CASE – 2   Dealer Training Programs – A New Trend

IIBMS – Dealer Training Programs – A New Trend 

In India, the corporate training market was pegged at Rs 25 billion (by the end of 2004) and was growing at a rate of 30% annually. Though sales training was not new concept in Indian industry, the trend of extending sales training initiatives to business partners was slowly catching up. The automobile companies were among the first to implement dealership training programs. For example, when Maruti Udyog Limited (Maruti) got the highest rank in customer satisfaction in the JD Power Asia Pacific India customer satisfaction index (CSI) study in 2000, it launched ‘Project Hat Trick’ in consultation with NIS Sparta, a leading training and consulting organization. The project aimed at creating excitement among the service staff (of the dealers) and also imparting the knowledge and know-how required to satisfy the customer. As part of the project, the service supervisors were trained on the aspect of customer delight and managers were trained on leadership and business planning aspects. The service mechanics were given training in the areas of self-empowerment and behavioral interventions. This also helped to bring about attitudinal changes in the dealer segment to meet the demands of customers. Consequently, Maruti received the award for the next two consecutive years. In 2002, it topped in four out of five factors of the customer satisfaction index (CSI) and received the highest score of 124 as against the industry of 118.

Speaking on the issue of training in the automobile sector, Vijay Kohli, Vice-President, NIS Sparta, said, “Training in this sector is also quite different from others as here the customer expects sales executives to know the features, advantages, and benefits of each and every part of your vehicle. Not only that, the customer also expects the executives to know the technical side and the product advantages over others to make his/her decision.

Consumer appliances manufacturers were also focusing on these areas in light of cut-throat competition, increased customer expectations, and the increased complexity of the product line. For example, Philips India Ltd. (Philips) a leading consumer appliances company, launched a dealer training program in 2000 called ‘Unique Selling Program’ (USP) aimed at creating awareness about its products among the dealer sales personnel as well as to enhance their softselling skills. The training program consisted of the following elements – role play, presentations, hands-on-demos, and group working. The role plays enabled the participants to comprehend the features of the products thoroughly. The hands-on demos trained the participants on conducting product demonstrations to the customers. In the group working module, participants were allowed to team up with other members and conduct demos without the help of the trainers. Through this program, Philips aspired to enhance the salesperson’s selling skills, communication skills, and sales closing techniques. The company conducted 40 such training programs covering 25 cities across India. The program was a success as it helped the company to improve its market share in big stream audios and CD-VCRs segment by 80% and in the Walkman market by 20%. Speaking about the success of the program, Rajeev Karwal, Philips India senior vice-president (consumer electronics), said, “The company has benefited from this exercise as the USPs have helped in reinforcing the superiority and product differentiation of Philips products in the dealer salesman’s mind, resulting in increased confidence in the Philips brand.” Buoyed by the success of the program, Philips decided to make USP a regular feature and conduct the program twice every year.

Dealer training programs were also being increasingly adopted by FMCG product companies. Sensing the need for training its business partners, HLL, the leading FMCG company in the country, launched an ambitious sales training initiative aimed at distributors’ salesforce called  ‘Project Dronacharya’ in 2003. Under this program, HLL planned to train nearly 10,000 retail stockists’ salespeople spread across 70 cities in a phased manner. The training program covered various aspects of the sales process including merchandising, route planning, cross-selling, and upselling. The training job was entrusted to leading training organization NIS Sparta. The training program involved 139 trainers called ‘Dronacharyas’ accompanying the retail sales stockists’ men (RSSM) on the field and explaining what their shortcomings were and how they could improve their skills. Within eight months of the launch of the program, HLL saw good results. The total lines sold per day (TLSD) and sales target improved by 15%. Some distributors achieved sales above Rs 10 million.

Another prominent example in the FMCG sector was the Gujarat Cooperative Milk Marketing Federation (GCMMF) (the brand owner of Amul), India’s largest food products marketing organization. GCMMF also undertook a similar initiative called ‘Amul Yatra’. Under this program, the company trained all its 3,000 distributors and their sales force on various aspects such as the Federation’s philosophy and culture, procedures, and operational systems. The training program also aimed at improving their selling skills.

Commodity product manufacturers like Tata Chemicals too focused on training their business partners. In 2002, the company conducted a training program for its business associates aimed at strengthening the brand equity of Tata salt, the largest selling iodized salt brand in India. Tata Chemicals initiated these training programs as a part to its strategy to develop a long-term relationship with marketing and distribution partners, to improve the synergy between the company and the channel members, as well as to leverage on the resources effectively and efficiently. During the first phase of this initiative, the company conducted a five-day training program called ‘owner management program’, wherein the channel members and distributors were provided training in marketing and strategy skills. The objectives of this program were to:

 

• Equip participants with marketing concepts, techniques, and functional inputs.
• Help them comprehend organizational decisions and responses in the face of evolving markets and consumers.
• Help identify opportunities and successfully manage an enterprise.
• Enhance value propositions in transitional markets.
• Make informed and progressive decisions based on the marketing mix.

 

In the next phase, the company conducted an intensive sales training program for the sales force of Tata Salt channel members and distributors. In this program, participants were trained to get a better focus of the market with a suitable sales strategy. It also helped the participants in managing markets for profits and growth.

 

Questions

 

1. Indian companies, which used to focus mainly on sales training programs for their own sales force, are now extending these initiatives to their business partners. What are the major reasons behind the increasing prominence of such initiatives among Indian companies? Also throw light on the advantages and disadvantages of outsourcing the training activities to third parties.
2. Behind every successful dealer is a smiling and efficient dealer salesperson. Explain the relative importance of dealers in the consumer durables industry over and above those in the FMCG industry. How have consumer durable players improved the performance of their dealers through training?

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