SDM Session 1

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Intro : Sales and Distribution

Management

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Why?

What is distribution?

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Your role in the process????*

What is a marketing channel?

External contactual organization that management

operates to achieve its distribution objectives

Outside the firm

Firm involved in negotiatory functions

Managements involvement in

the process

Goals that change, causing variations

in contactual organization & the way

in which

management operates it

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Distribution in India is

complex/Difficult..

Some Statistics

A typical distributor (FMCG) will have

approx. 2-3000+ Distributors

Each Distributor having a Sales force of

around 4

Covering 6.3 million retailers (1milliondirectly..HUL)

Approx. 8-12 million retailers in the country

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Products present in over 3.4 mn outlets in

India

Has a network of more than 4,000

distributors & almost 8,000 sub-distributors

& super-stockists

Every week salespeople visit over one mn

retailers & everyday we sell more than 70mn piecies

In a fortnight an equivalent number to the

whole Indian Population eats at least one

of PVMIs products

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Difficulties

Diversity in retail

Number of retailers

Wholesale trade!!!!

Lack of technology

Geographical barriers, rural urban divide,

Poor Infrastructure Cold Storage ,

transportation Stuck in transition

More Challenges

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A Typical FMG Company

Organized

Retail Big

Bazaar, Food

World,

Spencer's

Super Markets in

SEC A Areas of a city

Small & Medium

Sized Kirana Stores

Spread Across the

City

Pan Beedi Shops

Other

Retailers

based on the

company

URBAN

RURAL

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EXPERIENTIAL

STORES, SONY

WORLD, AYUSH

CENTERS

ONLINE CHANNELS,

BOOKS, REDIFF, iTunes..

NEW CHAN.. DTH

SERVICE

PROVIDERS

LOW-TEC, TIE-UP

WITH SHG GRPS,

POSTOFFICES,

COOPERATIVES..

TRADITIONAL TRADE MON-POP STORES, MINI

SUPER MARKETS, ORGANIZED RETAILERS,

WHOLESALERS, SHOP-IN-SHOP.

Institutional Vs

Retail Customer

Rural

Urban

VENDING MACHINES,

TELE SHOPPING

Why the growing importance of

marketing channels?

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1

1. The explosion of information technology andE-commerce

2. A greater difficulty in gaining a sustainable

competitive advantage

3. The growing power of distributors, especially

retailers in marketing channels

4. The need to reduce distribution costs

Distribution Costs

Autos Gasoline Fax

Machine

Packaged

Goods

Distribution 15% 28% 30% 41%

Manufacturing 40 19 30 33

Raw Material

& Components

45 53 40 26

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Role of Marketing Channels

Time Utility available when want to purchase

Place Utility available at convenient locations

Ownership Utility title passes from producer to intermediary to

consumer

Example

Typical Distribution Structures

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Company

CFA

Distributors /

Dealers (Urban)

Distributors /

Dealers (Urban)

Distributors /

Dealers (Urban)

Super Stockist

(Rural)

Distributors

(Rural)

Rural Retailers

Retailers Wholesalers

Retailers (Semi-

Urban , Rural) Rural Retailers

Can we do away with

intermediaries?

If yes, how or why?

If No, why not?