SALES PERFORMANCE

MANAGEMENT in KRC

By Group 8 (Section A)
Ankit | Megha | Naman | Snehil| Tulika

CASH FACTS

Ronit (RSM) transferred Ramandeep Singh (Sales Executive) from Punjab to

small territory of Rajasthan with annual target of INR 200 million

Decision was forced on the branch and was against the prevalent sentiment of
Punjab branch

Ramndeep Singh was a 40 year old executive in home territory for 18 years
working with KRC

He was able to leverage his personal relationships with dealer to bring sales

Ramandeep had been the outperformer in branch for many years and got
support from his managers

Market dynamics changed after 2004 intensified competition, changed from

sellers market to buyers market

KRC is struggling with financial performance and not willing to match

discounts given by competitors or extend credit terms

RDS PERFORMANCE

Performance was evaluated on:

Sales Figures

No. of days of sales outstanding

Network coverage for dealers

Based on the sales performance tracker, RDs performance can be rated as:

In terms of sales target:

Excellent till 2005 as he was meeting his targets and also outperformed branch in terms of growth

Good/Average till 2008 but unacceptable after it

In terms of days of sales outstanding:

Good till 2007 as compared to branch (ignoring recession period)

Poor after 2007

In terms of market coverage

Poor

TOTAL TYRE MARKET

IN PUNJAB
(INR MILLIONS)

PERFORMANCE
(INR MILLIONS)

Branch
Performance
900

Growth

RD's Target

Branch
Target
900

100.00%

4500

7.14%

1000

1000

100.00%

2000

5000

11.11%

1100

1120

2001

5750

15.00%

1250

2002

6250

8.70%

2003

6500

2004

OUTPERFORMED
(GROWTH)

Growth

Branch

Market

370

RD's
Performance
400

108.11%

11.11%

420

440

104.76%

10.00%

YES

101.82%

12.00%

480

540

112.50%

22.73%

YES

YES

1250

100.00%

11.61%

540

570

105.56%

5.56%

1400

1380

98.57%

10.40%

600

600

100.00%

5.26%

4.00%

1450

1450

100.00%

5.07%

640

650

101.56%

8.33%

YES

YES

7500

15.38%

1600

1600

100.00%

10.34%

700

720

102.86%

10.77%

YES

2005

9000

20.00%

1750

1700

97.14%

6.25%

750

750

100.00%

4.17%

2006

9500

5.56%

1900

1800

94.74%

5.88%

800

750

93.75%

0.00%

2007

10500

10.53%

1900

1750

92.11%

-2.78%

800

720

90.00%

-4.00%

2008

12000

14.29%

1800

1650

91.67%

-5.71%

750

680

90.67%

-5.56%

YES

2009

14000

16.67%

1900

1680

88.42%

1.82%

800

650

81.25%

-4.41%

2010

15000

7.14%

1900

1700

89.47%

1.19%

800

670

83.75%

3.08%

YES

2011*

16666.67

11.11%

2000

1933.33

96.67%

13.73%

800

666.67

83.33%

-0.50%

CAGR

10.35%

CAGR

5.61%

CAGR

3.72%

Year

Actual Sales

Growth

1998

4200

1999

O/S No. of Days of Sales

Dealer Network Coverage

Year

Branch

RD

Outperformed
Branch

Dealer Universe in
Punjab

KRC Dealer in
Punjab

Dealer Universe in
RD's Territory

KRC Dealers in
RD's Territory

1998

45

35

YES

120

35

40

18

1999

42

36

YES

122

35

40

18

2000

40

38

YES

125

35

40

18

2001

45

40

YES

130

35

40

18

2002

45

45

135

35

43

18

2003

39

46

140

37

45

18

2004

37

42

140

37

45

18

2005

36

40

160

40

47

18

2006

42

38

YES

180

45

60

20

2007

45

44

YES

200

50

67

20

2008

46

48

225

55

80

20

2009

48

47

YES

230

55

85

21

2010

48

50

230

55

85

21

2011

45

48

240

70

86

21

CAGR

5.08%

5.08%

5.62%

1.11%

RDs OVERALL PERFORMANCE

BELOW AVERAGE

Sales figures were in line with target till recent past but now even they are not met

Market grew at 10.35% CAGR, Punjab branch expanded as 5.61% CAGR while his own
sales figures increased only at 3.72% CAGR

Days of sales outstanding was also the fault of appropriate authorities at Head Office
because no billing was done without their approval

Had RD not got the flexibility, he would not have achieved even these sales numbers

Punjab branchs overall growth in market coverage has been in line with the growth in
dealer universe (5.08%) however RDs territory was expanding fast at 5.62% CAGR but RD
was very sluggish in responding to expansion and expanded only at 1.11%

Even his dealers started losing faith and believed that RDs prime time is over

RSMs feedback was not worked upon, if disclosed to RD

RDs loyalty was more towards his dealer friends than towards the company

Observing that his policies are not beneficial to company, he did not change his style of
working and was committed more to his friendship than accomplishing companys
objectives

ALTERNATIVES FOR RSM

ALTERNATIVES
Give a warning and
deadline to improve

PROS
Motivation boost,
increase in loyalty

Transfer to another branch

with specific instructions

Other executive who will

replace RD may make up
for loss caused by RD

Fire RD

Change in practices will

be easier

Send for appropriate

training

He will know other

aspects of business,
increase in acceptability
of company decisions,
improvement in
performance

CONS

IMPACT ON OTHER
EXECUTIVES & BRANCHES

Might not improve

May send a wrong message to

other executives

Decrease in motivation,
might quit as family
cannot transfer easily,
Dealer loyalty may get
effected and further
drop in sales in next
few years

Will give a strong signal to other

employees to focus on
performance and company first,
may improve performance of
others as well, may drop
motivation level of other
employees

May be reluctant to
learn at the age of 40,
may not be effective in
home territory with
same dealers whom he
is dealing for past 18
years

Promote a supportive culture in

organization, develop a sense of
security and loyalty among other
employees, KRC will retain an
executive with 18 years of
experience, good past sales
record, and strong dealer network
in faster growing territory

OUR RECOMMENDATIONS

Cancel transfer order and send for training program with strict guidelines and
deadlines for improvement on KRAs

Observe, accompany RD and other executives in field and guide for

improvement

Issue clear instructions for all other branches as well with strict KRAs and
KPIs

Retaining an executive fro gong to a training program should be strictly

discouraged throughout the company

If RD fails to perform even after given a chance to improve, then transfer him

Some nearby territory can be considered for transfer

Prevalent practices by a company receive slow response from market when

move on stricter side, so should inform about hitbacks in short-term but also
educate about long term benefits