DISTRIBUTION DOSSIER OF MAPRO FOODS

A report submitted to
Prof. K. Dasaratharaman and Prof Srinivas Govindrajan

In partial fulfilment of the requirements of the course

Sales & Distribution Management

By
Hitarth Bhatt (188112)
Mohammed Shahbaaz (188147)
Rajat Garg (188193)
Rohit Bhadola (188203)
Vaibhav Savani (188203)
Vaishali Gupta (188264)

On 17-08-2019

1
Table of Contents
INTRODUCTION................................................................................................................................. 3
CHANNEL DESIGN ............................................................................................................................ 4
General Trade ................................................................................................................................... 4
Modern Trade ................................................................................................................................... 4
CHANNEL MEMBER MANAGEMENT .......................................................................................... 7
Monetary & Non-Monetary methods as rewards .......................................................................... 7
Target Setting .................................................................................................................................... 7
Monitoring mechanism used to keep track of channel members ................................................. 7
FIELD FORCE MANAGEMENT ...................................................................................................... 8
ANALYTICAL FRAMEWORK ....................................................................................................... 11
FINANCIAL ASPECTS ..................................................................................................................... 14

2
INTRODUCTION

Mapro
Mapro is a food processing company founded in 1959, in the hill-town of Panchgani, near
Mahabaleswar. It develops, produces, packages, stores, and sells fruit-based confectionery
products in India. At present Mapro has one of the biggest product range in the industry and
is known for good quality products. It offers fruit jams, crushes, squashes, bars, jellies,
chews, syrups, fruit crush concentrates, chocolates, and dessert toppings.
The company markets its products through distributors and stores and rely on word-of-mouth
marketing which to a large extent has been instrumental in their success in the western region
but in other regions of the country it has yet to make a good impact. The company
concentrates on point-of-sales promotion rather than embarking on a grandiose brand
building activity involving print and electronic media. In northern region Mapro as a brand is
small to sustain a large-scale media blitz that is why the initiatives has been restricted to
point-of-sale promos. Mapro prefer activity over advertising that is why they believe in large
sales force and high number of interns.

3
CHANNEL DESIGN

Mapro follows two slightly different channels for general trade and modern trade. Apart from
that, Mapro also sells various products through its official website.

General Trade
Mapro products pass through following distribution system before reaching the retailer.

Manufacturing unit

Main warehouse

CNF

Superstockist

Distributor

Retailer

Every product produced in the manufacturing unit in Panchgani is being sent to company’s
main warehouse. From the main warehouse the goods are shipped to CNF agent in Pune.
CNF agent takes care of proper storage and handling of goods. CNF shall keep proper record
of stocks arrived from the company and ship the goods to various super stockists as per their
demands. CNF would prepare invoices as per the company guidelines. Super stockists of
Mapro are located in various cities. They place the order to CNF agent and fulfil the demands
of various distributors. They place monthly orders to CNF. They pay for the stock as per
company margin policy to the CNF agent. Super stockist’s responsibility is to take orders
from various distributors. Super stockist prepares invoices for distributors as per company
margin policy. Distributor takes order from retailers located in his territory and deliver the
products in one days time. At last, products reach the end users from the retailer.

Modern Trade
Mapro products pass through following distribution system before reaching superstores,
hypermarkets, etc.

4
 Manufacturing unit

Main warehouse

CNF

Superstockist

Super store

Mapro’s distribution channel for the modern trade which includes super stores such as Big
Bazaar, D-Mart, etc is almost similar to that of general trade as explained above. Only
difference in this case is that the super-stockist directly takes order from super store and
delivers the products in required quantity. Finally, the products reach the end users.
E-commerce: Mapro has an official site shop.mapro.com for ordering various products
online.

5
Mapro delivers the products in most of the states. Customers can pay online while ordering or
opt for cash on delivery. Almost entire range of product is available on the online portal.
Each product comes with easy return and replacement policy. These products are being
shipped from nearest super stockist or company warehouse, which get the details of orders
from the company and create invoice on behalf of Mapro.

6
CHANNEL MEMBER MANAGEMENT

Monetary & Non-Monetary methods as rewards

Mapro products are of higher quality than its competitors, hence they are priced at a premium
to the end consumer. Mapro has no active advertisements campaigns on any media channels.
The company and its product visibility are low in many parts of India expect western India.
In order to increase the sales to HoReCa as well as retail outlets in other parts of India, Mapro
engages in trade promotion techniques.
A trade promotion can offer several benefits to Mapro in a highly competitive environment.
Trade promotion can be used to build brand awareness and product visibility or increase sales
of product with respect to the category or increase product market segment penetration
amongst many things. Mapro gives trade promotions up to 20-25% for products sold through
Kirana stores and General Trade. They also guarantee return of the unsold product with 1
month left in expiry date.
Mapro product require cold chain management, hence the distributor needs to have cold
storage facility in order to be a Mapro distributor. This is a huge challenge in areas that are in
North India as very few distributors are willing to take up Mapro’s distributorship and these
distributors assert their power in choosing credit terms. In order to overcome the
distributorship problem, Mapro has entered a risk sharing model with the distributor to setup
the cold storages in order to mitigate the distributor’s risk.

Target Setting

Target setting is done by the company based on the geography. Salesmen are given targets by
the company. These targets are meant to motivate the sales team to generate high sales and
decide upon the variable part of the salary. Targets for the salesmen might vary by territory.
For example, if the demand is higher in a particular area the target would be higher for
salesmen in that area.

Monitoring mechanism used to keep track of channel members

Mapro uses Bizom app for record keeping and order entry. This app is used by entire sales
team of Mapro. The app is very helpful in sales force automation by providing the following:
 Order at an outlet recorded with geolocation capture and confirmed by digital signature
 Manage schemes and returns
 Monitor stock at outlets
 Strengthen revenue recognition with effective collection and payment tracking
 Get intelligent order suggestions based on off take at an outlet
 Stock at distributor is reviewed and new order is placed to company if required

7
FIELD FORCE MANAGEMENT

Field force management helps in managing and tracking employee activity and performance
which further helps in improving the efficiency of the distribution system. As stated earlier,
Mapro has its manufacturing plant at Panchgani in Maharashtra. It is the only manufacturing
plant in India and from here, the company transports the products to other states. Thus, the
management and performance of the field force become very important to make the product
successful. We have seen the distribution channel followed by the company. Companies like
HUL and Britannia, have two types of distributors. One, are the exclusive distributors, which
deal with only company-specific products and the other, which deal with products of multiple
companies. Mapro’s distributors were of the latter type, who not only handled the products of
Mapro but also of its competitor. This hampered the sales of Mapro’s products and frequently
led to stock-outs, which we shall see later.
We will consider the role of the distributor and the sales force from the point of view of
South Delhi. In South Delhi, there are three distributors of Mapro. The distributors will be
assigned a certain number of salesforce people. It must be noted that the salesforce people
were hired and paid by the company and not the distributor. The salesforce people were
answerable to the Area Sales Manager (ASM), an employee of the company, and not to the
distributer. This led to the development of a superficial relationship between the distributor
and the salesforce of the company.
Every salesforce personnel would be assigned a beat plan every day. It would be clearly
articulated in the beat plan as to which retail outlets the salesperson is supposed to visit in a
day. In South Delhi, the salesperson was given a target of bringing in 12 productive calls per
day, failing which the salesperson would be marked absent (or on leave) for the said day.
After taking order from the retailer or the wholesaler, the salesperson would forward the
order to the distributor. It would be the responsibility of the distributor to fulfill the order and
transport the products to the retailer or wholesaler in a predefined time interval (usually one
day).
To easily track the activity of the salesforce people, to manage them efficiently, to reduce the
hassle of paperwork and to have a record of every transaction, the company went digital by
introducing Bizom app into its salesforce. The below image shows an illustrative screenshot
of the Bizom app.

8
The app was a great addition however it was not implemented the way it was supposed to be.
There was no actual tracking of the activity daily, which defeated the primary purpose of
incorporating the app. The salesforce people were supposed to get 12 productive calls per
day. The salesforce would enter as 12 even if they had done less than that and would adjust
the order to the distributor on the day, they had higher calls. The salesforce people would take
the order on paper and pass on the same paper to the distributor, who would fulfill the order
according to it. The app was just used as an official entry of the order.
The distributer had products of other companies like Malas and Kissan in his arsenal. If the
distributor received an order of say 10 units from a retailer in area A, he would not deliver the
order to the retailer unless he gets the order of different companies from that area to satisfy
his minimum consignment in order to reduce his costs. This might sometimes run into 10-15
days and in some cases into months of stockout of the product from those retail outlets. This
was mainly because of poorly defined rules for the distributors and because of a lack of
communication between the company and the distributors. It is the responsibility of the ASM
to intervene and solve the impending issue.
Consider a salesperson is given a target of 1 lakh per month. If the salesperson has managed
to get a sale of 1.2 lakh in that month, and unfortunately, he does not fall in the top 3 sales for
that month, the salesperson will not be eligible for any incentive. Only the top three
performers are eligible for the incentive. This is a huge morale downer; it demotivates the
salespeople and does not give them any reason to meet their targets as they are not assured of
being awarded an incentive. The salespeople had taken up the issue with the ASM a couple of
times. The ASM assured them of incentives if they do business above the targets, he also
assured that he would talk to the HR regarding the same. However, nothing materialized, and
the salespeople were left dejected and fuming. This clearly indicates the poor management of
the salespeople who are the first point of contact between the company and the retailers and
wholesalers, which also suggests that the company has a lot to work and build on to improve
its field force management.

9
TRANSPORTATION AND LOGISTICS

The products of Mapro pass through a four-stage distribution channel before reaching the
retailer. The major entities involved in the distribution channel of Mapro are:
1. Warehouse
2. CNF
3. Superstock
4. Distributor
From the distributor, the products are passed on to the Retailer. The Transportation and
Logistics part of the channel covers the product flow from the Warehouse to the Retailer;
which can be majorly divided into two segments: Warehouse to Distributor and Distributor to
the Retailer. The factories of the company are located in Panchgani town, Gureghar town of
Mahabaleshwar in Maharashtra. The major warehouse of the company is located in Pune.
According to the demands by distributors, the products are moved to the Super stockists
situated in every state. For example, in the Gujarat region, there are two super stockists: one
in Surat and another one in Ahmedabad. The products are then transferred to Distributors and
Retailers which varies in different Geographical Regions. In Western India, the flow of
products takes around one day. However, in NCR, it might go up to four days. The major
mode of transportation is the delivery trucks that are used to transfer the products to
Distributors.
The flow of Products from Distributors to Retailers are also done by the Mapro trucks itself.
The Sales team of Mapro visits Retailers to take the order and the entire ordering information
is transferred to the Distributor at the end of the day. The following next day, Mapro trucks
deliver the Products and the invoices of the same to the Retailers.
In terms of penetration of Technology in the company, Mapro still uses the manual process of
taking the order; resulting in a lot of involvement of Human Resources. However, the
company uses a Bizom software; which helps in automating the entire sales force
management and helps in predicting the real-time demands by retailers to cater them
effectively and efficiently. This is used to save retailers from stock-outs, seasonality of
demand, transfer of stocks, dead stocks or slow-moving stocks, and freeing up the Human
Resources for their better Utilization. However, as of now, Software is just used to managing
the transactions on a Management level. The Sales team is still holding on to the conventional
way of ordering and delivering.

10
ANALYTICAL FRAMEWORK

We tried to analyse Mapro’s distribution network in the light of the most significant variables
that affect the distribution part of channel management for any organization in the business of
marketing & selling of goods. The variables, their explanations and their impact on the
Mapro’s distribution network are given below –
1. Number of Consumers

Due to the presence of Mapro being mainly in Western India, the overall demand comes from
there. And its demand is relatively less in northern parts of the country. Thus, it has been able
to establish a smooth-running distribution system in western part of the country and there
aren’t many layers in the system.
2. Geographic Dispersion of Consumers

Mapro has been trying to establish its hold in the Northern region of the country. One area of
concentration is Delhi NCR for the company. But since most of its facilities are in
Maharashtra, it faces difficulty in making efficient last mile delivery to Delhi NCR. Also, the
customers in that region are very less, so the transportation costs are high.
3. Frequency of Purchase

The purchase frequency of Mapro’s products varies from product to product. Generally, these
products are purchased every month, therefore efforts are required from the field force to
regularly visit the retailers.
4. Tendency to Postpone Purchase

Since FMCG products are used regularly and these products are not “necessary evils”,
distribution network of Mapro does not require any expert field force to sell its products.
Only the recent diversification of Mapro into the Northern region requires expert field force.
5. Level of Familiarity/Knowledge (of consumer) about the Product

Since FMCG goods are very much familiar to consumers, channel and its different members
are very much important to Mapro and field sales force’s function is mostly limited to
channel management and ensuring availability of products. Also, according to a recent report,
the awareness for Mapro’s products in the state of Gujarat is close 65 % and for NCR, it is
20%. Thus, NCR’s field force may need to make special efforts to increase awareness.
6. Degree of Brand Loyalty

As Mapro enjoys high brand loyalty from its customers, it has less to worry about margins to
channel members or POS advertising. But this situation can change considerably in the face
of rise of new competitors in the market.
7. Purchased on Impulse

Mapro’s products have a moderate degree of impulse purchase among its customers. That is
the reason, their strategy is to ensure proper visibility and focus on POS promotions in the
number of stores it covers so as to induce the customers to buy their products.

11
8. Level of Involvement (LOI)

As FMCG products are generally Low Involvement Products, Mapro has to bother more on
ensuring availability of the products, rather than supply of information.
9. Purchased as a Basket of Goods

This aspect partly applies to Mapro’s products as some products like crush, squashes, jams
etc may fall in a basket. Efficient distribution network of Mapro ensures availability of all
such products at each selling point (individual retailer).
10. Speed & Complexity of Decision-Making Process

If the speed is low, then the complexity of the decision-making process is higher and greater
is the importance of field sales force and the salespersons’ skill, knowledge and quality. For
FMCG products, complexity of decision-making process is not there and so, speed of
decision making is high. This means that for Mapro, field sales force is of moderate
functional usage.
11. Present of Expert Influencer in the Decision-Making Process

For FMCG goods, role of expert influencer is limited. But Mapro essentially relies on word-
of-mouth Marketing in order to ensure that customers buy their products. Therefore, Mapro
ensures proper availability of the products at the outlets with maximum repeat purchases so
that these users advocate to others.
12. Element of Crisis Purchase Exists

None of the products of Mapro fall under this category. Nevertheless, availability of products
of Mapro is necessary for other reasons.
13. Element of Risk Aversion Exists

Mapro is not affected for its products by this variable. For some products whose shelf life is
less, this can have considerable impact if its sale starts to happen through channel members
rather than by field sales force as is happening now.
14. Perishability of the Product

The FMCG products that Mapro sells are not perishable by nature but have limited life. So,
this aspect is not critical for Mapro.
15. Time Band Associated with the Purchase of the Product

There is no rigid time band associated with the products of Mapro. Therefore, Mapro is not
affected by this variable in a significant way.
16. Fungibility

As branded FMCG goods are not fungible per se (branding is done to “decommoditize” &
differentiate the product), the importance of channel members will continue.
17. Degree of Customization Possible

For FMCG products of Mapro, which are mass produced, such customizations are not
possible and thus with higher economies of scale, lower criticality of field forces from the
12
standpoint of customization of product offerings, costs are lower in these respects with
Mapro.
18. Negative or Positive Reinforcing Product

Crush drinks are distinctly positive reinforcing products from Mapro, so these are seen in
most shops etc. with high visibility displays(fridges) to reaffirm the feelings. Consumers are
willing to pay higher for these brands.
19. Value/Volume Ratio (Value Density) of the Product

In general for FMCG goods and for Mapro as well, value density is relatively lower. In
addition to this fact, increasing trend towards using smaller pack sizes increases the
packaging density Since value density is less, transportation costs will be higher and thus it is
of economic sense to have manufacturing plants located closure to major markets. This is the
reason Mapro has manufacturing plants nearby the areas it covers in its distribution.

13
FINANCIAL ASPECTS

Under the financial analysis of the organisation, Mapro’s expenditure in terms of

advertisement and expenditure in terms of sales and distribution is analysed in line with the
contribution. Also, for comparative analysis HUL in food and grocery segment is
considered.
Market spend on Food and grocery by Mapro and ITC:
Mapro HUL
Advertisement Expenditure 22.8 4153
Sales and Distribution
Expenditure
a) Distribution 72.48 1547
b) Travelling 4.92 179
Total Sales and Dist. 77.4 1726
Expenditure
Total Market expenditure 100.20 5879

Note: all the figures are in crores.

HUL Expenditure on Advertising and Sales & Distribution:

Expenditure of HUL

29%

Advertising
Sales and Distribution

71%

14
Mapro Expenditure on Advertising and Sales & Distribution:

Expenditure of Mapro

23%

Advertising
Sales and Distribution

77%

Inference:
From the above analysis of the financial of the companies Mapro and HUL, there is a stark
difference between the proportion of the expenditure on the advertisement and sales and
distribution. For Mapro, they are only expending 23% of the total expenditure towards sales
of the product. Their modes of the promotion of their products are heavily dependent on
sampling. They expend very less for the traditional promotional ways through media. Hence,
their sales and distribution expenditure are higher as compared to the advertising cost.
Whereas, HUL has very diversified portfolio and the distribution channel for all the brands
and their SKUs is common. Also, the company’s sale of the product is happening through the
pull for the brands. And hence, the advertising is critical to generate the market pull for
various brands. Hence, the advertising expenditure is 71% and it is comparatively higher that
the sales and distribution cost.

15