Study of Sales & Distribution Channel of HP Printers in Jammu Study of Problems faced by HP in Jammu Recommending Solutions for the problems faced by HP in Jammu

1. HP Printers
Sales & Distribution
In J&K
Presented By:

2. HP Distribution network
• HP is having two channels for Distribution as shown below
HP
National Distributor
Civics India
RIL LTD
Ingram Micro India LTD
Compage
Regional Distributor
2 Jammu
Source Peripherals
AGM Sales Corp
2 Kashmir
Territory Market
Total 120-150
Active ~25
HP
National Distributor
Civics India
RIL LTD
Ingram Micro India LTD
Compage
HP World
5 No's in Jammu

3. HP is having two channels for Distribution
There are four NDs. Every ND is present in every state in India.
Civics India
RIL LTD
Ingram Micro India LTD
Compage
• There are four NDs. Every ND is present in every state in India.
• RD are authorized to take material from ND’s only.
• ND’s bill RD 3 times a month.
• Ownership flows with the product from ND to RD’s.
• Targets for these ND’s and RD’s are decided by the company i.e. HP itself depending upon
the last year’s targets and market conditions. General conditions next year target is 10-15%
more than last years.
• In general, the Company offers 15-21 days of credit limit to ND’s and ND’s offer same
duration of credit to RD’s.

5. National Distributor
Civics:
• It has five sales men and they have one accountant.
• It deals with various other products other than those of HP i.e. Compaq(TFT), Lenovo Consumer products and Logitech (peripheries).
Ingram:
• Ingram is versatile in their Brands they are National distributors for HP [both consumer and commercial], they also have Epson, Dell,
Microsoft, Acer, Samsung Mobiles and Apple products.
• They have only one sales person and they have a national accounting system.
Compage:
• They have a team of 8 for sales and they are primarily focused in HP Printers only (Excluding Laptops).
• K7 and Intex IT products are also their offerings.
RIL:
• They have two employees, one for sales and one for accounts, they are dedicated suppliers of HP consumer and commercial products.
• They also supply DELL products.

6. Regional Distributors (RD’s)
AGM Sales:
• AGM sales have their interests in HP consumer and commercial products.
• They deal with only corporates
• They have a turnover of Rs 30 crores
• They have a staff force of 15 to take care of their sales & service
• 6-7 are there for handling the service department
Source Peripheral:
• They supply laptops, desktops and printers in HP consumer segment.
• Apart from these, they are also focused on Epson printer/projector, Luminous, Asus, Microsoft and Medical
shop soft wares.
• They have an annual turnover of Rs 15 crores.
• They have employed in total of 15 people for sales and service both
• 5 people are only for handling services of HP products

7. Market coverage of RD’s
AGM
HP commercial
products
(corporates)
Target 30lakhs
Source
Peripheral
HP consumer
products (40-50
active retailers and
approximately ~100
retailers)
Target 30lakhs

8. Incentive Structure
Linearity 1
Linearity 2
Linearity 3
•Incentive0.75
•Incentive0.75
•Incentive0.50
 The billing is done thrice every month once in ten days.
 So approximately they receive ~ 2% every month on sales
 During billing, they get an extra 2%. So overall, they receive 3-4.5% of incentives in the end.
 They have a credit term of 21 days with the ND, the RD give the tertiary retailers ~ 2-3
months. They use Tally to do their accounting.

9. ASM and TSM
ASM
Territory
3
Territory
2
TSM2
Territory 1
TSM1
 The whole area of Jammu and Kashmir are maintained and supervised
by an area sales manager (ASM).
 In addition to the J&K Himachal Pradesh is also maintained by the
Area sales manager. So primarily they take care of all the NDs in that
area.
 In parallel the RD’s are managed by the TSMs, they maintain the stocks
and manage the sales in the retail stores.
 The Territory sales manager maintains the territory and covers the
whole area by using BEAT plan.
 The whole aspect of the beat plan is to cover the territory by visiting all
the retailers once in 15 days.

10. Logistics
• Their whole logistics was planned by the number of retailers in a given territory.
• They would visit those nearby in the first fifteen days, then going for the next target
sector in the next 15 days. When there was an emergency where in immediate
stocking was required they visited those stores more than twice a month.
S.No Territory No. of Retailers
1 Kathua 8
2 Samba 4
3 Akhrnoo 3
4 Udhampur 12
5 Poonch 4
6 Rajouri 6
7 Jammu 20
8 Reasi 2
• They had “Builty” to transport the bulk of goods which were in general Tempos used to carry the
goods to various parts of Jammu.
• While if the requirement was less and within a small region of coverage, then they would prefer an
Auto for delivering the goods.

11. Key Points and improvement areas from
the above Findings
• Distributed work force like separate RD for corporate and separate for consumer segment to
avoid conflict of interest.
• BEAT plan should be improved as HP sales people are visiting the retailers after 15days, should
be made a bit more frequent to check and maintain the stocks properly this will help the
company also to forecast properly
• Conflict of interest might occur as ND and RD’s have multiple brands also of competitive brands
this should be avoided
• High cost of setting up of ND’s in each state , so they might have C&F in each state and then RD’s
can be there so they might consider standard direct distribution channel structure like Company -
> ND -> C&F -> RD -> Retailer
• Loss of customers on stock out
• High transportation cost
• There are still vital localities where they are still using the old printing and Photostat machines.
There is a huge market potential for HP.

12. Sales and Marketing:
• In HP, sales and marketing are managed by two different teams
• Both work under HP and directly report only to the company
• Distributors also have their own sales force

13. Structure of Sales Team
NSM •National Sales Manager
ZSM •Zonal Sales Manager
RSM •Regional Sales Manager
ASM •Area Sales Manager
TSM •Territory Sales Manager

14. Sales Force
• The number of sales persons depends on the density of the retailers
• The main work of the sales force is to generate the orders
• The distributors and retailers place actual orders directly, not through
sales people
• Retailers to place the order have to find the distributor with the required
product

15. Recruitment and Training
• All are recruited by the centralized process
• Recruitment is according to the demand of the sales
• A national trainer is responsible for coordinating the training
• No formal institute for training the employees
• All the sales people go the on-the-job training
• Quarterly or bi-monthly training session are held to motivate the
employees
• Some special sessions are also held to train the sales force about the new
products and features
Regional
Trainer
Territory
Trainer
National
Trianer

16. Co-ordination
• Sales people are part of the WhatsApp groups
• Product and Sales people coordinate and report simultaneously using
the groups
• Stock at the distributors is know through “SECAP” portal
• But they are manually updated by the retailer/distributor
• Dealers and distributors meet with marketing team at least once in 6
months

17. Promotions
• Marketing team handle all the promotional activities like discounts,
freebies or festive offers
• Festival season and launch of new products
• Stocking up of the particular products
• To push the sales of a particular product
• Demo products are sold at discount of 30 - 40%
• The main work includes
• Visualizing the product
• Print and video advertisements
• Selection of locations for promotions