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Effectiveness and Efficiency of Distribution Stations In FMCG

Fast Moving Consumer Goods popularly known FMCG is as the name suggests is the most demanded products in the market. It includes from foods like flour, biscuits, ice products, etc to body products soaps, face creams to cigarette smoking to beverages, etc. consumers need these things in their everyday life so they invests

a good portion of there income in these exact things. There are so many companies that happen to be working in FMCG products like HUL, Dabur, Cavin Treatment, AMUL dealing in dairy products, etc. By the vary dynamics of the product the companies are witnessing this as a great source of income. As large numbers of companies are looking this sector as a profitable endeavor, so for sustaining there position and gain new market they have to bring some thing unique in their products or services to get position on the market or to preserve there.

In modern business circulation network has a great effect on the success of any business. In the FMCG portion the role of the excellent distribution route becomes even more important because the delivery of FMCG Product is restricted to daily basic. Hence to be able to make it through and thrive in a highly competitive market you 'must' have a distribution channel without any problem at any point of the syndication channel.

The factor which is of important importance to survive in any business is the understanding of your brain of the individual consumers. What are main characteristics which consumer consider while making a purchasing decision regarding FMCG Product.

In order to make right decision regarding each one of these aspects the company requires a complete knowledge of the problems encountered in distribution route and what should be achieved in order to overcome all these problems.

Better infrastructure facilities will improve their supply string. FMCG sector is also more likely to benefit from growing demand on the market. Because of the reduced per capita consumption for almost all the products in the country, FMCG companies have huge possibilities for expansion. And if the firms have the ability to change the state of mind of the consumers, i. e. if they are in a position to take the consumers to top quality products and provide new generation products, they might have the ability to generate higher development soon.

Table of Contents


A Distribution Route is a couple of interdependent organizations (intermediaries) mixed up in process of making a product or service available for use or use by the buyer or business customer.

Channel decisions are among the main decisions that management encounters and will straight affect almost every other marketing decision.

Functions of Syndication Channel

All Use Up Scarce Resources

All May Often Be Performed Better Through Specialization

All CAN FREQUENTLY BE Shifted Among Channel Members

Types of Circulation Channel

A channel of circulation or trade route is the path or option along which goods move from makers to ultimate consumers or commercial users. Quite simply, it's the distribution network through which a producer places his product in the hands of real users. The channel of syndication includes the original producer, the ultimate buyer and any middlemen-either wholesaler or merchant. The term middleman refers to any organization or specific in the channel which either acquires subject to the goods or negotiates or markets in the capacity of an agent or broker. But facilitating businesses that perform or assist in marketing function are not included as middlemen in the route of circulation.

This is basically because they neither acquire title to the goods nor negotiate purchase or deal. Such facilitating agencies include finance institutions, railways, roadways, warehouses, insurance companies, advertising businesses, etc.

The pursuing diagram (graph) is illustrative of the channel of distribution which might exist in a market:

The above chart indicates that the amount of middlemen may vary. If there is direct deal by the produce to the consumers then there is no middleman. But that is very uncommon. As the graph shows the manufacturer may sell goods to dealer who may then sell the same to consumers. The designer may sell goods to wholesalers who may inturn sell to merchants and the retailer may sell to consumers. The fourth choice channel of distribution is when any agent/seller intervenes between your producer and suppliers and acts as a middlemen. The agent is appointed by the producer for the sale of goods to the vendors. Another alternative route will there be when producer's agent provides goods to wholesalers who sell to stores. Agent/dealer is an independent person/organization buying

goods and offering them to suppliers. Agent/dealer could also sell to wholesalers who will then sell to suppliers and goods are thus made available to consumers. Inside the channel of syndication there could be more than one agent/dealer and wholesaler.

A brief explanation of different stations of distribution is listed below:

Manufacturer Customer: That is also called direct selling because no middlemen are involved. A producer may sell immediately through his own shops, for example, Bata. This is actually the simplest and the shortest channel. It really is fast and inexpensive. Small makers and suppliers of perishable commodities also sell right to the local consumers. Big companies adopt direct offering to be able to cut syndication cost and because they have got sufficient facilities to sell directly to the consumers. The maker or the businessperson himself works all the marketing activities.

Manufacturer Retailer Customer: This is one stage circulation channel having one middleman, i. e. , dealer. In this channel, the producer provides to big sellers like departmental stores and string stores who in turn sell to customer. This route is extremely popular in the distribution of consumer durables such as refrigerators, T V packages, washing machines, typewriters, etc. This channel of distribution is extremely popular these days because of introduction of departmental stores, excellent market segments and other big shops. The stores purchase in large volumes from the manufacturer and perform certain marketing activities in order to sell the product to the ultimate consumers.

Manufacturer Wholesaler Merchant Customer: This is actually the traditional channel of distribution. You will find two middlemen in this route of distribution, namely, wholesaler and merchant. This channel is most ideal for the merchandise with widely scattered market. It is employed in the distribution of consumer products like groceries, drugs, cosmetic makeup products, etc. It is quite suitable for small scale providers whose product line is narrow and who require the expert services and promotional support of wholesalers.

Selection Criteria of any Distribution Channel

While selecting a distribution channel, the entrepreneur should compare the expenses, sales amount and gains expected from different channels of syndication. To be able to pick the best channel for distributing his product, a small-scale maker should keep in mind the following considerations:

Market Considerations: The nature of the market is an integral factor influencing the choice of channels of distribution. The following features of the marketplace is highly recommended to look for the channels:

Consumer or Industrial Market: If the product is meant for professional users, the route of distribution will be a short one. It is because professional users buy in a large amount and the designer can easily set up a direct contact with them. However in case for goods meant for consumers, retailers may need to be contained in the channels of distribution.

Number and location of clients: When the number of prospects is small or the market is geographically positioned in a restricted area, direct advertising is simple and economical. In case of large numbers of customers, use of wholesalers and merchants becomes necessary.

Size of order: Direct selling is convenient and economical where customers place order in big plenty as in case of commercial goods. But where the product is sold in small amounts, middlemen are used to send out such products. A manufacturer might use different programs for different types of buyers. He may sell right to big retail stores and may use wholesalers to market to small stores.

Customers buying practices: The client buying patterns like enough time he is prepared to spend, the desire for credit, the inclination of personal attention and one stop shopping significantly have an effect on the choice of distribution channels.

Product Concerns: The type and dynamics of the product influence the quantity and type of middlemen to be chosen for distributing the product. The important factors with regards to the product are the following:

Unit value: Products of low device value and common use are usually sold through middlemen, as they cannot bear the cost of direct selling. Alternatively, expensive consumer goods and professional products can be purchased straight by the makers.

Perishability: Perishable products like vegetables, fruits and bakery items have relatively brief channels, as they cannot withstand repeated handling. Goods, that are subject to consistent changes popular and style, are generally distributed through short programs, as the manufacturer must maintain close and continuous touch with the marketplace.

Bulk and weight: Heavy and large products are allocated directly to minimize controlling costs. Coal, bricks, rocks, etc. , are some examples.

Standardisation: Custom-made and non-standardised products usually pass through short channels because of the need for immediate contact between your company and the consumers. Standardized and mass-made goods can be distributed through middlemen.

Technical character: Industrial products necessitating demonstration, unit installation and aftersale service tend to be sold directly. The buyer products of technological nature are usually sold through vendors.

Product lines: An entrepreneur producing a variety of products could find it economical to create its own shops. On the other hand, firms with one or two products think it is profitable to spread through wholesalers and retailers.

Age of the merchandise: A fresh product needs higher promotional work and few middlemen may like to take care of it. As the merchandise gains acceptance on the market, more middlemen may be employed for its syndication.

Middlemen Concerns: The cost and efficiency of distribution depend largely after the nature and kind of middlemen as given in the following factors:

Availability: When middlemen as desired are not available, an entrepreneur may need to establish his own syndication network. Non-availability of middlemen may arise when they are controlling competitive products, as they do not like to cope with more brands.

Attitudes: Middlemen who do nothing like a firm's marketing plans may refuse to deal with its products. For instance, some wholesalers and merchants demand sole selling rights or a warranty against street to redemption in prices.

Services: Use of those middlemen is profitable who provide financing, storage, campaign and aftersale services.

Sale Probable: A business owner generally prefers a dealer who offers the greatest potential volume of sales.

Costs: Choice of a channel should be produced after comparing the expenses of circulation through alternative channels.

Company Considerations: The type, size and objectives of the business enterprise organization also play an important role in the selection of distribution channel. It includes financial resources, market

standing, volume of production, desire for control of route, services provided by manufacturers', etc. For example a firm with substantial money need not rely too much on the middlemen and can afford to lessen the levels of distribution. Similarly an organization desiring to exercise greater control over route will choose a shorter channel.

After deciding the number of middlemen, an entrepreneur has to select the particular retailers through whom he will disperse his products. While selecting a particular wholesaler or dealer, the following factors should be taken under consideration:

a. Location of dealer's business premises;

b. Budget and credit standing of the dealer;

c. Knowledge and experience of the dealer;

d. Storage and showroom facilities of the dealer

e. Potential of the supplier to secure satisfactory business and cover the market;

f. Capacity of the supplier to provide aftersale service;

g. General reputation of the seller and his sales force;

h. Willingness of the dealer to take care of the entrepreneur's products;

i. Degree of co-operation and campaign service he's willing to provide;

j. Characteristics of other products, if any taken care of by the dealer.

Need for Distribution Channel

Why are these layers needed in syndication ? Why can't a manufacturer simply sell to a store, who sells to a consumer? It's a good question, and perhaps, that is strictly how it happens. However the fact is that lots of providers are either too small or too large to take care of all the required functions themselves to get

their products to advertise.

Consider the small, specialty manufacturer who is marvelous at making fine leather handbags but may well not have the knowledge to market its products as well as it makes them, or they might not exactly have the funds to employ a team of full-time salespeople to court the customers and secure the requests. An intermediary

who works for several small, noncompeting organizations can easily handle those functions cost-effectively. An intermediary who specializes in importing and exporting are designed for the intricacies of customs paperwork, overseas shipment, and foreign marketplaces, too.

Conversely, large companies need intermediaries because they're also available of manufacturing, not marketing. Turning out tens of thousands of cases of soft drinks, for instance, do you consider Pepsi has the perfect time to take and complete individual orders from households? Route participants like wholesalers and retailers

are useful because they're best at specific aspects of sales in their market segments, giving the manufacturers to do what they do best-which is come out the perfect product.

Having a circulation channel breaks the complete investing process and all its related negotiations into manageable jobs, each performed by companies that focus on certain skills. Using an import wholesaler, for example, can be helpful because they know the laws and regulations and traditions of the suppliers' countries; and they generally offer their own lines of credit so the store won't have to deal with forex or negotiate payment terms with a bank or investment company in another country.

Another advantage of the distribution route is its potential to even out the natural ebbs and moves of a source chain. This comes from the ability of some route associates to store excessive goods until they are really needed, also to stockpile goods in anticipation of seasonal sales peaks. Depending about how close their romantic relationships, channel members may also work together to buy goods or services in higher quantity at discounts, passing the savings on to customers.

Even for consumers, the syndication chain is handy-beyond very useful, in reality! It has become a necessity in our society. What if there have been no supermarkets, for instance? Can you imagine how much more time and money you'll spend needing to buy every item at its source? How practical would it not be to perform out to the nearest farm to get a quart of milk and some salad ingredients on the way home from work?

FMCG Sector


FMCG is an acronym for Fast Moving Consumer Goods, which refer to things that people obtain local supermarkets on daily basis, the things which have high turnover and are relatively cheaper. Products that have a quick turnover, and relatively low priced are known as FAST PACED Consumer Goods (FMCG). FMCG products are the ones that get replaced within the year. Types of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetic makeup products, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, light bulbs, batteries, paper products, and clear plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and delicious chocolate bars.

A subset of FMCGs is FAST PACED Consumer Electronics such as innovative electric products such as cell phones, MP3 players, digital cameras, Gps navigation Systems and Notebooks. These are replaced more frequently than other electric products.

White goods in FMCG make reference to household electronic items such as Refrigerators, T. Vs, Music Systems, etc.

These types of goods are needed frequently by consumers therefore a large area of the monthly salary or income will be spent on buying all the products posted on the consumer's grocery list. New players keep getting started with the FMCG circles but find the heading tough unless they have got a well planned strategy along with large cash reserves because of their product promotion. A particular FMCG company might be considered a strong urban market head, but will still find it tough to go into the rural marketplaces or a new Indian express or area.

Although FMCG companies create a large volume of sales and money, they are really always under pressure as they keep facing a lot of competition using their company fellow competitors. Due to this, the FMCG companies try to do their level best in maintaining a fine balance in their revenue and the product price. Thus they keep facing new difficulties on their margins month after month.

One of the key factors for an FMCG company to prosper is a proper distribution network. When a circulation network of a particular FMCG company is well oiled, then that particular FMCG Company will definitely find the going much easier on the market. But companies have to allot a huge chunk of their finances in growing and fine tuning their distribution networks.

The advertising of a product of an FMCG company too is known as very crucial for its success. The market has many players. Every FMCG company has to fight because of its space and audience in the Indian market. Thus, whenever a multinational company gets into the Indian market, it creates an even bigger problem to the prevailing players on the FMCG world. If the promotion is done well, then your manufacturing of the product could even be outsourced. This can save valuable financing for a company. Therefore will help the company to utilize their energies on other areas of their product. A number of the top players on the FMCG arena in India are Hindustan Unilever Ltd. , ITC (Indian Cigarette Company), Nestl India and Dabur India.

So, we can say that FMCG are the products that happen to be:

Sold quickly at relatively low cost

Sold in large quantities

Have low overall earnings but high cumulative profit

Sector Performance

FMCG is mostly of the sectors that is unscratched and shows consistent progress despite economic downturn which is proved by some of the leading publications articles like:

According to Business Standard-"FMCG resilient to the economic slowdown and drop in consumer sentiment".

According to Economic times it is one of the very few sectors considering M&A recently.

Economic times also comment that Indian rural market in untapped and unpenetrated.

The expansion in this sector is also apparent from the fact that lots of FMCG companies are planning to foray into West Asia, South Africa and Egypt.

FMCG industry provides a wide range of consumables and accordingly the money circulated against FMCG products is also high. The competition among FMCG manufacturers is also growing and consequently of this, investment in FMCG industry is also increasing, specifically in India, where FMCG industry is undoubtedly the fourth most significant sector with total market size of US$13. 1 billion. FMCG Sector in India is estimated to increase 60% by 2010. FMCG industry is regarded as the major sector in New Zealand which makes up about 5% of Gross Home Product (GDP).

Some of the merits of FMCG industry, which made this industry as a potential one are low functional cost, strong distribution networks, presence of renowned FMCG companies. Human population growth is another factor which is responsible behind the success of this industry.

Some of the well known FMCG companies are :

Sara Lee


Reckitt Benckiser


Procter & Gamble




General Mills


Mars etc.

FMCG industry creates a variety of job opportunities. This industry is a well balanced, diverse, challenging and visible industry providing a wide range of job categories like sales, source chain, funding, marketing, functions, purchasing, human resources, product development, and standard management.

Indian FMCG Sector

FMCG is the fourth most significant sector in the Indian Overall economy with a total market size of Rs. 60, 000 crores. FMCG sector produces 5% of total factory employment in the united states and it is creating career for three million people, especially in small cities and rural India.

The FMCG sector in India is a sector which is dominated by a high level competition between all the players. This specific sector includes MNC's as well as local Indian companies. Certain companies are leaders in a particular talk about or area. While some of the firms are extremely strong in the rural areas compared to the urban areas. Some of the most powerful companies in the FMCG sector are: Hindustan Unilever Ltd. , ITC (Indian Tobacco Company), Nestl India, GCMMF (AMUL), Dabur India, Asian Paints (India), Cadbury India, Britannia Industries, Procter & Gamble Hygiene and HEALTHCARE and Marico Establishments. All these companies have a proper syndication network along with proper product advertising tools which have helped these to regularly increase their sales and presence on the Indian scene.

Well-established distribution sites, as well as powerful competition between your organised and unorganised segments will be the characteristics of the sector. FMCG in India has a solid and competitive MNC existence across the entire value chain. It has been forecasted that the FMCG market will reach to US$ 33. 4 billion in 2015 from US $ billion 11. 6 in 2003. The middle school and the rural segments of the Indian human population will be the most promising market for FMCG, and present brand makers the opportunity to convert those to branded products. A lot of the product categories like jams, toothpaste, skin care, shampoos, etc, in India, have low per capita utilization as well as low penetration level, however the potential for development is huge.

The Indian Economy is surging in advance by leaps and bounds, keeping pace with immediate urbanization, increased literacy levels, and rising per capita income.

The big organizations are growing bigger and small-time companies are finding and catching up as well. Based on the analysis conducted by AC Nielsen, 62 of the top 100 brands are owned or operated by MNCs, and the balance by Indian companies. Fifteen companies own these 62 brands, and 27 of the are owned or operated by Hindustan Lever. Pepsi reaches number three accompanied by Thums Up. Britannia requires the fifth place, accompanied by Colgate (6), Nirma (7), Coca-Cola (8) and Parle (9). These are figures the soft drink and cigarette companies have always shied from revealing. Personal care, cigarettes, and soft drinks are the three biggest categories in FMCG. Between them, they account for 35 of the most notable 100 brands.

Hindustan Unilever Limited has been functioning in India from quite a while. They can be India's major FMCG Company and are also one of India's largest exporters. The set of their popular products is a very large one. A few of their popular products are Lifebuoy, Rexona, Lux, Liril, Lipton Tea, Brooke Relationship Tea, Bru Caffeine, Pepsodent, Search, Rin, Steering wheel Laundry Detergent and Kissan. The company has a great research centre which was proven in 1958 and has a solid team of highly experienced scientists. Recently they have launched new jobs like Ayush Ayurvedic Products & Services and Pureit Normal water Purifiers.

ITC which was create in 1910 in India was previously known as Imperial Tobacco Company of India Small. ITC has an enormous presence in variety of products and some of them are handmade cards, cigarettes, paperboards, product packaging, branded clothes, foods & confectionery and FMCG products. ITC has demonstrated its worth when you are one of India's biggest forex earners. Though it already has many leading products from quite a while, it is recently wooing over efficiently clients in its businesses of branded apparel, packed foods & confectionery and greeting cards & stationery.

Nestl first made its occurrence in India in 1912. They have always managed to get itself detailed in India's 'Most Respectable Companies'. This has been possible due to its practice of producing products of a worldwide standard in India. It has additionally been able to provide customer satisfaction to the consumers of its products.

The success of Gujarat Cooperative Dairy Marketing Federation (GCMMF) has demonstrated a cooperative too can develop into a top class company if it's backed by proper eyesight, effort and an excellent product. It has helped it to become the largest food product marketing company in India. A few of its popular products are Amul Snow cream, Amul Dairy, Amul Butter, Amul Shrikhand, Amul Dairy Natural powder, Amul Ghee and Amul Cheese.

Thus the above mentioned four samples show a number of factors that happen to be accountable for turning a corporation into a respected FMCG company.

The top 10 10 companies in India are as follows:

The FMCG sector can be sub grouped into:

Personal Health care: The personal care category gets the largest variety of brands, i. e. , 21, inclusive of Lux, Lifebuoy, Fair and Lovely, Vicks, and Ponds. There are 11 HLL brands in the 21, aggregating Rs. 3, 799 crore or 54% of the personal care category. Cigarettes take into account 17% of the most notable 100 FMCG sales, and just underneath the personal good care category. ITC together makes up about 60% volume level market talk about and 70% by value of most filter cigarettes in India.

Foods: The meals category in FMCG is gathering popularity with a golf swing of launches by HLL, ITC, Godrej, as well as others. This category has 18 major brands, aggregating Rs. 4, 637 crore. Nestle and Amul slug it out in the powders portion. The food category has also seen innovations like softies in glaciers products, chapattis by HLL, prepared to eat rice by HLL and pizzas by both GCMMF and Godrej Pillsbury. This category seems to have faster development than the stagnating personal care and attention category. Amul, India's most significant foods company, has a good presence in the food category with its ice-creams, curd, dairy, butter, cheese, and so on. Britannia also ranks in the top 100 FMCG brands, dominates the biscuits category and has launched a series of products at various prices.

Household attention: In the household treatment category (like mosquito repellents), Godrej and Reckitt are two players. Goodknight from Godrej, is worth above Rs 217 crore, followed by Reckitt's Mortein at Rs 149 crore. Within the hair shampoo category, HLL's Medical center and Sunsilk make it to the very best 100, although P&G's Brain and Shoulders and Pantene are also trying hard to be added to top. Medical center is nearly dual how big is Sunsilk.

Herbal care and attention: Dabur is one of the top five FMCG companies in India and is also a natural specialist. Using a turnover of Rs. 19 billion (approx. US$ 420 million) in 2005-2006, Dabur has brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real.

Paint: Asian Paints is enjoying a formidable occurrence in the Indian sub-continent, Southeast Asia, ASIA, Middle East, South Pacific, Caribbean, Africa and European countries. Asian Paints is India's major car paint company, with a turnover of Rs. 22. 6 billion (around USD 513 million). Forbes Global mag, USA, placed Asian Paints on the list of 200 Best Small Companies in the World

Chocolates/Confectionary: Cadbury India is the marketplace innovator in the chocolates confectionery market with a 70% market share and is placed number 2 in the full total food drinks market. Its popular brands include Cadbury's Dairy Milk, 5 Celebrity, Eclairs, and Gems. The Rs. 15. 6 billion (USD 380 Million) Marico is a respected Indian group in consumer products and services in the Global Beauty and Wellness space.

Outlook for FMCG Sector:

There is a huge growth potential for all the FMCG companies as the per capita consumption of virtually all products in the country is amongst the cheapest on earth. Again the demand or potential customer could be increased further if these businesses can change the consumer's frame of mind and offer new era products. Previously, Indian consumers were utilizing non-branded clothing, but today, clothes of different brands are available and the same consumers are happy to pay more for branded quality clothes. It's the quality, advertising and creativity of products, which can drive many areas.


Exploratory research:

The exploratory research design is suitable for any any problems in which a very little knowledge can be found. An Exploratory analysis is in the nature of an initial phase and is completely essential to be able to secure a proper definition of problem at hand. So it is helpful in breaking extensive and hazy problems into smaller, more exact sub problem claims, hopefully, in the form of specific hypothesis.

In this study the exploratory research has been used to shape structure questionnaires, individuals with knowledge and ideas have been interviewed to get the theory to frame structure questionnaire. A part from books and publications has been used to gather information about the insurance and the insurance industry.

Data Collection:

In this research internal and external source for data collection had been used. In the internal and external resources of data collection these two types of data makes picture:

Primary Data

Secondary Data

Primary Data

All the primary data for the purpose of the study were obtained by interviewing the retailers with the help of a questionnaire. Questionnaires were framed based on product & its competition. The questions were designed in such a way concerning elicit maximum information and data.

Secondary Data

Secondary data has been accumulated from literature and websites.

Internet websites:

www. yahoo. com,

www. Coca-Cola. com,

www. wikipedia. com,

www. coca-colaindia. com

Magazines - BUSINESS COMMUNITY Management and Technology


There can be two types of questionnaire.

Questionnaire for Whole sellers:

Name:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age:. . . . . . . . . . . . . . . . . . . . . . . . . .

Area:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Years available:. . . . . .

Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

http://2. bp. blogspot. com/_STNJ3qjC9Nk/SX30qf_Ve3I/AAAAAAAAAcU/P3nV5aXUBdY/s320/Coca-Cola_custom logo5. jpg

Q1. Which coca cola cold drink brand markets the most?

Coke b. ThumsUp c. Limca d. Sprite e. Fanta f. Maaza g. Others

Q2. Which nutrient water markets the most?

Kinley b. Aquafina c. Bisleri d. Local brands

Q3. What type of package cold beverages sells the most?

300ml container b. 600 ml dog or cat container c. 1. 5L family load up d. Others

Q4. What is the replacing time on the average?

Within 2-3 days b. Regular c. 15 days d. Monthly

Q5. How many times you lose sales in case of non availability per day?

2-5 times b. 5-10 times c. A lot more than 10

Q6. Do customers ask specifically coke or any other brand?

Yes No

Q7. What's the margin on the cost price that you earn over a container/crate??

5-10% b. 10-15% c. 15-20% d. 20-25%

Q8. What's the price price of a bottle/crate??. . . . . . . . . . . . . . . . . . . . . . . . . .

Q9. What incentives do you get from the company for reselling large quantities??

Cash Incentives b. Other Please identify. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Q10. Just how many containers break in a kennel on an average??

1-2 b. 3-4 c. A lot more than 5

Q11. What happens to the containers that are shattered?

Company can take it again b. Provides it to Kabariwala c. Other

Q12. Who bears the loss of the broken bottles?

Retailer b. Company c. Sharing between Merchant and Company

Q13. How much do the sales upsurge in optimum season?

Double b. 3 times c. 4 times d. 5 times e. Higher

Q14. May be the source sufficient to meet requirements in maximum season?

Yes No

Q15. What extra will company will in peak sales season?

Increase in securities b. More consistent replacements c. Others

Q16. Does any company agent comes and meet you?

Yes No

Q17. If yes then how frequently do they come?

Weekly b. Once a month c. In 6months d. Yearly f. Never

Q18. Will there be any complaint/feedback system?

Yes No

Q19. Do you have any issues/feedback towards the company?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Questionnaire for Company Representatives:

Name:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age:. . . . . . . . . . . . . . . . . . . . . . . . . .

Designation:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . http://2. bp. blogspot. com/_STNJ3qjC9Nk/SX30qf_Ve3I/AAAAAAAAAcU/P3nV5aXUBdY/s320/Coca-Cola_logo5. jpg

Q1. Which coca cola chilly drink brand gets the maximum sales?

Coke b. ThumsUp c. Limca d. Sprite e. Fanta f. Maaza g. Others

Q2. Which type of packing markets the most?

300ml bottle b. 600 ml family pet bottle c. 1. 5L family pack d. Others

Q3. What's the annual way to obtain cold beverages?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Q4. What are the annual local sales in Delhi/NCR region?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Q5. What's the seasonal effect on the sales and exactly what does company do to take on the challenge?



Q6. What percentage of bottling is performed by the business vis-a vis subsidiaries?

Company. . b. Subsidiaries

Q7. What are the major bottling companies of the business?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . .

Q8. What's the revenue showing model that the business adopts with the bottling crops owned by franchisees?


Q9. What incentives that the company fives to vendors and large sellers?

. .

Q10. What's the margin given to the next on an average:

Distributors. .

Retailers. .

Q11. What happens to the bottles that break during vehicles?

Company calls for it back b. Offers it to Kabariwala c. Other

Q12. Who bears the increased loss of the broken bottles?

Retailer b. Company c. Posting between Retailer and Company

Q13. Just how much does the sales increase in top season?

Double b. 3 times c. 4 times d. 5 times e. Higher

Q14. Exactly what does company do to meet the demands in peak season?


Q15. Will there be any complaint/feedback mechanism for the distributor and merchants?

Yes No

Q16. What's the procedure for opposite logistics of bottles?


Case Analysis: Study of Distribution Route of Coca-Cola

Distribution Network of Coca Cola:

HCCBPL has a broad and well maintained network of salesmen appointed when planning on taking up the responsibility of syndication of products to diverse parts of the locations. The distribution channels are constructed in such a way that the demand of customers is fulfilled at the right place and the right time when it's needed by them.

A typical circulation string at HCCBPL would be:

Production --- Place Warehouse --- Depot Warehouse --- Distribution Warehouse --- Retail Stock --- Retail Shelf --- Consumer The customers of the Company are divided into different categories and different routes, and every salesman is given to one particular road, which is usually to be followed by him on a daily basis. An in depth and well organized distribution system contributes to the efficiency of the salesmen. It also contributes to low costs, higher sales and higher efficiency thereby leading to higher gains to the firm.

DISTRIBUTION ROUTES The many routes designed by HCCBPL for syndication of products are as follows:

Key Accounts: The customers in this category collectively add a large chunk of the total sales of the Company. It basically includes organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being created by them after having a certain time frame i. e. the month of half a month.

Examples: Golf clubs, fine dine restaurants, hotels, Corporate houses etc.

Future Usage: This option consists of outlet stores of Coca-Cola products, wherein a considerable amount of stock is held in order to use for future utilization. The stock does not exhaust inside a day or two, instead as so when required securities are stacked up by them so as to avoid scarcity or non-availability of the product.

Examples: Departmental stores, Super market segments etc.

Immediate Consumption: The stores in this option are those which require stocks on a regular basis. The stocks and options of products in these stores aren't stored for future use instead, are tired on the same day and may run a little into the next day i. e. the products are used at a fast pace.

Examples: Small sized bars and restaurants, educational establishments etc.

General: Under this path, all the outlet stores that come in a particular area or an area along with its neighbouring areas are catered to. The utilization period is not taken into consideration in this specific route.


Direct syndication: In direct syndication, the bottling device or the bottler partner has direct control over the activities of sales, delivery, and merchandising and local accounts management at the store level.

Indirect syndication: In indirect distribution, a business which is not area of the Coca-Cola system has control using one or more of the distribution elements (Sales, delivery, merchandising and local bank account management)

Merchandising: Merchandising means communication with the buyer at the point of purchase to convey product gain, value and Quality. Sales people and delivery personnel both have this responsibility. In certain locations special groups who get into business locations to specifically merchandise our products.


The Syndication process mainly involves three departments:

Distribution Department: It appoints marketers and establishes a distribution network, operations approved sale requests and prepares invoices, arranges logistics and ship products, co-ordinates with vendors for choices and monitors syndication stocks and their set-up.

Finance Team: It bank checks credit limitations and approves sales purchases in conformity with the credit insurance plan followed by the firm, records collections from distributors, periodically reconciles outstanding balances from distributors, obtains balance confirmation from distributors and employs up outstanding amounts.

Shipping or Warehousing Division: It dispatches goods according to approved by order, means that companies are dispatched over a FIFO basis, ensures physical control over weight out area and changes warehouse stock information in a timely manner.

Data Research and Interpretation

On the foundation of the survey done the inferences can be drawn the following:

Packaging and sales:

From the review it could be easily discovered that the utmost sales happen for the 300ml bottles and then come the 600ml packaging. When arriving to family pack and cans their sales are incredibly less in quantities which is influenced mainly by the region. It means that the sales of can will be higher in ares near to the schools/college that is the area in the children vicinity whereas the sales of family load up is in residential areas.

For the pictorial representation, considering only 2 types of packaging i. e. 300ml and 600ml.

Their sales can be symbolized as:

This demonstrates the sales of the company is powered mainly by the 300ml accompanied by 600ml and the rest presentation styles are just an increase for the company.

Replacement Time: Most of the retailers were happy with the replacing of the stock. The average time came out to be within 1 to 2 2 days that is a good sign for the company. This helps the company to interact more frequently with the suppliers and means that no sales are lost due to unavailability of the stock.

Customer Patterns: Customer patterns is also on the company side as almost all of the clients specifically ask for the company's product.

This data can be show as:

This is an excellent sign for the company as in such times of competition having brand commitment isn't just important but it addittionally helps the business to introduce new products much easily.

Incentives for high Sales: From your review it is clear that the company does not have a proper insurance policy in spot to reward the marketers and stores having high sales. This is a location of concern for the business as giving bonuses to the retailers would assist in increase in sales and brand presence of the company.

At present the business is only offering cash incentives to the suppliers but it should also begin looking at awarding these vendors in some kind of total annual meet of the business so that the retailers feel to be a part of the company.

Peak Season Demand and Supply: It is pretty visible from the review that the company struggles to meet the demands in peak times of sales and the rival is cashing upon this weakness of the business.

Most of the suppliers say that the business struggles to meet up with the demand in summers and peak times and in times when the supply should be increased, the business cuts the supply causing lack of sales to the dealer as well as the business.

In peak season the increase in sales can be depicted as:

From the graph it is clear that almost all of the retailers believe that the sales almost quadruples in maximum season and there is no measure from the company to meet this huge demand as the business changes nothing at all to meet this demand. The business has the same syndication strategy even in peak season that brings about lack of sales for the suppliers and making them miserable.

Reverse Logistics: The business has a proper channel set up for reverse logistics as follows:

Coca Cola





The opposite logistics start from the customer and ends back again to the company. The sellers are imposed monetary fines if they do not returning the bottles allotted to them.

Core Issues and Guidelines in supply of goods to the complete sellers:

Minimizing Order Processing Wait times

Wait times occur in many places and are often an integral determinant of the quality of logistics service (airlines wait times: pre, through, and post journey inspections; depot repair time; defect trouble firing and repair time)

For Coca-Cola the hang on times of the merchandise resulted in the supply string delivery system as seen in the physique below:

Predicting the scheduling wait times for the delivery of the products and payments

We perform a scheduling simulation using the forecasted runtimes as the run times of the applications. This provides predictions of when applications will begin to execute.

We simulate the FCFS, LWF, and back_ll scheduling algorithms and predict the wait time for every application when the application form is published to the scheduler

Demand Forecasting

Demand is the desire of a person to get your products. Demand is principally affected by:

Exogenous Factors:

Economic Prosperity

Competing Products



Internal Factors


New Product Introductions

Reaction to competitor's activities

Pricing Decisions


Service Levels

Demand Management includes ALL decisions that a company makes that affect demand.

Need for Demand Forecasting:

Need to make development/procurement/capacity decisions in advance of actual demand

In a natural make-to-order environment or if lead times were 0, forecasting would not be necessary

Increase customer satisfaction

Reduce stock-outs

Schedule development more efficiently

Lower protection stock requirements

Reduce product obsolescence costs

Manage shipments better

Improve costs and campaign management

Negotiating superior conditions with suppliers

Making more knowledgeable pricing decisions

Steps in the Forecasting Process

Establish goals for the forecast.

Determine what to forecast.

Specify the time period for the forecast.

Gather and analyze data.

Select a forecasting method.

Make the forecast.

Present the forecast results.

Monitor and control the forecast.

Considerations in selecting a Forecasting Method:

Type and amount of data available.

Underlying routine of the past data.

Forecast time horizon.

Technical capability of the forecaster.

Use of the forecast.

Attitude of the finish end user toward specific methods.

Forecasting Methods:

Judgment Methods:

Nave Extrapolation

Sales Pressure Composite: Each salesperson jobs their sales. It really is combined at district and national levels.

Jury of Professional Point of view: It consists of group of high-level professionals. The group estimates demand working along. They combine managerial experience with statistical models.

Delphi Technique: It is an iterative group method.

Forecasting Methods:

Counting Methods:

Market Testing

Consumer Market Study: Asking consumers about their purchasing plans

Industrial Market Survey

Time Series Methods:

Moving Averages

Exponential Smoothing

Time Series Extrapolation

Time Series Decomposition

Box-Jenkins Method

Causal Methods

Correlation Methods

Regression Methods

Econometric Methods


Aggressive Marketing

Regular trip to distributors

Sales campaign and advertising to be produced more regular for brand building.

Communications should be upgraded. Fulfil the Demand of product by company. Inside the field's sales situation. Sales people work independently and away from the office.

Good communication requires conversation between those organizing and those receiving reports. An excellent sales reporting system provides both for communication from the field to office and form office to the field.

Sales reviews provide data for analyzing performance.

Company should make plans for better performance to the sales man.

Company should be employing the customer's recommendations and grievances about products, service plans, price changes, advertising companies etc.

Company should collect information of competitor's activities. Vehicles confers time electricity and place tool to the merchandise. It determines the business's customer service; it has also important bearing on the other components of physical distribution and marketing.


To conclude we can say that the business should do the next to maintain a rise its sales:

Increase in supply in peak seasons

More bonuses to merchants and distributors

Feedback device for retailers

More consumer centric approach

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