Rijksuniversiteit Groningen
Faculty of Management & Organization
From Driver to Salesmen
Sales effectiveness of the salesmen from the direct
sales channel
From Driver to Salesmen
Sales effectiveness of the salesmen from the direct
sales channel
December, 2006
University of Groningen
Faculty of Management and Organization Marketing Department
Author:
J.J. Nieuwburg S1148133
Supervisors University of Groningen: Mr. Drs. H.A. Ritsema
Drs. H.C. Stek
Supervisor Bralima S.A.R.L.: B. Theys
Preface
This thesis is a result of the research I performed at the marketing and sales department of Bralima and it will mark the end of my studies at the faculty of management and organization.
Since the beginning of my studies I wanted my internship to be an international internship. When the opportunity arose to go to the Democratic Republic of Congo my decision was quickly made. Looking back at the 6 month period I spend in Kinshasa working at the marketing and sales department of Bralima S.A.R.L, I can honestly say that it was an amazing experience in many ways and one never to forget. I would like to thank mr. van Mameren for giving the opportunity to perform my research at Bralima S.A.R.L. I would like to thank my ‘’colleagues’’ within the marketing and sales department for helping me to understand Bralima, Kinshasa, the culture, the music, the market, the food, the people, the nightlife and the atmosphere.
In Groningen I would like to thank my first supervisor Mr. Drs. H.A. Ritsema for his patience and support throughout the process of writing and finishing this thesis. Finally I would like to thank my parents for the enjoyable time in Paterswolde.
Jorik Nieuwburg
Table of Contents
Preface Table of Contents Chapter 1 Introduction... 6 1.1 Heineken ... 6 1.2 The Market ... 6 1.3 Bralima Kinshasa ... 8 1.4 The SRD Channel... 9Chapter 2 Research definition... 11
2.1 Problem area ... 11
2.2 Research objective... 14
2.3 Theoretical framework... 16
2.4 The conceptual model... 23
2.5 Methodology ... 23
2.5.1 Limitations ... 23
2.5.2 Research methods... 24
Chapter 3 The Logistic situation of the SRD channel... 25
3.1 Introduction ... 25
3.2 Routings ... 25
3.3 Truck park warehouse full crates ... 27
3.3.1 The First run ... 27
3.3.2 The Second Run ... 28
3.3.3 Visiting the clients ... 29
3.3.4 Evening Truck Park ... 32
3.3.5 Truck park warehouse empty crates ... 32
3.4 Sub conclusion ... 33
Chapter 4 The factors influencing the environmental situation of the salesmen... 34
4.1 Introduction ... 34
4.2 Personal variables ... 35
4.3 Organizational environment... 36
4.3.1 The marketing and sales department... 36
4.4 External environment... 40
Chapter 5 The primary determinants of the sales effectiveness... 41
5.1 Introduction ... 41
5.2 Motivation ... 42
5.2.1 Introduction ... 42
5.2.3 Financial compensation plan ... 44
5.2.3 Expectancies ... 44
5.2.3 Instrumentality ... 44
5.2.4 Valence for Reward ... 45
5.3 Role perceptions... 45
5.3.1 Introduction ... 45
5.3.2 Expectations Role Partners ... 46
5.4 Aptitude ... 48
5.4.1 Introduction ... 48
5.4.2 Aptitude of the salesmen... 49
5.5 Skill Level... 49
5.5.1 Introduction ... 49
5.5.2 Skills of the salesmen ... 50
5.6 Sub Conclusion ... 50
Chapter 6 Conclusion and Recommendations... 52
Chapter 1 Introduction
1.1 Heineken
The history of Heineken began 300 years ago as a family business in Amsterdam, 300 years later the company is still a family business represented in more than 170 countries worldwide. Heineken has divided the world into 4 parts, the Western Hemisphere, Europe, Africa & Middle East and the Asian Pacific. Within this division Heineken is represented by local breweries called OpCO’s (operating companies).
Bralima S.A.R.L.
In the Democratic Republic of Congo Heineken has ownership of Bralima S.A.R.L. Bralima S.A.R.L. (Bralima) is one of the oldest breweries of Africa with the operating company based in Kinshasa.
Bralima owns 5 other breweries throughout the country (Boma, Lubumbashi, Bukavu,
Kisangani and Mbandaka) and a bottle factory ‘Bourkin’ (Kinshasa). The brewery produces
beer (Primus, Turbo King, Mutzig, Guinness and Maltina non-alcoholic) soft drinks (Coca Cola, Fanta, Sprite, Schweppes) and water (Vitalo). Heineken will be imported and introduced in Kinshasa in the near future.
1.2 The Market
The Democratic Republic of Congo with the size of Western Europe is seen as one of the richest countries in the world concerning natural resources. The paradox is that the potentially richest country of the world is in fact one of the poorest countries. The history of Congo provides plenty of explanations for the current state of the country. President Mobutu ruled the county for 30 years, these 30 years where known for corruption and economic mismanagement leaving the country in 1997 in a very poor state. The years to follow, the war dominated the country, killing 3 million people and worsen the infrastructure. From 2002 the situation has been relatively stable creating economic progress. Although nothing can be said for the future the current situation is reflected in a rapidly growing market for beers and soft drinks.
There are two players controlling the beer and soft drinks market, Bralima and Bracongo. Bracongo has a slightly larger market share, but this has been declining the last periods. Bralima’s brand portfolio is bigger than the competition, efforts have been made by a brand portfolio health review to differentiate more from the competition.
Bralima Bracongo
Beers
Primus Skol
Turbo King Doppel Mutzig Castel Guinness
Heineken Maltina
Soft Drinks
Coca-Cola Djino (4 flavors) Fanta (2 flavors) American Cola Sprite
Schweppes (2 flavors)
Vital’O (2 flavors)
Total 14 8
Table 1 Brand port folio Bralima/Bracongo
Not many people in Congo have a steady income, money is received and spend at an ad hoc base. Prepaid cards (Celtel, Vodacom) and companies selling bags of water are seen as substitute products from beer and soft drinks.
1.3 Bralima Kinshasa
Two players, Bralima and Bracongo, are dominating the market in Kinshasa. Both companies are producers and sellers of beers and soft drinks. They use similar distribution channels to sell their products, selling at the same price.
Next to a Primus bar you can easily find a Skol bar, next to a Bralima depot you can easily find a Bracongo depot. Both their television campaigns are using famous Congolese stars to perform in their commercials. Bracongo is focusing more on the home segment the same plans are being made at Bralima. The similarities outnumber the differences between the two breweries.
The products of Bralima are being sold to depots and bars. Bralima has two distribution channels SRD (Service Rendu Domicile) 40% of sales and SRG (Service Rendu Grossiste) 55% of sales. The rest of sales (5%) are being distributed to markets outside of Kinshasa by boat or train. SRG serves to big distributors, who have their own distribution to smaller depots and bars. SRD serves directly to the bars and depots.
SRD 40% SRG 60% Independent Driver Price SRD Exclusive distributors distributors Dépôts Price SRD Mixed Dépôts Price SRD Dépôts Relais Price SRD Retailers Consumers 100% 50% 50%
The key initiative in the operational plan for 2005-2007 for distribution is to increase the performance of SRD channel. Management wants the number of second trips of the trucks to increase in order to create higher margins. Focus for recent years have been on increasing the sales by the SRD channel. In 2002 the division of sales between SRD and SRG was 20%-80%, for 2004 it was 40%-60%. The first reason for this change is to lower the dependency on SRG channel. The SRG distributors work for themselves and their own interest go above the interest of Bralima.
For 2005-2007 management wants to keep the current division of sales trough the channels. Financial motives are at the bases of this, the current SRG clients have little depths and pay in advanced making them a stable resource of income.
The second reason is originated from one of the main difference between the competition and Bralima, the brand portfolio. Whereas Bracongo has 8 products Bralima has 14. Focus has been on delivering the complete portfolio to the customer. For every occasion Bralima wants to provide a beverage for their customer. The SRD channel has direct contact with the customers, management wants to use the possible advantages of this direct contact. The control of the product portfolio is higher, accessibility to market information and the ability to influence the customers behavior are seen as these advantages.
1.4 The SRD Channel
The performance of the SRD channel falls within the responsibilities of the sales and promotions department. Within Bralima, Kinshasa is divided in 2 districts with 2 chef de district responsible, a district is divided in 3 sectors. These sectors are divided into 4 communities. Every sector has a ‘’chef de sector’’ who is responsible for 4 promoters and 1
The drivers arrive at 6.00-6.15 at the brewery, they have to leave the brewery before 7.30. Before leaving they have to check their truck and cargo. The trucks need to carry all the different products available, for every product a minimum quantity is given. A final check is being done by an outsourced security company (ASCO) before leaving the gates. The drivers are independent and choose their own people to work with. On average they work with two ‘’convoyuers’’ who are responsible for unloading the full crates and loading the empty ones on the truck. The convoyeurs are waiting outside the gates for the truck to arrive. The drivers then start to visit the customers. The team arrives at the client, the driver will go to the owner or the person in charge and discusses what the client will buy. Nothing is ordered in advance, the client decides what he wants on the premise.
The convoyeurs start unloading the crates.
The amount of crates being bought has to be the same as the amount being returned. The convoyeurs unload the crates next to the truck, the owner has his own convoyeurs who takes the crates inside and brings the empty ones outside. During the unloading of the crates the drivers writes an invoice for the client and the client pays the amount in cash. Some drivers have a fourth person in their team solely for counting the money. After the money counting and the loading of the truck is finished the drivers go to the next customer. The truck returns to the brewery after the last client has been visited. Before entering the brewery they wait on a parking lot next to the brewery. They have to wait there until they get the green light from ASCO to enter the brewery. At the brewery the empty crates are unloaded and the driver goes to bank at the brewery, the money is counted and stored at the bank. If the truck is going out for the second trip, the truck is being loaded with crates, and the process starts all over again. If the driver goes out for a second trip he will contact the brewery in advance to let them know the quantity of products he needs for the second trip.
Chapter 2 Research definition
2.1 Problem area
The market in Kinshasa in highly competitive and competition is, apart from the more extensive products, very much identical as Bralima. For the clients there is not much difference in doing business with Bralima or Bracongo. Management believes that with a higher performance of the SRD channel it can increase customer satisfaction and by that create customer loyalty. This allows them to create differentiation from the competitor and increase the sales.
The SRD channel functions as a logistic channel, getting the product to the customer, and as a sales channel as well.
Within the current growth of the market it is essential to have a second trip to serve the clients. There is believed to be room for improvement of the logistics, making it able to serve all clients and serving them on time as well. A client being served at 23.30 is not the preferred situation by clients and management.
Examples of inefficiencies within the process are:
Much effort is being made by the routing department to optimize routings. Nevertheless drivers are still driving their own routes ignoring the prescribed route.
I. Big customers are being served first regardless their position in the routing. II. If stock is low on certain products they will serve their ‘’friends ‘’ first. Disrupting
the described sequence and leaving disappointed customers.
the day. With the 100 FC notes being used most often this means 13.000 notes need to be counted. Often the (un)loading of the crates is finished but they cannot leave because the money counting is not finished. After the drivers return at the brewery the money counting at the bank takes about an hour and half. Money counting is seen as one of the main bottle necks for further improvement. Little by little banks are arising but because of high inflation and economic mismanagement in the past, people have little trust in banks. Recently there has been contact with a company called Celpay. They arrange payments by mobile phone, management believes that this could be an improvement for the SRD channel.
The cooperation of the clients is essential for the process; clients do not always have the empty crates standing ready outside on time; the money is not available when the truck arrives; the owner and his team are not at the depot or bar.
Drivers have to wait before arriving at the brewery to unload their empty crates and load the full crates for the second trip. The time between arrival and departure often succeeds over 1 and a half hour. Lack of fork-lift trucks is thought to be creating long waiting times.
SRG trucks are loaded at the same time as SRD trucks, the SRG are often large trucks creating a blockage within the SRD process.
The SRD is a direct sales channel. Trough this channel the customer has direct contact with Bralima trough the salesman, but also the promoter and the chef de route. The effectiveness of the salesman is not optimal. Having contact is not the same as having a relationship. The buyer-seller relationship seems to be under developed. Bralima used to work with drivers with a fixed contract. There was no difference in salary between the driver selling the most and the driver with the poorest sales. The decision was made to change the contract and make the drivers independent. They are still selling exclusively for Bralima but they are getting paid according to a performance based system. The reason for this is to stimulate the drivers not just to be a deliverer but to be a salesman witch was the case before 2004.
At this moment the salesman are still not selling but merely delivering to the clients, direct contact is most of the time nothing more than a exchange of money for crates.
More findings are:
Although there is a extensive product portfolio most sales are still derived from Coca-Cola, Primus and Fanta. The sales of products being sold trough SRD and SRG differ but on a very small scale.
Salesmen are not performing as salesman. Their focus, when they are with the clients, is on counting the money this is to make sure that that there a no losses, because they end up paying for it.
The time to answer clients who have requests or complaints is very long and information within the company is hardly shared or available. If the client has asked the promoter for an extra fridge the salesman cannot answer if there are fridges at stock, when they are coming and most important whether the client is going to receive one or not. Clients perceive Bralima as slow operating and bureaucratic. Where as the competition is seen as more flexible and quicker in there responses (see example 1).
A lot of information is available, but the usability is very low because the format, handwritten documents, makes the analysis difficult.
Promoters focus mainly on bars neglecting the depots.
In the beginning of November 2004 a bar got a renewed contract, as part of the contract he was given 20 chairs, 4 tables and promotion materials. The contract had been signed by the 6 responsible involved, this alone took approximately 3 weeks. When the owner asked in January when he would receive his promised goods, the answer was ''soon''. In February 2005 ( 3 months later) when he had received 2 tables and 8 chairs, he asked when the rest would follow. The answer he received was ''soon''. At the end of February he received the rest of tables and chairs. It took him almost 4 months to receive the goods he was promised, whereas plenty of these goods lay at stock all the time.
Receiving the answer ''soon'' can take up to 2-3 days sitting in the waiting room at the sales department. The sight of people sleeping for hours in the waiting room is not a rare sight. In many cases this example is the rule rather than the exception.
Logistic Efficiencies
Crates
per Truck Margins
Customer Satisfaction SRD Performance Selling Effectiveness Customer Loyalty
model 2.1 Problem area
2.2 Research objective
The research objective determines who the research is made for, what the output will be and why it is relevant (De Leeuw, 2001). The problem area stresses the demand for higher performance of the SRD channel, the research objective is:
The research objective is to make recommendations to Bralima management on how to improve the total performance of the SRD channel.
Main Question
From the research objective the main question can be derived, the main question of this research will be:
How can the performance of the SRD channel be improved by improving the efficiency of logistics and the effectiveness of the sales force?
The salesman is involved in the logistics and the selling process, if the salesman time is generally spend on logistic activities less time is left for the actual selling. One of the restrictions for a salesman to sell is that their needs to be actual time to sell. At first the focus in this research will be what the main logistic inefficiencies are. Having looked at the restriction time, the focus will be on the sales effectiveness.
The availability of time is a restriction for making sales but time alone does not make or increase the sales. The second part of the research will deal with the effectiveness of the salesmen.
To give an answer to the main question a division in sub questions is made. By answering these sub questions and combining them, they will provide the answer to the main question.
Chapter 3: What are the inefficiencies of the physical distribution of SRD channel?
Chapter 4: What are the effects of the environmental situation on the sales effectiveness of the sales force?
Chapter 5: What are the effects of the primary determinants on the sales effectiveness of the sales force?
2.3 Theoretical framework
For doing business customer satisfaction can be fundamental. The degree to which customers are satisfied determines whether customers make additional purchases and recommend the company and its products to others (Sharma et. Al 1995). By making consumers satisfied a competitive advantage can be created.
Bralima’s final customers are the consumer’s at the end of the line. Bralima’s clients in the SRS channel are the bars and depots which are being sold to by the salesman working for Bralima.
Customer satisfaction is essential but not enough, to benefit from your satisfied customers, you need to create loyal satisfied customers. Satisfied customers may still behave opportunistic to competition offerings. Loyal customers ‘’ ones committed to a relationship with plans to continue or expand purchase in the future’’ is seen as a strategy more resistant to such opportunism (Daugherty et. al 1998). The research performed by Daugherty et al. was into the relationship between the effect of logistics service on market share. They use the following conceptual model to examine this relationship.
Distribution Service Market Share Loyalty Customer Satisfaction
Model 2.2 Conceptual model Daugerthty et. al 1998
Their research shows that the vendors of personal products that establish both customer satisfaction and loyalty through logistics service capabilities enjoy greater market share. Firms that focus on providing logistical services that satisfy customers will nurture long-term commitment and repurchase intentions. According to them firms must rethink and align their customer relationships, product/service offerings, employees and measurement systems to focus on the generation of customer loyalty that influence market share and profit increases.
In the research by Sharma et al. (1995) the interface between customer satisfaction and logistics is examined. The paper presents a conceptual framework that examines the effect of the logistics department’s behavior and logistics policy on customer satisfaction and corporate profitability. Their focus is on creating strategic partnerships; a business relationship in which two or more independent organizations decide to work closely together to yield differentiated and intermediate or long-term benefits to the parties involved. To work
on relationships the issue that needs to be determined is what the level of customers’ logistics service expectations is compared to the actual level of service.
When the expectations are lower than the actual level of services, importance lies in increasing the expectations of the customer. If expectations are higher than the actual situation, action needs to be taken to improve the actual situation in the areas the client perceives important. If improvement in those areas is too difficult or expensive the attention of the customer should be attracted to the areas where the company exceeds expectations. Research by Gilmour, Lambert and Stock (1993) summarized 5 attributes to be consistently ranked as very important concerning logistic services.
Availability of Item- the ability of the supplier to satisfy customer orders within a specified time.
After sales Service and Backup- the ability to quickly replace defective or damaged items and subsequent follow-up to determine if user is happy with purchase.
Efficient Logistics Service Communications- the ability to quickly and intelligently handle customer queries about the product or service.
Paperwork- the ability to efficiently and accurately complete necessary paperwork that caters to the customers’ systems.
Delivery Time- the ability to supply goods within the committed time with little variation.
The experiences companies have with the logistics services that have been offered to them in the past by the companies available to them, builds their expectations.
The model is focused on logistics’ performance, for the SRD channel this is believed to be one the problems because of the inefficiencies occurring in the logistics channel.
Pressure has been on the salesman to follow their routings. If the salesmen follow their routings their are still inefficiencies causing delays within the process.
model 2.3 model of logistic efficiencies
The model by Sharma also pays intention to other variables influencing customer satisfaction which can be relevant for the SRD channels’ performance. One of the variables is the selling firm’s effort which is to believed to influence customer satisfaction. When customers believe that the selling firm’s effort is greater than their expectations, they will be more satisfied than if the effort is the same as or lower than their expectations (Sharma et. al 1995).
Bralima has contact with their clients 6 days a week, they could make a difference by exceeding the expectations using their salesmen.
Currently the salesmen at Bralima are seen as ineffective, the question that can be derived from that is; what determents the performance of a salesman? This question has been the interest of researchers since the early beginning of the 19th century.
In 1977 Walker, Churchill and Ford developed a model ‘’Determinants of Salesperson’s performance’’ (WCF model). In this model the authors describe a model with 5 variables directly influencing the behavior and performance. The 5 variables are; 1 Motivation, 2 Skill level, 3 Aptitude, 4 Role perception 5 personal, organizational and environmental variables. The model has is origin in industrial selling in business-to-business situations. The products of Bralima can not be categorized as industrial, but they do operate in a business-to- business environment. The variables being used in the model still have their relevance but they need to be applied to the specific situation for Bralima. In the model the sales behavior and performance are apart from the 5 variables discussed below influenced by ''type of sales
job'' and ''relevant selling activities''. These two variables can give the boundary conditions on how to look at the model and make it specific for Bralima.
1. Motivation can be explained as the amount of effort a salesperson desires to expend on each of the activities or task associated with his or her job. Activities and task are interpreted as sales behavior.
2. Skill level represents a salesperson’s learned proficiency at performing the necessary task.
3. Aptitude is the overall limit of, or constraint upon, a person’s to perform a sales job given an adequate understanding of the role to be performed, motivation, learned skills, and the absence of other external constraints.
4. Role perception reflects the salesperson’s view of his or job based on the expectations, demands and pressures of the various individuals who have a stake in how the salesperson’s job is performed.
5. Personal, organizational and environmental variables; job experience, territory potential, closeness of supervision, concentration of customers, age, the salesperson’ s workload, education and the intensity of competition.
Personal, Organizational, And Environmental Variables Role Perceptions Skill level Aptitude Motivation Behavior Performance Relevant selling activities
Type of sales job
Effectiveness
Organization’s goals and objectives
model 2.4 Determinants of salesman’s performance
The mentioned variables influence the behavior of the salesperson. In the WCF model behavior is defined as ‘’ what people do in the course if working’’. Behavior or sales behavior involves the execution of selling-related activities by salespeople in the performance of their jobs.
Performance is defined in the model as behavior that has been evaluated to the goals of the organization and reflect a qualitative assessment of the behavior relative to the organization’s goals and objectives.
Personal, Organizational, And Environmental Variables Role Perceptions Skill level Aptitude Motivation Behavior Performance Relevant selling activities
Type of sales job
Effectiveness Organization’s goals and objectives
Routing
Delays
Logistic
Efficiencies
2.4 The conceptual model
Having an effective sales force in an inefficient process does not give the desired result, the process should have room within the process for the salesman to perform. At first the logistic efficiencies will be examined. The outcome of the model has influence on the model for sales effectiveness. The variables of the WCF model will be described and compared to give insight in matters of improvement.
By using both of the models the goal is to give practical recommendations on how to improve the SRD channel.
2.5 Methodology
Methodology deals with the approach of the research. The methodology for this research consists of limitations of this research and the research methods that have been used to conduct the research.
2.5.1 Limitations
As with all research, there are limitations to the interpretation of the results and other issues that need to be considered when trying to generalize these analyses to broader issues of interest. To demarcate this research the following limitations are set:
2.5.2 Research methods
To provide an answer to the research question as well as the sub questions data is gathered there are tree ways to collect data; desk research, observations and written or oral interview (Baarda & Goede., 1995).
• Desk research had been performed on existing documentation as; internet, databases, internal reports.
• Observations have been made by accompanying the salesmen on 16 occasions. This has been done in order to get good perception and understanding of the actual sales processes and procedures of the SRD channel. During these occasions informal conversations were held with the clients, customers, salesmen and deloaders in order to obtain data.
• Interviews are conducted because they enable the interviewer to obtain information about attitudes, opinions, knowledhe and views of the interviewee on certain topics Interviews can either be structured or semi-structured. Semi-structured interviews are conducted with a fairly open framework which allow for focused, conversational, two-way communication. They can be used both to give and receive information.
(Baarda & Goede., 1995). The stakeholders within the SRD channel were interviewed; clients, salesmen, employees and management.
Chapter 3 The Logistic situation of the SRD channel
3.1 Introduction
In this chapter the physical distribution of the SRD chapter will be discussed. In order to answer the following question:
What are the inefficiencies of the physical distribution of the SRD channel?
The purpose of the question is two fold; at first to give insight in the bottle necks in order to improve the conditions for the salesmen to make a second run. The second purpose is to find the possibilities, within the process, for the salesmen to perform there sales duties.
The process will be described according to four separate locations in the process. Observations were made at these locations and the people involved and responsible were interviewed.
The activities, involving the salesmen, of the physical distribution takes place at four locations.
1. Truck park warehouse full crates 2. On route at the clients
3. Evening truck park
4. Truck park warehouse empty crates
An important aspect within the distribution system is the routings the salesmen follow. This will be discussed first.
arrival, the amount of crates bought and the departure time when leaving the client. The chef de routing uses this information to control and optimize the routings.
From observations 1made by accompanying the salesmen during their workday the following can be said regarding the routes they follow:
• Instead of visiting the last client first, most salesmen paid a visit to their largest client first regardless the position of that client. The empty crates are often left at these clients and are taken on the way back to brewery.
• Favoritism occurs between clients and salesmen, resulting in clients being visited regardless their position on the route.
• The required forms are often filled in afterwards when returning to the brewery
The explanations for the behavior given by the salesman can be summarized by the following:
• The big clients are visited first to create handling space for the loaders. The full crates have to be replaced by empty crates, the truck should always have the same amount of crates onboard. When the empty crates are left at these large clients the loaders have more room and can easier unload the crates at the other clients. This is seen as an advantage by the salesmen
• Regarding the filling in of the required forms all salesmen claimed that this was an exception and not common behavior.
Leaving the empty crates does make it easier and can save time during the unloading. The advantage of time can be neglected by the extra time of returning to the client.
The traffic situation in Kinshasa is very bad. The main roads date from the sixties before the independence of Congo. Although improvements have been made the roads are too small for the increasing number of cars and trucks.
During one the observations with the salesmen, the empty crates stayed at the first client he visited. The gaining of time was the reason for this he explained. After visiting the last client on his route he returned for the empty crates. From the last client to the brewery would take approximately 30 minutes. Because the empty crates were still at the fist client it took an extra 2 and half hours to return to the brewery. Without the traffic jams it would have been faster. The salesman was asked if he stood in traffic jams often. He responded: ’’Almost every day’’.
Example 3.1
From interviews with the chef de routings another explanation for neglecting the order of the routes was given. Leaving the empty crates at the clients also has an advantage for the clients. Payment is done in cash after receiving the bill from the salesman. When the crates are left at the client payment is done when the truck returns for the crates at the end of the route. This gives the client the opportunity to raise the necessary money during the day by selling the unpaid crates received. In return for the delayed payment terms the salesman can leave his crates at the depot during the day. Above that when there are crates being unsold the client often helps out by buying these crates from the salesman.
Favoritisms occur mainly when production on certain products is low. During high season productions priority is on Primus and Coca-Cola other products like Fanta, Sprite and tonic become a rarity. When these products are available salesman tend to visit their friends, and family first neglecting the routing.
The chef de routings believe that the salesman fill in the administration afterwards in order to change the driven routing into the prescribed routing.
3.3 Truck park warehouse full crates
The salesmen are expected to perform two runs a day, at first the actions performed before departure of the first run will be described. The departure before the second run will follow after that.
3.3.1 The First run
On both sides of the brewery there is a truck park, one is situated next to the warehouse of the full crates and one is situated next to the warehouse of the empty crates.
Guinness and Heineken; lower income communities prefer Primus and Coca-Cola. Although this is recognized by the sales and marketing department this is not translated into the loading sheets.
When the manager of the warehouse receives the loading sheets the warehouse personnel starts loading the trucks.
After the loading of the truck by the forklift drivers the amount and the division of product is checked by the warehouse manager, the driver and the independent security company ASCO. The final check performed at the gates by ASCO is the most time consuming. Often queues occur at the gates the checks are not performed simultaneous but one by one at the gates.
Although the occasional delay occurs because of the checking, it is seen as a necessity because of the long history of corruption and theft performed by personnel and intruders. The time that all the salesmen have to leave the gates of the brewery is 07.30. Because there are not many delays during the loading in the morning the restriction of 07.30 is usually met by the salesmen.
During the high season, from October to December, there is often a lack of stock for best selling product like Primus and Coca-Cola. If production is producing Coca-Cola and a technical problem arises, power cuts often take place, the salesmen have to wait at the warehouse for the crates before leaving the brewery. This can result in long delays but leaving without Coca-Cola or Primus is not an option because they generate most of the sales.
3.3.2 The Second Run
When the salesman has visited their last client they place an order at the radio control room. The control room gives the order to the warehouse manager who prepares the order.
After the empty crates are unloaded the salesmen arrive at the truck park next to warehouse full crates. The actions made are similar like the first run the second run differs concerning the delays. There are long queues before the trucks are loaded with full crates by the forklift trucks. The queues at the warehouse are caused by;
• The amount of forklift trucks is minimum and often need to be repaired Wrong orders being made because of disturbance in the communication between salesmen, radio control room and warehouse
• Waiting for the mixed pallets; pallets are stored on the warehouse with one product only, Primus and Coca-Cola are loaded on the truck per pallet, the other products are combined on a pallet. These pallets are made at order by hand taking very long. 3.3.3 Visiting the clients
The preferred situation when delivery takes place at the client is: The truck arrives at the client. The client has his empty crates standing outside and gives his order to the salesman. The loaders unload the full crates and the invoice is made by the salesman. The salesman starts counting the money while the loaders load the empty crates on the truck. When the money is counted the client gets a receipt and the truck departs. The salesman should use the time available at client to talk with the client and perform the duties of a salesman.
During the observations made the following can be noticed about the actual delivery at the client;
• The clients often do not have the crates standing outside
• The invoice and the payment takes place after the all the crates are unloaded • Crates contain broken bottles
• The most time consuming is the counting of the money
• Passive behavior of the salesmen, in some cases the loaders have the actual contact with the client and the salesman only takes care of the counting
• The money is not available at the depot
When especially the larger clients do not have the crates standing outside this can cause considerable delays. Although the loaders could start unloading without knowing the exact amount of crates the clients orders, they prefer not to and will wait for the exact amount. When the clients are asked why they do not have the crates ready before the truck arrives the following answers where given;
The main concern of the salesman is that the payment is correct. If there are any differences at the end of the day concerning the received money, the salesman is responsible. The process of the money counting exceeds the (un)loading of the crates. In order to decrease the time of the money counting 2 options are at hand.
Celpay
In a country with 56 million people there is not a single ATM machine available. During the war inflation went up 2000% and lots of people lost all their savings stored at the bank. The number of people in Kinshasa with a bank account was approximately 2000. Payments are done in cash, the Congolese currency is linked to the dollar 100FC is worth about 0,23$. The highest and rarest available banknote is worth 500FC, the most common notes being used
are the 50 FC, 100 FC, and 200 FC.
In May 2004 Celpay opened an office in Kinshasa. Celpay is a subsidiary of Amsterdam based MSI Cellular Investments of Africa. MSI runs mobile operators in 13 countries throughout the continent, offers satellite services, and provides Internet access. Celpay provides a service that takes away the banknotes between companies and clients. The customer - whether it is a merchant or payer - registers for Celpay and receives a special, secure SIM card that puts a new menu onto his cell phone. The payer puts money into his Celpay account, either via a transfer from his bank account, or by directly depositing cash or cheque into a Celpay partner bank The payer then inputs the amount to be paid to the merchant or supplier, possibly inputting the invoice number as a reference. He authenticates the transaction with a secret Personal Identification Number. Both payer and payee receive confirmation of the transaction. Each transaction has a unique reference number, with full details available online. The merchant or supplier has a complete online audit record of who paid what when. Celpay instantly transfers the money into the merchant's Celpay-enabled account, and will sweep the funds to its main bank account on the merchant's instruction (www.Celpay.com). For a client of the SRD channel this means that before the truck arrives he has to go to a cash point and deposit his money on his Celpay account. When the salesman gives the invoice to the client he pays the invoice by using his Celpay account. As mentioned the counting of the money often exceeds the (un)loading of the crates. This time can be gained by using the Celpay system.
Of great importance for the Celpay system is the participation of the client. In order to find out if the Celpay could work for the Bralima and their clients, a pilot was held with 30 SRD clients. The clients participating in the project were selected on bases of an average order of 40 crates per day or more. The clients were visited by a representative from Celpay and
Bralima to explain the system and answer question of the clients. When the clients agreed to participate they were given a cell phone with the Celpay sim card. The salesmen working with the system were instructed by Celpay instructors. Evaluation after the first 3 weeks of the pilot gave the following results;
• Clients are willing to use the system as long as; there are no extra costs for them, the cash point is near by.
• Clients appreciated the safety advantage of the system. Clients do not have to secure there daily earnings overnight.
• The opening hours of the cash points did not match the opening hours of the depots, the cash point close at 17.00 depots on average between 18.00-19.00
• There were not enough cash points available
The administration department made mistakes affecting the payment of the salesmen. The money received from clients using Celpay was not added to the clients paying with cash. The salesman using the Celpay system noticed that they did not receive the amount of money they were supposed to. The salesman did not want to use the system anymore and the project doomed to fail. The administration department got extra training and after an apologies and explanations the salesman agreed to use the system again.
Everybody with a cell phone and receiving reasonable income can become an cash point. Telephone card dealers were already using the Celpay system and agreed to accept clients from Bralima to deposit their money. Because of the large network of telephone card dealers depositing money is made easier for the clients. Also there will be mobile cash points visiting
the clients and collecting their money.
After the improvements concerning the cash points the clients were more willing to use the system. Clients understand that using Celpay has its advantages but they also see that the
An option already being used by some salesman is to work with 4 people on the truck, 2 loaders, the salesman and a person responsible for counting the money. The time advantage is not as big as with the Celpay system.
The salesmen are responsible for the payment of there team, having an extra person means lesser income for the salesman.
3.3.4 Evening Truck Park
When the truck is empty after the first run or the last client of the second run has been visited, the salesmen return to the brewery. The radio control room is called for permission to enter the truck park next to the warehouse empty crates. If permission is given the truck will directly go to the truck park to be unloaded. Due to the limited capacity at the truck park the salesmen are often redirected to wait at the evening truck park witch performs as a buffer. This is situated 200 meters next to brewery. It is also used when drivers arrive after 22.30 (closing time of the truck park) so they can stay overnight in a secured area. The security personnel from ASCO is responsible for the flow of the trucks from the evening truck park to the brewery. The trucks have to wait for until there is room for the unloading. When there is space for the unloading ASCO should call to the evening truck park and the first truck waiting in the queue, should leave. The waiting time is increased because of the following;
• The time there is space available for the unloading and the actual call for permission is often different.
The delays in the permission calls can be explained because it is the responsibility of ASCO but within the ASCO team nobody was made responsible. ‘’ Sometimes we were all waiting for the next truck to arrive, thinking somebody had made the call, but somebody had not done it’’ (Abel M’hudi, ASCO).
3.3.5 Truck park warehouse empty crates
After the salesman has received permission he parks his truck at the next to the warehouse empty crates. The crates are unloaded and checked for broken bottles. A market exist for empty bottles and crates, preventing theft and fraud the salesmen were made financially responsible, decreasing the number of reported breakage.
While the truck is being unloaded, the salesmen bring the money they received to the bank. Even though the money is counted by machines this process takes about 90 minutes. After the money is counted they receive a receipt of payment.
Salesmen going out for a second run prefer to bring the money of the first and second trip when returned from the second run. The bank is a local office of the Raw Bank and after depositing the money it falls within their responsibilities. The warehouse has got similar problems as the warehouse full crates. There is a lack of forklift trucks and the interference of SRG trucks. The crates received from the SRG client contain a higher breakage number compared to the SRD.
3.4 Sub conclusion
Within the physical distribution of the SRD channel there are possibilities for improvements. The results of these improvements can stimulate the increase of second runs and can create the extra time for the salesmen to perform there duties as salesmen. For the improvements the participation of the salesman, clients, chef de routing and management is necessary.
The trade in crates can be very valuable and is seen as a safe investment. At a certain moment the number of crates recorded at the gates by ASCO and the actual number of crates at stock in the warehouse did not match. The number did not match because SRG clients had find a lucrative way of piling the crates on the pallets. The pallets piled in a way that they became hollow but looked completed from the outside.
The problem was solved by writing the license plate of the trucks on the wood of the pallets and performing extra controls.
Chapter 4 The factors influencing the environmental situation of the salesmen
4.1 Introduction
In the previous chapter the logistic inefficiencies of the SRD channel were revealed. Chapter four and five deals with sales effectiveness witch are represented by the model below witch is part of the conceptual mode. The behavior of the salesmen is seen as a function of five primary determinants. In this chapter the personal, organizational and environmental variables will be discussed. The other four determinants will be discussed in the following chapter. The personal, organizational and environmental variables do not only affect the sales effectiveness directly but also indirect by influencing the other determinants. These variables deal about the environment in witch the salesmen are operating.
Personal, Organizational, And Environmental Variables Role Perceptions Skill level Aptitude Motivation Behavior Performance Relevant selling activities
Type of sales job
Effectiveness
Organization’s goals and objectives
model 1.1 determinants of a salesmen's performance
Personal variables are seen in this model as being a ‘’Good Corporate Citizen’’. The focus changes from focusing on single transactions to building and maintaining a relationship with clients. Salespeople have been asked to engage in whole range of activities that can be described as ‘’organizational citizenship behaviours’’. These behaviours focus on four basic types op behaviour: (1) sportsmanship, the enthusiasm on the salesmen’s part to endure sub optimal conditions without complaining to superiors or other salesmen, (2) Civic virtue,
proactive behaviour that includes making recommendations to management that will improve the overall performance of the organization, (3) conscientiousness is the willingness to work beyond the normal expectations of the job , (4) altruism, helping others in the organization. Salesmen who engage in these kind of activities are to believed to perform better on both outcome-based measures (sales volumes) and behaviour-based measures (customer satisfaction).
The organizational environment, also known as the internal environment, deals about the organization and the structure of the sales force. Also important variables of this environment are, financial resources, production capabilities and personnel.
The economic, natural, legal and political, technical and social cultural variables are part of the external environment from the model. Even though the external environment is fixed and beyond the control of the individual manager is important to understand the external environment.
At first the personal variables regarding to the salesmen will be discussed followed by the organizational and environmental variables.
4.2 Personal variables
With the high unemployment rate in Kinshasa a job at Bralima is very attractive. The affect of this is noticeable in the personal variables. In general the salesmen will not want to much attention focus on them. This means that they do not complaint, certainly not to superiors. You can say that they perform high on sportsmanship but there is also a negative aspect to this. The level of civic virtue is low, the same barrier to complaint goes for making recommendations for improvement. The thought that the recommendation made by the
4.3 Organizational environment
4.3.1 The marketing and sales department
The salesmen are part of the marketing and sales department .The marketing and sales department performs a key role within the company.
The marketing and sales manager is responsible for 5 divisions; Marketing and events, Sales and Promotions (S&P), Administration and Logistic, Warehouses outside Kinshasa, Breweries outside Kinshasa.
All the marketing activities for Congo are developed in Kinshasa, activities as television advertisement, bill boards, POS (Point-of- Sales) material and merchandise. The sales and promotion activities differ between the 5 breweries throughout the country. The competition is the fiercest in Kinshasa, in some regions Bralima has a monopoly position resulting in very little sales and promotion expenditure.
The salesmen fall within the responsibilities of the sales and promotions manager. The marketing and sales department in Kinshasa has a hierarchical character, with many layers. Within this division there are many jobs at different levels, having contact with the client and the final consumer.
As said the division is hierarchical structured, the manager of the division is responsible for the district manger, the sector chefs, the promoters, the routing chefs and the salesman. The organization of the sales force is geographical. Individual salesmen are assigned to separate geographic territories.
The city of Kinshasa consists out of 24 communities the structure of the division is based on these 24 communities (fig 4.1). The 24 communities are divided into 2 districts, with the district manager responsible for 3 sector chefs. The sector chef is responsible for 6 promoters and one routing chef. Depending on the size of a community a promoter is responsible for a community or part of a community. The routing chef is responsible for the routing within a sector.
Figuur 4.1 organogram marketing and sales department
The promoters visit clients on a regular bases, they check the availability of the products, the sales made by the client and the positioning of the POS material. The promoters also deal with questions, complaints or request from the client, either they are solved by the promoter or they are redirected to the responsible in matter.
They also interact with the customers of the client, promoting the products of Bralima. They have a weekly budget for buying drinks for customers. This is usually done in mixed bars where the customers drinking products of Bralima are rewarded with a free drink.
salesman concerning the following of the prescribed routing. Questions of the clients concerning the distribution should be treated by the routing chefs.
4.3.2 Communication within the SRD channel
The salesmen have daily contact with the clients selling the products. When a client have questions or requests the salesmen they should solve or redirect it to the responsible in the matter.
Looking at the above described functions the client has several channels to communicate with the S&P division. Depending on the source (distribution, promotion, sales) of the questions, request or complaints he can contact the concerning person.
To start and run a depot or bar the clients are dependent on the S&P division. To start a bar or depot the client has to buy empty crates from the brewery. Clients from the SRD channel are provided with chairs, tables, sun umbrellas, freezers, etc. This gesture of the brewery is caused by high poverty making extra investments difficult.
Depending on the daily demand of crates a number of chairs and tables are assigned. Many request to the S&P division deal about extra tables, chairs and refrigerators. It is possible for clients to buy these from the brewery but this does not happen often.
The general perception is that Bralima is rich and that they should invest not the client.
From the interviews with the clients there is one common issue named by all, slow communication. They all perceive the time it takes to receive a reply to take very long. Above that they often feel unsatisfied by the answer given to them.
There are hardly any fixed telephone lines in Kinshasa, there is therefore no general number for the S&P division. Clients often make there request by mail to the marketing and sales director. As mentioned the S&P division is very hierarchical structured within the division you can speak of a ‘’signature’’ culture.
Figuur 4.2 routing of a request
The process in fig 4.2 shows the routing of a request made by a client to the S&P division. From the secretariat the request is passed on to the promoter from the clients sector, he will gather the information to deal with the request. When there is a for example a request for chairs he will judge the necessity of the request at the client. The promoter will make up a report which he will sign. The report is then passed on up the chain and needs to be signed by all the parties involved. When the signature of the marketing and sales director is written down is passed on down again to the promoter. The promoter passes on a note to the warehouse material and contacts the client.
The signatures are too believed necessary to prevent fraud within the division. The procedure provides room for errors and delays. The amount of signature someone has to write depends on their position in the division. The amount of paperwork to be signed within the division increases enormous from the bottom until the top. When a document is already signed by six persons the assumption is easily made that it is probably all right to sign. Above that, the willingness and time to carefully read the documents has gone down. This has lead to cases of fraud. Apart from that, takes the requiring of the signatures very long. The time it takes to answer a client is between 3 and 4 weeks
The salesmen have the most frequent contact with the client. This can be a source of information for the client and the division. The clients do not have the understanding that the salesmen are a source of information for there demands. If a demand is made which cannot be dealt with the salesman should redirect. The communication with the division and the salesmen is not optimal making the source of information inefficient.
The salesmen leave the brewery before 07.00 to start visiting there clients. The promoters start at 0.900 and leave at about 13.00 to visit clients. The truck park and the offices of the division are separated by two gates. There is no central system where salesmen can leave messages or remarks. Above that there are no fixed meetings between the salesman and the promoters making it difficult to communicate with each other.
All the salesmen have a mobile phone to contact clients or the division. The cost of call units are high, the mobile phone is not used unless the call has priority. The demand of the client does not always fit this priority.
The salesmen are directly involved with the targets and goals of the division. The current situation does not provide the environment to translate these goals into the field. The lack of information and communication, the goals and targets are not discussed with the salesmen, makes it difficult for the salesmen to optimal for fill there role as a salesmen.
4.4 External environment
The only certainty about the external environment is that it will be uncertain. The The economic With the upcoming elections, the first elections in 40 years, it can either bring stability or may start another civil war. The current stability has had is direct effect on the sales volume.
The communication between the division and the clients is not optimal.
Final authorization is made at the top and information is not widely available to respond to the clients. The salesmen are expected to the eyes and the ears of the organization but are not able to translate this to the division and back to the client.
Chapter 5 The primary determinants of the sales effectiveness
5.1 Introduction
The performance of the sales force can be influenced by lots of different things; training programs, compensation plans,recruitment, promotions, etc. The model below is there to structure and visualize the effects of these influences on the performance of the salesmen. In the model the performance of the salesmen’s is seen as a function of five basic factors: (1) role perceptions, (2) Aptitude, (3) Skill Level, (4) Motivation level, (5) Personal, organizational and environmental variables. The personal, organizational and environmental variables have been discussed in the previous chapter.
The model below presents an overall model of a salesmen’s performance that includes these factors as primary determinants. A change in the primary determinants is expected to have a effect on the behavior and performance of the salesmen. This effect can either be positive or negative.
The determinants combine and interact to influence the performance. Per example, motivation can be high but if the salesmen do not know how to perform there job or know what is expected of them their performance can be low. Even with excellent skills and aptitude a lack of motivation can cause disappointing results.
The aim of this chapter is to reveal the points of interest for improvement of the performance. To visualize these points the individual primary determinants of the model will be described according to situation within the SRD channel.
Personal, Organizational, And Environmental Variables Role Perceptions Skill level Aptitude Motivation Behavior Performance Relevant selling activities
Type of sales job
Effectiveness
Organization’s goals and objectives
model 2.1 determinants of a salesmen's performance
5.2 Motivation
5.2.1 Introduction
Motivation is seen as the amount of effort the salesmen desires to expend on each activity or task associated with the job. These activities and task can be; calling on potential new clients, serving existing clients, developing sales presentations, filling out reports, etc. A salesmen motivation to expend effort on a given task is determined by three sets of perceptions:
(1) Expectancies – the perceived relation between expending more effort on particular task and achieving improved performance. In other words, expectancy is the salesmen’s estimate of the chances that expending effort on some task will lead to improved performance on a dimension. Two aspect of expectancies are important, the accuracy and the magnitude of
the expectancies. The accuracy refers to how clearly the salesmen understand the relationship between effort expended on a task and the resulting achievement on some performance dimension. When the expectancies are inaccurate the effort on the tasks of the salesmen is likely to be misallocated. They spend too much time and energy on activities that have little impact on performance and not enough on activities with a greater impact.
The magnitude of a salesmen’s expectancy reflects the perception of his ability to control or influence his own job performance.
(2) Instrumentalities: Like expectancies instrumentalities are estimates of changes. They are the perceived relationship between improved performance and the attainment of increased rewards. Meaning, an instrumentality is a salesmen’s estimate of the chances an improvement in performance on some dimension will lead to specific increase in a particular reward. The reward may be more pay, winning a sales contest or promotion to a better territory. Again the accuracy and the magnitude of the instrumentalities are important to get a clear understanding of the instrumentalities.
(3) Valence for reward – The salesmen’s valence for a specific reward is the individual’s perception of the desirability of receiving increased amounts of that reward. This valance along with individual’s valence for all attractive rewards and the salesmen’s
Instrumentality perceptions determine how attractive it is to perform well on some specific dimension.
Level of effort expended
5.2.3 Financial compensation plan
To understand the perceptions influencing the motivation level is necessary to look how the components of the financial compensation plan are formulated.
The following components can be recognised: sales contests, incentive payments, commissions, salary and benefits.
The SRD salesmen are paid on solely on straight commission witch is performance based. They receive 0.9% of the sold value of the crates. This percentage is fixed and the same for every product sold.
Above the commission the salesmen receive benefits. The salesmen and the members of there families receive free medical care. As part of the medical care the brewery offers free condoms, HIV testing, AIDS prevention seminars and medication for antiretroviral medication.
Sometimes there are sales games for the promotion of a product. After a certain period the sales of the promoted product are compared and the best selling salesmen is rewarded for example with a t-shirt or (a) crate(s) of the product. There are no extra incentive programs.
5.2.3 Expectancies
As said, expectancy is the person’s estimate of the probability that expending effort on some task will lead to improved performance on a dimension. The salesmen perceive their influence very low, the general belief is that the clients decide for them selves what they want and that they are just the providers.
Increase in sales is often allocated to external factors as economic growth, political stability and the time of the year. Although these external factors do have influence on the growth of sales, this effect is the same for all the salesmen. With the effect of external factors in consideration there are still salesmen who stand out compared to the others.
5.2.3 Instrumentality
Instrumentalities handle about the salesmen’s perception between job performance and various rewards. The job performance is measured by the sales they generate, the higher
the sales the more they receive. Although management wants to sell the complete product portfolio, the rewards are fixed, making it not worth wile for the salesmen to put extra effort in.
The sales games witch are occasionally held are there to stimulate certain products or to boost general sales. The effects of the sales games are very low. The games are based on volume only and the results and rewards take very long to process.
Per example a sales game was held for Guinness, the person to sell the most crates would receive a merchandise kit of Guinness. Guinness is expensive and difficult to sell in certain communities. Because some salesmen knew at forehand that they could sell some extra crates but never enough to win the game they did not put any extra effort in.
The only activity rewarded is the sales of crates. Other activities like bringing in new customers or providing useful information is not rewarded in any way.
5.2.4 Valence for Reward
The valences deals about the desirability of receiving increased amounts of the rewards they might attain as a result of improved performance. For many salesmen there is no direct linkage between performing better and an increase in income. They link the extra sales to external factors. Although money is seen as the most important reward, the salesmen also call for non-financial rewards.
5.3 Role perceptions
accurate. Perceived role conflict arises when a salesman believes the role demands of two or more of his role partners are incompatible. So he is not possibly to satisfy them all at the same time. A salesman suffers from perception of conflict, per example, when a client demand a credit and delivery term the salesmen (delivery in the morning followed by payment in the afternoon) believes will be unacceptable to management. Perceived role ambiguity occurs when salesmen believe they do not have the information necessary to perform the job adequately. The salesmen may be uncertain about what some role partners expect of them in certain situations, how they should satisfy those expectations, or how their performance will be evaluated and rewarded.
Salesmen Chef de Sector Management Clienst Role Perceptions
Role Expectations: Does role partner expect me to engage in that activty?
Role ambiguity: Do I know what role partner expects with regard to that activity? Role conflict: Is there disagreement between two
of these role partners over the performance of that activity?
Role inaccuracy: Are the salesmen perceptions of the demands being placed upon him correct?
model 5.3 Sales Perceptions of the Job
5.3.2 Expectations Role Partners
The introduction of the performance based payment changed the view on the drivers. Not only had the name changed from driver into salesmen. The expectations of management changed as well.
