CETMA for forging closer ties with trade partners

Mukta Magazine in New Delhi

Tough times call for innovative approaches. Realising that unfair business practices will rock the boat further for the already beleagured industry, consumer durable majors are trying to build bridges with their trade partners. While companies are focusing more on dealer and sales force training, the Consumer Electronics Traders & Manufacturers Association (CETMA)’s special Code of Conduct group headed by Mr K S Raman, former president of CETMA, is also trying to smoothen ruffled feathers between companies and their trade partners.

Says Mr Raman,‘‘as a result of the present unfair business practices, the industry has been seeing haphazard growth, brands are losing respect and unfair prices are prevailing, resulting in loss all round.’’ Presenting a case for forging closer ties with trade and adopting fair and transparent business practices, he says, ‘‘this will ensure growth of the retail dealer network, confidence in the company’s pricing policy, stability of market operating prices and ultimately make the industry healthy.’’

Typically, companies tend to focus on 10 per cent of their top dealers and lose contact with 90 per cent of dealers. As a result, the brand gets drawn into the clutches of a few large dealers, who get unreasonable incentives from the company. This disturbs market operative prices (MOP) and alienates the B, C & D class dealers.
Unfair prices to different dealers results in unfair prices to customers. Another discrepency is that large dealers or wholesellers sell their products further through unauthorised dealers at lower prices than the authorised dealers, thus disturbing market prices.

Says Mr Raman, there is a need to bring all these dealers into the fold and religiously track their performance and also that of the competition. As a result of improper tracking, decline in sales at any counter is not tracked in time nor is it given serious attention.
Companies are being told that sales teams need to go in for more frequent market visits, to monitor the dealer outlets, remove their grievances immediately, fix achievable targets for them according to their classification, device incentives and price structures with reasonable incremental value as large price variations will antagonise the smaller dealers.

Dealer/sales force training
Companies are also increasingly focusing on dealer and sales force training to equip them to tackle the ‘moment of truth’ at the point of sale. The issues here are: How to motivate dealers to work in tandem with the company, take steps to ensure their growth alongwith the company and how to maximise the effectiveness of the sales force which is difficult to monitor since there is no day-to-day contact. The main grouse of dealers usually concerns margins, so companies are going in for motivational and attitudinal training programmes to assure them of a fair deal.

Philips is spending Rs 25 lakh this year on sales force training, up from last year’s budget of Rs 10 lakh. It has roped in training consultants Achieveglobal to impart professional selling skills and USP training to demonstrators. It has also developed a sales performance tool kit to measure sales per person on grounds of sale. Besides this it also has a five-month course for dealers.

Likewise, LG Electronics also will lay greater emphasis on training from this month. Says Mr Pradeep Tognatta, senior general manager, sales & marketing, ‘‘We are planning to induct a person at the corporate level to impart training across dealers, markets and branches. We will first train the area managers and engineers. This will include USP training on product features, which is important as technology is a great differentiator.’’ It has allocated Rs 7 million for training.

Similarly, Electrolux has allocated Rs 50 lakh for training this year. The company has a thorough training programme, with three-day training for dealer salesmen. It covers areas like motivation theories, presentation skills, how to approach customers and handle objections, closing techniques, besides product training. For dealers it has a programme on upgrading knowledge on product information. According to the company, the training is on scientific lines, with generous use of animations to overcome language problems. It has chalked out 120 training programmes of half-day duration, which are conducted twice a year. The company has close to 8,000 dealers and 300-400 dealer salesmen.