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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?

Outside the firm
Firm involved in negotiatory functions
Managements involvement in
the process
External contactual organization that management
operates to achieve its distribution objectives
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 (1million
directly..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 70
mn 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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URBAN
A Typical FMG Company
RURAL

Organized
Retail Big
Bazaar, Food
World,
Spencer's

Small & Medium

Sized Kirana Stores
Spread Across the
City

Super Markets in
SEC A Areas of a city

Other
Retailers
based on the
company

Pan Beedi Shops

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Institutional Vs
Retail Customer

EXPERIENTIAL
STORES, SONY
WORLD, AYUSH
CENTERS

NEW CHAN.. DTH

SERVICE
PROVIDERS

ONLINE CHANNELS,
BOOKS, REDIFF, iTunes..

Rural
Urban

VENDING MACHINES,
TELE SHOPPING

TRADITIONAL TRADE MON-POP STORES, MINI

SUPER MARKETS, ORGANIZED RETAILERS,
WHOLESALERS, SHOP-IN-SHOP.

LOW-TEC, TIE-UP
WITH SHG GRPS,
POSTOFFICES,
COOPERATIVES..

Why the growing importance of

marketing channels?

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1. The explosion of information technology and

E-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
Packaged
Machine Goods

15%

28%

30%

41%

Manufacturing 40

19

30

33

Raw Material 45
& Components

53

40

26

Distribution

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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)

Retailers

Wholesalers

Super Stockist
(Rural)

Retailers (SemiUrban , Rural)

Rural Retailers

Distributors
(Rural)

Rural Retailers

Can we do away with

intermediaries?
If yes, how or why?
If No, why not?

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