HARDSELL

THE SALES AND DISTRIBUTION MANUAL

MARKSOC 2010

Two years of turmoil is coming to an end. The blood, the sweat, the dreams, is all at stake dependent on the coming week. This coming week is the culmination of your karmas in last two years. Among this chaos of aspirations, achievements, CVs, signouts & GBMs, applications, submissions, MARKSOC comes out with its Hard-Sell: Sales & Distribution Manual

The purpose is two fold, to give an in depth insight about the sales and distribution processes of the major FMCGs of the country and to empower you with the knowledge of alternate and innovative models of distribution.

A special note of appreciation is due to the summer interns/ alumnus of the FMCG companies in the senior batches for their valuable contributions both in terms of content and time.

Last, but not the least, we would like to wish you ALL THE BEST for your placements and are sure that we shall see you emerge with flying colours.

Go Get Them!! TEAM MARKSOC

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CONTENTS
HUL COCA COLA PEPSI ITC NESTLE CADBURY GSK ASIAN PAINTS COLGATE PALMOLIVE SAB MILLER P&G AMUL GODREJ DABUR ESSAR PERFETTI VAN MELLE VODAFONE WHIRLPOOL TATA S&D STRUCTURED SERVICING OF RETAIL OUTLETS 3 10 13 17 24 26 29 30 31 33 37 44 53 55 58 63 65 66 67 68
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U2 consists of all products (not brands) that are high margin. For example, this would mean that Ponds Talcum powder is part of U1 while Ponds Face Wash is a part of U2.

The division of products is made according to the different channels that they are suitable for. Therefore it is easier to implement customized channel programs once a dedicated sales system is in place for each. For eg., U1 is more suitable for kirana, U22 for chemist and U21 for fancy stores.

The Grocery retail has many divisions so that there is some focus in the service provided by the company to the retail outlets.

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The Traditional Marketing Setup

Factory Carry & Forward Agent Distributor Redistribution Stockist Wholesaler

Retailer Customers

The Modern Trade Setup of HLL is a direct distribution setup wherein the company directly supplies to the large-scale retail outlets. These require daily servicing, the company also aims to improve range availability and reduce inventories. These stores can also be used as nodes for running direct promotions and interacting with customers. The Rural Distribution setup

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A point of contention in the above is the role of a star seller, which acts as a central hub for many rural retailers in lieu of the fact that these villages have low volumes, and are spread over vast geographical distances which make it infeasible for the rural distributor to supply to them directly.

HLL classifies the retailers according to their Turnover and the volume of the business done by the retailer Type Vijetha Family Groceries B C D Details Mass retail outlets and major wholesale dealers. These outlets are serviced and shipments of salt are directly sent to the key outlets. These are larger groceries which are analogous to our ISS outlets and further in these shops the range of product are very wide so the merchandising operations are very intense. Local Kirana shops (T.O range Rs.10,000 - Rs.5000) {Lab towns} Small Kirana shops (T.O range Rs.5,000 - Rs.3000) {Lab towns} Local Pan shops ( T.O range less than Rs.3000) {Lab towns}

CHANNEL PROGRAMS CHANNELS Modern Trade Family Grocer / Kirana Wholesale Chemist Fancy Store SPECIALIZED PROGRAMS MT Business Efficiencies SuperValue store VIJETHA Unicare (Pilot project) -

Kiosk (less than 50sq. ft. area) HARDSELL | 2/5/2010

There is also a Food Leadership Outlet program for high turnover food retailers.

Market Segmentation How do they segment the market? wrt Towns Population wrt Consumers Income

Class of society Product Usage

PROJECT SHAKTI

The objectives of Project Shakti are to create income-generating capabilities for underprivileged rural women by providing a sustainable micro-enterprise opportunity and to improve rural living standards through health and hygiene awareness.

Project Shakti works through the concept of Self Help Groups based on the Grameen Model of microfinance. The participants in this model are women who are termed as Shakti entrepreneurs.

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Typically, a woman from a SHG selected as a Shakti entrepreneur receives stocks at her doorstep from the HLL rural distributor and sells direct to consumers as well as to retailers in the village. Each Shakti entrepreneur services 6-10 villages in the population strata of 1,000-2,000 people Typically a Shakti entrepreneur sets off with 4-5 chief brands from the HLL portfolio - Lifebuoy, Wheel, Pepsodent, Annapurna salt and Clinic Plus. These are the core brands, then they are layered with whatever else is in demand like talcum powder or Vaseline during winters. These brands apart, other brands which find favour with a rural audience are: Lux, Ponds, Nihar and 3 Roses tea. Typically, unit packs are small. All the brands are national and HLL is cool to the idea of creating a rural-specific brand as it will only dissipate the advertising media effort for the brands. To get started the Shakti woman borrows from her SHG and the company itself chooses only one person. With training and hand-holding by the company for the first three months, she begins her door-to-door journey selling her wares.

The model must has a Win for all key stakeholders Value-adding to consumers

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It has already been extended to 190 districts from 11states, the Project Shakti footprint now reaches approximately 3 lakh households across rural India.. HLL's vision is to scale it up across the country by 2010, creating about 11000 Shakti entrepreneurs, covering 100,000 villages. A typical Shakti entrepreneur conducts business of around Rs.15,000 per month, which gives her an income in excess of Rs.1000 per month on a sustainable basis. As most of these women are from below the poverty line, and live in extremely small villages (less than 2000 population), this earning is very significant, and is almost double of their past household income

In line with the Corporates commercial priorities Beneficial to all other facilitators

The next stage of Project Shakti is even more ambitious. HLL is now in the process of piloting `I-Shakti', an IT-based rural information service that will provide solutions to key rural needs in the areas of agriculture, education, vocational training, health and hygiene. The project will be piloted in Nalgonda district again. Based on a palm pilot, HLL is looking at sourcing appropriate low-cost hardware from Hewlett-Packard while Unilever Research out of London is developing the consumer interactivity software

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COCA COLA

The distribution setup of Coca Cola India is based on three models The first two are the traditional models.

There are two types of bottling operations, which can be either Company Owned Bottling Operations (COBO), or Franchisee Owned Bottling Operations (FOBO). The first model is used primarily in metropolitan cities such as Delhi. The working of the reverse flow in the BSD segment
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The BSD can be characterized with a phenomenon known as the reverse flow. The bottles of soft drink find their way back to the COBO/FOBO after they are consumed wherein they are refilled and put back into the system. So the same truck, which delivers the bottles to the distributors also collects them and takes them back to the COBO/FOBO.

The oth er model of d istribut ion is the hub a nd spoke models

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This hub and spoke model is used extensively in a rural distribution setup and also in urban and sub urban areas at times. Here the distributor catering to a large area with a large number of villages sets up a spoke at each village or 1 spoke for a number of close-by villages. These spokes would again ideally be retail outlets. This spoke would service all the retail outlets in its designated area that could be the village itself or then a number of villages. The commission for these spokes could

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be paid in part by the company and rest by the distributor or then by the distributor completely. Examples are :

In bus stands of small towns such as Bhopal, wherein there are about 70 small shops a distributor finds it economically infeasible to service the outlets on a regular and frequent basis. The reason for such outlets needing frequent servicing is that they do not have the funds to purchase a larger amount. Hence the distributor appoints a spoke that would ideally be an outlet/retailer itself that would act like a stocking point for the BSD. Hence the outlets can now be serviced as frequently as needed by this spoke which in fact would be serviced once a day by the distributor. In urban areas certain localities suffer from a lot of traffic congestion such as Chandni Chowk in Delhi. It might not be feasible for the distributor to send in his vehicles every day to all the shops in such a locality so he might appoint a spoke there and supply him with extra crates to cater to the demand of the other shops.

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PEPSI

There are a lot of commonalities between the distribution setup of Coke and Pepsi. The basic structure of distribution setup in the BSD segment has already been explained in the Coke section. Certain aberrations pertaining to Pepsi and certain other key points are mentioned here. There are two important ways of making sales in the BSD Segment. Direct Selling System The vehicle is loaded with all variants and is sent on its route. The route here signifies the number of shops and points it will cater too. No pre estimate of demand is made and the vehicle essentially unloads whatever stock it has. Order-Based System - This is done for major accounts wherein the stock of any variant demanded has to be essentially maintained. For this purpose the account is contacted and an order is taken for the variants required which are then stocked in the vehicle and dispatched. PepsiCo is making a shift from direct selling system to order-based system, to avoid the operational issues and increase efficiency.

The Zero Layer Distribution of Pepsi comprises of Modern Trade to which it caters directly.

The main players in the distribution setup of Pepsi are Distributors C&F Agents Route Agents Whole-seller Sub-Distributors Retailers

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The Hub and Spoke model is also extensively used by Pepsi in its distribution setup. The Spoke covers hinterlands through mechanized vehicles, cycle rickshaw, animal cart (Tonga) and tractors. It helps in reducing the vehicle turnaround time and acts as a stocking point for local markets.

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Portfolio

LRB (liquid refreshing beverages) approx 45 SKUs

Convinience Food

CSD Carbonated Soft Drinks LRB CSD

Non-CSD

Snacks Lays, kurkure, Stacks , uncle chips

Non CSD Juice based: Slice, Tropicana gold and Tropicana twister Water: Aquafina Sports Drink: Gatorade Energy Drink: SoBe Adrenaline Rush

Cola based drinks: Pepsi, diet Pepsi, Pepsi gold Flavours: 7up, mirinda, mountain dew

Regional Sales S tructure Classification of Channels

INFO ABOUT PEPSI BOTTLING PLANT Innovation is the fuel that can take a new venture in an established market and create a more

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1. Traditional Trade: mom pop stores and smaller retailers 2. Organized trade a. Modern trade(MT) : Big Bazaar, Reliance b. On premise accounts or Institutional Accounts: KFC, Hotels, restaurants, pubs and bars c. Stand alone Chains: Basically MT accounts with no more than 2 outlets in a city d. CSD: Army, police and military canteens

formidable presence in a short period of time. Pepsi Bottling Ventures, based in Raleigh, North Carolina has taken business intelligence, married it with creative management, and created a marketing and sales powerhouse. In 1999, Pepsi Bottling Ventures (PBV), a manufacturing and direct store distribution company, was formed. The new initiative merged teams and territories from two successful entities: a piece of PepsiCo-owned territory and a territory formerly serviced by PepCom, a subsidiary of the Japanese owned company Suntory. PBV was charged with providing beverage manufacturing, local marketing, sales and distribution for the Pepsi Cola territory covering much of North Carolina and Long Island, east of New York City. PBV handles 50M cases per year and has 1700 employees. They represent Pepsi, Mountain Dew, Dr. Pepper, Sierra Mist, AquaFina, Gatorade, SoBe and other brands. As the new venture was being formed and the company was beginning to take shape, senior managers were ready to find ways to fine-tune and amplify the effectiveness of two very effective sales teams that had to learn to work together very quickly. The management team also wanted to position the company for future growth and possible acquisitions. The management team was committed to innovation and they found a business intelligence solution that solved their immediate needs, molded to their future growth model, and created opportunities that helped drive their business toward even greater success. Pepsi Bottling Ventures selected Margin Minder by Salient Corporation as their business intelligence solution for profit and sales management. Challenges Amplify sales effectiveness in a merger environment Combine two separate sales teams into one cohesive team Re-define sales roles and commission structures in a competitive environment Develop a disciplined price-setting process One of the first challenges that PBV had as a merged company was to create an environment where all sales information was available through one system. As separate companies, PBG and PepCom were using two very different systems to manage pricing and profitability for the sales force. One company was using a customized application; the other was using an ERP solution. One system, although customized for the bottling business, was expensive and wasnt positioned for future growth. The other system was out-dated and could not meet future requirements. In todays beverage marketplace, everything is moving quickly. PBV wanted to ensure that profits continued to grow and they wanted to find a cost-effective way to create price consistency in a fastpaced environment. At the same time, the senior managers theorized that the traditional method of sales and delivery in a DSD business - where route drivers provide both sales expertise and distribution/delivery - created overhead costs and inefficiencies that could be trimmed without sacrificing customer satisfaction. The team needed a business intelligence solution that would support their vision of the new sales model.

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Solution Focus on a best-of-breed technology strategy and unify the sales information into one business intelligence solution Realign the sales and distribution functions Improve distribution by implementing dynamic routing Introduce a price-setting process known as deal creation PBV management team trusted that the only solution to meet their business intelligence needs was Margin Minder by Salient Corporation. By selecting a best-of-breed solution, the sales team was quickly equipped with a critical selling tool and the company was able to equalize the technology gap between the two sales teams. The granularity and finger-tip control of the information presented by Margin Minder allowed the sales team to understand market behavior and react accordingly to the needs of their individual accounts. The PBV team used the information from Margin Minder to separate the sales function from the delivery function. This created an incremental gain in profitability and a bigger gain in sales execution. The field sales team is responsible for calling on customers and using their hand-held computers and their cell phones to automatically transmit orders to the distribution facilities. The delivery team is responsible for fulfilling the orders as quickly as possible. This means that every delivery is maximized for efficiency and the waste of energy, time, human resources and vehicle maintenance are limited. Client Success Pepsi Bottling Ventures Because sales information is readily available through Margin Minder, the sales management team is able to enforce pricing discipline. They can monitor information to ensure that deals are occurring as planned. Using pricing and volume history from Margin Minder they can plan future pricing strategies in a process known as Deal Creation. This process allows PBV to be disciplined in analyzing price and volume trends and maximize profitability. Another important benefit of the intelligence provided by Margin Minder is the ability to track new product penetration and sales execution. Before Margin Minder, it would take the sales management team up to 6 weeks to ensure that every customer was fully equipped with product and promotional materials to launch a new product. Using Margin Minder, the sales team can set targets and monitor sales execution quickly and easily. Now sales execution can be measured in about 2 weeks. Results Delivered over $1.25M straight to the bottom line by reducing sales and delivery costs Reduced the new product sales execution cycle from 6 weeks to about 2 weeks Company is positioned for more growth through mergers and acquisitions

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ITC
ITC possesses the largest sales and distribution network in India amongst all the FMCGs. It caters to 30,00,000 retail outlets in India. There are Six primary channels in the setup The Convenience Channel (Interestingly 90% of the revenue comes from this channel, which primarily sells cigarettes) The Grocery Channel, Key accounts (retail marts), Horeca (Hotels restaurants and cafes), Independent service outlets (Big dept stores midways between mom and pop and big retail marts mostly found in South India). Greeting Cards and Stationery All the sales of ITC are on a cash basis & no credit is provided. ITC essentially operates on Trade Marketing concept. The only other companies in the world, which do so, are Pepsi and P&G. Three important parameters of this concept are. Availability Visibility Freshness There are certain norms for each parameter, which are internalized, and highly confidential. This sales team has to ensure that these norms are strictly followed. For example the Coverage ratio needs to be very high. Coverage Ratio no of outlets serviced/no of outlets in the area A Distributor Call Card needs to be maintained by the supervisor, This primarily concerns issues like the share of the facings (visible SKUS in the shop), share of the sub brands in the facings, and inventory movement, in store merchandising. Distribution/Sales Tracking System Sales Man Order book: The book in which he allocates a page for each retailer and noted down details like Order taken Availability Norms Norms is the potential to push the products in the store which is calibrated if the competitors benchmark brands are available in the store. Wholesale Dealer (WD distributor) data Book the WD has all the details of the sales accomplished by the different Sales men, which are noted in a daily basis.

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This actually signifies the trade marketing approach because none of the issues actually point to direct sales. Its all about consistent product trials over a period of time, which would build the brand image. ITC is NOT a target driven organization. The improvements in distribution are mapped in terms of availability & visibility matrix unlike HLL. ITC also believes in secondary sales & not primary sales i.e. sales are when it reaches retailers & not the distributors ITC has a system of not rotating its distributors unlike the likes of HLL The Distributor is also not according to a specific product category. Rather a wide variety of products over many categories are pushed through a single distributor.

S & D Objectives Maintain benchmark supplier status in the convenience channel Develop excellent trade market and distribution capabilities w.r.t key A\Cs and Independent Modern Format Stores Become the benchmark supplier status in the grocery channel

Outlet Classification ITC classifies the outlets according to their turnover. This helps the company service the outlets according to the profitability of each retail outlet. The service levels accordingly differ. The turnover class A is given the maximum service whereas the Class G is given the least. The service may be anything from visit of Merchandiser to order collection of the salesman. T.O Class A B C D E F G Range of T.O per day >11,000 7,500 - 11,000 4,000 - 7,499 2,000 - 3,999 833 666 < 665 - 1,999
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832

The rules for sales and distribution are set according to this classification.

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ITC e-Choupal

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An example of the successful application of IT is the e-Choupal experiment kicked off by diversified tobacco giant ITC. ITC has designed and set up internet kiosks called e-choupals to support its agricultural product supply chain.

The e-Choupals are totally owned and set up by ITC with the operators not having any investment or risk of their own. There are four kinds of e-Choupals tailored for shrimps, coffee, wheat and soybeans. The focus is on creating internet access for global market information to guide production and

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supply decisions. It provides price information and thus, price certainty to the farmers. In addition, the farmers get access to operational information, developed by ITC experts, pertaining to cropping, seeds, fertilizers etc.

Significance of e-Choupal The initial benefits of the ITC effort include a substantial reduction in transaction costs, from 8 per cent to just 2 per cent. These gains are shared roughly equally between ITC and individual farmers. The longerterm goal is to use e-Choupals as sales points for soybean oil and a range of other consumer goods. ITC has also set up its first rural mall near Bhopal, where it distributes products of other FMCG majors as well. Hence, incomes generated through e-choupals will be targeted by the FMCG major to drive their product sales.

Traditional Model

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The operation of the Mandi consists of a number of different stages, from the logistics of transporting grain to the market to quality inspection, auction, bagging and weighing, and payment. Based upon local information within the village, farmers decide in which of the nearby mandis to sell. They transport their crops to the mandis in carts drawn by animals or tractors. Very often, to avoid peak-time crowds, farmers will arrive at the mandi the night before they intend to sell. When the mandi opens in the morning, farmers bring their carts to display areas within the mandi.

Supply chain followed in the traditional model

Business model

A pure trading model does not require much capital investment. The e-Choupal model, in contrast, has required that ITC make significant investments to create and maintain its own IT network in rural India and to identify and train a local farmer to manage each e-Choupal. The computer, typically housed in the farmers house, is linked to the Internet via phone lines or, increasingly, by a VSAT connection, and serves an average of 600 farmers in 10 surrounding villages within about a five kilometer radius. Each e- Choupal costs between US$3,000 and US$6,000 to set up and about US$100 per year to maintain. Using the system costs farmers nothing, but the host farmer, called a sanchalak, incurs some operating costs and is obligated by a public oath to serve the entire community; the sanchalak benefits from increased prestige and a commission paid him for all e-Choupal transactions. The farmers can use the computer to access daily closing prices on local mandis, as well as to track global price trends or find information about new farming techniqueseither directly or, because many farmers are illiterate, via the sanchalak.

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They also use the e-Choupal to order seed, fertilizer, and other products such as consumer goods from ITC or its partners, at prices lower than those available from village traders; the sanchalak typically aggregates

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the village demand for these products and transmits the order to an ITC representative. At harvest time, ITC offers to buy the crop directly from any farmer at the previous days closing price; the farmer then transports his crop to an ITC processing center, where the crop is weighed electronically and assessed for quality. The farmer is then paid for the crop and a transport fee. Bonus points, which are exchangeable for products that ITC sells, are given for crops with quality above the norm. In this way, the e-Choupal system bypasses the government-mandated trading mandis.

Re-engineered supply chain

Benefits to the farmer

- Benefit from more accurate weighing, faster processing time, and prompt payment, - Access to a wide range of information, including accurate market price knowledge, and market trends,

which help them decide when, where, and at what price to sell. - A higher price for their crops than they would receive through the mandi system, on average about 2.5% higher (about US$6 per ton). - The e-Choupal system has had a measurable impact on what farmers chose to do: in areas covered by eChoupals, the percentage of farmers planting soy has increased dramatically, from 50 to 90% in some regions, while the volume of soy marketed through mandis has dropped as much as half. Whats in it for ITC?
- Better supply chain for ITCs Food & Agri Businesses - Costs, Quality, Traceability - net procurement costs that are about 2.5% lower (it saves the commission fee and part of the transport

eChoupal Scale & Scope Today

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costs it would otherwise pay to traders who serve as its buying agents at the mandi) - Access to the Underserved Rural Markets - Through a Virtuous Cycle created by Larger Incomes, and founded on Trust that is built - New ITES Business Opportunities - Health, Education, Entertainment, eGovernance - Shareholder Value through Serving Society - Also, the infrastructure serves as a reliable delivery mechanism for resource development initiatives (e.g. water management)

- 'e-Choupal' services today reach out to more than 4 million farmers growing a range of crops - soyabean,

coffee, wheat, rice, pulses, shrimp - in over 40,000 villages through 6450 kiosks across 8 states (Madhya Pradesh, Karnataka, Andhra Pradesh, Uttar Pradesh, Maharashtra, Rajasthan, Uttaranchal & Tamil Nadu). - Marketing a variety of goods & services (Agri Inputs, Consumer Goods, Insurance, Market Research) - 2003-04 Transactions US$ 100 Million eChoupal Vision for Tomorrow
- 20,000 Choupals in 15 states covering 100,000 villages, servicing 25 million farmers (by 2010) - Larger range of agri commodities (adding Spices, Horticulture, Cotton) - Wider variety of goods & services (Education, Health, Entertainment, eGovernance, - Resource Development Initiatives) - 2010 Transactions US$ 2.5 Billion (projected)

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NESTLE
The sales and distribution structure of Nestle is as follows.

The C&S is the location where goods are transferred from the MG, as there is a legal/excise related requirement of a C&S in each state. There is a great deal of focus on ensuring that the product reaches the retailers with abt 70-75% of it shelf life remaining. In this context, the supply chain becomes very critical and FIFO is followed in all cases.

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The Mother Godown (MG) as its called in Nestle is a large warehouse that stores all range and depth of SKUs.

Nestle focuses on the merchandising activities which are of primary importance. This is also coupled with extensive sales promotion activities, primarily sampling activities, to complement the trade schemes offered to trade partners. The trade initiative is less than the other FMCG majors as Nestle primarily focuses on urban and sec A markets. There are regional distributors appointed in upcountry areas to increase the coverage and depth of the products reaching the consumers. Nestle focuses on healthy distributor relationships and boasts of many long term relations with key distributors as long as 80 years. That ensures product pushing in slack seasons. Nestle also operates in beverage retailing through vending business formats at some key places like shopping malls, corporate offices etc. Nestle also covers the HORECA outlets for their food-services business. These comprise the bulk packs of soups, food service sauces, bulk packs of noodles, chocolate blocks etc. This also aims at covering alternate channels of consumption for the consumers. The Infant Food business is governed by a set of guidelines by WHO and Indian Government. As per these guidelines, the business cannot be advertised, cannot be promoted (directly or indirectly), cannot be incentivesed, cannot be merchandised, cannot establish a point of communication with the customer (including the person making the purchase or the decision maker). These products are thus marketed to the medical fraternity through Medical Representatives. These are distributed through the normal conventional channel itself.

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CADBURY
At Cadbury India limited there are a number of different channel partners in the distributor network ranging from Redistributor, Wholesalers, Superstockists, Sub Stockists and retailers. The primary models of distribution are as follows: o Model 1 Redistributor Retailer o Model 2 Redistributor Wholesaler Retailer o Model 3 Superstockist Substockist Retailer In every territory either Model 1 or 2 or both are operating. However, the operation of Model 3 is contingent upon the fact that the operation of model 1 is not efficient because of the small market opportunity in the area

Disclaimer : The above information and the distribution diagram shown in the next page is from a FMS Summer Trainees report of the batch of 2002 and hence might not be up to date.

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Cadbury has a 2 way distribution network Mass Distribution of SKUs priced less than Rs.5 (clairs, Chotta Perk, Mini 5-star, Halls etc.)
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Base Distribution of SKUs priced more than Rs. 5 (CDM, Perk, 5-star, Celebrations etc.) Cadbury clairs are delivered on order basis- the order is typically placed on Thursday and delivered on Friday. In Kolkata Cadbury DM clairs were present in 81% of the shops that I visited. In the remaining 19% a few shops was not visited by the salesmen or there was a stock-out and delivery was not done on time. However in the neighboring towns the distribution of Cadbury was not as good as in the city. There was only one distributor for each town and few salesmen who failed to reach the inner by-lanes of the town.

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This is where PVM had an advantage. PVM products were well distributed due to its 4way distribution network and also because the company has many small distributors instead of one big distributor.

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GSK

The Sales and Distribution setup at GSK is very traditional FMCG setup The only difference is in the OTC segment. GSK has three OTC products namely Crocin, Eno and Iodex. Now, these are distributed through three channels Wholesalers , Semi Wholesalers and Crocin only Wholesalers. GSK Wholesalers who also carry Health Food Drinks like Horlicks, Boost, Moltova, Viva etc. The sales team of a GSK Wholesaler would consist of a vehicle and a salesperson taking orders or giving ready stock.

Like all FMCGs, GSK has a separate modern trade team which handles all the modern retail

outlets, which are called key accounts in the company.

For its vending business, GSK has a separate team under the name of NFS (Nutritional Food

Services) and has a separate distribution structure from its traditional structure. The company passes the machine, premix packets and cups to distributor who gets the machine installed at various locations and supplies the packets and cups to them. Distributor is assisted by the sales team from GSK.

The Semi-wholesalers are special breeds of wholesalers who are stockists of various drugs from possibly hundreds of pharmaceutical companies .They have huge volumes and hence they are mostly responsible for undercutting of prices in the pharma wholesale markets. An example will make it clearer. They sell Ranbaxy tablets below market prices but charge market rates in Cipla, Nicholas Piramal, Pfizer, etc products. They are able to do this because they would have got Ranbaxy at lower rates than most, because every pharma co. has some listed semi-wholesalers who have preferential rates. Now since the number of semi-wholesalers in a wholesale market is huge, almost every other drug suffers from undercutting because wholesaler A has an advantage in say Co. A, while wholesaler B has advantage in say co B. Crocin Only Wholesalers are nothing but semi-wholesalers who get preferential treatment from GSKCH due to historical reasons. Semi-Wholesalers have no salesmen. They have a wholesale market to themselves. An example is a semi wholesaler in Bhagirath Place near Chandni Chowk in Delhi. Normally chemists from Delhi and nearby places and even from Nepal would come here to buy their requirement of drugs.

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ASIAN PAINTS

The Sales and distribution structure of Asian Paints is different from a traditional FMCG in regard to the fact that there is almost a non existence of middlemen or wholesalers in the setup. The paints are carried from the plant to the regional distribution centres (RDCs) and then transferred to units who supply them to the dealers. The company also has a practice of supplying paints directly to dealers. In the early 90s, for the first time in the paint industry Asian Paints offered the consumer over one hundred and fifty shades. The concept was extended to the dealer shops through Colour World in the mid-90s, where Asian Paints began offering over one thousand shades. The introduction of Colour World provided a new direction for the paint industry into the age of retailing by providing the consumer - a service interface. With only a limited set of bases and colourants, manufactured and transported throughout the supply chain, Asian Paints provided a choice of innumerable shades to the customer through a technology of tinting at the last retail store. The company has 29 manufacturing facilities across 21 countries and over 70 sales branches spread across India. The extensive distribution network of over 15000 dealers and a product range of over 2900 Stock-keeping units is supported by the worlds first state-of-the-art IT solution to SCM from i2 Technologies, and an ERP solution from SAP. Exporting to over 26 countries, Asian Paints are the largest paint exporters from India.

The company has joint venture with PPG of USA for manufacturing automotive paints. Asian PGG is the exclusive supplier to Hyundai, Daewoo, and GM. It is also a major supplier to TVS Suzuki, Hero Honda and Bajaj Auto.

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COLGATE PALMOLIVE

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The MAs (Major Accounts) are further divided into: Shoppe (Given extra incentive of 2.5% for face on stacking of toothpastes etc. for better visibility but, takes more shelf space) Shoppe Plus (Given extra incentive over Shoppe ~4% for putting EMDS and other displays like banners, dispensers, cards, Palmolive Aromatherapy Trays, Toothbrush strips hooks, etc. over and above face on stacking) Other MA (approx. 10K a/cs) A Retail Environment (RE) is any place where the consumer or the shopper can come and buy products. A RE has various objects (like posters, dispensers, banners, etc.) for increasing visibility and influencing the purchase behavior of the shopper. A RE along with the way it is supplied with goods, eg. wholeseller, stockist, etc. is called a channel. The Feeder Wholesaler (FWS) channel forms a very integral channel for Colgate Palmolive for its rural distribution. This is due to the fact that the FWS cater to the retailers of the nearby villages where Colgate cannot directly reach since it is unviable operationally and economically because these villages might not have the critical mass to justify a direct setup. Thus, the FWS covers the retailers of these villages who come to the FWS (usually weekly) to buy an assortment of products to fulfill their requirements.

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SAB MILLER
SAB Millers market is spread over a large geography. They have chosen a decentralized organization model supported by a lean central function that will introduce and implement proven best practices in the beer industry.

SABMiller India has nine world-class breweries strategically located across India, which are well positioned to easily access and efficiently service the beer markets. SABMiller India is structured into three core operational regions which enable us to understand the nuances of our markets and its operations. The breweries and Sales & distribution network complement each other to cater to the consumer in each region. Mumbai is the hub for the West and East regions. Operations of the sales teams at these locations and the breweries ECDBL and PDL function under the Operations Director, Central. The North Operations of the sales force and the breweries CDBL, HBL and RBL respectively are under the Operations Director, North operating from the regional office located in Gurgaon Bangalore houses the regional office for the South region. The sales team and the breweries MBL, SICA, CBL an Malabar report to the Operations Director, South.

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SAB Millers Distribution Model

Brewery

Import

Bonded Warehouse (Bond)

Distribution

Corporations

Institutions

L 52s / L 53s

DSIDC

Hotel

DSCSC Clubs DTTDC

DCCWS

Restaurants

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SAB Millers Import Procedure

Application of Import Permit Import Permit Obtained IP Sent to the Brewery Brewery obtains Export Pass Cases sent with Invoices Excise Verification Certificate

Sab Miller(Distribution Channel Structure in Uttar Pradesh.)

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FL-2 Depots having license for wholesale vend of foreign liquor (other than denatured spirit) FL-2(B) - Depots having license for wholesale vend of beer only. Retail Shops No on premise consumption allowed. Model Shops Have On premise consumption license but have to sell the entire bottle (SKU). Bars On premise consumption. Allowed to break down the SKUs. In Uttar Pradesh there are around 3500 retail shops. There are 48 FL-2s and 7 FL-2(B)

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P&G
P&G is one of the most modern distribution networks in the country but the penetration is acknowledged has a long way to go. P&G distribution network covers almost every Indian town with a population of over 20,000.

SWINGS 2.3.5 FROM P&G

P&G distribution network is known for its strong IT backend. This is the backbone of the for their distribution network which successfully handles a large volume of retailers of different turnover classes. This IT backend is supported with the Palmtops which is used for various analysis of the retailing operations.
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The Swing is the software provided by the P&G itself which is used for the accounting of the sales and the trade operations. This is a highly customized package and consists of modules which can be used various operations. Each module is displays a list of features available in the package.

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STRUCTURE OF THE IT BACKEND

The operations which is done by the data obtained from the retailer Trade Accounting Analysis of Order Performance Review

This is the SWING 2.3.5 software which does the IT backend work. Interface between Swings and MARS

LIST OF RETAILERS

ORDERS PERFORMANCE REVIEW PARAMETERS

The orders are taken in the Palmtop system and the predefined routes and the retailer pick list loaded in the Palm top.

MARS software (software used in PDA) keeps the orders and the inputs got from the Retailer outlet.
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Palmtop in Distribution
RETAIL OUTLET

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The Palmtop is used as the interface between the salesmen and the Distributors software. This is used to take the orders from the salesmen who carry the Palmtop and note down the order in it. Further the record of the availability, visibility and freshness of the stock is also noted. This removes the necessity of an order book or the beat card. The Palmtop works on the software called MARS and manages the trading by the Salesmen. P&G operates with very limited inventory with large branches maintaining inventories as low as 2 days.

Distribution Structure (golden eye) P&G has 29 distributors. Each distributor has executives to facilitate different facets of managing the distribution set-up. Under the executives are the different officers who work at the branch level and finally there are people who work at the ground level.

The rural network for P&G runs parallel and is similar to the above network.

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MARICO
Marico's distribution width and penetration is acknowledged as one of the best in the industry and is a leverageable strength. Every month, 56 million consumer packs are sold to about 1.8 million households through 1.6 million retail outlets spread across the country. Marico's distribution network covers almost every Indian town with a population of over 20,000. The chart below depicts Marico's distribution network in the urban & rural markets: Thus, 1 out of every 10 Indians is a Marico consumer. Distribution Alliance: Our distribution strength has been recognised by Indo Nissin Foods Ltd. through their association with us for the distribution of Top Ramen products on a national basis. Rural Sales & Distribution: Marico's parallel rural sales and distribution network ranks among the top three in the industry and contributes 24% to the company's topline. Their infrastructure comprises 882 direct distributors, 153 super distributors, catering to 2393 small stockists and 4523 van markets. A dedicated team of Territory Sales Executives and Pilot Sales Representatives distribute Marico's as well as alliance brands through this vibrant network. Sales Capacity: They have made significant progress in the areas that enhance sales capacity. Quality of our distributors Quality and number of the distributor field force Upgradation in the role of the company's front-line sales force. Technology (IT) in Sales: Marico has been making investments in IT to ensure: Supply Chain efficiencies Availability of the SKU at the right distributor point, at the right time in right quantities Timely availability and reliability of Sales MIS, which help in taking prudent decisions on a real time basis. In order to reap maximum benefits from its sales and distribution network, Marico embarked on an

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internet-enabled application - MI-Net - to establish a network between Marico and its distributors through a web interface. This project is aimed at providing real time information on the status of various business operations between Marico and its distributors. This initiative is expected to provide business benefits in the form of increased penetration by the sales force, reduced communication costs, reduced working capital requirements, etc. The project went live on April 1, 2002 with connectivity to 330 urban distributors, who together account for about 3/4th of Marico's domestic turnover. The business benefits are expected to accrue over a period of time.

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MOTOROLA
Motorola and Hariyali Kisaan Bazaar Announce Major Alliance for Handset Distribution Agreement to leverage synergies in mass market phones and rural retail, to Connect the Next Billion

Pehowa, (Haryana), March 10th, 2006: Motorola (NYSE:MOT) today announced an alliance with DCM Shriram Consolidated Ltd. (DSCL)s Hariyali Kisaan Bazaar chain of rural/semi-urban utility marts for sales and distribution of handsets. With this, Motorola will acquire unparalleled penetration for its handsets sales in India. The alliance is a perfect match of Hariyali Kisaan Bazaars expertise in rural retail, and Motorolas new BharatMoto initiative, aimed at connecting the next billion through Indias mass market consumers in rural/semi-urban areas. The alliance will offer consumers direct, over-the-counter access to a wide range of handsets across categories and price bands : from the mass-market C11x series, to premium SLVR L7 and RAZR V3 models. Consumers will also benefit from the assurance of a first ever direct channel for purchase of new handsets. This is a boon for a segment which has traditionally suffered from grey market and/or refurbished units. In keeping with its focus on service, sale of all handsets will be covered by Motorolas robust aftersales support.

Hariyali Kisaan Bazaars 24 operational centres have a presence across belts in Madhya Pradesh, Rajasthan, Uttranchal, Uttar Pradesh, Punjab and Haryana, with additional plans to rapidly scale-up presence in the next few years.

Motorola and ITCs e-Choupal Announce Alliance for Mobile Phones Sehor (Bhopal), March 13th 2006 : Motorola (NYSE:MOT) today announced the establishment of a distribution agreement with ITCs e-Choupal division for its Mobile Devices business. This pioneering move, coupled with previously announced agreements, secures even further breadth and depth for its already impressive sales and distribution reach in India.

e-Choupal reaches out to more than 3.5 million farmers through 5,200 kiosks across six states (Madhya Pradesh, Karnataka, Andhra Pradesh, Uttar Pradesh, Maharashtra and Rajasthan). Its judicious blend of click and mortar capabilities, village internet kiosks, physical transmission and consolidation of all intermediaries

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in the distribution chain, is a perfect match for Motorolas new BharatMoto initiative, aimed at Indias mass market customers in rural/semi-urban areas.

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AMUL
THE CHANNEL NETWORK Distribution channel

GCMMF Head office

Manufacturing

First leg

(from manufacturing units)

Depot...1

Depot...n

Second leg

WD1

WDn
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Third leg

Downstream flow Procurement Channel

Retail1

Retail...n

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Distribution

GCMMF Head office

MU1

MU...n

VCS1

VCSn

Upstream flow
Village1 Villagen

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SCM AND MARKET LOGISTICS The network Milk is procured from the villages and collected at Village Cooperative Societies (VCS), from there the milk is taken to manufacturing units where the milk is processed into various products. The products are then transporters to the company Depots located in various parts of the country. The products are then sent to Wholesale Distributors (WD) and from there to the retailers. The fact sheet Milk is procured twice a day from 2 million from Gujarat alone The payment is made under twelve hours of procurement There are 10000 village cooperative societies There are 3600 wholesale distributors in the country 45 depots The C&F agents are not fixed and are decided by the local company offices There are aproxx. 4,50,000 retailers spread all over India Total house hold consumers covered are 100,000 The milk procured per day is 5 million liters Where the total capacity of operation is 7 million liters per day The peak processing till date has been 6 million liters per day These co operative societies are bound to supply there produce only to GCMMF

SCM and Market Logisti cs Enterprise resource planning: the company at has implemented an ERP program as low as Rs. 3 corers in collaboration with TCS ltd. The company uses it, the data right from the procurement from the farmers till the delivery of goods to the retailers is fed into the system. The software enabling the channel members to use for the synchronized working and best possible utilization of the available resources maintains details regarding the inventory management.
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Market logistics deals with the implementation of the SCM of the company. Upstream Channel in which milk is procured from the farmers to the manufacturing units. 1. In the first step, the milk is taken to the VCS by the farmers on foot or bicycles in small quantities

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2. The second step involves the transportation of milk from the co-operatives to the manufacturing units this is done in special trucks which are equipped with tankers to carry milk. Downstream Channel, it is the distribution part of the supply chain. From the manufacturing units to the retailers. 1. First leg of transport is from the manufacturing unit to the company depots. This is done using 9 and 18 MT trucks any lesser quantity will be uneconomical to the company there fore is some time the quantity ordered is lesser then club loading is done which means that the product ordered is supplied with some other products. a. Frozen food the temperature of these trucks is kept below -18C b. Dairy wet the temperature of these trucks is kept between 0-4C 2. Second leg is from the depot to the WDs, this transport is carried out in insulated 3 and 5 MT TATA 407s here a permanent dispatch plan (PDP) is prepared where the distributor plans out the quantity of various products to be ordered on a particular date. 3. Third leg this is the flow of good from WDs to retailers, a beat plan is prepared and transportation is done on auto-rickshaws, rickshaws and bicycles. SELECTION, MOTIVATION & EVALUATION OF CHANNEL MEMBERS Selection The company takes into consideration a host of factors while selecting the channel members. This is because GCMMF believes that selection of channel members is a long run decision & the rest of the decision regarding the supply chain depends upon the efficiency & coverage by the channel members. The following are the host of factors considered by the company in selecting the channel members:
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Authentication is required by the regarding the identity of the channel members, which includes the name & address, photograph of the location. Proof of solvency which requires name & address of the channel members bankers Safety of the inventory, which means that the distributor/ dealer should get the stock of the company insured. Inventory or the perishable goods kept by the distributor/ dealer should be in good condition which means a detail of storage space & Refrigeration facility is to be provided. Refrigeration system should have deep freezers, cold room & walk in coolers. Details of the delivery vehicle, which includes Light Commercial Vehicles, Matador, 3 Wheeler Van, Tricycle Van & Hand/Push cart. The number & model of each of the vehicle needs to be furnished to the company.

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GCMMF acknowledges the fact that it needs to be sensitive to the market demands. For this it requires that a number of salesmen needs to be present on the field. The salesmen too are divided into various categories like the Field salesmen & Counter salesmen. Also the details of Clerical Staff & Mazdoors are to be provided. The technical competence of the salesmen needs to be mentioned Details of the product kept of other companies have to be provided. The annual sales of these products too have to be mentioned. Also details of complementary products & product lines need to be mentioned. Dealers of the company must carry a good reputation. This is due to the fact that the company believes reputation of the dealer affects the clientele. Market coverage by the distributors needs to be defined which includes details of Geographic coverage & Outlets per market area. The company also requires the dealers to furnish any Advertising & Sales initiative undertaken by them on behalf of the company.

Motivation of Channel Members GCMMF strongly believes in maintaining a good relationship with the channel members so that they are genuinely motivated to work for the company. Also if the channel members are motivated, they can also initiate advertising & sales promotion schemes on behalf of the company. However to keep the channel members motivated to work, the company has to incur certain costs but the benefits of it are felt in the long run. The following are the motivation programs run by the company: Distributors One of the main factors, which keep the distributors motivated, is the margin. Usually the margins offered by the company are 8% & it is raised to 8.5%. Volume wise this comes out to be a big figure since Amuls product has a good demand in the market. However compared to the other companies the margins are still lower since the new players in the market offer a much higher margin. But the very fact that Amuls products have good demand in the market motivates the distributors to stock it. Amul being a cooperative cannot afford to give heavy monetary incentives. Amuls products are considered to be value for money since the company does not believe in charging high margins. In fact all monetary incentives are just the short run means to promote the companys product. In order to keep the Channel members motivated in the long run, Amul builds on the concept of Trade Marketing which makes the dealers & the distributors believe that the companys products are worthy of being pushed in the market. The company is organizing various Total Quality Management initiatives & workshops. Here various counseling measures are undertaken by the company to improve the overall working of the distribution network.

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Vision and mission statement: the company cascades down the vision to the various channel members, this is done through various events organized by the company at different locations where the values of the company are made clear and enforced to the channel members. Also the fact that Amul being a cooperative society cannot afford to spend exorbitantly on such events therefore it has a very traditional way of organizing these get together which leaves an impact on the members. Amul yatras: this includes taking the channel members on a guided tour of the manufacturing and procuring facilities in Gujarat. So that the channel members can have an experience of the working of the company and can pick up some quality measures that can help them to synchronize and improve their own functioning at various levels. This in turn help the company to co ordinate the entire value chain, as the channel members understand the various constraints and liberties the company goes through. The company has already got the Rajiv Gandhi award for quality.

The Retailers Trade schemes: these are undertaken by the company only for the hard selling items e.g. Ice creams, flavored milk etc. for these the company raises the margins by 2%, also schemes like good packaging incase of butter and cheese is undertaken by the company. However this is only a short-term initiative to push the products of the company. Glow boards: the company puts up glow boards at the retailer and pays the major portion of the cost. Schedule of the salesmen: they provide the retails with this schedule so the retailers can pre estimate the quantities of the various products needed. Infrastructure facilitation: the company facilitates the retailers to buy freezers and fridges by formulating an easy payment program and a commitment to buy back the equipment at a reasonable price when the value of the equipment has depreciated.

Evaluation of channel memb ers Beat plan: this plan is generated for the various product categories i.e. diary dry, diary wet, Dhara and ice cream. A weekly schedule is prepared for various markets and the retailers the turnover for each of the product is calculated for the wholesale dealers. Cumulative performance: the performance of the dealers is averaged out over a period of three years where a comparison is made of the present performance vis--vis the previous ones. Target versus achievement: the performance and the targets are compared and therefore the gaps are identified which help in evaluating the WD and planning for the next year as well. This is done for each of the product category.

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Other criterion o o o o o o o o o Details of the bank guaranty Photographs of the offices Details of the WD salesmen and the product lines he deals in The computerization facility available The storage space Refrigeration facility with photograph Details of the delivery vehicle with photograph Summary of the monthly potential sales of markets Summary of the product wise monthly sales potential of institutions

CONFLICTS AND CO-OPERATION AMONG CHANNEL MEMBERS Conflicts Ownership of assets: Previously the company used to give the cooling equipment on lease to the retailers, when the company wanted the stuff back; the retailer disagreed to comply and created issues of ownership. Stocking issues: The company doesnt want the retailers to stock the competing brand in the company leased fridges, which at times s hard to manage as retailers tend to do it often. Replacement of products: The deterioration in the product calls for fail in replacement by the company this major issue of vertical conflict. Credit policy: Compared to the market, the companys credit period is less that specially incase of institutional sales is very important. Packaging: The channel members for easy storing demand a better quality of packaging. Replenishment: The replenishment of the stocks is not prompt in case of amul cheese and all hard selling items. Margins: The Company provides least margins to all the channel members. For e.g. The retailers margin in case of butter is 8% as compared to Britannias 12%
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Co-operation among channel memb ers Amul quality circles: The members of the local channel meet together every month to share issues and the achievements of the channel members. This is an ongoing activity facilitated by the company offices in different locations; this enables the channel members to learn together and reduces the horizontal conflicts among the WDs.

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Pilot salesmen scheme: To reduce the financial burden of the distributors this scheme is run whereby half the cost of the salesmen is born by the company and the rest half by the distributor Scheduling of sales: The WDs provides Schedule of the distributors sales men to the retailers so that the retailers can plan out and place the orders in advance. Agreement defining rights: The company makes the distributors sign an agreement where the areas of operation for each of the distributors are defined, therefore avoiding any conflict amongst the distributors regarding their areas of operation.

OBSERVATION, COMMENTS AND SUGGESTION Observations The companys strength is in its procurement and not the distribution even they know this, as this is the industrys main problem. Other companies fail to replenish demand due to lack in procurement of raw milk. Amul has loyal cooperatives that provide milk only to them, over time the relationship of trust has built up with these people that amul leverages now. Transport channel is another strength as the transporters have grown with the company overtime the bonding with them enables the company to give least margins when it comes to the distributors in the industry, lowering the costs. The company believes that there is an ongoing demand in the market and therefore no promotions are needed to increase the sales, also the fact this would affect the cost of the product the company doesnt undertake many promotion schemes. The not being a profit driven organization, is able to provide products at the least price in the industry, and is able to give least channel margins as the channel members earn through volumes and not through high margins. The company is enabled to push its new products into the market by hooking them onto the fast moving products like Amul butter; they force the channel members to carry the new products as well.

Comments and Suggestion:

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Amul should go in for exclusive outlets in at least all the shopping malls coming up these days and any location where footfalls are large in number. The advantages of this channel will be: i. Full range display ii. Easier to promote new products iii. Easy to push impulse purchase products

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iv. Brand building will be facilitated Pushcarts should be increased in number in order to increase the market reach this can provide with e very effective channel for ice creams and flavored milks. Trade promotion should be formulated for newly launched products instead of just tagging them onto best sellers. The company should start a home delivery where a particular household will order full range of products required by it over a period of time. For this the company could provide a deliveryman with cycle to reach the different houses. In order to motivate the channel members it is also very essential for the company to increase the margins for the hard selling items e.g. Amul dahi where it faces competition from Nestle & Mother dairy. In order to remain sensitive to market demand, it is essential for the company to place additional salesmen on the field since the brand as such commands a high demand in the market but fails to match it with the supply.

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Godrej
The sales and distribution network of Godrej is armed with seven manufacturing locations in India and abroad, 33 clearing and forwarding agents and a 280 strong, all India sales-team, the company reaches all agglomerations with a population of more than 10,000. Close to 650,000 retailers are directly covered by GCPLs 4500 distributors and sub stockists. Apart from the traditional model mentioned above, products also reach consumers through Direct sales channel. This includes Godrej Interio and Natures basket. Natures basket is branded fruit and vegetable outlet opened by Godrej Agrovet Ltd. The brightly painted store stocks vegetables such as artichokes, asparagus, broccoli, bamboo shoots and red cabbage. It also sells fruits like kiwi, tangerine, cherries and apples from different countries and herbs like oregano, rosemary, thyme and watercress. Godrej Interio is a business unit of Godrej & Boyce Mfg. Co. Ltd. - part of the Godrej Group, one of Indias largest engineering and consumer product groups. It offers home and office furniture, along with solutions for laboratories, hospitals and healthcare establishments, education and training institutes, shipyards and navy, auditoriums and stadiums. It is present across India through our 50 exclusive showrooms in 18 cities and through 800 dealer outlets. Self service portal for large enterprise customers: The BroadVision-powered sales portal allows Godrej Industries Limited to unify disparate content sources and provide a personalized information channel for its large industrial supply customers who now rely on the portal for online collaboration and to schedule deliveries using a web-based customer service module. This portal provides the ability to synchronize information on consumer behavior and consumption patterns with sales and supply information in real-time. The sales portal uses a CPFaR solution that includes online collaboration for all demand chain participants, such as distributors and field staff, to keep information relevant and current. Godrej Adhar
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Godrej Aadhar is the retail outlet of Godrej Agrovet with a vision to be the complete solution provider to the farmers rendering farm advisory services, credit facility to farmers, providing up to date information on weather, price, soil & water testing facility, FMCG / consumer durables etc. to farmers. Each Aadhar outlet services around 20 villages in its radius. Every Aadhar has a team of qualified Agronomists who interacts with farmers on a daily basis and travels to the villages in the interior to educate them on farm practices.

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Highlights: The company's rural sales have grown by 40% while urban sales have grown at 20%. The rural sector contributes 42% of total sales and the company expects it to rise to 50% in three years. GCPL has 3-pronged strategy to tap rural markets 1. Increasing regional advertising 2. Launching small packs 3. Scaling up rural distribution Company spends 66% of A&P money on regional advertising Advertises on Doordarshan, local TV and radio channels, Top-performing brands see high regional ad spends

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DABUR
The campany has a flat structure with a single marketing head, a sales chief and a common sales and distribution team. Dabur has an extensive supply chain consisting of over a dozen manufacturing locations, six mother-warehouses and over 50 CFAs that distribute more than 1,000 SKUs to several thousand stockists countrywide. All Dabur stockists can check their order status, account statements and inventory at the click of a few buttons. Dabur captures month-end status of secondary pipelines through the Internet. Sales force can use the data for monthly planning and operational needs to evaluate targets, stockists performance, sales officers performance. An inhouse developed datawarehousing software on ASP and SQL platform displays countrywide as-ofyesterday status of stock, sales, banking, back-orders, receivables on the corporate Intranet. In 2006, dabur launched Dare to leverage its brand holdings in the country's fast evolving retail environment. The programme had a six-point focus for expanding presence in the retail market. A strategy was devised to segment the retailers according to their type in terms of the products, credit facilities and promotional plans offered to them. For example, retailers will be segmented into groups such as grocers, chemists, wholesalers, distributors and so on. Second, the focus was on trade marketing capability through which Dabur got a better insight into consumer requirements at the point of sales. For this, Dabur tied up with modern retail players like Big Bazaar, Reliance and Spencers, for better visibility of the brands. For instance, there were Vatika Beauty Zones at each of these retail outlets that sell all the Vatika brands under one shelf section, apart from their being displayed in their respective category shelves. The company also identified six States Punjab, Bihar, West Bengal, Uttar Pradesh, Maharashtra and Madhya Pradesh to improve rural distribution and develop innovative trade promotions and packaging solutions through a sales team exclusive to these areas. It also offered various incentives to distributors and wholesalers to perk up sales performances. Dabur also proposes to integrate key customers into its IT network to help gather real time market information, being enabled by a `point of sale software'. Dabur has a distribution reach of 25 lakh retail outlets across the country. About 75 per cent of the company's sales come from rural areas, hence, it has created the Astra training consultancy module in five vernacular languages, Bengali, Tamil, telungu, Malayalam and Kannada. Under Astra, Dabur has categorised its sales and distribution channels into finer segments, such as key grocers, mass grocers, chemist, wholesale, small outlet and modern trade. The programme address specific needs and expectations of each channel in the areas such as, trade activation programmes, trade promotion programmes, brand/SKU focus, merchandising and managing channel conflict. Astra is a step ahead of Dare, driving achievement of retail excellence, introduced by the company in 2006. Dare was aimed at leveraging Dabur's brands performance in modern retail. Astra will encompass the distribution channels including modern retail. It also runs refresher training courses every six months. Every sales officer in Dabur has to work according to a journey cycle that begins on the first of every month.

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EMAMI
Emami covers all the states with 29 depots across India and enjoys a wide distribution network comprising 2500+ distributors and a direct coverage of 4.15 lacs outlets. To felicitate this distribution strength, Emami has 1200+ strong and motivated Sales Force including both direct & indirect manpower operating in the market. Modern Trade: With the change of scenario in retail market the Company has drawn an extensive coverage plan for targeting customers in modern format outlets effectively selling in the market directly or through exclusive distributors. A specialized Sales Force has also been developed to service these ever growing Modern Retail outlets. Currently, the Company is covering over 4000+ key accounts and is expected to double the sales in 200809. In order to bring in complete retail focus to the business through direct reach and distribution, the Company has also undertaken an aggressive plan to identify Focus Sates in the country. The objective behind this is to increase strong numeric distribution, reduce dependency on wholesale, initiate extensive BTL activities, strengthen rural coverage and introduce smart sales force to counter any competition.

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Emami sales and distribution across India

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ESSAR
ESSAR STEEL HYPERMARTS Essar Steel hypermart is a strong network of over 65 hypermarts and 15 expressmarts. It has a strong workforce of over 230 employeesacross the countrywho are committed to meeting the requirements of small manufacturers, local fabricators and engineering and construction companies who today buy steel from local intermediaries or traders. At Essar Steelhypermart one can choose from a comprehensive range of flat steel products for variety of applications. The five Value propositions of Essar Steelhypermart are: 1. 2. 3. 4. 5. Trust of Essar Quality Immediate Delivery Transparent Pricing Easy Contactability Pan-India presence

Currently, it has over 300 outlets across the country. It said the retail segment caters to between 20 per cent and 25 per cent of the total steel demand in the country. One of the reasons for setting up the retail marts was to cater to the small and medium enterprises as well as small customers that, the company felt, had been largely ignored. These retail marts also sell steel in smaller pack sizes, apart from offering financing options to the customers. Essar Steel plans to further expand its distribution network through Expressmarts and Expresspoints. These are dealer-owned and -operated outlets and offer Essar Hypermart products across all key steel consumption centres.

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Segment wise distribution of Essar

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Perfetti Van Melle

DISTRIBUTION CHANNEL All the products in India are divided and clubbed into groups. In Pan India excepting Kolkata the products are divided into 2 categories (2way Distribution). In a few selected markets (especially eastern region) the products have been divided into 3 categories for better reach and distribution. In Kolkata and upcountry Bengal markets (where I was involved) the products were divided into 4 categories. 4 way distribution For Kolkata and its neighboring markets (upcountry) all the products of Perfetti Van Melle are divided into four categories- P1A,P1B,P2A and P2B. The logic for these divisions is to provide better distribution of its products to the retailers who are largely panwallahs and are spread all over the city. The market in Kolkata and its neighboring towns are earmarked as being unique in that the retailers are mostly panwallahs and are not capable of making huge purchases. It was observed that these retailers would purchase only one or two products if a salesman goes to him with the entire portfolio of products as he might not have enough cash at hand at that point of time. But if the products were sub-divided and if four different salesmen visited him, over the course of the week, with different sets of products then the salesmen could convince the retailer to keep more products on his shelf.

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A majority of Perfetti Van Melles sales in Kolkata are done on credit basis with a cycle of 15 days. So dividing the products and distributing them through different salesmen makes it easier for the company to keep track of their credit collection. Each distributor has his area divided into 6 beats, each comprising of 50-60 shops, and each salesmen (under the distributor) visits all the 6 beats through the wee(Mon-Sat). This way every salesman develops a relationship with the retailers and is aware of the credit repayment capability of all the retailers in all the beats he visits. Thus a salesman, based on his previous experience, decides which retailers he can give the products on credit. Now since the products are divided and are distributed by various salesmen the retailer can purchase more products on credit from different salesmen at different points in time through the week. Sales Beats of PVM which is covered over a period of one week.

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Vodafone
Vodafones products and services are available directly, via Vodafone stores and country specific Vodafone websites, and indirectly via third party service providers, independent dealers, distributors and retailers, to both consumer and business customers in the majority of markets under the Vodafone brand. Distribution Direct distribution Number of directly owned stores=1,150 Vodafone directly owns and manages over 1,150 stores. These stores sell services to new customers, renew or upgrade services for existing customers, and in many cases also provide customer support. A standard store format, which was tested in 2006, was rolled out in 11 markets during the 2008 financial year. The store footprint is constantly reviewed in response to market conditions which resulted in, for example, Vodafone opening a further 90 stores in Spain and 21 stores in Romania during the year. Additionally, all stores in India were rebranded as Vodafone and over 40 stores were refurbished to the Groups standard format. The Group also has 6,500 Vodafone branded stores, which sell Vodafone products and services exclusively, by way of franchise and exclusive dealer arrangements. The internet is a key channel to promote and sell Vodafones products and services and to provide customers with an easy, user friendly and accessible way to manage their Vodafone services and access support. As a result, a specific Group wide programme is currently being rolled out across all controlled markets, in order to ensure Vodafone websites have state of the art online capabilities and provide the customer with an excellent and consistent online experience. Additionally, in most operating companies, sales forces are in place to sell directly to business customers and some consumer segments. Indirect distribution Number of branded stores=6,500
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The extent of indirect distribution varies between markets but may include using third party service providers, independent dealers, distributors and retailers. The Group hosts MVNOs in a number of markets. These are operators who buy access to existing networks and resell that access to customers under a different brand name and proposition. Where appropriate, Vodafone seeks to enter mutually profitable relationships with MVNO partners as an additional route to market. During the past year new relationships established include Asda in the UK, Euskaltel in Spain and Carrefour in Italy.

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WHIRLPOOL
From push to pull manufacturing Whirlpool Corporation is the worlds leading manufacturer and marketer of major home appliances. Until recently, Whirlpool relied on push manufacturing, a system of producing as much inventory as possible, then pushing it out to the distribution channels. Although this system allows plants to operate at capacity, it has the disadvantage of creating periodic oversupply and consequent discounting pressure in the distribution channels. Furthermore, since production schedules were based on a weekly time step, a minimum four week delay was required to fill non-standard orders. The Whirlpool logistics teams goal was to reduce inventory, work in progress, and product obsolescence: in short, fundamentally alter Whirlpools manufacturing model from push to pull. Pull manufacturing bases factory production on actual customer demand, and therefore requires both timely relay of orders to the plant and a highly optimized production scheduling process to fulfil orders. The time step of production schedules had to be slashed from a weekly to a daily basis to reduce response time to customer orders from four weeks to five days.

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TATA
Tata's new model for Nano production, distribution Distribution fees may be the wave of the future in the auto industry. At least India's Tata Motors is thinking along those lines. Tata now has a plan in place where any customer that purchases a Nano in India will have to pay a variable transportation charge depending upon the purchase location, company officials said. One case in point is a car will cost 11% more in Mumbai than in New Delhi. With this move, surely other automakers will be watching. In addition to the variable pricing model, Tata also worked out a modular manufacturing design for the vehicle, making it possible to distribute it in complete knock-down (CKD) kits where local assembly hubs and entrepreneurs can assemble and service the vehicles closer to consumers, officials said. Under this model, the cost of transporting modular CKD kits made at a central manufacturing plant will go directly to the customer. This approach will shorten the go-to-market time and help speed up the distribution process, even to the more remote locations of India.

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S&D STRUCTURED SERVICING OF RETAIL OUTLETS

ACCURATE ORDER CAPTURE : The correct demand must be forecasted properly so that the correct order can be given to the customer.

EFFICIENT DELIVERY OF SERVICE : The supplies must be delivered in the right time. This must be done in the most cost efficient manner. The most economical conveyance in selected.

POS MATERIAL : The materials such as banners, pluck cards, posters etc that are given to the retailer is the POS Material.
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DISPLAY SUPPORT : The Danglers and the Supporters which are given to the retailer to improve the visibility of the brand.

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BUSINESS BUILDING SUPPORT : The retailers building must be conducive to sell the products. Eg. Multi purpose paste

MULTI-LEVEL CONTACT : Each store will have a person to contact. For eg. The modern outlet will have a manager to contact who can be contacted by an A.E. The local kirana shop can be contacted by the salesman.

CHANNEL SPECIFIC SUPPORT : There can be a multitude of channels like the HoReCa , ISS, Grocery etc. Each channel has a specific manner of Distribution.

SPACE MANAGEMENT : To help the retailer manage the space available to him, there is professional him available to help him manage his space. If it becomes very uncluttered then he may not be able to give the stuff the customer asks or he may not be able to locate it.

CATEGORY MANAGEMENT : There could be a shop specific to a product catergory for eg. Panshop Cigarettes, Biscuits Local grocery.

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