CHAPTER- 1

INTRODUCTION TO TOPIC
Channels of distribution have a vital role to play, especially in the distribution of consumer
goods. The most innovative product offered at an attractive price would be of no use unless there
is an efficient distribution system. The consumer will not search for the product; it has to be
made available at a convenient place from where he can obtain it easily. The distribution channel
provides three types of utilities –time, place and ownership. Time utility means the products
should be made available when consumers want them. Place utility is provided by making the
product available at a location where a consumer wants it. Ownership utility is created when the
physical possession and title to the product are transferred to the consumer. Market channels play
a far more important role than the mere transporting of goods from producer to consumers. The
economic function of the various institutions that make up a channel are cost reduction,
financing, co-operation in setting prices, communication link between the buyer and the user,
promotional assistance, and reduction in the number of transactions.

COMPANY PROFILE

Hangyo Ice Creams Pvt. Ltd., is a flagship company of Srikrishna Group, which is a Rs.100
crore entity with interests spanning various sectors like milk and milk products, ice creams and
fresh foods, restaurants and hospitality. Srikrishna Group has the distinction of being the first
organized private sector venture in milk industry in Karnataka state. Continuing in the same
pioneering tradition, Hangyo Ice Cream Pvt. Ltd., is also Karnataka’s first private ice cream
manufacturer in the organized sector. Incorporated in 2002, Hangyo, is today a leading ice cream
brand loved by consumers across all segments of society in its rapidly growing market spanning
the states of Karnataka, Kerala and Goa.

ISO Certification:

Hangyo Ice Cream Pvt. Ltd., is a ISO 22000:2005 certified company for both its divisions -
Dairy and Ice Cream. Hangyo is probably the first ISO certified company in private sector in ice
cream manufacture in the state.
Market Reach:

Hangyo ice creams are offered in a variety of presentations like cups, cones and candies. At
present 138 varieties of ice creams are available in these novelties and also in larger take home
family packs. Hangyo Ice Creams are presently marketed throughout Coastal Karnataka from
Mangalore to Karwar and in major cities of the state like Bangalore, Mysore, Hubli, Dharwad,
Belgaum, Haveri, Gulbarga, Bagalkot, Bijapur. The small towns like Athani, Navalgund,
Naragund, Ranebennur, Gadag are also covered. Hangyo Ice Creams have already opened in
Solapur and Kolhapur, in southern Maharashtra.

Retailing Models:

Strong retailing network is the key to win any retail market. Hangyo Ice Creams has introduced
an unique retail format which has enabled the brand to remain consistently successful. This
format relies on a chain of franchisees called “HangyoParlours” and “Hangyo Shoppes” for the
vending of ice creams and milk products.

Hangyo Ice Creams Pvt. Ltd., presently has a network of over 6000 retailers in its operational
area. In larger cities, Hangyo Ice Creams also has valuable associations with bigger Retailing
giants like Big Bazaar, Metro, More and Reliance Fresh for display and sales of its varieties of
ice creams
Infrastructure:

Maiden Unit : The company’s maiden full-fledged manufacturing plants are situated in Heroor
Village of Udupi District. This plant was established in 2003 with all indigenous content.

The plant has production capacity of 10,000 litres of ice cream per day. All the ice cream
products of the company are manufactured in this plant in various presentation like Cones,
Candies, Sundaes and Ice Cream Cups.

The dairy unit of the plant has a capacity of 50,000 litres/day of processing and distribution of
milk and milk products.

New Plant : In view of overwhelming response from the channel partners and also the
consumers, Hangyo Ice Creams has embarked on a major expansion drive which will result in
increased capacity and bigger market share.
As a first step in this direction, a New Plant has been established by the company at Hosalli
Village, Kirwatti on National Highway 63 near Yellapur, Uttar Kannada District. The plant is
just 45 kms from HubliThe new imported automatic plant has a production capacity of 16,000
litres/day of ice creams and can produce ice cream mix too. The company had also installed the
continuous freezers to match the processing and manufacturing process; compatible packing
capacity is also available to support the production process.

VISION:
Vision statement describes a desirable state that a company wishes to attain at some time in the
future. Vision statement of Hangyo Ice Creams Pvt. Ltd. is to be the major player in the state of
Karnataka with the product folio.

MISSION:

 To improve quality and quantity of products.

 Services by promoting healthy practices with economical.

 Operation and with an aim to service the ultimate consumers.

 To their utmost satisfaction at affordable prices with an optimization of group’s wealth.

OBJECTIVES:
The objectives of the company are as under
 Maintain on time delivery of products.

 Improve awareness of Food Safety Management System among all the employees.

 Empower the employees through training to delegate the work to meet the customer
needs.

 Improve the quality and quantity of sales of Products.

 Creation of employment.

 Better utilization of skilled local manpower.

 Increase the demand for the product.

  To ensure as well as enhance customer satisfaction

Quality Policy:

The quality policy of the Company is as under.

 Quality and Safety requirements in all stages of Procurement, Processing, Packing,

storage and supplying of Milk, Milk Products and Ice Cream for Customer Satisfaction.

 Evolving and Practicing Integrated and Interactive Total Quality Management.

 Quality Improvement as continual process and improve the Quality Management System
continually to ensure and enhance Customer satisfaction.

PRODUCT PROFILE:

 Dairy Division has wide range of milk and milk products. Following is the details of the
products.

 Srikrishna Toned Milk: This milk is having 3% fat and 8.5% SNF content and packed in
500 ml and 1000 ml food grade polythene pouches.

 Natural Rich Milk: This milk is having 4% fat and 8.5% SNF content and this is also
packed in 500 ml and 1000 ml food grade polythene pouches.

 Srikrishna Curds: Curds are prepared from toned milk. These are packed in 200 ml and
500 ml food grade polythene pouches.
  Srikrishna Pot Curd: This is prepared from Natural rich milk and packed in 250 ml
earthen pots in order to preserve the natural taste, texture and flavor.

 Srikrishna Buttermilk: This is available in sachets of 200 ml and in bulk, in two varieties,
Masala Buttermilk and Jeera Masala Buttermilk.
 Srikrishna Lassi: This is available in 200 ml sachets, in two varieties viz., plain and
mango.
 Machineries being used for milk operations are Storage Tanks, Cream Separator,
Pasteurizer, Homogenizer, Packing Machine, Boiler, etc. Other infrastructure facilities
include Refrigerated Cold Storage, Diesel Generators, etc.
 The daily distribution of milk and milk products is about 25,000 liters. Hangyo Ice
Creams Pvt. Ltd., has two divisions, viz., Dairy Division and Ice Cream Division.

The various departments are as follows:

1. Purchase Department

2. Production Department

3. Stores Department

4. Quality Control

5. Maintenance Department

6. Marketing Department

7. Personnel Department

8. Dispatch

9. Accounts Department
Purchasing :
Suppliers are analyzed on the basis of quality, capability to deliver, past experience and
reputation. Most of the purchases are made locally. Other purchases are made from places like
Mumbai as per the needs and quality.

The various raw materials include:

Sugar Black Current Fruit

Glucose Angeer
Milk Powder Supporta
Butter Banana
Milk Cream Strawberry Fruit
Mango Pulp Litchis Fruit
Stabilizer Food Colors
Emulsifiers Cashew

Other seasonal Fruits

The purchases are generally made from wholesalers on the basis of the demand. Seasonal fruits
are purchased when available, processed and stored. The local sources are preferred mainly to
minimize inventory control. The food color used is also organic and that is the reason why the
slogan of the organization goes this way “SPREADING HAPPINESS NATURALLY”.
Purchasing Activity:

Terms and Conditions of Purchase:

1. Period of supply of raw materials need to be specified.

2. Load of raw materials to be supplied has to be specified.

3. Whether the transport facility will be provided by the factory or the supplier has to
make arrangements.
 All the user departments will send the list of regular items required by them to stores. If
the stock availability is found to be insufficient stores department in consultation with
production manager shall place purchase orders.

Production
The different steps followed before the process of production starts
1. Receiving the Milk Cream:-The manufacturing process of Hangyo starts when milk
cream is received from Srikrishna Dairy Private Limited. The quality of milk measured
using the following factors.
a) Taste has to be pleasant
b) Flavor has to be good
c) Fat content should be 9.5%
d) Presence of SNF content

2. Sample Testing: -
The first and foremost test is milk testing. Milk used for milk cream will be tested in the
laboratory situated in the plant.
The various tests are:
a) Fat Test
b) Protein Test
c) Total Solids Test
d) Activity Testing
e) Color Testing
f) Flavor Testing
g) Nuts and Fruits Testing
h) Weight Testing
i) Melting resistance Test
j) Taste Testing
k) Bacteria Test
The Process:
Ice cream production is mainly dependent on the quality of Ice creams. As Hangyo is situated
near Srikrishna dairy there is no problem in the availability of milk cream which is a very
important component in Ice cream production. The milk cream used in Hangyo Ice Cream is
pure and fresh. Hangyo contains permitted colors, added flavors of milk and milk fat. At each
step the production manager will test the product.
Selecting and mixing of ingredients: 20
Ingredients like milk cream, other milk products and non-dairy products like sugar, glucose,
stabilizer and emulsifiers are mixed together in a tank at certain temperature.

Batch Pasteurizer:-
Heating:-
In the Batch Pasteurizer first milk will be heated that is indirect heating by water through jacked
tank without direct heating.

Addition of other raw materials:

At 500 c other raw materials like skimmed milk powder etc. are added.

Pasteurization and holding for 30 minutes:-

It is a process whereby the mixture is heated up to 720 c temperature and held for half an hour
till the machine cools off. By doing so the milk cream cab be preserved for a longer time and
prevents the growth of bacteria like mesophilic and thermo uric bacteria in milk cream.

Homogenization:-
It is the process of applying pressure on the product. In the first stage 2500 PSI pressure and in
the second stage 5000 PSI pressure is applied. This pressure mixes the SNF and fat content.

Cooling:-
Cooling is done at 450 c
Chilling:
Chilling process is similar to the homogenization. After this it passes through chilling machine.
If mixture is chilled properly then it can be preserved for a longer time. It is chilled to 400 c.

Arrange – addition of colors, flavors, fruits and nuts:

There is a fixed composition according to which colors, flavors, fruits and nuts are added. The
color should be attractive. If it is more than the composition then it will taste odd. So color
testing is important, only after the test the color needs to be added.
There are different flavors like vanilla, chocolate, butter scotch, mango, coffee, honey due
melon, apple, black current, rose, gulkand, strawberry, pineapple, apricot, guava, orange and
water melon.
Depending on the order the production manager will decide which flavor is to be produced.
Flavor testing is also done. Fruits and nuts are also tested before using. Each and everything used
in production process will be tested.

Freezing and Packing:

Freezing is a process where cream turns into ice. There is a freezing point that is the temperature
at which the liquid freezes. To preserve the food products in frozen state the process of freezing
is of utmost importance.
After freezing it is packed. Packing is done according to SWAM Act i.e. Standard Weights and
Measures Act. Packing material is bought from faraway places. The Hangyo packages are
attractive. Price and weight of the product, packing date etc is mentioned on the pack.

Hardening:-
Hardening is done to make the product hard or unyielding. If hardening is not done in a proper
way it will melt before it reaches the customers.
Storage:-
After hardening the products go to storage room. The product is stored in a cold room at a
temperature of -300 c. The products are stored for future use. In rainy season there will be no
production of ice cream if there is any order the items from store will be sent.

Quality Control Department:-

Chemicals and macro biological test is done and if the product is not up to the mark it is either
reprocessed or destroyed.
They have their own parameters to determine the quality. This separate department has got
chemists and technicians. The Fat content, protein and acidity are tested.

Maintenance :
Production largely depends on the maintenance of the plant. The plant is generally kept under the
control of the works manager.
Maintenance of the machine means efforts directed towards up keep and repair of the machines.
Maintenance department is responsible for the smooth and efficient working of the industry and
helps in improving the productivity. There are 2 types of maintenance.
1) Preventive Maintenance
2) Breakdown Maintenance
At Hangyo they follow all these types of maintenance. The maintenance of major equipment’s
such as plant machineries, cold storage, deep freezers, diesel generators are carried out through
annual maintenance contract.
1) Preventive Maintenance
The preventive maintenance schedules are drawn by the general manager and are implemented
by the supervisor for production equipment and utilities as per preventive schedule. Preventive
maintenance shall be carried out as and when the equipment is free. Any defect is brought to the
notice of the general manager, who takes necessary corrective actions.
2) Breakdown Maintenance
Whenever there is a breakdown the concerned supervisor will raise the maintenance report which
would have the name of the machine, nature of breakdown, breakdown time etc. then the
maintenance report is handed over to the general manager.
General Manager Calls the operator and then the job is allotted to him. Whole attending to
breakdown, reference to trouble shooting procedure given in the concerned machine equipment
manual is made.
Whenever breakdown of machine occurs alternative arrangements are made by the plant
manager in consultation with the general manager to see that the production process is not
affected by the breakdown.
This department has a total of 10 members
Their Main functions are to check the condition of machines and cleaning the dust. Every week
they check the oil belt tension and once in three months the oil is changed.

Important among the above mentioned activities are:

Pricing of products:
Prices of the products are fixed as below.
Maximum retail price
Dealer margin 25%
Distributors margin 12%
GST 18 %

Selling and distribution Expenses

Transportation cost
Salary (marketing)
Distribution Traveling Allowance and Dearness allowance.
Newspaper Ads
Sales promotion and point of purchase
Product complaints and damages
Marketing Traveling Allowance and Dearness allowance
Launching Expenses.

AWARDS
CHAPTER -2
INRODUCTION TO WORK WORK PROFILE

I choose to take my project in distribution channels because channels of distribution have a vital
role to play, especially in the distribution of consumer goods. The most innovative product
offered at an attractive price would be of no use unless there is an efficient distribution system.
The consumer will not search for the product; it has to be made available at a convenient place
from where he can obtain it easily. The distribution channel provides three types of utilities –
time, place and ownership. Time utility means the products should be made available when
consumers want them. Place utility is provided by making the product available at a location
where a consumer wants it. Ownership utility is created when the physical possession and title to
the product are transferred to the consumer. Market channels play a far more important role than
the mere transporting of goods from producers to consumers. The economic function of the
various institutions that make up a channel are cost reduction, financing, co-operation in setting
prices, communication link between the buyer and the user, promotional assistance, and
reduction in the number of transactions.

WORK PROFILE:

 Understanding the overall Bangalore ice cream market and competition of the ice cream
industry in Bangalore, understanding the key competitor with their share of market through
analyzing  secondary data.
 Visiting super stockist to understand how much business they are doing, what is the storage
capacity and  their level of satisfaction towards Hangyo brand and its operations. Also
understanding the problem they are facing in the distribution level.
 Interviewing the distributors to understand why they join Hangyo brand, what kind of
initiative they are taking to increase the Hangyo market share,
 understanding what kind of support given by the company to the distributors and also what
kind of problem faced by them from company side as well as from retailer side .
 Understanding  the Hangyo  promotions and other support for the distributor for increasing
the sales  market share and compare it with the competition. 
 Understanding storage capacity of each distributors. and they are doing delivery to retailer
 Understanding the retailer segments like Modern Trade, Food Stores , General stores etc and
their rules of engagement with Hangyo. 
 Visiting retailer point to understand their perception towards Hangyo brand and what
difficulties they are facing while selling Hangyo products to the consumer.
 Identify the problem faced by retailer from company and distributor point.
 Understanding what is the credit policy of intermediaries (distributors and retailer) is there
any problem in payment system
 identify the promotion initiative taken from company to create brand awareness and attract
customer toward hangyo ice cream

LEARNING AND TAKEAWAY

 what is the share of each ice cream in Bangalore and what is the positioning of each
company and how every company making difference with competitor .how the message
is delivered to target customer through various communication channels 
 Through analyzing the sales data I understand which products are highest selling and
which are the lowest selling product and also understand how sales figures will fluctuate
throughout the year
 what kind of problem distributors are facing from company side as well as from the
retailer side and what is the solution for that 
 what is the company replacement policy, on what basis company decide the product
replacement to the distribution 
 how the company is doing the promotion of brand in low cost
 what is the share of freezer is taken by hangyo ice cream in each retailer point and what
perception retailer having about hangyo ice cream compare to other ice cream brands 
 what kind of problem arise in the distribution process and what is the best solution for
resolving that issue 
CHAPTER -3

REVIEW OF LITERATURE

Dr. A.K Singh

Rural markets offer a great scope for FMCG Companies to market their products because of the
recent increase in the rural incomes. The tough competition in the FMCG sector makes it
important to constantly revise the schemes as per the market conditions. Understanding the taste
and preference of the consumers provide the useful insight into the market conditions and helps
companies devise their schemes accordingly. Proper distribution coverage is a powerful tool to
stimulate the demand which not only helps in retaining the present customers but can also attract
additional customers by offering better services. The right distribution objective is to get the
right goods to the right places at the right time for the least cost. The paper opted for an
exploratory study using the interview technique to solicit information from the distributers,
wholesalers and retailers. The data were complemented by other information from Consumer
Behavior and Rural Marketing literatures also. The distribution mechanisms and channel
behavior dimension of the rural market of Bhopal and Hoshangabad is analyzed. The channel
behavior has a critical influence on channel decisions and identifying the manner in which the
distribution channel performs would help us to understand how successfulness the company is.
The paper includes implications for understanding distribution management and channel
behavior which are critical to Study the Problems faced by the FMCG Distribution Channels in
Rural Area of Bhopal &Hoshangabad Districts of M.P.

DR. HAMID SAREMI

One of the main issues that marketing managers are faced with it is decisions about the
distribution of goods. Decisions about the structure of the distribution channel are important in at
least in two dimensions. First, the decision has a direct effect on other marketing strategic
planning decisions (including pricing policy, advertising, packaging, etc). Second, decisions
regarding distribution channels require long-term commitment. It takes several years to be
deployed a desired distribution system and can’t be changed easily. Distribution means
delivering the product to the consumer at the right time and place. In marketing Association of
America's definition distribution channel is the structure of the organizational units within the
company and outside the company, brokers, wholesalers and retailers that market goods or
services. Distribution channels always include the manufacturer and the final consumer, the main
duty of distribution system is that place goods to potential customers in the right time and place.
Today managers becoming more important due to the distribution issue, according to the
distribution, physical distribution and management of it and the cost and interaction between
analysis, planning, and control of service levels are physical tasks of distribution management.
Companies achieve competitive advantages using distributed systems.
DOMNIC ZIMON
The main aim of this publication is to analyze the influence of standardized quality management
systems for the betterment of distribution channels in the FMCG market. The research covered
20 deliberately chosen distribution channels of a large manufacturing company carrying out the
activity in the food industry in the FMCG market in SouthEastern Poland. For the purposes of
the research process, channels are divided into two groups. In the first group were classified
channels in which all (or almost all) cells have implemented quality management systems (ISO
9001, ISO 9004 or ISO 22000). In the second group were classified channels in which
intermediaries had no standardized quality management systems. The research conducted
process helped to answer the research questions and the following conclusions: distribution
channels with implemented quality management systems in most cases have received better
grades than other distribution channels. In particular, their advantage is evident in aspects such as
customer service, timeliness and accuracy.

Dr. P Selvaraj
The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian economy. This
sector touches every aspect of human life. The FMCG producers now realize that there is a lot of
opportunity for them to enter into the rural market. The sector is excited about the rural
population whose incomes are rising and the lifestyles are changing. There are as many middle
income households in the rural areas as there are in the urban. Thus the rural marketing has been
growing steadily over the years and is now bigger than the urban market for FMCGs. Globally ,
the FMCG sector has been successful in selling products to the lower and middle income groups
and the same is true in India. Over 70% of sales is made to middle class households today and
over 50% of the middle class is in rural India. The sector is excited about a burgeoning rural
population whose incomes are rising and which is willing to spend on goods designed to improve
lifestyle. Also with a near saturation and cut throat competition in urban India, many producers
of FMCGs are driven to chalk out bold new strategies for targeting the rural consumers in a big
way. But the rural penetration rates are low. This presents a tremendous opportunity for makers
of branded products who can convert consumers to buy branded products. Many companies
including MNCs and regional players started developing marketing strategies to lure the
untapped market. While developing the strategies, the marketers need to treat the rural consumer
differently from their counterparts in urban because they are economically, socially and psycho-
graphically different to each other. This paper covers the attractions for the FMCG marketers to
go to rural, the challenges, the difference between the rural and the urban market and the suitable
marketing strategy with the suitable example of companies and their experience in going rural.
Githa S Heggde
The paper aims to identify channel design for effective bi-directional relations between the
company executives who are the representative of the manufacturers and the channel partners in
FMCG sector, with special reference to the Indian scenario. The study focuses on the major
criteria that the channel managers and the distributors consider important for selecting and
designing the number and type of channel structures.

Zeng Xian-dong
The problem of marketing channels would seriously affect the production and operation of
enterprises,and the feature of FMCG industries makes this industry channel more
complicated.How to establish good terminal channel management mechanism for effective
distribution is a significant problem which affects the survival of enterprise.American Wrigley
Candy Company has very good sales performance and excellent goods condition in some cities
of Jiangsu.Its success comes from the deep comprehension of terminal channel management,and
good job of terminal market segmentation and intensive cultivation,thatis,if enterprises want to
succeed now,they must pay attention to market overall layout and improve in details.

AvinashG.Mulky
An effective distribution channel can be a source of strategic advantage for companies. However,
little research exists about the distribution channel structure in India, which is largely traditional
and quite unique. The first part of this round table article provides an overview of distribution
channels, particularly their constituents and structure, with a special focus on distribution
channels in India. The second part of the article reports on a panel discussion with eminent
academic and industry experts on the challenges that companies in India face in designing,
constructing, and managing distribution channels on the ground.

Midhat Saleem
The study is attempted to examine the competence of distribution in progress of FMCG industry.
Through this study, trying to realize the level of progress increment by distribution channels. The
outcomes attracted the study is absolutely in light of study directed among the retailers. With a
direct distribution framework, the marketer achieves the proposed last client of their item by
circulating the item straightforwardly to the distribution channels are characterized and arranged.
Their improvement is clarified and new potential outcomes of their advancement in
contemporary conditions are demonstrated. In this sense, a variety of distribution channels exists,
and in addition the contemporary understanding of overseeing supply chains and value creation
systems. The information was gathered from 35 retailers, who practice consistently. The
information required for the study has been gathered from the retailers through questionnaire.
Analysis and interpretation has been done by using the statistical tools. The outcomes from the
study demonstrates that dominant part of the respondents are satisfied with the facilities offered
by the distributors. The intense rivalry in the FMCG part makes it imperative to always modify
the plans according to the economic situations.

Ioana Barin
Distribution includes all activities undertaken by the producer, alone or in cooperation, since the
end of the final finished products or services until they are in possession of consumers. The
distribution consists of the following major components: distribution channels or marketing
channels, which together form a distribution network; logistics or physical distribution. In order
to effective achieve, distribution of goods requires an amount of activities and operational
processes related to transit of goods from producer to consumer, the best conditions, using
existing distribution channels and logistics system. One of the essential functions of a
distribution is performing acts of sale, through which, with the actual movement of goods, their
change of ownership takes place, that the successive transfer of ownership from producer to
consumer. This is an itinerary in the economic cycle of goods, called the distribution channel.

Mano Raj.
The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian economy. This
sector touches every aspect of human life. The FMCG producers now realize that there is a lot of
opportunity for them to enter into the rural market. The sector is excited about the rural
population whose incomes are rising and the lifestyles are changing. There are as many middle
income households in the rural areas as there are in the urban. Thus the rural marketing has been
growing steadily over the years and is now bigger than the urban market for FMCGs. Globally ,
the FMCG sector has been successful in selling products to the lower and middle income groups
and the same is true in India. Over 70% of sales is made to middle class households today and
over 50% of the middle class is in rural India. The sector is excited about a burgeoning rural
population whose incomes are rising and which is willing to spend on goods designed to improve
lifestyle. Also with a near saturation and cut throat ...

Trevor Stanley
ABI has a sophisticated and effective distribution fleet which delivers canned and bottled non
alcoholic beverages to 12000 wholesale and retail outlets in the Durban Metropole and to 46000
outlets nationally. Delivery is normally executed once per week, 48 hours after a separate order
is taken by an account manager. In the more rural or "emerging market" areas traditional retail
outlets such as supermarkets and superettes are scarce and reliance is made on spaza and house
shops. Cash flow and storage space is limited. The sales and distribution calls are expensive,
relative to the size order that the spaza would place. Spaza shop owners rely on distributors or
collect from wholesalers. These outlets often run out of stock. Sales revenue is thus not
maximized. Outlet development is marginal. The writer embarked on a research project to
develop a sustainable and cost effective Sales and Distribution model in order to address these
constraints in the Emerging Market territories of ABI Durban. Traditional theory turns to channel
distribution as a means to effectively reaching an entire retail market. Levels are thus added to
the distribution channel. The research however showed that service levels are sometimes
compromised. The model that was developed returns ABI to DSD (direct service delivery) via
specially designed vehicles and combines the function of "preseller" and "delivery merchandiser"
on a dedicated route. Although a marginal increase in cost per case has been experienced,
deliveries are direct to store, at least twice per week. Sales growth in these routes have been in
excess of 85% while the total Umlazi area grows at 13%. Customer service levels, as surveyed,
are exceptional. Although the model was specifically designed by ABI Durban for use in
Durban, the concept has been adopted as a best practice and is being "rolled out" across the
business. By the end of 2005, 10% of ABl's fleet nationally will function as MOTD
(Merchandiser Order Taker Driver) routes. Additional vehicles have been ordered for delivery
during the period July 2005 to September 2005 in order for this to be achieved. This model has
assisted ABI in achieving its goal of maximizing DSD and lifting service levels to its customers
(retailers). Revenue has increased significantly along with volume in these areas. Invariably
MOTD acts as a significant barrier to competitor entry in those geographic areas where it is
utilized. The Merchandiser Order Taker Driver (MOTD) model is successful and has potential
for wider use, even in more developed markets.

Rashid, Paola
The purpose of this thesis is to add empirical findings of IMC strategies utilizing digital- and
traditional marketing communication channels to build and maintain brand equity in the FMCG
industry. More specifically awareness, associations/image and sales that are said to be critically
affected by communication are the focus of the study.

Joe Nyaga
The general objective was to investigate factors affecting distribution of fast moving consumer
goods (FMCG) in Kenya, with particular emphasis on Eveready East Africa Limited. The study
specifically aimed to; determine the effect of competition; establish the effect of price; analyze
the effect of promotion and investigate the effectiveness of demand forecasting on distribution of
Eveready East Africa Ltd products. The study adopted a descriptive research design and the
study population comprised of 120 distributors and staff assigned in market territories in Kenya.
The study applied a stratified sampling technique to select a total of 120 respondents.
Questionnaires were used as the main data collection instruments and a pilot study was
conducted to pre-test questionnaires for validity and reliability. Descriptive statistics data
analysis method was applied. The study findings indicated that the major factors affecting
distribution of the company fast moving consumer goods are; high competition from cheap
imports, high prices of the company FMCG in comparison to the competitors FMCGs,
application of ineffective promotion campaigns and lack of effective demand forecasting
systems. The study recommendations were; introduction of less expensive and high quality
FMCGs in the market that is dominated by cheap and poor quality imports; application of
effective pricing strategies like competitor based pricing; offering of effective promotion
methods such as sales promotion and continuous advertising and application of effective demand
and forecasting systems such as distribution requirement system and material requirement
system.

Githa S Heggde
This study focuses on the distribution strategy for enhanced channel partner performance in
Insurance, Mobile telecom and Fast moving consumer goods (FMCG) Sectors. The dimensions
considered in the study were Motivating channel members, positive attitude towards channel,
providing the channel members with market knowledge, conducive credit facility, constant and
effective communication and being aggressive. Results indicated lesser correlation between the
distributors and channel managers of insurance sector, whereas the Mobile telecom's distributors
correlated with that of the channel manager's attitude. The attitude of High performing
distributors and channel managers of FMCG sector were similar, while it did not correlate with
that of the low performing distributors.

Mirza Hasan Hosseini

Due to the industry globalizing and getting more competitive, today, more than any time else, we
feel the necessity of an integrated and coordinated distribution system for all industries
especially fast-moving consumer goods manufactures. In other words, distribution is the main
element in presenting products by marketers that indicates buyers the significance of availability
and trustworthiness of presenter as shopping objectives. The current study is carried out with the
aim of investigating the role of effective factors in selecting distribution channels and their
significance improving the competitive advantage of fast-moving consumer goods producers.
This research from the point view of its practical goals, the descriptive research method and data
collecting is a scrolling type. The research statistical society includes exporters, senior managers
and certified marketers in Ranchers Dairy Industry Company; therefore we disregard sampling
due to the limitation of the statistical society in line with the increase in research validity. The
findings suggest positive and meaningful effect of substructure features, marketing ability and
communication and transition ability in choosing distribution channel. Due to the results, the
choice of distribution channel impacts the competitive advantage of company as well.
Deepa Ingavale
The rural markets have been increasing steadily since the 1980s and are now bigger than the
urban market for both FMCGs (53%) and durables (59%). The rural consumer market, which
grow 25% in 2008 when demand in urban areas slowed due to global recession, is expected to
reach $425 billion in 2010-11 with 720 – 790 million customers which will be double the 2004-
05 market size of $220 billion. All smart marketers, Indian as well as MNCs, are trying to enter
into rural markets. Companies such as Hindustan Lever, Godrej, Colgate Palmolive, Parle Foods,
Philips, Dabur India have made inroads into the countryside. Rural reach is on the rise and it is
fast becoming the most important route to growth. Accessing rural markets presents challenges
to the marketers as these markets are geographically spread out with a large number of retail
outlets. Study on buying behavior of rural consumer indicates that the rural retailers influence
35% of purchase decision. India offers a huge, sustainable and growing rural market which can
be tapped effectively through innovative distribution channels with retailing being the most
critical element of this strategy as it is the final touch point. The paper focuses on the rural
distribution strategy and emerging distribution channels for rural market with due emphasis on
rural retailing.

Kaushik Manda
India has been witnessing a sea change in terms of competition since the decade of nineties.
Indian players, especially players of FMCG, Cement & Durable, are compelled to change their
functional operations under this high degree of competitions. Therefore, functional operation like
distribution management is considered important in terms of effectiveness & efficiency. For the
purpose of effective & efficient distribution, marketers have to take not only the care of logistics
but also they have to take care of behavioral management of channel partners. Globally accepted
literatures have already proposed for strategies of power & influence in this regard. But some of
the empirical researches have raised questions on applicability of those strategies in relation to
developing nations. Considering this question valid and relevant we have identified our research
plan vis-à-vis Indian distribution. For this study we have selected three objectives: i)
Development of scale for identification of channel control strategies of marketer, ii)
Identification of strategies for controlling channel partner, and iii) Identify the importance of
each specified strategies. For the empirical purpose of present research, we have executed a
survey in southern part of west Bengal, a state of India, with randomly selected 166 respondents
who are distribution channel partners in profession. We have selected southern part of the state
of West Bengal because this region is having representative character of India. For the purpose
of attainment of first objective stated above, we have developed a valid and reliable construct by
combining items from the globally recognized scales of power & influence strategies. We have
reached second & third objectives by using appropriate statistical tools used for Exploratory &
Confirmatory factor analysis. Finally, we are able to identify four important strategic-facets
namely i) Intelligence ii) Big Bossing iii) Contract Orientation iv) Expert for Indian distributions.
Result indicates deviation from the global research outcome. Thus, the present research is very
much contributory to academic & management world, especially in reference to developing
nations.

Odupitan, Aminat
The Fast Moving Consumable Goods (FMCG) sector in Nigeria is one of the largest sectors in
the country and its contribution to the economy cannot be over-looked. This sector is highly
important in the food industries which makes this study to focus on its distribution channels. This
study also focus on its challenges that is related to the distribution channels.
This study aimed to help foreign investors that are investing into the food sector as well as
students, and sales representatives of the companies to understand the distribution channel that is
used in the sector by FMCG Companies in Nigeria. Some theories of marketing distribution
channels are used and which are collected from different sources such as books, articles and
journals.
Both qualitative and quantitative research approach was used to elicit the information required
for this study. A random sampling method was used to select the participants of this study. The
study population in this study were FMCG companies in Lagos industrial area and managers and
distribution staff of FMCG companies. Questionnaires and phone interviews were used to obtain
information from respondents. Reliability and validity tests were conducted to ascertain the
precision of the data tools used in this study.
The findings in this study revealed the types of distribution channels that are used by fast moving
consumable goods companies and some of the problems encountered the problems which
include; defaults in payment, stolen goods, poor infrastructure, presence of counterfeit goods in
the market place, quality issues,
discriminatory trade offers, inadequate training of sales personnel and etc.
The analysis of findings in this study suggest that these distribution channels may affect the
profitability, sales turnover, market share, productivity and revenue generated by FMCG
companies. Furthermore, FMCG companies must be willing to monitor their territory
management, business status, financial capability and infrastructure compliance to ensure the
efficacy of distribution strategies.

James A. Adeniran
It has been suggested that a firm should adopt only a few variety of routes to market in order to
minimise channel conflicts. But today’s consumers which have developed varied and complex
choices and preferences for where and how they want to purchase products are continuously
forcing FMCGs firms to tailor their channel design and configuration towards multiplicity of
channels. Therefore, this study examines the effect of distribution intensity on consumer
perception of marketing utility in relation to channel multiplicity. Cross sectional survey research
design was adopted for data collection with the aid of a structured and closed ended
questionnaire. The questionnaire was administered to 384 consumers across all the local
government areas in Lagos. Data was analysed using descriptive and inferential (simple and
multiple linear regression analysis) statistics. Findings reveal that distribution intensity has a
significant positive effect on marketing utility perception of consumers of FMCGs products in
Lagos State, Nigeria. Also, a significant positive relationship was established between
distribution intensity and channel multiplicity. Further results show that channel multiplicity has
a significant positive effect on marketing utility perception. In a final analysis, the study reveals
that distribution intensity and channel multiplicity have a combined effect on marketing utility
perception. In concluding, the study gave useful recommendations.

Rajesh K. Aithal
This chapter explores the distribution challenges in Indian rural market and evaluates the various
strategies to approach rural markets. Reaching out to rural markets has been acknowledged as the
biggest challenge. This chapter discusses various strategies used by firms to reach out to rural
India. A set of six strategies of distribution in rural India has been identified. Major fast-moving
consumer goods (FMCG) firms which have serious interests in rural markets have been using
these strategies. The pros and cons of each distribution strategy have been elaborated. The
critical discussion of these six distribution strategies and future recommendations is expected to
enhance the understanding of marketers so that they can plan better for reaching to rural India.