fmcg distri final

8/3/2019 FMCG Distri Final

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DISTRIBUTION NETWORK OF FMCG PRODUCTS


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WHAT IS DISTRIBUTION?


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UNORGANIZED MARKET

RETAILOR


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Aparna Distributor

HUL

Chamadia Distributor

P&G

RANGOLI STORES

Location:Hinjewadi


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HUL FACTS

HUL distribution covers 1 million retail outlets across India

directly i.e 80% of retail outlets in India

Owner of 39 factories

Has a distribution channel of 6.3 million outlets & owns 35major Indian brands

More than 3000 products

Main hair care brands are-Clinic Plus, Sunsilk,Dove etc

Started with its own distribution network & supplied, but due

to a large market of 6 million outlets in India depend on

Stockiest and Wholesalers.


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C & F Agent

Stockiest / Distributor

Retailer

Customer

HUL


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Orders are taken by distributor.

Wholesaler once in 3 days

PAYMENT-Credit for 8-10days

Retailer once a week

PAYMENT-Cash/Cheque

immediately

ORDERING PROCESS

Bangalore Depot

Kolhapur Depot

PuneDistributor(Aparna

Enterprises)

Wholesaler/retailer


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}Distribution of goods from the manufacturing site to C& F agents take place through either the trucks or rail

roads depending on the time factor for delivery and cost

of transportation.

}From the C & F agents, the goods are transported to

Stockiest' by means of trucks and the products finally

make the last mile based on local popular cheap mode

of transport.

}Distributor supplies to 8000 shops in Pune.

DISTRIBUTION


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}

Sales Margin: 4.76% which includes cash discount,unloading expenses from depot, distribution expensesto retailers, incentive schemes & other incidentalexpenses.

}

Modes of transport used: Rickshaw, tempo, Trucks.

} Software systems and Information System: UNIFY 8.3(Developed by IBM & CMC).

}This software needs to be synchronized daily tomaintain inventory levels.

}Areas of Operations: Marked for each of the retailers

STOCKIEST


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Consumer Sales Promotions

Price-pack deal: The packaging offers a consumer a certain percentagemore of the product for the same price (for example, 25 percent extra).

Rebates: Consumers are offered money back if the receipt and barcode

are mailed to the producer.

Trade Sales PromotionsDealer loader: An incentive given to induce

a retailer to purchase and display a product.

Trade contest: A contest to reward retailers

that sell the most product.

Push money: also known as "spiffs".

An extra commission paid to retailemployees to push products

PROMOTION SCHEMES


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Shelf conceptMerchandisers select the shop

Shelf space is assigned to HUL

Rs 300-500 are paid per month to the retailer

Super Value Store

The stores are revamped

Sales people are provided with training

Vijeta Scheme

For wholesalers

Points gained are converted to cash discounts or holidayschemes

CONTINUED..


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C & F (CHAMADIA)

Distributor/ Wholesaler

Retailer

Customer

P & G


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} Chamadia 3.5% margin on basic price

} Distributers 5% margin on basic price

}

Retailers 8 to 12% margin of basic price

} Gifts, gold coins for retailers

} Zero credit period

MARGINS & INCENTIVES


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PROMOTIONS

Provides incentives on huge sales & profit percentage canvary with seasons & may touch between 9%-15%

Extra Stock to the Retailer

Provides return back policies


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ORGANIZED MARKET


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sourcing contractsourcing contract

}

PRODUCTS

}QUANTITY

}PRICE

}TAXES

}RETURN POLICY


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HUL / P & G Logistics

Reliance Logistics Inc.

Smaller Local LogisticsAgents


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Return LogisticsReturn Logistics

HUL / P & G Logistics

Reliance Logistics Inc.

Smaller Local LogisticsAgents


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PROMOTIONSPROMOTIONS

& Visibility& Visibility

}Assortment Matrix

}Promotions by HUL and P & G

}Selling shelf Space

}Store Promotions

}Consignment Stock


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} Central Demand and Sales Forecast

considering lead time ( 8 days ) and demandand sales at individual stores

} 30% - 40% of demand is sent as stock toindividual stores

} Individual stores send feedback and indents toReliance to extrapolate the demand

} SAP

} Tries for zero inventory

InventoryInventory


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Product Credit Period

Non Perishable Goods 30 days

Perishable Goods 7 days

PAYMENTSPAYMENTS


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fmcg distri final

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