Case Analysis Distribution And Sales Operations Marketing Essay

Case Review Distribution And Sales Supervision Marketing Essay

The Bajaj Group is usually amongst the most notable 10 business houses in India. Its footprint stretches over a wide selection of industries, spanning automobiles (two-wheelers and three-wheelers), home appliances, lighting, iron and steel, insurance, travel and finance.

Bajaj Auto

The group’s flagship business, Bajaj Auto, is ranked as the world’s fourth largest two- and three- wheeler supplier and the Bajaj manufacturer is well-known across different countries in Latin America, Africa, Middle East, South and South East Asia. Today’s Chairman of the group, Rahul Bajaj, took fee of the business in 1965. Under his leadership, the turnover of the Bajaj Automobile the flagship company has truly gone up from Rs.72 million to Rs.46.16 billion (USD 936 million), its merchandise portfolio has extended and the manufacturer has found a global market apa essay. In this record, we will consider only the two wheeler division of Bajaj Car.

Bajaj Auto – Merchandise Portfolio (Two Wheeler Segment)

Sub Brand

Products

Bajaj Avenger

Avenger 200 DTS-i

Bajaj Pulsar

Pulsar 150 DTS-i

Pulsar 180 DTS-i

Pulsar 220 DTS-i

Pulsar 135 LS

Baja Discover

Discover 135 DTS-i

Discover DTS-Si

Bajaj Platina

Platina 125 DTS-Si

Platina 100

Bajaj XCD

XCD 135 DTS-Si

Bajaj Kristal

Kristal DTS-i

Kawasaki Ninja

Ninja 250R

Bajaj Auto – Revenue and Distribution Structure (2 Wheelers)

Bajaj Automobile has two revenue and distribution channels for its two wheeler items (Fig. 1) –

Sales through direct organization operated shops like Bajaj Probiking and a few wholly company operated dealerships existing in a few spots around the united states like Pune (Enterprise dealership in Wakdevadi)

Sales through dealer franchises

Bajaj Probiking

Bajaj has determined a segment of buyers ‘Probikers’, who are knowledgeable, appreciative of modern technology, they happen to be trendsetters and incredibly choosy

about what they drive. Hence, Probikers need to be resolved in a meaningful method that goes beyond the merchandise. Bajaj Auto has setup a chain of shops across the country exclusively for high-end, effectiveness bikes. These shops are named ” Bajaj Probiking”. Twenty-two such stores have been opened over the India. These stores exclusively sell powerful vehicles such as Bajaj Avenger, Pulsar 220 DTS-I and the Kawasaki Ninja 250R.

Bajaj Dealer Franchises

Bajaj Auto has a network of 498 sellers and over 1,500 alum molar mass authorized program centers spread across the country. Around 1,400 rural outlets have already been created in towns with populace of 25,000 and below. The existing dealer network can be servicing these outlets.

Bajaj Auto

Dealer

Authorized Service centre (ASC)

Customer

Customer

Customer

Probike

Figure 1: Distribution Channel for Bajaj Auto (2 Wheelers)

Shakthi Bajaj

Bajaj Auto has 8 dealerships in Chennai as displayed below –

Dealership

Area

Jai Automobiles

Tambaram

Jai Autos

West Mambalam

Khivraj Automobiles Ltd.

Mount Road

KLN Automobiles Pvt. Ltd.

Anna Nagar East

Malinisri Motors

New Washermanpet

Shakthi Motors

Poonamallee High Road

Sri Jai Autos Pvt. Ltd.

Adyar

Vishaka Auto

Saligramam

In this statement, we can look at the sales and distribution network of 1 of the largest dealerships in Chennai – Shakthi Bajaj. Shakthi Bajaj has got twelve-monthly sales of around 4000 motorcycles in 2009 2009. The product product sales portfolio for Shakthi Bajaj for 2009 is really as shown below –

Product

Annual sales quantity

On Road Value (Rs)

Dealer Margin per automobile (Rs)

Pulsar 150 DTS-i

1400

67967

2890

Pulsar 180 DTS-i

600

72133

3060

Discover DTS-Si

600

47831

2030

Discover 135 DTS-i

800

59145

2510

Platina 100

300

40682

1730

Platina 125 DTS-Si

75

46260

1970

XCD 135 DTS-Si

200

54629

2320

Kristal

25

42322

1800

Out of the 4000 units sold in ’09 2009, about one third of the sales happen to be from the showroom while the remaining is from the authorized provider centers of Shakthi Bajaj.

Customer Profile

Out of 100 people who go to the store, around 60% essentially end up buying bicycles at Shakthi Bajaj. 50% who go to the store are teenagers, 30% happen to be middle aged (30-45 years) and another 20% happen to be 40+ who normally shop for motorcycles for his or her sons. The customers generally come to the stores with their family members and it is the older members of the family who make the ultimate decision of whether to get the motorcycles because they are the ones who generally make the payments because of their families. The customers likewise come to the showrooms along with a good friend or a mechanic who provides knowledge about the many motorcycles and who acts as the influencer for these clients. Usually 70% of the customers require the finance alternative while the remaining employ the money and carry mode.

Shakthi Bajaj – Showroom

Shakthi Bajaj is situated on the outer elements of Chennai on Poonamallee Superior Road and serves consumers in the nearby parts of Egmore, Purasawakkam, Kilpauk and various other localities. The showroom is normally 3000 sq.ft in proportions and comes with an adjoining workshop (6000 sq.ft) which services motorcycles. The showroom offers several departments within it such as sales, spare parts and the accounts department. In this article we will focus simply on the product sales division of Shakthi Bajaj.

The entire showroom is certainly blue themed based on the Bajaj company symbol. There can be one vehicle on screen from its unique sub brands. The automobiles on display usually are black in color as these are the colors which usually are preferred by the majority of customers. If the customers wish to see vehicles of various other colors they are taken up to the vehicle holding area which is present on the first ground of the showroom.

Showroom Sales Team

Function

Number

Sales Executive

3

Sales Manager

1

ASC Sales Manager

1

Financiers (Bajaj Auto Finance)

3

Pre Delivery Inspectors

3

RTO Managers

3

Selling Process in Showroom

When a person enters the showroom, the showroom revenue executive meets the potential consumer, interacts with him, identifies his needs and shows him the many models of bikes. Typically he persuades the customer to take a test ride of the bicycles of his interests.

After the client decides on the bike the revenue executive queries concerning whether the customer is going to pay by funds or whether he would need a financing scheme.

Cash Payment

If the customer is to make cash payment, the product sales executive discusses about the pricing and if the customer requires additional features such as a helmet. The prices are generally fixed unless there is a promotional offer for that one period. If there is intense pressure on the sales executive with regards to the pricing he takes the customer to the sales manager who’s similarly firm with the customer and gets him to comprehend on the concept of fixed prices from Bajaj. After the customer is content with the costs, he pays the money amount to the product sales executive, gets a receipt, picks out his automobile from the holding region on the first flooring. The vehicle is then inspected by the pre delivery inspectors and is usually sent to the RTO group to get it registered with the neighborhood RTO office. The vehicle is then inspected

again by the pre delivery inspectors and can be then found by the customer from the showroom at his period of choice.

Financing

If the customer prefers a financing choice, the sales executive transfers him to one of the three financiers from Bajaj Car Financing Ltd. The representative discusses the loan details with the clients like financing period which normally varies between 12 to 36 months and the necessary identification and salary proofs which he would have to service the loan. When a sale is made, the invoice is provided to the Bajaj Auto Finance Ltd. hq, and the showroom receives the cash within 2-3 days for the sale made.

The ex showroom rates are fixed by Bajaj Car and the on street rates are fixed to end up being the same across all dealerships by mutual consent of the 8 dealers in Chennai. The clients spend on an average of about 45 mins in the showroom for a order.

Authorized Service Centers (ASC) – Sub dealers of Shakthi Bajaj

Shakthi Bajaj also offers motorcycles through its authorized service centers which act as sub sellers of Shakthi Bajaj. During this record, Shakthi Bajaj has 11 ASCs under its command as shown –

ASC Name

Area

Shree Balaji Motors

Moolakadai

Shree Motors

Perambur

Kamakshi Bikes

Peravalur

Deepa Shakthi Motors

Govardanagiri

Raj Shakthi Motors

Pudupet

PV Motors

Puzhal

Sree Shakthi Motors

Avadi

ASV Motors

Madhavaram

Karan Bikes

Moolakadai

Ram Motors

Kilpauk

Annai Motors

Choolaimedu

Each ASC has 2 persons looking after the sales, the dog owner and a product sales executive.

Relationship between ASC and Shakthi Bajaj

These 11 ASCc donate to about two thirds of the sales of Shakthi Bajaj. A few of the terms which can be found between Shakthi Bajaj and the ASC are as follows –

The ASC get to retain 70% of the dealer margin on a car.

They hold vehicles limited to screen at their centres as well as a one month demand stock of cars at their premises

Their repayment schemes are completely on credit. The company regulated payment schemes are 15 times of credit however in reality they take about thirty days of credit.

All promotions are completed by Shakthi Bajaj and the ASCs usually do not make any advertising schemes on their own.

The automobiles are transported from the main dealership to the premises of the ASC using small trucks with the price borne by the ASC.

Suppliers – Bajaj Auto

Bajaj Auto’s has in every three plants, two at Waluj and Chakan in Maharashtra and one plant at Pant Nagar in Uttranchal.

Plant

Product Manufactured

Waluj

Motorcycles and three wheelers

Chakan

Motorcycles

Pant Nagar

Motorcycles

Physical distribution to Shakthi Bajaj

Shakthi Bajaj gets the bikes from the Manufacturing crops in trucks. Each vehicle carries 50-70 bikes. It requires anywhere from 6 – 17 times for the vehicles to attain Shakthi Bajaj after the time of positioning an order.

Promotions

Promotion schemes from Bajaj Vehicle are in the kind of joint publicity and so are given simultaneously to all or any the Bajaj sellers in Chennai. It is normally in the sort of full site newspaper advertisements both in English and the neighborhood Tamil newspapers. For many sales advertising schemes and melas, the sellers combine with financiers such as for example Bajaj Auto Finance for the promotional schemes and income sharing is done predicated on sales revenues and the quantity of business which the financier gets. This joint advertising clearly depicts one circumstance of the incentive incompatibility between your dealer and the financier as the incentive scheme for the financier is based on the business enterprise which he gets which constrains the seller to push for financing backed obligations to his customers.

Information Flow

The dealers are normally informed of the advertising plans of Bajaj through meetings kept at the Regional Workplace as well as National meetings held with the top performing dealers. The neighborhood changes in the on road prices of the motorcycles because of changes in road tax and RTO prices etc. will be communicated to the sellers through meetings at the Regional Offices. The information about the status of the dispatch of the vehicles from the manufacturing plant is normally conveyed to the dealers by the Regional business office.

Relationship between Shakthi Bajaj and Bajaj Auto

The following are some of the aspects of the partnership between Shakthi Bajaj and the suppliers (Bajaj Car) –

There are no credit rating terms between Bajaj Vehicle and a supplier for the order of vehicles. All purchases are through cash obligations.

The on road prices are set by Bajaj Vehicle and the dealers have no leverage in changing the prices.

Bajaj Vehicle expects the dealers to hold about 21 days of share in its inventory. Even so, the truth is Shakthi Bajaj is pressured to hold 60 days of stock in its inventory.

Problems

Dealer inventory

The Company regulation says that each dealer must hold 21 days of stock as his inventory. This corresponds to around 330 bikes in share for Shakthi Bajaj. Nevertheless, in reality Shakthi Bajaj is pressured to hold 60 days of share in its inventory which corresponds to around 650 vehicles. This combined with the insufficient credit payment schemes for purchase from Bajaj Auto outcomes in tangled up working capital excessively inventory.

Varying demand in colour

Customers have specific color preferences with black being the most favored colour. However, you will find a shortage in dark motorcycles with Shakthi Bajaj even with an excess share as the Regional Workplace and Bajaj Auto try to push slow moving inventory to the many dealers. This is a huge problem especially during the festive season as demand is large for black motorcycles while the high transit period from the manufacturing plant means loss of sale to competition.

Action Plan

While better information stream between your dealership and the Regional Business office would help to reduce the inventory to a certain extent, any strong actions plan to decrease the excess inventory would need the Regional Office to abate the pushing of cars onto the dealers to show favourable sales to the top Office that will not occur anytime soon. Any try to bypass the Regional Workplace and interact directly with the top office could be harmful to the dealership. Again that is an example of the principal agent issue and the incentive incompatibility in a distribution system.

For the varying demand in color for Bajaj bikes especially during festive periods, Shakthi Bajaj could adopt the practise of shopping for spare black petrol tanks and dark-colored chassis spare parts and changing those of another colour with these dark chassis. This may be a short term solution till a fresh stock of black vehicles arrives at the dealership.

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