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CASE STUDY of CASE STUDY of Assam Farm Fresh TeaAssam Farm Fresh Tea

Handling salespressures

PRESENTED BY:

Ankita Prasad.

Date:15-03-2011



Purpose of the CasePurpose of the CaseStudyStudy

y How should Assam Farm Fresh Tea (AFFT) strikea balance in its µpush¶ and µpull¶ policies to enablesales personnel function in a result-oriented way.

y Major decision areas and activities that makesales force management as an importantdeterminant of a firm¶s success.

y How Kapoor,the Sales Officer, and AFFT willposition himself between Shah Bhai and hisbosses.



IntroductionIntroduction Assam is situated at the North-eastern Himalayan Sub-region of

India.

Assam is one of the industrially backward states of the country. Inspite of being blessed with a high potential for development of resource-based and demand-based industries in the state, thepace of industrialization in Assam had not been satisfactory.

The industrial sector in the state had been centralized aroundsome particular sectors, like tea, petroleum, coal, jute andforests.

Industries in Assam can be broadly classified into four heads :(a) Agro-based industry,(b) Mineral-based industry,

(c) Forest-based industry, and(d) Other industries.

Agro-based industries of Assam include-Tea industry, Sugarindustry, Grain mill products industry-(Rice, Oil and Flour Mill),Food processing industry and Textile industry.



Brand Preference across allBrand Preference across allsegmentssegments--::

1.Since tea is a highly differentiable product, its pricesmakes very a lot depending upon consumer segmentsto which it is targeted.For Example-: Tea brands in the economy segmentrange from Rs.19 to Rs.35/250g, where specialty teas

are priced as Rs.375/250gm.

2. The premium and specialty segments creating agood number of brand loyal consumers, therefore theprices tends hardly any important to consumers.

3.Product initiates type of packing which ensures-freshness of the ³flavor and fragrance´ Secure packaging to prevent loss.



4.The taste and demand of tea market can bedivided into various segments based onpack sizes-:

In the urban India customer preference is for 200/250gramswhich contribute 48% to total market.

Demand of smaller packs of 50 grams and less representedincreasing growth rate from 32% to 45% from 1995 to 2000respectively.

The pack types prevailing in today industry are in the form of jars, bottles, boxes,pouches,strips etc.



A new report by Global IndustryA new report by Global IndustryAnalysts, Inc. Analysts, Inc. A new report by Global Industry Analysts, Inc. predicts that global

tea and coffee sales will reach $70 billion by 2015. The keyfactors driving growth are health, quality and premiumization.

Despite a smaller market size, tea is expected to overtake coffeeproducers of the famous Assam region in India have asked thelocal government for tax relief to counter rising production costsand low margins, which have plagued the industry in recent

years. The Tea Board of India has launched the first e-auction of tea in

the headquarters of country¶s largest tea auction firm, J Thomas & Co. The country has seven auction centers located at Guwahati,Siliguri, Jalpaiguri, Kolkata, Coimbatore, Connor and Kochi, wherethe online trading platform will be gradually introduced .

Average prices in Assam, which accounts for more than half of

production, may reach $4 per kilogram by April from currentlevels of approximately $3.30. The company attributes the rise toinconsistency in weather or cropping pattern, as well ascontinuing past attacks. Price rises are set to boost profits of teagrowers including McLeod and Jayshree Tea, and raise costs fortea buyers like Unilever or Tata Global Beverages.



Introduction of the companyIntroduction of the company

y In such a scenario, Assam farm fresh tea has lunched anew attractively packaged leaf tea, called µValley¶s Pride¶.

y The company has a turnover of Rs 210 crore and has beenthere in the Indian market since last 35 years.

y It has made its mark because of its quality of tea, aromaand µvalue for money¶ pricing however the business isgetting extremely competitive now.

y Since last 5 yrs, the co. has also started procuring fruitdrinks, jams and jellies from contract manufacturers understrict quality-control norm and started branding anddistributing them through their existing channel partners.



WorriesWorries

1.Low scale achievement.

2.Sales of valley¶s pride have notpicked up in Gujarat and Maharashtra.

Kapoor,the sales

officer.

Vijay

desai, theboss.



Another worries«Another worries«

y Brakes bond which is the nearestcompetitor is launching another leaf tea µGreen

Darjeeling¶ next month.

y AFFT¶s distributors were facing resistance fromretailers as they said four other brands were wellestablished and µValley¶s Pride¶ was not evengetting trials.

y Although, sales of µValley¶s Pride¶ has picked upin up,Rajasthan,Uttaranchal,Punjab and Haryanabut Kapoor¶s territory is primarily³dust tea´.



consignment

Shah Bhai,Thedistributor.

Kapoor. The

salesofficer.



Imagine you are kapoor who is stuck

between his channel partners and bosses. What would u do in such a situation?

kapoor

Convinces shah Bhai to take 3 tons

of tea

promising quick adver tising

and

liquidation of stocks.



Desai disappointed that shah Bhaimust have taken 5 tons instead of 3 tons.

2 tons of µtetra pack drinks¶

lying as unsold inventor y.



1.Shah bhai found wrong products and unwantedpacked sized composition.

2.He found wrong flavour of fruit drinks which

was unsold in his territory.

3.R etailers also complained that the company isconstantly trying to push unordered low demandproducts along with ordered ones.

consignment

kapoor

Shah

bhai



Lists of How Mr.Kapoor would like toLists of How Mr.Kapoor would like to

make the channel partners inclined tomake the channel partners inclined topush the Valleys Pride to the Customerspush the Valleys Pride to the Customers

1) Region wise customers should be listed.2) Consistence of quality.3) Packaging should be attractive.4) Quantity wise easy availability of products.5) Dealers should be given extra incentives for selling of

products to the customers.6) Frequent meeting of dealers and product trials and

testing.7) Attractive sales commissions.



The reasons of where AFThe reasons of where AFFFT wentT went

Wrong:Wrong:

1)Proper zone wise distribution was not followed.2)Customers· choice was not taken intoconsideration.3)Improper packaging of product.4)Product was sub-standard.

brand preference across all segments-

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