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National-Foods
National foods have a conventional distribution system, well know in the FMCG industry. With 770
distributors who buy from the 6 warehouses of the company which are located in different locations in the
country who in turn pass it down to retailers spread across 350 towns. The focus is primarily on the urban
market as to a great extent the rural market still follows the cultural norms of making homemade spices.
(exhibit --- shows the Distribution Flow chart of the company)
Geographical Distribution
In terms of geography , National Foods has divided Pakistan into 6 regions which are:
1. Lahore: includes Faisalabad and Sheikhapura
2. Islamabad: includes Islamabad, Peshawar and Kashmir
3. Sukkur
4. Multan: includes DG Khan, Bhawalpur etc
5. Karachi: includes Karachi, Hyderbad, Quetta
6. Gujranwala: includes Jhelum, Gujranwala
In each region the company appoints distributors and they then appoint sub distributors. Key accounts
which includes institutions, CSD, Hypermarkets and institutions are delt directly by the company
regardless of the region of their presence.
Export market too is directly dealt by the company. They do not have operations outside the country but
export to more than 35 countries around the globe contacting distributors or one main distributor present
there.
Sales Hierarchy
The sales hierarchy consists of two regional managers in each of the 6 broadly defined
locations which means that there are 12 regional managers. Each regional manager is
responsible for two zonal managers reporting to him, which makes 24 zonal managers. Each
zonal manager is in charge of 2 territory managers which make up 48 regional managers.( See
exhibit for sales Hierarchy). The training of the sales team is mostly done in house.
Regional manager is responsible for Manage the day-to-day activities of a regional sales force
in order to implement the organisation’s overall sales strategy for an assigned region. He is
required to monitor the performance of the sales teams or branches within the region and re-
allocate resources to improve overall results. He also oversee sales support activities such as
sales administration, customer service, distribution, invoicing, and credit and collections to
ensure that customer orders are processed, dispatched, invoiced, and paid accurately and on
time. He also coaches sales representatives on the technical aspects of the organisation’s
products and services; on marketing campaigns and sales promotions; and on sales techniques,
procedures, and standards that will help them achieve their sales targets. RSM also is to
manage targeting products on the basis of value, stock, and boys etc and handle all distribution
related issues such as ordering, claims, procedures etc.
The zonal manager is responsible for primary monitoring (company requirements of demand
and supply) and secondary monitoring (market demand). He develop sales plans, activities, and
campaigns and manage the day-to-day activities of a sales team in order to implement the
organisation’s overall sales strategy for an assigned geography, product line, market segment,
or list of customer accounts. He is responsible for inventory control and prepares sales
forecasts and budgets, monitor’s sales volume, revenues, and costs against forecasts to
identify problem area. He also adapt’s procedures or re-allocate resources to improve the
overall performance of the sales team. It his also his responsibility to contribute to the
development of sales, and distribution strategies for area he is responsible for.
The territory manager leads the day-to-day activities of a sales team in order to achieve the
sales team's business targets. He Supervises team members, priorities and assign tasks to
ensure that the team's resources are used effectively and targets are met. Some of his key
activities may include development of new and potential business, marketing, customer
retention, advertising, pricing and distribution sales strategies. He is basically Responsible for
area development.
UNDERCUTTING & Dumping
National foods controls undercutting by applying same price policy. There is no policy of
providing different process even to bulk buyers such as institutions or hyper markets. Such bulk
buyers may be given the advantage of credit terms but the price is always the same as the
company does not want them to sell of at lower prices to the consumers or encourage any
cross over purchases.
Also, initially the company’s sales force targets were divided between direct and indirect sales
equally but now they weightage has shifted to 25:75. By giving 75% weightage to indirect sales,
it reduces sales force’s motive to sell to distributors which may lead to dumping as now 75% of
the targets are based on what the distributor sells to retailers.
SHAN FOODS
Sales Hierarchy
Undercutting &Dumping
Comparative Analysis
Both companies National and Shan have a local heritage and operational experience of many years. The
distributional network established by both is large and quite similar. Market share of both is competing at
40% each in the branded spices market. The outlet coverage