Problem Identification:

In this case, there are 4 major Players, namely Vipul Desai (ASM), Khimji Tanna (Retailer),
Damodar Girjee (Distributor) and Arjun Kapoor (Sales representative). Although each of them
faces unique challenges, their problems are all inter-related.

Damodar Girjee (Distributor)

There had been no encouraging growth in the demand for Valley’s Pride in the past 4 months,
and it was becoming tougher for Girjee to offload the inventory, thus resulting in very high
carrying cost. Despite that, the company was pushing the products on him, compounding his
problem.
Moreover, the retailers were constantly demanding more credit and his working capital was
going through the roof.
TIL was forcing on him 1Kg packets of Valley’s Tea, even when the demand was so clearly for
the 0.5 Kg packs. This made it extremely difficult for him to sell the consignments.

Khimji Tanna (Retailer)

Valley’s Pride was occupying valuable shelf space, without sufficient returns.
With the product in the trial phase, it would have been easier to sell 0.5Kg packs, which the
company was in no mood to supply.
He was also not satisfied with the consignment of Healthy juices, complaining that the company
is forcefully pushing the pineapple flavour, which the consumers clearly do not prefer.

Arjun Kapoor - Sales Representative

The biggest problem for any sales representative is managing both the Area Sales Manager
and the Distributor. In the case as well, Arjun has to face pressure from both the ends.
On the one hand, Vipul Desai, the Area Sales Manager, wanted him to make sure that the
monthly targets are met; and on the other hand the distributor was unwilling to take such a large
shipment of Valley’s Pride. He also wanted to put forward a scheme for the distributor which the
ASM wasnt keep about

Vipul Desai (ASM)

He was primarily concerned about meeting the sales targets for the month. He believed that the
right amount of push can make any product sell in the market.

Analysis:

The region where Damodar Girjee was set up and had to push Valley’s Pride into was one
where the consumers primarily consumed other types of tea - especially Dust Tea and not Leaf
Tea which was the kind of Tea that Valley’s Pride, notwithstanding its expensive price.
This could explain why there was not much encouraging growth for the past 4 months despite
having substantial enough advertisements. One could say the pull strategy to get the Customers
to choose Valley’s pride might not have all panned out well.
Damodar Girjee and Khimji Tanna both had two problems in common - Space and Money
movement. Space constraints would always exist and hence prioritzation of those goods which
would give him maximum revenue was important. When the TIL and the CFA dumped some
extra stock of Pineapple juice or the 1kg packs instead of 0.5 kg ones, it cost Damodar Girjee
space and turnover time since they werent getting sold due to low demand.
Due to these same reasons that the stocks werent getting cleared and valuable space was
getting used which contributed to poor Working Capital Management which further inhibited the
intake of further stock.

The retailer was the closest to the consumer and hence had a better pulse of the market , in a
direct manner. HIs insight was that Valley Pride wasn't selling as expected and unlike the
example of Soap which is a top of the mind good, juices or Tea were impulsively purchased.
And for that reason , customers didnt purchase pineapple ( probably because they didnt like it
and preferred Mango) and most importantly, did not purchase Valley’s Pride because of it being
a LEaf Tea and due to its 1kg SKU and not 0.5kg SKU which would go off the shelf faster if they
wanted to try. A consumer would “pick” such a low uncertainty good for experimentation which
has lower price or lower quantity.

Perhaps the biggest problem of all is that of Arjun Kapoor- the sales representative.He had to
meet the target set by his ASM and had to convince the distributor to take in more stocks and
had to persuade the Retailer for greater space all without breaking down any relations. The first
problem was due to the ASM’s goal to follow his planned target schedules decided beforehand
at the launch of the product. Being a new product, the ASM’s goal was to proliferate it as much
as possible and in the shortest time. The second problem - the distributor’s issue has been
discussed. And the Retailer was simply dictating his terms because he could rely on the
innumerable other brands to earn his income and was not relying on TIL or its products since
they werent in demand. Besides, the competition was also working hard to appease the retailer
and perhaps garner more visible shelf space for which TIL wasnt giving enough premiums and
sought for schemes from distributor and the company just like Girjee sought schemes from TIL.
Recommendations:

1) Product Mix:
The biggest issue faced by distribution is that they are pushing the 1kg tea pouches for a
brand which is lesser known and is still in the trials phase. A smaller SKU like 0.5 kg or
0.25kg will help distributors like Girjee and Tanna to push it towards the end consumers
and when the repurchase phase kicks in, then the 1kg packs can be pushed forward.
Another way to keep the distributors and retailers enthused is to increase the ratio of
Mango : Pineapple juice flavors for the ‘Healthy’ brand. Healthy would lose the market
share if they try to push Pineapple more as that flavor is preferred “if” there is no other
flavor available, hence Kapoor and Desai should think on that aspect and provide Mango
a bit more than the current supply.

2) Leveraging ‘Healthy’ for ‘Valley’ launch as well as other Tea brands:

Desai and Kapoor can leverage the ‘Healthy’ juices brand and push his new tea launch
Valley with Healthy. There is a good demand for Healthy’s Mango Juice along with
Orange and Lemon too. Now, TIL’s tea brands aren’t much in demand and distributors
and retailers do not want to stock it. Now, for Valley’s launch, the ASM can devise a plan
wherein they offload a pre-defined quantity of ‘Valley’, say 2-3 tonnes for a distributor
like Girjee and provide him with more Mango juice of Healthy to enthuse him for pushing
tea brands, especially the new launches.

3) Simultaneous Push & Pull Activities:

There is a dilemma with the managers to make the product available first or make it
wanted by consumers prior to making it available in the market. Now, here in this case,
to help stakeholders like Girjee and Tanna push tea brands especially the new launch,
advertising needs to be considered as well to help brew demand in the market; once the
demand is created, TIL can push other products as well, like the 1kg pouches, pineapple
juices because the bargaining power increases on the hand of TIL.

4) Schemes:
Now, TIL needs to consider schemes a bit more in priority because as we analysed from
the case that retailers like Tanna have gained a lot of bargaining power because 100
brands approach them now, offering incentives and price for the display shelf space. TIL
is bound to lose if they don’t consider keeping retailers like them enthused. That doesn’t
mean TIL needs to agree to whatever Tanna and Girjee asks for. There must be a
middle ground in designing the incentive system and Trade Schemes, and compensate
for that lesser incentives by offering a better product mix in terms of a better mango to
pineapple juice ratio and smaller SKU tea pouches.

5) Revising the “Targets” mindset:

Managers like Desai have developed a skewed mindset in terms of just attaining their
monthly sales targets rather than having a long-term approach wherein they need to
build long-lasting relationships with the distribution stakeholders to ensure that these
channels do not clog in the future, rather it keeps flowing smooth, if the monthly sales
targets are not the primary goal of the ASM, rather work on a quarterly or half-yearly or
yearly targets to help understand the concerns of these channels and get inputs from the
Corporate to use it to lower their difficulties which will ultimately be beneficial for Desai.