CASE STUDY 13.

3: APPLE FOOD PRODUCTS

GROUP 4
PROBLEM DESCRIPTION:

Apple food products is a well known company with a wide product range
comprising sof drinks, ice creams and ready-to-eat (RTE) food products.
Over the years, AFP had developed an excellent distribution system which is
a combination of its own salesforce and distributors.
While customer segment for each other of the product categories could be
different, there are a large number of retailers who keep all the products and
pack sizes of AFP.
The bottle coolers and deep freezers are given to the major retail points by
the company and owned by it.
The company has been fortunate to find a large number of independent
distributors for each of its business units and product categories.
The distributors are primarily financers for the business and their redistribution abilities are not of top qualities.
Hence there is a need for AFP to have so many of its own salesmen to
generate secondary sales.
Some of the concerns about this distribution network, which top management
wants answers to, are:

QUESTIONS:
1. Is the role of a distributor primarily that of a financer? Is he not supposed to
take care of the re-distribution of the products to all the outlets in his
territory?
2. What should be the role of the company salesmen? Should they be used only
to generate secondary sales and get new orders from the distributors? Should
not the secondary sales be generated by the distributors own salesmen?
3. How will the company salesmen manage the large number of vans in
operation? How does a company like AFP decide the permanent journey plan
for its salesmen?
4. What should be the span of control of an average salesman? Is it correct, too
high or too low for AFP?
5. The company has put in a large number of cold storage units in the market
place. AFP has noticed that salesmen of the one product group do not pay
attention to the cold storage unit of another product group in the same
outlet. Many times these other units may be getting misused to store
competitive products. Is not the use of cold storage unit part of the
merchandising task of the salesmen and distributors?
6. The division by the product groups has created exclusive turfs for each set
of salesmen. Every distributor or salesman visiting the outlet is bothered
about his product group and there is no company pride.
7. How would retailer react if five distributors and company salesmen visit him
every week? How would they ration the money available for buying AFP
products among the five distributors? Would not some of there calls be un-

productive? Is it likely that two salesmen and distributors of AFP visit the
retailer within hours of each other? Is this the meaning of intense
distribution?
8. Bottle coolers and deep freezers were not kept in many outlets. Who is
responsible for their upkeep and maintenance? Do the salespeople and
distributors have nay role to play in this?
9. With so much specialization, is it possible to rotate between product groups?
How would one design trade and consumer promotions.
10.How would one design any incentive scheme for salesmen in such a multiproduct, multi-distribution channel system to be equitable for all salesmen?
ANSWERS:
1. The role of a distributor is not primarily that of a financier. Financiers
invested much to discover and manufacture products in order to meet the
needs of the consumers.
Distributors are supposedly responsible in distributing the products to all
outlets in its own territory. This is to ensure close monitoring of the constant
availability of the products. Therefore, he will be more familiar to the supply
and demand of the consumers in his area.
2. The role of company salesmen is to close monitor the bulk order and supply
of the distributors. Salesmen cannot only be use to generate secondary
sales, however they can directly make primary sales to retailers outside the
territory of the distributors.
In my own opinion, I prefer the salesmen of the distributor to make secondary
sales than that of company salesmen hence, it is their territory.
3. Company salesmen can easily manage the large number of vans during
operations. They have to arrange the schedule of delivery by region, by day
and the availability of the vans. Permanent journey depends on the demands
of their respective distributor, considering the volume of supply and its
location.
4. The span of control of an average salesman depends on the Geographical
dispersion:
a. If the branches of a business are widely dispersed, then the manager will
find it difficult to supervise each of them, as such the span on control will
be smaller.
b. Capability of workers, if workers are highly capable, need little
supervision, and can be left on their own, e.g.: Type of people, they need
not be supervised much as they are motivated and take initiative to work;
as such the span of control will be wider.
c. Capability of boss, an experienced boss with good understanding of the
tasks, good knowledge of the workers and good relationships with the
workers, will be able to supervise more workers
d. Value added of the boss, a boss that is adding value by training and
developing new skills in the workers will need a narrow span of control

than one who is focused only on performance management (this is the

reverse of the capability of workers point above)
e. Similarity of task, if the tasks that the subordinates are performing are
similar, then the span of control can be wider, as the manager can
supervise them all at the same time.
f. Volume of other tasks, if the boss has other responsibilities, such as
membership of committees, involvement in other projects, liaising with
stakeholders, the number of direct reports will need to be smaller
g. Required administrative tasks, if the boss is required to have regular face
to face meetings, complete appraisal and development plans, discuss
remuneration benefits, write job descriptions and employment contracts,
explain employment policy changes and other administrative tasks then
the span of control is reduced
In the case of AFP, we have to base the above listed situations which is
not clearly elaborated, therefore I cannot give my conclusion.
5. The use of cold storage unit is part of the merchandising task of the salesman
and distributors. These items were entrusted to them by the company,
therefore, they have to take care of them.
6. To avoid turfs between salesmen, it is better for the company to assign one
salesman for all products per outlet per distributor. This way, each salesmen
will take pride of the product of the company.
7. Retailer might be confused if he will deal with many distributors/salesman.
Retailer will find it hard to ration his capital it might cause trouble. They
should prioritize the distributor that they feel convenient to deal with.
Definitely, some calls maybe declined especially of source of funds are
insufficient. This is not the meaning of intense distribution.
8. For the maintenance and repair of the freezers, this depends upon the
agreement of the company and the distributors. If the damaged is due to
ordinary wear and the tear repair must be at the expense if the company. But
if the damage is due to the negligence of the salesmen ot the distributor,
therefore it will be of their account.
9. Specialization is not advisable; all salesmen must be familiar with all the
products. Should specialization be a practiced to the company, then there
must be rotation of salesmen.
Marketing strategy helps one design trade and consumer promotion.
10.Incentive depends on the income earned by the company. Salesmen with
good performance must be equally compensated. They must get what is due
to them if they really deserve it.