PROJECT :

DESIGNING LOYALTY PROGRAMME

FOR ARVIND MILLS LTD.

SUBMITTED BY:

NITESH SABOO

SUMMER INTERNSHIP REPORT

ON

“ Designing a loyalty program for the channel partners of Arvind Mills Ltd”

With special reference to:

Arvind Mills Ltd

By:

Mr. Nitesh Saboo

PGDM

Roll no 077

Class of 2009-11

Corporate guide: Academic Guide:

Mr. Minesh Juneja Prof. Dhruv Chak

Arvind Mills Ltd Faculty

BIMTECH

TABLE OF CONTENTS

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SLR NO. CONTENTS PAGE NO.

1 Summer Internship Certificate 4

2 Certificate of Approval 5

3 Declaration 6

4 Acknowledgement 7

5 Background of the study

- Statement of the problem

- Importance of the problem

8

6 Objectives 9

7 Scope and coverage 10

8 Introduction – A brief about the company 11- 14

9 Various processes / departments of Arvind Mills 15- 25

10 Review of literature

- Basic concepts

- Terminologies used

26- 33

11 Methodology 34

12 Findings and formulation 35 - 42

13 Conclusion 43

14 Limitations 44

15 Recommendations 45 - 46

16 Annexure 47 - 62

Birla Institute of Management Technology

3

Greater Noida

Birla Institute of Management Technology

Summer Project Certificate

This is to certify that Mr. Nitesh Saboo , Roll No. 077 , a student of Post Graduate

Diploma in Management has worked on Summer Project titled “Designing a loyalty program

for the channel partners of Arvind Mills Ltd.” at Arvind Mills Ltd after trimester III

in partial fulfillment of the requirement for the programme. This is her original work to the best

of my knowledge.

Date: Signatute

Seal: (Faculty Guide)

CERTIFICATE OF APPROVAL

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The following Summer Internship Report titled “Designing a loyalty program for the channel partners of Arvind Mills Ltd” is hereby approved as a certified study in management carried out and presented in a manner satisfactory to warrant its acceptance as a prerequisite for the award of Post Graduate Diploma in Management for which it has been submitted. It is understood that by this approval the undersigned do not necessarily endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve the Summer Internship Report only for the purpose it is submitted.

Organizational Guide Signature……………………….

: Name: Mr. Minesh Juneja

: Designation: Marketing Head - Domestic

Arvind Mills Ltd

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DECLARATION

I hereby declare that the project report titled “Designing a loyalty program for the channel

partners of Arvind Mills Ltd” is my own work and has been carried out under the able guidance

of Prof. Dhruv Chak, Faculty, BIMTECH and Mr. Minesh Juneja, Marketing Head - Domestic,

Arvind Mills Ltd.

All care has been taken to keep this report error free and I sincerely regret for any unintended

discrepancies that might have crept into this report. I shall be highly obliged if errors (if any) be

brought to my attention.

Thank You.

(Nitesh Saboo)

Place: GreaterNoida E-mail: nitesh.saboo11@bimtech.ac.in

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ACKNOWLEDGEMENT

I would like to thank Mr. Minesh Juneja, my project guide for their guidance and support throughout the tenure of the internship. Without their co-operation and review, the project would not have encompassed so many aspects of marketing and would not have been such a wonderful learning experience.

I owe enormous intellectual debt towards my teacher and mentor Prof. Dhruv Chak whose suggestions and guidance was invaluable and helped me throughout my project on “Designing a loyalty program for the channel partners of Arvind Mills Ltd”.

Next, I would like to express my deepest gratitude to Arvind Mills Ltd and BIMTECH for giving me an opportunity to undertake this project. It was a wonderful learning opportunity and I look forward to associations with Arvind Mills Ltd in the future as well.

Last but not the least I would like to thank all those persons and organizations who have helped me directly or indirectly in the successful completion of this study.

Nitesh Saboo

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BACKGROUND OF THE STUDY

Statement of the problem

“Designing a loyalty program for the channel partners of Arvind Mills Ltd”

Channel partners as a phrase is used to describe a company that partners with a manufacturer or producer to market and sell the manufacturer's products, services, or technologies— usually through an affiliate partner or reseller relationship.

Channel partners may be distributors, vendors, retailers, consultants, systems integrators (SI), technology deployment consultancies, and value-added resellers (VARs) and other organizations.

Importance of the problem

As mentioned above it is evident that channel partners are an integral part of the marketing value chain. For Arvind Mills, they serve as the bloodline as the channel partners especially the distributors serve as a major link between the customers and the company. If relations with the distributors and/or channel partners are strained then often the company shall face problems financially like lowered sales, low profit margins, etc in the short and long run and also lead to dissatisfied customers owing to lower or non-availability of products. This project intends at serving as an initiative to design and formulate a loyalty program for the channel partners to overcome the problems.

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OBJECTIVES

The basic objective of this project is to evolve a new loyalty program for the channel partners of Arvind Mills Ltd.

This loyalty program is intended to strengthen relations between the various channel partners namely the distributors, vendors, retailers, consultants, etc. the loyalty program is so designed that it ensures a symbiotic relationship between the channel partner and vendor for mutual benefit. This ensures that in the long run both the parties shall operate so as to aid the growth of the other.

The very foundation of the loyalty program will be on trust and confidence so that neither of the parties feel either of them are loosing out and will ensure a sense of commitment from both sides.

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SCOPE AND COVERAGE

The scope of the project is to ensure that a single policy is followed across the entire organization with its channel partners and builds loyalty among them. This would ensure a more transparent system across the firm. In addition, this project will ensure a standardized process with an extensive integration to ensure that the channel partners benefit as much from the loyalty program as the firm itself thus ensuring a healthy mutual relationship.

This program shall cater to all distributors spread across Pan India to ensure a common loyalty program. It would be beneficial to all types of distributors – big and small to avoid any kind of discrepancy or feud among various them and ensure a sense of trust and commitment.

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INTRODUCTION

About the company

Arvind Limited started with a share capital of Rs 2,525,000 ($55,000) in the year 1931. With the aim of manufacturing the high-end superfine fabrics Arvind invested in very sophisticated technology. With 52,560 ring spindles, 2552 doubling spindles and 1122 looms it was one of the few companies in those days to start along with spinning and weaving facilities in addition to full-fledged facilities for dyeing, bleaching, finishing and mercerizing. The sales in the year 1934, three years after establishment were Rs 45.76 lakh and profits were Rs 2.82 lakh.

In the mid 1980’s the textile industry faced another major crisis. With the power loom churning out vast quantities of inexpensive fabric, many large composite mills lost their markets, and were on the verge of closure. Yet that period saw Arvind at its highest level of profitability. At this point of time Arvind’s management coined a new word for it new strategy – Renovision. It simply meant a new way of looking at issues, of seeing more than the obvious and that became the corporate philosophy.

The national focus paved way for international focus and Arvind’s markets shifted from domestic to global, a market that expected and accepted only quality goods. Cottons were the largest growing segments. But where conventional wisdom pointed to popular priced segments, Renovision pointed to high quality premium niches. Thus in 1987-88 Arvind entered the export market for two sections -Denim for leisure & fashion wear and high quality fabric for cotton shirting and trousers. By 1991 Arvind reached 1600 million meters of Denim per year and it was the third largest producer of Denim in the world.

In 1997 Arvind set up a state-of-the-art shirting, gabardine and knits facility, the largest of its kind in India, at Santej. With Arvind’s concern for environment a most modern effluent treatment facility with zero effluent discharge capability was also established.

Year 2005 was a watershed year for textiles. With the muliti-fiber agreement getting phased out and the disbanding of quotas, international textile trade was poised for a quantum leap. In the domestic market too, the rationalizing of the cenvat chain and the growth of the organized retail industry was likely to make textiles and apparel see an explosive growth.

Arvind has carved out an aggressive strategy to verticalize its current operations by setting up world-scale garmenting facilities and offering a one-stop shop service, by offering garment packages to its international and domestic customers.

Of Lee, Wrangler, Arrow and Tommy Hilfiger and its own domestic brands of Flying Machine, Newport, Excalibur and Ruf & Tuf, is setting its vision of becoming the largest apparel brands company in India.

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JOURNEY

1931Arvind Limited is set up by three brothers Kasturbhai, Narottambhai and Chimanbhai Lalbhai with a share capital of Rs 2,525,000 (US$55,000) backed by state-of-the-art technology, with the aim to produce high-end superfine fabric.

1934 With sales reaching Rs 45.76 Lakhs, and a profit of almost Rs 3 Lakhs, Arvind establishes itself amongst the foremost textile units in the country.

1986- An uninterrupted record of not missing out on paying dividend to its shareholders.- An established leader in fine & superfine cotton fabrics for Indian market.

1986Renovision: First company to bring globally accepted fabrics Denim, yarn dyed shirting fabrics & wrinkle free gaberdines to India.

1987- The largest zero discharge green effluent treatment plant in India.- Commitment to greener world

1987- First company to bring International shirt brand “Arrow” to India- First Company to start dedicated “retail” outlets for Arrow brand.- Awarded various awards for highest exports and ISO

1989- Largest denim & shirting in South Asia.- 3rd largest denim capacity in the world

1997

First Indian company to verticalise the cotton textile business from cotton fields to apparel retailing.

1997-1998First company to introduce ERP SAP business solutions

2008Company launches 'Megamart', now India's largest value apparel-retail chain

Largest portfolio of International brands: Lee, Wrangler, Nautica, Jansport, Kipling, Tommy, Arrow, US Polo, Izod, Pierre Cardin, Palm Beach, Cherokee, hart Schaffner Marx

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Lifestyle Fabrics

The Fabric of a Global SocietyIn a world without boundaries, Arvind fabrics are equally universal in their appeal. Arvind aims to enrich lifestyles globally, inspiring diverse customers with the beauty of their fabric.

Denim

There are many delightful features of Arvind denim: An annual capacity of 110 million meters; the position of 3rd largest producer of denim in the world; and an export network of 70 countries worldwide. Prominent products in this category include ring denim, indigo voiles, organic denim, bi-stretch denim and fair trade certified denim. This is apart from regular light, medium and heavy weight denims. They come in various shades of indigo, sulphur, yarn-dyeds, in 100% cotton and various blends.

The facilities of Arvind Denim are accredited with ISO 9001, ISO 14001, OEKOTEX 100, GOTS, Organic exchange standard, FLO for fair trade and Lycra Assured. As one of the largest denim producers in the world, Arvind caters to quality markets of Europe, US, West Asia, the Far East and the Asia Pacific.  

Shirting

It is one of the most well-known products of Arvind Group, selling at a premium in the international market. It has an astonishing annual capacity of 34 million meters. Prominent products within this category include fabrics with non-iron properties, mechanical finishes, printed fabrics apart from the cotton and cotton blends in Linen, Lycra, Polyester, Modal, Silk etc. with varieties in yarn dyeds and solids.

Further, Arvind has a unique plant for manufacturing very light weight indigo dyed fabrics in yarn dyed and solids for top weights. Arvind Shirting has a liquid ammonia based fabric processing plant and a state-of-the-art print house – a first for India and one of the few in Asia.

Backed by the latest technology and state-of-the-art equipment, every stage of the production process, right from spinning of the yarn to final processing and testing of the fabric, ensures that stringent quality standards are met and products remain eco-friendly.

Khaki

The many virtues of Arvind Khaki merit your undivided attention: An annual capacity of 21 million meters which facilitates the launch of two new collections annually; and the distinction of being the only khakis division in South East Asia to do so.

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The division provides the finest fabrics in the variants of 100% Cotton, Cotton Rich Polyester Blend, Cotton Lycra, Cotton Tencel, Cotton Linen, etc to name a few. The division has an integrated plant with weaving and processing facilities. The most prominent products in this range include Chinos, Canvas, Ribstop, HBT, Tussore, Cavalry, Structures and Dobbies.

Knits

Arvind’s knits department has an annual knitting capacity of 10,000 tons. Apart from the basic knitting capabilities (jersey, pique, rib, and interlock), Arvind has mastered specialty knitting techniques such as yarn-dyed autostripers, jacquards, and stretch fabric. The knits vertical has a fabric dyeing capacity of 6500 tons per annum and yarn dyeing capacity of 3500 tons per annum. It has the ability to process both tubular and open-width fabric and offer specialty finishes like mercerization, singing and various forms of brushing and peaching. The department also boasts of a state-of- the art print shop equipped with fully automatic placement printing capabilities.       

Voiles

Arvind is the uncontested market-leader in the manufacture of voiles, with a production capacity of 33 million meters per annum. Arvind’s voiles are primarily used as blouse material and are sold in the domestic market through an impressive network of 150 dealers, reaching over 5000 retail outlets throughout India. High quality Swiss voiles are exported to Switzerland, Sri Lanka and countries in the Middle East. 

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VARIOUS PROCESSES / DEPARTMENTS OF ARVIND MILLS

a. Spinning department

The first step in the manufacturing of all kinds of fabric i.e. spinning of bales of raw cotton into

yarns of various kinds suited for producing varieties of fabric.

Trivia about Arvind Mills:

‘Voile’ fabric is mainly used for knitting purposes and for making saris too, but is

mostly exported to the middle east

In addition to collaborations with multinational apparel giants, Arvind Mills runs its

own brands of clothing e.g. Excalibur, Flying Machine, Ellites et al

Cotton is procured from a host of countries including far-flung ones like Egypt,

America and Germany

Recently, Arvind Mills has come up with its unique product, Ready To Stitch (RTS)

kits

Cost of fabric accounts for ~65% of the cost of raw material

850 million m2 of denim fabric is manufactured every month at facilities at Naroda,

entirely dedicated for this purpose

Towards this end, 4500 tonnes of yarn is spun every month, an exercise that

contributes 450 crores towards costing only for denim

There are primarily two kinds of technologies that are in popular usage vis-a-vis spinning of yarn

namely open end technology, also called roter spinning owing to its being the key component in

the machines involved, and ring spinning technology. The facility at Naroda works entirely on

open end technology and produces ~60 tonnes of yarn a day with 5472 roters being around on

campus. At other manufacturing facilities of AM, ring technology is used, which generally

results in production of 70 tonnes of yarn a day. Rest of the yarn required for fabric production

The cotton spinning can be done using any of the four technologies:

1. Ring spinning

2. Open end spinning

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3. Drap spinning

4. Air-jet spinning

The open end technology of spinning requires cotton to be processed in mainly 4 broad stages as

enumerated below:

Blowing: In this stage physical, in situ and ex situ impurities are gotten rid of raw cotton

Carding: Cotton, thus purified, is put into cylinders in sliver form

Drawing: Parallelization of fiber takes place

Roter spinning: The main process of drawing cotton fiber into yarn is carried out

b. Weaving department

The weaving department has 203 weaving machines en Toto, of the make ZAX and 209i, the latter being an older version. The machines are of the company TSUDAKOMA, a Japanese concern as opposed to the spinning department where the machines were of German companies. The ZAX machines work at 750 rpm whereas 209i model machines work at 650 rpm. Together they churn out a lac m2 of cloth a day. In total the department has 159 ZAX machines and 44 209i. There happen to be 261 labourers working in 4 shifts in the department with 20 staff members i.e. 5 in each shift, out of whom there is one supervisor for each shift. A beam card keeps all the records of what is being put on the machine and under whom it is supervised.

Inputs used for the weaving departments can vary from:

1. OE- open end

2. ER- even ring

3. UR- uneven ring

Lycra is used to increase the elasticity of the fiber. Filament is used in the fiber which is exported to countries where the level of sweating is lower as compared to Indian condition where majorly cotton is used for the same reason.

The weaving department has the distinction of being the largest at Arvind Mills and exports close to 95% of its manufactured fabric. Discussing the denim fabric, the core competence of AM, original denim is composed of 100% cotton but with a view to bring in variations to the material in consonance with the emerging trends in the market, various natural fibers like linen and synthetic fibers like filament, lycra, polyester are added to cotton. While weaving such mixed fabric, the core is made of the addend and original cotton is wound around it. Yarn woven

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vertically is called warp while that woven laterally is termed as weft. For weaving purposes a cotton count ranging from 5 to 20 is generally used.

c. Dyeing department

Arvind Mills has a grill section that was loaded with 12 beams of yarn, though latest machinery could support even 16 of them. They are also known as warping beams and their design depends upon the texture and construction of fabric e.g. weight, length etc.

Each beam consist of 350-400 ends and 12 such beams are joined together to form one at last with 4000-4800 ends which is used in the weaving process.

Four types of dyeing processes are used in Arvind mills namely:

1. Indigo dyeing

2. SBIT-sulphur bottoming indigo topping

3. IBST-indigo bottoming sulphur topping

4. Sulphur dyeing

All the above processes differ in the process of loading on the fabric.

The dyeing process in a flow chart is explained below. (Ref. fig 1.1 )

Pre-wetting PWA

|

W.B.1 (W.B.-Washing box)

|

Dye box (6 shades are used)

|

W.B.2

|

Sulphur

|

W.B.3

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|

Pre dryer

|

Saw box (Sizing)

|

Post dryer

|

Compromising (speed is increased)

|

H/S

d. Finishing department

The department churns out 300000 meters of finished denim cloth a day. What happens to the fabric that has come off loom is called surface finishing that entails softening of fabric, thus making it fit to wear. Further, de sizing is done in order to reduce tension in the knit yarn, to ensure that it doesn’t break out of undue tension.

To accomplish the process, there are three basic mechanisms involved namely desized finishing, desized mercerized finishing and desized mercerized tint finishing. In yesteryears, there existed a demand for long lasting colors in denim apparel, which is no longer present. Consumers are becoming more inclined towards denim that loses color in a few washes. For such emerging needs and choices, double dyeing concept has been adopted that renders denim fabric various effects after subsequent washes.

The process is as follows

1. Singeing is done and the hairiness of the fabric is burned by flames.

2. Desizing removes the sizer put on by the suker muller in the dyeing department to increase the strength of the fabric (a mixture of desizing agent, alcozyme and acetic acid is used for the same).

3. Mercerizing is the process of caustic wash and the unit studies is GPL (gram per liter).

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4. Stunter is used to settle the width shrinkage and to adjust the elasticity by killing the elastic properties of lycra in the fabric which is to the tune of 30 to 40% earlier and can be dropped down to 3 to 8% as per customer requirement.

Finishing techniques used in Arvind mills are:

1. Glaze finishing

2. Padding

3. Curing

4. Montfort finishing

5. Foam finishing

In addition there is an intervening singeing and washing process that brings in more softness in the fabric. The product is washed off water soluble chemical remnants, steam dried and then causted that lead to swelling of the material. Earlier foam technology was used for this purpose, which has now been replaced by wet technology that gives more softness and binding to fabric. This is the followed by moving the fabric through centering machines that kill extra percentage of inbuilt Lycra to peg elasticity at the desired level as demanded by the customers. Temporizing is the next process to be carried out with the help of rubber and leads to permanent shrinkage of the fabric.

e. Quality Assurance department

Traditional view:

Traditionally quality assurance was looked as if a post-mortem report where in the yarn and the

fabric was checked for the quality and standards as per required by the customer. a proper

policing was kept on what has been done and what is to be done

Modern view:

In the modern day quality assurance has a wider scope and it includes activities like process

ownership and calliberation where in the department ownership is given to a person and it

becomes his/her duty to deal with it in the most efficient manner.

Quality assurance at Arvind mills has the following labs. :

1. Cotton laboratory

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2. Physical testing laboratory

3. Chemical testing laboratory

4. Callibaration laboratory

5. Colour quest laboratory

6. Clearance department

COTTON LABORTARY:

Cotton is held for the 70% cost of the fabric cost only and hence becomes a major factor

which if controlled will add maximum contribution to the strength of avind mills.

The coefficient of variance is calculated for the width, diameter and hairiness of the fibre.

The machine used for this purpose is USTER TESTER 5.the fibre is passed at a speed of

400m/min and the variance is hence calculated. The variance is calculated against

international or the preset arvind standards

The length, weight and the exact count of the fibre is also calculated and the CASCADE

machine is used for this purpose which ensured the right thing at the right time as per

customer demands.

PHYSICAL TESTING LABORTARY

This testing happens at the yarn manufacturing stage and the yarn is tested for its

1. Length

2. Elongation

3. Elasticity etc

The yarn should be tested in a way so as to know whether the yarn can take all the

loadings or not and if yes to what extent can it take.

This helps in deciding what processes the yarn can face and what effects cab be

deduced.

Single yarn strength and its elongations is measured using the USTER TENSORPAID 3 machine

which is the most trusted name in the field and comes from Switzerland.

INSTRON 4465 is used to check the tensile strength of the fibre and the tear strength is also

calculated in grams.

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For all the above written testing’s the standard lab conditions are made at a temperature of 60+/-

2 f and the humidity level is maintained at 65%+/-2%

Factors like stretchabliltyskew and shrinkage are tested after marking is done followed by three

washings of the fabric; the fabric is tonned to the environment after keeping it in the standard

environment.

CHEMICAL TESTING LABORTARY:

In the chemical laboratory they check all the fuels, dyes, and all the chemicals that are used in

the production process. They even check the denim if it is washed with bleach how much it fades

the colour. They try different process like how the denim would react in different conditions like

in case of perspiration, salt water, normal water, in extreme temperature.

COLOUR QUEST LABORTARY:

In the colour quest they try to find out the different shades and they see to it that after the

washing and drying process does the shade match the requirement of the customer or not.

CALIBRATION LABORATORY:

Definition:

Calibration is a specialized measurement process where in one compares test and measuring

instruments/equipments of unknown status to well defined standards of greater accuracy in order

to detect /eliminate error by adjustments & report any variation in accuracy capability.

CALIBRATION ACTIVITY

Calibration through in –house facility 93%

Calibration throughout-side agencies 7%

CALIBRATION FACILITY AT CALIBRATION LABORATORY

PARAMETERS INSTRUMENT & FUNCTIONS

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Temperature Mercury thermometer, temperature indicator & controllers, temperature switches, temperature gauges, temperature transmitters.

Pressure Pressure gauge, vacuum gauge, pressure transmitter, pressure switch.

Mass Analytical weighing balance

Electrical AC/OC voltage, AC/DC current, single phase power, frequency, resistance capacitance, conductance, logic pulses, logic levels.

Digital & analogue amateur, multimeters, panel meters, frequency meters.

Dimensional Measure tape, steel scale, verniar capture, micro meter, dial gauge.

Gas lab instruments Lab instruments used for quality conformance tests & physical testing lab & chemical testing lab.

f. DTNG Department

In Arvind mill manufactures 8.5 million of denim per month. Out of which 60% is exported and

remaining is manufactured for the domestic market. There are around 34 companies who are the

manufactures of the denim product in the market.

The USP of arvind mill is that it believes in innovation and constantly keeps on innovating new

products. It innovates around 1700 new product material every year which is equivalent to 5 new

product materials every day. Arvind mill manufactures around 1600 denim fabric out of which

1300 includes different shades of blue colour.

New designs are created on the basis of the following parameters:-

1) Customer based development : Product is developed on the basis of customer

requirements. Sometimes the customer asks for the exact imitation of the product (on the

basis of texture, strength, durability, etc) at a cheaper rate. In order to target the exact

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customers and fulfil demands Arvind mills has its marketing team worldwide including

Europe who keeps on meeting the customers from time to time in order to get their

feedback and review for the required product.

2) Design collection : Arvind mills also displays its designed products at fashion shows held

at various public functions to promote it brand awareness as well as show the distinct

variety of product it manufactures. The process of creating a designing concept and

further executing it takes around 18 months. One of the products of arvind mills “Auto

meter” was proposed for making in January 2009; the production process started in April

2009 and was launched in the market in the year 2010.

3) Trouble shooting : with the new technologies good quality of the same material at a

cheaper rate can be manufactured. Due to huge demand of its denim product in the

market Arvind mills department of weaving spinning and finishing outsources not less

than 1000 tonnes of yarn per year.

g. Inspection Department

After the processing of the denim in the finishing department it is sent to the inspection

department where certain parameters are checked n then inspected in the inspection machine.

The parameters that are checked before inspecting in the machines are

1. Feel of the denim

2. Look of the denim

3. Weight of the denim

4. Shrinkage

5. Skewing

6. Elasticity of the denim

The operator checks for the damages, spots, knots in the denim .there are certain signs that

are used for the damages like if he finds out any knot he puts a dot on that place

Dispatching is done according to the customer requirements. For dispatching the denim bale

is packed. There is special packing machine of LEVY & SMITH .After the role is inspected

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it is passed on to conveyer belt where a bar code sticker is placed with certain details like

yards of denim, meters, pieces, 4 point ,quality number , style , bale number , particular

number is given to each bale.

After that it is passed through 150 degree Celsius so the total air is vacuumed from the bale.

Then it is sent to the sorting department where the bales are sorted out as per the requirement

and style by the sticker that was placed on the bale.

h. ISO & EMS Department

ISO 9001-2001-2008

ISO is a system certificate and not a product certificate .It tells us about how the procedure and

systems are in place or not. It says if your system is on place then your product will be good

automatically.

After you apply for ISO certification first thing that takes place is pre-assessment auditing

standards they find out the discrepancy or non-conformity. After all the discrepancies are

removed there is certification audit. There is 100% audit of all the departments and report is send

to the committee and they give the certificate according to details in report for auditing. ISO has

appointed different companies to do that. The certificate is given for 3 years and for every 6

months surveillance audit is done. They check around 30 -40% of the departments and during the

period of 3 years again 100% auditing is done of all the departments. During the surveillance

audit they will take sample size and would do the auditing. After 3 years you can apply for re-

certification and whole procedure takes place again. Then there is another certification that is

EMS (environment management system) .it looks after whether the surrounding atmosphere is

safe for the other people or not. It looks after certain parameters like noise pollution, air, water,

land pollution for that certain standards are followed and are taken care of. there is and ETP

which is EFFLUENT TREATING PLANT which treats water ,chemical and dyes to bring down

to certain PH level which is then sent to drainage that water is not harmful after the treatment .

The sludge that remains after the treatment of water is dumped to a certain land that is certified

by the government for disposal of such harmful wastes.

There are other types of certifications are

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ISO -14000-2004 is followed which looks after the resources utilization or depletion of

resources.

ISO-18000 OSHO’S its occupational standards for health and safety where every measure for

safety of the staff is taken into consideration.

i. Marketing Department

As Arvind mill is one of the leading company in textile industry they provide their fabric

to domestic as well as international market also. They have different teams which handle

marketing activity in different region.

Arvind mill produce 8 million meter fabric every month. Out of which 60% is exported and the

rest is manufactured for the domestic market. For, promotion of their products in domestic &

international market they organize fashion shows. They have different designer for U.s, Europe,

and domestic market. They introduce their new collection twice every year (summer spring and

autumn winter) known as American line collection for the American market and Europe line

collection for the European market. Apart from that the also hold exhibition and seminars for the

concerned buyers.

j. Human Resource Department

In strategic business unit the retention rate of the employee is low as the plant is 80 years old.

When a new employee joins the plants the excitement level of the employee is quite high but

within time it declines. At Arvind mills an attempt is being undertaken to decrease the number of

employees especially those who do not have the required employment skills. The employee

strength is over 2500 across all the units.

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REVIEW OF LITERATURE

1. Basic terms

a. Who are distributors?

Companies use various modes of marketing to reach the customers. These include retailers, distributors, agents, etc. Distributors are those points of contact for the customer where they can attain the goods and services of the parent company via a medium namely the distributor.

b. What is a distribution network?

The system of intermediaries between the producer of goods and/or services and the final users.

An optimal distribution network is intelligently designed to minimize costs by providing the customer the right goods, in the right quantity, at the right place, and at right time.

Distribution channels may not be restricted to physical products alone. They may be just as

important for moving a service from producer to consumer in certain sectors, since both direct

and indirect channels may be used. Hotels, for example, may sell their services (typically rooms)

directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation

systems, etc.

c. What is loyalty?

Loyalty, also called allegiance or truth, is faithfulness or a devotion to a person or cause.

The practice of providing discounts, prizes, or other incentives to encourage continued patronage of a business. Generally, loyalty programs are considered less expensive to maintain than allowing customer defection or 'chun'.

d. What is a Loyalty program / Channel incentive program?

A channel incentive campaign offers channel partners something that motivates, rouses, or encourages specific behavior. Often focused on a specific product or within a finite time period, the incentive itself comes in the form of a bonus or reward, often monetary or other benefit in kind. A well executed channel incentive program creates a virtuous circle in which both channel partner and vendor are motivated to collaborate to attain improved performance and achieve pre-defined goals.

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e. Who are Channel partners?

The phrase used to describe a company that partners with a manufacturer or producer to market and sell the manufacturer's products, services, or technologies— usually through an affiliate partner or reseller relationship.

Channel partners may be distributors, vendors, retailers, consultants, systems integrators (SI), technology deployment consultancies, and value-added resellers (VARs) and other organizations.

In reselling, the partner takes title to product and resells. Usually, the relationship is defined by the manufacturer's equipment being part of a larger solution offered to customers by the channel partner. The partner will "add value" (see VAR) to the product or technology, or even build a solution that utilizes one or more of the vendors' products.

Channel partners form relationships for a number of different reasons and results. For the manufacturer, a channel partner can help bring a new   product  to market and increase visibility of a brand and boost sales. For the business, it helps open the doors to new business with a lower cost and a smaller risk factor than producing your own technology or merging/acquiring to obtain the technology for your service portfolio.

f. Who are the channel loyalty programs for?

Channel loyalty programs are not suitable for every vendor or every situation. From the vendors perspective, good candidates are vendors who:

o Want to reward partner loyaltyo Suffer from poor partner loyalty

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o Want to reward partner investment and commitmento Enjoy a more mature or intimate relationship with their partners

Similarly, loyalty programs are not effective with all channel partners. Good candidates are partners who:

o Respond well to strategic loyalty programso Have a desire to minimize the number of vendors product lines carriedo Have a desire to specialize in a limited number of technologies or solutionso Have influence over the technology purchasing choices of their customero Afford their sales people a high degree of autonomy in their choice of product

portfolio.

g. Why implement such incentive or loyalty programs?

Sales people sell for many reasons; their innate competitiveness, their desire to be the best, a need to gain approval from their management and peers and their appetite for career advancement all play a part. But by far the greatest driver of sales activity is financial compensation and benefits. Hence when a vendor employs a direct sales force, motivation is a relatively straightforward affair:

• Pay a competitive salary• Pay attractive rates of commission on sales• Offer a compelling package of benefits to the sales person and their familyBut there are also several other less tangible sources of motivation:• Provide them with desirable high quality products that offer competitive benefits• Generate demand and channel it to them in the form of sales leads• Own a strong brand behind which they can feel some sense of pride to unite or at least form a positive personal attachment• Provide them with the sales tools and resources necessary for them to do their job• Minimize bureaucracy and red tape in order to be an easy company in which to operate• Celebrate and reward success• Be seen to reward performers and punish persistent failures• Be prepared to offer additional incentives when the business requires its sales people to go the extra mile

What is also common is that direct sales people have a contractual obligation to sell on behalf of the company and company alone. They are also obliged to meet the performance targets consistently or else put their job at risk.

Hence, channel sales people must be motivated and incentivized to sell your products especially when, as is most often the case, competitive products are available for them to sell. It goes without saying that partner sales people are just as motivated by money as your own

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but you have little or no influence over what they are paid or how they are compensated. Interestingly however, if we review the list of less tangible motivators above, we can see a direct correlation between the needs of direct and indirect sales people from the vendor. It is through addressing these that you will have more success in winning over your channel sales people.

h. Benefits of distribution network

If selling directly from the manufacturer to the consumer were always the most efficient

methodology for doing business, the need for channels of distribution would be obviated.

Intermediaries, however, provide several benefits to both manufacturers and consumers:

improved efficiency, a better assortment of products, routinization of transactions, and easier

searching for goods as well as customers.

The improved efficiency that results from adding intermediaries in the channels of distribution

can easily be grasped with the help of a few examples. Take five manufacturers and 20 retailers,

for instance. If each manufacturer sells directly to each retailer, there are 100 contact lines—one

line from each manufacturer to each retailer. The complexity of this distribution arrangement can

be reduced by adding wholesalers as intermediaries between manufacturers and retailers. If a

single wholesaler serves as the intermediary, the number of contacts is reduced from 100 to 25:

five contact lines between the manufacturers and the wholesaler, and 20 contact lines between

the wholesaler and the retailers. Reducing the number of necessary contacts brings more

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efficiency into the distribution system by eliminating duplicate efforts in ordering, processing,

shipping, etc.

In terms of efficiency there is an effect of diminishing returns as more intermediaries are added

to the channels of distribution. If, in the example above, there were three wholesalers instead of

only one, the number of essential contacts increases to 75: 15 contacts between five

manufacturers and three wholesalers, plus 60 contacts between three wholesalers and 20

retailers. Of course this example assumes that each retailer would order from each wholesaler

and that each manufacturer would supply each wholesaler. In fact geographic and other

constraints typically eliminate some lines of contact, making the channels of distribution more

efficient.

Intermediaries provide a second benefit by bridging the gap between the assortment of goods and

services generated by producers and those in demand from consumers. Manufacturers typically

produce large quantities of a few similar products, while consumers want small quantities of

many different products. In order to smooth the flow of goods and services, intermediaries

perform such functions as sorting, accumulation, allocation, and creating assortments. In sorting,

intermediaries take a supply of different items and sort them into similar groupings, as

exemplified by graded agricultural products. Accumulation means that intermediaries bring

together items from a number of different sources to create a larger supply for their customers.

Intermediaries allocate products by breaking down a homogeneous supply into smaller units for

resale. Finally, they build up an assortment of products to give their customers a wider selection.

A third benefit provided by intermediaries is that they help reduce the cost of distribution by

making transactions routine. Exchange relationships can be standardized in terms of lot size,

frequency of delivery and payment, and communications. Seller and buyer no longer have to

bargain over every transaction. As transactions become more routine, the costs associated with

those transactions are reduced.

The use of intermediaries also aids the search processes of both buyers and sellers. Producers are

searching to determine their customers' needs, while customers are searching for certain products

and services. A degree of uncertainty in both search processes can be reduced by using channels

of distribution. For example, consumers are more likely to find what they are looking for when

they shop at wholesale or retail institutions organized by separate lines of trade, such as grocery,

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hardware, and clothing stores. In addition, producers can make some of their commonly used

products more widely available by placing them in many different retail outlets, so that

consumers are more likely to find them at the right time.

i. What are the key steps of a loyalty program?

10 Steps for Setting up a Loyalty Program

Step 1: Evaluate the Product

The first step is always to answer the following questions honestly:• Is my product good enough?• Is my product worth the investment?

Step 2: Identify the Value Proposition

This part is one of the absolutely most important steps before implementing a Customer Loyalty Program. What to offer customers? What is the value proposition? If the value is not well received by customers, the program will not work at all. Therefore use extra time to develop your value proposition. Here are some general guidelines:1. The value, reward, benefits have to be of “high value” in order to make the membership attractive. The benefits must meet the expectations of the target groups.2. It is not enough to think that a benefit offered are of high value. The benefit must also have a high “perceived value”. If customers perceive it differently because it is not the benefit they desire, the program will not work.3. Selection of benefits. Benefits can be “Hard” or “Soft” (See figure below).4. Timing of benefits or rewards (i.e., instant or delayed reward) needs to be considered.

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The right mixture of loyalty program benefits

Step 3: Create Program Goals

Goals can be divided into core, primary and secondary loyalty program goals. Below are some possible goals:Core Goals:• Revenue• Profit• Market sharePrimary Goals:• Customer loyalty• Win new customers• Build up a strong database• Support other company departments• Create communication opportunitiesSecondary Goals:• Increase visit frequency at point of sales• Increase usage and purchase frequency• Develop problem solutions• Support public relations of company• Add customer support capacity• Support dealer network• Improve product, brand and company image

Step 4. Determine the Financial Cost

The main costs you should consider are:• Technical, organizational and personnel infrastructure• Program service centre• Development, storage and shipping of the rewards• Communication measures• Initial development and constant improvement of the program concept

Step 5. Develop a Communication Platform

A loyalty program must include communication methods that reach its members with themes that are of interest to them. You must further bear in mind that the program has to communicate in three different environments, each with different interests and goals:• The loyalty program members• The company´s employees, management and stakeholders• The external loyalty program environment, which includes the media, the industry in which the sponsoring company operates, external partners, and so on

Step 6: Determine program organization and management

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In order to guarantee a smooth development of the loyalty program concept and its implementation, your company should put together a project team made of people from:• different departments (marketing, sales, IT, research, finance and so on) and• different management levels (from top management down to customer service representatives).

Step 7: Set up a database

A database that contains detailed and correct information on your customers is a strategic weapon that will greatly influence your success. Companies with CRM success all take a pragmatic, disciplined approach to CRM, launching highly focused projects that are relatively narrow in their scope and modest in their goals. CRM often fails when the customer strategy is put in the back seat and CRM in the front.

Step 8: Research on other loyalty programs

You need to consider the following questions:• How do competitors organize their customer loyalty programs?• How are loyalty programs set up in other industries or in other countries?• What can we learn from other successful customer loyalty programs?• What can we learn from loyalty programs that have failed?• Is there any specific literature (for example, case studies) on the subject?• Are there external specialists whom we can consult?

Step 9: Implement the loyalty program

One of the questions that need to be addressed is how to implement or integrate the program into your company’s organizational structure. The most popular alternatives are:• Founding a totally independent company to manage the loyalty program;• Integrating the loyalty program into an existing department;• Outsourcing the entire loyalty program management to an outside agency.

 Step 10: Prepare a strategy for program defectors

A loyalty program should be able to identify program defectors in order to try to win the customers back. Customers who leave can provide a view of the business that is unavailable to those inside, and whatever caused one individual to defect may cause many others to follow. In most businesses, 60 % – 80 % of customer defectors say that they were “satisfied” or “very satisfied” on the last satisfaction survey prior to their defection. The reasons for satisfied customers defecting are often due to competitors changing offerings and/or the customer developing new requirements or buying habits and beginning to look for alternative products or the customer simply moving to another location. A proper strategy should be put in place to identify the exact reasons and determine how to address each.

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METHODOLOGY  

Primary data 

1. Data provided from the company on this program, if already some work is in place.

2. Meetings with the distributors to identify the discrepancies and areas of concern which can then be made the focal point of the loyalty program

3. Interviews with the functional heads to provide assistance and guidance to help understand the intent of this program and what are the factors which the company can offer to them

4. Firm may help to set up meetings with other company functional heads to get industry data

 Secondary data 

1. Online websites can be used to gather data on similar loyalty programs of other firms.

2. Standard structures and formats can be attained from the intranets and internet forums.

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FINDINGS AND ANALYSIS

Based on the questionnaire as in Annexure 1, certain problems were identified from the end of the distributors. Some of the problems were generic and some specific to Arvind Mills. The main problems identified were

1. They have to collect the invoice from the company, whenever they place an order and have to make payments against them to the company. No system of delivering the invoice at their respective offices, and collection of the payments

2. Problem with the attitude of people working in the company like not picking up the phone calls, not attending the channel partners properly, not calling them back, etc

3. Confirmation needs to be taken about the given order very often with the company’s marketing officials because they modify it according to their availability of stock

4. New ERP system enrolled by the company - a number of problems have been occurring from the company’s side in terms of integration

5. Problems with the invoice - high level of difficulty is identifying the details of the invoice in terms of category number, font size, order details,

6. No clear policy for the sales return - Try to compensate it with the No Claim Bonus.

7. The fault of the marketing officials have to be borne by the distributor - For example Demand of a specific denim cloth is 150 tonnes, and if by mistake it is entered 1500 tonnes in the ERP system, a long procedure has to be followed to modify it again

8. Shortage of length - No one listens to the complaint regarding this issue. And if it has been considered, then a company official comes after 7 to 10 days to have a look at it, but again no action is taken.

9. Poor after sales service - For example:  If suppose denim fabric gets wet in the rain before reaching it to the distributor, company does not held herself responsible and does nothings about it.

10. Sample size – Lack of focus on the sample size. More often than not, the distributors face the problem of shortage of samples which disrupts their functioning and leads to low demand from the distributors end.

11. No support from the company’s side on non-moving items – distributors are often faced with the problem of non – moving items as Arvind Mills does not provide any support in any way on that front.

12. When the company introduces a new fabric, they send the same to the distributors. If there is no response from their end then the company assumes that

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the fabric will not sell and discards the same without analyzing the feasibility and demand and need of the fabric.

13. Transportation Cost- There is a discrepancy in the process of charding for transportation. For the local distributors, company charges the transportation cost in their bill, whereas for their distributors outside Ahmadabad they do not charge anything till the delivery it to the local transporters.

14. No demographic division – There is a lack of clear-cut demographic distinction defining the markets of the distributors. For e.g.: Mumbai distributor also sells the garment in the Ahmadabad market. Because of the reason that Mumbai distributor costing would be low as compared to the Ahmedabad one. This not only leads to duplication of distributors but also cannibalization.

15. Meeting of targets – Distributors feels a lot of pressure towards the end of the month when Arvind Mills uses a push strategy to meet their targets. In doing so Arvind Mills dumps the deficit of the target onto the distributors irrespective of the fact that the distributor has the demand or what.

16. Lack of co-ordination – This can be taken as an off shoot of the above problems itself. Some of the problems mentioned above have its genesis from the same. The various departments are not well co-ordinated leading to failure in delivery and unhappy distributors.

On discussions with the management, it was decided that Arvind Mills would now come up with Channel Incentive or Loyalty program for its distributors so that most of the domestic channel partners would benefit from the same and the problems faced could be curbed as much as possible.

Steps to formulate the Loyalty program

Step 1: Evaluate the Product

The product line of the company was well defined in totality. Broadly the product lines indentified were : 0-4 , Stock and Indent. 0 – 4 is the low category inferior quality product type. Stock included the export surplus product type and Indent included the fresh stock of the company. Post discussion with the marketing and sales team high contributing product types based on their contribution to revenue were identified. This was the Stock and Indent category which included the high contributing product types

a. Chinosb. Cotton + Poly

c. Lycra

d. Poly lycra

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Step 2: Identify the Value Proposition

In this step, the company identified that the Loyalty Program would be non-monetary one which would segregate the distributors into categories. The categories are listed as per Annexure 2. Based on the sales of the companies (calculated in meters) rewards would be given as a ratio of the total allocated incentive.

1. The value, reward, benefits were highlighted as “high value” to provide the maximum benefit from the incentive program.

2. Selection of benefits – the benefits were mostly soft benefits like gift items, laptop, bike, etc

3. Timing of benefits or rewards was annual in nature. But there is a scope of change eg during lean period this program can be modified and be made more frequent to boost sales

Step 3: Create Program Goals

The main goals of the program were to cater to

a. Have increased loyalty from the distributorsb. Create a sense of trust and confidence in the distributors

c. Give a sense of reward and ownership to the distributors for their contribution to the company’s sales and profits

d. Administrative points can be awarded as non-monetary compensation for those occasional problems that channel partners face

e. Loyalty programs provide an opportunity to learn about your customers’ preferences and expectations when carrying out their duties as channel partners

f. Want to reward partner investment and commitment

g. Enjoy a more mature and/or intimate relation with your channel partner

These are the overall objectives of the Loyalty Program of Arvind Mills.

 Step 4. Determine the Financial Cost

 First, the sales for the years 08-09 and 09-10 were collected from the company. The same is in Annexure 3.The categorization was already available as mentioned previously. Then a pivot table was prepared for the list of distributors under study as per Annexure 4.

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Let us understand the calculation of the financial cost keeping in mind one distributor ie AMP Polycot.

To undertake this study, only high contribution product type were considered which included Chino, Cotton + Poly, Lycra and Poly lycra. Monthly sales for each product type for the years 08-09 and 09-10 for each distributor was collected. The sales values were in meters.

a) Calculation of monthly sales

The values were collected for each month of 08-09 and 09-10 for Chino, Cotton + Poly, Lycra and Poly lycra. Then the dealer totals were calculated for each month for all the product lines say for April 08, sales (in meters) for

Product type Sales (in meters)Chinos 4745Cotton + Poly 13570Lycra 0Poly lycra 220

Making the total sales for AMP Polycot for April 08 being 18535 meters. Similar calculations were carried out for each of the month.

b) Calculation of annual sales and grand total of sales

In this the sum total of one type of product for all the 12 months were taken to come up with the total annual sales of that product. For example, for Chinos the sales for 08 for the months were

Months Sales

April 4745May 1816June 3475July 11267August 10313September 8347October 4252November 10922December 930January 3616February 2131March 6375Grand total 68189

Similar calculations are done for other product types.

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To calculate the grand total for all the product types for the entire year, the above totals are added. So for 08-09,

Product type Sales

Chinos 68189Cotton + Poly 272267Lycra 1921Poly lycra 138928Grand total for 08-09 481305

c) Calculation of percentage

Let us take the calculation for percentage for Chinos for the month of April 08. As shown above the sales for Chinos for the month was 4745 meters and the grand sales for the month of April was 18535 meters. The percentage calculation was as

(4745/18535)*100 = 25.60021581%.

Similar calculations were done for month wise for each product type separately.

The details of step a, b and c are shown in Annexure 5.

d) Month wise calculation of sales

To understand this, the figures of 09-10 are taken into consideration. The annual sales and the percentage for each product type for the entire year 09-10 was taken as shown below

Product type Sales Percentage

Chinos 99014 14.9Cotton + Poly 100596 15.1Lycra 18875 2.8Poly lycra 445551 67.1Grand Total 664036 100

Similar calculations are done for the 08-09 and for the other distributors as well as shown in Annexure 6.

e) Per unit cost

For this firstly the loyalty program is defined as shown below

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Category Sales (in meters)(in lakhs)

Reward System (Value)

Maximum incentive In Rs

I 0 - 1 Gift Item 15000II 1 - 4 Laptop 35000III 4 - 7.5 Bike 70000IV 7.5 – 11.5 Gold Item 150000V 11.5 – 16.5 Car 350000VI 16.5 and above Europe trip 600000

A condition is defined that 55% of the total sales should be Poly lycra and 5% should be from new collection.

The point system followed as follows :

Product type Sales (in meters) Equivalent points

Chinos 200 1Cotton + Poly 150 1Lycra 100 1Poly lycra 50 1

The grand total is taken into consideration to determine the category in which the distributor falls into. Say if we consider the year 09-10, the grand total sales is 664036 meters. This means that the distributor falls into Category III which means the maximum incentive is Rs 70000.

Now, for the calculation of per unit cost we found that the average cost for the four product types under consideration was Rs 106. The total amount was calculated by multiplying the grand total sales of the year with the average price. So in this case it would be Rs (664036 X 106) = Rs 70387816. The per unit cost is calculated by dividing the maximum incentive amount by the total calculated above which is Rs ( 70000/70387816) = Rs 0.000099449. The per unit cost at the current production rate is as follows

Year 09-10

Grand total sales (in meters) 664036Average price (in Rs) 106Total (in Rs) 70387816Per unit cost (in Rs) 0.000099449

Since, the denim sector grows at the rate of 10% we consider a growth of 10% and calculate the per unit cost as above.

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Year 09-10

Grand total sales (in meters) 731500 (664036 + 10% of 664036)Average price (in Rs) 106Total (in Rs) 77539000Per unit cost (in Rs) 0.0000902772

Since the grand total sales is short the maximum limit of the category we will also consider the maximum limit of the category

Year 09-10

Grand total sales (in meters) 750000Average price (in Rs) 106Total (in Rs) 79500000Per unit cost (in Rs) 0.0000880503

This per unit cost shows that this is the amount per meter that the company has to charge more to the distributor to recover the incentive amount.

Similarly, calculations are carried out for the other distributors. In some cases, if the 10% increment falls short then a 15% increment calculation is also done only when the 15% increment in sales value is lower than the maximum limit of the category.

It must also be noted that the incentive calculation to be given is not the entire amount allotted to the reward system but as a ratio. So if the grand total sales is 664036 meters and the maximum limit is 750000 meters and the maximum incentive amount is Rs 70000 then the incentive given is Rs (664036/750000 ) X 70000 = Rs 61976.6933.

Step 5. Develop a Communication Platform

The loyalty program shall be communicated to the members of the organization and the channel partners in different ways.

a) Within the organization – A session with all the functional heads will be held where the rationale and the details of the Loyalty program shall be discussed to keep everyone in the loop and increase accountability. Post this a training program will be conducted for all the members of the organization to show the working of this program.

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b) To the channel partners – a mail and a letter explaining the details and workings of the Loyalty program will be sent to the channel partners to make them aware of the Loyalty program.

 Step 6: Determine program organization and management

The most vital role in the implementation of the Loyalty program will be played by the IT department. Arvind Mills uses a MIS system by IBM named Now where this loyalty program will be integrated so that all the calculations are automated and not manual. In addition, all the functional departments will play their respective roles for the successful implementation of the same.

 Step 7: Set up a database

The marketing and sales department shall provide the basic database of the distributors and other channel partners for whom this program is formulated and the IT department shall maintain the same. This does not mean that the onus of the other departments becomes defunct. Other departments shall play their respective roles as well.

 Step 8: Implement the loyalty program

The implementation of the loyalty program is of utmost importance. For Arvind Mills this step shall not be outsourced. There can never be just one person responsible for the same. It has to be a well co-ordinated and continuous effort made by all the functional heads and other responsible heads of the company.

The data on the channel partners can be provided by the Marketing and Sales department. This data is integrated into the IBM MIS system named “NOW” and the maintenance of this database is not only the responsibility of the IT department but that of all the functional areas.

Thus, a well defined and mutual effort of all in the organization shall ensure the success of this program.

 

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CONCLUSION

It is evident from the project that loyalty programs as these should revolve about such aspects that will help establish a two way relationship between the company and the channel partner.

Such programs ensure an environment of mutual trust and understanding and often make the channel partners overlook minute fallacies on the part of the company (if any).

Programs as these when properly implemented and evaluated and revamped at regular intervals ensure long term benefit to the company and healthy relations with channel partners.

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LIMITATIONS

1. Due to time constraints, a number of aspects of both the loyalty program could not be covered

2. Owing to interaction with only the channel partners of Ahemdabad and its vicinity, the issues of the other channel partners may not have been addressed.

3. Due to the limited theoretical knowledge on loyalty programs, some aspects may have been missed out upon

4. Due to lack of technical knowledge and time, a feasibility check on the maintenance and integration of the loyalty program on “NOW” could not be checked

5. Due to lack of time, the loyalty program could not be implemented in the tenure of the project so understand if any practical problems existed or not

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RECOMMENDATIONS AND SUGGESTIONS

The following are the suggestions made to the distributors made on the questionnaire :

1. Providing a unique Customer ID and a Password which can be given to all the channel partners, which will contain all the information about the order placed, actual order delivered, whether the goods are in transit or has it been delivered and all the other relevant information

2. Customer can place the order directly into their respective customer id provided by the company. Issues like missing the phone calls, not attending the phone or not replying back can be easily solved by this. Even problems of missing the order placed or something like this can be solved

3. With the technical support company should also provide a sales support, which can collect the invoice from the company and deliver it to the channel partners and can collect the payment from the distributers. Other than this one sales representative can be allotted one particular city and he/she can coordinate with the distributer about the status, order, or payment schedule

4. Availability and maintenance of samples should be done properly so that the distributor can assess his/her demand and place the order accordingly.

5. ERP systems should be maintained properly. It should be widely integrated and a proper training should be given to the staff. A separate department should be made for this so that ERP becomes a part of their bloodline.

6. Policies for sales return should be made clearer to the channel partners so that they can put forward their grievances in an effective manner and would also assist Arvind Mills to analyze its loop holes

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7. Any kind of losses, while the goods are in the transit should be borne  by the company so that it creates a sense of ownership on the part of the company and the distributors feel that the company does not merely dumb its goods on them.

8. The grievance resolving / problem solving department should function in a more prompt manner. All the issues should be addressed at the earliest so that a symbiotic relationship is maintained and the distributors don’t feel aggrieved or cheated.

9. There should be an automated system where the distributor can check the availability of a particular fabric or product that he or she needs.

10. A common set of policies should be laid down for all the distributors and there should be no bifurcation on the same.

11. A well defined demographic distribution should be laid down defining the areas of operations for each of the distributor to avoid any overlapping markets.

The following are the recommendations were made to the Human Resource Department

1. A feedback system must be incorporated so as to get a full picture of employees despite its large employee base.

2. Performance appraisal should be transparent and critical people should be known.

3. At the time of exit of employees, exit interviews should be held to ensure a win-win

situation and also analyze the improvement areas of the company.

The following are the recommendations were made for the loyalty program

1. A feedback from the channel partners and an analysis post the implementation of the loyalty program to ensure its success

2. An online system for the channel partners to put forward their suggestions and/or complaints on the loyalty program

3. A responsible head or team for the heading the implementation and evaluation of the loyalty program

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ANNEXURE 1 - Questionnaire

Questionnaire for the Distributors

1. How do the you (distributor) know about their order status? Do you have a mechanized system or do you have to manually call the company for the same?

2. What are the possible reasons for which you need to call the company at regular intervals for the order status (if you have to call the company)?

3. What are the problems faced by you on the product front?

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4. What are the problems faced by you with regards to service offered by the company? Also, give suggestions to improve them.

5. Are there any problems faced by you related to stock?

6. Are there services that you get from other Denim mills that Arvind Mills doesn’t provide? If yes, what are they?

7. What are the other issues faced by you with Arvind Mills?

8. Do you face any problems with regards to shortage or irregularity of supply from Arvind Mills?

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9. How efficiently are your problems solved by Arvind Mills?

10. What are the differentiation strategies that you get from other companies?

11. Have you heard of channel incentive or loyalty programs?

12. If yes, which companies offer the same?

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13. Do you think that such programs serve as an impetus for better working and increased sales?

14. If Arvind Mills had a loyalty program of their own for you, do you think it would improve the relations between the two?

15. What aspects of the product / material sold by you should serve as the basis of the loyalty program?

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ANNEXURE 2 - Category

COMPOSITION FAB TYPECOTTION 75%+LINEN25% LinenCOTTON 62% + LINEN 38% LinenCOTTON 70%+LINEN 30% LinenCOTTON 70%+LINEN30% LinenCOTTON 75% + LINEN 25% LinenCOTTON 75%+LINEN 25% LinenCOTTON 75%+LINEN25% LinenLINEN 35% + SILK 65% LinenLINEN 60% + SILK 40% LinenCOTTON 74%+LUREX1%+POLY25% LurexCOTTON 74%+LUREX1%+POLY25%+LYCRA LurexCOTTON 75%+LUREX1%+POLY24% LurexCOTTON 75%+POLY24%+LUREX1% LurexCOTTON 75%+POLY24%+LUREX1%+LYCRA LurexCOTTON 97%+LYCRA1%+LUREX2% LurexCOTTON 98%+LUREX2% LurexCOTTON74%+LUREX1%+POLY24%+SP1% Lurex100% FAIR TRADE COTTON Cotton100% ORGANIC COTTON Cotton50 % ORGANIC COTTON CottonCOTTION 100% CottonCOTTON 100 CottonCOTTON 100 % CottonCotton 100% CottonCotton 100% FAIR TRADE COTTON CottonCOTTON 75%+SILK 25% CottonCOTTON 80%+WOOL18%+JUTE2% CottonCOTTON 95%+DOW 6% CottonCOTTON 98% + DOW2% CottonCOTTON 98% + LYCRA 1% CottonCOTTON 98% + LYCRA 2% CottonCOTTON 98% + LYCRA2% Cotton

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EXCEL 100% CottonEXCEL 75% + COTTON 25% CottonEXCEL 75% + COTTON 25% CottonFAIR TRADE COTTON 100% CottonORGAN COTTO+30% COTTON +70% CottonORGANIC COTTION 100% CottonORGANIC COTTON 100% CottonORGANIC COTTON 100% CottonSILK 100% CottonCOTTION 98%+LYCRA2% LycraCOTTON 75% + T400 25% LycraCOTTON 75%+SPAND1%+POLY24% Poly LycraCOTTON 75%+T400 25% LycraCOTTON 75%+T40025% LycraCOTTON 79% + JUTE 20%+LYCRA1% LycraCOTTON 80% + POLY 19%+LYCRA1% Poly LycraCOTTON 82% + T400 18% LycraCOTTON 82%+T 400 18% LycraCOTTON 95% + LYCRA5% LycraCOTTON 95%+LYCRA 5% LycraCOTTON 95%+LYCRA5% LycraCOTTON 97%+LYCRA3% LycraCOTTON 98% +2% LYCRA LycraCOTTON 98% + LYCRA2% + ORGANIC LycraCOTTON 98% + LYCRA2%+ ORGANIC LycraCOTTON 98% + SPAND 2% LycraCOTTON 98% + SPAND2% LycraCOTTON 98% + SPANDEX 2% LycraCOTTON 98% + SPANDEX2% LycraCOTTON 98% + T400 2% LycraCOTTON 98%+LYCRA 2% LycraCOTTON 98%+LYCRA2% LycraCOTTON 98%+LYCRA2% ORGANIC COTTON LycraCOTTON 98%+LYCRA2%+ORGANIC LycraCOTTON 98%+SPAN2% LycraCOTTON 98%+SPANDEX 2% LycraCOTTON 98%+SPANDEX2% LycraCOTTON 98%+T4002% LycraCOTTON 99% + LYCRA 1% LycraCOTTON 99% + LYCRA1% LycraCOTTON 99% + SPAND1% LycraCOTTON 99% + SPANDEX 1% LycraCOTTON 99% + SPANDEX1% LycraCOTTON 99%+LYCRA 1% LycraCOTTON 99%+LYCRA1% LycraCOTTON 99%+SPANDEX 1% Lycra

52

COTTON 99%+SPANDEX1% LycraCotton94.5% / Lycra5.5% LycraCOTTON98% / LYCRA2% LycraCOTTON98% + LYCRA2% LycraCOTTON99% + LYCRA1% LycraEXCEL 75%+COTTON23%+SPAND 2% LycraORGANIC COTTON 98%+LYCRA2% LycraCOT-62%+ELASTICFIB-19%+POLY19% Poly LycraCOTTON 62% + SEOL 38% CottonCOTTON 64% +POLY35%+LYCRA1% Poly LycraCOTTON 64%+POLY18%+T40018% Poly LycraCOTTON 65% + POLY34% +LYCRA1% Poly LycraCOTTON 65%+POLY34%+SPANDEX1% Poly LycraCOTTON 74%+SPAND1%+POLY25% Poly LycraCOTTON 74%+T40013%+POLY13% Poly LycraCOTTON 75% + POLY 24% + SPA 1% Poly LycraCOTTON 75% + POLY 24% +SPAN 1% Poly LycraCOTTON 75% + POLY 24%+SPAN 1% Poly LycraCOTTON 75% + POLY 24%+SPAND 1% Poly LycraCOTTON 75% + POLY 24%+SPANDE1% Poly LycraCOTTON 75% + POLY24% + SPAN1% Poly LycraCOTTON 75% + POLY24%+ SPA1% Poly LycraCOTTON 75%+POLY 23%+SPANDE 2% Poly LycraCOTTON 75%+POLY 24%+LYCRA1% Poly LycraCOTTON 75%+POLY 24%+SPAN1% Poly LycraCOTTON 75%+POLY 24%+SPAND 1% Poly LycraCOTTON 75%+POLY 24%+SPANDEX1% Poly LycraCOTTON 75%+POLY23%+LYCRA2% Poly LycraCOTTON 75%+POLY24%+LYCRA1% Poly LycraCOTTON 75%+POLY24%+SPAND 1% Poly LycraCOTTON 75%+POLY24%+SPAND1% Poly LycraCOTTON 75%+POLY24%+SPANDEX 1% Poly LycraCOTTON 75%+POLY24%+SPANDEX1% Poly LycraCOTTON 75%+SPANDEX 1%+POLY 24% Poly LycraCOTTON 75%+SPANDEX 1%+POLY24% Poly LycraCOTTON 75%+SPANDEX1%+POLY24% Poly LycraCOTTON 75%+T40023%+POLY2% Poly LycraCOTTON 76% + POLYESTER24% Poly LycraCOTTON 80% + POLY 19%+SPAND1% Poly LycraCOTTON 80% + POLY 19%+SPANE1% Poly LycraCOTTON 80% + POLY 19%+SPNAD1% Poly LycraCOTTON 80%+POLY19%+LYCRA1% Poly LycraCOTTON 81%+ POLY 18% +LYCRA 1% Poly LycraCOTTON 82% +POLY16% + LYCRA2% Poly LycraCOTTON 82%+POLY17%+LYCRA1% Poly LycraCOTTON 83% +LYCRA1%+POLY16% Poly Lycra

53

COTTON 93% +POLY 6% + LYCRA 1% Poly LycraCOTTON 95% + SPAND 4%+POLY 1% Poly LycraCOTTON75%+POLYE24%+LYCRA1% Poly LycraCOTTON 55% + POLY45% Cotton + PolyCOTTON 58% + POLY42% Cotton + PolyCOTTON 65% + POLY 35% Cotton + PolyCOTTON 65% + POLY35% Cotton + PolyCOTTON 65% + POLYESTER35% Cotton + PolyCOTTON 66% + POLY34% Cotton + PolyCOTTON 68% + POLY 32 % Cotton + PolyCOTTON 72% + POLY25% Cotton + PolyCOTTON 73% + POLY 27% Cotton + PolyCOTTON 74 % + POLY 26 % Cotton + PolyCOTTON 74% + POLY 26 % Cotton + PolyCOTTON 75% + POLY 25 % Cotton + PolyCOTTON 75% + POLY 25% Cotton + PolyCOTTON 75% + POLY25% Cotton + PolyCOTTON 75% +POLY 25% Cotton + PolyCOTTON 75%+ POLY 25% Cotton + PolyCOTTON 75%+POLY25% Cotton + PolyCOTTON 76% + POLY 24% Cotton + PolyCOTTON 80% + POLY 20% Cotton + PolyCOTTON 82% + POLY Cotton + PolyCOTTON 82% + POLY 18% Cotton + PolyCOTTON 82% + POLY18% Cotton + PolyCOTTON 82% +POLY 18% Cotton + PolyCOTTON 82%+POLY 18% Cotton + PolyCOTTON 82%+POLY18% Cotton + PolyCOTTON86% +POLY14% Cotton + PolyTENCEL 100% TENCELCOTTON 100% (VOILES) VoilesCOTTON 100%(VOILES) VoilesCOTTON 99%+LYCRA1%(VOILES) VoilesCOTTON 70% + HEMP30% CottonCOTTON 75% + HEMP25% CottonCOTTON 75%+POLY 25% Cotton + Poly

54

ANNEXURE 3 – Sales Date 08-10

YEAR MONTH Off Party Name Type F TYPE TYPE

(Mtrs)

Pakg.

Amt(in lacs)

Amt/Mtr AMOUNT

09-10 Mar-10 AHM ARVIND BRANDS LIMITED Lycra INDENT 0 1 0 0 0

09-10 Mar-10 MUMKRAFTEX TRADING PRIVATE L DEALER Cotton INDENT 0 24 0 0 0

08-09 Jul-08 AHMKALPESH KUMAR HIRALAL SHA DEALER

Cotton + Poly INDENT 0 4 0.01 0 0.00

09-10 Jun-09 AHM AMP POLYCOT DEALERCotton + Poly INDENT 0 5 0.01 0 0

09-10 Dec-09 AHM K.PRASHAM TEXTILE DEALER Cotton INDENT 55 1 0.04 80 4400

09-10 Dec-09 AHM K.PRASHAM TEXTILE DEALER Cotton INDENT 64 1 0.05 80 5120

08-09 Aug-08 MUMKRAFTEX TRADING PRIVATE L DEALER Cotton INDENT 48 1 0.06 119 5712.00

08-09 Oct-08 AHM AMP POLYCOT DEALER Cotton INDENT 70 1 0.06 86 6020.00

08-09 Dec-08 AHM AMP POLYCOT DEALER Cotton INDENT 100 1 0.06 63 6300.00

08-09 Dec-08 AHMSANGATMAL DAYALDAS DEALER #N/A INDENT 106 1 0.06 56 5936.00

09-10 May-09 AHM AVADAT APPARELS DEALER Cotton INDENT 70 1 0.06 80 5600

09-10 May-09 AHMCORNERSTONE(Div of Asman X BY 2

Cotton + Poly INDENT 86 1 0.06 68 5848

09-10 May-09 DELCORNERSTONE(Div of Asman X BY 2

Cotton + Poly INDENT 106 1 0.06 59 6254

09-10 Dec-09 AHM K.PRASHAM TEXTILE DEALERCotton + Poly INDENT 80 1 0.06 80 6400

09-10 Dec-09 DEL INDO TEX DEALER Cotton INDENT 120 2 0.06 47 5640

09-10 Feb-10 MUMKRAFTEX TRADING PRIVATE L BRAND Cotton INDENT 93 1 0.06 63.37 5893.41

08-09 Jul-08 AHM AMP POLYCOT DEALER Cotton INDENT 100 1 0.07 65 6500.00

08-09 Sep-08 AHM K.DARSHAN TEXTILE DEALER Cotton INDENT 85 1 0.07 78 6630.00

08-09 Dec-08 AHM CORNERSTONE DEALERCotton + Poly INDENT 88 1 0.07 85 7480.00

08-09 Dec-08 BNGCORNERSTONE(Div of Asman DEALER

Cotton + Poly INDENT 78 1 0.07 85 6630.00

09-10 Apr-09 DELWEAR WELL INDIA PVT. LTD.

EXPORTERS Cotton INDENT 91 1 0.07 75 6825

09-10 May-09 CALCORNERSTONE(Div of Asman X BY 2

Cotton + Poly INDENT 122 1 0.07 59 7198

09-10 Jun-09 MUMKRAFTEX TRADING PRIVATE L DEALER Lycra INDENT 85 1 0.07 82 6970

09-10 Dec-09 AHM K.PRASHAM TEXTILE DEALERPoly Lycra INDENT 93 1 0.07 80 7440

09-10 Dec-09 AHM K.PRASHAM TEXTILE DEALER Lycra INDENT 86 1 0.07 80 6880

09-10 Dec-09 AHM K.PRASHAM TEXTILE DEALER Lycra INDENT 86 1 0.07 80 6880

55

ANNEXURE 4 : Pivot Table

 AMP POLYCOT

 AHM

 DEALER

  ChinoCotton + Poly Lycra

Lycra Total Poly Lycra

Poly Lycra Total

DEALER Total

AHM Total

    INDENT STOCK INDENT STOCK  April '08 4745 13570 0 0 0 220 0 220 18535 18535May '08 1816 7122 0 0 0 1198 0 1198 10136 10136June '08 3475 33243 270 0 270 6212 0 6212 43200 43200July '08 11267 44631 56 0 56 3539 0 3539 59493 59493Aug '08 10313 53311 0 0 0 12935 0 12935 76559 76559Sept '08 8347 26096 0 0 0 14537 0 14537 48980 48980Oct '08 4252 11917 0 0 0 8087 0 8087 24256 24256Nov '08 10922 29568 0 0 0 18063 0 18063 58553 58553Dec '08 930 21991 0 0 0 20118 1172 21290 44211 44211Jan '09 3616 7919 0 0 0 21658 0 21658 33193 33193Feb '09 2131 13349 1055 0 1055 18037 0 18037 34572 34572March '09 6375 9550 0 540 540 10605 2547 13152 29617 2961708-09 Total 68189 272267 1381 540 1921 135209 3719 138928 481305 481305April '09 6896 24397 0 720 720 14139 0 14139 46152 46152May '09 4842 9278 703 0 703 34829 0 34829 49652 49652June '09 5744 6522 0 2774 2774 29847 0 29847 44887 44887July '09 7496 5045 0 0 0 25073 0 25073 37614 37614Aug '09 11297 4966 0 0 0 32000 0 32000 48263 48263Sept '09 5717 6069 0 0 0 19042 0 19042 30828 30828Oct '09 13075 1614 0 0 0 34790 0 34790 49479 49479Nov '09 3994 9709 0 5016 5016 54933 0 54933 73652 73652Dec '09 6086 9854 2893 4008 6901 63356 0 63356 86197 86197Jan '10 10306 17062 1198 857 2055 37184 0 37184 66607 66607Feb '10 11504 1557 135 0 135 56239 0 56239 69435 69435March '10 12057 4523 0 571 571 44119 0 44119 61270 61270

56

09-10 Total 99014 100596 4929 13946 18875 445551 0 445551 664036 664036Grand total 167203 372863 6310 14486 20796 580760 3719 584479 1145341 1145341

K.BHAVESH & CO.MUM

DEALER

  

Chino

Cotton +

Poly LycraLycra Total Poly Lycra

Poly Lycra Total

DEALER

TotalMUM Total

MUM Total

INDENT STOCK

INDENT STOCK  

April '08 2235 7639 0 0 0 31055 0 31055 40929 40929 40929May '08 2404 3091 0 0 0 37588 0 37588 43083 43083 43083June '08 817 10181 0 0 0 64309 0 64309 75307 75307 75307July '08 1783 12880 0 0 0 80100 0 80100 94763 94763 94763Aug '08 517 18380 0 0 0 70029 540 70569 89466 89466 89466Sept '08 1016 54507 0 977 977 51830 0 51830 108330 108330 108330Oct '08 2410 9754 0 10020 10020 29968 0 29968 52152 52152 52152Nov '08 542 39108 0 0 0 43102 0 43102 82752 82752 82752Dec '08 398 43139 0 0 0 24155 0 24155 67692 67692 67692Jan '09 0 76647 0 0 0 30847 0 30847 107494 107494 107494Feb '09 0 52019 0 0 0 27599 177 27776 79795 79795 79795March '09 0 36901 0 0 0 30185 0 30185 67086 67086 6708608-09 Total 12122

364246 0 10997 10997 520767 717 521484 908849 908849 908849

April '09 729 43804 0 0 0 29156 0 29156 73689 73689 73689May '09 0 10563 0 772 772 64067 0 64067 75402 75402 75402June '09 0 15344 135 0 135 47419 0 47419 62898 62898 62898July '09 1341 8418 0 0 0 79052 0 79052 88811 88811 88811Aug '09 2893 35628 0 0 0 71481 0 71481 110002 110002 110002Sept '09 0 44155 0 0 0 51985 0 51985 96140 96140 96140Oct '09 1011 51793 4085 0 4085 41882 0 41882 98771 98771 98771Nov '09 0 46924 1738 2968 4706 48778 0 48778 100408 100408 100408Dec '09 0 34801 0 4486 4486 55794 0 55794 95081 95081 95081Jan '10 0 30027 96 3491 3587 56776 0 56776 90390 90390 90390Feb '10 0 23997 0 592 592 80486 0 80486 105075 105075 105075March '10 0 38562 0 0 0 48297 0 48297 86859 86859 8685909-10 Total 5974

384016 6054 12309 18363 675173 0 675173 1E+06

1083526

1083526

57

Grand total 18096

748262 6054 23306 29360 1E+06 717 1E+06 2E+06

1992375

1992375

ANNEXURE 5 – Percentage wise (Indent and Stock)

AMP POLYCOT  Percentage

 DEALER

TotalAHM Total

Grand Total  

  ChinoCotton + Poly Lycra

Poly Lycra Chino

Cotton+Poly Lycra

Poly Lycra

April '08 4745 13570 0 220 18535 18535 18535 25.6 73.21 0 1.187May '08 1816 7122 0 1198 10136 10136 10136 17.92 70.26 0 11.82June '08 3475 33243 270 6212 43200 43200 43200 8.044 76.95 0.63 14.38July '08 11267 44631 56 3539 59493 59493 59493 18.94 75.02 0.09 5.949Aug '08 10313 53311 0 12935 76559 76559 76559 13.47 69.63 0 16.9Sept '08 8347 26096 0 14537 48980 48980 48980 17.04 53.28 0 29.68Oct '08 4252 11917 0 8087 24256 24256 24256 17.53 49.13 0 33.34Nov '08 10922 29568 0 18063 58553 58553 58553 18.65 50.5 0 30.85Dec '08 930 21991 0 21290 44211 44211 44211 2.104 49.74 0 48.16Jan '09 3616 7919 0 21658 33193 33193 33193 10.89 23.86 0 65.25Feb '09 2131 13349 1055 18037 34572 34572 34572 6.164 38.61 3.05 52.17March '09 6375 9550 540 13152 29617 29617 29617 21.52 32.24 1.82 44.4108-09 Total 68189 272267 1921

138928 481305 481305 481305 14.17 56.57 0.4 28.86

April '09 6896 24397 720 14139 46152 46152 46152 14.94 52.86 1.56 30.64May '09 4842 9278 703 34829 49652 49652 49652 9.752 18.69 1.42 70.15June '09 5744 6522 2774 29847 44887 44887 44887 12.8 14.53 6.18 66.49July '09 7496 5045 0 25073 37614 37614 37614 19.93 13.41 0 66.66

58

Aug '09 11297 4966 0 32000 48263 48263 48263 23.41 10.29 0 66.3Sept '09 5717 6069 0 19042 30828 30828 30828 18.54 19.69 0 61.77Oct '09 13075 1614 0 34790 49479 49479 49479 26.43 3.262 0 70.31Nov '09 3994 9709 5016 54933 73652 73652 73652 5.423 13.18 6.81 74.58Dec '09 6086 9854 6901 63356 86197 86197 86197 7.061 11.43 8.01 73.5Jan '10 10306 17062 2055 37184 66607 66607 66607 15.47 25.62 3.09 55.83Feb '10 11504 1557 135 56239 69435 69435 69435 16.57 2.242 0.19 81March '10 12057 4523 571 44119 61270 61270 61270 19.68 7.382 0.93 72.0109-10 Total 99014 100596 18875

445551 664036 664036 664036 14.91 15.15 2.84 67.1

Grand total 167203 372863 20796

584479 1145341 1145341

1145341 14.6 32.55 1.82 51.03

K.BHAVESH & CO.  Percentage

 DEALER

TotalMUM Total

Grand Total

  ChinoCotton + Poly Lycra

Poly Lycra Chino

Cotton + Poly Lycra

Poly Lycra

April '08 2235 7639 0 31055 40929 40929 40929 5.4607 18.664 0 75.88May '08 2404 3091 0 37588 43083 43083 43083 5.5799 7.1745 0 87.25June '08 817 10181 0 64309 75307 75307 75307 1.0849 13.519 0 85.4July '08 1783 12880 0 80100 94763 94763 94763 1.8815 13.592 0 84.53Aug '08 517 18380 0 70569 89466 89466 89466 0.5779 20.544 0 78.88Sept '08 1016 54507 977 51830 108330 108330 108330 0.9379 50.316 0.902 47.84Oct '08 2410 9754 10020 29968 52152 52152 52152 4.6211 18.703 19.21 57.46Nov '08 542 39108 0 43102 82752 82752 82752 0.655 47.259 0 52.09Dec '08 398 43139 0 24155 67692 67692 67692 0.588 63.728 0 35.68Jan '09 0 76647 0 30847 107494 107494 107494 0 71.304 0 28.7Feb '09 0 52019 0 27776 79795 79795 79795 0 65.191 0 34.81March '09 0 36901 0 30185 67086 67086 67086 0 55.006 0 44.9908-09 Total 12122 364246 10997 521484 908849 908849 908849 1.3338 40.078 1.21 57.38April '09 729 43804 0 29156 73689 73689 73689 0.9893 59.444 0 39.57May '09 0 10563 772 64067 75402 75402 75402 0 14.009 1.024 84.97June '09 0 15344 135 47419 62898 62898 62898 0 24.395 0.215 75.39July '09 1341 8418 0 79052 88811 88811 88811 1.5099 9.4786 0 89.01Aug '09 2893 35628 0 71481 110002 110002 110002 2.63 32.389 0 64.98Sept '09 0 44155 0 51985 96140 96140 96140 0 45.928 0 54.07Oct '09 1011 51793 4085 41882 98771 98771 98771 1.0236 52.437 4.136 42.4Nov '09 0 46924 4706 48778 100408 100408 100408 0 46.733 4.687 48.58Dec '09 0 34801 4486 55794 95081 95081 95081 0 36.601 4.718 58.68Jan '10 0 30027 3587 56776 90390 90390 90390 0 33.219 3.968 62.81Feb '10 0 23997 592 80486 105075 105075 105075 0 22.838 0.563 76.6March '10 0 38562 0 48297 86859 86859 86859 0 44.396 0 55.6

59

09-10 Total 5974 384016 18363 675173 1083526 1083526 1083526 0.5513 35.441 1.695 62.31Grand total 18096 748262 29360 1196657 1992375 1992375 1992375 0.9083 37.556 1.474 60.06

ANNEXURE 6 – Month wise (All)

   TOTAL (in mts) PERCENTAGEAMP POLYCOT      

     CHINO 99014 14.9COTTON+POLY 100596 15.1LYCRA 18875 2.8POLYLYCRA 445551 67.1

 

GRAND TOTAL 664036  

   TOTAL (in mts) PERCENTAGEK.BHAVESH & CO.      

     CHINO 5974 0.6COTTON+POLY 384016 35.4LYCRA 18363 1.7POLYLYCRA 675173 62.3

 

GRAND TOTAL 1083526  

60

ANNEXURE 7 – Per Unit Cost

The loyalty program is defined as shown below (also shown previously)

Category Sales (in meters)(in lakhs)

Reward System (Value)

Maximum incentive In Rs

I 0 - 1 Gift Item 15000II 1 - 4 Laptop 35000III 4 - 7.5 Bike 70000IV 7.5 – 11.5 Gold Item 150000V 11.5 – 16.5 Car 350000VI 16.5 and above Europe trip 600000

A condition is defined that 55% of the total sales should be Poly lycra and 5% should be from new collection.

The point system followed as follows :

Product type Sales (in meters) Equivalent points

Chinos 200 1Cotton + Poly 150 1Lycra 100 1Poly lycra 50 1

AMP POLYCOT CATEGORY TOTAL (in mts) PERCENTAGE

  CHINO 99014 14.915.12.8

67.1

    

  COTTON+POLY 100596  LYCRA 18875

  POLYLYCRA 445551

61

 

 GRAND TOTAL 664036  

This dealer would fall under category III  

Year 09-10

 Percentage increase by 10%

Highest value of the slab

AMP POLYCOT (in mts.) 664036 731500 750000Avg price (in Rs.) 106 106 106Total 70387816 77539000 79500000

Per unit Cost 0.00099449   0.000902772 0.000880503

  CATEGORY TOTAL (in mts) PERCENTAGEK.BHAVESH & CO.     

CHINO 5974 0.6COTTON+POLY 384016 35.4LYCRA 18363 1.7

POLYLYCRA 675173 62.3   GRAND TOTAL 1083526  

This dealer would fall under category IV 

Year 09-10

 Highest value in the slab

K.BHAVESH & CO. (in mts.) 1083526 1150000Avg price (in Rs.) 106 106Total 114853756 121900000

Per unit Cost 0.001306009   0.001230517

62

Note : All calculations are shown for two distributors namely AMP Polycot and K. Bhavesh & Co. Similar calculations were done for all distributors.

63