Distributor Management
Purpose
This procedure establishes a structured framework for evaluating, onboarding, and managing distributors for the
Lubricants Department. It ensures that distributors align with business objectives, maintain operational efficiency,
and contribute to market growth through strategic partnerships.
Scope
This procedure covers the evaluation, selection, and onboarding of new distributors, the development of annual
business plans, marketing budget allocation, and incentive structures. It also outlines ongoing distributor
performance assessments, ensuring alignment with Entity’s strategic goals and market expansion objectives.
13.1 New Distributor Evaluation
A comprehensive checklist for Distributor evaluation shall be maintained by LPG Department, including but
not limited up to:
13.1.1 Pre-onboarding & Screening
a. Technical Checklist: A checklist for Distributor evaluation shall be maintained by KAM, including
but not limited up to:
Local government authorization certificate: Verification that the Distributor possesses a
valid authorization certificate.
Product compatibility assessment: Evaluation of Distributor’s capability to store, handle,
and distribute the LPG cylinders safely and effectively.
Supply chain capabilities evaluation: Assessment of the Distributor’s supply chain efficiency,
reliability and responsiveness.
Logistics assessment: Review of Distributor’s logistics network, including transport,
warehousing and inventory management practices.
Any additional details can be obtained and verified as identified by the competent Authority
or any other process agreed with Entity’s strategic partners (National Oil Companies).
b. Commercial Checklist:
Market presence assessment: Evaluation of Distributor’s market reach, industry reputation,
and customer base.
Sales capabilities evaluation: Review of Distributor’s sales infrastructure, experience, and
past performance (if applicable).
c. Financial Checklist:
Financial health evaluation: Assessment of the Distributor’s financial stability, discipline,
past records and business references.
Compliance with regulations: Verification that the Distributor adheres to all applicable legal
and regulatory requirements, ensuring alignment with industry standards.
d. Alignment with business objective:
Evaluation of the Distributor’s strategic alignment with the company’s vision, values, and
growth goals, ensuring a compatible partnership in the country of operation.
All checklists shall be conducted by Sales Coordinators in coordination with respective KAM to
ensure thorough due diligence during the onboarding process.
13.1.2 Training
a Sales Guidance: Offer guidance on effective sales strategies
b Marketing Materials: Distribute updated marketing materials, including product brochures,
pricing sheets, and promotional content, to ensure consistency in brand representation across all
distributor activities
13.1.3 Sales & Demand Forecasts
a The Lubricants Department shall provide periodic demand forecasts to distributors to facilitate
accurate inventory planning and replenishment strategies
13.2 Yearly Business Plan
If Distributor agrees, a yearly Business Plan for the next year shall be signed during the Q4 of the previous
year and ensure following steps:
13.2.1 Marketing Budget Allocation:
a. The marketing budget and incentives shall be determined in alignment with the annual volume
targets.
b. This budget shall be based on joint marketing expenditure assessed and co-funded to support
marketing initiatives by distributors for advertising campaigns, promotional activities, and
branding efforts that directly contribute to sales growth within the Distributor’s region.
c. The annual marketing budget shall be provided to Distributors against the targeted annual
volume, subject to the maximum cap of the planned budget or pro-rata actual against volume
achievement, whichever is lower.
13.2.2 Incentive Plan:
a. Achievement of incremental growth on annual volume targets may entitle a country distributor
to earn an incentive.
b. The incentive plan shall be proposed by KAMs for approval of HOD against prospective growth-
promising distributors in strategic markets to support business development efforts, reinforcing
their contribution to the business and fostering continued growth.
c. The annual incentive after approval shall be documented in the business plan and signed as per
DOA.
13.2.3 Alignment with Company Objectives:
a. This business plan is structured to align Distributor activities with Entity’s objectives for the
country, ensuring that Distributors are actively contributing to increased market penetration
and growth.
b. By incentivizing Distributors to invest in local marketing efforts, Entity aims to enhance brand
recognition, improve product visibility, and ultimately drive higher sales volumes.
13.3 Distributor Performance Management
13.3.1 Sales & Growth Target
a Quarterly and annual sales targets shall be established for each distributor if the agree, aligning
with overall business objectives and market potential.
b Distributor performance shall be monitored against the set targets through periodic sales
tracking and reporting mechanisms.
c Performance reviews and sales analysis shall be conducted in coordination with the Key
Account Manager (KAM) to assess sales trends, identify growth opportunities, and address any
performance gaps.
13.3.2 Incentives & Support
a If agreed during annual target signing stage, Distributors shall be eligible for volume-based
discounts, structured to encourage higher sales performance and market expansion
b Marketing support, including advertising, branding initiatives, and participation in industry
events, shall be provided to enhance market penetration and brand visibility.
c Periodic sales training and strategy workshops shall be conducted to equip distributors with
product knowledge, sales techniques, and market insights, ensuring alignment with business
objectives
13.3.3 Compliance & Brand Protection
a Distributors shall adhere to the company’s pricing policies and brand positioning guidelines to
maintain market consistency and brand integrity.
13.4 Distributor Review & Termination Process
a Annual evaluations shall be conducted to assess distributor performance based on:
Sales target achievement.
Market expansion efforts and brand presence.
Adherence to company policies and contractual agreements.
Customer feedback and service quality
b In cases of underperformance, corrective measures shall be implemented, including:
Strategic sales support and guidance.
Additional training sessions and marketing resources.
c Distributor may be subject to termination under the following conditions:
Violation of contractual terms, including unauthorized pricing or brand misrepresentation.
Financial instability or inability to meet payment obligations.
Non-compliance with legal or regulatory requirements.
d In case of termination, a formal notice shall be issued, providing a grace period for stock
clearance
13.5 Reporting & Continuous Improvement
13.5.1 Key Performance Indicators (KPIs)
a Distributor Sales Growth Rate – Measure the percentage increase in sales volume over a defined
period.
b On-Time Payment Rate – Track the percentage of invoices paid within agreed payment terms.
c Market Expansion Success – Evaluate the number of new customers acquired and territories
covered.
d Compliance Score – Assess the distributor’s adherence to company policies and contractual
obligations.
13.6 Responsibilities
13.6.1 Sales
a Identify potential distributors and evaluate market opportunities.
b Develop sales strategies and promotional support for distributors.
c Monitor distributor sales performance and provide necessary training.
13.6.2 Distribution
a Ensure smooth order fulfilment and timely delivery to distributors.
b Maintain inventory planning
13.6.3 Finance
a Assess distributor financial stability and creditworthiness.
b Manage pricing, payment terms, and credit limits.
13.6.4 Legal & Compliance
a Ensure distributor agreements comply with local regulations and company policies.
b Monitor compliance with branding, pricing, and ethical guidelines.
13.7 Procedure Review:
These procedures shall be reviewed annually to ensure they remain relevant and effective in supporting the
Lubricants department’s and Organizational goals.
