The Indian Institute of Planning & Management

Project Trimester
(Spring Summer 2008-10)

Sales and Distribution Management

“Sales and Distribution” Effectiveness:

A Comparative Study of
Tata Sky & Airtel DTH.

Submitted by:
(GROUP NO.HR263)-
Gaurav Soni (16)
Kumar Deepak (24)
Sanya Gulati (49)
Saurabh Mishra (51)
 DTH industry Group No. - HR-263

EXECUTIVE SUMMARY

Over the years back as we all know cable TV was everywhere, but the
two three years back a new technological revolution happened and
direct to home satellite television came into existence and as days
passes by DTH sector in India has developed with the availability of
more brands, better quality products and better service.

Our research facilitates designing an overall sales and distribution

management strategy for a DTH sector after an in-depth study and
analysis of two established brands in the DTH business sector: Tata
Sky and Airtel DTH (India).

The objective of our research was:

• To compare the sales and distribution effectiveness (Quantitative
Research).
• To carry out a detailed study of “Logistics Network”
• To design a comprehensive sales system.

The data collected for the research involves the use of both primary
and secondary sources. Primary data is based on the findings from the
company personnel with the use of tools like questionnaires and
discussions. This data is further substantiated by the use of
appropriate secondary sources like internet and books.

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In this project we went through interviewing the retailers, distributors

and management officials of Tata Sky and Airtel DTH covering most of
the regions of Delhi and NCR.

After all the research and analysis work done during the course time of
this project we came to the conclusion that Tata Sky sales is more
effective than that of Airtel DTH, but even then there is a great room
for improvement available for them.

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ACKNOWLEDGEMENT

We would like to express our gratitude to all the dealers, distributors and the
corporate officials of Airtel DTH and Tata Sky for their kind support and assistance
while furnishing the required information’s.

We also express our gratitude and thanks to Prof. Maninder Singh for their
invaluable co-operation, continued support and guidance as well as healthy criticism
throughout resulting works. Their able guidance, encouragement and valuable suggestion
led our way pass easily through most difficult period during this Sales Project.

We would also like to thank the faculty and staff of IIPM because without their
help this project would not have been completed.

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TABLE OF CONTENTS

S No. Topics Page No.

1. Methodology …………………………………..………………...5

2. Company Background ………………………………..…………8

3. Findings Data Analysis and Conclusions ………………….….. 14

4. Recommendations ……………………………………………....32

5. Sales Reporting System………………………………………….33

5. Bibliography …………………………………………………….35

6. Annexure………………………………………………………....36

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METHODOLOGY

Business Sector:

In order to study the sales and distribution effectiveness of two

organisations we decided to take the ‘DTH Industry’.

Organisations identified for the study:

Under the ‘Footwear Industry’ the two organisations which we are going
to study are:
 Tata sky
 Airtel DTH

Objective:

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The main objective of the study can be divided into following heads:
• To compare the Sales and Distribution Effectiveness (Quantitative research).
• To carry out a detailed study of ‘Logistics Network’: Mode/s, Costs and
Monitoring Systems.
• To design a comprehensive sales reporting system for the chosen business
sector.

Data Collection:
Data collection will be done from both Primary as well as Secondary sources.

Primary data collection: It will be collected by In-Person Interviews as well as

Telephonic Interviews of various personals/managers working in the organisation and
dealer’s/retailer’s etc.

Secondary data collection: From newspaper, magazines, libraries and websites.

Research Design:
The research is descriptive type and accordingly the design is formulated so that
precise and relevant information may be gathered.

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Data Collection tools:

• Structured Questionnaires

Sample design:
The research will be conducted by interviewing various Organisational officials and
the Dealer’s, Retailer’s and Franchisee’s.
• Sampling: Simple random and Convenient.
• Method Adopted: Personnel Interviews
• Field: Delhi and NCR regions.
.

Sample Size:
The target will be to interview at least 4 distributor of each company and as many
official’s as possible.

Data analysis tools and technique:

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.
• Graphical method (Bar Graph).

COMPANY BACKGROUND

Tata Sky
History:
Tata Sky, an 80:20 joint venture between Tata Sons and the Star group, provides satellite
television services to Indian viewers. The company was incorporated in 2004 and offers a
range of media and entertainment options to customers.
The TATA Group is one of India’s largest and most respected business conglomerates. It
comprises diversified businesses in sectors such as materials, engineering, services,
energy, information systems & communications, consumer products and chemicals.

The Group and its enterprises have been steadfast and distinctive in their adherence to
business ethics and their commitment to corporate social responsibility. This is a legacy

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that has earned the Group the trust of many millions of stakeholders in measure few
business houses anywhere in the world can match

Areas of business
Tata Sky's direct-to-home satellite platform delivers more than 100 television channels,
movies and interactive services for games, learning, recipes, news, chat rooms, etc. It has
state-of-the-art digital infrastructure and a retail network that covers more than 4,500
towns in India.

Location
Based in Mumbai, the company has three call centres (Pune, Chandigarh and
Hyderabad).

Airtel DTH
History:

The businesses at Bharti Airtel have always been structured into three individual strategic
business units (SBU's) - Mobile Services, Airtel Telemedia Services & Enterprise
Services. The mobile business provides mobile & fixed wireless services and has recently
launched a Direct-to-Home (DTH) service, Airtel digital TV. The company provides end-
to-end data and enterprise services to the corporate customers.

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Findings, Data Analysis

And Conclusions

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DISTRIBUTION SYSTEM

AIRTEL DTH

DISTRIBUTION SYSTEM
A proper distribution system is very important for every company because now a days the
customer wants full service without any pain. Airtel has a deep penetration in the market
due to its cellular services and it has provided them a advantage in the market. I have
also seen in the market the happy faces of customers and retailers of Airtel because of the
easy availability of Airtel DTH retailers.

BENEFITS OF GOOD DISTRIBUTION SYSTEM

1. Easy availability

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2. Satisfied customers
3. Competitive advantage
4. Better market reputation
5. Saves time

DISTRIBUTION SYSTEM OF AIRTEL

1. Organisation (C&FA's)
2. Distributor
3. Retailer
4. Customer

Organisation
C & FA

Distributior

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Several FOS

FOS FOS FOS

Different retailers Different retailers Different retailers

DISTRIBUTOR

Channel Structure:

AIRTEL DTH

Manufacturing unit

Warehouses

Distributors Exclusive Showrooms Demo at shopping malls Exclusive Retailers

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Product Area Distributor

Dealer

Retailer

Customer

Tata Sky DTH

Manufacturing Unit

Warehouses

Distributors

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Dealer Exclusive Showrooms (Experience Zone) Corporate sales

Retailer

Customer

Criterion and Condition for selecting Channel Members:

The criterion followed for the selection of channel members is almost same in case of
both Airtel DTH and TATA Sky DTH. The various conditions based on which the
members are selected are:

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1. Financial Capacity: The financial condition of the member must be sound and
he should posses a neat and clean past market record.
2. Market Reputation: He should have a good reputation in the market and also
with the customers.
3. Space and Location: In case it is a distributor the factor taken into
consideration is
-Space and in case of retailers it is location.
4. Experience: He should have been in the field for a minimum period of 5 years.

Average Inventory Size:

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Airtel DTH: The average inventory size kept by airtel is of almost 15 set-top box for
each set of set-top box sold.

Tata Sky: The average inventory size in case of tata sky is of 20 set-top box for each
set of set-top box sold.

LOGISTICS:

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Airtel DTH: Order processing time in case of Airtel is 1 day. Although airtel follows
a special logistics for any urgent demand.

TATA Sky DTH: In case of TATA sky the order processing time is 2 days. The
modes of transportation adopted are basically Road and Rail, but in certain urgent cases it
may be sent through Air.

The order processing of Tata Sky is same as that of Airtel.

Performance Appraisal

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Airtel DTH: The performance appraisal of channel members in case of airtel is done
on half-yearly basis. The major criterion for appraisals is the net increase in terms of
sales compared to that of last time .the incentives provided varies from gifts to free
foreign trips.

Tata Sky: In case of Tata sky the evaluation is done on a quarterly basis and the
appraisal is provided annually.

The reason for high satisfaction of the channel members of tata sky can be understood
from this, as they are duly appraised on a regular basis and their problems are duly
solved.

Assigning of targets:

Airtel DTH: In Airtel DTH the targets are assigned to the sales personnel’s based on
the following criterions:
i. Population of that area.
ii. No. of distributors in that area.
iii. Potential available in that territory.
iv. Back history of individual sales personnel.

Tata Sky: In TATA Sky the targets are assigned to the sales personnel’s based on the
following criterions:
i. Total area to be covered.
ii. Past performances of the individual.
iii. No. of distributors in that region.

LIMITATIONS OF THE STUDY

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While working on this project I have to face some difficulties while conducting the
survey.
People were not interested in giving their actual information about their family income
and airtime, as they were extremely scared about the income tax some people have
difficult to take them in confidence so that they can give correct information.
Some of the limitations are:
• Not at home
• Refusal to co-operate
• Respondent bias

Market Research:

Airtel DTH: They do market research through questionnaires which they ask to fill
from their customer after they install their set-top box.

Tata Sky: They do not conduct any individual market research but they get the desired
information from the same method as they ask customer to fill a questionnaire during the
installation of the product.

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SALES SYSTEM

On the basis of data collected from the retailers, distributors, etc. an approximated
comparison of the two is shown below:

Overall Effectiveness

Airtel DTH TATA Sky

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Quality maintenance:

Quality Maintainence

Airtel DTH Tata Sky

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Customer Orientation:

Customer Orientation

Airtel DTH Tata Sky

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Delivery Time:

Delivery Time

48

47

46

45

44

43

0
Tata Sky Airtel DTH

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Promotional activities:

Promotional Activities

Tata Sky Airtel DTH

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Services of the sales persons:

Salesmen services

Airtel DTH Tata Sky

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Ease & flexibility of ordering:

Order flexibility

Airtel DTH Tata Sky

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Transporters Behavior:

Transporters Behaviour

Airtel DTH Tata Sky

After going through the above values it can be concluded that Tata Sky sales and
distribution system is more effective than that of Airtel.

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Recommendations

1. Airtel should focus more on their promotional activities in more

innovative manner so that they can provide more competition to their competitors.
2. As Tata Sky Plus is targeting a niche market, it should make its products
like provogue more widely available in the market.
3. The availability of DTH is still lacking in the rural.

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Bibliography

For our project we have referred to the following places for information:

• www.tatagroup.com/tatasky
• www.airteltv.in
www. Indiantelevision.com
• Sales and Distribution Management – by F.L.Lobo
• Marketing Management – by Philip Kotler
Times of India, Hindustan Times
• "Bharti Airtel set to foray into India's DTH market, to launch Airtel Digital TV from Oct.
9". International Business Times (08 October 2008). 8 October 2008.
http://in.ibtimes.com/articles/20081008/bharti-airtel-digital-dth-service-satellite-
television.htm. Retrieved 2008-10-13.
• "ADAG & Bharti gearing for massive on air war".

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Annexure

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Questionnaire
(Sales and Marketing department)

1) Which brand of Direct to home do you own?

Airtel-DTH TATA Sky

2) Which kind of subscription do you use?

Yearly Six Monthly Quarterly

Monthly Two Year

3) How did you get to know about this brand?

Newspapers Magazines Friends & Relatives
Retailers Others (Specify)

4) From where did you purchase the connection?

Authorized dealer Exclusive Shoppe
Dealer nearby you A Known Dealer

Reason__________________________________________________________________
______

5) What percentage of discount you get from the dealer?

5% 10% No discount Vouchers offered

6) Have you ever faced any problem in your DTH regarding the following?
Maintenance Servicing Manufacturing Defect Others
Others
:
7) Rank the following:
1-Most Important 2-Important 3- Necessary 4-Least Important 5-Not Necessary
Price Brand After Sales Service Reach of Showroom
Availability of Product Discount/Scheme offered

8) What kind of After Sales Service do you use?

Company Service Other than Company

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9) Rate the services of the after sales person on the basis of following;
CRITERIA YES NO
Responsiveness
Availability 10) How much time taken by the
Helpfulness company to solve your problem
Capability completely?
24 hours 2-3 days 1
Week More

11) a) How many times you have lodged a complaint regarding a particular product?
1 time 2-4 times More

b) If yes, on how many calls have you been attended by an executive?

Readily available 2 – 3 times

4-7 times More

12) 11) Tick the efficiency of the Sales Person to make your buying more
comfortable?
Very efficient Efficient Sharp/rude Less knowledgeable

Less efficient Less knowledgeable Knowledgeable but Less effective

Convince you to buy other brand

14) How the product has reached to your home?

You yourself have taken Dealer has provided you with a service

15) Tick one of the following:

DEGREE PRODUCT COMPANY
Fully Satisfied
Partially
Satisfied
Not Satisfied

If Not Satisfied, which brand in future you would like to buy and why?
_______________________________________________________________________
_________

NAME:_________________________________________________________________
________
OCCUPATION: SERVICE BUSINESS OTHERS (Specify)
_____________________

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HOUSEHOLD INCOME: 1.5 – 3Lakhs 3 – 4.5Lakhs 4.5 –

6Lakhs
Above 6Lakhs

THANK YOU

Questionnaire
(For Dealer’s/Retailer’s/Franchisee)
CHANNEL MEMBER

1) a) What are the Terms and Conditions set by the Company for the Channel
Members?

____________________________________________________________________
_________
____________________________________________________________________
_________

b) What are the average sales per month?

_________________________________________________________________
_________
c) How much is the average sale for refrigerator per month?
_________________________________________________________________
_________________________________________________________________
__________________
2) Are you Happy with the sales targets set by the Company?

_________________________________________________________________
_________________________________________________________________
__________________________
3) Do you get any credit period from the company?

Yes_______ No_______
If Yes, What is the credit period you get?
i) Upto 15 days ii) 15-30 days iii) >30 days
4) What is minimum reorder level?
_______________________________________________________________________
___

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5) What are the margins that you get from the company?
_________________________________________________________________
_________

6) What is the average order cycle time taken by the company?

i) < 5 days ii) 5-10 days iii) > 10 days
7) Where would you rank the services/assistance provided to you by the company/s
Services Very Good Good Satisfactory Poor Very
poor
Delivery Time
Quality Maintenance
Incentives
Promotional activities
Condition of Product
Commercial Terms
Services of Sales Persons

8) How will you rate the efficiency of your sales persons?

a) Very Good b) Good c) Satisfactory d) Poor e) Very poor

9) How the Company does help you to assist the Product to the End Consumers?
Yes______ No______
If Yes, Do you face any problems in the Distribution Network of the Company?

_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
__________________________________________

10) Do you face complains?

Yes______ No______
If Yes, what are the kinds of Complains?
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
________________________________________________________

11) How do you manage them in the given span of time?

_______________________________________________________________________

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_______________________________________________________________________
_______________________________________________________________________
__________________________________________

Person Contacted:
____________________________________________________________________
Name of dealer:
_____________________________________________________________________
Address:
_____________________________________________________________________
Tel. No.:
______________________________________________________________________

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COMPANY REPRESENTATIVE

1) What is the Sales Turnover of the Company?

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2) a) In how many Zones is India Divided?
______________________________________________

b) On what basis Delhi – NCR is divided?

_____________________________________________
c) Number of showrooms
India____________ Delhi – NCR___________
3) a) What is the Company Sales Organization Structure for HONDA?

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b) What are the profiles of the Members involved in the Structure?
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c) Who Monitors the entire Sales Process? In what ways does it serves as an
effective tool for the company.
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4) a) What are the formats opted by HONDA for the Distribution of its product?

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b) On what basis does the Company chooses its Channel Members?
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c) What are the Criteria to Appraise the Channel Members?
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d) How does the Company responds the different distribution Flaws faced during
the
process?
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5) What is the product range?

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6) a) How many warehouses do you have?

India____________ Delhi – NCR___________

b) How are Orders Processed among the Channel Members and the Company
Level?
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7) How the Logistics Network Works including:

a) Importing of the product

______________________________________________________________
______________________________________________________________
______________________________________________________________
_______________________________________

b) Distribution of the Product

______________________________________________________________
______________________________________________________________
______________________________________________________________
_______________________________________

8) What is the Basis on which Incentives are given to various Channel Members?

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9) a) How many Service Centers does the Company have?

India____________ Delhi – NCR___________

b) How the Complain Cell does bring about the Effectiveness of its Service
Centers regarding the Channel Members and its Consumers?
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10) Is there any kind of Marketing Research done by the Company with respect to
Channel Members and Consumers?

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