MANAGING SALES TEAM AT BALRAM BEVERAGES

Shyam Sundar, General Manager (Sales and Marketing) at Balram Beverages Pvt. Limited
(BBPL), located at Bulandsahar was pondering over the final decision regarding whom to offer
the post of Deputy General Manager - Sales (DGM -Sales). BBPL was a bottling franchisee of
Coca Cola Company, which was a global leader in aerated and fruit based drinks, and was the
market leader in India. Shyam was responsible for the total sales in 16 districts of the state of
Uttar Pradesh1 and Uttrakhand.
The recruitment panel of BBPL had interviewed six candidates in the first half of 25th of May
2016 and had found two candidates to be suitable for the position. Shyam was asked to make the
final choice as the candidate would be directly reporting to him and work with him. The offers
had to be signed the next morning and Shyam had the post lunch session to deliberate and
decide.
As Shyam reached his office after the lunch, he saw the resignation letter of Vimal Dhingra, one
of his best performing and trusted Market Expansion Managers, who was tasked with growing
the untapped and small rural markets. Immediately Shyam remembered the conversation he had
with Vimal a fortnight back, where Vimal had expressed his desire to apply for the position of
DGM as an internal candidate which Shyam had rejected.
Shyam knew that Vimal was an important team member of BBPL and significant part of April -
June sales performance depended on him. Hence, he called up Vimal on his cell phone and asked
him to see him in his cabin as soon as he could. Vimal reached Shyam's office in the next fifteen
minutes and shared that he had been offered a very healthy career progression by a local soft
drink marketer who was an upcoming competitor of BBPL. The offer had higher designation,
much larger sales territory and a salary hike which was very lucrative. Though, the company was
not very firmly entrenched in the market, Vimal was confident that he would be able to deliver
the expected results, especially in the rural markets where he had done exceeding well with
BBPL. At this point Shyam did not want his team to be destabilized and made a counter offer of
30% salary raise in the next performance appraisal, due in another three months time, which
Vimal refused it point bank. Vimal however shared that only if he were offered the position of
DGM - Sales by BBPL, he would be ready to take back his resignation.
After the interviews held in the morning, the original choice was between Sandeep Gandhi and
Arun Mohan. Sandeep was an ex-employee of BBPL and had worked with Shyam from 2006 to
2015 as a Sales Manager - Route to Market. Arun Mohan was from a very reputed Indian fast
moving consumer goods company, which operated through an entirely different channel than
BBPL, and dominated the packaged fruit juice market in India. The selection board of BBPL had
opined that experience and expertise of Arun could be useful to BBPL in its market expansion
plans for the new NARTD2 products. Now, with the resignation of Vimal, the prioritizing
between stability and future growth become more complicated for Shyam.
From past experience, Shyam knew that any senior sales person's departure had immediate
impact on sales, though the impact of recruitment could take time to manifest. April-June period

1
Uttar Pradesh was the most populous state of India.
2
Non Alcoholic Ready To Drink

1
accounted for almost 45% of the annual sales and he could not afford to mess it up, so he had to
decide fast. However, the decision he took, would also have a long term effect impacting the
morale of the sales team, which could be much more important for sales results in the longer run.
Shyam expected the sales figures of Coca Cola and BBPL would increase considerably over the
next few years due to the natural growth in the market and the planned increase in the product
portfolio. Naturally there would be a commensurate increase in the sale force size. However, the
key to harnessing the growth and profitability would be essentially by expanding the distribution
channel to include the fruit juice / milk product specific retail outlets, and by driving execution
excellence and productivity of the sales force. He wondered how important would be the stability
of the sales force as compared to the need to infuse new talent and knowhow about new channels
in the sales team.

BACKGROUND OF BBPL
In 1986, Balram Beverages Private Limited ventured into soft drink bottling and marketing under
franchised agreement from Parle (Exports) Private Limited for the state of Karnataka in India. Its
portfolio included popular Parle brands like Thums-up, Limca, Gold Spot, Citra and Bisleri Club
Soda. When Parle (Exports) Private Limited sold all its brands to the Coca-Cola Company
(Coke) in 1993, BBPL became the first franchise in India for Coke.
In 1998, BBPL sold its franchisee rights for Karnataka back to Coke and acquired the franchise
rights for 16 districts in the state of Uttar Pradesh and Uttrakhand. The sales volume was just 0.7
million cases in 1998. The production capability was expanded form sparkling water to fruit
based drinks in 2003.
As part of franchisee agreement, Coke supplied all the raw materials to BBPL. Coke also paid a
fixed sum on monthly basis and a variable cost as per the production. After acquiring requisite
permission from Coke, from time to time BBPL also sold their surplus production to other
bottlers located in different states like Delhi, Madhya Pradesh and West Bengal. BBPL had the
capability to produce carbonated soft drinks in rotated glass bottles (RGB), PET3 Bottles and
fruit drinks in PET bottles and tetrapacks4.
BBPL was responsible for the entire production, supply chain and local sales and marketing
initiatives while Coke managed the brand portfolio at national level. Apart from a few agreed
control parameters set by the principal Coke, BBPL was an independent business entity and had
its own processes, culture and policies.
Indian market was growing in the carbonated soft drinks in single digits but the growth in
NARTD was in double digits. Coca Cola India was a major growth driver for Coca Cola
worldwide and hence growing in the NARTD market was critical. To harness the opportunities
in the growing NARTD market is India, Coke had big plans for this segment. However, the
distribution channel and the sales operations in the NARTD categories were quite different from
the carbonated water business. Thus Coke was expecting its bottlers including BBPL to expand
their distribution network to leverage the changing product portfolio so that Coke could
dominate the NARTD segment in the near future.

3
Polyethylene terephthalate
4
A specific type of packaging material for beverages

2
SALES AT BALRAM BOTTLERS
Sales Organization of BBPL was headed by Shyam. He was assisted by three Sales Managers,
four Rural Sales Managers, one Market Expansion Manager, two Route to Market Managers one
Sales Generating Asset Manager5 and one Key Account Manager responsible for the new
product introductions. The total sales staff of BBPL was around 200. However, the organization
operated like a large family and sales team members from all levels came to Shyam for their
personal and professional problems. Shyam being the senior most in the team, with his helping
nature, had immense personal equity with the sales team and commanded their respect and trust.
But managing inter personal issues took away a significant amount of his time and energy.
With the increasing focus by Coke on establishing a dominant position in the NARTD business,
it was important for Shyam to provide a strategic thrust to the NARTD distribution channel
development and growth. So it was important to focus on expanding the presence of BBPL in the
channels which were primarily dealing in juices, milk based beverages etc. Also, at the same
time, there was a continuous pressure for growing the existing business of carbonated drinks.
Thus, Shyam was torn between the pressure of present and the need to create opportunities for
the future.
Sales of BBPL had grown considerably over the years (See Exhibit 1 for sales figures) and
Shyam's span of control was quite big. It was felt that he was getting sucked more into
operational and maintenance activities and could not devote adequate time and energy to the
strategic and developmental work. Hence, BBPL top management decided to create a second line
of leadership by introducing a position of DGM Sales, who would report to Shyam and deliver
on current business and sales figures, thereby providing Shyam more time to focus on
developmental work. Refer to Exhibit 2 which gives the planned organization chart for BBPL.
Exhibit 3 gives the idea about the compensation structure and the experience profile of the sales
team. Exhibit 4 gives details of the KRA's of some key sales positions.

COMPETITIVE LANDSCAPE
Coca-Cola India was the highest selling beverage company in India in 2016. In 2012, it had
announced investment of an additional US$3 billion (approximately INR6 165,000 million) in
India through 2020 to further capture growth opportunities in the country’s fast-growing
NARTD market. The products were sold through a network of more than 1.5 million outlets.
The investment in India was focused on delivering innovation, partnerships and a product
portfolio that enhanced the consumer experience, ensured product affordability and built brand
loyalty to deliver long-term business growth7.
PepsiCo was Coca Cola's biggest global competitor. It had started its India operations in 1989
and had been consistently investing in India, in the areas of product innovation, increasing
manufacturing capacity, ramping up market infrastructure, strengthening supply chain. The

5
Coca Cola had to ensure a reliable cold chain in hot climate which prevailed in India. Hence, it had to invest in
refrigerators, coolers, freezers etc. These assets required to be deployed, maintained in good working conditions
and accounted for.
6
Indian Rupees
7
http://www.coca-colaindia.com/coca-cola-targeting-additional-us3-billion-investment-support-long-term-
sustainable-growth-india/ accessed on 2nd June 2016.

3
company had built an expansive beverage and snack food business supported by 37 beverage
plants and 3 food plants. In last two decades, the company had been able to organically grow
eight brands, each of which generated INR 10 billion or more in estimated annual retail sales and
were household names, trusted across the country8. PepsiCo was quite well established in the
juices channel in India which overlapped quite a bit with their snack foods business, where they
were the market leader in India.
Xalta Food & Beverages Private Limited started in 2013 with a wide range of beverages, such as
packaged drinking water, juices and aerated drinks etc. They aimed at providing superior quality
food and beverages to their consumers interspersed across different states nationwide. To retain
the freshness and quality of the products, hygenic, quality-controlled, takeaway bottles were
manufactured near Delhi9. It had more than 415 feet on street who were actively selling and
promoting Xalta products in the territory covered by BBPL as it was one of their focus markets.
Man Pasand beverages was a fruit drink manufacturing company with a primary
focus on mango fruit (brand Mango Sip). Mango juice accounted for 80% of fruit
drink market in India. Their brands were strategically focused towards customers
primarily based in semi urban and rural markets. Under the ‘Fruits Up’ brand, they
offered fruit drinks and carbonated fruit drinks in different flavors. 'Manpasand
ORS’ brand offered fruit drinks with energy replenishing qualities, primarily
focused on North East India in different packaging types and sizes.
Apart from these, there were numerous local manufacturers of the sparkling and
fruit juices who offered greater margin and credit to the distribution channel and
did good seasonal but localized sales.
The Juices segment also had major players like 132 years old India company Dabur.
Their "Réal" brand of fruit juices was the largest juice brand in India and enjoyed consumer's
trust. They had a large portfolio and had a distribution network, covering over 5.3 million retail
outlets with a high penetration in both urban and rural markets.
Coke enjoyed more than sixty five percent market share in its territories. Being the
largest share holder also meant that competitors were always trying to chip away
from its share in areas of even smallest weakness. Thus, sales team of BBPL had to
ensure adequate market coverage, timely and adequate supplies, keep track of
competitive offers. The brand pull of Coke was quite high and good sales service
and support was adequate to get fair share of the market.
In the last few years, the BBPL's market had been gradually shifting from
returnable glass bottles to PET and tetrapack products which did not require reverse
logistics support. Also, there had been proliferation of the brands and the stock
keeping units (SKU's). It increased the complexity of business and required higher
investment from the distributors. In future there would be more automation and
sales focus would move from selling to the channel intermediaries to selling to the

8
http://www.pepsicoindia.co.in/company/about-pepsico.html accessed on 3rd June 2016.
9
http://www.xalta.in/about-us.htmlaccessed on 3rd June 2016

4
end consumers. Addition of more and more different channels leading to greater
channel conflict was also expected as the product portfolio and c onsumer base was
likely to increase. Internally the sales and supply chain coordination had to improve
significantly, requiring planning and setting up of processes. Finally different
brands had different SKU's and each had different gross margins, hence c ontrolling
the product mix would be key to managing the profitability of the business.

THE DETAILS OF THE SALES PROFESSIONALS

Sandeep Gandhi: He had joined BBPL in 2012 as Route To Market Manager. He had previously
worked for four years in HCCB10 and eight years in another bottler of Coca Cola located in
Madhya Pradesh as ASM. He led the market development activities at BBPL and was a steady
performer, showing very good growth in his territory. He had friendly relations with his
subordinates and was happy at BBPL.
Sandeep had come to Shyam in May 2015 and explained that; his previous boss from HCCB had
joined a major adhesive company in India and had offered him better salary and designation. He
also promised a better location after the initial three months training period was over. Better
location was important to Sandeep as that ensured that his son could access better coaching
facilities for engineering entrance tests. He was quite clear in his mind that he wanted to give
better education to his son, which Bulandsahar could not provide. Shaym could not offer
Sandeep the change of posting to more a suitable location. Hence Sandeep had resigned to join
the adhesive company in August 2015, after serving the requisite notice period with BBPL and
handing over charge.
As luck would have it, Sandeep did not get a location of his choice in the adhesive company. The
actual location offered was even less attractive than Bulandsahar from the point of view of his
son's education. Hence Sandeep looked for an alternate job in a better location. He had joined
Ludhiana Beverages, another bottler of Coca Cola as Deputy General Manager - RTM in
February 2016 and was still working there.
During the interview with BBPL, he had explained why he considered Bulandsahar to be better
than Ludhiana for his son's education. Also, had shared that he was happy at BBPL and had
performed well. He had only left BBPL to take care of his son's education and now he had
understood the ground realities, would be happy to join back.
Arun Mohan: Arun was a native of Bulandsahar, who had spent his entire 15 years of career in
sales function with a well known FMCG11 company which operated in juices, personal care,
Ayurvedic12 products across the North India, which also included Uttar Pradesh and Uttarkhand.
He had started working as a Sales Executive and had risen to the rank of Area Sales Manager
(ASM), which meant that he had his feet firmly in ground. Thus he had personal experience of
markets and channels which were not available with BBPL and would be relevant for NARTD
business.

10
The Coca Cola company owned bottling operation in India.
11
Fast Moving Consumer Goods
12
is one of the world's oldest holistic (whole-body) healing systems. It was developed thousands of years
ago in India. It is based on the belief that health and wellness depend on a delicate balance between the
mind, body, and spirit.

5
Arun's basic motivation to move to BBPL was that he could not possibly grow further in his own
organization without moving out of Bulandsahar. He did not want to move out of Bulandsahar
as he had a lot of immovable properties and family commitments. Also, he was looking forward
to the expansion in the NARTD business of Coca Cola and felt that he could contribute
considerably by working with BBPL.
The reference checks from his professional colleagues, competitors as well as the market were
quite positive. He was known to be capable, hardworking and result oriented. But the operations
in FMCG business and that of the BBPL were quite different and many adjustments would be
required for Arun to establish himself in BBPL. Since Arun had only worked in one company,
his ability to adjust to a entirely different business, culture and people was not tested so far.
Vimal Dhingra: He had joined BBPL in 2009 as ASM responsible for the rural markets. He had
previously worked for around eight years with M/S Rampuria, a very big Pepsi bottler as Sales
Executive and Senor Sales Executive in different locations. He was a super performer all his life
and had always increased sales. In BBPL, he was give additional responsibilities and
subsequently promoted to Market Expansion Manager in 2012. In that role, he identified rural
untapped markets with 3,000 to 6,000 population and appointed sub distributors in those
locations. This helped develop the nearby markets and business growth was quite sustainable and
also remarkable. However, Vimal was not really satisfied with this move from ASM role to
Market Expansion Manager's role. He perceived the movement as not a progressive step in his
career as this new role did not have direct sales responsibilities. He longed for handling the large
distributors with higher sales numbers to his credit. He had shared with his wife also that he was
not happy with his role and in case he could not get higher recognition or significantly more
money, he would consider leaving BBPL.
Vimal was ambitious, adventuresome, capable and did not require any additional motivation to
work. Though he was not happy with his role, he continued to perform very well. He, had
immense faith in Shyam and the scope of growth for Coke's business in India. He was not really
happy with his immediate boss (Sales Manager) during 2009-2011, when his boss attributed the
growth in the territory to the natural growth in the market and did not give Arun his due credit.
Shyam however had always encouraged him, recognized and supported his good work. He was
promoted by Shyam and now he reported to Shyam. He was however skeptical about his further
growth prospects in BBPL considering the hierarchy.
In March 2016, Xalta had offered Vimal the position of Zonal Manager, which covered the entire
geographical spread of BBPL business. He knew the rural demography and the markets, which
Xalta focused on, and was quite confident of his being able to deliver on the targets. However,
when he talked to Shyam about the offer and expressed his desire to join Xalta, Shyam had
explained that he was moving from a prestigious brand to an relatively unknown brand. When
Shyam offered him an immediate pay hike of 15%, he continued. Subsequently, when the
position of DGM was announced, he was keen to apply. When Shyam refused him the
opportunity, he had once again approached Xalta and they once again offered him the same
terms. He informed Xalta that he would send in his acceptance in another three days and
immediately sent his resignation letter to Shyam.
THE DECISION

6
Sandeep was tried and tested in the BBPL business, knew the organization, was a motivated
worker and was stable. However, his acceptance as the Deputy General Manager by the same
staff who had worked with him earlier, was uncertain. Also, the impact of bringing someone who
had left BBPL, back into the team, that too in a higher position might have adverse effect on the
motivation of the rest of the sales team.
Arun brought with him entirely different sales and distribution experience and skill sets which
was likely to give fresh perspective to the distribution set up of BBPL. Also, he would most
likely be more easily acceptable to the team at a senior position. However, how he would gel
with the sales team, the BBPL operations, his loyalty and stability in BBPL was uncertain.
Promoting Vimal would ensure continuity and keep the BBPL sales team stable. Vimal could
potentially increase the business of Xalta considerably as he had the knowledge of the market
and had personal equity in the market, though some of it was because he worked for BBPL and
Coke brand pull. Vimal's elevation could also give the rest of the sales team a hope for
promotion to higher levels based on performance. However, it could also give an impression that
the bosses would give you promotion only when you resign and that may lead to instability in the
long run.

7
EXHIBIT 1: SALES DETAILS OF BBPL

Share of total sales in %

Sales (in Carbonated
Year million Cases) Drinks Juices Water
2009 4.4 82 3 15
2010 5.1 80 3 17
2011 5.4 78 4 18
2012 6.5 75 5 20
2013 7.5 72 6 22
2014 9.3 68 6 26
2015 7.1 65 8 27

Gross margin Average

(% of Sales) Case Value
Carbonated
Drinks 35 300
Juices 30 480
Water 20 240

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Exhibit 2: The Organization Structure of BBPL

General Manager

Deputy General
Manager

Market Route To Sales Key

Sales Rural Sales Expansion Market Generating Account
Manager Manager Manager Manager Asset Mgr. Manager

Area Sales Area Sales Territory SGA

Manager Manager Lead Technician

Sales Sales
Executive Executive
Market Market
Developer Developer
Market Market
Developer / Developer /
Pre-sales Pre-sales Market
representative representative Developer

9
EXHIBIT 3: COMPENSATION CHART ACROSS SALES LEVELS

Annual Compensation
(range)in INR Million
Average Work
Experience in
Designation Salary Incentive years
Sales Manager 1.2 to 0.8 0.5 to 0.3 > 10
Rural Sales
Manager 0.9 to 0.7 0.4 to 0.2 7 to 8
Market
Expansion
Manager 0.8 to 0.7 0.2 >8
RTM Manager 0.8 to 0.6 6 to 8
KAM 0.8 >5
SGA Manager 1.0 to 0.8 6 to 8
Area Sales
Manager 0.8 to 0.7 0.2 7 to 8
Territory Lead 0.5 0.2 4 to 6
Sales Executive 0.4 to 0.3 0.1 to 0.05 3 to 5
Market
Developer / Pre-
sales
representative 0.15 0.05 < 2

10
EXHIBIT 4: KRA'S FOR KEY SALES POSITIONS

A. Sales Manager

i. Distributor financial health

ii. Return on investment of distributor

iii. Integrated commercial planning (forecasting)

iv. Gross margin contribution

B. Area Sales Manager

i. Distributor primaries

ii. Number of outlets covered

iii. Range of products available in counters

iv. Capability development of sales force (BBPL & Distributors)

C. Route to Market Managers

i. Developing untapped markets - sales generated, number of outlets

ii. Planning & executing brand building and sales promotion activities

iii. Deploying and supervision of market developers

11