Rural Marketing Strategies 5

(Distribution & Logistics)

Advertising is easy but Managing
Distribution network in Rural
Market is Donkey’s work
- Mr Harish Bijoor a marketing Consultant
What is Distribution? What is Logistics?

Distribution
Chain of intermediaries, each passing the product
down the chain to the next organization,
before it finally reaches the consumer or end-user.
This process is known as the 'distribution chain' or the 'channel.'

Logistics
is the management of the
flow of goods,
information and
other resources,
between the point of origin and the point of consumption
in order to meet the requirements of consumers
Distribution channels in Rural Marketing
Conventional
Wholesaler
Conventional Retailer
Weekly Haats, Bazaar and Shandies
Vans

New players
Unofficial Channel – eg 500 dealers of Hero Honda
Co-operative Societies – State, Regional & District Level
Petrol Bunks – LPG, Ferilizer, Pesticides etc.
NGO – Some NGO work for the social sustainable development
Son of Soil Channel – Self help
Strategies of Distribution & Logistics in Rural
Marketing

Ensure Reach
Reach by whatever mode
Strategies of Distribution & Logistics in Rural
Marketing

Ensure Visibility
No Stock outs – Over stocking is
bad but Stock outs are worst
Strategies of Distribution & Logistics in Rural
Marketing

Reach Haats / Mela / Pilgrim Site

A typical Mela or Fair – a case study
In 2007 HLL spend Rs 30 cr in Kumbha mela
Average spending in
Mela/Haats/Fairs/Shandies is around Rs 50 to 60 Cr
Strategies of Distribution & Logistics in Rural
Marketing

Delivery Vans cum

Promotional Vans cum
Mobile Retail Outlet
Convert Delivery van into Promotional van or Mobile retail outlets in remote areas
Strategies of Distribution & Logistics in Rural
Marketing

Collaborate with Distribution

P&G collaborated with most of the distributors

Understand the Peak Season

Demand based strategy

Convert Unorganized Sector Manufacturers

into Distributors
Local Manufacturers knows the pulse of local retailers & distributors
Strategies of Distribution & Logistics in Rural
Marketing

Encourage Jobbers
Son of Soil – a mobile traders that go from house to house

Sales Women Network

Project Shakti – Shakti Amma,
TTK group – Prestige Pressure cooker – Emphasis on Add
 Manufacturer

Through C&F Agent of a State/City

Which
Transports Sole Distributor of a District

A Rural Stockist of a Feeder Town

Customer
Gets Distributor of a village

His
Retailer
Product
Customer
Key Components of Transportation

The key components of Transportation

decisions are:

1. Route and network selection – Direct shipment, Milk run, Central

DC, Tailored Transportation

2. In-house or Outsource – Purchase versus Leased versus Vendor’s

vehicle

3. Trade off - Responsiveness versus Efficiency – Cost versus Speed

 Transportation Network

Suppliers Retail Stores

Direct Shipping Network

 Transportation Network

Suppliers Retail Stores

Direct Shipping with Milk Runs of Retail Stores

 Transportation Network

Suppliers Retail Stores

Direct Shipping with Milk Runs of Suppliers

 Transportation Network

Suppliers Retail Stores

DC

Direct Shipping via Central DC

 Transportation Network

Suppliers Retail Stores

DC

Milk Runs from DC

 Route selection in Transportation
Factors to be considered while deciding stores route

Octroi naka passing (In Cities)

Octroi Held up time
Store opening/closing time
Traffic regulations
Lean hours of retailer
Staff availability to unload
Merchandise mix
Load size
Delivery Route – length in km
Route selection in Transportation
1
2
Retail Stores

5
4
DC 7

10

8
6

9
Route selection in Transportation
1
2
Retail Stores

5
4
DC 7

Route selection methods

10 Saving Matrix method

General assignment method

8
6

9
Distribution Centre

Go down
 DC/ Godown Inventory Flow

Put away method

Flow through method

Cross Docking
DC/ Godown Layout
 DC Planning and Parameter

Infrastructure
Layout
Staffing
Equipments
IT
Misc.
Location & Infrastructure of DC/ Gown

Nearness to City /Cities / Town /District/ Feeder town

Octroi

Weighing Bridges / Petrol pumps

Power / Electricity – Gen set

Communication – landlines/Mobile/VSAT

Water for (Wet DC)

 Layout

Pallets v/s Bins

Grid Layout

Flooring / Height / lights / Ventilation / Docks

Other planning – Office/Security/Staff Welfare/Genset

Food v/s Non- Food

Out bound / In bound staging areas

Area for flow through / cross docking

Other areas – Scarp/Damage/Expiry/Batch mgt

Layout
Grid Layout
 Staffing

3PL v/s Own Staff

KAM/DC Mgr/OB/IB/Inventory/Transportation

3PL – KAM/ Supervisor/DEO/Checkers/Pickers/Helpers

Shifts / Breaks / Over time

Security
 Equipments & IT in (DC)

Pickup Trolleys

Fork-Lifts & Reach Trucks

Battery charging section

Bar-coding – IB & OB

RFID – Chips/RF Gun / Wi-Fi for RFID