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From THE HINDU group of publications
Thursday, December 13, 2001

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Kinetic energy


Sudha Menon

IN a crowded marketplace where companies are bending over backwards to get consumers to loosen their purse strings, innovation is the only way to get ahead in the business, says Sulajja Motwani, the thirty-something Joint Managing Director of Punes Kinetic group of companies. She should know. Over the last few years she has transformed what was perceived as a laidback, closely-held, family-run two-wheeler manufacturing company into an organisation which has survived the exit of its foreign partner, Honda, and gone ahead with its business with very few bruises to show. And the credit for the entire show goes to innovation and perseverance, she says.

And it is this very same I word that has been applied to great effect by Motwani who has led the company the last two years in a unique direct selling effort that has seen it sell a whopping 35,000 two-wheelers last year through this route alone. We arrived at this solution to further push our sales after months of brainstorming and now that we have discovered it, there is no looking back, says a visibly elated Sulajja Motwani. The experiment to directly sell two-wheelers to consumers started in a small way a couple of years ago with the dealers themselves employing sales executives to sell two-wheelers on a door-to-door basis but that did not take off due to a variety of factors, including reams of red tape at the dealers end.

When we reviewed the experiment we found that the 12 consultants we had hired across various cities had each sold 150 two-wheelers and it was at this point that we decided to get serious about the effort, says Motwani, who got into action putting a new team into place immediately to take the project to its right conclusion. That was in 1997. Fired by the success of its direct selling efforts, a separate company, Kinetic Marketing & Services Ltd (KMSL), was formed last year to support the dealer and the finance companies to increase the groups finance to the sales channel. KMSLs business model is simple x 650 sales officers spread across 105 locations in 14 strategic States literally take to the streets with just one mission: create a market for a Kinetic two-wheeler where there is none. Almost anyone is a target for the direct marketing push, the friendly neighbourhood chemist, or panwallah , the newspaper vendor or the milkman, your driver or the watchman for your apartment block. Depending on the target, Kinetic puts the right brand from its range on offer.

One of the most reliable customers for KMSL has been the merchant community which runs shops in residential areas or commercial centres. These people have the money but either think they cant afford a motorised two-wheeler or simply dont get time enough to go to a dealer and get his family a two-wheeler, says R.Niranjan, Deputy General Manager, KM&SL. They are also perfect customers for us since they can be traced to their shops anytime so there is no question of bounced cheques or errant payments, grins Motwani.

Niranjan and his team of 650 graduate sales officers work at convincing these sections of society that they can actually own a moped for as little as Rs 500 a month and make life better. Their job often takes them to low-income housing colonies where the mere arrival of a person who is willing to give them a test ride on a two-wheeler is itself cause for celebration. The direct marketing effort has worked remarkably well in rural areas where the sales officers often put up a tent at the weekly haat and literally display their wares by doing a few tricks on their vehicles or dumping gallons of water on it to show the village folks that it still works after a heavy downpour! Niranjan says most times the villagers are hooked after a display of this kind and the company has sold a vehicle in an area where there never was a market for it. This also helps to create new channels for business but more important is creating a bond with a customer. There have been times when the proud owner of a new moped has actually wept out of disbelief and joy because he never thought he would be able to own a motorised vehicle, elaborates Niranjan.

The system itself works with the company keeping tight control on costs. Individual sales officers get salaries but most of their earnings come from incentives on sale of vehicles - the more you sell the more you earn. For the manufacturing company and the dealer it is a recession-proof way of doing business and getting the volumes - they dont have any overheads. Once a vehicle is sold both the dealer and the manufacturer pay the company a fixed amount which covers KM&SLs cost, contributes to its kitty and keeps it going.

The sales officers, says Motwani, are continuously motivated to better their performance with one of the most attractive incentives being entry into the coveted Kinetic Achievers Club where the best performers converge at a five-star hotel where there is an elaborate felicitation function among the other goodies on offer. Easy as it sounds, Motwani, who is one of the directors on board the company, says direct marketing is one of the toughest jobs to crack in a business, what with a continuous turnover of trained people leaving the company when under pressure. Which is why at one point the management worked out that giving part ownership of the company is a good way to keep employees from straying - 49 per cent of the company is today owned by the employees.

With the team continuously pushing the limits, KM&SLs sales in 2000-2001 touched 35,000 units and everyone is waiting with bated breath as it heads towards an expected sale of 60,000 units in 2001-2002. The fact that the team now has a motorcycle to sell too means a larger product portfolio and this helps in getting in the numbers, says Kinetic Engineerings Senior Vice-President Ajay Kapila, adding that by the end of the year, the direct marketing company will be contributing 20 per cent of the groups sales.

For Niranjan and team, however, there is more to the game than just selling a few thousand two-wheelers. For them, it is all about brand-building and leaving a permanent impression on their customers. Every month we make 5,000 sales calls and spend a minimum of 15 minutes with each customer. Can you imagine the potential brand recall factor involved here? asks Niranjan.

Meanwhile, with things going smoothly for the company, the management is now thinking of newer ways to leverage its large field force. On the cards is a foray into insurance products distribution, consumer appliances and sale of branded accessories from the company. With hundreds of people working in multi-locations and with Kinetic Finance having the largest retail distributor network with 350 locations, We are ideally suited for businesses which require direct consumer interface, says Mohan Khanna, CEO, Kinetic Finance, and Director of both the finance company and KM&SL.

Khanna says Kinetic is already in discussion with a clutch of large insurance companies for distribution of both general and life insurance products but that a final decision and announcement will come in the next quarter by when the Governments policy on corporate agents will be clearer. In addition to getting revenues from the sale of such products it gives Kinetic the entry into the insurance business which is the high growth business of the future, says Khanna. Also on the cards, says Khanna, is a foray into the sale of branded personal computers and appliances, among other things. Sulajja Motwani sums it up aptly when she says, From something that started out as an experiment we now see KS&ML developing into a complete solutions provider for the customer.

 
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