SONY INDIA PVT. LTD.

– DISTRIBUTION CHANNEL STUDY

INTRODUCTION
A distribution channel is a Path or 'pipeline' through which goods and services flow in one
direction from vendor to the consumer, and the payments generated by them flow in the
opposite direction from consumer to the vendor. A distribution channel can be as short as
being direct from the vendor to the consumer or may include several inter-connected
(usually independent but mutually dependent) intermediaries such as
wholesalers, distributors, agents, retailers. Each intermediary receives the item at
one pricing point and moves it to the next higher pricing point until it reaches the
final buyer.

This assignment is an attempt to study the distribution network of SONY INDIA PVT.LTD.
Being an electronics company they manufacture products mainly at Japan, China &
Malaysia. This assignment shows how the product reaches from the manufacturer to the
consumer or the business customer, the channel members involved in the process and their
functions.

This assignment contains:

-History of SONY corporation

-Brief on SONY INDIA LTD and its products.

-Distribution channel of SONY INDIA LTD.

-Functions of channel partners

- Recommendations

-Conclusion

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SONY CORPORATION - HISTORY

Sony was founded in 1946 by Masaru Ibuka and Akio Morita. The two complemented each
other with a unique blend of product innovation and marketing savvy, and formed a
company that would eventually grow into a more than $60 billion global organization.

In 1950, in post-war Japan, Ibuka and Morita created Sony’s first hardware device, a tape
player/recorder called the G-TYPE recorder. Materials were in such high demand that the
first tapes were made of paper with hand painted magnetic material applied by Sony’s first
engineers.

Sony, is a Japanese a multinational conglomerate corporation headquartered in Minato,

Tokyo, Japan and the world's fifth largest media conglomerate with revenue exceeding
$78.88 billion U.S. (FY2008). Sony is one of the leading manufacturers of electronics, video,
communications, video game consoles, and information technology products for the
consumer and professional markets. Its founders Akio Morita and Masaru Ibuka derived the
name from sonus, the Latin word for sound, and also from the English slang word "sonny",
since they considered themselves to be "sonny boys", a loan word into Japanese which in
the early 1950s connoted smart and presentable young men.

Sony Corporation is the electronics business unit and the parent company of the Sony
Group, which is engaged in business through its eight operating segments – Consumer
Products & Devices, Networked Products & Services, Disc Manufacturing, Pictures, Music,
Financial Services, Sony Ericsson and All Other. These make Sony one of the most
comprehensive entertainment companies in the world. Sony's principal business operations
include Sony Corporation, Sony Pictures Entertainment, Sony Computer Entertainment,
Sony Music Entertainment, Sony Ericsson, and Sony Financial. As a semiconductor maker,
Sony is among the Worldwide Top 20 Semiconductor Sales Leaders. The company's current
slogan is make.believe. Their former slogan was like.no.other.

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SONY INDIA LTD. & PRODUCTS
Sony Ltd. is a multinational company which deals in electronics and consumer durables. In
India Sony India Pvt. Ltd. runs all the operation of the parent company. They deal in a range
of products such as LCD television, Music system, Laptops, Desktops, Cameras, gaming
systems and other related accessories.

Sony has its standardized product category all over the world. Sony India Pvt. Ltd. does not
have any production unit in India. They used to import all the products to the Hub
warehouses situated in Kolkata, Chennai, Mumbai and Noida. In these Hub warehouses they
run some value added activities like labelling, bar coding, packaging and warranty card
insertion. After all the value added activities are over they used to transfer these products to
the spoke warehouses. The job of Spoke warehouse is unloading, storing, picking and
delivering to the distributors and dealers within a specific region. In some places the
company itself runs the spoke warehouses and in some cases they assign the jobs to the
C&F agents.

PRODUCTS:

CATEGORY PRODUCTS

TELEVISION & PROJECTOR 1) LED 3D, LED,LCD & CRT TVs

HOME AUDIO & VIDEO
HOME THEATRE SYSTEM
DIGITAL PHOTOGRAPHY
DIGITAL SLR
VIDEO CAMERA
2)Projector: Home & Business
3)Public display panel
1)BLU-RAY, DVD/HDD/CD players
2) Hi Fi System
3)Accesories
1)DVD Home Theatre System
2)Home Theatre component system
3) Home theatre system accessories
1)Cyber shot Digital camera
2)Digital Photo Printer
3)Digital photo frame
1)Digital SLR Camera
2)Lens
3)Accesssories
1) Handycam

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 2)Handycam Accessories
COMPUTERS 1)VAIO Laptop and computer
2)VAIO Accessories
3)Memory Stick
4) Flash or Data media
5)Storage media
PORTABLE AUDIO 1)WALKMAN MP3
2)CD WALKMAN
3)Voice Recorder
4)Audio Accessories
GAMING DEVICES 1)PLAYSTATION3
2)Playstation2
3)PSP( Playstation Portable)
4) Game CD/UMDs
MOBILE PHONE 1)Basic Phone & Smart phones
2)Mobile phone accessories
CAR ENTERTAINMENT 1)XPLOD CD player
2) CAR LCD screen
3) Amplifiers
4) Speakers/ Sub woofer
5)Aaccessories
STORAGE AND RECORDING 1)Memory stick
MEDIA 2)USB storage media
3)Data storage media
4)Compact flash
5)Audio Media
6)Storage Media
7)Professional media
BATTERY & CHARGER 1)BATTERY
2) CHARGER
DISTRIBUTION CHANNEL – SONY INDIA LTD.
The company follows two types of distribution process mentioned below:

 Primary Distribution
 Secondary Distribution

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Primary Distribution:

Sony India Pvt. Ltd. term Inter Branch Transfer (IBT) as their primary distribution process. If there is a
shortage in any warehouse they used to transfer the required products from the nearest available
warehouse. This transfer can be done in many ways like courier, surface transport, air or train.

For example if there is a shortage of 10 LCD Bravia television in Delhi spoke warehouse they will first
enquire at the Noida Hub if the Hub cannot meet the requirement then they will check the Gurgaon
warehouse, if they also cannot meet the requirement then concerned person at Delhi warehouse
will check for the products in the Gaziabad warehouse and so on. The concerned person in the Delhi
warehouse will look for available products in other warehouses through SAP ERP system. If the
products are found available in any warehouse the concerned person at Delhi warehouse will place
an order with the specific warehouse. Then the concerned person in that specific warehouse say
Gaziabad will transfer products to the Delhi warehouse by surface transport .

Secondary Distribution:

Secondary distribution is used for dealer as well as distributor delivery. The company uses different
routes for delivering different dealers and distributors based on their location. For example say any
route is assigned no.1 serving the area Nehru place, Lajpat Nagar, South Ex., Sarojini nagar. Any truck
going out from the warehouse for Route-1 will serve all the dealers in this route.

CHANNEL FLOW

Since Sony is not manufactured in India it is imported to warehouses situated in Kolkata,

Chennai, Mumbai and Noida. It is from here it is sent to the concerned dealers for each
states, Theses dealers then distributes it to various retailers, SONY WORLD ( exclusive
showroom) and other business houses for end use.

Diagram is presented below on how SONYs distribution networks-

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DELHI
GAZHIABAD
GURGAON
DEHRADUN
LUCKNOW
LUDHIANA
GUWAHATI
CHANDIGARH BHUBANESW-AR
PATNA
PARWANOO
RANCHI
NOIDA KOLKATA
JAMMU (DADRI/DELHI ) (HALDIA PORT)
4DD
JAIPUR
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5

5 IMPORT 6
AHMEDABAD
BANGALORE
INDORE HYDERABAD
COCHIN
PANVEL CHENNAI PONDICHERY
GOA (NHAVA-SHEVA) )PORT) 3 (CHENNAI PORT)
COIMBATORE
RAIPUR VIJAYAWADA

MUMBAI

NAGUR

PUNE S/D

Sony’s distribution channel starts from importing. The products get imported to various
ports in NOIDA, KOLKATA, PANVEL & CHENNAI. It is from these ports the products are
distributed to various states under the concerned territory. FOR example in Northern India
which is served by the Noida warehouse, has 10 spokes ie, places like Delhi, Gurgaon,
Luknow etc , the warehousing in these places receive products from Noida and then it is
distributed to retailers across different cities . SONY operates its own C&F and also gives it
to third parties. In the warehouses which are controlled by Sony India Pvt. Ltd., every aspect
of the job like unloading, storing, picking, delivery, insurance and all other responsibility is

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vested on the company itself but in third party warehouses Sony does only the job of
monitoring . All other responsibilities regarding warehousing, distribution, inbound logistics
are vested on those concerned third parties.

For better understanding of the distribution process of Sony India Ltd. one third party
service provider warehouse is taken into consideration.

 Gurgaon spoke warehouse – Gati Ltd. (C&F)

Gurgaon ( C&F Gati Ltd.):

Work done by C&F:

Gati Ltd. does the following activities in the below mentioned sequence:

1. Unloading
2. Storing
3. Receiving Sales Order
4. Picking
5. Packaging
6. Docketing
7. System entry through hand held PDA
8. Loading
9. Transfer to HUB of Gati Ltd. in Pataudi, Gurgaon
10. Route wise delivery
11. Consignment delivered
12. POD (Proof Of Delivery) receive
13. System Update
14. Bill generation (monthly) for Sony India Ltd.
15. Bill Processing

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The next diagram shows clearly how product moves from the warehouse in Gurgaon to the
end consumer anywhere in Gurgaon. Sony also supplies technology and other products like
public display panels to hotels, airports, railway station etc which makes it eligible as B2B
company.For example Sony supplies audio components for Maruti.

GURGAON
W/H

SONY CENTRE SONY BUSINESS AUTHORIZED

(distributor) EXCLUSIVE BUYER DEALER

DEALER CUSTOMER CUSTOMER MARUTI CUSTOMER

FUNCTIONS OF CHANNEL PARTNERS

Transportation:

For transportation CHANNEL PARTNERS uses its own vehicles or vehicles of other
transporters. There is only one TATA ACE fully dedicated for the warehouse for urgent
delivery at any time during the working hours. They use to send one person other than the
driver with every consignment for betterment of unloading, documentation procedures etc.
The number of persons can be increased depending on the permission of the company.

Employees:

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The normal C&F employs 4 labors for unloading, storing, picking, loading. 2 people for
official works, 1 data entry operator. Sony India Ltd. has appoints one official for monitoring
the entire activities done by the C&F.

Warehousing:

The floor space allotted in the warehouse for Sony products in the warehouse is 3000 sq.ft.
The warehouse stores 300 S8KUs.

There are three kinds of pallets used for storing and moving items. They are:

 Wooden Pallets
 Plastic Pallets
 Brown paper Pallets
Big items such as LCDs, Home theatres, laptops, TVs are stored on wooden pallets of
standardized 12 sqft. Wooden pallets stored on floor should not go beyond the yellow line
drawn in the warehouse. This is done for smooth functioning inside the warehouse and to
prevent injury of staff. The pallets are placed two feet from the wall for smooth functioning
inside the warehouse and to prevent items from wet walls during the monsoon and also fire
reason. High value and small items like handycams, cameras, mobile phones and other
accessories are stored in the cage at the end of the warehouse. They use one Handheld
Pallet Truck for moving the items inside the warehouse.

Retailer:

There are three retail formats in which Sony sells it’s products. They are:

 Sony Centre
 Sony Exclusive
 Dealers and Retailers
Sony uses pull strategy rather than push strategy. Other competitors like Samsung and LG
uses push strategy where the companies influence the customers by frequent promotions,
retailers by high percentages on sales.

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One sample from each category is taken to understand their formats and operations.

Company owned warehouse:

The following activities for the Delhi warehouse in the below mentioned sequence:

1. Unloading

2. Storing
3. Receiving Sales Order
4. Picking
5. Packaging
6. Docketing
7. System entry through hand held PDA
8. Informing Transporter
9. Loading
10. Post goods issue through SAP
11. Route wise delivery
12. Consignment delivered to whole sellers
13. POD (Proof Of Delivery) receive
14. System Update

These are the various functions carried by the channel members to endure flawless
purchase with minimum effort to the customer. The channel partners must make sure all
the products are available for purchase at any point of time.

RECOMMENDATIONS

Distribution decisions focus on establishing a system that, at its basic level, allows customers
to gain access and purchase a marketer’s product.  However, marketers may find that

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getting to the point at which a customer can acquire a product is complicated, time
consuming, and expensive.  The bottom line is a marketer’s distribution system must be
both effective (i.e., delivers a good or service to the right place, in the right amount, in the
right condition) and efficient (i.e., delivers at the right time and for the right cost). 

In order to facilitate an effective and efficient distribution system many decisions must be
made including (but certainly not limited to):

 Assessing the best distribution channels for getting products to customers

 Determining whether a reseller network is needed to assist in the distribution

process

 Arranging a reliable ordering system that allows customers to place orders

 Online purchasing option and delivery system and Creating a delivery system for
transporting the product to the customer

CONCLUSION
In this assignment I have tried to portray the importance of selling & distribution. Today
every vendor needs the help of professional distributor in order to strengthen their cause
for which they are operating. Distributor works for the vendor as well as dealer, therefore
distributors deal with larger group of industries. The distributors are not only useful for
vendors but also useful for continuous supply of the product in the market. In its real sense
the distributor plays a very important role in every organization big or small.

Selling & distribution activities takes place in all the organizations big or small but it depends
on the organization either to have its own department or to outsource it to distribution
companies. In case of vendors the major reason for having distribution companies is to
create greater demand and bigger market for the product.

REFERENCES
www.wikipedia.org

www.sony.com

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www.reserchandmarkets.com

http://tutor2u.net/business/marketing

http://www.businessdictionary.com

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