Key Account Management in Benckiser

Submitted To: Sir Saeed Ur Rehman Sales Management

Submitted By:

Fahad Naseer Hammad Hasan Jaferi Hooriyeh Ali Sarah Zubair Janoo Samra Javed

23/04/15 ACKNOWLEDGEMENT

We would like to thank our course instructor Sir Saeed Ur Rehman for giving us the opportunity to increase our knowledge and broadening our vision through the process of compiling this report. We are grateful and truly indebted to him for giving us the chance to learn from the professional world, and having the unique experience of meeting with professional salespeople. His guidance and support, without which we would not have been able to compile this report, are highly valued and appreciated. It has been an honour to have been taught the course of Sales Management by Sir Saeed Ur Rehman.

We would also like to acknowledge and thank Mr. Salman Tariq, Head of Sales Operations at Reckitt Benckiser, for taking out his time and imparting knowledge with us regarding key account management at Reckitt Benckiser. We would not have been able to present this report without his help and esteemed direction. LETTER OF TRANSMITTAL

Respected Sir: TABLE OF CONTENTS:

INTRODUCTION:...... 4 HISTORY:...... 5 MISSION STATEMENT:...... 5 VISION…………………………………………………………………………………………………… ……………………………………………….5

WHAT ARE KEY ACCOUNTS?...... 6 WHO MANAGES KEY ACCOUNTS AT RECKITT BENCKISER?...... 7 RESPONSIBILITIES OF KEY ACCOUNTS MANAGER...... 7 SALES CALL FOR KEY ACCOUNTS...... 8 SKILLS AND TRAINING REQUIRED...... 9 INCENTIVES/DISCOUNTS TO KEY ACCOUNTS CUSTOMER:...... 10 SHELF WARS:...... 11 PROBLEMS FACED TO MANAGE KEY ACCOUNTS:...... 11 THE DIFFERENCE BETWEEN KEY ACCOUNT MANAGEMENT AND TRADITIONAL SALES...... 13 OBSERVATION AND RECOMMENDATION:...... 15 INTRODUCTION:

Reckitt Benckiser is a multinational consumer goods company and a major producer of health, hygiene and home products. We all are quite familiar with its brands like , , , Harpic and , which are the world's largest selling brands in their respective industries.

In accordance to our project related to key account management in FMCG’s, we went to the Head of Sales Operations at Reckitt Benckiser, Mr. Salman Tariq. He shared with us some useful information, for e.g. the sales of Reckitt Benckiser are divided into four regions: field sales, sales operations, trade marketing and key accounts. Key accounts is a separate function at RB with its own hierarchy. Field sales is divided into 4 regions headed by regional sales manager. Then there is head of sales, head of trade marketing and head of key accounts. The national sales manager is responsible for sales teams, hiring’s, CFC operational budget for incentives etc. The key accounts are spread throughout Pakistan. The 4 key accounts that are classified as key accounts are Hyperstar, Metro, utility stores and CSD stores. The key accounts divided under two managers at Reckitt Benckiser, to ensure smooth flow of process.

Reckitt Benckiser trusted medical devices, medicines, hygiene and other home products filled its history of strong financial performance along with social responsibility. HISTORY: Reckitt Benckiser’s history spans 150 years of innovation for consumers across the world. Johann A. Benckiser founded a business in Germany in 1823. Its main products were industrial and consumer goods industrial chemicals. It was formed in 1999 by the merger of the UK-basedReckitt & Colman plc and the Netherlands-based Benckiser NV.It has operations in around 60 countries and its products are sold in almost 200 countries.The company runs a number of graduate programmes, in most of its markets, with over 200 graduates joining the schemes worldwide.

MISSION STATEMENT: Our purpose is to make a difference by giving people innovative solutions for healthier lives and happier homes. This means we are expanding our capabilities and investing in innovation to stay ahead of the game.

VISION: Reckitt Benckiser's vision is to passionately deliver better solutions in household, health and personal care to customers and consumers, wherever they may be, for the ultimate purpose of creating shareholder value. Reckitt Benckiser aims at creating a world where people are healthier and live better.

WHAT ARE KEY ACCOUNTS:

Key Account Management is normally associated with the idea of looking after large and important accounts that are critical to the business. Key Account Management is far more than just selling products to big customers, its dealing and negotiating with those customers who have a strategic role to play in the growth of a supplier. Key account management is about developing long-term relationships with strategic customers. A company’s greatest assets are its customers. Without customers there is no company.

People at large companies toss the terms "key account management" and "strategic account management" in conversation every day. Ask people to define what these are, or to tell you what the criteria are for an account to be named a "key" account, and you’re likely to get very different answers.

At Reckitt Benckiser, according to Mr. Salman Tariq a fixed definition is used to determine an account as a key account. There are two types of key accounts at Reckitt Benckiser:

Foreign Accounts

Government Accounts

Reckitt Benckiser has four key accounts in Pakistan, two foreign and two governments. The four key accounts of Reckitt Benckiser are as follows:

 Hyperstar  Metro  Utility Stores  CSD

Field sales cover all outlets from Karachi to Peshawar. What key accounts do not cover is covered by field sales. For example if Tesco comes to Pakistan it will be treated as Reckitt Benckiser’s key account as it is a foreign account. In the same manner, government and military have to be treated differently. If a new superstore opens in your neighborhood, which is big and have departments it will not be a key account for Reckitt Benckiser, but this doesn’t mean Hyperstar have a better deal than a down the road store. All stores are given incentives and discounts differently.

WHO MANAGES KEY ACCOUNTS AT RECKITT BENCKISER:

At Reckitt Benckiser there is a bit of hierarchy in place. The Head of Key Accounts do the negotiations at all four key accounts of Reckitt Benckiser. Key account managers duties not just include sales but also planning and managing the full relationship between a business and its most important customers. The four key accounts are also divided into two Key Accounts Managers.

First Key Account Manager is responsible for the foreign accounts, which include Hyperstar and Metro. The second Key Account Manager is responsible for the government accounts, which include Utility Stores and CSD stores.

Both the Key Account Managers have two different teams working under them who are trained in the relative key accounts. As different strategies are required to deal with the different key accounts.

There is not just a hierarchy in place at Reckitt Benckiser but also at the customers end. For example at Hyperstar there is complete team in working. Each time you meet a different person at Hyperstar. Hence, strong relations are to be created. RESPONSIBILITIES OF KEY ACCOUNTS MANAGER:

We met with Mr. Salman Tariq, National Sales Manager at Reckitt Benckiser. We asked him about his responsibilities and what is included in his job description. He listed the following duties which come under his scope:

 Responsible for the complete sales team including their perks, incentives etc.  Hiring  Complete distribution management.  Responsible for CFC or operational budget(CFC is the fund with which you manage operations).

We asked Mr. Salman Tariq to tell us about the responsibilities of a key accounts manager and he gave us the following list of duties:

 Managing key accounts  Working in close coordination with trade marketing department.  Manage relationships with key accounts  Negotiating with key accounts  Leading the team  Keep records of transactions  Strategic planning  Help in new innovations  Ensure customer satisfaction  Evaluate customer practices at the key accounts.

Mr. Salman Tariq told us that a key account manager fulfills many other duties and responsibilities. This is not an exhaustive list. A key accounts manager deals with any problems and issues which come to him and needs urgent decisions. SALES CALLS FOR KEY ACCOUNTS: Usually pre-arranged and face-to-face meeting between a salesperson and a prospect for the purpose of generating a sale. Sales call is similar to a client call, wherein you discuss your products, the benefits of your products and trying to end the call with a sale. The term 'call' can apply not only to phone sales, but to actual face-to-face visit to a prospective buyer.

According to Mr. Salman Tariq average sales call time differs according to different accounts. Its obvious key accounts require more time and attention but most key accounts have moved out of the traditional sales call. Hyperstar and Metro no more require a sales man going to them and recording stocks and orders. At Aghaz the old model is still existence but at foreign key accounts of Reckitt Benckiser automated orders are generated through softwares.

The government accounts of Reckitt Benckiser do not have softwares installed so they require a sales man going and taking orders. Which is given same time, equal to normal accounts.

What differs between key accounts and normal account is the time dedicated to meetings deciding deals, incentives, shelf space etc. Orders are automated but prices and promotions need to be decided. As key accounts are major accounts and negotiating with them is a difficult job, time is needed to be dedicated.

We even asked Mr. Salman Tariq about how to make a sales call most effective. He said you must have read the usual model for an effective sales call. But in my opinion for key accounts prior preparation and knowing their needs is most important. For example we know that Metro is famous for bulk buying, so we offer incentives and deals accordingly.

SKILLS AND TRAINING REQUIRED: According to Mr. SalmanTariq all sales person required special training and skills for eg communication skills, negotiation skills but the ‘Key Account Manager’ is one step further than a area sales manager. He require one step further training and working skills, the reason for that is key accounts are not a easy customers to handle because they also desire more from your side. And it is very difficult for a company to entertain all the key account holders at the same time.

According to Mr. Salman Tariq key accounts requires “customize attention”, “customize strategies” and “customize discounts” and importantly structured negotiation techniques. The one skill which is essential for the key account manager at Reckitt Benkizer is “Negotiation skills”, according to Mr. Salman Tariq this is the utmost requirement, as already mentioned that key accounts always ask for more, so to tackle them and get what you want from them keeping them happy is a challenging work, and this is beauty of this work and key account manager at ReckittBenkizer are going their work quite efficiently and effectively. He added an example that, for a special promotion at hyperstar you gave them discount of Rs 2000/= on your product but hyperstar wouldn’t be happy they will ask for more,so here the negotiation skills come, you sit with them try to find some solutions and if there is a deadlock than you said that there is Rs 2000/= lying on the table for a limited time if you agree than okay if not then I will invest this somewhere else. Moreover he also mentioned some more skills which are essential for a key account manager. According to him we cannot a hire a fresh graduate or a person with a less experience, people with high experience are pit in this place and how understand this side of business closely, who have work in this field in past. These people are highly trained on these skills, for e.g. Imtiaz manage by only one person, but hyperstar is being looked by the complete trained team. For all key account holder we have different techniques and skills required to get the work done and it depend upon the size, customer traffic of that key account, as mentioned that Imtiaz is being looked by only one person and hyperstar by the complete team. For the area sales manager, key account manager is a next step. Key account management teams are given special negotiation skills.

INCENTIVES/DISCOUNTS TO KEY ACCOUNTS CUSTOMER: Discounts and incentives offered to key account customers varies from each other, it depends upon the size of key account and customer traffic. We cannot have good visibility everywhere we need to choose between the best location. Two big stores should at least be targeted for the good visibility, Reckitt Benkiser invest more in hyperstar for the good visibility, we hardly see and visibility at metro. He also mentioned that we consider Imtiaz as our big account in terms of sales but we give more priority to hyperstar for promotional stuff because of customize customers. Place like aghaaz, shaaz, Imtiaz we prefer to give discounts on lets say 250 ml bottle of ‘Harpic” but in hyperstar we would like to give discount on 750 ml bottle of Harpic, because of the customer traffic there and the type of customer visit there, this thing also matter as to give what type of discount to what account. But as compare to retailers and wholesalers we give high discounts and incentives to these key accounts because bulk buying is witness there, customers buy products in bulk for their monthly grocery. SHELF WARS: Almost every company every brand targets this big places and desire to make them their key account. Thousands of products are there in these places, so this gives rise to shelf war. Everyone wants the best location to keep their products, so according to Mr. Salman there is a three way war, one between the products of ReckittBenkizer, secondly with competitor’s brand and lastly with the key account. its like a triangle. For example in hyperstar every company desire to get the most favorable promotional slots, and they cannot make everybody happy a same time, so what actually happens that, we splay it very sharply for example we have promotional strategy for dettol like buy 2 get 1 free. We cannot put this strategy to everywhere because it is not feasible for the company, so if we put this strategy only on metro so hyperstar and Imtiaz will not be happy with us and we cannot afford this, so we negotiate with all our key accounts like if you give this slot to us so we will give offer to you first, and than we have an agreement with them like in June this offer will be in Imtiaz and in July this will be given to hyperstar.

PROBLEMS FACED TO MANAGE KEY ACCOUNTS: When we ask him the question about the problems faced due to shelf war, so he replied I will not say this that these are the problems, these our the challenges for us and every sales person enjoys the challenges whether he is the salesperson of ReckittBenkizer or the salesperson of uniliver. To achieve this challenges we use structured negotiation techniques, build strong relationships with our key accounts, persuasive and highly dedicated team, and deliver the best service and offers to key accounts as they requires customize attention, discounts and strategies, ensuring the supplies on time. KEY ACCOUNT MANAGEMENT:

Six Components of Defining Key Account Management

1. Viewing key accounts as separate from those that are simply large accounts in terms of revenue.

2. Limiting the number of key accounts, and protecting vigorously from uncontrolled and ill-advised key account list growth.

3. Pursuing key accounts as institutional partners such that you build innovation and value together, becoming deeply linked to each other’s future.

4. Allocating key account focus on three core topics: penetrating, expanding, and protecting accounts from competition.

5. Viewing key accounts as assets that require continued, and often significant, investment to yield maximum returns. These investments often include structuring and aligning your business’ processes and systems to maximize account value.

6. Viewing key account investment returns as tied to long-term business strategy. THE DIFFERENCE BETWEEN KEY ACCOUNT MANAGEMENT AND TRADITIONAL SALES

OBSERVATIONS AND RECOMMENDATIONS: It seems Mr. Salman Tariq lacks patience. As he mentioned in the interview, if the negotiation is taking more time than planned - he puts the money on the table as a limited time offer and makes a "take it or leave it" approach. This can be taken very negatively- especially from the key account holders which the company values greatly. They may not feel important and may at times even be offended. Therefore, we'd recommend that a little more patience is shown with key account holders and more time is set aside for negotiations. He could also mention that the offer being made is for a limited time along with the benefits of making an on the spot decision while at the same time avoiding a "take it or leave it" approach.

As mentioned by Mr. Salman Tariq, the organisation avoids hiring fresh graduates or a person who lacks high level of experience. The organisation may consequently be missing out on creative, unique and "out of the box" thinkers. The young generation of today sometimes is able to think differently and come up with new ways and ideas that haven't been used in the past. Therefore, it is recommended that the organisation considers fresh and people and even those without high level of experience as they may comprise of a charismatic personality and a creative mind which if groomed correctly could lead to loyal employees who contribute a great deal to the success of the organisation. It would also be beneficial for Reckitt Benckiser if they would consider stores like Imtiaz as part of their key accounts, in our opinion. This is because it is a growing business and with an increasing consumer traffic; thus, it has great potential and should be utilized before some other company takes up the opportunity. Lastly, it is recommended that the organisation keeps an eye on the number of key accounts that it caters to, because key accounts require special attention and care and need to be managed efficiently.