Channel member Management

Monetary Rewards

The use of monetary rewards is quite common in this sector. Targets are created in order to
determine monetary rewards. Following the achievement of the goals, the channel partner
receives a monetary bonus. Target-based benefits are offered to all layers of the distribution
network, from the office through distributors, wholesalers, and sales reps.
Wholesalers expect to be paid right away. As a result, long-term target-based incentives,
such as annual bonuses, are ineffective for these wholesalers. Instead, immediate benefits
in the form of bulk purchasing plans are offered (QPS). For example, if you buy 50 cartons,
you get a 1-2 per cent discount. The discount is given at the time of purchase, without any
delay.

Non-Monetary Rewards
The firm provides non-financial incentives to channel members in addition to the financial
benefits.
Tours and trips are provided to the channel members. Targets are used to determine which
trips and activities are provided. For example, 75 per cent completion of the target will be
rewarded as a trip to Goa, 90 per cent in Thailand, and 100 per cent in Singapore.  The trips
and activities are offered to channel members at various levels—the location of the
trip changes depending on the hierarchical level and relevance of channel partners.
Accessories are provided in addition to trips and activities. Electronics, motorcycles,
automobiles, and other accessories are among the items offered.

Target setting mechanism

The total customer demand is forecasted using sales information from the previous
year, kept in the ERP system. The regional offices in each zone provide sales information to
the central headquarters in Ahmedabad, Gujrat. The data is then analysed in order to
forecast demand and sales for the coming year. Following the forecasts, the amount to be
manufactured by each facility is determined by the headquarter. Then the production
orders are issued to the plant operators. Then they divide the overall volume to be
manufactured into quarterly numbers. Then the central headquarter in Ahmedabad decided
on a minimum sales target for every distributor.
There are two types of approaches to set the target:
The bottom-up Method: It begins with the last-mile delivery salespeople. The sales reps
review their accomplishments over the previous year, as well as developments in their
territory. They propose the current year's objective based on the same. The firm specifies a
certain percentage of growth as a criterion. The sales agents are expected to provide the
objectives promptly. The objective is determined by the Area Sales Managers and
distributors.
Top-Down Method: In this method, the management sets the objectives for the entire
country. The zonal and regional objectives are set based on the total national goal. The
overall goal is separated among all channels from the first to the last channel.

The Monitoring Mechanism:

The Fortune food products are sold across General Trade, Modern Trade and E-Commerce.
To monitor sales and distribution practices, the company has an IT system that includes SAP
and ERP systems.

The ERP system keeps track of the orders, billing and sales etc., SKU wise. Modern trade
does not use the IT infrastructure often, and only some distributors data is monitored
through the ERP while others are mostly manual. Apart from this, a company representative
visits the market to collect feedback regarding availability of stock, delivery accuracy etc.

Training and HR Inputs provided to channel partners:

Most of the salespeople are not highly educated, and an exclusive training program is not
that common. The training is done on the field and is taken care of by ASM and RM for their
respective sales representatives. On a need basis, some training is also given at the company
headquarters when changes in product, process, or policy are recommended by ASM and
RM. Sometimes, the distributors are also provided with training if required. The decisions
are taken together by ASM and the sales representatives.

Field Force Management

There are distributors to whom the company distributes the products. They, in turn, sell the
products to retailers or wholesalers through a field force consisting of salespeople hired by
the company and by the distributors. The salesperson is either hired by the company
directly or through a consultancy firm. The requirement of salespeople is proportional to the
sales for that period. If sales increase, more people are hired to meet the demand and vice
versa. The role and responsibility of a salesperson are the same whether hired by the
company or a distributor.

Monetary and non-monetary rewards:

Generally, all the salespeople hired are on a fixed salary basis, and incentives are given for
achieving or exceeding the targets. The incentives are mostly monetary and rarely non-
monetary in the form of utensils, small appliances etc.

Target Setting and Monitoring:

If salespeople are hired by the company, then targets are set by the ASMs. The distributors
set targets for the field force under him/her. The incentives are also taken care of by the
same people respectively. The monitoring of sales is through sales records which
salespeople should keep track of after every deal. The order taking, sales calls, inventory
level etc., are monitored and taken through phone calls, weekly visits or WhatsApp, mostly
for the retailers and wholesalers.