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SDM PROJECT

PHASE 2 - SALES

Air Conditioners

Faculty: Prof. Bhalender Singh Nayyar

Date: 29.07.2013

Group 1:

Avneesh Luthra (063012)

Karishma Malhotra (063020)

Nishit Sehgal (063032)

Prashant Tejwani (063037)

Siddharth Paul (063052)

Swati Jain (063057)

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Table of Contents

SAMSUNG ................................................................................................................................... 3

Organisational Hierarchy: ................................................................................................................... 3

Sales Organisation:.............................................................................................................................. 3

Advantages and Disadvantages: ......................................................................................................... 4

Ranking of Skill Sets required for Sales Staff: ..................................................................................... 4

Recruitment and Selection of Sales People: ....................................................................................... 5

Training Methods for Sales Staff: ........................................................................................................ 6

Training for SPCs is designed in the following manner: ...................................................................... 6

Compensation Structure: .................................................................................................................... 7

Prospecting and Reporting with Degree of Sales Force Automation: ................................................ 8

DAIKIN ......................................................................................................................................... 9

Organisational Hierarchy: ................................................................................................................... 9

Sales Organisation:.............................................................................................................................. 9

Sales Force Numbers:........................................................................................................................ 10

Territory Design: ............................................................................................................................... 11

Advantages and Disadvantages: ....................................................................................................... 11

Ranking of Skill Sets required for Sales Staff: ................................................................................... 12

Recruitment and Selection of Sales People: ..................................................................................... 13

Training Methods for Sales Staff: ...................................................................................................... 13

Compensation Structure: .................................................................................................................. 14

Prospecting and Reporting with Degree of Sales Force Automation: .............................................. 15

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SAMSUNG

Organisational Hierarchy:

Headquartered in New Delhi, Samsung India has a network of 30 Branch Offices located all

over the country, which are headed by a branch manager. Branch managers have managers

of 5 different domains under him.

Figure 1: Samsung Branch Level Hierarchy

(Source: Primary Data obtained from Samsung)

Sales Organisation:

The Sales Force at Samsung is split in 2 categories:

1. Residential Air Conditioners2. Commercial Air Conditioners

Under Residential Air Conditioners Samsungs Sales Team is further split in two categoriesbased on channel:

a) Primary Sales Order taking and billing to Distributorsb) Secondary Sales Billing to End Consumers.

Primary Sales Force:

1. Under this model, Samsung deals with one majordeal in a state which in turn deals with sub-

dealers and shop owners in the state. The dealer

appoints his own staff (FOS Friend on Sight) tomake orders and bill the sub-dealers.

BranchManager

Sales ManagerMarketingManager

CommercialDepartment

LogisticsManager

Finance &AccountsManager

HR ManagerService

Manager

SAMSUNG

Dealer

SubDealer 1

SubDealer 2

SubDealer 3

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2. Productivity of these FOS is essential for the sale of Samsung products.Secondary Sales Force:

1. Sales Representatives under this model are known as Samsung Product Consultants.SPCs are present at retail outlets and are required to pitch Samsung products to theend consumer.

2. Their reporting officer (Team Lead) is the RSO (Relationship Sales Officer).Pan India SPC Sales Force Arrangement:

1. Currently there are 3600 Samsung ProductConsultants spread across retail outlets pan

India.

2. Samsung have laid major emphasis on SPCsas they are the point of contact between the

company and end-consumers.

3. The SPC team is also known as the Go toMarket Team.

4. Details of functions performed by the Go toMarket Team are explained below:

Responsibilities of the Go to Market Team

SPC Operation Display Training

Agency Load

Sales Strategy

Store Display & Merchandise Content Development for

SPCs

Advantages and Disadvantages:

Advantages Disadvantages

Samsung uses a Market based SalesForce Specialization split on the basis

of channel of distribution.

This allows them to focus onchannels separately. This allows

prevents duplication of efforts of

Sales Force when interacting with

dealers/retailers.

FOSs are recruited by the majordealer of Samsung in a particular

state, Hence, Samsung does not have

adequate control towards choosing

appropriate sales people.

The SPC sell all types of Samsungproducts on offer. Hence, there is no

concentrated effort just to sell Air

Conditioners.

Ranking of Skill Sets required for Sales Staff:

The following are skills sets, ranked in order of importance, required for Sales Staff as per the

Company:

Head Office

10 Field ForceOperations Managers

109 Team Leads (RSO)

3600 Samsung ProductConsultants

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Table 1: Ranking of Skills Sets (Company Perspctive)

Rank Friend on Sight Samsung Product Consultants

1. Negotiation and Persuasion Skills Team Player

2. Networking Ability Presentability

3. Adaptability Communication & Interpersonal Skills

4. Communication Skills Observation

5. Innovation & Creativity Sincerity and Honesty(Source: Primary Data obtained from Samsung)

Negotiation and Persuasion Skills are important in case of FOS since they have tointeract with dealers/retailers across their area and persuade them to promote

Samsungs products. Their networking ability also is an important factor at the time

of selection as it helps expand the dealer base of the company.

SPCs are primarily required to be good team players and work towards achievinggroup targets. Presentability and Communication Skills of the Sales Representatives

are also essential qualities as they interact directly with the consumers and influence

them into purchase of Samsung products. They must also be keen observers of the

way consumers choose products, so as to influence them better.

Table 2: Ranking of Skill Sets (Employee Perspective)

Rank Samsung Product Consultants

1. Spontaneous & Resourceful

2. Communication & Interpersonal Skills3. Patience and Tolerance

4. Presentability

5. Sincerity & Honesty(Source: Primary Data obtained from SPC)

The employee perspective on skills required for the job differed to an extent fromthe company perspective. The most important skill as per the SPCs was being

spontaneous and resourceful while attending customers, so as to offer them

appropriate solutions on the spot. Communication skills were also deemed

important. The job required them to be patient and tolerant as many a time

customers may not make a purchase despite of the sales persons best effort.

Recruitment and Selection of Sales People:Samsung recruits employees under the following roles:

1. Shop Floor Staff2. Team Leaders (RSO)3. Area Sales Manager

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Table 3: Samsung Job Roles

Shop Floor Staff

(SPC)

Team Leader

(RSO)

Area Sales

Manager

Recruited by Company Company External

Agencies

Minimum

Requirement

12th Pass Graduation Masters Degree

with minimum 4

years experience(Source: Primary Data obtained from Samsung)

Recruitment is done using the following methods:

1. Career Opportunities on WebsiteSamsung also allows candidates to search and apply for vacant posts in Sales through their

official website (http://www.samsung.com/in/aboutsamsung/careers/JobSearch.html)

2. Campus RecruitmentGraduates are recruited directly from reputed colleges across India in various roles Sales

Service, Management Trainee etc.

3. Job PortalsJob vacancies are listed on certain job portals inviting applications from appropriate

candidates.

4. Interview CallsInterview calls are made to employees of other companies across different industries.

Poaching from rivals from HVAC industry is also apparent.

Training Methods for Sales Staff:

Training for SPCs is designed in the following manner:

Table 4: Samsung - Training Content

Training -> Product Specific/Technical

Training

Soft Skills & Language

Grooming

Composition 70% 30%

Store Hygiene

10%

Soft Skills

20%

Types of Training:

1. Classroom Training: This involves an instructor led training with 25-30 students in abatch. The training imparted under this method is majorly product

related/technical.

2. Online Training: Training content is uploaded on Samsungs website wherefromtrainees can download and the study the material and appear for tests.

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3. Root Training: Under this method, the trainer will actually go to the shopfloor/stores and impart training

Except for Root Training, trainings are conducted in the appropriate branch offices. Branch

Offices are responsible for preparation of Monthly Training Calendar Plan. Trainings areusually held twice a month.

Samsung does not consider training as a cost, but instead consider it to be a profit centre.

Training process is continuous and ongoing and special attention is paid during new product

launches.

Effectiveness of Training:

1. Frequent training schedules allow employees to be updated with the latesttechnologies and practices.

2. Separate Shop-floor training allows understanding how to effectively use SPCs. SPCscome out with any issues/problems that they face in real time and these are then

dealt with.

3. Assessments through tests ensure that the sales force is well adept with theconcepts and techniques to be used in selling.

Compensation Structure:Table 5: Samsung Compensation Structure

Designation Compensation Plan Fixed Variable

Friend on Sight Fixed - NIL

Samsung Product Consultants Fixed + Variable 10,000-16,000 -

Relationship Sales Officer Fixed + Variable - -

Area Sales Manager Fixed + Variable - -(Source: Primary Data obtained from Samsung)

Compensation structure of FOS only has fixed component, which is paid by the dealer.

There are no incentives or bonus.

Fixed component of Samsung Product Consultants ranges between Rs. 10,000 and Rs.16,000 per month, based purely on the experience of the employee. Separate incentives

are offered on achievement of targets.

Bonus is given to sales force on two occasions

Diwali: Approximately up to 2 times of Basic Salary. Financial Year Ending: Approximately up to 3 times of Basic Salary.

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The amount of bonus is based on the annual performance of the company. Better than

expected company performance may lead to bonus 2.5 times of basic salary while it may

drop to 1.5 times of basic salary in case of poor performance.

Effect on Morale of Team: 100% Fixed Salary for FOS boosts morale as there is no extra pressure on the sales

representatives to work for commission.

However, there is no marked difference between sales people who achieve morethan the target and those who barely or fail to achieve their targets.

For SPCs, a Fixed + Variable compensation plan encourages them to put in extraeffort to achieve targets.

Moreover, since bonus is given on the basis of company performance, eachemployee is motivated to achieve individual as well as team goals.

Prospecting and Reporting with Degree of Sales Force Automation:

Samsung uses 2 different softwares as part of Sales Force Automation:

Distribution Management System (DMS): This system is to track Sell out value ofproducts, Give daily tracking. SPC uses this software to enter the detail of every sale

(Location, product, Dealer name). This software allows the company to calculate Sell

in and Sell out amount.

This also gives daily tracking reports to Area sales manager, Zonal Manager, Regional

Manager about the target of any particular dealer, sales in current and sales in

previous months. Based on this data, daily routine of RSO and other sales staff is

decided.

SMART DOST: This is a messenger installed on mobile phones of salesrepresentatives. It allows RSO/ASM to stay in touch with the SPCs, and allows

acceleration of any message between them.

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DAIKIN

Organisational Hierarchy:

Operations at Daikin are divided into two functional categories:

1. Sales2. Support

Figure 2: Daikin Functional Classification

(Source: Daikin Official Website)

The Sales division comprises of 3 separate business units (Explained in detail later). The

Support division comprises of 5 sub-divisions - Marketing, Service, Finance, IT, HR & Admin

and Supply Chain.

Sales Organisation:

The hierarchical chart for the three business units is shown below:

ManagingDirector

DeputyManagingDirector

Sales

Vice President(Residential)

Vice President(Commercial)

Vice President(Industrial)

Support

GeneralManager

(Marketing)

Vice President(Service)

Vice President(Finance)

Head (IT)

DGM (HR &Administration)

GM (SupplyChain)

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Figure 3: Daikin Sales Organization Hierarchy

(Source: Primary Data obtained from Daikin)

The Sales Force at Daikin is divided across 3 separate business units, which handle 3

separate categories of products:

Table 6: Daikin Business Units

RA, PA, SA VRV, LCOM & Tech Support Chillers

This is the channel business

division which primarily

handles the sale of

Residential Air Conditioners

like Split ACs, Floor Standing

ACs etc.

This division is responsible

for handling Commercial Air

Conditioners like VRV

Systems, Ducted ACs etc.

This is the applied business

division which handles sale

ofIndustrial Air Conditioners

like Chillers, Cassettes etc.

(Source: Primary Data obtained from Daikin)

Sales Force Numbers:Table 7: Daikin Employee Count

Total Employee Count: 452

Employees part of Sales Force: 179 (39.6%)(Source: Primary Data obtained from Daikin)

Vice President

GeneralManager (T8)

DeputyGeneral

Manager (T7)

SeniorManager (M4)

AssistantManager (J1)

Executive (E1)

Sales Trainee

SeniorManager

(M5))

DeputyManager (J2)

Executive (E2)

GraduateEngineering

Trainee

AssistantGeneral

Manager (M6)

Manager (J3)

SeniorExecutive

(E3)

ManagementTrainee

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Table 8: Daikin Sales Force Composition

Residential Commercial Industrial

Sales Force Number 78 73 28

% of Total Sales Force 43.6% 40.8% 15.6%(Source: Primary Data obtained from Daikin)

Territory Design:

Daikin presently have 11 branch offices (Sales & Service), 13 resident offices, 4mother warehouses and 18 supporting warehouses.

Table 9: Daikin Zonal Distribution

Zone-> North West South East

No. of

Branches

4 3 3 1

Locations

Chandigarh

Delhi NCR

Jaipur

Lucknow

Ahmedabad

Mumbai

Pune

Bangalore

Chennai

Hyderabad

Kolkata


The main manufacturing facility is located at Neemrana, Rajasthan. The Head Officeis located at Gurgaon.

Territory allotment is not done based on regional contiguity but instead done as perthe state jurisdiction (E.g. Ghaziabad falls under the control of the Lucknow branch

despite being closer to Delhi NCR).

Advantages and Disadvantages:

Advantages Disadvantages Daikin uses a Product based Sales

Force Specialization.

This results in more focused selling asthe efforts of the sales force is

concentrated towards selling a

specific type of product across

different channels.

Training the Sales Force becomeseasier for the company. .

There may be duplication of effort incase of a dealer which keeps

residential, commercial as well as

industrial air conditioners.

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Ranking of Skill Sets required for Sales Staff:

The following are roles that the Sales Force performs as part of their job:

Figure 4: Daikin Job Roles

Residential Commercial & IndustrialAchievement of Sales Target. Dealer

Management. Design, Estimation and order

execution. Client management.

Building client base, Developing and

supporting project dealers, Architectures,

and HVAC consultants. Design, Estimation

and order execution. Planning and execution

to meet sales targets.


Based on the job responsibilities, the following skills are deemed necessary by Daikin:

Table 10: Ranking of Skill Sets Required as per Company

Rank Skill Reason

1. Network & Relationship Building

Capability

Most important as a sales

representatives existing network

with dealers proves beneficial for the

company in the effective distribution

of its products.

2. Persuasive Essential when interacting with

channel partners.

3. Flexible Approach to Work Working hours are not fixed and

hence the company requires its salesrepresentatives to be flexible in this

regard.

4. Perseverance The company requires its employees

to put in their best effort to achieve

best possible results.

5. Integrity The company expects its employee

to be honest and not share valuable

company information with

competitors.

6. Communication Skills Focus on communication is minimumsince sales representatives dont

have to pitch the products directly to

the end consumers.(Source: Primary Data obtained from Daikin)

Ranking of skill sets required, as per the sales representatives, is as follows:

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Table 11: Ranking of Skill Sets as per Sales Force

Rank Skill

1. Network & Relationship Building Capability

2. Ability to negotiate

3. Spontaneity

4. Flexible Approach to Work

5. Perseverance

6. Communication Skills(Source: Primary Data obtained from Daikin)

There is a great deal of similarity in the perspective of the Company and the Sales Force

towards the kind of skills required to be effective in sales. Preference of skills required also

matches to a great extent.

Recruitment and Selection of Sales People:Daikin recruits employees under 4 different roles:

DET Diploma

Engineering

Trainee

ST Sales

Trainee

GET Graduate

Engineering

Trainee

MT

Management

Trainee

Minimum

Requirement

Diploma

Engineering

Graduation Engineering

Graduate

Post Graduate

(MBA)

Upon joining, employees work as trainees for a period of 1 year. As their 1 year tenure is

completed, STs and DETs are promoted to Executives (E1), GETs to Executives (E2) and MTs

to Senior Executives (E3).

1. Interview CallsDaikin mostly poaches talent (with prior experience) from other companies in the HVAC

Industry, by calling them for interviews. The primary reason for employing such a strategy is

that the company wants people who have good existing networks with dealers where they

can introduce products of Daikin. The practice is apparent across all companies in the HVAC

Industry.

2. Career Opportunities on WebsiteDaikin also allows candidates to search and apply for vacant posts via their official website

(http://www.daikinindia.com/careers/opportunities.html).

3. Campus RecruitmentThe company recruits DETs, GETs and MTs directly from diploma, engineering and MBA

colleges across the country.

Training Methods for Sales Staff:Daikin imparts two types of trainings to its sales staff:

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1. Training at Manufacturing Facility2. On-the-Job Training

Training at Manufacturing Facility:

1. Trainings for Sales Staff are at the ACDC facility located at the companysmanufacturing plant in Neemrana, Rajasthan.

2. Daikin does not have in-house trainers; the training is instead delivered by expertsfrom the industry.

3. Training is held once in 6 months, mostly during the off-peak period (August-February).

On-the-Job Training:

1. Majority of the training to field-based sales team is delivered on-the-job.2. Involves a 24 month study program to provide training in professional and personal

competencies (Product Training, Presentation and Sales Techniques, Time

Management etc.).

3. Involves intensive personal guidance from a personal mentor.Effectiveness of Training:

1. Daikins mentorship program allows for effective learning of the sales force asissues/tips are provided based on experience rather than theory.

2. On-the-job training allows for understanding of issues that sales people face in realtime (individually as well as in general).

Compensation Structure:

Designation Compensation Plan Fixed Variable

DETs, STs, GETs, MTs Fixed - NIL

Executives (E1 & E2) Fixed + Variable - Up to Rs. 50,000

Executives (E3) Fixed + Variable - Up to Rs. 85,000

Managers (J Level Employees) Fixed + Variable - Up to Rs. 1,25,000

1. There is no fixed ratio of Fixed and Variable income.2. The company does not offer any incentives or bonus.3. The variable component, across the different levels, depends upon three factors:

a. Performance of the Verticalb. Performance of the Branchc. Individual Performance.

Effect on Morale of Team:

100% Fixed Salary Total Assurance of income for the sales people.

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The companys policy of not offering incentives and bonus can play negatively on themorale of the employees.

Variable Component is offered only after completion of 1 year of service in thecompany. Employees may not be motivated to put in their best efforts during this

period due to the lack of competition from other sales people.

Prospecting and Reporting with Degree of Sales Force Automation:

1. There is not a high degree of sales force automation. MS Office (Word and Excel) areused by the Sales Staff.

2. Softwares such as SAP, ESS Portal, Myemployeewise etc. are used in the Supportfunction (Marketing, Services, Finance, IT, HR & Admin, Supply Chain).

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