Sales and Distribution Management of Reckitt Benckiser

Sales and Distribution management is among the vital activities that almost any FMCG should handle within the efficient way. Distribution could be the way through which a final goods reach the best consumers. The primary objective of this report is to learn the problems and the probable solutions from the distribution management system connected with Reckitt Benckiser (Bangladesh) Limited.

Introduction

Business now a day has become so tough and competitive. Pressure is coming from both the competitors and the consumers. In the new era of globalization consumers are more prepared to choose among competitive offerings. The marketer capable of offering the highest satisfaction through his product is the most likely to be successful. So the one and only way to be successful in the business is to provide more and more consumer satisfaction specially in getting a product in the moment of need without any difficulties. This factor depends on how effective the distribution management of that particular company is.

The subject matter of this report supports this statement. This report deals with the distribution management of Reckitt Benckiser (Bangladesh) Limited. The objectives of the report is to have a clear-cut idea about the practical sales and distribution management system of the organization, determining the factors that should be considered while selecting the distributor and to find out the problems and the probable solutions of the distribution management system of Reckitt Benckiser (Bangladesh) Limited. I tried to conduct an analysis with the intensive study, which I had experienced for the last two and half years as an employee in Reckitt Benckiser (Bangladesh) Limited. This report is mainly based on the analysis of data from the secondary sources and my practical knowledge in Dinajpur territory and regional office in Bogra.

The Distribution strategy of Reckitt Benckiser (Bangladesh) Limited is to ensure brand availability by taking accurate orders ensuring optimal stock levels ensuring efficient delivery service through right service frequency and by on time in full (OTIF) delivery ensuring product and quality such as freshness and appearance & distribution expansion by ensuring direct coverage in potential new markets, direct coverage in the potential new outlets within existing routes, ensuring passive distribution coverage through strategic wholesalers.

From the report it is clear that Reckitt Benckiser (Bangladesh) Limited is solely dependent on its distributors for distributing its products. The   company makes the distributing process easier and smoother for the distributors. So the distributors play a vital role to keep the image of Reckitt Benckiser (Bangladesh) Limited up and to ensure its products availability in the actual and potential markets. The problem sometimes occurred is due to the carelessness of the distributors. But sometimes the distributors claim against the root level management as well as the company’s policy for the distributors such as low Return on Investment.

Making recommendation regarding Distribution management requires a vast knowledge and experience. As Distribution management is not that much flexible, from my little experience and knowledge that I have captured when working in this particular sector, it is recommended that the company should keep close-up view on its distribution channel through monitoring the root level managers’ activities time to time and negotiating regularly with the distributors so that they become motivated to carry on their business with Reckitt Benckiser (Bangladesh) Limited. Reckitt Benckiser (Bangladesh) Limited should take the initiatives so that the ROI of the distributors’ increases.

Objectives of the Report:

Sales and Distribution management is one of the vital activities that any FMCG should handle in an efficient way. Distribution is the way through which the final goods reach the ultimate consumers. The primary objective of the internship report is:

To find out the problems and the probable solutions of the distribution management system of Reckitt Benckiser (Bangladesh) Limited.

Methodology of the Report: 

Theoretical knowledge required for the study was collected through some books on this respective field. The data that have been used for this study are both primary and secondary types. The Primary data have been collected through direct observation, face-to-face discussion with Regional Sales Manager, Territory Sales Managers, Distributor, and the Distributors Sales Representatives, Retailers and Wholesalers and unstructured questionnaires for Retailers and wholesalers, Distributor sales representative, Distributor and other company personnel.

 Secondary data consists of all published or reported materials, which have already been collected or preserved. In this study the secondary data sources are reports like Sales reports, Market return report, Route plan, Return on investment sheet, training modules, Incentive reports, and web site of Reckitt Benckiser.

Necessary discussions were conducted with academic advisor, Regional Sales Manager, Territory Sales Managers and the Distributor of Dinajpur. Sometimes for having route level information necessary discussion was conducted with the Distributor sales representatives.

Overview of Reckitt Benckiser

Reckitt Benckiser is the world’s No.1 Company in household cleaning products, (excluding laundry detergents) and a leading player in health and personal care. Reckitt Benckiser truly a global company with a consumer-oriented vision, operations in 60 countries, sales in 180 countries and net revenues in excess of £3 billion/$4.2 billion. Reckitt Benckiser is passionate about delivering better solutions – making life easier for consumers around the world is what drives the constant innovation. New product launches account for 20% of total net revenues. It goes without saying that the ultimate objective is to deliver outstanding results to the shareholders.

Company Description

Reckitt Benckiser Plc was formed in 1999 with the merger of Reckitt & Colman Plc. and Benckiser N.V. It manufactures and sells household and healthcare products. Reckitt Benckiser is the world’s largest household cleaning Product Company (excluding laundry detergent). It is the market leader in household cleaning products. Its brands include air fresheners (Airwick), household cleaners (Lysol, Easy-Off), laundry products (Woolite), furniture polishes (Old English), and dishwashing detergents (Electrasol). Its various business segments accounted for the following net revenue share in 2006: Surface Care 20.1%, Fabric Care 27.4%, Dishwashing 14.4%, Home Care 14.5%, Health and Personal Care 14.5%, Food 5.2% and Other Household 3.8%.

Since its formation, Reckitt Benckiser has outperformed its peer group with above average growth in both sales and profits and has grown ahead of target.  For the last seven years, the Company has achieved a net revenue growth of 7% per year, adding around £1900 million net revenue since 1999 faster than industry average profit growth, tripling net income from £200m in 1999 to £768m in 2006. Reckitt Benckiser’s net revenue for 2006 was £4.9 billion.

Reckitt Benckiser People

Reckitt Benckiser employs high quality people who consistently deliver outstanding results. Reckitt Benckiser is a highly innovative business organization where entrepreneurship is encouraged and valued. How much you earn and how fast you progress depends on talent and achievement. It’s a beautifully simple, exceptionally powerful philosophy:

• People get promoted as soon as they’ve proved they’re ready and the company has the right opportunity
• Exceptional rewards for people who deliver exceptional performance.

People in senior management can earn an annual bonus of up to 144% of base salary. Reckitt Benckiser has a true multi-national team, where no single culture dominates. Reckitt Benckiser believes that combining talented people with different professional and cultural backgrounds in action-oriented teams is what gives us real competitive edge. “For a complex problem, teamwork is extraordinarily powerful.” The Reckitt Benckiser managers are highly mobile and flexible; moving regularly to opportunities where their development needs are best matched with the company’s interest. The company is home to many ‘best-in-class’ minds in all the key areas of business. Reckitt Benckiser people think and act with consistent quality and effectiveness – but don’t confuse consistency with uniformity. The structures and systems are there to facilitate action. They leave room for flexible thinking and new ideas. People know that what works today for consumers may not work tomorrow. “Reckitt Benckiser is right for anyone who’s as passionate about winning as they are about beating the competition.”

Sustainability Performance

The successful execution of the sustainability strategy at Reckitt Benckiser positions it among the leaders of the industry supported by high level of engagement across all three corporate sustainability dimensions. Its capabilities in mitigating the challenges in the economic dimension are among the best in the industry underlined by a particularly strong performance in brand management and corporate governance. The company considers its brand performance to be the key to the company’s performance. In the environmental dimension, it scores significantly above the industry average with a clear out performance in environmental policy and management and environmental reporting. Moreover, it performs among the best in the social dimension, particularly in human capital development.

Vision and Values Statement

Reckitt Benckiser passionate about delivering better solutions to consumers and customers

• Vision

Reckitt Benckiser is about passionately delivering better solutions in household cleaning and health & personal care to customers and consumers, wherever they may be, for the ultimate purpose of creating shareholder value.

This vision defines both Reckitt Benckiser’s purpose and values as a Company and encompasses the commitment to product quality and safety, customer service, innovation, global reach and corporate social responsibility.

• Values

The core values are a set of guiding principles through which Reckitt Benckiser think, behave and conduct the business in order to deliver on the vision, they are:

• Achievement
• Teamwork
• Entrepreneurship
• Commitment

Reckitt Benckiser Code of Business Conduct

The purpose of Code of Business Conduct is to ensure that management and employees across the Group have a clear understanding of the principles and ethical values that the Company wants to uphold.

Reckitt Benckiser is committed to responsible corporate behavior; this includes high standards of business conduct in relationships with employees, customers, consumers, shareholders, suppliers, governments, competitors and the local communities in which Reckitt Benckiser operate. It applies to all employees in all Reckitt Benckiser Group companies globally. Where the Company participates in joint ventures the Code’s standards should also be actively promoted. Compliance with the Code is an important factor in maintaining and building the reputation of Reckitt Benckiser as a responsible and trustworthy business partner, employer, supplier and corporate citizen. The Code forms the core element of Reckitt Benckiser Corporate Responsibility Framework; this comprises a set of policies and control arrangements that govern how Reckitt Benckiser acts as a Company and how Reckitt Benckiser interact with its stakeholders in conducting the Company’s business. It is not possible to anticipate every situation. The Code is necessarily broad and general in nature and is not intended to replace more detailed policies and procedures. Nevertheless, these basic principles and ethical values should serve as a guide to each employee in his or her dealings with customers, suppliers, shareholders, colleagues and others with whom the company has relationships. Together with Reckitt Benckiser Vision and Values Statement, and the other components of Reckitt Benckiser Corporate Responsibility Framework, the Code outlines the way the Company wants to conduct business now and in the future.

Commitment to employees.

• Freedom of association

Reckitt Benckiser recognizes the right of employees to freedom of association (or parallel means where such activities are restricted under law).

• “Whistle blower” help line

During 2003 Reckitt Benckiser rolled-out its “whistle-blower” help line. Employees globally have access to a telephone help line; run by an external organization, to report – anonymously if desired – any suspected breaches of Reckitt Benckiser Code of Business Conduct. Internal Audit then investigates these.

• Equal opportunities – no discrimination

Reckitt Benckiser is a truly multi-cultural company. Reckitt Benckiser believes that combining talented people from different professional and cultural backgrounds drives innovation and gives us a competitive edge. 20% of the Company’s Board, and 15% of Reckitt Benckiser ‘Top 400’ senior management, are women.

Commitment to International Standards

Reckitt Benckiser subscribes to a number of international standards and guidelines relevant to corporate responsibility and business conduct, including:

• The United Nations (UN) Declaration of Human Rights (www.un.org)
• The United Nations (UN) Convention on the Rights of the Child (www.un.org)
• The International Labor Organization (ILO) eight Fundamental Conventions (www.ilo.org)
• The Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises (www.oecd.org) the principles and requirements of these standards and guidelines are incorporated into this Code of Business Conduct and other elements of Reckitt Benckiser Corporate Responsibility Framework.

Compliance with laws, regulations and Company policies

There are many laws and regulations applicable to the conduct of the Company’s business. All employees should be aware of and observe the laws and regulations governing their work activities, including those concerning: occupational health & safety; employment practices; protection of the environment; competition; intellectual property; and, the payment of taxes and social security. Compliance with the Company’s internal operating policies and procedures is of equal importance.

Ethical business conduct and fair dealing

All employees must accept responsibility for maintaining and enhancing the Company’s reputation for integrity and fairness in its business dealings. In its everyday business transactions the Company must be seen to be dealing even-handedly and honestly with all its customers, consumers, suppliers, employees and others with whom the Company has a relationship.

Conflicts of interest

Outside engagements – employees of the Company should not undertake any other business or profession, be an employee or agent of any other company, or have any financial interest in any other business or profession, other than: non-executive positions approved by the Company; community / voluntary activities; and, bona fide investment holdings of shares or other securities. The Company must approve any exceptions to this requirement, which could for example apply to a part-time employee. Insider trading – employees in possession of information on the basis of which an effect on the Company’s securities may reasonably be predicted, may not trade in any of the Company’s securities as long as they could take advantage of such sensitive information. Additional trading restrictions exist for senior executives during the two months prior to publication of the year-end results and for one month prior to the publication of quarterly results, and at other times indicated by the Executive Committee when the Company may be deemed to be in receipt of insider information. Gifts and entertainment – employees of the Company must ensure that they deal with customers, suppliers and other business relationships in a way that avoids their independent judgment on behalf of the Company being influenced by personal advantage, or any appearance that this may be the case.

Employees

Working conditions – the Company believes the human rights at work of its employees are an absolute and universal requirement (see Human Rights below). Reckitt Benckiser subscribes to the International Labor Organization’s (ILO) eight Fundamental Conventions (no forced labor, no child labor, freedom of association and no discrimination); and the Organization for Economic Co-operation and Development’s (OECD) Guidelines for Multinational Enterprises. Equal opportunities / no discrimination – in employment related matters (including recruitment, access to training and promotion, transfers, employment termination, discipline, compensation and benefits), decisions are made on the basis of the qualifications, performance record and abilities needed for the work to be undertaken, and relevant business circumstances. The Company is committed to equal opportunities at work; employees should not engage in or support discrimination based on race, color, language, caste, national origin, indigenous status, religion, disability, gender, marital status, sexual orientation, union membership, political affiliation, or age. Working environment and occupational health & safety – the Company is committed to providing a safe and healthy working environment and to ensuring, so far as is reasonably practicable, the health, safety and welfare at work of its employees.

The Company’s Occupational Health & Safety (OHS) Policy and objectives are publicly available and a Group Occupational Health & Safety Management System (OHSMS) is in place to coordinate the management of occupational health & safety across the Company. Employees have a duty to take reasonable care for their own health & safety and that of others who may be affected by their acts or omissions. Employees must use all work items provided by the Company correctly; in accordance with their training and the instructions they received to use them safely. Employee Communication – the Company is committed to providing timely and effective communication with its employees.

Suppliers and contractors

The Company is committed to proactively encouraging its suppliers and contractors to demonstrate responsible business behavior and high standards of business conduct. This commitment is presently focused on direct suppliers involved in the manufacture, assembly or distribution of products on behalf of Reckitt Benckiser Group companies, and on those suppliers /contractors who are actively engaged in work at Company facilities. The Company’s Global Manufacturing Standard sets out minimum levels of performance and performance expectations in the areas of working conditions / human rights at work, occupational health & safety and environmental management, for all suppliers manufacturing, assembling or distributing products on behalf of Reckitt Benckiser Group companies. The Company’s environmental and occupational health & safety management systems include in their scope the activities of suppliers and contractors who are actively engaged in work at Company facilities.

Sustainability and the environment

Reckitt Benckiser views corporate responsibility and sustainability as one and the same and is committed to moving its business towards greater sustainability across the economic, social and environmental dimensions of its activities. The Company believes that a more sustainable business will not only better fulfill the responsibilities to society but also contribute to delivering Reckitt Benckiser vision of better consumer solutions and greater long-term shareholder value. The Company’s Environmental Policy and objectives are publicly available and a Group Environmental Management System (EMS) is in place to coordinate environmental management across the Company.

Company assets

Protecting Company assets – employees of the Company are responsible for the proper use, the protection and the maintaining of company assets, including intellectual property (e.g. patents, trademarks and designs). Company assets may only be used in relation to the Company’s business. Crisis management – the Company has in place a Crisis Management Policy and Group Crisis Management Guidelines, supported by regional / local control arrangements and emergency response plans, to minimize the risks to the business, its customers, employees and shareholders in a crisis situation. Business Continuity Planning forms a key part of these arrangements. Authorities – the existence of an agreed authority’s structure is an essential requirement for establishing an effective financial and operational control environment. All business units are required to establish and maintain appropriate levels of authority to cover all items of asset value / expenditure and all transactions which need to be subject to management approval. Integrity of company financial records – the books and records of the Company must accurately reflect the nature of the underlying transactions and no undisclosed or unrecorded liabilities or assets shall be established or maintained. Books and records must be maintained in all respects according to law and the accounting principles, policies and procedures that the Company has adopted. The Company will not evade tax obligations and all taxable benefits which employees may receive will be listed and

Declared for tax purposes. Protecting confidential information – employees of the Company must ensure that confidential information is preserved and protected. Confidential information is that which is not generally known outside the organization and either gives or could give the Company a competitive advantage or disadvantage, or could lead to the loss of an existing competitive advantage, if it became known to others or became known in the public domain. This kind of information may not be revealed to anyone outside of the organization unless an appropriate confidentiality agreement is in place and such disclosure is necessary for business purposes.

Other issues

Product safety and quality – the Company is committed to delivering safe, quality products to its customers and consumers. Management believes that this is implicit in the Company Vision and fundamental to the brands, the business and long-term success. The Company has in place:

• A Product Safety Policy, and comprehensive control arrangements including the Global Ingredients Guidelines, to fulfill the commitment to developing and marketing products that can be manufactured and used safely as directed.
• A Quality Policy, and Group / site-level Quality Management Systems (QMS), to control the quality of RB products. Human rights – the Company believes that human rights are an absolute and universal standard. The Company subscribes to the United Nations Universal Declaration of Human Rights and the Convention on the Rights of the Child. In countries where the Company is present, Reckitt Benckiser will aim to support progress on human rights issues in accordance with what reasonably can be expected from a commercial organization. Political activities – the Company is not a political organization. It neither supports political parties nor contributes to the funds of groups whose activities are calculated to promote party interests.

Compliance with this Code

All employees are required to comply with this Code of Business Conduct and are personally responsible for doing so. It is the responsibility of the Board of Reckitt Benckiser to ensure, so far as is reasonably practicable, that the principles and ethical values embodied in this Code are communicated to all employees of the Company. Senior management is required to certify compliance with this Code for the operations for which they have responsibility on an annual basis by Internal Audit, and the Board monitors the findings of this certification. The Board of Reckitt Benckiser will not criticize management for any loss of business resulting from adherence to this Code. The Company undertakes that no employee will suffer as a consequence of bringing to the attention of the Board or senior management a breach or suspected breach of this Code. Reckitt Benckiser has in place a confidential “whistle blower” policy and process, communicated globally, to encourage the reporting of any non-compliance with this Code of Business Conduct. If in any doubt, employees can obtain full information on this process from their local Human Resources department.

Reckitt Benckiser policies:

Environmental Policy

Reckitt Benckiser is committed to running its business in a responsible, environmentally sound and sustainable manner. Reckitt Benckiser recognizes that the processes and products have both direct and indirect environmental impacts. Reckitt Benckiser will seek to identify adverse impacts and find effective ways of reducing them, aiming for continuous improvements in the environmental performance and progress towards sustainable development objectives. Throughout the operations Reckitt Benckiser will regard compliance with the law as a minimum standard to be achieved.

Environmental Objectives

The environmental objectives have been chosen and are regularly reviewed to ensure that the actions match the commitments in the environmental policy. They are:

• To take environmental considerations into account throughout the operations.
• To ensure that environmental factors are properly assessed and considered, together with other issues, when key decisions are taken about new products and Processes.
• To establish and measure the significant environmental impacts of the operations, set realistic targets for performance improvements and monitor progress against those targets.
• To use energy and natural resources wisely, eliminate and minimize waste where practical, and re-use and recycle where it is sensible to do so.
• To engage with stakeholders on environmental issues, including the integration of environmental factors into the relationships with key suppliers.
• To ensure that RB employees have a good understanding of environmental issues, know why these are important to the company and the wider community, and have training appropriate to their environmental responsibilities.
• To conduct an annual review of the environmental performance, including progress against objectives and targets, and to make that review publicly available. The Chief Executive Officer is responsible for the Company’s environmental policy and performance. This responsibility is delegated operationally through the Company’s management structure, which includes an Environmental Director responsible for coordinating environmental performance across the Company.

Social responsibilities

The social responsibilities are associated with the stakeholder groups relevant to the activities, and towards whom the improvement program is focused:

• In the Workplace, this means the Employees
• In the Community, this means the responsibility to Society at large and to Governments & Regulators
• In the Marketplace, this means the Customers, Consumers, Shareholders and Suppliers.

 Reckitt Benckiser Brands:

Reckitt Benckiser focuses on five core categories – Fabric Care, Surface Care, Health & Personal Care, Automatic Dishwashing and Home Care, which collectively account for 89% of total net revenues and include any world-leading brands such as: Calgonit/Finish (Automatic Dishwashing) Vanish (Fabric Treatment) Calgon (Water Softeners) Woolite (Fine Fabric detergents) Lysol (Disinfectant) Dettol (Antiseptic) Veet (Depilatory)

Surface care

• 20% of net revenues
• Category consists of five product groups; disinfectant cleaners, lavatory cleaners, general purposes cleaners, specialty cleaners and polishes and waxes.
• Number one worldwide in disinfectant cleaning and lavatory cleaning.

Fabric Care

• 28% of net revenues
• Category consists of five product groups; Fabric Treatment, Garment Care, Water Softener, Fabric Softener and Laundry Detergents.
• Number one worldwide in Fabric Treatment and Water Softener categories.

Dishwashing

• 14% of net revenues
• Category includes products used in automatic dishwashing; key brands include Calgonit, Finish, Electrasol and Jet-Dry

Home Care

• 15% of net revenues
• Category consists of three products groups; Air Care (products which freshen or add fragrance to the air or, increasingly, to create an ambience), Pest Control (products that offer solutions to domestic infestation by insects or pests) and shoe care.

Health and Personal Care

• 15% of net revenues
• Category consists of five main product groups – Antiseptics (Dettol), Depilatories (Veet), Denture Care (Kukident, Steradent), Analgesics Cold/Flu (Lemsip, Disprin) and Gastro-Intestinals (Gaviscon, Senokot, Fybogel)
• Dettol is the world leader in antiseptics bought for use at home.  It is marketed in 37 countries.
• Veet is the world leader in depilatories sold in over 55 countries.  The latest innovation is the “Veet Bladeless Razor Kit”.  Specially designed without a blade, you do not run the risk of nicks and cuts. Launched globally in January 2004
• Steradent/Kukident is a major European brand in denture cleaning and denture fixatives.  In April 2004 Kukident Ultra 3 in one extra strong Fixative cream was launched, delivering hold and comfort in 3 phases, all day long
• Lemsip is the market leader in the treatment of cold and flu in the UK. Disprin has a strong market position in the analgesic market in South Africa, India and Pakistan.
• Gaviscon is a treatment for heartburn and indigestion with major markets in the UK, Italy, France, Turkey, Australia and Africa.
• Senokot provides gentle, overnight relief from constipation.  Senokot is a stimulant laxative based on the natural ingredient senna.
• Fybogel was first launched in the UK in 1974 and is a natural fibre-based, bulk forming laxative in the treatment of constipation and the maintenance of bowel regularity.

Food

• The Food category represents 6% of Reckitt Benckiser’s worldwide net revenues.  While the category is focused primarily in North America, the famous food brands are distributed and sold in more than 55 countries.  More than 90% of Reckitt Benckiser portfolio is made up of number one or number two brands.
• The Food business is focused on products that liven up the flavor of your favorite foods and make meals more enjoyable.  Major segments are mustard, mayonnaise, barbecue sauce, hot sauce and French Fried Onions.
• French’s is the largest brand in the division and the leading brand of mustard in the world.  Its North American market share is more than 30%.  Other RB Food brands include Frank’s Red Hot Sauce – the region’s number two hot sauce – and Cattlemen’s Barbecue Sauce – the number one barbecue sauce in foodservice.
• In addition to more traditional retail grocery and mass merchant channels, food brands source a significant amount of net revenue from the foodservice/commercial channel, where RB brands hold number one shares in most segments.

Reckitt Benckiser is committed to supplying safe products to the consumers and to understanding all the issues involving safety associated with Reckitt Benckiser products. The policy governs Reckitt Benckiser continuing work to ensure the safety of the products and active promotion of responsibility and concern for customer safety across all aspects of the business.

Global Policy Statement on Product Safety:

The vision of Reckitt Benckiser is to deliver better solutions to consumers. Reckitt Benckiser is therefore committed to supplying safe products to the consumers and to understanding all the issues involving safety associated with the products. Reckitt Benckiser believes that Product Safety is fundamental to the integrity of the global brands and businesses, to sound and ethical business practice, and to the responsibility as a producer of quality consumer products. Reckitt Benckiser will actively promote responsibility and concern for the safety of the customers, the employees and the general public at all levels of the company and in all aspects of the businesses. It will be the Policy of Reckitt Benckiser to:

1. Develop and market products that can be manufactured and used safely as directed.
2. Comply with all regulatory requirements for product safety testing and labeling in all jurisdictions in which a product is developed, produced or marketed.
3. Continually assess products, packaging, labeling and raw materials to ensure the health and safety of the public and the company’s customers and employees.
4. Apply consistent product safety standards across all regions.
5. Actively participate in scientific, regulatory and consumer discourse on Product Safety issues either directly or through relevant and responsible trade associations, professional societies, regulatory authorities and consumer groups.
6. Freely disclose product safety information on Reckitt Benckiser products through the release of relevant information to appropriate governmental, professional and business organizations, and to the public.

Global Manufacturing Standard:

Reckitt Benckiser is committed to responsible business conduct amongst its suppliers and contractors that meets or goes beyond applicable laws and regulations, respects the human rights of employees, safeguards health & safety at work, protects the environment, and generally supports the contribution of business to achieving sustainable development.

Community Involvement Policy:

Reckitt Benckiser operates for the ultimate purpose of creating shareholder value. However, the Company recognizes that other stakeholder constituencies need to be satisfied in maximizing long-term shareholder value. The Company benefits from its reputation in the wider community, both in terms of its brand success and its recruitment, and from a workforce that passionately believes in the company for which they work. Reckitt Benckiser Community Involvement Policy is intended as a guide to the Company’s community involvement around the world, to ensure that Reckitt Benckiser’s activities are sufficiently focused to have impact on the employees, the communities in which Reckitt Benckiser operate, and aligned with the Vision and Values.

Emergence of Reckitt Benckiser (Bangladesh) Limited:

The company was incorporated on 15 April 1961 in the territory now comprising Bangladesh. Reckitt Benckiser (Bangladesh) Limited started its business in this country in 1962 as Robinson Foods (EP) Limited. At that time the only product manufactured was Robinsons Patent Barley. However products like Barley, Cherry Blossom, and Robin etc. were being imported to cater the needs of the consumer.

After 1971, the company slowly started to build its own plant as the import of all other products stopped. Gradually Harpic, Dettol, Robin Blue, Mortein Liquid, Mortein Aerosol and other household plants started to be established. Under joint venture agreements. Mortein coil, Dettol Soap and Robin Fabric products Care have been introduced.

The name of the company was changed from Robinson’s food (Pakistan) Limited. to Robinson’s food (Bangladesh.) Limited after the independence. In 1978 it was again changed to Robinson’s (Bangladesh) Limited. In 1985 the name took the style of Reckitt & Colman Bangladesh Limited. Finally as Reckitt and Colman Plc, UK and Benckiser NV, Netherlands merged on December 03, 1999 the name was again changed to Reckitt Benckiser (Bangladesh) Limited on 9^th November 2000.

Products of Reckitt Benckiser (Bangladesh) Limited:

Reckitt Benckiser (Bangladesh) Limited is present in all global core products categories mentioned before. But all products under each category do not exist in the Bangladesh market. Bangladeshi consumers are served with some of the global brands from each category based on local taste and demand. Basically this company follows a globally local approach and the marketing practices are supported by locally established consumer behavior along with global strategies.

Despite the presence of Reckitt Benckiser (BD) Limited. in all core categories, the major NR contribution comes from Pest Control, Lavatory Care, Antiseptics and Analgesic.

PRODUCTS LIST

Market Positions Held By Different Categories:

• Market leader in pest control with Mortein coils, Mortein Mats and Mortein Liquid. Mortein Aerosol holds the 2nd position in the market after the ACI aerosol.
• Market leader in Lavatory care with both Harpic power and Harpic total.
• In the Antiseptic category, Dettol liquid holds the 2^nd position with 30% market share after Savlon the market leader. The Dettol anti bacterial and skin care soap accounts for only 2% market share.
• In the Analgesic category, Disprin is the market leader in the Asprin market holding 68% market share. Disprin CV 100 is the market leader in the market of cardiovascular medicines. But Disprol, which is a variant of Paracitamol, holds only 1% of the market share.
• Market leader in specialty care with Mr. Brasso holds approximately 80% market share.
• Market leader in the Barley Market with Robinson’s Patent Barley with 100% market share.
• Market leader in the Fabric Care category with Robin liquid blue and Robin Powder blue holding 50% and 35% market share respectively.
• Market leader in Dishwashing Liquid with Trix.
• Air Care consists of a very insignificant share of the market.
• Recently Reckitt Benckiser (Bangladesh) Limited has entered in Depilatories market with Veet Hair Removal Cream and is trying to be the market leaders by capturing market share from Nair- the current market leader in depilatories.

SUPPLY CHAIN DEPARTMENT:

Major Functions of the supply chain Department

The Supply Department comprises of three functional areas:

1. Procurement
2. Manufacturing
3. Quality Assurance

The demands of the products are initially determined through the demand review meeting held between the sales department and the supply-planning manager from the supply department. The supply-planning manager then conveys this unconstrained demand to the procurement and production department. In return the production departments notifies procurement about the amount that can be produced after an analysis of their production capacity, work force development etc. procurement also looks at the supply possibilities, availability if the raw and packaging materials, inventory management, import condition etc. After the assessment of the unconstrained demand, a supply review meeting is held between the supply-planning manager, the import-buying manager, the local and co-pack buying manager and the procurement executive. In this meeting a constrained demand is determined. Based on this demand the raw materials are ordered locally or imported. The production department and the contract manufacturers are notified about the quantity and the timing of orders.  Inventory analysis and timing of inventory are also function of the supply chain. As the raw materials are received, the production process keeps on going. The demand for the

products is transformed into production schedules and manufacturing takes place The procurement departments also monitors whether the raw materials and finished goods are supplied according to the right quantity within the right time. Procurement deals with the contract manufacturers to look after whether they are delivering the goods properly. The quality assurance department plays an important role throughout the whole process. They specify a certain quality level both for raw materials and finished goods. They are also engaged in checking and monitoring the quality of raw materials and finished goods and are responsible for any faultfinding and rejection.

After the production process, the finished goods are delivered to the depots directly from the Chittagong factory or from the contractual manufacturers. In fact there are seven contractual manufacturers working for Dettol Soap, Mortein coil, Robin Blue and Air Wick Incense Stick. From the factory 60% of the goods are delivered to Dhaka Depot and the rest 40% are delivered to the Chittagong depot. The contractual manufacturers usually send the goods to Dhaka, but occasionally, when requirement arises goods may also be sent to Chittagong from them. From Chittagong goods are supplied to the distributor in Chittagong1, Chittagong 2, Feni, Comilla Cox’s Bazar and a few other small towns nearby Chittagong and from Dhaka to the distributors in the rest of the country. If shortfall arises in Chittagong, which is a very rare situation, it is met by a supply of goods from Dhaka.

The Logistic Executive controls the Depot. He looks after whether the depots are functioning properly. A Logistic Assistant and a Depot Contractor, assist each Logistic Executive. The Depot Contractor works on a contractual basis and is not an employee of Reckitt Benckiser (Bangladesh) Limited Depot contractor is involved in loading and unloading goods, controlling the receipts and outgoing consignments, payments of labors and other miscellaneous payment. According to the demand of the distributors, they place order in the Headquarter. Then orders are sent to the depots in Dhaka and Chittagong. Then Logistics Department makes arrangement to transport the goods to the destination.

FINANCE DEPARTMENT:

Major Functions of the Finance Department

The finance department of Reckitt Benckiser (Bangladesh) Limited is divided into three functional areas:

• Finance and accounts
• Corporate affairs
• Management account and costing

The staffs of each functional part are capable of taking over the responsibilities of other functional parts on contingency basis. The major jobs of the finance department are carried out by the finance and account section and these are accounting functions such as day to day book keeping, updating the day to day records & Final Account preparation, different variance analysis, forecasting budgeting, handling treasury matters etc. MIS functions and VAT handling. The corporate Affairs departments may deals mainly with the share-related activities like dealing with shareholders, Stock Exchange, SEC, holding the Annual General Meeting etc. The management accounting and costing section is basically accountable for product costing.

HUMAN RESOURCES DEPARTMENT:

 Major Functions of the Human Resources Department

The Human Resources department is relatively small compared to other departments. The issues in the Human Resources are looked after the HR looks after director and the administrative matters by the junior administrative officer. The basic function of this department is to deal with all factors related with human resources like forecasting and planning selection and recruitment, training and development etc. The various aspect regarding administration like office security, vehicles, canteen, telecommunication etc. are also dealt with through this department.

The head of HR is mainly in charge of the department. His/her major responsibilities are:

• To update organ grams regularly
•  To carry out the performance development review.
•  Managing the internal and overseas postings.
• Managing the HR Information System.
• Looking after the internship program.
• To handle career management of all the employees.
• Developing the service rules and looking after whether they are properly implemented.
• To carry out salary surveys.
• Taking care of leaves of the management staff.
•  Handling grievances.

Sales and distribution management of Reckitt Benckiser (Bangladesh) Limited

Literature review:

Selling is the process of persuading others to exchange something in return for money. In another words, Sales is the lifeblood of an organization because in general case the selling is the revenue generating activity of an organization. So the management of sales determines whether the company will exist in the competitive business arena.

Distribution is the process to ensure the availability of final goods of right quality at right place in right quantity at right price in time to satisfy the actual customer.

Distribution is to ensure brand availability by taking accurate orders ensuring optimal stock levels ensuring efficient delivery service through right service frequency and by on time in full (OTIF) delivery ensuring product and quality such as freshness and appearance.

Distribution expansion by ensuring direct coverage in potential new markets, direct coverage in the potential new outlets within existing routs, ensuring passive distribution coverage through strategic wholesalers.

All the efforts made by the organization till the last moment of sale is only to ensure the sale of company products, as sales figure is the key factor to measure the success of a marketing company whether it is a manufacturing one or not. From the above-mentioned definition of distribution in twenty first century, it is clearly seen that selling of even diamond is quite impossible on one’s part if distribution system is inefficient.

Sales process of Reckitt Benckiser (Bangladesh) Limited:

After completion of the production process the finished goods are delivered to the depots directly from the factory of Chittagong or from the contractual manufacturers. In fact there are seven contractual manufacturers working for Dettol Soap, Mortein coil, Robin Blue and Air Wick Incense Stick. From the factory 60% of the goods are delivered to Dhaka Depot and the rest 40% are delivered to the Chittagong depot. The contractual manufacturers usually send the goods to Dhaka, but occasionally, when requirement arises goods may also be sent to Chittagong from them. From Chittagong goods are supplied to the distributor in Chittagong1, Chittagong2, Feni, Comilla Cox’s Bazar and a few other small town nearby Chittagong and from Dhaka to the distributors in the rest of the country. If shortfall arises in Chittagong, which is a very rare situation, it is met by a supply of goods from Dhaka.

The Logistic Executive controls the Depot. He looks after whether the depots are functioning properly. A Logistic Assistant and a Depot Contractor, assist each Logistic Executive. The Depot Contractor works on a contractual basis and is not an employee of Reckitt Benckiser (Bangladesh) Limited. Depot contractor is involved in loading and unloading goods, controlling the receipts and outgoing consignments, payments of labors and other miscellaneous payment.

According to the demand of the distributors, they place order in the Headquarter. Then orders are sent to the depots in Dhaka and Chittagong. Then Logistics Department makes arrangement to transport the goods to the destination.

After the products are transported to the distributor, they are sold to the retailers with the help of the Distributor sales representative (DSR). The planning is done in the periodic meeting in the middle of the months on the basis of the sales forecast depending on the feedback from the field as well as the budgeted target. These are called mid- month flashes and it includes:

The past two week performance

• Forecast for the near future
• Activities to increase the sales.

The overall target is divided into 4 regions according to their previous contribution ratio. The Regional Sales Manager sets the target of the TSMs under him. The TSM does in turn divide the target to the Sales Representatives. The target and performance of the sales force are measured by productivity and strike rate. Productivity is the number of sales made against the number of calls and the strike rate is the number of outlets covered against the number of total shops in a certain route.

The three most important functions of the sales department are:

1. Set up, maintenance & expansion of distribution network.
2. Making products available and visible in the market place.
3. Boosting In Market Sales.

Major Responsibilities of Key Personnel:

Sales Director

The Sales Director like all other directors is in command of the entire department. He looks for new opportunities in sales; receive reports from the RSMs about the key business areas and concentrates on strategies that would help the department to gain monthly and annual targets. He also monitors and evaluates the performance of the whole department, since he is the one who is responsible for ultimate result.

Trade Marketing Manager

The major responsibilities are:

• i Sales MIS development and management.
• ii Institutional sales development.
• iii Company activity planning.
• iv Sales training.
• v Roll- out policies, schemes Templates to monitor and enhance team performance.
• vi Communication to sales team and distribution network.

Regional Sales Managers

• After receiving the sales target, they split the target per Distributor per territory and give it to the territory sales manager.
• Sets the sales drivers to achieve the value target. These sales drivers can be productivity target, strike rate or SKU per memo. They provide the target to the TSMs and sales people for implementation resulting in achieving the value target.
• Provide training to the Distributor’s Sales Representatives and Deliverymen both on the job and through classroom sessions.
• Develop distributor as per business requirement.
• Training on warehousing to the distributors and depot managers.
• Implementing damage stock policy by ensuring a minimum level of damaged stock.
• Effective implementation of marketing programs like consumer promotions, trade promotions etc.
• Making plans for new product launches such as how many outlets will be covered, what will be the stock depth, etc.
• Closely interact with other support departments likes marketing, supply chain, finance etc
• Provide feedback on market information and competitors activities to concerned departments.
• Identify opportunities and plan activities to utilize those.

 Territory Sales Manager

1. Inducing the distributor to send DD and purchase order in time.
2. Helping them to shape the order (SKU wise).
3. Determine the demand of a particular SKU under each Distributor point.
4. Breaking up of the sales target among the DSRs.
5. Implement the sales drivers through DSRs and monitor their performance.
6. Giving training to the DSRs.
7. Reporting to the RSM about particular territory.
8. Visiting the markets as per necessity.

Executive MIS and Sales Administration:

Major Functions are:

• i Prepare daily Sales Report.
• ii Support Field Staff and Manager with data and information.
• iii Liaisons with supply chain and Finance in day-to-day operation.
• iv Setting Distributor & SKU wise target per month.
• v Collection of Shipment & IMS data.
• vi Sales Admin jobs.
• Communication with Distributor & field Staff about sales, price etc.

Distributor’s Sales Representatives

The main responsibility of the DSR is to achieve the sales target. The distributor sales force call at the shops in their respective routes and according to the plans once in a week or fortnight and induce the retailers and wholesalers to buy the products and induce the retailers to keep products in their shelves. They also install the point of sales (POS) materials and other promotional activities in their shops.

For managing the proper sales and distribution channel Reckitt Benckiser (Bangladesh) Limited has break up the whole country into 22 territories under 4 regions.

Territories of Reckitt Benckiser (Bangladesh) Limited:

There are 7 TS Ms under the RSM Central and they cover the areas of Dhaka1, Dhaka 2, Dhaka 4, Tongi, Tangail, Narayanganj and Mymensingh. Chittagonj Region has 7 TSMs under RSM East covering the area of Chittagong 1, Chittagong 2, Feni, comilla, Sylhet, Srimangal and Cox’s Bazaar. Under the RSM North, there are 4 TSM’s covering Rajshahi, Bogra, Rangpur and Dinajpur. In South region under the RSM South there are 4 TSM’s covering Khulna, Jessore, Faidpur, and Barisal. They are basically responsible for achieving the targets and carrying out Reckitt Benckiser (Bangladesh) Limited Business efficiently.

Sales Promotion strategies of Reckitt Benckiser (Bangladesh) Limited:

Reckitt Benckiser (Bangladesh) Limited have specific strategies for promoting the brands in the market to gain competitive advantage over the competitors.

Trade promotion (TP): 

Trade promotion is to encourage the wholesaler and retailers for selling Reckitt Benckiser (Bangladesh) Limited products. The objectives of Trade promotions are given below:

• Increase distribution (Stock depth and width)
• Counter competitive pressure
• Encourage buying.
• Increase brand presence in stores.

Consumer Promotion (CP): 

Consumer promotion is to encourage the consumers for buying Reckitt Benckiser (Bangladesh) Limited products. The objectives of Consumer promotions are given below:

• Designed to induce specific consumer purchase decisions.
• Increase brand awareness.
• Induce trial.
• Induce repeat purchase.
• Strengthen brand loyalty.
• Counter competitive activities.
• Secure marginal customers.

Analysis:

What we can figure out is that the sales department is not only responsible for the actual sales of product, but it also takes care of logistics functions. There is no separate Logistics department in this organization .The sales department is responsible for logistics management to some extent like transportation, depot management etc. The rest of the logistical matters like inventory management, materials management etc. are taken care by the supply department. The challenge of the sales department is to ensure that wherever customers shop they always find the products merchandized with the correct shelf placement in the right assortment and in the right price and promotional offers. It is through this department the products reach at the hands of the consumers. Sales are basically responsible for actualization of the marketing strategies and plans. All the marketing efforts will go in vain if sales department cannot function properly and fail to reach the products to the distributors, retailers and ultimately to the consumers. The marketing and the sales department combine to utilize a pull strategy, which is consumer demand is created through effective communication which makes consumer looking for the product to the retailers who in turn demand the product from the wholesalers. The major support groups of the sales department are the sales representative, distributors and customers. Retailers and wholesalers are the major pressure groups because if their demands are not met or if they are not satisfied they might refuse to accept and sell products of RBBL, which would ruin the activities of sales department. A sale is actually, the results of marketing. So, sales and marketing departments act as complementary to each other. Formulation and implementation of best possible strategies by both of these departments will only bring about optimum results and foster growth of the organization.

The sales department has no value if it cannot sell the expected volume of products. So proper distribution of products must be ensured for the existence of the company. For the smooth flow of products selling RBBL has been trying to ensure the best distribution policy for its products since its first footstep in this country.

Distributor Selection Process of Reckitt Benckiser   (Bangladesh) Limited:

At first Reckitt Benckiser (Bangladesh) Limited collects the necessary information as a tool to determine whether the organization or the person have the necessary qualification to conduct the business with Reckitt Benckiser (Bangladesh) Limited. The RSM and TSM first physically visit the prospect and they verify the prospects qualifications basing on the following factors:

Detail of the prospect

• Name of the firm
• Business Address
• Mailing address
• Telephone and fax number
• Nature of business
• Name of the proprietor
• Name of the partners (if any)

Existing business of the prospect

• Nature of existing business
• Experience
• Detail of distribution or dealership business

Logistics status of the prospect

• Name of the bank
• Number of showrooms and warehouses and their locations.
• Status of warehouses, capacity, ownership
• Manpower
• Number of managers, sections.
• Sales vans and their types.

Financial status of the prospect

• Monthly expenditure. (Item wise), fixed assets
• Investment, sales value and ROI on existing business.

Distribution status of the prospect

• Geographical demarcation
• Existing and expected coverage
• Existing and expected volume of business

Business reputation:

• In the market
• With bank
• With suppliers
• With rivals
• Recommendation of RSM
• Recommendation of sales controller.

If the prospect have all the necessary qualities that are required by the Reckitt Benckiser (Bangladesh) Limited, the prospect is issued a letter by the Sales Controller regarding the duties, geographical demarcation of his distribution point, and the terms and conditions. The RSM & the TSM physically visit the point and give necessary information and training to the distributor and his sales team.

Terms & conditions & duties of Diligence for distributor:

Article1: Appointment:

The company is having the right to appoint number of distributors in respect of all or any of its products in the same town or area, in which the distributor is situated or at any other place as the company deems fit. Before doing this the company can have pre discussion with the distributor but the right to appoint such a distributor remains solely with the company.

According to the terms and conditions mentioned here Reckitt Benckiser (Bangladesh) Limited now appoints the distributor as one of its non-exclusive distributors for the territory/ the products purchased from RBBL from time to time.

The distributor cannot or shouldn’t claim on account of the appointment of any distributor for the sale of the products, tender supply or sale of the product to any person, any compensation or commission brokerage or other fees or payments.

Article2: Distribution:

The distributor agrees to sell, distribute and merchandise the products in the territory to his best ability, to fully collaborate with RBBL and to inform Reckitt Benckiser (Bangladesh) Limited regularly of all relevant data concerning the development of the business and to provide Reckitt Benckiser (Bangladesh) Limited with the reports and information of daily, weekly, and monthly sales and market condition.

The distributor undertakes to maintain throughout the territory, as its own cost and expense an exclusive well developed an active sales organization for the distribution of the product and to visit present and prospective clients regularly and the frequency required by Reckitt Benckiser (Bangladesh) Limited.

The Distributor shall be responsible for recruit, hire engage employ and train all personnel and other persons at his own cost and expense required by the distributor for proper complete and satisfactory performance by the distributor of his duties and obligations arising from his agreement. Resource requirement s will be reviewed on a half yearly basis and it will be contingent on the distributor to provide additional resource if mutually agreed between the company and distributor.

Targets:

• Monthly /quarterly will be given by the territory sales manager.
• Performance incentives will be linked to the achievement of the monthly/quarterly target.
• Once the monthly target is agreed with TSM, target will be broken into weekly shipment plan. And the sighed shipment plan should be sent to the Regional sales manager (RSM).
• Once agreed and signed the distributor must achieve the shipment plans by specific dates, unless the target is revised by RSM.

Article: 3: Delivery of products to the distributor:

The distributor should time to time submit orders for purchase of the products at least 3 days before the delivery date. Reckitt Benckiser (Bangladesh) Limited holds the right to absolutely discretion to decline to accept wholly or part of any order.

The purchase price of the products should be paid by advance bank demand draft or pay order or in such manner that Reckitt Benckiser (Bangladesh) Limited might time to time agree.

All risk of loss, damage or destruction shall pass to the distributor as soon as the products are reaching the distributor’s warehouse gate. The distributor must submit products that have deteriorated, leaked, broken or damaged to RBBL within 7days of the receipt of the product from Reckitt Benckiser (Bangladesh) Limited. The distributor shall alone be liable and responsible for any product damaged at any time after delivery.

Article: 4: Replacement of expired or defective products

The distributor should never sell deteriorated, leaked, broken or date-expired products.

Distributor must abide by the rules and regulations, which are to be made by the Reckitt Benckiser (Bangladesh) Limited as “product return policy”.

If the sale of any of the products is prohibited by a competent authority under any applicable law, Reckitt Benckiser (Bangladesh) Limited shall instruct the distributor and the distributor shall cease distributing and selling such product.

In case of unsold warehouse stock for any of unexpected trouble where the company itself is the victim, the value of stocks shall be adjusted in distributors account by a credit invoice.

Article: 5 Sales promotion and advertising

The distributor shall extend fullest cooperation to Reckitt Benckiser (Bangladesh) Limited and shall furnish such information and returns regarding the markets for products, sales, maintenance of stocks, deterioration, date expiry and other matters for verification (If required) by Reckitt Benckiser (Bangladesh) Limited. The distributor shall also inform about stocks report to Reckitt Benckiser (Bangladesh) Limited at the end of each week/month. The distributor must follow the form structure for sending such information specified by Reckitt Benckiser (Bangladesh) Limited from time to time. Distributor should permit one or more authorized personnel of Reckitt Benckiser (Bangladesh) Limited for direct access to warehouse for stock verification & all sales and other related data to the sale and distribution of the products (including branch wise data) available to the distributor.

Reckitt Benckiser (Bangladesh) Limited shall initiate and control sales promotion and advertising of the products in the territory and may from time to time furnish to the distributor, free of charge, such samples of the product and such sales promotional materials. All such materials shall remain the property of Reckitt Benckiser (Bangladesh) Limited until disposed in the usual and prescribed manner.

The distributor shall arrange cash memo, sales promotion and advertising of the products within its territory upon the request and instructions Reckitt Benckiser (Bangladesh) Limited. All costs incurred by the distributor in this regard shall be in the account of Reckitt Benckiser (Bangladesh) Limited, provided that they have been authorized by Reckitt Benckiser (Bangladesh) Limited in writing and the actual cost incurred in the sales promotion and advertising of the products are fully substantiated by the distributor to the satisfaction of Reckitt Benckiser (Bangladesh) Limited.

Claims against any activities should be made within thirty days for smooth settlement of claims. If anybody were failed to do this within thirty days, it would not be considered as a legal one.

If there is no claim, it should be informed in every three months.

Critical checklist to monitor distributors’ performance:

Distribution Operation Management Audit. (DOMA)

To evaluate the distributor’s performance Reckitt Benckiser (Bangladesh) Limited answers the following questions which comes under DOMA:

1. Is the distributor maintaining the safety stock for key brands?
2. Is the distributor maintaining the agreed working capital?
3. Is there any non-compliance for executing the trade promotions?
4. Is there any distribution contingency plan in case of political strike?
5. Is the distributor following the market return policy?
6. Is the distributor taking adequate measures to minimize market returns?
7. Is the employee turn over rate is higher? If yes, they why?
8. Is the distributor taking initiative for market development?
9. Is the distributor following logistics maintenance principles?
10. Is the distributor maintaining the shipment frequency?

Distribution strategy of Reckitt Benckiser Bangladesh Limited:

Reckitt Benckiser Bangladesh Limited has specific distribution policy. Its target is divided into two mechanical strategies those are product push strategy and customer pull strategy.

Products push strategy

Here product push strategy is such devices where the distribution people follow “pro-actively influence sell-in” of Reckitt’s product that is they actively influence the buyer to buy Reckitt’s product.

The key challenges they face here are as follows.

• Direct coverage expansion.
• Driving passive distribution.
• Right service frequency
• Selecting the right distribution partners.

Customers pull strategy

Here the customer pull strategy is such a device where the distribution people are to depend on “the natural demand” for Reckitt’s product at the retail level. That is if the retailers want a high volume of products then Reckitt can generate high-scaled revenue.

Here the key challenges they face are divided into two teams that is the distribution people and the brand team. The key challenges both the group faces are as follow:

• To create natural demand.
• To ensure visibility at point of sales (POS).
• To influence trade to be Brand Ambassador for RBBL products.

Forms of Distribution:

There are two forms of distribution in Reckitt Benckiser Bangladesh Limited

• Direct distribution.
• Indirect distribution.

Direct Distribution

In direct distribution process Reckitt Benckiser (Bangladesh) Limited has full control over the entire supply chain ranging from depot down to the point of sale. Here RBBL practice direct coverage policy. The benefit direct distribution is to retain ownership and control over supply chain.

Defining market as the prerequisite of distribution planning:

Market can be defined based on:

• Administrative structure, whether the company has direct control over the market or out of it.
• Economic profile, the consumption pattern and the economy of that particular market area.
• Geographic nature, the geographic characteristic of the particular market. Such as Chittagong hill tracts, plain land markets are of Khulna.

Reckitt Benckiser (Bangladesh) Limited defines its market in following ways:

• Urban market: Urban market is based in metropolitan city and all the district head quarters.
• Sub-Urban market: Sub-Urban market is based on all the Thana head quarter.
• Rural market: market based in beyond Thana head quarter. For example, unions and bazaars.

Urban and Sub-Urban market:

Key features of urban and Sub urban markets are:

1. Urban market accounts for more than 50% of the business for Reckitt Benckiser (Bangladesh) Limited.
2. Disposal income is much higher than rural market.
3. Density of population is much higher than rural area.
4. Consumers are more critical as they are better informed.
5. Consumers tend to follow the life style of capital city. Here capital sets the trend.
6. Developed infrastructure.
7. Easy access to electronic media.

Distribution Strategy for Urban and Sub-Urban Market:

Route planning is very critical. The responsible person who has expertise regarding the traffic routes of that area makes the route plan. Sometimes it is done with the negotiation of the responsible groups. But 3 factors should be kept in account always.

• Cost effectively.
• Traffic jam free routes.
• Highest area coverage.
• Distributors sales representatives should not be over burdened.
• Engage a mix of top and medium performers

Right service frequency for each route based on the 80-20 theory. It means high volume contributory routes should have higher service frequency. If required, additional service during the peak season or any occasion e.g. before Eid and shab-e-barat.

Close supervision on distribution services by launching Customer satisfaction measurement (CSM).

Ensuring distribution even in by-lines within the urban / semi-urban base market.

Outlet survey should be conducted in every November as the off pick season starts from the month of November.

Rural market:

Key Features of Rural Markets:

1. Strong agro-based economy thereby disposable income is Limited.
2. River, mountain and lots of small villages.
3. Low density of population.
4. Completely different life style than urban areas.
5. Infrastructure is yet to be developed in many rural areas.
6. Relatively less critical consumers.
7. Access to electronic media is Limited. So point of sale is the key source of brand awareness.
8. 62% of outlet universe belong to rural markets.

Distribution Strategy for Rural market:

Distribution channels are completely different in rural markets. Rural market is the future source of this business so companies should give extra emphasis.

Rural market penetration: Market prioritization is made through some approaches

Spot light approach:

Spot light approach is used through long-term analysis of some factors as

• Distribution network
• Performance of present distribution network.
• Manpower.

Now the grading colors of spotlights and their criteria are mentioned bellow:

     Green: Good distribution network

     Yellow: Where RBBL have distribution, but not up to the satisfactory level.

     Red: Where RBBL have no distribution or have an extremely poor distribution. (Covers only highways with very low frequency).

Red and yellow markets are selected for RMP-distribution drive.

Outlet classification: outlets are classified on the basis of the following factors, the classification along with the factor are given bellow:

Channel:

• Traditional grocery.
• Departmental or general stores.
• Modern trade.
• Specialist (Hardware, pharmacy, cosmetics stores.).
• Non-retail channels. HoReCa (Hotels, Restaurants and Café.) Institutions, saloon, beauty parlors and ladies hostel.

Quality:

• High quality
• Normal quality.

Volume:

• Big outlets (Consisting of sales volume more than 2000 Taka of RBBL product per month.)
•  Small outlets (Consisting of sales volume less than 2000 Taka of RBBL product per month.)

Managing and developing people for better distribution:

Skill development of the field force through conducting training e.g. successful selling skills, coaching (on the job mostly), running fresher clinic e.g. one-hour session in each month.

Recruiting field force as and when required: a TSM can recruit the right person like SSF (special sales force) and CM (contract merchandiser).

Market return policy of Reckitt Benckiser (Bangladesh) Limited:

Reckitt Benckiser (Bangladesh) Limited implements its Market return policy for all the distributors and sales partners across the country. The policy aims at defining the scope, the possession and the authority level for market returns on regular basis to keep the sale system and the outlets clean. The Market return policy ensures that Reckitt Benckiser (Bangladesh) Limited sells and merchandises products as per Reckitt Benckiser global standard. To reduce the market return Reckitt Benckiser (Bangladesh) Limited suggests the distributor to store product in a cool, dry place with adequate ventilation and away from excess sunlight and incandescent materials.

Nature of damage and market return

Reckitt Benckiser (Bangladesh) Limited settles distributor claim in respect of the following categories under specified condition:

Product defect

1. Broken products..
2. Discolored products that show significant difference in color
3. when compared to standard.
4. Microbial growth any product which shows visible microbial growth such as mould/bacterial/fungus on the surface.
5. Pack shortage means any trade outer containing less then the specified units.
6. Under weight or less content means any skillet containing less then the declared weight/units of product.
7. Empty pack/can/tube, which contains no product in it.
8. Leakage any can/pack/tube which is leaking or spilling.
9. Any significant defect to the finished goods packaging.
10. Discolored packaging.
11. Expired product.
12. Damage in transit from Central warehouse to distributor point and to secondary distribution.

Process of withdrawing the market returns

Withdrawing the defective goods from the market is an on-going process, whenever the shopkeepers give any complain about the defective or broken products, the DSR checks the product status and detects the cause of the damage. If the cause is transit to distributor point or to the market place then the DSR puts signature on the skillet or the packet. In the next market delivery visit of the deliveryman he replaces the defective product with a fresh one. The defective products are stored in the warehouse of the distributor. The company time to time asks the RSM to withdraw the damage good from the respective region. The RSM ask the distributors to claim for damage goods, after getting all the with a stipulated time period  claims are send to the head office and the authority takes decision about the quantity of damage withdrawal and approves a certain amount of market return. The RSM distributes the allocation after having a meeting with the TSM. The RSM finally informs the distributor about the amount of market return that will be withdrawn from him. Finally, talking to the factory manager the distributor fixes a date for shipment of the damaged goods. Here the company bears transportation cost.

Conditions for market return

1. Market return is .05% against current months’ shipment.
2. In case of damaged coils the weight of damage coils and the number of coil heads are taken into consideration.
3. In case of liquid products the company grants the broken or defected cane/tube.
4. If the Reckitt Benckiser (Bangladesh) Limited personnel gets any fresh product while checking at the factory, the total amount of damage shipment of the distributor will not be fulfilled for that time.

Distribution process in Dinajpur Territory

Dinajpur Territory:

M.S. Islam & Sons is the sole distributor of Reckitt Benckiser (Bangladesh) Limited products for Dinajpur District.  Dinajpur Territory also covers some other districts; these are Thakurgaon, Panchgar and Nilphamari. A single distributor, M/S Khan & Brothers, covers Panchagar and Thakurgaon districts and Nilphamari is maintained by M/S Raja Traders from Saidpur. The TSM is the representative of Reckitt Benckiser (Bangladesh) Limited for the regular dealings and communication with the distributor. The concerned TSM makes the forecasting of product volume with the market demand. This is done basing upon distributor’s report about the stock in his warehouse and the required safety stock of 7days market demand. Then the order made by the distributor is sent to the central warehouse. It is mentioned that the distributor is to make a demand draft on 100% payment for getting that order fulfilled. It is the company’s responsibility to send the products as per order at the distributors’ warehouse. The company uses Full Truck Load (FTL) or Less than Container Load (LCL). The company determines whether to use FTL or LCL based on time and cost factor. The company’s responsibility for transportation is over at the door of the distributor’s warehouse. Then the distributor’s workforce keeps the goods in side the warehouse as per directed to store. As per the fixed frequency for different routes the TSM and the distributor jointly decide the delivery vehicles to reach to the ultimate outlet. This process is also covering the wholesalers. The DSRs are to go to the market for knowing the demand for different Stock Keeping Units in the form of orders. Here the DSRs are using the printed order form supplied by the distributor. The next day of market visit the deliverymen are taking the goods to the outlets as per the previously given orders to the DSR. For any kind of problematic product the shopkeepers inform the DSR. Then the DSR checks the products whether complain are valid. If it is found valid the DSR ensures the change of the defective product in the next delivery date.

The map stated here shows different sections in the Dinajpur under Islam & Sons enterprise.

Sections in Dinajpur:

Islam & Sons enterprise has 14 Sections; the DSRs visit these sections in different frequencies according to the economic characteristics of the markets under each section. Markets under each section, the visit frequency and their distance in Kilometers are stated below:

Problems found in the distribution process of Reckitt Benckiser (Bangladesh) Limited in Dinajpur Territory.

Stock out:

Stock out is the unavailability of required sellable product of the company in a stipulated period in a certain or more distribution point. During my working period in Dinajpur there were 2 stocks out for the 2 most demandable products: a) Mortein power coils, b) Mortein power booster coils.

Stock out for Mortein power coils was from 5^th March to 4^th April. The monetary value of the 7 working days long stock out was approximately of Tk. 125000.The impact was huge because Mortein Power contributes 40% in the sales volume in Dinajpur Territory. The distant sections were not visited during the stock out duration.

Stock out for Mortein Power Booster Coils was from 24^th March to 29^th April 2007. The monetary value was Tk. 30000.

At a glance, it may be assumed that these 2 stock outs have less significance in the total month sales but in reality the scenario might not be that because in the long run the effect might be huge. The effects may be of 2 types: monetary and customer loyalty effect. Monetary effect is the effect, which is countable in terms of monetary value. During the period of stock out the competitors may capture a significant portion of customer, which the company will loss only because of the stock out. Loyalty effect is that effect for which consumer may loose their existing loyalty from the certain brand and tend to switch to the competitor brands. It can also happen to the Distributors and other channel members.

 Damage goods:

At present there is huge quantity of damaged good stock in the distribution point and the outlets. During the survey period 3 types of damaged goods were observed. They are accordingly

1. Damaged Goods Company has accepted but yet to collect form the Distribution point.
2. Damaged goods collected from the Market by the distributor yet to inform to the company.
3. Damaged goods stuck in the outlets in the sections.

The quantity of damaged goods within the survey period is shown below:

Accepted Damaged Goods yet to collect form the Distribution point.

Table: 1

Source: Damage claim report, Dinajpur, April 2007

Damaged goods collected from the Market by the distributor yet to inform to the company.

Table:2

Source: Damage claim report, Dinajpur, may, 2007

Damaged goods stuck in the outlets in the sections.

According to the report of the Distributors sales representatives to the territory sales manager the Ex. Factory value of damage goods in different sections is Tk. 18796.

Total amount of damage goods in Dinajpur point is 67196, which is approximately 10% of the average sales.

 Distributor sales representative Incentives and performance reward:

Distributor sales representatives are the people who are the ultimate sellers of the company’s product in the market place. They always keep contact with the wholesales and the retailers by taking the orders and supply them with the required quantity of the right product. They often help the retailers’ display and merchandize the products in the outlet to draw the customer attention. As they are playing a key role, they should be kept motivated by ensuring their incentives as they perform well. During the 12 weeks of the study the company granted two incentives for the Distributor sales representatives.

Malpractice regarding the trade promotion programs:

Trade promotion is a sample product given by the company to encourage the wholesaler and retailers for selling Reckitt Benckiser (Bangladesh) Limited products. It is normally given on the cases and dozen basis purchases. The objectives of Trade promotions are:

• Increase distribution (Stock depth and width)
• Counter competitive pressure
• Encourage buying.
• Increase brand presence in stores.

In some cases there are complains about the distribution of Trade promotion (TP). In some remote markets the Distributor and the DSR do not give the TP.

Problem in Route Planning

There are some remote areas and those very areas have huge potential markets of Reckitt Benckiser products especially for coils. But those areas are not in the coverage of the existing route planning. If those areas can be covered there is large possibility to increase the sales in a significant ratio. And in some other areas like Mangarpur, Pulhat , Sikdarhat and Birampur, were visited forth-nightly. But if the frequency of the visits could be increased, it has been seen that the sales increases in large portion.

Number of vehicles:

For delivering the ordered products in time the distributor does provide only two vehicles: one is a rickshaw van and other is a tempo. The number of vehicles depends on the number of the sections and their distance from the distribution point. In Dinajpur some of the sections are more than 70 kilometers from distribution point but the distributor is used to deliver there by his rickshaw van which is very difficult and time consuming.

Lack of proper documentation

In M.S. Islam & Sons, the sole distributor of Reckitt Benckiser (Bangladesh) Limited for Dinajpur, the Distributor himself manages the business as there is no manager. Most of the times the Territory sales manager need to visit the distribution point to collect the actual stock report, sales report and other required information. There is a lack of documentation and paper works in Dinajpur distribution point.

Condition of warehouse

M.S. Islam & Sons uses 3 small warehouses to store Reckitt Benckiser products and the condition of the warehouses is not up to the Reckitt Benckiser standard. The Storing principles are not maintained properly. The standard is keeping 6 cases of coils at best in each Column but normally 10 cases are stored in each column. And in most of the cases for other product the standard is not maintained properly. This is one of the causes for which the coils and other products are damaged.

Recommendations

There are many critical and minute problems that have been found in the sales and distribution management system of Reckitt Benckiser (Bangladesh) Limited in Dinajpur. On the basis of those problems, following recommendations are listed below:

• Regional depots should be established in Bogra from where the inventory requirement of the distributors can be met with the lowest possible lead-time and can be reached to the customer at any time.
• The company should employ a distribution supervisor in each distribution point who could guide and monitor the distributor sales representatives for the best interest of the company.
• At present there is a huge quantity of damaged goods in different outlets. So these products should be replaced immediately because delay in replacing may hamper the image of the company.
• As the Return on Investment is 13%, which is very poor, the company standard is at least 20%. The company had better pay for a single sales unit (one DSR, one delivery man) so that it can minimize the cost of the distributor. The Company should pay more attention on market return management so that the higher frequency of withdrawing market return can be ensured.
• Route planning should be reviewed and as there are some uncovered remote markets that are potential, if necessary passive distribution should be introduced to capture those markets.
• Distributor should have some covered van and a motor van for the Delivery teams to work efficiently. Company should concentrate on it.
• A single distribution point should be established in Panchagar district as sales have been increased there tremendously.
• All types of documentation like Daily sales report, weekly sales report, DSR incentive report, trade promotion report should be prepared and monitored regularly.
• The condition of the warehouse should be made standard and there should be one warehouse to store the products.
• The company management must ensure the retailers’ and the wholesalers’ opportunities in trade promotion.
• The management should provide the rewards to the Distributors Sales Representatives (DSR) for each and every better performance and this field sales force should be trained on a regular basis.

Conclusion

Reckitt Benckiser (Bangladesh) Limited is one of the most reputed global companies operating in our country. Its positive image and brand equities have helped it to foster growth throughout the years since its establishment. The company continues to focus on presenting better solutions to the consumers’ problems by continuously developing the existing products, introducing new products, concentrating on new media opportunities and improving the communication system, expanding distribution network and innovating new ideas. And all these activities are undertaken by a set of superbly proficient and talented employees working with a proactive outlook. The sales of Reckitt Benckiser (Bangladesh) Limited is mainly based on distributors.

Though the organ gram is showing a good set of managers to ensure the best distribution but here they have no direct control over the sales. With the help of strong strategic marketing plan and supports form other departments the distribution channel is running smoothly. Day by day, their sales figure is increasing but here they can develop their distribution efficiency, if they follow the things, which have been recommended in the part of recommendation.