STUDY OF SALES AND DISTRIBUTION CHANNEL

MMS – A | BATCH 2019-21 | GROUP 3.

STUDY OF SALES AND DISTRIBUTION CHANNEL OF MARICO
 MARICO (COMPANY OVERVIEW)

• ONE OF THE INDIA'S LEADING CONSUMER PRODUCTS & SERVICES

COMPANIES IN THE BEAUTY AND WELLNESS SPACE
• FOUNDER : HARSH BENIWAL
• HEADQUARTER : MUMBAI
• EVERY YEAR 70 MILLION MARIO CONSUMER PRODUCTS PACKS REACHES 130
MILLION CONSUMERS ACROSS 23 MILLION HOUSEHOLDS, THROUGH ITS
DISTRIBUTION NETWORK OF MORE THAN 3.5 MILLION OUTLETS IN INDIA
PRODUCT PORTFOLIO
 WHAT IS DISTRIBUTION CHANNEL ?

 A DISTRIBUTION CHANNEL IS A CHAIN OF BUSINESSES OR INTERMEDIARIES THROUGH

WHICH A GOOD OR SERVICE PASSES UNTIL IT REACHES THE FINAL BUYER OR THE END
CONSUMER
 DISTRIBUTION CHANNELS INCLUDES WHOLESALERS, RETAILERS, DISTRIBUTORS, AND
SOMETIMES EVEN THE INTERNET
 DISTRIBUTION CHANNELS ARE PART OF THE DOWNSTREAM PROCESS
 GOODS AND SERVICES SOMETIMES MAKE THEIR WAY TO CONSUMERS THROUGH MULTIPLE
CHANNELS—A COMBINATION OF SHORT AND LONG
 INCREASING THE NUMBER OF WAYS A CONSUMER IS ABLE TO FIND A GOODS CAN
INCREASE SALES OF THE COMPANY
TYPES OF DISTRIBUTION CHANNEL
COMPANY’S DISTRIBUTION CHANNEL
COMPANY’S DISTRIBUTION CHANNEL (CONTD…)

 MANUFACTURER : PRODUCTS ARE MOVED FROM 8 COMPANY

MANUFACTURING UNITS TO DEPOTS IN EACH STATE
 NUMBER OF DEPOTS IN EACH STATE IS DETERMINED BY SIZE OF STATE. FOR
EXAMPLE, MAHARASHTRA AND UTTAR PRADESH HAVE MULTIPLE DEPOTS
TO CATER THE DEMAND OF WHOLE STATE.
 FROM DEPOTS GOODS ARE TRANSPORTED TO DISTRIBUTOR ACROSS
VARIOUS DISTRICTS
 BIG MARKETS LIKE HYDERABAD, DELHI AND MUMBAI MIGHT HAVE
MULTIPLE INDEPENDENT DEALERS WHILE TIER 2 AND TIER 3 TOWNS MIGHT
HAVE SHARED DISTRIBUTORS
COMPANY’S DISTRIBUTION CHANNEL (CONTD…)

 RETAILER : STOCK IS MOVED FROM DISTRIBUTOR TO RETAILER

 COMPANY DOES NOT SELECT COUNTER WHERE MARICO PRODUCT WOULD
BE PLACED
 FOLLOW A POLICY OF INTENSIVE DISTRIBUTION
 PRODUCTS ARE SOLE TO CONSUMERS, FORMING FOURTH AND FINAL LEVEL
OF DISTRIBUTION CHANNEL
 DISTRIBUTION CHANNEL IN RURAL AREA

 THE RURAL CHANNEL IS 5 LEVEL CHANNEL MARKET

 WHOLESALER IS ADDED BETWEEN DISTRIBUTOR AND RETAILER TO CATER THE
LARGELY THE SEGREGATED MARKET
 THE STOCK IS MOVED FROM THE COMPANY DEPOT TO THE SUPER DISTRIBUTOR
FROM WHERE IT IS MOVED TO THE WHOLESALER WHO DELIVERS THE GOODS TO
THE RETAILER
 THE WHOLESALER IS APPOINTED BY COMPANY ITSELF AND IT CATERS TO A CLUSTER
OF VILLAGE
 THIS HELPS IN INCREASING PENETRATION AND ALSO ITS COST EFFECTIVE
 DISTRIBUTION CHANNEL : MODERN TRADE

 THE MODERN TRADE ARE BIG RETAIL CHAINS AS VOLUME PURCHASE BY

SUCH STORES IS VERY HIGH
 THESE ARE HANDLED BY KEY ACCOUNTS MANAGERS
 THE PRICE AND MARGINS ARE DIFFERENT FROM THOSE GIVEN TO THE
OTHER SMALL DISTRIBUTORS AND RETAILERS
 THE TRANSFER OF STOCK TAKES PLACE DIRECTLY FROM THE DEPOT TO THE
STORE LOCATION
 CHALLENGES AND SOLUTION

 MODERN TRADE CONFLICT WITH RETAILER: MODERN TRADE CONSISTS

OF MULTI-BRAND RETAILERS LIKE BIG BAZAAR, RELIANCE FRESH AND
SPENCER’S WHICH ARE ABLE TO AVAIL GREATER MARGINS DUE TO THEIR
BULK BUYING FROM THE DEPOT. THEY BYPASS THE DISTRIBUTOR AND
HENCE ARE ABLE TO GET THE PRODUCTS AT A MUCH CHEAPER PRICE. THIS
MAY LEAD TO CONFLICTS BETWEEN RETAILER CHANNEL AND THE MODERN
TRADE CHANNEL DUE TO THE PRICE DIFFERENCES.
 SOLUTION : MORE FAVORABLE SCHEME SHOULD BE AVAIL FOR RETAILERS
AS THEY HAVE HIGHER REACH TO RURAL CUSTOMERS WHICH MODERN
TRADE LACK IN
 CHALLENGES AND SOLUTION

• MANAGING AVAILABILITY OF PRODUCT IN THE COMPLEX DISTRIBUTION

SET UP
• SOLUTION : COMPANY HAS TO WORK WITH MULTIPLE LAYERS OF
WAREHOUSES, SMALL RETAILERS BETWEEN COMPANY AND END CUSTOMER.
• COMPANY HAVE REALIZED THAT THEY NEED TO CONNECT TO CONSUMERS
PRESENT AT THE LOWER END THROUGH A WELL DESIGNED SCM 
• HOWEVER COMPANY SHOULD HAVE HIGH PACKAGING AND TRANSPORTATION
COSTS SO THAT THEY CAN MADE THERE PRODUCT AVAILABLE AT MAXIMUM
POSSIBLE PLACES.
 CHALLENGES AND SOLUTION

 INCREASING COMPETITION FROM MANUFACTURERS :

 SOLUTION : INCREASINGLY EFFICIENT LOGISTICS SYSTEMS ALLOW
MANUFACTURERS TO SELL MORE GOODS DIRECTLY TO END USERS,
BYPASSING DISTRIBUTORS. PLUS, CONSOLIDATION IN MANY MANUFACTURING
SECTORS HAS PRODUCED LARGE MANUFACTURERS WITH NATIONAL
DISTRIBUTION SYSTEMS.
 CHANNEL PARTNERS ARE RESPONSIBLE FOR DELIVERIES & INVOICES. HENCE
IT IS IMPORTANT TO PROVIDE PROPER CUSTOMER SERVICES TO RETAILER AND
DISTRIBUTORS THAT CAN ABLE TO GAIN A COMPETITIVE ADVANTAGE
 CHALLENGES AND SOLUTION

 PAYMENT ISSUES : COMPANY COMPLAINS THAT PAYMENT REALIZATION

TAKES MORE EFFORT AND A LONG TIME FROM THE DISTRIBUTOR’S SIDE.
THIS MAY BE BECAUSE OF VARYING FINANCIAL CONDITION OF DIFFERENT
DISTRIBUTORS.
 SOLUTION : SET A CREDIT LIMIT OF EACH OF THE DISTRIBUTOR DEPENDING
UPON THE VOLUME OF THE ORDER ISSUED.