Airetel-Ps Report Mid Sem

BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE

Management Group

Mid Semester Practice School Report

Sales & Distribution in Bharti Airtel


Management Group


On


Prepared by:

Vikash Kumar

2009H149190




Prepared by:-

Vikash Kumar

2009H149190P

INDEX

Introduction……………………………………………………………………………………………… 03

Bharti Hexacom………………………………………………………………………………………… 04

Sales and Distribution Strategies……………………………………………………………….. 05

Second degree distribution network…………………………………………………..…….. 07

Third degree distribution network………………………………………………………..…… 07

Reasons for having second and third degree distribution network………….… 07

Urban Distributors…………………………………………………………………………………….. 08

Responsibilities of urban distributors………………………………………………………… 08

Rural Stockists……………………………………………………………………………………………. 08

Responsibilities of rural stockists……………………………………………………………….. 09

Rural Distributor………………………………………………………………………………………... 09

Responsibilities of rural distributors…………………………………………………………... 09

Sales Force……………………………………………………………………………………………….… 10

Responsibilities of FOS…………………………………………………………………………….…. 10

ARE…………………………………………………………………………………………………………….. 10

Back-Hand………………………………………………………………………………………………….. 10

Company support and monitoring of sales and distribution network…………. 10

Responsibilities of CSD……………………………………………………………………………….. 11

Challenges faced by company…………………………………………………………………….. 11

INTRODUCTION

Bharti Airtel Limited is an Indian telecommunications company that operates in 19 countries

across South Asia, Africa and the Channel Islands. It operates a GSM network in all countries,

providing 2G or 3G services depending upon the country of operation. Airtel is the fifth largest

telecom operator in the world with over 200 million subscribers as of October 2010. It is the

largest cellular service provider in India, with over 143 million subscribers as of September 30,

2010. Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China

Mobile and China Unicom. It has a 29.00% market share of the GSM mobile service in India.

The company is structured into four strategic business units (SBUs) - Mobile, Telemedia,

Enterprise and Digital TV. The Telemedia business provides broadband, IPTV and telephone

services in 89 Indian cities. The Digital TV business provides Direct-to-Home TV services

across India. The Enterprise business provides end-to-end telecom solutions to corporate

customers and national and international long distance services.

Airtel is known for being the first mobile phone company in the world to outsource everything

except marketing and sales and finance. Its network (base stations, microwave links, etc.) is

maintained by Ericsson, Nokia Siemens Network and Huawei, business support by IBM and

transmission towers by another company (Bharti Infratel Ltd. in India).

Bharti Hexacom

In 2004, Bharti acquired control of Hexacom and entered Rajasthan. The Airtel subscriber base

according to Cellular Operators Association of India (COAI) as of August 2010 in Rajasthan was

11,004,105. The Rajasthan telecom circle is divided into six zones viz., Jaipur, Jodhpur, Alwar,

Kota, Udaipur, Bikaner. A Sales Head (SH) handles six zones. Every zone has one ZBM (Zonal

Business Manager). One zone consists of few numbers of districts. The sales responsibility of

every district is with a ZSM (Zonal Sales Manager). A ZSM has a team of RTMs and UTMs

(Rural/ Urban Territory Manager). The team size depends on the population density of area.

Every RTM and UTM takes care of few distribution areas.

Sales & Distribution strategies

Airtel has set-up a multi-regional marketing and sales team that is responsible for building two

types of sales channels:

1. Direct sales channels

2. Indirect sales channels

The 23 circles have been divided into regions or territories and the regional organizations are

responsible for the designing of the sales & marketing strategies for their respective areas. Each

region also provides significant inputs and reviews of the corporate strategic sales, marketing,

and product direction.

Airtel has a network of personnel who take care of marketing and sales plans of their regions by

capitalizing on the opportunities in their geographic region.

These teams build both direct customer relationships as well as indirect channels (through

handset manufacturer, Network Solutions Provider, etc.).

The distribution strategy of Airtel includes second and third degree distribution network. As

shown below, Airtel makes transactions only with Urban Distributors (UDs) and Rural Stockist

(RS). These transactions generally are invoices of SIMs, RCVs, GSM Pay Phones etc.

Company makes invoice of SIMs, PEFs, GSM Pay Phones, RCVs of various denominations

chiefly Rs.10, Rs 30 and Rs. 60 to only Urban Distributors and Rural Super Distributors. Easy

balance is also transferred to only Urban Distributors (UDs) and Rural Stockists (RS).

AIRTEL

URBAN

DISTRIBUTOR

RURAL

STOCKIST

RURAL

DISTRIBUTOR

RETAILER

RETAILER

Second degree distribution network:

The second degree network includes the urban distributors, who collect the above items from

Airtel and distribute them to the retailers. These distributors also transfer easy balance through

FOS (Field Officer Sales) SIM to the retailer according to his/ her demand. Since this set up

includes only two channel members, it is 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.

Third degree distribution network:

This network includes Rural Stockist (RS) who distribute the above items to Rural Distributors

(RDs). In this case, the RS transfers easy balance into Rural Distributors. Rural Distributors then

take the items to the retailers and transfer easy balance through FOS SIM to the retailer,

according to his/ her demand, from easy balance of Distributor SIM. This three level distribution

makes it easier for the company to reach the sub urban and rural areas, where retailers are few

and widely located.

Reasons for having two degree and three degree networks:

• Second Degree network suits the urban areas well since these areas are usually densely

populated, and have very high demands for Airtel’s products and services. It becomes

important for the company to supply the products and services as quickly as possible. As

the distributor (UD) gets the products directly from Airtel, therefore, the products,

services and promotional materials can reach the retailers in shorter span of time.

• Three degree distribution suits the sparsely (or less densely) populated areas, where

retailers are spread over large geographical areas. Due to less demand for company’s

products and lack of proper infrastructure in rural areas, Airtel has established a three

level distribution network. Since in rural areas there is poor banking infrastructure and

courier services hence for availability of products and services, three degree distribution

is more appropriate.

Urban Distributors:

Known as UD, they distribute products like, SUK, RCV, easy balance, services and promotion

material to retailers in their designated (urban) areas 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 (Currently 4.0 %) on his SIM’s billing and

has to pass a certain percentage (2.5%) of this discount to the retailers. They make DD payments

to the company for RCV, SUK sales thrice a week on Monday, Wednesday and Friday and for

easy balance from Monday to Friday.

Responsibilities of Urban Distributors:

• Distribution of SIM, Easy Recharge, PEF, 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 checking 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 company.

• Maintaining distributor health report, secondary details regarding retailers, SIM

activation details and stock of RCVs and Easy Recharge for 10 days.

• Proper circulation of communication from the company to retailers.

• Escalation of retailers’ claims and complaints to TM/ZSM.

Rural Stockists:

These are the rural counterparts of UDs. Their roles and responsibilities are similar to the UDs.

However, being part of a third degree distribution channel, they have certain conditions and

some added responsibilities. The RS gets certain discount (Currently 4.5 %) on his SIM’s billing

and has to pass a certain percentage (3.8%) of this discount to the RD and RD passes 2.5 %

discount to retailers.

One Rural Stockist (RS) can have a maximum of 12 Rural Distributors (RD) under him and he

may have a maximum turnover of Rs. 1 crore. This is to limit the bargaining power of the RS

and to exercise more control over the rural distribution channel.

Responsibilities of Rural Stockists:

• All responsibilities of UD

• Collection of money for invoices to RDs and ensuring adequate supply to RDs.

• Have to maintain required stock of RCVs and recharge for 7 days.

Rural Distributors:

They are known as RDs and are located at blocks and towns as compared to the UDs and RSs

who are located at District HQ. There has to be an RD for every population block of 5000. Their

roles and responsibilities are the same as the UD.

Retailers:

Retailers are strategically located shops from where customers can buy products and services e.g.

mobile handset shops, phone booths, convenience stores etc. Retailers get a 2.5% margin by way

of discounts on all its sales. This discount is extended by the RD/UDs. Select retailers get Lapu

SIMs mapped to their respective FOS for Easy Recharge facilities. Other retailers are provided

with RCVs.

Roles and responsibility of retailer:

• Fill error free PEFs and verification of supporting copy for POI and POA of the customer

with originals and same for the Re-documents before activating the SIM.

• Proper utilization and display of promotional materials.

• Communicate customers properly about the schemes, new offers and benefits.

• To sell the product and services to customer at right price.

• Serve the customers’ requirements with the available stocks of SIM, RCV and easy

balance etc. and not to create artificial shortage.

• Should purchase RCVs, SIMs and Easy Balance from respective distributor only.

Sales Force

These are the manpower of distributors. They are referred to as Field Officer Sales (FOS). They

sell SIM, RCVs, Easy Balance etc. on behalf of the distributor to all retailers assigned to his beat.

Responsibilities of FOS:

• All secondary sales assigned under his beat

• Collection of Payments against billing by retailer

• Promotion material distribution as instructed by TM.

• Communication regarding schemes, incentives, new offers from the company to the

retailers

• Resolving retailer complaints using the FOS helpline

• Escalation of unresolved complaints and claims to the distributor and TM.

ARE (APEF Representation Executive)

ARE collects APEF from retailers and checks if POI and POA are stick on the APEF or not.

When a retailer activates a new sim, the command sent by the retailer reaches the ARE who

forwards it to BACKHAND for activating the sim.

BACK-HAND

Backhand checks the APEF and fills the column unfilled in APEF. She/he maintains the record

of all the activation e.g., name of customer, name of retailer, retailer lapu number, customer’s

MSISDN number, date of activation of sim and tele-calling to numbers activated.

Company support and monitoring of sales and distribution networks

Reports from RSs and UDs are the basis on which territory managers and ZSMs monitor the

sales and distribution networks entrusted to them. There is a customer service division (CSD)

which helps in resolving complaints and also provide valuable support in the sales and

distribution monitoring.

Responsibilities of CSD

• Resolving general complaints of customers.

• Providing helpline to retailers and FOS.

• Providing helpline to territory managers and helping them resolve escalated retailer

issues and FOS issues.

• Communicating all service related messages to retailers, FOS, distributors, TM and ZSM.

Main issues/ challenges faced by the company

Mainly two important issues are being faced by the company in their sales and distribution

system. These are:

• Problem of service gap: Cases have been there where the retailer has run out of its

recharging balance and the balance has not been refilled by the distributor timely. This

may be caused because of the time lag, or because of the no credit policy of the

distributor.

• Competition: Due to large number of players, now the retailers have to keep competitors

product as well. But they are unwilling to make extra investments.

Documents

Airetel-Ps Report Mid Sem