1. DEALER INCENTIVE TOURS BUSINESS WORLD 08/08/1995 Submitted By: Sumedha Nanda 10DM-159

4.  An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time.  Can be-  Points-based incentive programs  Employee incentive programs  Consumer incentive programs  Dealer incentive programs  Sales incentive plan(for sales agents)

5. Dealer incentive programs  With umpteen brands fighting for shelf space companies are trying to lure dealers by offering more and more incentives to dealers  Dealer incentive programs are used to improve performance for dealer and channel resellers using sales incentive programs.

6.  Rewards can be:  Cash  Gift Coupons/vouchers  Merchandize  Travel  The most effective one for maintaining long term relationships is ::Travel

7. Examples

8. Farm pesticide firms  To push sales, farm pesticide firms offer foreign trips to dealers  Free tour to Italy, Switzerland, Thailand, Singapore, Malaysia, Australia are just a few of the alluring offers which the companies have extended to the dealers  Higher the sale, better will be the destination of tour, say the promotional offers.  For example-Nagarjuna Fertilizers ::If they sell 500 kg of a particular product, they get four night-five day stay in Thailand for free.

9. Saab Cars- Tour de France  Same concept is being used internationally  Started with the guys at Saab Germany catching on  Current tour of Saab dealers to france was a huge success  Saab conducted promotional event in france with its dealers where people could ride the newest versions and compare with other brands.

10. All that is Spent Type % of Total Estimated Expenditure (expressed in $ billions) Consumer/User Promotions16%$4.3 Sales Incentive — Merchandise15%$4.0 Sales Incentives — Travel18%$4.7 Dealer Incentives — Merchandise16%$4.3 Dealer Incentives — Travel15%$4.0 Non-Sales Employee — Merchandise 9%$2.5 Non-Sales Employee — Travel4%$1.1 Business Gifts7%$2.0 Total100%$26.9

11. All that is Spent--Travel  Konica  Locations: Germany,Africa  Amount:Rs 40,000 per head  Godrej-GE  Locations: US,Germany  Amount:Rs 4 crore  Videocon  Locations: London,Paris  Amount:Rs 35,000 per head  Number of Deaers taken :650

12. How to benefit on tour  Godrej-GE top brass flew to Kenya where their dealers were on a company sponsored tour to make a presentation on company’s plans to launch a new range of products.  Tour is one place where you can get complete attention of the dealers.  Apart from sight-seeing companies are adding activities like factory visits to Dealer’s itinerary.

13. Advantages  It can motivate the staff which in turn only helps business.  It helps boost morale and increase loyalty  It helps build long term relationship with dealers

14. Advantages  These programs help companies in  Capturing market share  Launching new products  Reducing cost of sales  Increasing product adoption  Driving sales

15. Disadvantages  Incentive tours will very often create moral hazards. By giving the incentive of hitting specific targets, the targets become the goal, rather than raising the performance of the organization as a whole. This causes reduction in overall performance, even while increasing the rate of hitting targets.  Slowly this has turned from a differentiation point to a Point of Parity.  Costs much higher than other incentives like Diwali bonus etc.

16. Thankyou