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Tuesday, July 26, 2011

Retail industry offers good options for enterpreneurial graduates

Organised retail industry is growing at a rapid rate in India. Big Bazaar, Spencer, More, Smart, Hypercity are all springing up in the urban centres, and with them, we are seeing a new option for graduates, especially the entrepreneurial graduates. In order to understand the options available in retail industry, let us understand the structure of the industry.

In the lowest scale, retail is dominated by Supermarkets. A supermarket like Reliance or Spencer is a shop of approximately 3000-5000 square feet space, sells about about 3000 SKU's ( stock keeping units or identified unit of sale such as soap, sugar or curd) sells about 15-30 lakhs per month and employs about 15-25 employees. A hypermarket like Big Bazaar is a shop of approximately 20-30 K square feet, sells about 15000 SKU's, clocks a sales of about 3-5 crore per month. A mega-hypermarket like Hypercity or Metro has even higher square feet area like 80 K square feet.

All these shops have three sections: Sales floor employees who help customers buy a product, back end employees who interacts with suppliers to get the material of requisite quality and quantity and supporting employees like security, cashier and cleaning. Sales floor employees progress in the following hierarchy: customer sales representative > Team Leader > Department leader ( such as that of food) > Stores manager. Other positions are Regional office and Head office positions.

Working in sales floor is supposed to be the premium job and is also paid the best, followed by back end and supporting section in the descending order. One generally starts working from supermarket and move to Hypermarket and then to mega-hypermarket. Normally it takes about 10-15 years to become a store manager. A store manager of a supermarket may earn about 25K per month while the same store manager of mega-hypermarket will earn about 100K per month.

One can join a supermarket at the lowest level even after passing HSC. That is a huge advantage for an entrepreneur as he can gain the necessary customer knowledge and buyer market as well as learn the necessary skills. If you work on sales floor, you understand what customers want, how they buy, which products move faster in the market and so on. If you are working as a Buyer ( in back end section), you not only gain information about the best suppliers of a product, you also understand which products have better margins. For instance, you will understand that apparel section has higher profit margin than food section !

By the time you graduate, you have learnt the ropes of business and can make the next move. You can , for instance, start an apparel shop in an area that you know has market. Or you can decide to become an intermediate distributor of vegetables and fruits. Or you can just decide to have a repair shop for TV's.

Even if you decide to stick with employment, MBA can be a distinct advantage to move beyond the level of store manager. One can also move midway to Hotels and restaurants if one finds it as more exciting. I know of a person who decided to use his retail management expertise to start a franchise outlet of Macdonald. Not only the options are available, but they are available at the right age.

Do you see the advantages of working in retail?

Monday, July 18, 2011

Why should graduates prefer Sales function?

Last week, i was coaching a final year engineering graduate, Atish.

Atish was finishing his degree in Telecom Engineering. His marks for last three years were between 57%-59%, missing the first class by a whisker. His academic track record suggested that he was ill at ease in Engineering subjects. On the other hand, he seemed to be comfortable in 'extrovert' skills, which was noticed by his excellent rapport with friends from different culture and economic background, his participation in college events, his liking of people-related experiences. So i suggested him ' Why don't you make career in Sales'. He immediately retorted 'I do not like sales.'

Whenever i meet graduates, i encounter this general dislike of 'sales' function. So when i probed Atish, what does he not like about sales, he told me about one of his friend who was selling 'electronic components' to retailers. He said ' My friend keeps on moving from one shop to another, shows the catalog, takes the order ( or the money), and moves to the next shop. He is constantly travelling, staying in not-so-good hotels and is generally hassled'.

If that is the 'view' of sales, how can Atish want to go to Sales? Other graduates tell me about the FMCG 'salesman' they see at a retail Kirana stores, while some others tell me about the pharmaceutical 'salesman' they see in the doctor's consulting room. With this limited, and uncharitable view of a salesman, it is difficult to chose sales, even when it is the most appropriate function for someone like Atish?

On the other hand, see the other side of the story. In an organisation, Sales is the most critical function, because it brings in 'revenue'. And because it is a critical function, it is also the best-paid function. Without working in sales, it is very difficult to reach the top. And unlike other functions in an organisation, the correlation between your effort > output is the highest. You immediately know what you are doing wrong, because of which you can correct yourself quickly, and learn therefore at the fastest speed. What else you would want in a job?

I therefore feel very 'disturbed' when graduates avoid 'sales' function just because they are not fully aware of 'what is sales'. So here is an attempt to unblock the negative bias of sales.

Sales is a function where one has to convert a 'suspect' into a 'customer'. Marketing is a function that converts 'prospect' into a 'suspect'. For instance, marketing job is to get me 'interested' in buying 'sedan car'. They provide me lot of information ( in a broadcast mode) to convert me from a prospective customer into a suspect customer. Once i am interested in their car, and enter in the car showroom, it is the job of sales to convert me into their 'customer'.

Due to this correlation between marketing and sales, sales job have different shades of complexity. The complexity varies from type of product, nature of product ( must-have or nice-to-have), price of the product, type of customer ( is it specialist individual like a doctor or an entity like company).

The type of product varies from simple product selling > services selling > complex solution selling. Product can be as simple as soap or toothpaste or it can be as high priced as car or flat. Services can be as simple as selling repairing service of mobile to a complex selling of investment service. Solution can be selling a solution of 'method of testing a car's engine' or selling a solution of 'fitting a car body to the specification of a customer ( which Manu Chabria does when he makes vehicles for celebrities).

Complexity determines the skill requirement of 'sales' function. Low-priced products like soap are easier to sell than high priced products like flat. Must-have products like insurance are easier to sell than nice-to-have products like financial advice. And selling it to individuals is far more easier than selling it to companies. More complex and difficult is the selling, more is the 'specialised skill and knowledge' required. You cannot selling 'testing solution' to a car manufacturer until you completely understand his requirement, competitor's products and your product advantages. In complex selling jobs, 'marketing and sales' are almost bundled together. In lower complexity jobs like soap salesman, marketing and sales are unbundled.

While sales function combines your 'engineering knowledge' with your 'people-skills', design function combines your 'engineering knowledge' with your ' intrinsic technology skills'. Combinations are different, and if someone like Atish, who has a head start over others in terms of people-skill, should he not use this for his advantage by working in sales?

In technology selling, the complexity of selling is very high. It not only requires knowledge of product and technology, but it also requires another unique ability: converting extremely complex technological language into the language of buyer. This skill is so difficult to acquire, that in technology, 'sales' skills are more in demand than even 'design' skills. For instance, when you you think of Apple computer, whose name do you recollect? Do you remember Steve Jobs, the man who 'configured' and 'sold' the first computer, or do you remember Steve Woznaik, who designed the Apple computer?

Side Bar: Marketing is systematically taught in MBA courses because it is a 'thinking' competency. Sales, being a 'doing' competency, is still learnt best in a job. That is why many 'people-skill' graduates take up Marketing speciality in MBA. For engineering graduates, who do not like technology very much, getting into sales function is perhaps the best opportunity to enter this critical organisational function.

Thursday, July 7, 2011

Drafting Resume - is it art or science?

For graduates, preparing resume is one of the most important aspect that can spell the difference between getting a good job and an average job. Let us see the cases of Ram and Anik.
Ram is graduating as a E&TC engineer from a metro town. His college, though not the best of lot, has a professor who was teaching in IIT, Mumbai. Because of his excellent credential, he got a very good assignment for a group of students from an excellent institute which does work in Astronomy. The project turned out to be so successful, that Ram's group has done follow-up work even after finishing final exam. Ram, appearing in one of the better MNC's in Bangalore, had prepared his resume. He had written about this project in 'three lines' in his resume of 2 pages.
Anik, on the other hand, has been a star student of a good college from Bangalore doing Biotechnonology. He was a GS of a college annual festival, represented his college in various forums, won debating prizes and represented his college in a famous Quiz competition. He had written an exhaustive resume of 4 pages.

Who do you think will get the job - Ram or Anik? I know it will surprise you. But both Ram and Anik cannot get the job they want, because they have not followed the three golden rules (at the minimum) of writing a good resume.

Rule 1: Write resume for a targeted audience. Graduates generally write 'everything' in the resume, without knowing the 'profile' of 'audience'. Imagine, you going to a automobile showroom, and given an exhaustive car brochure of 10 pages!Will you be able to interested in reading the brochure explaining features like 'how much torque is created by the engine'?

This is what Anik did in his resume. He wrote everything in his resume. The 'reader' is interested in 'specific items' that he can comprehend. Morever, graduates do not realise that their resume has two distinct audience : One is a representative of HR department who will shortlist the resume based on very generic criteria, and second is the functional specialist, who looks for very focused items in a resume.

Rule 2: Write resume like a brochure. Remember, your resume is a 'brochure'. A brochure is a short pithy document about a product to attract the 'audience' so that he/she is interested in knowing more about the product. Advertising professionals are masters in writing the most important aspect of product in a 1-page brochure!

Ram and Anik have committed the same error in writing their resume. While Ram downplayed and wrote very little about his important 'project work', Anik overplayed his wide variety of credentials and wrote everything. For Ram, it is important to learn the art of writing 'long' about his project without losing the interest, while Anil has to learn the art of writing 'short' without loosing the essential aspects of his background.

Rule 3: Resume is just one 'link' in the chain of your selection: To get selected in a job or assignment, an 'interview' is equally important after the resume is sent.

If you are buying a printer, after you read the 'brochure' of printer, you will like to verify the specified qualities of the brochure in the 'demo' of printer. It is same with your 'resume'. Your resume is your brochure, while your interview is the 'demo'. Interview is like a 'demonstration' of your stated qualities whose features have been written in your resume. ( i.e.brochure)

What could Ram have done to use this idea? Ram has done an excellent project in the final year. He could have written 'as much details as practical' about his project work in his resume to make the 'interviewer' ask him questions in the interview. If Ram does not write 'enough' in the resume, interviewer will not ask him any questions due to which Ram's work and qualities will remain hidden from the interviewer. Will Ram get the job he wants after the interview?

Ram therefore has to learn the art of writing about his project in a language that will invoke curiosity in the interviewer's mind and will 'compel' him to ask questions, which in turn will enable Ram to showcase his qualities.

How do you write your resume?