Study of Parameters Involved in Distribution Channel and Promotions Regarding New Product Launch

In partial fulfillment of the requirements for the award of the Post Graduation Diploma in Management in Marketing and Finance

Summer Internship Project Report

Submitted by

Under the guidance of

Academic Year 2011-13

INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA Nande Campus, Pune.

International School of Business & Media, Pune 1

INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA Nande Campus, Pune. CERTIFICATE

This is to certify that this project entitled STUDY OF PARAMETERS INVOLVED IN DISTRIBUTION was done by who carried out the project work as a summer internship under my supervision for partial fulfillment of the requirements for the award of the degree of Post Graduation Diploma in Management in Marketing & Finance at International School of Business & Media, Nande Campus, Pune.

Date: SIGNATURE Reporting Officer

International School of Business & Media, Pune 2

INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA Nande Campus, Pune. ACKNOWLEDGEMENT

It is my great pleasure in taking this opportunity to express my sincere thanks and deep sense of gratitude towards my honorable and respected guide Mr. who has given us valuable guidance constructive criticism, kind advice and constant encouragement for making this project a success. I take this opportunity to thank, for being the wonderful guidance light and a source of inspiration throughout the project. I would also like to thank Mr., Owner, Sai Agency for taking necessary steps required for completion of this project.

ISB&M, Pune (Nande)

International School of Business & Media, Pune 3

INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA Nande Campus, Pune. DECLEARATION

I, hereby declare that the project report entitled STUDY OF PARAMETERS INVOLVED IN DISTRIBUTION is an original and practical work. The content of project report has not been published before and reflects the work done by me during my summer internship in Pune from 2nd April 2012 to 1st June 2012, under the Post Graduation Diploma in Management in Marketing & Finance at International School of Business & Media, Nande Campus, Pune.

ISB&M, Pune (Nande)

International School of Business & Media, Pune 4

Executive Summary

The Gujarat Cooperative milk Marketing Federation Ltd, Anand (GCMMF) is the largest food products marketing organization of India. It is the apex organization of the Dairy Cooperatives of Gujarat. Over the last five and a half decades, Dairy Cooperatives in Gujarat have created an economic network that links more than 3.1 million village milk producers with millions of consumers in India. These cooperatives collect on an average 9.4 million liters of milk per day from their producer members, more than 70% of whom are small, marginal farmers and landless laborers and include a sizeable population of tribal folk and people belonging to the scheduled castes. This report analyzes the parameters involved in distribution channel. The report is divided into four parts. The first part gives information about company and then theoretical background on this project topic. The second part mentions the objective, scope and limitations of the project. The third part contains the research methodology and data analysis. In this we will see the characteristics of the population, their size, and how the data is collected. Then in data analysis part will give some inferences from analysis of the data collected, collated; where charts, tables, bar diagram, pie charts will come to make the data more meaningful. In last part of the report covers observations from the data analysis as well as the information collected. Then conclusions are reached on the basis of inferences from data analysis & observations. Finally the recommendations are noted down for further actions as required.

International School of Business & Media, Pune 5

Table of Contents
1. Introduction..............................................................................................................................7 2. Information about the company ............................................................................................9 3. Theoretical background of the topic ...................................................................................12 4. Objective of the study ...........................................................................................................14 5. Scope of the project ...............................................................................................................15 6. Limitation...............................................................................................................................16 7. Research Methodology .........................................................................................................17 8. Data Analysis .........................................................................................................................23 9. Launch of Amul PRO ...........................................................................................................40 10. Observation and conclusion .................................................................................................43 11. Recommendation ...................................................................................................................46 12. Bibliography ..........................................................................................................................47

International School of Business & Media, Pune 6

INTRODUCTION
Distribution channels are sets of interdependent organization involved in the process of making a product or service available for use or consumption. Whether selling product or services, marketing channel decision play a role of strategic importance in the overall presence and success a company enjoys in the marketplace. Now parameter involved in distribution channel i.e. distribution or supply from manufacturing point to the customer. The process from manufacturing the goods then deliver goods to carry and forward point then to various distributors and then to retailers and finally to the customer, so this type of process is followed by the company to delivered the product. The distribution of goods across the country in the right quantity, right time and at the right place is already one of the biggest challenges every company face. In order to thrive in the era of modern trade, company need to deliver a service level that is higher than what the industry is used to and operate a supply chain which is superior to our competitors. So that Gujarat Cooperative Milk Marketing Federation Ltd. i.e. GCMMF will plane to implement a SAP module in their organization. After implementing SAP module they will know about the each and every situation involved in distribution parameters like how much stock a particular distributor have in daily basis or how much order a particular salesman take from market on daily basis. So that company will know about each and every distributor current status. Holding sufficient level of inventory is very important; to act as a buffer between two operations, to manage mismatches between supply and demand, and to avoid delays in passing product to customers. Inventory management is primarily about specifying the size and placement of
stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. Management of the inventories has the primary objective of determining, controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs.

Order booking is very important process of secondary sales which directly affects the primary sale. Hence role of a distributors salesman is crucial, who is responsible for secondary
International School of Business & Media, Pune 7

sales. To improve the outcome of order booking process Companies are adopting to technology. Palmtops are becoming a common practice for salesman. The Order booking software in palmtops helps to take the order easily without carrying any paper or pen. From which salesman can easily read out the complete product line SKU and also helps him to decide how much order he can take by checking the stock-level at storage point. GCMMF is also planning to adapt to the technology for order booking and implementation of retail register is their first towards it. It is also important maintain a ledger for stock. Many times distributor doesnt know about the zero inventory stock and accordingly he forget to place the order for that product or SKU. So all of these parameters and practices are important for distribution of consumer products in highly competitive market.

International School of Business & Media, Pune 8

Gujarat Cooperative Milk Marketing Federation Ltd.

Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), is India's largest food product marketing organisation with annual turnover (2011-12) US$ 2.5 billion. Its daily milk procurement is approx 13 million lit (peak period) per day from 16,117 village milk cooperative societies, 17 member unions covering 24 districts, and 3.18 million milk producer members. It is the Apex organisation of the Dairy Cooperatives of Gujarat, popularly known as 'AMUL', which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money. Its success has not only been emulated in India but serves as a model for rest of the World. It is exclusive marketing organisation of 'Amul' and 'Sagar' branded products. It operates through 47 Sales Offices and has a dealer network of 5000 dealers and 10 lakh retailers, one of the largest such networks in India. Its product range comprises milk, milk powder, health beverages, ghee, butter, cheese, Pizza cheese, Ice-cream, Paneer, chocolates, and traditional Indian sweets, etc

GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status. Many of our products are available in USA, Gulf Countries, Singapore, The Philippines, Japan, China and Australia. GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 13 years. For the year 2009-10, GCMMF has been awarded "Golden Trophy' for its outstanding export performance and contribution in dairy sector in India by APEDA. For its consistent adherence to quality, customer focus and dependability, GCMMF has received numerous awards and accolades over the years. It received the Rajiv Gandhi National Quality Award in1999 in Best of All Category. In 2002 GCMMF bagged India's Most Respected Company Award instituted by Business World. In 2003, it was awarded the The IMC Ramkrishna Bajaj National Quality Award - 2003 for adopting noteworthy quality management practices for logistics and procurement. GCMMF is the first and only Indian organisation to win topmost International Dairy Federation Marketing Award for probiotic ice cream launch in 2007.

International School of Business & Media, Pune 9

The Amul brand is not only a product, but also a movement. It is in one way, the representation of the economic freedom of farmers. It has given farmers the courage to dream. To hope. To live.

GCMMF Overview
Year of Establishment Members No. of Producer Members No. of Village Societies 1973 17 District Cooperative Milk Producers' Unions (15 Members & 2 Nominal Members) 3.18 Million 16,117

Total Milk handling capacity per 13.67 Million litres per day day Milk Collection (Total - 2011-12) 3.88 billion litres Milk collection (Daily Average 2011-12) Milk Drying Capacity Cattle feed manufacturing Capacity Sales Turnover -(2011-12) 10.6 million litres (peak 13 million) 647 Mts. per day 3690 Mts. per day Rs. 11668 Crore (US $2.5 Billion)

International School of Business & Media, Pune 10

The Amul Model

International School of Business & Media, Pune 11

THEORETICAL BACKGROUND
Distribution Channel: The chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. A distribution channel can include wholesalers, retailers, distributors. Distribution Management: The management of resources and processes used to deliver a product from a production location to the point-of-sale, including storage at warehousing locations or delivery to retail distribution points. Distribution management also includes determination of optimal quantities of a product for delivery to particular warehouses or points-of-sale in order to achieve the most efficient delivery to customers.
GCMMF Mfg Unit Warehou se Distribut or Retaile r Consum er

Inventory Management: Inventory management is the process of efficiently overseeing the constant flow of units into and out of an existing inventory. Role of Distributor: An entity that buys noncompeting products or product lines, warehouses them, and resells them to retailers or direct to the end users or customers. FMCG distributor generally has exclusive rights of distributing all products or a set of products in a defined geographical territory. In the given territory, he will be responsible for the redistribution of the products, retail penetration and market coverage. Sometimes, distributor is also appointed to serve a particular clientele base like hotels, canteens, restaurants etc. Traditionally a distributor is treated like a trader in the distribution channel. But now many organizations have started seeing distributors playing much bigger role.

International School of Business & Media, Pune 12

Following are some of the functions a distributor plays in modern FMCG channel. Basic role of distributor is to purchase/stock products in bulk from the manufacture and sell/distribute them to retailers in smaller quantity. Distributor takes orders from the retailers and institutions and ensures timely and quality delivery of products. Distributor maintains stock of the products to absorb the supply fluctuation from manufacturer. Distributor provides required financing for allowing credit to the retail market. Distributor is the person who will provide ground level data on demand estimation for the products. Distributor expands the retail universe (by opening new outlets) as well as the retail penetration of various products. Distributor takes up field level marketing activities like H2H promotions, inshop promotions. Distributor helps in minimizing consumer complaints and resolving them.

Stock Keeping Unit (SKU): Warehousing item that is unique because of some characteristic (such as brand, size, color, model) and must be stored and accounted for separate from other items. Every SKU is assigned a unique identification number. Receipts: The stock received by the distributor from the Company after placing the order. Stock-out: Stock-out is the situation of having Zero Inventory for a particular product.

International School of Business & Media, Pune 13

OBEJECTIVES OF THE PROJECT

To find out the performance of the Distributor by observing various things. To find out the average inventory held by the distributor per day and the average investment by the distributor. To implement the retail register introduced by the company and to check the result & effect after the implementation. To provide useful recommendations for improvement in distributors performance.

International School of Business & Media, Pune 14

SCOPE OF THE PROJECT

Scope determines the boundaries of the project and provides the framework for working. I was assigned to Sai Agency from Hadapsar area of Pune city, which is responsible for the distribution of Amul products in Hadapsar and surrounding area. Scope of the project was as follows : Hadapsar and surrounding area The Project covered only the Dairy products of Amul. For implementation of retail register- only 1 beat, i.e. Solapur Road-1 For Inventory Analysis- 4 Categories of Amul dairy products, i.e. 1. Butter 2. Cheese 3. Shrikhand 4. Beverages

International School of Business & Media, Pune 15

LIMITATIONS OF THE PROJECT

Salesmans knowledge and understanding of the retail register was a limitation for Implementation of the retails register. Retail register was not completely user friendly as it was a big size register and weighed around 1.5 Kg. So salesmen felt it quite inconvenient to carry along and this required convincing the salesmen to use the register and bring it in practice. Data for March 2012 of secondary sales, i.e. route wise and retail store wise sales data was not available for comparing with sales data of the months of April & May, to find out the result and effect of implementation of retail register.

International School of Business & Media, Pune 16

RESEARCH METHODOLOGY
Name of the Distributor : Sai Agency, Hadapsar.
I was assigned to the study at Sai Agency located in Hadapsar area of Pune city. Sai Agency distributes Amuls Dairy as well as Ice-cream products in Hadapsar and the surrounding area.

Infrastructure at the Distributor :

Storage Capacity: Type Temperature Area -18C Cold 300 sq.ft. 4C Cold 200 sq.ft. Normal or Dry Ambient 250 sq.ft. Products Stored : a) In Cold Storage at 18C Ice-Creams Paneer b) In Cold Storage at 4C Butter Cheese Shrikhand c) In Dry Storage Flavored milk Ghee Lasse Buttermilk Amulya, Amulspray Fresh Cream DTM Milk
International School of Business & Media, Pune 17

Other : No. of Salesman: 2 No. of Delivery Boys: 2 No. of Vans for Delivery of Products: 2 (TATA Ace)

Distribution to : Small Retail Outlets Modern Retail Formats (Reliance Fresh, DMart, Big Bazaar, Hypercity)

Weekly Beat Plan for Sai Agency (Small Retails) :

Day Monday Tuesday Wednesday Thursday Friday Saturday Beat Solapur Road- 1 Solapur Roda- 2 Kondhawa-2 Sayyednagar Kondhawa-1 Fatimanagar-Wanwadi Sasanenagar Malwadi Kondhawa-2 Handewadi Kondhawa-1 Fatimanagar-Wanwadi Weekly Frequency Once Once Twice Once Twice Twice Once Once Twice Once Twice Twice

Total No. of retail outlets covered by the Sai Agency = 270 Outlets (Approx.)

International School of Business & Media, Pune 18

Retail Register

This is the Retail Register which GCMMF has introduced for implementation. Retail register the proper format for order booking for small retail outlets by the salesman. It covers all the list of SKUs under different product categories against which orders can be noted down on respective days for each retail outlet regularly visited by the Salesman. It also contains images of the SKUs listed in the register.

International School of Business & Media, Pune 19

Stock Ledger

This is the Stock Ledger introduced by GCMMF for inventory management practice. It covers all the list of SKUs under different product categories against which opening stock, closing stock, receipts, and sales can be noted down on respective days for available at the distributors place.

International School of Business & Media, Pune 20

 Methodologies for collecting Data or information :

(A) For finding out the performance of distributor Observing all the working processes like Order booking, Billing, Loading, Unloading, Handling & Storage, Delivery, etc. at the distributors workplace. Observing cases where there were delays in landing of stocks at distributor and also in delivery of products from distributor to retailers. Knowing about the retailers responses to the distribution. Observing the stock-out situations and also lost orders, if any. Observing distributor-salesman as well as salesman-retailer relationships to find out the effectiveness of distribution. (B) For finding out the Average Inventory held and the Average Investment The Stock Ledger was maintained for a period of approx. 1 month by observing Opening Stock, Receipts, Sales and Closing Stock on daily basis for all the SKUs available at the distributor. Stock level, receipts & sales were basically recorded in No. of Cases or boxes as instructed in the stock ledger. For SKUs where stock movement was very low and was majorly in packets, stock level and sales were recorded in no. of packets also. Calculation and analysis was done for 4 product categories of Dairy products, i.e., Butter, Cheese, Shrikhand and Beverages; as required by the Company. The analysis was done for 39 SKUs available at the distributor under the mentioned 4 product categories of dairy products. For Calculation, records of 1 month were taken. Opening stock of a day was considered as the stock level for that day. Then Average Inventory per day was calculated by summing up stock levels over the 30 days period.
International School of Business & Media, Pune 21

Also calculated were total receipts & total sales in the period as well as average receipts & average sales per day. Distributor landing rate, i.e. the rate at which distributor receives the stock from the Company, was noted down for all the SKUs under study. From the average inventory in volume, calculation was done for finding out the value of average inventory held, i.e. the average investment by the distributor in stock. Stock-outs for any SKU observed over the period were recorded in the stock ledger. Then stock levels over the period were plotted on the line charts and were compared with bar diagram of the receipts over the same period, for analyzing the cases of stock-outs observed.

(C) For Implementation of the Retail Register Explaining the need and importance of the Retail Register to the distributor and salesmen involved. Explaining to salesman in detail how to use the Retail Register. Make the salesman understand the process of order booking in the register in order to overcome the initial resistance and convincing him to accept the changes in the process, I.e. Change Management. Due to initial high resistance to implementing the Retail Register and time constraint on salesman, the activity of order booking in the register was carried out on only one beat, i.e. Solapur Road-1. Recording orders from retailers in the register and helping salesman to bring the register in practice. Finally, comparison was done between orders for all SKUs in the implementation period and orders in previous few weeks. The SKUs which got added in order booking in the implementation period were noted down and it was checked if the results can be attributed to the use of Retail Register. These effects were shared with the distributor and salesmen for further implementation of Retail Register for rest of the beats.
International School of Business & Media, Pune 22

DATA ANALYSIS
Data collected from the Stock Ledger was for 39 SKUs from the 4 product categories under study as mentioned below.

Following tables show the records of stock for 30 days from 20th April, 2012 to 19th May, 2012. This includes Opening Stock (OS), Receipts of Stock and Sales for each day of the period. The figures in the table are basically in number of cases (boxes), unless mentioned. Wherever

International School of Business & Media, Pune 23

the Sales volume for any SKU is low, i.e. in number of packets and not in cases, figures are in number of packets and hence mentioned in the 3rd column- Stock in bracket as, Sales (pkt).

BLANK PAGE

International School of Business & Media, Pune 24

BLANK PAGE

International School of Business & Media, Pune 25

BLANK PAGE

International School of Business & Media, Pune 26

BLANK PAGE

International School of Business & Media, Pune 27

Calculation of Average Inventory held in number of cases and Total Value of Average Inventory for all SKUs:

International School of Business & Media, Pune 28

The previous table shows, for each SKU, Volume of Total Inventory held over the month Volume of Average Inventory held per day Value of Total Inventory held over the month Value of Average Inventory held per day Total receipts of stock over the month Average receipts of stock per day Total Sales of stock over the month Average Sales of stock per day

For example, SKU: Butter 100gm 1) Total Inventory held over the month = 1138 Cases 2) Therefore, Average Inventory held per day = (1138 / 30) = 37.93 Cases 3) Total Value of Inventory held over the month = No. of Cases X Rate = 1138 X 3980.06 = Rs. 45, 29,307 4) Therefore, Average Value of Inventory held per day = (4529307 / 30) = Rs. 1, 50,977 5) Total receipts of stock over the month = 201 Cases 6) Average receipts of stock per day = (201 / 30) = 6.70 Cases 7) Total Sales of stock over the month = 184 Cases 8) Average Sales of stock per day = (184 / 30) = 6.13 Cases

Likewise, after doing the calculations for total 39 SKUs from 4 product categories, We get, Total volume of per day Average inventory for all SKUs together = 457.30 Cases 457 Cases Total value of per day AvG. inventory for all SKUs together = Rs. 6, 68, 474 Rs. 6.68 Lakhs
International School of Business & Media, Pune 29

i.e. Per day on an average, the Distributor holds a total of 457 Cases as Inventory and its total value is Rs. 6.68 Lakhs.

International School of Business & Media, Pune 30

Comparison of Receipts against Sales

Following table shows the comparison of total receipts of stock against the total stock-sales in the period, for all 39 SKUs under study.

To maintain a sufficient level of inventory and constant flow of stocks, Receipts should be more than Sales, R > S. Last column in above table shows, for a SKU, the condition R > S was satisfied or not.

International School of Business & Media, Pune 31

 Out of 39 SKUs, 26 SKUs had the situation R>S and for 13 SKUs the situation was RS. Although there were exceptions like Buttermilk, where there might be sufficient inventory already in place and hence the distributor might have placed comparatively lower orders in the mentioned period.

Summary of stock-out situations

Following table shows the summary of stock-outs observed during the period of study.

Out of 39 SKUs under the study, there were stock-outs observed for 21 SKUs. These stock-out situations can be classified and inferred in following manner. Category Period A B C upto 4 days around a week More than a week Possible reason/s Insufficient order quantity / gap between successive orders Unavailability of products / SKU getting skipped in the order Unavailability of products / SKU getting ignored for a long time
32

International School of Business & Media, Pune

Observation: There are 10 SKUs which are common to Table-2 & Table-3.

International School of Business & Media, Pune 33

Graphical Analysis

Avg. stock level =

Chart: Sample graph showing stock level over the month

Above graph shows the stock level over the month for Butter 100gm. It shows how the stock level varies over the period. Since this product has a great demand in the market, generally the distributor tries to maintain a good level of inventory to satisfy the demand and avoid any stock-out. Here Average Stock Level for the SKU is around 38 no. of Cases.

International School of Business & Media, Pune 34

For Stock-out Type-A

SKU: Cheese Block 1 Kg

The reason for the stock out situation shown above might be due to long gap between two successive orders as shown below in bar diagram for Receipts.

International School of Business & Media, Pune 35

SKU: Shrikhand Elaichi 200gm

The stock out situation shown above might be due to insufficient order quantity as shown below in bar diagram for Receipts.

International School of Business & Media, Pune 36

For Stock-out Type-B

SKU: Cheese Block 200gm

The stock out situation shown above might be due to unavailability of the product for a long time as shown below in bar diagram for Receipts.

International School of Business & Media, Pune 37

SKU : Kool Rose Flavored Milk

The stock out situation shown above might be because the SKU got skipped while placing the order as shown below in bar diagram for Receipts.

International School of Business & Media, Pune 38

For Stock-out Type-C

SKU: Cheese Slice 100gm

The stock out situation shown above might be because there was the no or less availability of cheese products for a long time as shown below in bar diagram for Receipts.

International School of Business & Media, Pune 39

SKU: Amrakhand 500gm

The stock out situation shown above might be because unavailability of the product or it might got ignored while placing the order time as shown below in bar diagram for Receipts.

International School of Business & Media, Pune 40

Implementation of Retail Register

Beat for implementation : Solapur Rd-1 Period of implementation : 23/04/12 to 14/05/12 SKU added after implementation : Mozzarella Pizza Cheese, 200 gm Amrakhand/Shrikhand, All flavours, 200 gm & 500 gm Kool Chocolate Milk, 200 ml TP Amulspray Tin, 500 gm

International School of Business & Media, Pune 41

LAUNCH OF AMUL PRO

Amul PRO is a malt based milk additive, which not only enhances milks nutritive value but also makes milk a very tasty drink for people of all ages, especially kids, who need milk and nutrition for healthy growth. It comes from the House of Amul, the brand which is known all over for providing quality products at value for money price.

SKUs: 500g Glass Cube Jar: The glass cube jar is a unique pack in the category, giving Amul PRO a distinct advantage of standing out of the clutter on retail shelves. 500g Refill: Amul PRO is also available in an attractive 5 panel 500g Refill

Ingredients: Malt Extract, Sugar, Milk solids, Cocoa solids, Caramel, Vitamins, Minerla, Permitted emulsifiers (E322, E476), Raiding agent (E500(ii)), DHA and salt.

Key product attributes of Amul PRO are as follows:

International School of Business & Media, Pune 42

Whey Protein: Muscle building & Immunity Whey Protein is the purest and most essential form of protein. It is easy to digest and helps muscle building and nurturing growth. Why Protein is often referred to as Fast Protein, provides quick nourishment to muscles, helping your child strengthening the immunity and stay healthy.

DHA: Brain Development Docosahexaenoic Acid (DHA) is an essential fatty acid required for optimal development and function of the brain, eyes and central nervous system of a child. It plays an important role in enhancing your childs immunity by protecting it from allergies like Asthma.

27 Essential Nutrients: Complete Wellness Amul PRO contains 27 essential nutrients (proteins, vitamins and minerals) that help in boosting immune system enhance metabolism and nervous system functions and helps children be mentally sharp and physically agile.

Prices & Margins: 500g Glass Cube Jar Price: Rs. 150 per unit, 500g Refill Price: Rs. 140 per unit, Promotional margin to retailer: 15% Promotional margin to retailer: 15%

Trade Sales Promotion:

International School of Business & Media, Pune 43

Trade sales promotion is promotion through the channel members or trade partners by Persuading the retailer or wholesaler to carry the brand or new product, Persuading the retailer or wholesaler to carry more units than the normal amount or quantity, By inducing retailer or wholesaler to promote the brand by featuring, display and promotional price reductions, By encouraging and stimulating retailers and their co-workers to push the product to customers.

Connecting with retailers: Conveyed all the necessary information related with the product and its unique selling propositions to the retailers and also encouraged them to create awareness about the same among their customers. Explained the retailers about the product pricing and respective margins to them. Also some comparisons with respect to competitors were elaborated to gain a competitive edge in minds of retailer in order to persuade them. Persuaded the retailers to subscribe to schemes and acquire shelf space for the product preferably at critical and important display positions & customer touch points. Retailers co-workers were also encouraged to push the product to customers. Distributed the display boards to retail outlets for more product awareness. Made retailers aware about the advertising support by the Company through mega advertising campaign which included television, print media and outdoor promotions.

International School of Business & Media, Pune 44

OBSERVATIONS
(A) Working of the distributor : Sai Agency uses software called WinOmkar for computerized billing process. All the data of receipts of stocks is also loaded in the computer system through the software. Salesman visits beats in the area as per weekly beat plan and books orders from retailers. Billing for these orders is done on the same day evening. Delivery for booked orders is done on the next day morning to retailers of the respective beats. All other processes like loading, unloading, handling & storage are done in proper manner. Sai Agency distributes both Dairy products as well as Ice-Scream products to small retail outlets and also to the Modern Retail formats like Reliance Fresh, DMart, Big Bazaar and Hypercity. There were rarely any delays observed in delivering stocks to retail outlets. Inventory Management practices need to be adopted to avoid stock-outs. The salesmen seem to have a good rapport & communication with most of the retailers. Retailer complained about the replacement issue which was on top of their list.

(B) Inventory Management : For SKUs, which have good & constant demand in the market, sufficient level of inventory was observed over the whole period.

International School of Business & Media, Pune 45

For some of the SKUS, stock-out was observed on few occasions. Out of 39 SKUs, stock-outs were observed for 21 SKUs. (Refer Table-3)

For some of the SKUs, total receipts were not more than total sales, over the month. Out of 39 SKUs, receipts were not more than sales for 13 SKUs. (Refer Table-2)

After comparing both Table-2 & Table-3, it was seen that 10 SKUs were common to both the tables. This shows that, the condition of receipts not being more than sales can lead to stockout situation.

For some of the SKUs, demand was varying & unknown and hence sufficient level of inventory could not be maintained.

Some of the SKUs got ignored because of low demand in the market and order of those SKUs was not placed for a long time.

Also observed was unavailability of stock, from Company for some SKUs over some part of the period.

As per calculations, per day on an average, the Distributor holds a total of 457 Cases as Inventory and its total value is Rs. 6.68 Lakhs. (Refer Table-1)

(C) Implementation of Retail Register : Salesmen are habitual to current process of order booking (on a page) and favor the same as they feel it more convenient & familiar. So there was a high resistance from salesmen for implementing the retail register, as the change for them was from a page to a complete register, which weighs around 1.5 Kg. Salesmens knowledge & understanding about using the register was a limitation.

International School of Business & Media, Pune 46

Convenience in order booking process was important to salesmen than any incentives offered. The retail register could be implemented on one beat only as trial. Order booking using the register took more time than normal, as it was lengthy. Salesmen needed to refer to 6 pages for each retail outlet.

SKU listed under some of the categories were not in proper order, e.g SKUs in Cheese. Some SKUs were not included in the register, e.g. Buttermilk. On the other side, the use of retail register helped to get orders for few additional SKUs on some of the occasions, as salesman spoke names of more SKU than normally he does.

Also, on few occasions the pictures of SKU on retail register helped retailer to place order for a SKU he could identify with the image than its name.

(D) Launch of Amul PRO : Most of the retailers asked for free samples to taste the product Some of the customers appreciated the design of Jar and felt it is attractive enough to go for the first purchase.

CONCLUSIONS
Sai Agency exhibits good practices for overall distribution. All the operations are done smoothly and it can support well the SAP integration GCMMF is planning for integration throughout the distribution channel.

International School of Business & Media, Pune 47

As good rapport & communication of salesman with retailer helps to bring more orders and achieve more sales, they need to be encouraged for strengthening Companys relationship with retailers.

To maintain a sufficient level of inventory and constant flow of stocks, total receipts should be more than total Sales over a period.

To avoid stock-outs at distributor, it needs to be ensured that there is constant supply of products from the Company, Order placing is logical, and SKUs do not get skipped.

Stock ledger can help distributor to know trends of stock consumption and thus will enable them to place orders logically.

A training session on implementation of retail register can prove helpful to salesmen to bring it in practice.

The retail register is not quite user friendly, hence salesmen continue to resist the change and favor the current process of order booking.

International School of Business & Media, Pune 48

RECOMMENDATIONS

Logical Order placing to maintain sufficient level of inventory Proper and consistent order frequency.

Equal focus on all available SKUs. Bring in more user friendly and compact format for retail register. Conduct a training session for salesmen on practicing retail register. Take Steps to motivate Salesman for strengthening the relationship with retailers to boost up the sales.

Replacement issues need to be addressed. Put more display for special/less known products at retail outlets to increase awareness.

International School of Business & Media, Pune 49

BIBLIOGRAPHY AND REFERENCES

www.amul.com Article on GCMMF (Amul) in Business India magazine on 13th May 2012. Sales & Distribution Management by : Krishna Havaldar and Vasant Cavale Marketing Management by : Philip Kotler, Kevin Keller, A. Koshy and M. Jha www.businessdictionary.com www.investopedia.com

International School of Business & Media, Pune 50