APEL CASE STUDY

Submitted To: Submitted By:Prof. Asif Zameer Group 3 Aakash Sharma-231002

Abhijeet Agarwal-231005Abhimanyu Choudhary-231006

Aditi Gupta-231012Ayush Jasoria-231037

FMG 23-AQus 1. What are the corporate, marketing and sales strategies which should be drawn up by APEL?

What steps if any, would you take for increasing the sales of Non MCB products?

Ans 1.

Corporate strategies

Hold Regional Managers responsible to receive payments on time.

RM’s should be given incentive for recovering existing credit within 60 days.

Focus on non MCB products should be increased.

Marketing strategies

They should continue maintaining leadership in MCB products.

Regional manager should properly motivate and control their sales team and territory performance rather than varying potential or geographic size of territories.

Growing number of quality complaints in ELCB and MCCB should be reduced.

Head Quarter should pay more attention to the Eastern region.

Sales strategies

Sales team has to be increased by atleast 20% especially in north and west region.

Healthy competition amongst sales staff through properly designed sales contest should be

there.

Sales staff should also concentrate on tier 2 cities apart from metro and class 1 towns.

Proper Travelling allowance and dearness allowance should be offered to sales employees to

meet travel, boarding and lodging expenses.

Strategies to be followed to increase the sales of Non MCB products

More focus should be given to the non MCB products.

A proper check should be taken regarding competition of non-MCB as their prices were not

competitive enough which resulted in the loss of sales.

While selling their MCB products they should also inform their customers about the non MCB

products so as to increase the awareness about the non MCB products.

Qus 2. What increase would you suggest for number of sales force to achieve the high target? Would you use the breakdown method or the workload method? Would you suggest market driven sales organization or a product driven one?

Ans 2.

The sales force needs to be increased in the Southern region as well as the non-metros i.e. Tier II cities. APEL had suffered a major loss in market share of these areas. There can be separate sales teams for MCBs and non-MCBs.

The breakdown method equalizes the sales potential for the territory assuming that all the persons are equal in productivity. However, the workload method equalizes the effort for dividing the territories but sales are not considered in that method.

In this case, we feel that breakdown method would be effectives since sales potential for different territories are different. It is calculated as: N = where N is number of salesperson, S is the sales potential for the territory and P is the per person productivity.

A sales-driven does not focus on long-term sustainability of product lines or service offerings. The primary goal for a sales-driven company is the highest possible profit in the shortest amount of time.

We suggest a market-driven sales organization that develops its activities, product offerings, and business strategies around the needs and wants of consumers in its target areas. This type of business still wants to make a profit, but does not devote all of its resources to the short-term goal of making as much as possible. A market-oriented business seeks to develop product lines and offer services that can attract consumer interest for the long term.

As RM South complained of the growing number of quality complaints, it can be improves upon. Similarly, the prices of non-MCB products were not competitive enough; the prices can be revised under this strategy. To maintain the level of trust of customers, market driven sales organization would be best suited for APEL in our opinion.

Qus 3. Examine the relative merits and demerits of deploying sales engineer on state wise territories versus territories carved out of consideration of:

• Geographical contiguity of towns of adjoining states

• Equal demand potential

Ans 3.

1) On the basis of Geographical Contiguity of towns of Adjoining States:

MERITS:

• Less travel time

• Equitable use of resources

• Optimum use of dealership network

• Can improve the customer experience by providing relationship consistency

DEMERITS:

• Loss of focus towards institutional buyers

• Cost of disrupting the sales force through realignment, if required.

2) On the basis of Equal Demand Potential:

MERITS:

• Avoids over or under-servicing of the customers.

• Optimum use of resources.

DEMERITS:

• No clear demarcation of sales territory

• Loss of focus towards institutional buyers

• New salesperson would not be able to handle high demand area.

Qus 4. What expertise would you inculcate in your sales force in the changing consumer environment? Suggest changes in the compensation structure to improve morale of sales team?

Ans4.

As APEL’s sales force plays a very important role in the demand generation activity of the products so they should be expert in their job.

MCBs should now be taken under FMCG sector and hence merchandising, door-to-door selling

and direct-marketing techniques should be introduced in the basic training of sales people.

Proper technical training of MCBs and Non MCBs products should be given to the sales force so

that sales team can focus on Non-MCBs as well.

Changes in the compensation structure to improve morale of sales team

Sales contests should be there in practice to bring Healthy competitive spirit amongst sales staff.

Team building exercises should be inculcated to keep employees motivated.

Special prizes for the high performing employees would be introduced in the new compensation

structure.

Proper Travelling allowance and dearness allowance rates should be offered to sales employees

to meet travel, boarding and lodging expenses.

Special allowance should be there for the employees who are using some special medium to

improve the overall sales of the product.

Qus 5 . What is your reaction to the suggestion of reducing dealer margins for MCBs and diverting the funds towards advertising and brand building? How would you communicate this to the dealers and what safeguards would you build into the system to adverse dealer reaction?

Ans 5.

APEL is growing at a rate higher than the market growth rate. It shows customers interest and confidence in the brand and to maintain it marketing of the product is very important. But, the marketing cost can’t be directly compensated with the dealer margin because it will create a negative impact of the company among dealers and it would be difficult for the company to handle it.

At that time APEL should come up with a new margin plan which will help them to identify the bigger and important customers for them. They should give high margin on the basis of two factors:-

1). Order size

2). Credit period

The highest margin should be given to the dealer with large order with less credit period.

0-4% margin can be given on the basis of the order size also 0-3% margin can be given on the basis of credit period.

This plan will help in encouraging the potential dealers to order more to save big on margins also large percent of margin would be saved that was given to small customers which can be utilized in the marketing and promotion activities.

Qus 6. What changes would you suggest in terms of having a separate sales force for dealer network and for institutional/OEM business?

Ans 6.

The dealers plays an important role in the APELs business, as 75% of the annual domestic sales is done by them. So a sales force expert in deciding dealer margin and credit terms should be there to deal with them. They should motivate local electricians and should be good at customer care which will ultimately helps in pushing sales.

Sales force dealing with the institutional/ OEM business should be more technically strong and should have proper knowledge about the basics of the product, as they have to deal directly with customers and comparison with competitor’s product can be there.

Also there can be a separate market managers for Institutional/OEM and for Household/Builders sales. These managers can be under a national head for marketing. This would make the structure more organized and proper attention would be given to each department.

CMD Joint Managing Director Executive Director

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