A Summer Training Report On Study of the rural distribution of the top FMCG companies and suggest opportunities for enhancing the rural distribution of Coca – Cola. SUBMITTED TOWARDS PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT (APPROVED BY AICTE, GOVT. OF INDIA) ACADEMIC SESSION 2009 - 2011 EXTERNAL GUIDENCE: INTERNAL GUIDENCE Aashish k Jha Res. V.S.SOLANKI sir Area channel manager Faculty, IPM, Meerut Coca-cola, Patna Submitted by: Sidharth Shankar Jha 1
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A
Summer Training Report
On
Study of the rural distribution of the top FMCG companies and
suggest opportunities for enhancing the rural distribution of Coca –
Cola.
SUBMITTED TOWARDS PARTIAL FULFILLMENT
OF
POST GRADUATE DIPLOMA IN MANAGEMENT
(APPROVED BY AICTE, GOVT. OF INDIA)
ACADEMIC SESSION
2009 - 2011
EXTERNAL GUIDENCE: INTERNAL GUIDENCE
Aashish k Jha Res. V.S.SOLANKI sir
Area channel manager Faculty, IPM, Meerut
Coca-cola, Patna
Submitted by:
Sidharth Shankar Jha
M-209061
PGDM (2009-11)
INSTITUTE OF PRODUCTIVITY & MANAGEMENT, MEERUT
1
DECLARATION
This is to certify that I, the student of PGDM(2nd year) have personally worked
on the topic “Rular Distribution of Coca Cola” under the able guidance of Mr.
Sarvjeet Singh Sir, DY. Director, Mr. V.S. Solanki Sir , & Mr. Michael Samuels Sir,
faculty of IPM, Meerut, U.P during the session of April-July 2010.
The data's mentioned throughout the project are authentic and reliable. I have
worked to the best of my efforts and capability.
Date: 20th July 2010 Sidharth Shankar Jha
Place: Meerut
2
ACKNOWLEDGEMENT
The research report will be incomplete without acknowledge giving my sincere,
gratitude to all person who have helped me in the preparation of this report.
First of all, I thank “GOD” for the blessing showered on me throughout this
project work, which has helped me in the successful completion of the training.
I express my thanks to Hindustan Coca Cola Beverages Pvt. Ltd. for granting
me the permission to work with the esteem organization.
I am also thankful to Mr. Aashish K Jha (Area channel manager) of Hindustan
Coca Cola Beverages Pvt. Ltd. He guided and helped me in all possible ways he
could, at every stage of the report.
I would also like to thank all the executives, distributors and staff of Hindustan
Coca Cola Beverages Pvt. Ltd. who provided all the relevant information and
their kind support on the basis of which this report has been prepared.
I would also like to thank all the executives, distributors and staff of all other
FMCG companies which we have considered.
I would also like to thank Mr. Sarvjeet Singh (Mentor for the summer training),
Mr. V. S. Solanki Sir & Mr. Michael Samuels Sir who helped me and guided me
through the course of internship.
Last but not the list , I am thankful to all retailers who gave their precious time
and support to fulfil this task, without their co – operation the study would not
have seen the light of the day & complete.
Sidharth Shankar Jha
M – 209061
IPM, MEERUT
CERTIFICATE FROM THE ORGANISATION
3
4
CERTIFICATE FROM FACULTY GUIDE
This is to certify that the project report entitled “RURAL DISTRIBUTION OF
COCA – COLA” made during the summer internship done at “HINDUSTAN
COCA – COLA BEVERAGES PVT. LTD” is a bonafide record of work done by
SIDHARTH SHANKAR JHA and has been submitted in the partial fulfilment of
the requirement of Post Graduate in Management from Institute of productivity
& Management, Meerut.
Mr. Sarvjeet Sir
Deputy Director
IPM, Meerut
LIST OF CONTENTS
5
S.NO PARTICULARS PAGE NO
1 BRIEF SUMMARY OF THE PROJECT 10
2 OBJECTIVES OF THE PROJECT 15
3 INTRODUCTION A Brief Insight – The FMCG Industry in India A Brief Insight – Beverage Industry in India
181921
4 THE COCA – COLA COMPANY HistoryHINDUSTAN COCA – COLA BEVERAGES PVT. LTD.(HCCBPL)About the CompanyHINDUSTAN COCA – COLA BEVERAGES PVT. LTD. PATNA Manifesto for Growth Values Mission Products Distribution network Setup of Coca – Cola
24
26
28
29293135
5 LITERATURE REVIEW 37
6 RESEARCH METHODOLOGY 40
7 FINDINGS Distribution Network and role of different channel partners Distribution Margins to the channel partners Order Collection Mechanism Delivery Mechanism Frequency of Service Investment and ROI of the different channel partners Sales Structure Data Management & MIS
424246475153545763
8 SUGGESTION Gaps and opportunities in the current rural distribution set up of Coca – Cola Opportunities to leverage the existing channel of different FMCG Companies Present Rural Distribution set up of Coca – Cola New Distribution model suggested by us Future view of our model Distribution model of COKE CHACHA
67
6770
70717274
9 LIMITATION 77
10 BIBLIOGRAPHY 79
LIST OF FIGURES
6
FIGURE NO
PARTICULARS PAGE NO
CHAPTER 4
4.1 Location of COBO, FOBO in India 28
4.2 Working with bottlers 29
CHAPTER 7
7.1 Distribution Network of Coca Cola 42
7.2 Distribution Network of Parle 43
7.3 Distribution Network of HUL 43
7.4 Distribution Network of Dabur 44
7.5 Distribution Network of ITC 45
7.6 Distribution Network Nestle 45
7.7 Order Collection of Coca – Cola 47
7.8 Order Collection of HUL 48
7.9 Order Collection of Parle 49
7.1 Order Collection of Dabur 49
7.11 Order Collection of ITC 50
7.12 Order Collection of Nestle 50
7.13 Sales Structure of Coca – Cola 57
7.14 Sales Structure of HUL 58
7.15 Sales Structure of Parle 59
7.16 Sales Structure of Dabur 60
7.17 Sales Structure of ITC 61
7.18 Sales Structure of Nestle 62
CHAPTER 8
8.1 Rural Marketing 67
8.2 Present Rural Distribution of Coca - Cola 70
8.3 New Distribution Model 71
8.4 Future view of our Model 72
8.5 Distribution Model of COKE CHACHA 74
LIST OF TABLES
7
TABLE NO
PARTICULARS PAGE NO
CHAPTER 1
1.1 Distribution Network of different FMCG Companies 11
1.2 Distribution Margin to the channel Partners 11
CHAPTER 8
8.1 Initial Investment of Coke Chaha 74
8.2 Investment of Coke Chacha in distributing the products to other outlet
75
8
CHAPTER - 1
BRIEF SUMMARY ABOUT THE PROJECT
9
The work assigned was to study the Rural distribution of the top 5 FMCG
companies and suggest opportunities for enhancing the Rural distribution of
Coca-Cola in Bihar.
Thus project was: -
Study the rural distribution of 5 FMCG companies and suggest opportunities for
enhancing the rural distribution of Coca Cola. For knowing the rural distribution
information requirement was:-
Distribution network and role of different channel partners.
Distribution margin to the channel partner.
Order collection mechanism.
Delivery mechanism – Company to Distributor, Distributor to the
rural partner, rural partner to the outlet.
Frequency of service.
Investment and ROI of the respective channel partners.
Sales structure.
Data management and MIS.
For this we had to collect the information from the distributors of different
FMCG Companies as well as distributors of Coca–Cola of rural areas. We went to
the urban and rural distributor of the different FMCG companies and asked
question on the 8 objectives stated above. We had taken companies like HUL,
Parle, Nestle, Dabur and ITC.
We also got the knowledge of the distribution setup of Coca–Cola.
By analyzing the information on the above mention objectives we had
to find the gaps and opportunities in the current Rural Distribution set
up of Coca–Cola. We had to also find the opportunities to leverage the
existing channel of different FMCG companies.
DATA COLLECTION: -
Data was collected from different location of Bihar as:-
10
Patna
Aarah
Darbhanga
Jhanabad
Gaya
Bhagalpur
1. Distribution network and role of different channel partners.
TABLE–1.1
Channel partners
HUL PARLE Coca
Cola
DABUR NESTLE ITC
C&F √ √ √ √ √ √
Super
Distributor
√
Distributor √ √ √ √ √ √
Wholesaler √ √ √ √ √
Retailer √ √ √ √ √ √
{√ Available}
ANALYSIS
In all other FMCG companies, there is one more intermediary which is
wholesaler. The wholesalers have a benefit that they are not bound to sell a
single company product. They can sell different company products. Coca–Cola
should focus on these wholesalers as this channel partner can help in
distributing the products very well.
2. Distribution margin to the channel partner.
TABLE-1.2
Channel partners
HUL PARLE Coca- DABUR NESTLE ITC
11
Cola
Distributors 4.76% 5.80% 1.44%
- 3%
Rural
Distributors
3.50% 4.00%
Super
Distributor
5.00%
Stockiest 5.63% 1.00%
AMC 3.57%
Wholesalers 5.00% 1.50% 3.00% 2.00%
Shakti Amma 3% -
10%
Retailer 10.00
%
15.00% 13.69
%
10.00% 10% - 12% 8% -
10%
ANALYSIS
Coca-cola gives a good margin to its rural outlet i.e. 13.69% is very good, with
respect to the other FMCG companies. Only PARLE gives a higher margin to the
retailers i.e. 15%.
3. Order collection mechanism.
ANALYSIS
In Coca – Cola there is no fixed day of stock keeping for the rural distributor like
other FMCG companies. For AMC and the outlets, orders are not taken by the
RMD where as HUL, Nestle, and Parle; the order is taken by the ME. Also in rural
areas the order is not collected with the help of Blackberry handset as it is
done in urban areas. HUL is the only FMCG Company which is using HTC
handsets in order collection in some rural areas.
4. Delivery mechanism–Company to Distributor, Distributor to the rural
partner, rural partner to the outlet.
ANALYSIS
Deliver mechanism in rural distribution of all the company is almost the same.
12
But in some companies like Nestle bears 75 % of the transportation cost and
the rest 25% is beard by different channel partners.
5. Frequency of service.
ANALYSIS
Frequency of service of all the company are near about the same.
6. Investment and ROI of the respective channel partners .
ANALYSIS
Retailers of Coca -Cola has to invest in GOD (Glass On Deposit) to the company
which is an extra investment to the retailers. The same is the case with the
distributor and AMC whereas it is not with the other FMCG companies. Also in
Coca-Cola all the intermediaries has to deal with the cash because Coca – Cola
does not do businesses in credit.
7. Sales Structure
ANALYSIS
There is only one RMD for 120km of area and 1000 outlets. Which is not
sufficient? The company should assign more RMD is these rural area; so that
the work should be divided equally is these RMDS. This will lowers down their
work load & will increase their work efficiency
8. Data Management and MIS
ANALYSIS
Coca-cola does not provide any software to its distributor. Whereas HUL, Nestle,
and Johnson & Johnson distributor have some kind of software (Respect
generating) provided by the respective company. Like j & j provide positive
spiral V3. It include reports like top article, dead outlet, reports attribute wise,
product wise, retailers wise, reports like actual receipt v/s order place,
Distributor -5.8 % in other products and 4.8 % milk items.
Rural Distributor –4 % in both items (milk as well as others).
46
Retailers –It varies between 10% - 12%.
Wholesalers – 2 %
3. ORDER COLLECTION MECHANISM
COCA–COLA-Company has appointed RMD (Rural Market Developer) for the
field work. These RMD takes the order from the retailers and AMC. Generally
RMD takes order on beat plan i.e. one RMD has 200 – 250 retailers with him
and it is up to the RMD to take orders twice in a week from one retailers. Some
times RMD takes the order on mobile phone in spite of visiting the retailers
personally. Then RMD passes the order to the local distributor. In urban areas
the MD (Market Developer) uses the Blackberry Handset to take the order. By
taking the order on this handset it automatically get generated to the database
of the company as well as to the distributor. The distributor gives the order to
the ASM (Area Sales Manager). Then the ASM forwards the order to RTM in the
main office twice a month because the distributor has to keep at least 18 days
stock with him.
FIGURE–7.7
HUL
Company has appointed MEs (Marketing Executives) for the field work. These
MEs takes orders from different outlets and then place the order on a hand
device known as HTC device.
47
Market Developer of Coca - Cola
MD Takes order on Blackberry (hand device of Coca-Cola)
Coca Cola company database
Concerned Godown or the concerned Distributor
Forwards the order automatically to company and concerned godown
HTC is the device which automatically forwards the order to the concerned
Distributor as well as to the company. HTC has the functions which immediately
generates the total value of the order.
FIGURE – 7 .8
PARLE
Company has appointed SMs (salesman) for the field work. These SMs takes
orders from different outlets. They take order on NOC (new order collection)
book and they place the order too the rural distribution point.
SM takes a order in MSSS (monthly stock and sales statement) and place the
C&F.
48
Marketing executives of HUL
ME Takes order on HTC (hand device of HUL)
HUL company database
Concerned C&F or the concerned Distributor
Forwards the order automatically to company and concerned godown
Salesman of PARLE
SM Takes order on NOC (new order collection book
Forwards the order to concerned rural distributo
PARLE
Forwards the order to Concerned C&F
FIGURE–7.9
Dabur
Company has appointed SMs (sales man) for the field work. These SMs takes
orders from different retail outlets and then place the wholesale point.
The salesman takes order to the SGB (sales generation book) and forwards the
order to the concerned rural wholesale Distributor. As well as to the company.
FIGURE–7.10
ITC
Company has appointed PSR (Pilot sales representative) for the field work.
These PSR takes orders from different retail outlets and then place the order on
an OGB (order generation book).
PSR take order to an OGB (order generation book) and forwards the order to
the concerned Distributor.
FIGURE–7.11
Nestle
49
Pilot sales representative of ITC
PSR Takes order on OGB (order generation book of ITC)
Forwards the order to concerned stockiest.
ITC company database
Concerned C&F or the concerned Distributor
Salesman of DABUR
SM Takes order on SGB (Sales generation book of DABUR)
Forwards the order concerned wholesaler
Dabur company database
Concerned super- Distributor Concerned godwon
Sales man of the distributor having the company sale book takes the order
from the urban and semi urban outlets once in a week. The rural distributor can
give order over the phone to the distributor. The rural distributor gives order to
the distributor as per their needs, it is not fixed.
FIGURE–7.12
4.Delivery Mechanism – Company to Distributor, Distributor to rural
partner, rural partner to the outlet
Coca – Cola
Company to C&F and C&F to Rural Distributor:
Company directly delivers its good to the C&F and through the C&F the goods
supply to the Rural Distributors through its own vehicles. Rural Distributors
have two vehicles only. 9 AMC works under 1 rural distributor.
The main difference between the Urban & Rural distribution is that delivery
cost is less in the urban distribution then rural distribution.
Rural distributor to the AMC as well as Retailers both:
Rural Distributor directly delivers its good to the AMCs as well as to the
Retailers. Sometimes AMCs also deliver its good to the retailers directly.
HUL
50
Salesman of Nestle
SM Takes order on SGB (Sales generation book of Nestle)
Forwards the order concerned wholesaler
Nestle company database
Concerned super- Distributor Concerned godwon
Company to Distributor and Super stockiest: -
Company directly deliver its goods to Warehouse and then to the C&F.
C&F then delivers the goods to the Distributor for Urban distribution and to the
SUPER STOCKIEST for Rural distribution by their own transport.
The main difference between the Urban & Rural distribution is that delivery
cost is less in the urban distribution then rural distribution.
SUPER STOCKIEST to Rural Partner: -
Super Stockiest have their own vehicle from which they supply the goods in the
rural area. Every vehicle goes in their particular route and it goes again in a
same route after a week.
They deliver the goods to the wholesaler, retailer and to the Shakti AMMA.
In case of Shakti AMMA the Super Stockiest delivers the products twice in a
month.
Parle
Company to C&F to rural Distributor: -
Company directly deliver its goods to Warehouse and then to the C&F.
C&F then delivers the goods to the Distributor for Urban distribution and to the
rural distribution by their own transport.
The main difference between the Urban & Rural distribution is that delivery
cost is same.
RURAL DISTRIBUTOR to Rural retailers: -
Distributor has their own vehicle from which they supply the goods in the rural
area. Every vehicle goes in their particular route and it goes again in a same
route after a week.
They deliver the goods to the retailer.
Dabur
51
Company to Super Distributor and Super distributor to rural
wholesaler: -
Companies directly deliver its goods to the C&F.
C&F then delivers the goods to the Distributor for urban super distributor and
SUPER DISTRIBUTOR deliver the goods to the rural wholesaler by their own
transport.
SUPER DISTRIBUTOR to Rural Partner: -
Super Distributor has their own vehicle from which they supply the goods in the
rural area. Every vehicle goes in their particular route and it goes again in a
same route after a week.
They deliver the goods to the wholesaler.
ITC
Company to Distributor: -
Company directly deliver its goods to Warehouse and then to the C&F.
C&F then delivers the goods to the Distributor for Urban distribution and to the
STOCKIEST for Rural distribution by their own transport.
STOCKIEST to Rural Partner: -
Stockiest have their own vehicle from which they supply the goods in the rural
area. They deliver the goods to the retailer.
Nestle
Company to Distributor:
The good are delivered to the distributor once in a week. The goods are
delivered from the company's C & F .
Distributor to Rural Distributor and Urban & semi urban Outlet :
52
Distributor delivers the goods to the Rural distributor and urban outlet once in
a week.
Rural distributor to rural outlet:
Rural distributor delivers the products to the rural outlet twice in a week.
In distributing the products company bears the 75% of the transportation cost
and the rest of the 25% of transportation cost is beard by different channel
partners.
5. FREQUENCY OF SERVICE:
COCA-COLA
The company work through the Beat plan system. Sales man goes to the particular market weekly. If sales man gets a good response from the market
then they visit 2 – 3 times in a week.
HUL
HUL works on GTM theme. (I.e. GO-TO-MARKET) Take the order per week
Deliver the order per week.
PARLE
Take the order per week. Deliver the order per week.
The distributor goes every week in a month to deliver the goods to Retailers.
DABUR
Take the order per week. Deliver the order per week.
The retail outlets who have a less capacity of purchasing goods, for these the super distributor have kept salesman to see all these outlets.
The Super distributor goes weakly to deliver the goods to rural distributor.
ITC
53
Take the order per week. Deliver the order per week.
The retail outlets who have a less capacity of purchasing goods, for these the stockiest have kept boys to see all these outlets.The Stockiest goes once in a week to Retailers.
NESTLE
Company to Distributor: Once in a weekDistributor to Rural Distr. and Urban & semi urban Outlet: Once in a week
Rural distributor to rural outlet: Twice in a week
6. INVESTMENT AND ROI OF THE DIFFERENT CHANNEL PARTNERS
COCA-COLA
Distributor: - Investment-10, 00,000
Turnover- 20, 00,000(monthly)
Margin- 4.76%
(Margin=3% excluding transportation cost)
ROI= 60, 000/10, 00,000*100=6%
AMC: - Investment – 20000
Turnover – 60000(monthly)
Margin – 3.57
ROI = 2142/20000*100 = 10.71%
Retailers: - Turnover – 15000(monthly)
Investment – 2500
Margin – 13.69%
HUL
Super Stockiest: - Turnover - 600000 (monthly)
Investment-300000
54
Margin-5.63%
(Margin=4%excluding transportation cost)
ROI= 2, 40,000 / 30, 00,000*100 = 8%
Wholesaler: - Turnover – 250000 (monthly)
Investment – 50000
Margin – 5%
ROI = 12500/50000*100 = 25 %
Shakti AMMA: - 20,000 turnover
Investment-10,000
For retailer-12,000*10/100=1200
For door to door-8000*3/100=240
Then, ROI=1440/10,000*100=14.40%
Parle
Rural distributor: - 20lakh monthly turnover
Investment-5lakh
Margin-5%
(Margin=3.5%excluding transportation cost)
Roi-20, 000, 00*3.5%/500000*100
Rural retailers: - 20,000 turnover
Investment-5000
Margin -15%
Dabur
Super Distributor: - 40lakh monthly turnover
Investment-10lakh
Margin-5%
(Margin=4%excluding transportation cost)
ROI-4000000*4%/1000000*100
55
Rural wholesaler: - 4lakh monthly turnover
Investment-1lakh
Margin-3%
ITC
Stockiest: - 20 lakh monthly turnover
Investment-5 lakh
Margin-.72% (on cigarette)
5% (personal care product)
(Margin=3.5%excluding transportation cost)
ROI= 70,000 / 5, 00,000*100 = 14%
Nestle
Distributor: Rs 40 lack Turnover
Rs 20 lack investment
Margin = 5.3% avg
ROI = 212000/2000000* 100 = 10.6%
Rural Distributor : Rs 10 lack Turnover
Rs 3 lack investment
Margin = 4 %
ROI = 40000/300000*100 = 13.33%
56
7. SALES STRUCTURE
Coca – Cola
RTM
Area Sales Manager
Sales Team Leader
Rural Market Developer
Under Rural Distributor
Sales man
Driver
Munsi
57
FIGURE–7.13
HUL
Area Sales & Commercial Manager
Sales Channel Manager
Activation In charge
Operational Manager (for distributor)
Territory sales in charge (the concerned person of HUL for rural distribution
only)
Sales Team Leader (1 STL for 10 ME)
Marketing Executive
58
FIGURE–7.14
NOTE: The work of Territory Sales in Charge is to cover all the issues of rural
distribution, such as investment issue, sales issue, any market problem etc.
Parle
Area in charge
Sales manger
Area sales manager
Area manager
Sales man
FIGURE–7.15
NOTE: The work of area Sales manager is to cover all the issues of rural
distribution, such as investment issue, sales issue, any market problem etc.
59
Dabur
Area Sales Manager
Area Sales executive
Sales officer
Pilot sales manager
Sales man
FIGURE–7.16
NOTE: The work of pilot Sales manager is to cover all the issues of rural
distribution, urban distribution, such as investment issue, sales issue, any
market problem etc.
60
ITC
Sales manager
SWSD (semi whole sale dealer)
PSR (PILOT SALES REPRESENTITIVE)
Supervisor
Distributor
FIGURE–7.17
NOTE: The work of Supervisor in Charge is to cover all the issues of rural
distribution, urban distribution such as investment issue, sales issue, any
market problem etc. and pilot sales representative plays an important role in
the rural distribution in all aspects
61
Nestle
Area Sales Manager
Sales officer
Pilot Sales man
Sales Man
FIGURE–7.18
Pilot Sales Man – All the rural area are taken care of by the Pilot sales Man .It
deals with the problem of rural distributor and rural outlet.
Sales Man – Sales man deals with the Urban outlets and distributors
62
8. DATA MANAGEMENT & MIS
Coca – Cola
Coca – Cola does not provide any software or database to the distributor to
manage sales and order list data. The work is done simply on ledgers and
register. It uses a blackberry hand set to take order in urban areas but not in
the rural areas. The order is taken by the salesmen in their monthly stock and
sales statement (MSSS) book. The salesman goes to the distribution point order
thus generated goes to the company’s database. PARLE checks this data on
daily basis and through this the company come to know about the requirement
of every C&F and Rural Distributor. The order goes to the C&F; through this the
C&F generates the order to the company about its requirement.
HUL
In most of the rural areas HUL uses HTC device to take order from the retailers.
The order thus generated automatically goes to the company’s database. HUL
checks this data on daily basis and through this the company come to know
about the requirement of every C&F and Distributor. The 2nd copy of the order
goes to the C&F; through this the C&F generates the order to the company
about its requirement.
Thus HTC device is the key player in the Data Management of HUL.
Ex of MIS Format
SALESMAN
NAME
MARKET NAME GROSS
SALE
NO. OF BILL
Parle
The order is taken by the salesmen in their monthly stock and sales
63
statement (MSSS) book. The salesman goes to the distribution point
order thus generated goes to the company’s database. PARLE checks this
data on daily basis and through this the company come to know about
the requirement of every C&F and Rural Distributor. The order goes to the
C&F; through this the C&F generates the order to the company about its
requirement.
Ex of MIS Format
SALESMAN
NAME
MARKET
AREA
GROSS
SALE
TOTAL
AMOUNT
%OF DISC. NO. OF
BILL
Dabur
The order is taken by the salesmen in their sales generation book. The
salesman goes to the distribution point order thus generated goes to the
company’s database. DABUR checks this data on daily basis and through
this the company come to know about the requirement of every C&F and
Super Distributor. The order goes to the C&F; through this the C&F
generates the order to the company about its requirement.
Ex of MIS Format
SALESMAN NAME
MARKET NAME
GROSS SALE
TOTAL AMOUNT
NO. OF BILL
ITC
The order is taken by the pilot sales representative in their OGB (order
generation book). The PSR collect the order to stockiest and deliver the order
to the urban distributor and thus generated automatically goes ITC checks this
64
data on daily basis and through the Sifyforum software. Company comes to
know about the requirement of every C&F, Distributor and rural stockiest. The
2nd copy of the order goes to the C&F; through this the C&F generates the order
to the company about its requirement.
Thus sifyforum device is the key player in the Data Management of ITC.
Nestle
It has SDS Software (Star Distributor solution). It has information like:
Daily Sales report
it is a online software
Actual receipts v/s order placed
Order placed v/s order generated
Route wise outlet wise bill value
Route wise retailing summary
Outlet wise retailing summary
Collection report - Daily cash balance
Pending bills
65
CHAPTER – 8
SUGGESTIONS
GAPS AND OPPORTUNITIES IN THE CURRENT RURAL DISTRIBUTION SET
66
UP OF COCA-COLA:
According to us the gap in the current rural distribution of coca-cola can be
seen in the following ways:-
FIGURE–8.1
Availability- This is the main thing which is concerned with the right product
at the right time, at the right place. The goods don’t reach in a time due to
road problem which leads to a negative word of mouth and customer
dissatisfaction. Other things are about electricity problem due to which the
67
product doesn’t remain chilled and thus retailer hesitate to keep a product.
Acceptability- First of all acceptability is concerned with the retailers that
product is acceptable to the retailers or not. To fulfill this gap the coca-cola has
to provide ice-boxes and deep freezer as per their requirement due to
electricity problem. The second thing is acceptability of product by the rural
consumer. It means coca-cola have to provide such type of product which is
easily acceptable to the rural consumer. As other companies provide a product
in a smaller pack, in the same way the coca-cola has to provide a bottle size
which is different from urban areas and which is easily acceptable to the rural
consumer.
Affordability- The main thing in the rural area is about the affordability of the
product. As other companies provide small unit packs which is affordable by
the rural consumer, the same process should be followed by the coca-cola to
bridge the gap of affordability. As we know that due to low income level and
lower standard of living the rural people are more conscious about the pricing
issue which has to be seen by the coca-cola. Coca-Cola has addressed the
affordability issue by introducing the returnable 200-ml glass bottle priced at
Rs 5. The initiative has paid off: Eighty per cent of new drinkers now come
from the rural markets. This is a good move, like this the company has to
make different strategies to lure the rural consumers.
Awareness- Awareness is termed as a backbone of marketing. If consumer will
not be aware, how come they know about the product and their features? So,
main thing is that there should be a proper advertising in the rural areas. Such
as signage, hoarding should be placed in a proper place. Vans should also be
utilized for the advertisement. In many places the folk-dances are organized in
the rural areas, so in these places the coca-cola can place an advertisement or
some Programs such as some promotional event to make aware about the
product and some new offers.
We also found some gap in the current Rural Distribution set up of Coca-Cola
that are-
As we know that the rural distributor handles the 50-60 villages and one RMD
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sees the 3 rural distributors. This is the tough task. If the rural distributor can
handle less villages may say 20-30 then they can nicely manage the work load
and other new distributor can get an opportunity to invest and to manage their
work which is also beneficial for the Coca-Cola.
Another thing is that the distributor place an order to the RTM and RTM to the
Company. So in our point of view it is a lengthy process which leads to a late in
a delivery system. Due to which the goods doesn’t reach in time in the rural
area. So it impact in the unavailability of product which leads to a negative
word of mouth for a company. So the company has to take some steps
regarding this issue to make fast delivery of goods.
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OPPORTUNITIES TO LEVERAGE THE EXISTING CHANNEL OF DIFFERENT FMCG COMPANIES
Present Rural Distribution set up of COCA-COLA:
COCA-COLA Company
C&F of COCA-COLA
Rural Distributor Rural Distributor
Rural DistributorAMC AMC
AMC Retailers Retailers
Retailers
FIGURE–8.2
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1 RURAL DISTRIBUTION AREA
Note: There are 3-4 rural distributors under each Rural Distribution Area.
After our survey and research work we have figured out a new distribution
model for COCA-COLA Rural, in this model we added the idea of SUPER
STOCKIEST presently used by HUL and DABUR. This Super Stockiest will act as
a warehouse in the Rural Sector. Definitely Company has to bear a good
amount of investment on its set up. But, concentrating on the future prospect
we will find that we can form a HUB & SPOKE model around this Super
Stockiest.
So, this idea will definitely give an extra edge to the company’s distribution.