide, generates most of its
revenue outside the US.

Operations

Mondelez's portfolio of food and snack brands are organized into five product categories. Its two
largest, biscuits (cookies, crackers and salted snacks) and chocolate, together account for about 70%
of total revenue. The remaining product categories include gum & candy (some 15%), cheese &
grocery (nearly 10%), and beverages (about 5%).

Geographic Reach

Europe represents Mondelez's largest market, generating nearly 35% of revenue. North America and
the AMEA region (Asia, Middle East, and Africa) contribute more than 20% and 30% of sales,
respectively, with Latin America adding another 15%.

Mondelez has some 150 manufacturing and processing facilities in more than 50 countries, primarily
in Europe and the AMEA region. It also has about 130 distribution centres, nearly two thirds located
in North America.

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Sales and Marketing

Mondelez sells its candy, snacks, and beverages through supermarket chains, wholesalers,
supercenters, warehouse clubs, mass merchandisers, convenience stores, drug stores, and other retail
food outlets. The company also sells through independent sales offices and agents in some of its
international locations.

Financial Performance

• Net revenues increased 0.2% despite unfavourable currency and divestiture impacts; Organic Net
Revenue1grew 2.4%, with balanced volume/mix and pricing.
• Gross profit grew $318 million (+3%); Adjusted Gross Profit1 grew $352 million (+4%) on a
constant currency basis.
• Operating income declined $150 million (-4%); Adjusted Operating Income1 grew $257
million (+6%) on a constant currency basis.
• Diluted EPS was $2.28, up 23% driven primarily by an after-tax gain on the Keurig Dr
Pepper transaction; Adjusted EPS1 was $2.43, up 15% on a constant-currency basis, driven by
operating gains, share repurchases, equity income & tax favourability.
• Cash provided by operating activities was $3.9 billion; Free Cash Flow1 was $2.9 billion
• Return of capital to shareholders was $3.4 billion.

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Strategy

Mondelez has been focusing on its core brands (its Power Brands) and brands that appeal to changing
consumer tastes as a key element of its growth strategy. It has launched healthier versions of some of
its iconic brands, including Oreo and Ritz. In addition, the company has recently introduced new
brands designed to appeal to the Millennial generation and others who prefer "better-for-you" snacks,
including savoury lines Good Thins in 2016 and Vea in 2017. It has also transitioned how it sources
ingredients, with a specific focus on sustainable palm oil and a commitment to source 100% cage-free
eggs over the next 10 years.

As part of this focus on core and growth brands, Mondelez in 2015 combined its wholly owned coffee
business with the coffee business of The Netherlands-based D.E Master Blenders to form a joint
venture, JDE. Mondelez owns just over a quarter of the venture. In 2017 it sold its Australia and New
Zealand grocery business, which includes the well-known Vegemite brand.

The company also has a heightened focus on cost-cutting and margin improvement as part of a $3.5
billion restructuring program that runs through 2018. It has spent about a billion dollars in restructuring
and implementation costs in each of the past two years as it works to make its supply chain more
efficient and reduce overhead. The restructuring has included asset disposals and layoffs.

Competitors

• Campbell Soup Company • Frito-Lay North America, Inc.

• General Mills, Inc.

• Kellogg Company

• Mars, Incorporated

• Pepperidge Farm, Incorporated

• Snyder's-Lance, Inc.

• The Coca-Cola Company

• The Hershey Company

• The J M Smucker Company

• The Procter & Gamble Company

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MARKET ANALYSIS

Market Share-2018-19

8%
9% Mondelez
Nestle
18%
65% Ferrero
Others

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 Biscuits Category

Mondelez
10% 15% General Mills
11%
H.J.HEINZ
13%
Hershey Co
19% 6% Kellogg
8% Pepsico
18%
Dean Foods
Conagra

Gum and Candy

Market Share- Gum and
Candy
mars inc
0%
10%1%
2%
3%
36% perfetti van mell group

33% Lotte group

2% 13%
mondelez international

Arcror Saic

Fujian JJW Foodstuff Co Ltd

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 Cheese & Grocery

Mondelez
1%5% 6%
0% Dean Foods
20% Kraft Foods Inc
Kraft Heinz Co
9% Lifeway Foods
59%
Syuntra International
Whitewave Foods

Beverages

Mondelez Int.
3%4%2% CampbellSoup Co
9% 8%
1%
3% Kraft Foods Inc
Kraft Heinz Co
J&J Snack Foods Corp
Inventure Foods,Inc

70% Treehouse Foods, Inc

Sunopta Inc

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SALES FORECASTING
Last 5 years’ sales data of Mondelez International.
Source: Bloomberg

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 After smoothing the data and removing seasonality and trends, the forecast is done for the following
6 data:
1. Total Revenue
2. Category 1: Biscuits
3. Category 2: Chocolates
4. Category 3: Gums and Candies
5. Category 4: Cheese and Groceries
6. Category 5: Beverages

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1. TOTAL REVENUE
Forecast for the next year in 2019 for 4 quarters are:

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CATEGORY 1: BISCUITS
Forecast for the next year in 2019 for 4 quarters are:

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CATEGORY 2: CHOCOLATES
Forecasts for the next year in 2019 for 4 quarters are:

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CATEGORY 3: GUMS AND CANDIES
Forecast for the next year in 2019 for 4 quarters are:

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CATEGORY 4: CHEESE AND GROCERIES
Forecast for the next year in 2019 for 4 quarters are:

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CATEGORY 5: BEVERAGES
Forecast for the next year in 2019 for 4 quarters are:

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MONDELEZ’S HIERARCHY

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FLAT SALES ORGANIZATION (MONDELEZ)

IMPROVED-HIERARCHIAL

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DISTRIBUTION STRUCTURE IN INDIA

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SALES PRODUCTIVITY
Number of Employees of Mondelez International Worldwide from 2012-2016 (inside and
outside US)

There has been gradual decline in the workforce mainly due to reason that there were long working
hours and the company did not provide proper training to its employees as was mentioned in the glass
door reviews.
Determining Sales Force size
The business survives because of the revenue it generates and sales force comprises of the people who
affect it directly. Further, the goodwill of the company is enhanced by the ethical conduct of its sales
force. That is why, companies spend a good amount of money to maintain a competent sales force and
hence, it is a costly affair. Also, increasing the sales force size increases revenue as well as cost. There
is a tradeoff between increasing cost associated with the size of the sales force and the revenue
generated by them or the opportunity lost if the additional people are not hired.
More than required size will add cost, whilst too few people would be inadequate to handle market
potential. Therefore, it is very important to determine the optimum size of the sales people to grow in
the market.

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 Tasks Time Spent

Administrative Tasks 15%

Face to Face Selling 45%

Travelling & Waiting 25%

Telephone & Communication 15%

First of all, the accounts of the company are classified into categories say A, B, and C from 'most
important' to 'least important'. It reflects the different kinds of efforts required for different kinds of
accounts. The frequency of call to these accounts will be different given their importance level.
Therefore, the next thing would be to determine the frequency of call and the length of each call to
each type of account. These are analyzed from historical information or on the judgment of
management.
Then multiply the number of accounts with the frequency and the length of the call to compute the
total workload of the entire market.

Accounts Number of Frequency of Call in Length of Call (a) *(b) * (c)

Accounts a year (c)
(a) (b)
A 200 30 times/ year 50 minutes/ 3,00,000min=5000hrs
call

B 250 20 times/ year 30 minutes/ 1,50,000min=2500hrs

call

C 456 10 times/ year 15 minutes/ 68,400 min=1140hrs

call

Total workload covering the entire market=5000+2500+1140=8640 hrs.

*Assumption that all sales persons have the same workload and all of them utilize their time with equal
efficiency.

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Determining the time available with one sales person of Mondelez

We have to determine the time available per salesman pertaining to selling activity.

For this, we need: -

1. Number of hours in a week to work, suppose 40 hrs. are available for a salesman of Mondelez
to work.
2. Numbers of weeks per year after allowing vacations, illness, emergencies etc. are suppose 48
weeks.
3. Apportionment of selling activity from total activity performed is to be estimated. It implies
that not all the time available with the salesman allocated to selling activity. Unfortunately, the
salesman has to do the travelling and other non-selling task also. The non- selling tasks include
preparing sales reports, attending meetings, conferences etc. Let’s assume that the salesman
devotes 45% of his time to selling activity.

Therefore, the time available per salesman for selling activity- 40 hrs.*

48 weeks per year * 45% = 864 hours per year.

Calculating the number of sales people required

The sales force size can be determined by dividing the total workload for the entire market by the
number of hours available per salesman.

8640hrs. /864 hrs. =10 Salesman

Therefore, we can conclude that a total workload of 8640 hours can be completed by 10 salesman of
Mondelez Company.

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MRP CALCULATION OF MONDELEZ PRODUCTS
GST rates in India are based on HSN code, an international classification system used by over 200
countries for levying customs or import duty. GST rate for both goods and services are applicable in
5 slabs namely, 0%, 5%, 12%, 18% and 28%.

GST Rate & HSN Code for Cocoa Powder, Beans, Paste, Butter, Chocolate & other Food Product
containing Cocoa is 28% and 1806 respectively.

1. Bournvita Pro-Health Chocolate Drink, 1 kg Jar

Distributor margin = 4.75%

Retailer Margin = 9%

Bournvita Pro-Health Chocolate

Drink, 1 kg Jar
Applicable GST Rate 18%

Amount IGST SGST CGST

Company Selling Price 285.05
GST 51.30 25.65 25.65
Distributor landed price
w/o GST 285.05
Distributor landed price
incl GST 336.35
Distributor Margin
(4.75%) 13.54
Retailer landed price
w/o GST 298.59
GST
GST 53.74 1.22 1.22
Retailer landed price SGST: INR 55.44
including GST 352.3 CGST: INR 55.44
Margin (9%) 34.8
IGST: NA
MRP w/o GST 317.5
GST (18%) 57.15 28.57 28.57
MRP 374.65

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2. Cadbury Dairy Milk Silk Chocolate Bar, 60 gm

Distributor margin = 5%
Retailer Margin = 14%

Cadbury Dairy Milk Silk Chocolate Bar,

60 gm
GST Rate 18%

Amount IGST SGST CGST

Company Selling Price 44.79

GST 8.06 4.03 4.03

Distributor landed price w/o
GST 44.79
Distributor landed price incl
GST 52.85

Distributor Margin (5%) 2.24

Retailer landed price w/o
GST 47.03

GST 8.42 0.18 0.18

Retailer landed price
including GST 55.23

Margin (14%) 8.99

MRP w/o GST 46.23

GST 8.32 4.16 4.16

MRP 54.56

GST
SGST: INR 8.37
CGST: INR 8.37
IGST: NA
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3. Cadbury Celebrations Chocolate Gift Pack - Rich Dry Fruit, 264 gm

Distributor margin = 4.5% Retailer Margin

= 14%

Cadbury Celebrations Chocolate Gift Pack - Rich Dry Fruit,

264 gm
GST Rate 18%

Amount IGST SGST CGST

Company Selling Price 433.99

GST 78.12 78.12

Distributor landed price w/o
GST 433.99
Distributor landed price incl
GST 512.11

Distributor Margin 19.53

Retailer landed price w/o GST 453.52

GST 81.63 1.76 1.76

Retailer landed price including
GST 535.15

Margin 87.12

MRP w/o GST 448.04

GST 80.65 18.90 18.90

MRP 675

GST
SGST: INR 20.66
CGST: INR 20.66
IGST: INR 78.12

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4. Cadbury Choclairs Gold Birthday Pack, 341 gm

Distributor margin = 4.5%

Retailer Margin = 14%

Cadbury Choclairs Gold Birthday Pack,

341 gm
GST Rate 18%

Amount IGST SGST CGST

Company Selling Price 77.68
GST 13.98 6.99 6.99
Distributor landed price w/o
GST 77.68
Distributor landed price incl
GST 91.66
Distributor Margin 3.49
Retailer landed price w/o GST 81.17
GST 14.61 0.31 0.31
Retailer landed price including
GST 95.79
Margin 15.59
MRP w/o GST 80.19
GST 14.43 7.22 7.22

MRP 94.63

GST
SGST: INR 14.62
CGST: INR 14.62
IGST: NA

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5. Cadbury Bournville Cranberry Dark Chocolate Bar, 80 gm

Distributor margin = 4.5%

Retailer Margin = 14%

Cadbury Bournville Cranberry Dark Chocolate Bar, 80 gm

GST Rate 18%

Amount IGST SGST CGST

Company Selling Price 63.35

GST 11.40 11.40

Distributor landed price w/o
GST 63.35
Distributor landed price incl
GST 74.75

Distributor Margin 2.85

Retailer landed price w/o GST 66.20

GST 11.92 0.26 0.26

Retailer landed price including
GST 78.12

Margin 12.72

MRP w/o GST 65.40

GST 11.77 0.185 0.185

MRP 77.17

GST
SGST: INR 0.44
CGST: INR 0.44
IGST: INR 11.40

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DTR CALCULATIONS

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DTR ANALYSIS
The ratio trend is inconsistent in terms of Mondelez.

Its increasing while moving from 2016 to 2017 that means collections obtained by the company are
efficiently increasing

On the other hand, the DTR is reducing from the second quarter of 2018 to the recent first quarter of
2019 depicting that company needed to review its credit policy during that time period.

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