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A brief understanding of Parle Agro's sales and distribution in Delhi...
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sSales and Distribution Network of Parle Agro
Gaurav-93017Manik -93026
Monika-93031Shashwat-93048
Richa-93060
Chauhan Family (Parle Brand)
Parle Products Parle Agro Parle Bisleri
About the company
•Parle Agro commenced operations in 1984
•Mr. Prakash Chauhan is the Executive Chairman of Parle Agro
•Manufactures,distributes and exports fruit drinks
•Entered into snacks and confectionery business recently (2008-09)
•Headquarters: Mumbai
•Annual turnover : Rs 1000 Cr
•12 company-owned factories across India
•Reaches out to around 5 Lakh outlets across India.
About the company
Brands•Beverages
Brands•Packaged Drinking Water
•Snacks and confectionery
Territory Design
Business of Parle Agro is divided into following forms:
General retailModern TradeHoReCaInstitutional
Structure of Delhi Office
Business Head
Business Manager(General
Retail)
Business Manager (HoReCa
)
Business manager
(Inst.)
Business Manager (Modern
Trade)
Marketing Team
Business Manager (General Retail)
Premium Line Team Head
RSM
ASM
Growth Officer
Normal Line Team Head
RSM
ASM
Growth Officer
Regions
For all the four trades, Delhi is divided into five regions
North Region Central Region South Region West Region East Region
Delhi
North
North 1
North 2
Central
Central
1
Central
2
South
South 1
South 2
South 3
West
West 1
West 2
East
East 1
East 2
East 3
General retail Distribution
HoReCa, Institutions and Modern Trade
Delhi
North Central South West East
Coverage plan followed by distributors
For Delhi Beverage Factory Location –GhaziabadWarehouse –Alipur, North Delhi
Parle Agro has a wide product line with Frooti as their flagship product. Frooti has such an impact that almost every distributor is involved and the rest of the products are carried along with the distribution of Frooti.
Penetration of Frooti is to the level of outlets such as small kiosks, telephone booths and even stationery shops now sell Frooti.
For Delhi the company has two approaches
(models).
• Model-1 Factory
Company warehouse(Alipur)
Disrtributor
General retailer wholesaler
Factory(Ghaziabad)
company warehouse
(Alipur)Modern Retailers
(Food Bazzar, Vishal
etc)
Model-2
These two models are implemented through their sales team & Distributors.
Company reaches out to 15000 retailers in Delhi directly.
Distributor Requirements
1) General trade distributer: Fees : Initial fees of Rs 5 lakh through draft Space requirement: Min.100 sq metre Transportation required: commercial vehicles depending
upon the area such as: Tata Ace, Vikram etc. I.T infrastructure: No requirement Inventory management capability: Done manually Manpower requirement: 1auto driver multi tasking and
educated(12th pass)
2) Institutional Distributor:
Fees : Initial fees of Rs 15 lakh through draft.
Space requirement: Min.300 sq. mt
Transportation required: commercial vehicles
depending upon the area such as: Tata Ace, Vikram etc
(2-3).
Inventory management capability: Computerized,
centrally monitored from Alipur Warehouse.
I.T infrastructure: 2-3 computers
Manpower requirement: 1auto driver per vehicle multi
tasking and educated(12th pass) & 1computer operator.
Company initiatives in Distributors:
PARB: A lot of support is provided by the company’s
active research wing, Parle Agro Retail Barometer
(PARB)intelligence, the company supports its franchisees
with an array of support systems which include,
quality control,
periodic technology up gradation,
fresh distribution patterns
even the installation of new machinery.
Channel Partners Category
Parle Agro has divided its Channel partners into 3 categories:-
General Trade Premium Distributor Normal Distributor
Modern Retail HORECA & Institutional
Support provided to Distributors by Company
Some general Support provided by Company is:-
Company Offers many types of incentives based on sales like 1% to 2% incentive on total sales or Gifts like LCD T.V on achieving sales target.
Company take care of their Channel partners by sending their sales representatives to discuss any kind of issue they are facing in sales of particular product also by monitoring the promotional needs in particular area.
Company educate their channel partners with knowledge of new systems like inventory management software etc and also educate them about their product and its benefits
Company also come up with some attractive schemes like expensive gifts for ex Air conditioning for retailers on achieving particular sales target these schemes act as an external motivation to retailers so they try hard to sell more
Category Specific Support provided by company
General Trade Growth officer of Parle Agro will accompany the
Distributor person on his vikram This Growth officer will not only take orders from the
Retailers but also will push them to buy more of the different kind of products
Modern Retail Company provide retail outlets with Support merchandiser
inside their stores who will monitor the shelves in which their products are and also will take care of stock
HORECA & Institutional Incentive based on bulk deals are given to them apart from
general benefits
Payment/Credit terms given to distributor by company
Every distributor would want to have some credit period
But It solely depends on few parameters like Past records of the distributor in terms of both payment and sales
It also depends on the size of the distributor and the territory it is handling, Company distributor relationship is also a very big factor in this
Normally all the goods delivered to the distributor are on some advance basis but depending upon the above factors and also to promote distributor to sell their goods in the market company usually gives 0 – 15 days of credit period
Margins given to Distributors are4-6% in General Trade6% in HORECA & Institutional
Usually products of lower size like 250 ml Mango frooti or 200 ml Appy Fizz have lower margins as compared to 1 liter bottle of the same
Credit /Payment terms for retailers
Every Retailer wants some credit period on purchase from distributor.
It is Retailer’s relationship with distributor and their past records of payment and sales that determine credit period
In case of Parle agro normally there is no credit period given but to some special case it can go up to 7-10 days depending upon the distributor
But in case of big retail stores like big bazaar they have to give some extended Credit purchase period because much of their sales come from these outlets also such big stores can some times dictate terms
Sales margins for the retailers varies in 10-12% in General Retail20-25 % bracket in Modern Retail20% in HORECA & Institutional
As retailers can sell up to any price till the MRP so margins are higher than those of distributors
No. of players at each level
Distributors – 25 distributors in Delhi
Retailers – Approx 15000 retail outlets
Wholesalers – Unaccounted
Modern Trade Centers – Approx 40 – 45
Role of each intermediary
Distributors Take orders Maintain Accounts Deliver Goods
3 types – 1) Catering to Institutions and HoReCa 2) Premium line distributors 3) Normal line distributors
Sales Team – Retail selling or push Retail Sales
Growth Officer – Retail selling in General trade
Merchandiser – Supervision at Modern Trade Shelf Space provided Positioning FIFO Checking Stock
Wholesalers – Do bulk buying at heavy discount
or credit. Retailers come to them
A few Practical Insights
• Target-days for Growth Officers– Daily routes fixed– Clear territory division based on roads
• The role of wholesalers– Complementary to the organized distribution– Channel Conflict
• The case of Modern Retail– Bargaining power of sales team: Piggybacking on brand
‘Frooti’
Pain areas of distribution
• Coordination between marketing and distribution team.
• Timely supply to all retailers.
• Channel conflicts due to wholesalers.
• Coverage conflicts among different teams.