Anda di halaman 1dari 8

Channel Management

Project Report On

Distribution Channel Of Airtel Prepaid In Bhubaneswar


PGDM, Section A, Batch: 2011 2013, Term III

Submitted to: Prof. S. Panda

By

Avik Mitra (11DM010) Arnab Mondal (11DM027) Ayan Mukherjee (11DM53)

Acknowledgements
We are immensely thankful to Prof. S. Panda for giving us this project and to Mr. S. K. Pattnaik, the distributors manager at Hindusthan Agencies, Rasulgarh and Mr. Kritinath Tripathy, Marketing Manager, Bharti Airtel for sharing their valuable information with us and helping us obtain an insight about the intricacies involved in the distribution channel of Airtel Prepiad.

Introduction
Airtel is the market leader in the Indian telecom Market with a revenue market share of 30.8% as on August, 2011. It is Indias first private telecom services provider covering all the telecom circles. Airtel prepaids distribution network is very similar to that of an FMCG. There are two type of markets: A) urban market B) rural market. The distribution for these two markets is totally different. Factors for deciding the distributor as told to us by Mr. Kritinath Tripathy, Marketing Manager, Bahrti Airtel at Infocity, Patia, the following are considered. 1) Population:- Population is one of the most important factor for selecting the urban distributor because if there is more number of subscriber of Airtel then there is more number of distributor is required. 2) No of retail outlets present in the area:- Airtel is trying to cover 1000 retail outlets by one distributor so the number of retail outlets is very much important. 3) BTS tower:- In area if the number of subscribers is more then for providing the proper connection the BTS tower is required. So if the subscriber is more then more number of distributor is required. 4) Revenue:- Revenue is one of the most important factor for selecting the number of distributor. 5) Geographical situation of market:- Geographical location of the market is important for selecting the distributor. There is also few criteria for selecting the distributor. For urban distributor minimum number of 25cr turnover is required and for rural super stockiest 10cr of turnover is required. In Bhubaneswar there are 30 and 2 BTS tower is in Puri. In Bhubaneswar there is one operational head under whom there are 4 ZBM; under one ZBM there are four ZSM and under him there are territory managers and rural territory managers.

The Distribution Channel


In order to have an understanding of how things work in the distribution channel in the telecom sector, for Airtel in particular, our area of study being Bhubaneswar. We had a talk with the manager of the distributor Mr. S. K. Pattnaik of Hindusthan Agencies at Rasulgarh where he looks after the entire proceedings. Following are our findings in this regard. Airtel has divided its distribution network into two heads namely Second Degree Distribution Network: The second degree network includes the urban distributors, who collect the items (RCVs, Dongles, LAPU SIMs, Activation kit for Dth etc.) from Airtel and distribute them to the retailers. These distributors also transfer easy balance through FOS (Field Officer Sales) to the retailer according to the demand. Since this set up includes only two channel members, it is regarded as a Second Degree network and is suitable for catering to the need of urban areas, where reaching the retailers is easier due to well established road and transportation facilities. Rationale: This type of distribution network suits the urban areas due to dense population and high demands for Airtels products and services, the quick supply of which becomes very important for the company. As the Urban Distributor gets the products directly from Airtel, therefore, the products, services and promotional materials can reach the retailers in shorter span of time. Third Degree Distribution Network: This network includes Rural Supers (RS) who distribute the above items to Rural Distributors (RDs). In this case, the RS transfers easy balance to the RDs. Next, RDs carry the items to the retailers followed by transfer of easy balance through FOS SIM to the retailer, according to the demand. These three levels aids Airtel in reaching the sub urban and rural areas, where retailers are few and widely located. Rationale: This suits the sparsely populated areas, where retailers are spread over large geographical areas. Due to relatively less demand for companys products and lack of proper infrastructure in rural areas, Airtel has established a three level distribution network.

In Khurda district there are 2 rural super stockiest. Under one rural super stockiest there are at least 20 rural distributor. There are 4 urban distributors in Bhubaneswar at Rasulgarh, Old Town, National Highway and Mancheswar. The one we had a study on was stationed at Rasulgarh which covered a territory of Bapujinagar to Rasulgarh and from Rasulgarh till the overbridge.

Urban Distributors
Also known as UD, they distribute products, easy balance, services and promotional materials to retailers in their designated (urban) territories of a district. They are responsible for achieving targets of SIM activation and recharge without encroaching on other territories. The retailers LAPU SIMs are mapped to the corresponding FOS SIM which is mapped to the particular UD SIM. The flow of easy balance starts at the UD SIM and ends at the LAPU SIMs through the FOS SIMs. The UD gets certain discount on his SIMs billing and passes a certain percentage of this discount to the retailers. Hindusthan Agencies & the distribution of Airtel Prepaid On a micro basis let us take a look at the functioning of Hindusthan Agencies. Situated at - Rasulgarh Manager - Mr. L.K Pattanaik Distributorship of -1) Airtel 2) Samsung mobile phones Vehicles - 9 (motorised) with 9 Field Sales Executives (FSEs) No. of counters covered - 503 Area of coverage - Bapuji Nagar Rasulgarh Rasulgarh Overbridge Distributors Margin - 1.3% of total revenue; target being Rs. 1 cr. 10 lakhs in a month Retailers Margin - 2.7% on sale of Rs. 100 Stock of maximum 7 days There are 30 KROs (Key Retailer Outlets/A type counters) which sell RCVs (Recharge Vochers), SIM cards (64k) for consumers as well as LAPU SIMs (128k) for cother counters. These KROs are visited everyday by 1 FSE. Some KROs: Shahid Nagar 4 VSS Nagar - 3 Bapuji Nagar 5 Rasulgarh - 2 Cuttack Road 2 Vani Vihar - 2 No. of LAPU selling outlets LSOs (SIM cards for easy recharge) 200 B type counters being those which are involved in SIM selling as well as RCV selling C type counters are the ones selling RCVs only The FSEs visit the B type and the C type counters every other day Coverage: 60 counters per day Target for Hindusthan Agencies 8000 activations. Following is a glimpse of the Beat Plan followed by Hindusthan Agencies in case of Airtel Prepaid along with the FSEs targets and achievements from which it is quite evident that Hindusthan Agencies try to visit every counter at least twice a week.

Other Airtel Products Airtel DTH


Target: 500 800 units for generating a target revenue of Rs. 50 lakhs No. of retailers in Khurda District (including franchisees): 240

Dongles Target: 15 27 units for generating a target revenue of Rs. 1500/unit No. of Retailers (mainly IT): 30 TRAI Regulations & its impact on schemes & strategies
This laid down that from 21st March onwards consumers have to go through three steps for accessing the prepaid services offered by Airtel as follows: 1. FRCV or first recharge voucher with the help of which consumers would be able to activate the SIM. 2. Balance through which consumers can punch in a certain balance of a certain amount in his/her SIM 3. Tariff through which consumers will be able to access the tariff reductions associated with various prepaid plans. This has a relaying effect on Airtel setting its target and devising its schemes. Airtel offers schemes only on the number on activations. The idea is that the more the number of activations the more there will be a relaying effect on the sale of RCVs and LAPU SIMs. Then Airtel also comes up with seasonal schemes. For example, Airtel comes up with new schemes at the time of June-July when there is a rush among fresh students to enter the city. Also there is provision for canopy selling for SIM cards for consumers. And schemes also include those like free SIM for those making a sale of above Rs. 100/- etc.

Billing In Airtel
Distributor purchases the recharge coupons and easy recharges of different denominations from the Company directly. Then distributor distributes those to the retailers with the help of Field Sales Executive (FSE). Finally customers purchase according to their need and the revenue is being collected by the field sales officer and submits it to the distributor. Each distributor is given more than or equal to the target of Rs 1.1cr/month. Since the amount is huge so the payment is made through Real Time Gross Settlement system for quick clearing of the cash. The distributor has to maintain a stock of rs 25,66,667 per month. The stock is being calculated in the following way Total turnover --------------------- * 7 days= stock/month 30 days

Other Issues
Objectives of Distributor Distribution of SIM, Easy Recharge, PEF (Prepaid Enrolment Form), RCV, GSM Pay Phones, FOS SIM, LAPU SIM according to the retailers requirement within its territory only. Activation of customer SIMs within its territory after proper verification of POI, POA and error free PEF. Collection of PEFs and other documents from retailers and sending them to respective Circle Head Quarter Distribution of promotional materials among the retailers according to the allocation of TM/ZSM, received from the company. Proper circulation of communication from the company to retailers. Escalation of retailers claims and complaints to TM/ZSM.

Role of Beat Runner: They are company representatives accompanying the FSEs to verify and collect the PEFs from the consumers. On their confirmation only, the consumers SIMs are activated and the distribution as far as activation is concerned is complete. Infiltration Infiltration as alluded to by the manager of the UD is mutual as in all distributors are aware of it and practice some degree of infiltration. In case it is on an excessive scale block complaints are lodged or else the distributors paaes on a certain portion of his margin (0.3% of 1.3%) to the retailers in his territory to counter inflation.

Anda mungkin juga menyukai