A

PROJECT REPORT ON
CHANNEL OF DISTRIBUTION
(MARKETING)
AT
ATUL AUTO LTD.

- : SUBMITTED BY : -

Musani Taha M.
T.Y.B.B.A.
ACADEMIC YEAR
2005-06

- : SUBMITTED TO : -
Smt. M. T. Dhamsania Commerce College,
Rajkot

- : AFFILIATED TO : -
SAURASHTRA UNIVERSITY, RAJKOT.
 - : Guided By : -
Dr. Manish Thakar
 SMT. M. T. DHAMSANIA
COMMERCE & B.B.A. COLLEGE, RAJKOT.

Certificate

This is to certify that Mr. Musani

Taha M. student of T.Y.B.B.A. carried

out his project as per the syllabus
of Saurashtra University.
He has prepared industrial
training report under / over
supervision and this is his own
contribution for making this report
during the academic year 2005 –
2006 is appreciated.
Place : Rajkot Prof.
Dr. Manish Thakkar

Date :

(PRINCIPAL)
 PREFACE
Experience is the best teacher as solution of
any problem is concern. As a student of Business
Management, we must have enough practical
knowledge. This practical knowledge cannot be
available to students in classroom. So that field
work is essential for achieving such practical
knowledge or experience.
As far as the rules of Saurashtra University is
concerned, it is compulsory for all T.Y.B.B.A.
students to visit an industry for the practical
study. This visit is playing a crucial role to develop
practical view points of the students and also
making them aware of the problems opportunities
and situations of the industrial unit.
I had visited ATUL AUTO Ltd. at Shapar
(Veraval), Rajkot. I tried my level best to collect
information from various departments of the
company viz. Marketing. So from this project you
can get a raw idea of the huge Plant and
Management system of ATUL AUTO Ltd.
My basic aim behind undergone this training
is to evaluate applicability of different
managements in practice. This report reflects the
image that I observed and come to know during
my visit at this industry.
I hope this project will also receive its
generous support and kind encouragement.
ACKNOWLEDGEMEN
T
During the industrial Training at ATUL AUTO
Ltd. and during the preparation of this report, I
have received help from many people.

I am extremely thankful to Prof. Manish

Thakar who had helped us in preparation of this
report.

I am also thankful to my senior friends who

had helped and guided me in preparing this
report.

I am thankful to those people of industry who

have directly or indirectly helped me in my
industrial training.

Place : Rajkot (Mr. Musani Taha m.)

 DECLARATION
I, Mr. Musani Taha M. student of T.Y.B.B.A.
of Smt. M. T. Dhamsania
Commerce College Rajkot hereby declare that this
project report which is my own work has been
carried out successfully.

The unit which I had visited was Large Scale

Public Limited Co. it’s name is ATUL AUTO Ltd.,
situated at Shapar(Veraval). I undersigned this
project and this project report was not previously
submitted to any college.

Place: Rajkot (Mr. Musani Taha M.)

Date : T.Y.B.B.A.
 DETAIL ABOUT COMPANY

Atul Auto Limited is leading manufacturers of diesel

three wheelers in India. The company originally started

activity in Jamnagar way back in 1960 as a partnership

firm, producing small rural vehicles. Over a period

company has grown substantially and today it is a public

limited company with manufacturing capacity of 10000

vehicles per annum.

In 1991 company set up new plant at Shapar

(Veraval), in industrial colony located near Rajkot, for

manufacturing new range of diesel three wheelers, i.e.

Passenger Rickshaws of 6 persons capacity and Pick-up

vans, of 750 kg. pay load useful in urban area.

As on today approximately 130,000 vehicles are on

Indian roads manufactured by ATUL AUTO LIMITED.

Investment in the project is approximately Rs.300

million. (US $ 7.5 million).
PRESENT GROUP TURNOVER

Rs.600 million (US $ 15 million)

PRESENT ACTIVITIES

Manufacturing and marketing of “ATUL KHUSHBU”

brand Diesel Commercial Vehicles.

MANAGEMENT

The company is managed by a team of professionals

having relevant average experience of 20-25 years, each.

Total Man Power strength 400

 INDEX
Sr. No. Particulars

(A) GENERAL INFORMATION

1 Introduction
2 Name, Size & Form of Company
3 History & Development
4 Infrastructure Available with Unit
5 Managerial Team
6 Organizational Structure
7 Location
8 Diversified Groups
9 Time – keeping system
10 Policy
11 Research & Development
12 Contribution of Unit
(C) CHANNELS OF DISTRIBUTION

1 Concept of Channels of Distribution

2. Objectives of Channel Selection

3. Marketing Channel and Function

4. Motivating Channel Members

5. Channel conflict and Solution

(D) Physical Distribution system

1. Objectives of Physical Distribution
2. Order Processing System
3. Ware housing Facility

4. Inventory Control
5. Transportation
(E) CONCLUSION
(F) QUESTIONNAIRE
(G) BIBLIOGRAPHY
 GENERAL
INFORMATION
 PROJECT AT GLANCE

Name :- ATUL AUTO Ltd.

Location :- 8-b National Highway,

Near Microwave Tower,

SHAPAR (VERALVAL),

Dist. RAJKOT –2 (INDIA)

Product :- Diesel 3-wheeler vehicles

Installed :- 3600 vehicles

Capacity
Annual :- 3343 vehicles

Production
Power Demand :- Consumption per unit of

production – 182 unit.

Work force :- 300 employees

Capital :- Rs. 300 million (US $ 7.5 million)

Investment
Establishment :- 1991

year
Total Share :- Rs. 5,58,44,050

Capital
Total Sales :- 3313

INTRODUCTION

India is characterized by all over expanding

population, this growth coupled with rapid

Industrialization has created huge demand for cargo

vehicles, also for passenger vehicles. Diesel vehicles

have been gaining more popularity on account of price

advantage enjoyed by diesel cost as compare at petrol

cost.

A listed Large Scale Public Ltd. Company ATUL

AUTO Ltd. is located at Shapar Industrial Zone, which is

a notified backward area by State Government eligible for

several benefits. It is 18 km. away from Rajkot city, on

National Highway 8-B, having

 land of 5,00,000 sq.ft. ATUL AUTO Ltd. has so far

invested more than Rs. 300 million (US$ 7.5 million) in

manufacturing unit with capacity of 10,000 vehicles per

annum. About 300 workers are employed in factory which

is equipped with most modern plant & machinery. The

manufacturing units are fully equipped with CNC machine

shop, test house etc. Most of components are produced

in-house to maintain strict quality control.

 Promoted by Mr. Jayantibhai Chandra who is

Chairman and Managing Director of ATUL AUTO Ltd. It

has become professionally managed organized sector

company with highly qualified and experienced team of

mangers and staff to further the growth of company’s

business.

ATUL AUTO Ltd. manufactures and market

“ATUL SHAKTI” Diesel 3-wheeler vehicles are very popular

among farmers and rickshaw owners in Gujarat on

account of invariably high standards of quality, expert

workmanship and high re-sale value. ATUL SHAKTI diesel

3-wheeler vehicles are available in different models and

variants like Load carrier, Pick-up van, Delivery van,

Bottle Carrier etc. The different models are ideal to meet

the urban and rural market demand.

As on today approximately 1,30,000 vehicles

are on Indian roads manufactured by ATUL AUTO Ltd.

 ATUL AUTO Ltd. is presently marketing its

product in Gujarat, Andhra Pradesh, Rajasthan,

Maharastra, Haryana through its existing dealer-network

of 70 plus. The company plans to introduced its vehicles

to other states like Punjab, Uttar Pradesh etc. ATUL

AUTO Ltd. has exported its product to number of Asian

and African countries in the past.

ATUL SHAKTI diesel 3-wheeler vehicles have

unique features like floor gear-shift, electrical etarter,

powerful engine, differential, two head light etc. These

vehicles are ideal to carry a load upto 1 tonne at a cost of

40 paise per kilometer(approximately). The vehicle

owners of 600 net per day, and thus these vehicles have

proved themselves to be the best means of self

employment.

“ATUL SHAKTI

Super – Earner,
Everyday Winner…”
NAME AND ADDRESS OF THE COMPANY

NAME

ATUL AUTO Ltd.

ADDRESS

-:Registered office:-

Survey No. 86, Plot Nos. 1 to 4

8-B National Highway,

Near Microwave Tower,

Shapar (Veraval) / Taluka : Kotdasanghani

Dist. Rajkot – 360002

Gujarat – INDIA

1 (02827) 252996,252998,252999

Fax :- +91 – 202827-252254

e-mail :- atulauto@yahoo.com

website :- www.atulautolimited.com
 CORPORATE OFFICE

Jimmy Tower, Gondal Road,

Opp. Swaminarayan Gurukul,

Gondal Road,

Rajkot – 360002

Gujarat (INDIA)

2 (0281) 2374991,2374992,2374993

Fax :- +91 – 0281- 2374994

 SIZE OF ORGANISATION
The business Organization may be small size,

medium size or big size. Size of Industrial unit can be

fixed on the basis of workers, capital investment, quality

of production, sales turnover etc.

If the capital invested by the company is less

than 3 crores it is known as Small Scale Industry and if

the capital invested by the company is between 3 to 5

crores it is known as Medium Scale Industry and if the

Capital Invested is more than 5 crores it is known as

Large Scale Industry.

Investment in ATUL AUTO Ltd. is more than 5

crores, so it is a Large Scale Industry.

 FORM OF ORGANIZATION
INTRODUCTION :

There are many forms of organization varying

from Sole Proprietorship, Partnership, Private Limited

Company, Public Limited Company, Joint Sector, Co-

operative Societies etc. ATUL AUTO Ltd. is a Public

Limited Company.

PUBLIC LIMITED COMPANY :

According to Company’s Act, 1956, A Company

in which there are minimum 7 members and having no

limits for maximum numbers is called a public Limited

Company.

ATUL AUTO LIMITED AS A PUBLIC LIMITED

COMPANY

(1) Voluntary Association :-

 When people join the group with the objective

of earning of profit or any specific objective without any

pressure is termed as voluntary association.

(2) Artificial Person :-

A company is a creation of law. A separate legal

entity or personality is a unique feature of a company

which distinguishes it form a sole trader or a firm. It has

no body, no soul, no conscience, still it is in a position to

exists. ATUL AUTO Ltd. was promoted by Mr. J.J.

Chandra.

(3) Common Seal :-

A company not being a natural person, cannot

sign documents for itself. So it has a device in the form of

common seal on which its name is engraved and this

common seal works as a signature. When it is affixed by a

board on any documents, it has to be witnessed by two

directors. ATUL AUTO Ltd. has its common seal.

(4) Limited Liability :-

The privilege of limited liability bestowed on all

registered trading companies is a born to the Joint Stock

enterprise. A member’s liability is usually limited by face

value of shares and if he own a fully paid share, he shall

not have any future liability at all. In ATUL AUTO Ltd.

shareholders have limited liability.

(5) Perpetual Existence :-

As company is an artificial person enjoying

individually. It is not terminable by death of any of its

shareholders or directors. Once a company is formed it

can not be dissolved until law recognizes it and till it is

wound up. As per the Act. ATUL AUTO Ltd. is also

enjoying same thing. If any of its shareholders or

directors will pass away company shall not come to a

stand still it will work

 HISTORY AND DEVELOPMENT

Each and every empire or business has its own

story to tell history of unit is a mirror of its image

building. That’s why I am drawing a verbal picture of this

units past in following lines :

The company originally started activities in

Jamangar way back in 1960 as a partnership firm,

producing small rural Vehicles. In the year 1986 a simple

man but having supurb knowledge, skill and experience

of automobile had started this company, he is Mr.

Jayantibhai J. Chandra. Shri Chandra’s dream of 1960’s

and the maiden venture became a successful reality. The

birth of this company was taken place at Jamnagar with

the name of “ATUL AUTO JAM. Pvt. Ltd.” After its

establishment within short period of time the

management of the company found that Jamnagar is not

a proper market. Afterwards they started new plant in

Pune (Maharashtra) but again same kind of problem

arose.

By analyzing the market segment and after

poteintial thinking over it, in 1991 company set up new

plant at Shapar (Veraval), in industrial colony located

near Rajkot, for manufacturing new range of Diesel 3-

wheelers, i.e. Passenger Rickshaws of six persongs

capacity and pickup vand of 750 k.g. pay load useful in

urban area.

The company had made rapid development in

producing and marketing of Diesel Auto Rickshaw. In the

beginning stage, they produce only one product that is

Khushboo Road Master, but there after they produced

many type of Diesel Vehicle. At present this unit is at No.

1 Diesel Rickshaw company in whole Gujarat Today the

Atul-Shakti brand of Diesel 3-Wheeler are market leaders,

a recognized force in Kutch, Saurashtra and Gujarat. The

company’s vehicles have also found excellent response

from the African countries of Kenya, Uganda, Tanzania,

Sudan and Egypt.

 ATUL AUTO Ltd. was a private limited

company when it was established in 1991. But after 1994

it was converted into a public limited company according

to company’s Act 1956. This proves its great financial

position.

As on today approximately 1,30,000 vehicles are on

Indian roads manufactured by ATUL AUTO LIMITED.

It was ATUL AUTO Ltd. who introduced Diesel

Carrier Auto Rickshaw for the first time in Gujarat.

 INFRASTRUCTURE AVAILABLE
WITH ATUL AUTO LTD.
A) Land and Building :-

The company’s main manufacturing unit is

located at Shapar Industrial Zone, which is a notified

backward area by State Government eligible for several

benefits. It is 18 kms. Away from Rajkot city, on National

Highway 8-B, having land of 5,00,000 sq. The existing

constructed factory area is of 1,45,000 sq. ft. Company

can also acquire more land as per the need of new

project being identified.

B) Plant and Machinery :-

The manufacturing units an fully equipped with

CNC machine shop, fabrication shop, assembly line, paint

shop, test house etc. with modern advanced equipment

and machinery. All the critical components are being

manufactured in-house except Engines and Tyres.

Manufacturing facilities are most versatile and can

undertake any precision job.

C) Inspection, Quality and P.D.I. :-

Company is having fully equipped quality

assurance department with sophisticated facilities.

Company is in the process to acquire ISO 9001 in the

near future.

MANAGERIAL TEAM
Who are Promoters ?

Person who had the idea to the establish

company, those who make the pre-preparations for it and

take personal responsibility for it are called Promoters.

Promoters, brings a company into existence on their own

imagination, they find out new business opportunities,

examine their feasibility and if found practical, they

establish a company through proper co-ordination of the

required capital, materials and manpower.

Mr. J. J. Chandra having superb knowledge, skill

and experience of automobile is the Promoter of ATUL

AUTO Ltd.

Board of Directors and Managing Team

 BOARD OF DIRECTORS

- Mr. Chandra J.J. - Chairman & Managing

Director
- Mr. Jogalekar - Vice Chairman

Shriharsh S.
- Mr. Chandra Bharat J.
- Mr. Patel Mahendra J.
- Mr. Dhruva Rajesh H.
- Mr. Kukreja Rajendra
- Whole time Director
- Executive Director
- Director
- Director

S.

AUDITORS

M/s. PUROHIT & Co. Chartered Accountant

BANKERS

State Bank of India (SBI)

Citizen Co-operative Bank Ltd.

Laxmi Vilas Bank Ltd.

State Bank of Saurashtra (SBS)

 ORGANISATIONAL STRUCTURE
An Organisational Structure is graphic means

or a record depicting vividly the formal organizational

structure and shows the formal superior subordinate

relationships. A organizational structure is a blue print of

company organizational, its function, lines of authority

and key positions. It shows who supervises and controls

whom and how the various units are interrelated.

 LOCATION
Location factors are crucial for profit

maximization; therefore, it is inevitable for every

industrialist to give full consideration to the suitable

location of the enterprise. An entrepreneur must choose

and ideal plant location at the time of launching the

enterprise. Thus location determines to a great extent,

the survival as well as prosperity of a business unit in a

free market company.

Optimum location factors are expected to give

lowest unit cost of production as well as of distribution.

MEANING:-

Location means “Selection of sight for

establishment of industries where the cost of production

is the lowest at the time of their establishment.”

FACTORS:-

To select SHAPAR only as a location there arose

many questions. The company was established in

Jamnagar. The management of company found that

Jamnagar was not proper market, Afterwords they started

new plant in Pune (Maharashtra) but again same kind of

problem arose and at last by analyzing the market

segment, and after potential thinking over it they set up a

new plant at Shapar.

Following are the factors to select

Shapar as a Location :

(1) Availability Of Raw Materials :-

Raw materials are very important for an

industry to manufacture different products. They play

very vital role in every industry entrepreneur try to

establish or locate industry where raw material is

available freely or easily. Raw materials used in ATUL

AUTO Ltd. are cast steels, iron, engines, accessories,

color etc.

(2) Nearness to Market:-

Quickness in marketing actions can be ensured

by being close to the market. Showing down of deliveries

can be avoided when plant is located near the market.

Large number of products produced by ATUL AUTO Ltd.

is sold in Saurashtra region and in state of Gujarat,

Rajasthan and Maharashtra.

(3) Availability Of Labour :-

To start any industry, workers or laborers are

needed, if laborers are available than it would be good

location otherwise it would be expensive. If cost of labor

is less, cost of production will be less. ATUL AUTO Ltd. is

located in Shapar near Rajkot from where it gets labor at

cheaper rate.

(4) Transportation:-

Transportation facility is the basic necessity for

each and every industry to bring in raw materials and to

supply finished goods to market. Usually there are main

four modes to transportation i.e. Road, Sea-route, which

connect to all parts of Saurashtra region and State of

Gujarat, Rajasthan and Maharashtra.

(5) Finance:-
 Finance is major factor required by each and

every organization, for establishment, expansion and

development. The availability of Capital at cheaper rate

of interest is a dominating factor influencing industrial

production.

The ATUL AUTO Ltd. has not faced any

difficulties due to lack of finance, it has a separate

Finance Department. It has raised its capital from various

financial institution and banks.

(6) Availability of Power Sources and

Water:-

In modern age industry could not work without

Power Factor. Power is necessity for today’s age industry.

Electricity allows greater freedom of choice for location.

Adequate and regularity of power supply are important.

Water resources are required for processing, sanitary and

drinking purpose.

(7) Site and Services:-

 Selection of a site and services affects the

location of an industry. To a certain extent Government of

India has declared some of the place all over India as

backward areas. Where they provide entrepreneur

incentives like subsidies, grants, loans with less interest,

supply of power at cheaper rates etc. So some

entrepreneurs are attracted by such backward areas.

ATUL AUTO Ltd. has set up its plant in Shapar (Veraval)

18 kms. away by State Government eligible for several

benefits.

(8) Latest Technology :-

In today’s modern world to stand, cost should

be less and production should be large and for that there

should be latest technology. ATUL AUTO Ltd. has

adopted latest technology in production. All its machines

are according to latest trends.

ATUL AUTO Ltd. was set up after taking into

consideration all above locational factors. None of the

factor have been ignored. Equal importance has been

given to all factors right from the stage of procurement of

raw material to the stage of latest technology. ATUL

AUTO Ltd. has been benefited due to its location.

 DIVERSIFIED GROUPS AND
THEIR ACTIVITIES
1. Khusbu Auto Pvt. Ltd.

Centralized Marketing Organization

(Rajkot, Ahemdabad, and Jamnagar)

2. Khusbu Auto Finance Pvt. Ltd.

Auto Finance Company

(Rajkot, Ahemdabad, and Jamnagar)

3. Vikram Sales Corporation

Trading House
(Jamnagar)

4. Atul International

Export-Import house
(Rajkot)
5. New Chandra Motor Cycle House

(Jamnagar)

- Dealers in Automobile Parts

- Distributors of LML Vespa Scooter
- Royal Enfield Limited Motor Cycle

6. Atul Engines Limited (Rajkot)

Manufacturers of I.C. Engines

7. Atul Auto Industries (Jamnagar)

Manufacturers of Diesel 3-wheeler

8. Atul Motors Pvt. Ltd. (Jamnagar)

Marketing of Cars and 4-wheelers

 TIME KEEPING SYSTEM
Man can work for some limited time, he cannot

work for 24 hrs., but industries are running round the

clock. So there are some adjustment made between the

workers which are known as the shifts.

The time keeping system at ATUL AUTO Ltd.

is situated at the entrance of the factory premises.

At ATUL AUTO Ltd. the system is fully

computerised which to makes work very easy and

comfortable. It has a set a punch-card system for

maintaining attendance of the employees at the

entrance. Card is to be affixed in the punching machine

and the machine records time, date, shifts, months etc.

The Assistant of Personnel Department

maintains the record of attendance on the daily basis.

These details of daily attendance are recorded in a

register which is sent to the Executive Director on a

Regular basis for verification.

Time keeping system at ATUL AUTO Ltd.

Session Time
First Session 9:00 am to 1:00 pm
Lunch 1:00 pm to 1:30 pm
Second Session 1:30 pm to 5:30 pm
Incentive Time 6:00 pm to 9:00 pm

For manufacturing department there is holiday

on Wednesday and for Administrative department there is

holiday on Sunday.
 POLICY
ATUL AUTO Ltd. with the help of other Atul

Group company is poised to establish a strong business

house where in ATUL AUTO Limited’s manufacturing

capacity and automobile experience reinforced and

supported by other group companies financial and

management strength, nation wide trading and servicing

network, would be a formidable force to venture for the

products like.

“ENGINES, CARS, LIGHT COMMERCIAL VEHICLES,

TRANSMISSIONS, POWER PACKS etc.’

 RESEARCH & DEVELOPMENT
Company carried out research and development

in the area of

a) Evaluation and assessment of new sources of raw

materials.

b) Product design and developments.

c) In house manufacturing of critical components.

d) Evaluation of alternative to diesel vehicles.

Benefits derived by the above measures

resulted in lower raw materials cost per vehicles and

increase in sales due to acceptance of new products

developed by the company.

After constant efforts of technology

upgradation company developed new auto rickshaw

model Atul Shakti which has contributed to the sales of

the company as a manor product. The vehicles attained

the international standards of Euro II emission norms
 CONTRIBUTION TO THE
INDUSTRY
Contribution of the unit to the industry means

what percentage of contribution is given by the particular

unit in the product.

The main product of ATUL AUTO Ltd. is diesel

3 – wheeler vehicles. It has applied modernized style and

latest technology in its production process which results

into large production. ATUL AUTO Ltd. plays a vital role

by contributing 80% of total diesel three wheelers

vehicles in Saurashtra region. These products have a very

good potential in Gujarat and in Indian market.

Ultimately we can say that ATUL AUTO Ltd. is

occupying a significant position among the industries

producing diesel 3-wheeler vehicles not only in

Saurashtra but also in Gujarat, Maharashtra, Andhra

pradesh, Haryana, Rajasthan and other states of India.

As on today approximately 1,30,000 vehicles are on

Indian roads manufactured by ATUL AUTO Ltd.

CHANNELS OF
DISTRIBUTION
 Concept of Channels of
Distribution:-
Most producers do not sell their goods directly

to the final users; between them stands a set of

intermediaries performing a variety of functions. These

intermediaries constitute a Marketing channel or

Distribution channel.

Marketing channels are sets of interdependent

organizations involved in the process of making a product

or service available for use or consumption. Marketing-

channel decisions are among the most critical decisions

facing management. The channels chosen intimately

affect all the other marketing decisions. The company’s

pricing depends on whether it uses mass-merchandisers

or high-quality boutiques. The firm’s sales force and

advertising decisions depend on how much training and

motivation dealers need. In addition, the company’s

channel decisions involve relatively long-term

commitments to other firms. When a automaker signs up

independent dealers to sell its automobiles, the

automaker cannot buy them out the next day and replace

them with company owned outlets.

A channel can be defined as “A path way composed

of intermediates, also called as middlemen. Who perform

the function of smooth and sequential flow of goods and

service from manufacture to consumer to achieve

marketing objectives of the company”.

There is a great importance of middlemen

marketing. As it functions like a bridge between the

manufacturer and the last user. It is like a chain. By

appointing middlemen the consent can reduce the

amount of work as well as the number of contracts with

the consumers.

Intermediaries smooth the flow of goods and

services… This procedure is necessary in order to bridges

the discrepancy between the assortment of goods and

services generated by the producer and the assortment

demanded by the consumer. The discrepancy results from

the fact that manufacturers typically produce a large

quantity of a limited variety of goods, where as

consumers usually desire only a limited quantity of a wide

variety of goods.
 Objectives of Channel Selection:-
Channel objectives should be stated in terms of

targeted service output levels. Channel objectives vary

with product characteristics. Perishable products require

more direct marketing. Bulky products, such as building

materials, automobiles etc. requires channels that

minimize the shipping distance and the amount of

handling.

Channel design must take into account the strengths

and weaknesses of different types of intermediaries. For

example, manufacturers’ reps are able to contact

customers at a low cost per customer because the total

cost is shared by several clients, but the selling effort per

customer is less intense than if company sales reps did

the selling. Channel design is also influenced by

competitor’s channels.

The objectives of channel selection of ATUL AUTO

LTD. are as under.

1. To provide better services to customers.

2. To increase the sales volume

3. To win the confidence of buyers

4. To know about customer needs

5. To provide the product whenever demanded.

6. To provide after sales service even to the

corner customer.
 Marketing channels & Functions:-

Channel Functions:-

A marketing channel performs the work of moving

goods from producers to consumers. It overcomes the

time, place, and possession gaps that separate goods

and services from those who need or want them.

Channel functions performed by ATUL AUTO LTD.

1. They gather information about potential

and current customers, competitors, and

other actors and forces in the marketing

environment. The flow of such information in

ATUL AUTO LTD. is from top to bottom.

2. They place orders with manufacturers.

3. They acquire the funds to finance

inventories at different levels in the

marketing channel.

4. They provide for the successive storage

and movement of physical products.

(B) Channel Levels:-

The producer and the final customer are part of

every channel.

Following channel levels are used by the ATUL AUTO

LTD.

A Zero-level Channel (also called as

direct-marketing channel):-

A zero level channel consists of a manufacturer

selling directly to the final customer. ATUL AUTO LTD. has

adopted Zero Level Channel for Rajkot City as the

company itself is the Authorised Dealer for Rajkot City

running the firm named KHUSBOO AUTO PVT. LTD.

0-LEVEL:-

ATUL AUTO LTD. CUSTOMER

(2) A One Level Channel:-

A One Level Channel contains one selling

intermediary, such as retailer or dealer or distributor.

ATUL AUTO LTD. has appointed state distributors as

intermediary to sell its products to consumer.

1-LEVEL:-

ATUL AUTO LTD. DEALER CONSUMER

(3) A Two Level Channel:-

A Two Level Channel contains two

intermediaries. In consumer markets, these are typically

a wholesaler and a retailer.

The state distributors of the company appoint

their sub-dealers and by this way the product passes

from company to consumer. ATUL AUTO LTD. does not

allow two level channel of distribution.

 MOTIVATING CHANNEL
MEMBERS:-
A company needs to view its intermediaries in

the same way its views its end users. It needs to

determine intermediaries’ needs and construct a channel

positioning such that its channel offering is tailored to

provide superior value to these intermediaries.

The company ATUL AUTO LTD. provides training

programs, market research programs, and other

capability-building programs to improve intermediaries’

performance. The company is also constantly

communicates its view that the intermediaries are

partners in joint effort to satisfy end users of the product.

These are the some of the ways of ATUL AUTO

LTD. to motivate its channel members.

Coercive Power:-

A manufacturer threatens to withdraw a

resource or terminate a relationship if intermediaries fail

to cooperate. This power can be effective, but its exercise

produces resentment and can lead the intermediaries to

organize countervailing power.

Reward Power:-

The manufacturer offers intermediaries an

extra benefit for performing specific acts of functions.

Reward power typically produces better results than

coercive power, but can be overrated. The intermediaries

may come to expect a reward every time the

manufacturer wants a certain behavior to occur.

Expert Power:-

The manufacturer has special knowledge that

the intermediaries value. Once the expertise is passed on

to the intermediaries, however, this power weakens. The

manufacturer must continue to develop new expertise so

that the intermediaries will want to continue cooperating.

The other types of motivations provided by the

company are as follows.

1. High Profit Margin.

2. Turn over discount.

3. Sales contest.

4. Cash discounts.
 CHANNEL CONFLICTS AND
SOLUTIONS:-
No matter how well channels are designed and

managed, there will be some conflict, if for no other

reason than the interests of independent business

entities do not always coincide.

The manufacturer hopes for channel cooperation

that will produce greater profits for each channel

member. Yet vertical, horizontal, and multi-channel

conflict can occur.

Vertical channel Conflicts:-

It means conflict between different levels

within the same channel. Atul Auto Ltd. came into conflict

with its dealers in trying to enforce policies on service,

pricing and advertising.

Horizontal Channel Conflicts:-

It involves conflict between members at the

same level within the channel. There has been no such

conflict in Atul Auto Ltd channel of distributions as the

company is very much concern about distributing its

products. The company provides the dealership of its

product to one dealer in one city. Thus there are no such

conflicts seen in the Atul Auto Ltd.

Multi-channel Conflict:-

This type of conflict exists when the

manufacturer has established two or more channels that

sell the same market. But as Atul Auto Ltd. has not

adopted multi-channel distribution, there is no question

of such conflict arising in the company.

MANAGING CHANNEL CONFLICTS:-

Some channel conflicts can be constructive and lead

to more dynamic adaptation to a changing environment,

but too much is dysfunctional. The challenge is not to

eliminate conflict but to manage it better. There are

several mechanisms for effective conflict management.

Super Ordinate Goals:-

Channel members come to an agreement on

the fundamental goal they are jointly seeking, whether it

is survival, market share, high quality, or customer

satisfaction. They usually do this when the channel faces

an outside threat, such as more efficient competing

channel.
Co-optation:-

Co-optation is an effort by one organization to

win the support of leaders of another organization by

including them in advisory councils, boards of directors,

and the like. As long as the initiating organization treats

the leaders seriously and listens to their opinions, co-

optation can reduce conflict, but the initiating

organization may have o compromise its policies and

plans to win their support.

Joint Membership in and Between Trade

Associations:-

Much can be accomplished by encouraging

joint membership in and between trade associations. For

example, there is good cooperation between the

Automobile manufacturers of India and Automobile

marketing institute, which represents most of the

Automobile chains; this cooperation led to the

development of the Universal Product Code. Presumably,

the associations can consider issues between Automobile

manufacturers and retailers and resolve them in an

orderly way.
Diplomacy:-

When conflict is chronic or acute, the parties

may have to resort to diplomacy, mediation or

arbitration.

In Atul Auto Ltd. there are less chances of channel

conflict. As the company has appointed state vise

distributors.
 PHYSICAL DISTRIBUTION
SYSTEM:-
Physical distribution system of commodities

represents those activities which create time and place

utilities in the process of the actual movement of goods

from producer to customers. These activities are key line

between producer and consumers and are performed by

the producers, middlemen and buyers in varied degree.

The success of the enter4prise depends very much on the

fact whether its products are available to the consumers

at right time and in the right quantity. Thus, it creates

time and place utilities and helps in maximizing firms

profits.

“Physical distribution involves the management

of the Physical Flow of products and the establishment

and the operations of flow system”.

1 William J.

Stanton.

In whole, physical distribution is the science of

business logistics where by the proper amount of the

produced goods is made available at the place where

demand for it exists. Viewed in this light, physical

distribution is the key line between manufacturing and

demand creation.
Physical Distribution Process Includes:-

(1) Various interrelated activities like inventory

control, storage, transportation, material handling,

order size control and order processing and also

(2) The Total Distribution system.

 EFFECTS OF PHYSICAL

DISTRIBUTION ON C.O.D

C.O.D. is affected by physical distribution if the

product requires storage; it should be sold out through

wholesalers who own their own Godowns or any other

storing facilities. If the company decides to manage its

own warehouses if then the location of such warehouses

should be not very far from the factory and not very far

from the market also. The company should also take into

consideration the transport facilities to carry the finished

products to the warehouse and from warehouse to the

market. These all factors should be taken into

consideration while taking any decisions regarding

channels of distribution.

Now a day, physical distribution has become a

challenging task and is very necessary in modern

marketing because of following reasons.

1. To minimize transportation cost

2. To minimize handling cost

3. To have control over inventory

4. To follow good over processing

system.
 OBJECTIVES OF PHYSICAL
DISTRIBUTION
Any company has objective of minimizing cost.

As many competitors have also are aware of this

distribution objectives as getting their goods to the right

place at right time at lowest possible cost. The ATUL

AUTO LTD. has also accepted such objectives and

designed as feasibility of physical distribution. The Atul

Auto Ltd. has formed its distribution channel linked in

such a way that company have more and more merits in

terms of lower cost and higher consumer’s satisfaction.

For fulfilling of the objectives of physical

distribution, many important decisions are taken into

consideration such as order processing, warehousing,

inventory and transportation. The decisions must be

made on the basis of total system a set of physical

distribution objective.
 ORDER PROCESSING SYSTEM

Order processing system means how the

company gets order from their customer. If orders are not

received properly and sales are not sufficient, then the

company will bear loss. Generally, the sales

representatives of the company list the dealers regularly

and collect the orders from them. The dealers are free to

place the order directly to the company.

In ATUL AUTO LTD. the orders are received

locally. The orders received from the distributors. Some

time the customers directly put the orders to the

company.
 WARE HOUSING FACILITY

Preserving of goods for future is pervasive

human desire. Under modern conditions, storage is a

major marketing function. Proper storing contributes as a

real asset to the production. It provides time utility to the

product. Products become meaningful only when it

reaches to the consumer when needed. Storage is a

function which helps in preserving the goods at one place

until they are needed at another place.

“If transporting and advertising are designed to

widen the market, then storage must be taken for

depending on the market”.

ATUL AUTO LTD. does not need warehousing

facilities because they produce goods on the order basis.

 INVENTORY CONTROL

Inventory is defines as a usable resources

which is physical and tangible such as materials. In this

sense, our stock is our inventory, but even then the term

inventory is more comprehensive. Though inventory is a

usable resource, it is also an idle resource, unless it is

managed efficiently and effectively.

Inventory management boils down to

maintaining an adequate supply of something to meet

the expected demand pattern subject to budgeting

considerations.

In ATUL AUTO LTD. inventory maintained after

taking in to consideration the demand pattern and

subject to budgeting consideration.

 TRANSPORTATION

Transportation is necessary in moving finished

goods from factory to consumers since markets are

geographically separated from factory. Transportation

becomes an essential marketing activity. Improved means

of transportation have increased the trade by leaps and

bound. It aids the marketing function by creating utility to

goods produced.

There are number of transportation modes

such as

1. Road way

2. Railway

3. Air way

4. Sea way

It is crucial task for management to select a right

type of transportation. It depends upon many factors

such as product characteristics, final position of the

company, demand of customers, market situations etc.

 ATUL AUTO LTD. uses Road ways to transport its

finished goods from factory to market or dealers. The

mean of transportation used for delivering final products

are huge Trucks.

 CONCLUSION

Summing up all the above discussion at the time of

training period, I have found out that working of all the

departments of the company was very well organized and

satisfactory and all the concerned managers and officers

are very interested and co-operative in there work. The

labour and power supply is very smooth.

The company has very efficient and smooth

marketing department, personnel department and

financial department. It has an experienced personnel

manager and marketing manager. They have provided

me every needed guidelines and information which I

needed to complete this project.

Seeing to the past achievements of the

company we can say that the company has a very bright

future and is capable to earn more profit and develop in

an average smooth rate.

So far as marketing channels are concerned,

the company has setup a good channel co-ordination. By

studying the distribution channels I can conclude that the

company cares for the customers and is very concern

about the difficulties of the consumers in regard to the

channels of distribution.
 QUESTIONNAIRE
(1) How sales forces are working?

(2) What is the basic purpose of personal selling?

(3) How the salesmen are paid incentives?

(4) Do you think sales promotion should be done

for your product?

(5) Which methods are adopted for sales

promotion?

(6) What are the objectives of sales promotion?

(7) What do you mean by consumer promotion?

(8) What are the reasons for sales promotion?

(9) What is effectiveness of sales promotion?

(10) What are the objectives of advertisement?

(11) How do you prepare budget for

advertisement?

(12) Which media is adopted by your company

for advertisement?
(13) Do you believe in publicity?

(14) Which media you select for publicity?

(15) What is the meaning of promotion?

(16) What is the main purpose of promotion?

(17) What do you mean by promotion

strategy?
 BIBLIOGRAPHY

Sr. Name of the Authors Publishin Year

No. Books g
House
1. Marketing Philip Kotlar Pearson 11th
Management Education Edition
2. Marketing S. A. Himalaya 16th
Management Sherlekar Publishing Edition
house 1999
3. Marketing Dr. C. N. Kalayani 1st
Management Sontoki Publisher Edition
1992
4. Modern S. A. Himalaya 16th
Marketing Sherlekar Publishing Edition
house 1998
5. Modern Dr. Rustom S. Universal 7th
Marketing Davar Book Stall Edition
Management Sohrab R.
Davar
Nusil R.
Davar
6. Marketing Pingali A division 1st
Channel Venugopal of Edition
Management Sage 2001
Publication