Development and Implementation of

Performance Based Salary System for Sales

Force of Coca Cola Bangladesh

Internship
Report
ABDUL MONEM LIMITED –
BEVERAGE UNIT

ABDUL MONEM LTD

Farzana Rahman Koly

 Internship Report
On
Development and Implementation of Performance Based
Salary System for Sales Force of Coca Cola Bangladesh

P r e p a r e d F o r

Noman Hossain Chowdhury

Internship Supervisor
BRAC Business School
BRAC University

P r e p a r e d B y

Farzana Rahman Koly

ID No. : 14364037
MBA Program
BRAC University, Bangladesh

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 BRAC University
Department of Business Administration
66 Mohakhali, Dhaka, Bangladesh

Letter of Transmittal

April 10, 2017

Noman Hossain Chowdhury

Internship Supervisor
BRAC Business School
BRAC University

Subject: Submission of Internship Report.

Dear Sir,

I have completed this report as part of my internship program. The report has been compiled as per your
requirements and those set by the host organization. It gives me immense pleasure to tell you that
working on this internship report has given me a wide range of exposure. The report is based on the
knowledge, experiences and the skills that I have acquired during my period of internship in Abdul Monem
Limited (Beverage Unit).

I am thus submitting this report with the hope that it lives up to your satisfaction. However I would be
glad if you enlighten me with your thoughts and views regarding the report. In addition, if you wish to
enquire about any of the aspects of the report, I would be glad to answer your queries.

Sincerely,

Farzana Rahman Koly

ID: 14364037
MBA Program
BRAC Business School
BRAC University

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 Acknowledgement

First of all, I would like to thank the Almighty Allah for blessing me with the strength, aptitude and patience
for successfully completing my internship and this report.

I would like to thank my Faculty Advisor, Noman Hossain Chowdhury for giving me the opportunity to
work with him during my period of internship. I have been able to compile and complete this report in a
comprehensive manner due to the guidance, support and counseling that he has provided me with during
this period. I have tried my best to implement his constructive suggestions while doing my report.

I would also like to take this opportunity to acknowledge the help provided to me by some personals of
the company. My sincere gratitude goes to Rashed Mosarof, Factory Head of HR; Rashel Ahmed Rony,
RTM Manager, Manager Md. Rokan uddin Ahmed (MIS), for giving me time from their busy schedule,
providing me with information that was required to complete the report, and for guiding me properly
throughout the period of my internship.

I would also like to thank all the employees of Abdul Monem Limited (Beverage Unit) who has supported
me and co-operated with me during my internship period. Finally my sincere thanks go to each and every
one who has helped and supported me significantly in different stages during the period of my internship.

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 Executive Summary
Abdul Monem Ltd. is one of the leading business enterprises in context of Bangladesh. Incepted back in
1956, Abdul Monem Ltd. has evolved today as one of the biggest group of industries and is a major player
in many industries including beverage industry. Abdul Monem Ltd. acquired the license from Coca Cola
Company, USA in 1982 and started their operation in the same year. The turnover of this company is 1000
crore.

For many years, Abdul Monem Ltd. enjoyed the privilege of being the lead player of a monopolistic
industry since new enterprises begun to join in during the early 90s. The enterprise adopted couple of
serious strategic measures to maintain the market leadership and in many cases they succeeded. Abdul
Monem Ltd. has successfully created an efficient and loyal distribution channel throughout the nation and
has managed to integrate its value chain process both in forward and backward direction. The marketing
policy of Abdul Monem Ltd. has always been its weakness which the rivals have always capitalized, but
yet, from time to time, Abdul Momen Ltd. showed good level of aggressive moves. Though at current
scenario, it is losing its market shares in many fronts to its rivals, it is showing great commitment to its
clients and the retailers.

The distribution operation of AML Beverage Unit is currently managed through 262 PSR’s (Pre-Sales
Representatives) nationally; AML employed them for respective distribution houses. The sales force
comprises of PSR (Initially Paid by Distributor and AML provide the bill) and Distributor Sales
Representative (Paid by Distributors). AML introduced a standard Salary, Incentive and others benefits for
its sales force back in February 2014, which is still maintained without any sort of revision. Company has
grown its business by 40% but there was no increment in their salary for last 3 years. PSR attrition rate
was as high as 50% in 2016. With this poor retention of qualified people in the field company is struggling
to manage its Annual Business Plan – Volume Target Committed to Coca Cola.

To achieve the vision of the beverage unit, it is high time to revise the salary structure of pre-sellers who
basically brings money for the company. In addition to the revision, company needs to ensure a pay for
performance model to drive the performance oriented sales culture.

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 Table of Contents
Executive Summary
Chapter-1 : Introduction
1.1 Introduction 7
1.2 Objectives 7
1.3 Methodology 8
1.4 Scope 8
1.5 Limitations 9
Chapter – 2: An Overview of Abdul Monem Limited (Coca Cola Distribution)
2.1 Company Overview 10
2.2 Corporate Profile 10
2.3 Inception and Expansion 11
2.4 Business Units of Abdul Monem Group 12
2.5 Beverage Unit Production Facilities 12
2.6 Company Vision for 2020 13
2.7 Company Values 13
2.8 Organogram of Beverage Unit 14
Chapter – 3 : Coca Cola Operation in Bangladesh
3.1 History of Coca Cola in Bangladesh 15
3.2 Strategic Hierarchy of Coca Cola in Bangladesh 16
3.3 Products of Coca Cola in Bangladesh 17
Chapter – 4: Industry Overview
4.1 Beverage Industry in Bangladesh 18
4.2 Major Competition in Beverage Industry 18
Chapter – 5: Distribution Model of Coca Cola Bangladesh
5.1 Current Distribution Structure 19
5.2 Sales Force Role & KPI’s 20-21
Chapter – 6: Sales Force Salary Structure (AML & Competition
6.1 Present Salary Structure of Pre-Sellers (AML) 22
6.2 Comparison of FMCG Industry Salary Structure 23
6.3 Limitations of Present Structure 23
Chapter – 7: Performance Based Salary System for Sales Force
7.1 Regularization of All PSR (Proposed) 24
7.2 Performance Based Salary Structure (Proposed) 24
7.3 Grading Scale 25
7.4 Target Setting & Evaluation Process 25
7.5 Cost Implication & Business Benefit 26-27
Chapter – 8 : Findings & Recommendation
8.1 Findings 28
8.3 Recommendation 28-29
Conclusion
Glossary of Terms
Bibliography
 List of Tables

Table Details Page Number

Table 1 : Role Profile of Area Sales Officer 14
Table 2 : Role Profile of Pre-Sales Representative 15
Table 3 : Responsibility of Distributors 15
Table 4 : Current Grade Point Calculation for PSR Salary 16
Table 5 : FMCG Industry Pre-Sales Representatives Salary Structure 17
Table 6 : Proposed Salary & Benefit Structure for PSR 18
Table 7 : Proposed PSR Grading Scale 19
Table 8 : Cost Implication of Proposed PSR Salary Structure 21
Table 9 : Business Benefit Proposed PSR Salary Structure 21

List of Figures
Figure Details Page Number
Figure 1 : Business Units of Abdul Monem Group 6
Figure 2 : AML Beverage Unit Market & Production Facilities 6
Figure 3 : Organogram of AML Beverage Unit 8
Figure 4 : Flow of Strategic Direction of Coca Cola Unit 10
Figure 5 : Products of Coca Cola Bangladesh 11
Figure 6: Current Distribution Model of Coca Cola in AML Territories 13
 Chapter 1
General Introduction

1.1 Introduction
For generations, the simple pleasure of drinking Coca-Cola has been associated with special times, special
places and timeless moments but also with the satisfying experience of everyday life. That is the magic of
Coke. Coca-Cola, the brand…is the heart of Abdul Monem Group. It has always been and always will be.
Coca-Cola, Fanta and Sprite create the magic to provide consumers with special moments. Consumers of
all ages want great tasting beverages that also provide nutrients for healthy growth and to make them
feel their best. Coca-Cola compliments and shares the best moments of all consumers!

The distribution operation of AML Beverage Unit is currently managed through 262 PSR’s (Pre-Sellers)
nationally; AML employed them for respective distribution houses. The sales force comprises of PSR
(Initially Paid by Distributor and AML provide the bill) and Distributor Sales Representation (Paid by
Distributors). AML introduced a standard Salary, Incentive and others benefits for its sales force back in
February 2014, which is still maintained without any sort of revision. Company has grown its business by
40% but there was no increment in their salary for last 3 years. Now company has identified the issues
which is hampering the business which is evident in declining market share for last one year.

1.2 Objectives
The major purpose of this report is to focus light on one of the oldest and key player of the Abdul Monem
and their Beverage unit specially Fanta. The underlying objectives of the report are:

 To know about the inception of the enterprise, as a whole and of its beverage unit as well.
 To know the operations and the management structure of AML
 Put light on the production, distribution and promotion of the beverage products of AML.
 To get an overview of food and beverage of Abdul Monem Group
 To understand the marketing challenges and managing sales force to drive growth
 To understand how to link performance with pay & benefits

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1.3 Methodology
The mode of methodology selected for this report is known as Multi-methodology. Also known as Mixed
Methods Research, Multi-methodology is an approach to professional research that combines the
collection and analysis of both quantitative and qualitative data.

Sources of Information

Data

Primary Data Secondary Data

Internal Sources

External Sources

Different data and information are required to meet the goal of this report. Those data and information
were collected from various sources, such as, primary and secondary which is showed below:
Primary Sources: I have had face-to-face conversation with Deputy Manager HR, Route to Market
Manager, Head of Sales and employees of this company. I've also used official documents of this company.

Secondary Sources: Necessary information was received from the Web Site and internal reports

1.4 Scope
Due to several unavoidable situation and reality, the extent of this report has been compromised up to
certain limit. The boundaries of this report are thus:

This report focuses on Abdul Monem and the beverage unit especially for sales & distribution
team

This report will focus on the value chain activity of the beverage production unit of AML, from
production to promotion, and the key factors affecting those activities.

The report will also focus on the strong logistic fleet and manpower to ensure the distribution of
its beverage product to each corner of the market place.

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1.5 Limitations
The extent and limit of the report were constricted due to some of the following considerations:

The time allocated for the report was limited which constricted the extent of this report.

AML doesn't agree to provide me their official papers & documents as they are one of the
renown in Bangladesh and they are competing with their competitors.

They don't provide their financial report for some obligations, for which I had to collect it only
by personal interview.

I got the information after a little bit late than I expected. For that, I have to make the report in
a very short time.

Employees of AML were very busy when I made my report thus can’t show my report for review

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 Chapter – 2:
An Overview of Abdul Monem Limited (Coca Cola Distribution)

2.1 Company Overview

Abdul Monem Limited is one of the leading diversified business conglomerates of Bangladesh which was
established in 1956.This Company one of the luckiest few to experience change over the Millennium.
Today, in the constantly growing and ever changing world of trade and technology, Abdul Monem Ltd. has
a new challenge, the challenge to keep it competitive in the Millennium with the leading edge
technologies as well as products and services. The company has long experience of more than 50 years in
accomplishing that in the past and is sure to be able to meet this challenge in the future as well. Started
as a Construction Contractor in 1956 and later diversified to food sector. Abdul Monem Ltd. proudly
represents brands like Coca-Cola, Igloo, Novus Pharmaceuticals and Danish Bangla Emulsion that are the
milestones to the company’s quest to provide the best and quality products to its millions of consumers.

2.2 Corporate Profile

Name of the Company : Abdul Monem Limited

Year of Establishment : 1956
Status of the Company : Private Limited Company
Country of Registration : Registered under Registrar of joint Stock Companies
Number of Employee : 5000
Corporate Head Quarters : Monem Business District 111, Bir Uttam C.R. Datta Road Sonargoan
Road, Dhaka-1205
Telephone : 880-2-9676301-3, 9669570, 8618079

E-mail : aml@bangla.net
Website : www.amlbd.com

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2.3 Inception and Expansion
The Managing Director and Chairman Mr. Abdul Monem had established the organization in the year 1956
and he still strongly and successfully runs it along with his two eligible sons working as the Deputy
Managing Directors (DMD) of the company, Mr. A.S.M. Mainuddin Monem and Mr. A.S.M. Mohiuddin
Monem.

Since 1956 and onwards, company has led others to follow. The core strength of this organization is rooted
in its capacity to gather the resources to complete infrastructure projects on a grand scale (funded by
Word Bank, ADB, JICA etc.) thus demonstrating the ability to bear the initial risks associated with such
projects and proving sustainability of the company throughout the long development periods.

Over a successful period, AML has not just developed a wealth of experience in infrastructure and
development project arena in order to meet the international standards of quality and services, it has also
become the bottler of Coca Cola, the producer of number one ice-cream brand Igloo, Igloo milk and dairy
products, Igloo food items and snacks, manufacturer of pharmaceuticals, maker of auto bricks, bitumen
and other selected construction materials. It also established AM Sugar Refinery Ltd., AM Rice Bran Oil),
ServicEngine BPO, AM Securities and Financial Services Ltd., etc. In 2015, it was awarded to develop one
of the first private economic zones of the country i.e. Abdul Monem Economic Zone (AMEZ) in Daudkandi,
Munshiganj on its land of 216 acres. All these strategic units are established with a view to leveraging the
strength of the parent company as well as to contribute to the national economy with an intention of
generating employment opportunities for fellow citizens. Even though, AML began as a family owned
business, it has transformed into a multi-disciplinary modern day business group delivering value to its
customers. As such, its priority has been to focus on building capabilities to infuse strength and character
in its people, business partners, associates and stakeholders resulting in robust and dynamic growth of
the establishment.

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2.4 Business Units of Abdul Monem Group

Abdul Monem Limited (AML) is one of the leading diversified business conglomerates of Bangladesh.
Our fundamental promise is ‘Touching Lives… Building Capabilities…!’

AML Beverage
Unit

Igloo Foods
AM Energy Ltd.
Igloo Suger
AM Economic
Zone Igloo Dairy Ltd.
Nature Fresh

Abdul Monem
Ltd.

AML
Construction
Igloo Ice-cream
Service Engine
BPO

Novus
Pharmaceticals

Figure 1: Business Units of Abdul Monem Group

2.5 Beverage Unit – Production Facilities

Full Production Plan in Comilla

RGB Capacity: 650 BPM
PET Capacity: 650 BPM
CAN Capacity: 400 CPM

RGB Filling Line in Chittagong

RGB Production Capacity:
450 Bottles per Minutes

Figure 2: AML Beverage Unit Market & Production Facilities

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2.6 Company Vision for 2020

AML – Vision 2020

Business Objective
To Drive Sustainable and Profitable Business in Bangladesh

● 33 Million Unit Cases : More than 3X of current Business

● 20% NARTD share* (+10 pts from 2016)
● 28% Sparkling share* (+7 pts from 2016)

● Most respected and connected organization with the community and Government
● To become the most preferred employer in the industry

2.7 Company Values

People

“Our people are our strength”. Hence, our company prioritizes to nurture and provide them with the
opportunities to achieve their maximum competence. We also express our preeminent desire to serve
the needs of our valued customers, business partners and the society in general by being responsible in
creating and delivering our valuable products, services and business practices.

Prosperity

“Prosperity outlook is key to our success”. Our company contributes immensely to the prosperity of the
people and the country. Therefore, we ensure to utilize advanced technologies, skills and knowledge of a
dedicated, well-trained and motivated workforce in delivering high quality products and services to our
esteemed customers.

Progress

“We explore for progress”. Our company believes in sustainable development by investing in the future
of our people, our business, our society and our nation as a whole. Thus, we continuously explore ways
to progress and elevate our practices, our standards and our expectations.

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2.8 Organogram of Beverage Unit

Managing Director

Deputy Managing
Director

Chief Operational
Officer

Head of Sales & General Manager

Head of Factory
Marketing Distribution

Quality Control Manager

NSM RTM TMM Plant Manager
Manager Distribution

RSM Assistant Plant

Manager Logistics
manager

ASM Manager
Transportation

ASO

PSR

Figure 3: Organogram of AML Beverage Unit

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 Chapter – 3
Coca Cola Operation in Bangladesh
3.1 History of Coca Cola in Bangladesh
AM Beverage Limited is the authorized bottler of Coca-Cola, Fanta and Sprite. The bottling operation
started after acquiring the plant of K. Rahman & Company in 1982. In 1987 the company made an
aggressive move to expand the market by establishing a new bottling plant of 450 bottles per minute
(BPM) capacity in Comilla. With this move the company immediately gained the market leadership
position from the competitors. Strategic planning in further capacity building, investment in logistics and
support services as well as aggressive marketing approach rewarded the enterprise with dividends in
better market share and product availability across the territory.
In 1990 the company was awarded the President’s Turtle Award by the President of The Coca-Cola
Company in recognition of its contribution to positioning the brand. This is the most prestigious reward
for bottlers by Coca-Cola.

In 1997 the company established another bottling plant at Chittagong. This state of the art bottling plant
of 650 BPM capacities is the most modern plant in the country, equipped with straight-line technology
from Germany. This plant was established to expand the market further and to deliver products at every
consumer’s doorstep, even to the most remote areas of Bangladesh.

3.2 Strategic Hierarchy of Coca Cola in Bangladesh

The beverage unit of Abdul Monem Limited works under two different managements. The production and
quality control of the beverage is maintained and strictly monitored by the international Coca Cola
authority headquartered at Atlanta, USA, whereas the local operations are maintained under the
supervision of Abdul Monem Limited Beverage Unit Management Board.

International Management of Coca Cola

At the lowest level of the International Coca Cola management team is the local authorized bottler, Abdul
Monem Limited. AML is accountable to the Country Manager of Coca Cola Far East Limited (CCFL) office
located in Bangladesh. The hierarchy then goes up to the Vice President of South West Asia Regional Office
to the President of Coca Cola India to President of Coca Cola EURESIA Group which is directly responsible
to the highest authority for the operation of Coca Cola all over the work, the President of Board of Director
of Coca Cola at Atlanta, USA.

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Local Management for Beverage Operation

The strategies and operations of the beverage unit of AML are maintained under the control of the
General Managers of corresponding divisions. The General Managers are supervised by the Chief
Operating Officer of the Coca Cola Operations, who is accountable to the Board of Directors composed of
The Managing Director and Deputy Managing Directors. The operation and performance of the Coca Cola
operations of AML are closely monitored by the International Coca Cola Authority through its regional
stations.

A conceptual flow diagram of the strategy making hierarchy of Abdul Monem Limited is given below:

Corporate Strategy
Undertaken by the international Coca Cola Authority at Atlanta, USA,
delivered and monitored by the local country

Business Strategy
Crafted by Abdul Momen Ltd. as a part of the group. The Board of
Director is responsible for the Beverage Unit as well as for other units

Operating Strategy within Business

The heads of the different divisions, like establishments, sales,
accounts, distribution and so on. Usually a General Manager is in charge
of every Division.

Functional Area Strategy within Business

Responsibility of the Chief Operating Officer of the Beverage Unit.
COO The looks after the operation of different divisions.

Figure 4: Flow of Strategic Direction of Coca Cola Unit

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3.3 Products of Coca Cola in Bangladesh
There are 4 types of carbonated beverage and 1 mineral water products of Coca-Cola, these are:

Coke/Coca-Cola
Coke Diet
Sprite
Fanta

Figure 5: Products of Coca Cola Bangladesh

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 Chapter – 4
Industry Overview
4.1 Beverage Industry in Bangladesh
After independence the food habit of Bangladeshi people has been changed a lot. Besides our traditional
food consumer of Bangladesh like to take western food also after 1980s. As a result of global marketing
this was not too hard for the consumers. Different foreign food companies were established in
Bangladesh. Beverage industry is one of them. But more interestingly we don’t know beverage is also our
cultural food because beverage doesn’t mean only carbonated drinks. Yoghurt, soup and lacchi are also
beverage of our own tradition which consumed for the last 100 years in Bangladesh. But carbonated
beverage is new in Bangladesh and today our research is on carbonated beverage market in Bangladesh
and consumer reaction to it. Carbonated beverage entered into our market in the later part of 1980. At
that time there were only few companies in Bangladesh. But by the change of time and western culture
influences it’s become very popular in Bangladesh. By year 2000 more than 12 Beverage Company
operating business in Bangladesh and most of them are foreign companies.

4.2 Major Competition in Beverage Industry

The rivals for the beverage unit of AML range from the rivals producing other carbonated beverages as
well as from the producers of other beverages such as Fruit Juices, Flavored Milk, Synthetic Drinks and
Pure Drinking Water. Notably, the major rivals of AML are:

Rival Carbonated Beverage Producers

Transcom Beverage (Pepsi Cola, 7up, Mirinda)
Pertex Group (RC Cola, RC Lemon)
AMCL – PRAN (Pran Cola, Pran Up)
Globe Beverage (Uro Cola, Uro Lemon)
Akij Food and Beverage Limited, AFBL (Lemu, Mojo, Spa)

Rival Fruit Juice Producers

AMCL – Pran (Pran Fruit Juice,Fruto)
Acme Pharmaceuticals (Acme Juice)
Akij Food and Beverage Limited,(Frutica)

Rival Other Beverage Producers

AMCL – Pran (Synthetic Lychi Drink)
Milk Vita (Flavored Milk)
Arong (Flavored Milk)

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 Chapter – 5
Distribution Model of Coca Cola Bangladesh

5.1 Current Distribution Structure

Comilla Factory

Regional Sales Depots

Distributors

Dealer Wholesaler

Wholesaler

Retailers

Consumers

Figure 6: Current Distribution Model of Coca Cola in AML Territories

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5.2 Sales Force Role & KPI’s
Table 1: Role Profile of Area Sales Officer

Area Sales Officer (ASO)

Reports to: Purpose Statement
 To lead a designated team of PSRs and supervise their daily works providing on the job coaching
Primary: Area Sales a needed.
Manager  Ensure and achieve volume targets.

Principal Accountabilities Working relationships

 Drive volume and ensure targets are achieved  Work with PSR to drive volume
 Have through knowledge of the routes and the SRs under him.  Work with godown keeper for smooth
 Supervise daily works of the PSRs (reach, OOS, IOQ) through daily allocation of stock for DSR
market visits and field accompaniment with them and perform post  Work with Logistics and Admin Supervisor to
visit briefings. ensure that delivery vehicles and fit and readily
 Provide on the job coaching to PSRs so that PSRs are well equipped available for daily service.
to perform their tasks.  Work with MD’s to update on merchandising
 Develop and follow structured route plan for PSR supervision and execution and maintenance
perform outlet calls as assigned and submit reports to Sales Manager
 Enhance and maintain relation with trade
 Observe and gather market intelligence on competition activities and
 Ensure right implementation and completion of assigned tasks (by self/
team) for cycles as per instruction.
 Allocate daily stocks for PSRs.
 Perform monthly performance evaluation of the PSRs under him.

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Table 2: Role Profile of Pre-Sales Representative
Pre -Sales Representative (PSR)
Reports to: Purpose Statement
 Ensure right distribution of brands/SKUs to targeted outlets through right order capturing as per
 Area Sales the set guidelines of the company.
Officer  Communicate relevant message(s) to the trade and actively enhance relation with trade.

Principal Accountabilities Working relationships

 Know all the customers in his route/sections and keep updated list of all
the outlets.  Work with DSR (where applicable) for right
 Sell brands/ SKUs to customers following ideal order quantity (IOQ). stock and vehicle management
 Capture orders and OHS rightly in prescribed cash memos for all  Work with godown keeper for stock
successful calls. collection and return
 Ensure continuous brand availability & expected in the assigned route as  Work with Accounts personnel for cash
per the company guidelines. reconciliation
 Enhance and maintain relationship with trade.  Work with MDs to update on merchandising
 Follow security guidelines while dealing with stock and cash execution and maintenance
 Ensure right stock rotation at outlet level to maintain freshness of
product.
 Handle quality complaints promptly or refer to Sales Supervisor
 Conduct cycle activities (assigned) properly as per instruction.
 Maintain and update records of sales in prescribed sales statements
 Feed information to MD’s on cooler opportunity/maintenance
requirements

Knowledge & Skills Key Performance Indicators (KPI)

 Know the right techniques of sales call

 Sound communication skills  Numeric Reach – all brand/ SKU
 Good negotiation skills  OOS – all brand/ SKU
Age profile during recruitment: 20 – 30 yrs
Education:
- HSC preferred, minimum SSC pass
Experience:
- Prior experience in sales is not mandatory
- Prior sales experience in relevant industry will be preferred.

Table 3: Responsibility of Distributors

Distributor
Reports to: Purpose Statement
Primary: Area Manager
Secondary: Regional  To market (sale & distribute) company’s product as the assigned distributor in a defined &
Manager demarcated market

Principal Accountabilities Working relationships

 Arrange for required capital for regular & adequate stock lifting  Work with ASM/ASO to get the direction on the
 Make necessary investment for the day to day business operation overall company business & on the
 Develop understanding of sales operation as directed by the company fundamentals of operation
 Accountable for annual performance of the distribution house & the  Work with Business manager for business
designated market progress & updates
 Develop successor through continuous business involvement
 Ensure that the key stakeholders of the market are regularly engaged
by him or his representative

Key Performance Indicators (KPI)

 Sales and turnover

 Numeric Reach & OOS of the brands
 Professionalism
 Overall discipline of the distribution operation

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 Chapter – 6
Sales Force Salary Structure (AML & Competition)

6.1 Present Salary Structure of Pre-Sales Representatives (AML)

Monthly Gross Salary: Tk. 5000.00

TA+DA
1. HQ = Head quarter (within 10 km encircle of distributor point) @ Tk. 100/= (Tk. 25 + 75) per
day.
2. ExHQ = Ex. Head quarter (10 to 30 km encircle of distributor point) @ 125/= (Tk. 50+75) per
day.
3. OS = Out station (more than 30 km distance from distributors point) @ 150/= (Tk. 75+75)
per day.
4. If PSR stay overnight Out of his HQ for any company purpose he/she will get additional Tk.
400 (Tk. 150 for food and Tk. 250 for hotel) as night halt allowance.
5. For inter district travelling, PSR will get actual Bus/ Train/Launch fair in additional with
others allowances.

Incentive
A) Grade point 10 + : Tk. 4000.00

B) Grade point 9 – 9.9 : Tk. 3000.00

C) Grade point 8 – 8.9 : Tk. 2000.00

Grade point calculation:

Table 4: Current Grade Point Calculation for PSR Salary

Achievement Scale Point for Sales Target Point for Memo Target
100 % + 5.00 5.00
90 – 99% 4.50 4.50
80- 89% 4.00 4.00
70 – 79% 3.5 3.5
 In addition with this PSR will get extra Tk. 2.00 per case for 100% achievement of RGB & CAN
target.
 PSRs’ Salary & TA/DA will be paid as per calendar month & Incentive- as per Coca-Cola month.
 With effective from : 1st March’14.

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6.2 Comparison of FMCG Industry Salary Structure
Table 5: FMCG Industry Pre-Sales Representatives Salary Structure
Mobile TA/DA RGB/CAN
Company Fixed Variable Total Payroll
Allowance Policy Incentive
BDT 2/Case
BDT Indirect
on RGB &
AML 5000 4000 9,000 125/Day through
CAN target
(Average) Distributor
Achievement
Tanscom 3rd Party
9500 2500 150 12,150 150/Day
Beverage Payroll
Under
4000
Akij Beverage 9000 500 13,500 TA Actual Company
(Inc. DA)
Payroll
Quarterly Under
Square Food &
10000 6000 16,000 150/Day Performance Company
Beverage
Based Bonus Payroll
Under
9000
Reckit Benckizer 5000 500 14,500 100/Day Company
(Gold)
Payroll
**All the companies have additional incentive programs in different modality for different period. On an
average a PSR/SR get additional BDT 500/Per Month from the incentive program.

6.3 Limitations of Present Structure

1. As salary is paid by the distributors initially PSRs tend to be more dependent on distributors.
2. Low motivation among qualified experienced PSR’s as there is no differentiation of salary with the
new joiners.
3. Low drive for result observed among PSR’s as there is no career advancement opportunity for
high performers.
4. RGB & CAN target incentive is market specific. Only the PSR working in urban area are getting the
advantage of this KPI.
5. Delay in PSR salary disbursement by certain distributors due to liquidity shortage

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 Chapter – 7
Performance Based Salary System for Sales Force

7.1 Regularization of All PSR (Proposed)

To enhance the ownership of PSR towards our business and minimizing the dependency on distributors
we will regularize all PSR’s under our company payroll. PSR’s will be accommodated in company payroll
as junior officer grade.

7.2 Performance Based Salary Structure (Proposed)

Performance Based Salary Structure
The Gross Salary of a PSR is divided into 3 parts. These are
 Guaranteed Cash : (fixed part of the salary)
 Sum of Basic Salary
 Accounts for 60-70% of the Total Gross Salary based on individual grade
 Performance Based Salary Scheme : (based on KPI of individual PSR)
 Accounts for 30-40%% of the Total Gross Salary (upon 85% onwards target achievement)
 TA/DA :Fixed amount irrespective of grade & market

Proposed salary & benefit structure:

Table 6: Proposed Salary & Benefit Structure for PSR
Grade Basic Pay Variable Mobile TA/DA Total Package
A 8500 4000 300 3000 15,800
B 7000 3000 300 3000 13,500
C 6000 2500 300 3000 11,800
On top of the above package there will be additional commission sharing modality as follows:

1. Distributor will share 20% of his Commission to PSR’s for additional volume achievement over
target
2. This commission sharing will only applicable if distribution house has achieved his target

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7.3 Grading Scale
A new Hybrid scale will be introduced to measure the performance and payout ratio of performance based
salary structure. The hybrid scale is developed with a combination of qualitative and quantitative
judgement. Assessment and grading parameters will be as follows:

Table 7: Proposed PSR Grading Scale

Population
Grade Selection Criteria Implication of the Grade
Cap.
- Highly Qualified Graduate PSR’s
A 10%
- Will be considered for promotion as ASO

1. Education - Experienced group of PSR’s with at least HSC

B 2. Market Performance 30% - Retaining this group is crucial for us
3. Reporting Capability - Assign important routes to this group
4. Communication
Capability - Entry level position as PSR
5. Integrity - Any new recruitment will be fall under this
grade
C 60%
- Qualified new recruit can be promoted in
Grade B after completion of his probation
(minimum 3 Months)

Payout Ratio and Process:

 PSR will be directly under the payroll of regions and will be paid directly from regional accounts.
 The threshold for earning performance based salary structure for each PSR’s will be 85%. The
individual will not get his variable portion of a KPI if he achieves below 85% of the target. At
threshold level, one will get 85% of his variable portion.
 TA/DA will be given as per the actual attendance of individual PSR. Equal amount of TA/DA will be
deducted from the salary for each authorized / unauthorized leave.
 For wrong reporting and integrity issue region can deduct any amount from the actual pay.

7.4 Target Setting & Evaluation Process

Pre-Sales Representative (PSR)
KPI:

 Volume Target (Total P/Cases) (weight 60%)

Strike Rate (weight 20%)
SKU Management (Flavor/Pack Call Productivity) (weight 20%)

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Target will split into3 SKU by respective the regions based on their priority. Therefore the calculation will
be:

SKU Name Weight Calculation

SKU 1 10% Target will be given as percentage of Memo for each SKU out
of Successful Memo
SKU 2 5% Example: If the strike rate target for a PSR is 70% and 500ml
Sprite Target is 50%, it means within the 70% successful
SKU 3 5%
memo 50% should have 500ml Sprite
Target setting process

 Route specific by-flavor volume, strike rate and SKU management targets will be set for each PSR.
 Region will decide the SKU target. It is suggested that minimum no. of SKU management in the
target will be 4 (four).

Evaluation process

 ASO will be responsible for evaluating the performance of PSRs. He will collect sales information
from sales statements and carry out outlet audit to evaluate strike rate & SKU management.
 For outlet audit, each morning before leaving for market, ASO will select 40 outlets in a section
from the PSR summary sheet considering different volume class mix. ASO will visit at least one
section of every SR in a week. In this process, ASO will visit each SR at least 4 times in a month.
So, total audited outlet/SR will be minimum 120.
 The actual achievement will be divided by the target to calculate percentage achieved under each
KPI. The percentage achieved under each KPI should be multiplied by weight-age and then
summed up to derive total achievement percentage against target. The total achievement
percentage will be used to calculate the variable amount as per hybrid scale.

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7.5 Cost Implication & Business Benefit
Cost Implication:

Table 8: Cost Implication of Proposed PSR Salary Structure

Cost Heads 2016 2017 (Proposed)

Total Budget for PSR Salary 35,380,613 36,394,800

CTC/PSR/Month 11,253 11,576
Volume/PSR/Month 1807 P/Cs 2955 P/Cs
 2.9% Increment in proposed budget
 Proposed amount is based on 70% success rate by PSR.
 100% TA/DA is considered in proposed budget (TA/DA will be based on attendance)

Business Benefits:

 Lower turnover rate for PSR

 If PSR can achieve 80% of their target it will ensure 26% volume growth in 2017
 The new salary structure will help us to retain qualified PSR’s which will help us to drive business
 With the incremental & focused target, new modality of PSR salary will help to ensure distribution
in 80% of our target outlets hence will increase the strike rate significantly and impact directly our
volume.

Table 9: Business Benefit Proposed PSR Salary Structure

2016 2017 (Expected)
Strike Rate 40% 80%
Annual Volume/Outlet 163 P/Cs 163 P/Cs
Annual Volume 5,679,967 11,306,071

 New modality of PSR performance based salary structure will also induce line per call (LPC).
Currently we have 1.5 SKU per memo (Approximate). To achieve 20% of his variable PSR needs to
maintain 3 SKU/Memo, which has direct impact on volume.
 Grading system will further motivate the experienced and qualified PSR’s to deliver additional
business, hence drive competitive environment
 Commission sharing by distributor will drive PSR’s to overachieve the target and drive volume
growth

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 Chapter – 8
Findings & Recommendations

8.1 Findings:

The carbonated beverage industry of Bangladesh is visibly a matured and growth is almost
stagnant

The existing market of carbonated beverage is seriously threatened by the emergence of other
substitute beverage products – like energy drinks & flavored juice

Over the last decade, numerous numbers of new enterprises has entered the industry and
eventually have swamped the industry for its volume.

The major role in selling beverage products even if it is Coca Cola is largely depends of the quality
and capability of sales representatives.

AML with its poor salary structured compared to competition currently not able to recruit & retain
quality Pre-Sales Representatives which is hampering their basic business.

As Pre-Sales Representatives attrition rate is more than 50%, trained PSR’s are not available in the
market. Mostly fresher’s are joining AML for initial experience

The marketing budget of Coca Cola is only channeled to branding activities, there should be some
allocation for sales representatives who actually represent the company to the retail outlets.

8.2 Recommendations:

Implementation of the proposed pay for performance salary structures for the pre-sales
representatives as early as possible. It will drive business positively and will help to recruit quality
people and motivate/retain them for long time.

The big change in PSR’s salary structure should be highlighted and communicated in a manner
that impacts the market positively. AML should organize regional briefing by the top management
for communicating the change.

To build trust among the PSR’s AML should create an example of promotion culture from grade A
PSR within six months of implementing the new structure.

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 A percentage of brand budget from Coca Cola should be invested in giving branded material to
PSR’s in regular interval – For Example: Branded T-Shirt, Branded bags for carrying memo & others
stuffs etc.

After completing recruitment of all right PSR’s an extensive training on the roles, responsibilities
and KPI’s of PSR should be organized for uniform understanding of the basics.

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 Conclusion
AM Beverage Limited is the authorized bottler of Coca-Cola and one of the leading diversified business
conglomerates of Bangladesh. The brand Coca Cola is well represented by the company and they have
good reputation in maintaining the quality standard of the products. But recently company is in declining
trend from 37% market share in 2014 currently they are holding only 22.5% market share. And one of the
key reason of this de-growth is the low motivation of their field force and not accepting the change in
timely manner.

The top management of AML beverage unit has accepted their shortcomings and started working on the
change requirements. Recently they have invested in marketing resources and increased the number of
field force in all levels. Now it’s high time to review the salary structure of the core sales team – the Pres-
sales Representatives. They are the key persons who communicates the brands and earn the revenue for
the company. The proposed pay for performance salary structure will drive motivation among the field
force and surely help the company to meet the annual targets for 2017. The system is designed in a
manner that it will bring focus in key parameters of sales – volume, distribution and availability of target
SKU’s.

The ultimate success of the proposed structure/change will depend on how the management
communicate the change and also drive the business objectives. The big change in PSR’s salary structure
should be highlighted and communicated in a manner that impacts the market positively. AML should
organize regional briefing by the top management for communicating the change. In addition to build
trust among the PSR’s AML should create an example of promotion culture from grade A PSR within six
months of implementing the new structure.

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 Glossary of Terms
AML : Abdul Monem Limited

ASO : Area Sales Officer

ASM : Area Sales Manager

BPM : Bottles per Minute

CCI : Coca Cola India

CSD : Carbonated Soft Drinks

DSR : Distribution Sales Representative

FMCG : Fast Moving Consumer Goods

KPI : Key Performance Indicators

MIS : Management Information System

NRTD : Nonalcoholic Ready To Drink

NSM : National Sales Manager

PET : Polyethylene Terephthalates

PSR : Pre-sales Representative

RGB : Returnable Glass Bottle

RSM : Regional Manager

RTM : Route to Market Manager

SKU : Stock Keeping Unit

TA/DA : Travel Allowance/Daily Allowance

TCCC : The Coca Cola Company

TMM : Tarde Marketing Manager

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 Bibliography

http://www.amlbd.com/

http://www.amlbd.com/beverage-unit-coca-cola/

http://www.coca-cola.com.bd

http://www.coca-colacompany.com/coca-cola-unbottled/coca-cola-opens-new-bottling-plant-
in-bangladesh

https://www.scribd.com/doc/28271798/Beverage-Market-in-Bangladesh

https://www.wikipedia.org/

Competition Salary Structure: Phone Call to Target RSM

CSD Market Survey Report: Neilson Retail Audit

AML Inter Office Memo: Dated 19.02/2014

Beverage Unit Salary Sheets

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