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DISTRIBUTION Powered By Docstoc
 Distribution has been defined as how to
  get the product or service to the customer.
 It is one of the four aspects of marketing.a
  distributor is the middleman between the
  manufacturer and the retailer.after a
  product is manufactured by a factory,it is
  stored in the distributors‟s warehouse.the
  product is then sold to customer.
 Frequently there may be a 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.'
 A number of alternate 'channels' of distribution may be
 -Selling direct
    -Mail order (including Internet and telephone sales)
    -Agent (who acts on behalf of the producer)

   Suppliers‟s job is to manage all the processes
    involved in the distribution chain,until the product
    or service arrives with the end-user. This may
    involve a number of decisions on the part of the
    -Channel membership
    -Channel motivation
    -Monitoring and managing channels
   Intensive distribution - Where the majority of
    resellers stock the `product' (with convenience
    products, for example, and particularly the brand
    leaders in consumer goods markets) price competition
    may be evident.
   Selective distribution - This is the normal pattern
    (in both consumer and industrial markets) where
    `suitable' resellers stock the product.
   Exclusive distribution - Only specially selected
    resellers (typically only one per geographical area) are
    allowed to sell the „product‟.

   There are many devices for achieving
    motivation. Perhaps the most usual is
    `bribery': the supplier offers a better
    margin, to tempt the owners in the channel
    to push the product rather than its
    competitors; or a competition is offered to
    the distributors' sales personnel, so that
    they are tempted to push the product.
Monitoring and managing channels

   Activities of distribution chain are
    monitored and managed as many
    organizations use a mix of different
    channels; in particular,they may
    complement a direct salesforce,with
    agents, covering the smaller customers
    and prospects.
HLL distribution channel
   India‟s Largest Fastest Moving Consumer

   Need Strong distribution channel to
    support its Extensive Product Line of more
    than 20.

   Sales Turnover of Rs.11,000 Crores.
 The corporate objective of HLL is "to meet
  the everyday needs of people
  everywhere". This is met through an
  extensive distribution system that covers
  the diverse geographical boundaries of the
 Company, almost touching the lives of two
  out of three Indians with 35 power brands
  and strong distribution channel.
              Distribution channel
   Recognized as HLL‟s one of the key strength.
   HLL enjoys a formidable distribution network
    covering over 3400 distributors and 16 million
          It Helps to maintain heavy volumes, and hence, fill the
           shelves of most outlets.
   Distribute products by network of about 7,500
    redistribution stockiest (RS) covering about one
    million retail outlets.
          They Sell to shops in urban areas and to villages accessible
           by road and with population of more than 2000.
         HLL – Multichannel DS

                                    Producer             Two Level Channel

                       One Level Channel
Zero – Level Channel                               Distributors

                                     Retailers      Retailers

             Consumer Segment 1 Consumer Segment2 Consumer Segment 3
         Urban Distribution channel
   One is by the Regular Retail Channel.
   The other is through Direct Selling Channel in
    the name of Hindustan Lever Network (HLN).
       It already has about 3.5 lakh consultants - all
        independent entrepreneurs, trained and guided by
        HLN's expert managers.
       Spread over 1500 towns and cities, covering 80% of
        the urban population.
   At the Supermarkets.
   Health & Beauty Services.
       Rural Distribution Channel
 In India, with the total potential of
  3,800 towns and 627,000 villages.
 Hll distribution network reached
  300,000 villages.
 Dilemma was how to extend its
  network to the remaining villages in
  inaccessible rural areas.
 Penetrating new markets would be
     Rural Distribution Model

Only Motorable villages covered. 25% of rural
population serviced.
         Operation Streamline
 One of the HLL‟s growth initiatives to
  penetrate rural markets that could not be
  reached by vehicle.
 With the help of local stockiest called “Star
  Sellers”, distribution network extended to
  villages with fewer than 2,000 people.
 In turn, Star Sellers sold the brands to
  retail outlets.
    Rural Distribution Model-

Motorability not a constrained. 37% of
population serviced
                   Project Shakti
   Started in 2001,it targets small villages with population of
    less than 2000 people.
   It aimed to bring down distribution costs in rural market.
   Save Distribution margin by cutting one layer of
    distribution- The local Distributors.
   It seeks to empower underprivileged rural women by
    providing income-generating opportunities.
   These saleswomen sell HLL products directly to their
   It already has about 25,000 women entrepreneurs.
   It has already been extended to about 80,000 villages in
    15 states.
Project Shakti

Woman entrepreneur selling HLL products
                   HLL - Logistics
   Marketing Logistics – It involves planning,
    implementing and controlling the physical flow of
    goods , services and related information from
    point of origin to point of consumption.

   Major Logistics Functions –
          Warehousing
          Transportation
          Logistics Information Management
   Warehousing –
              250 suppliers
              135 owned factories
              70 depots or warehouses
              and over 7,500 stockiest.
   Transport –TCI (Transport Corporation of India) provides
    transport facility. Goods are transported by trucks.
   Logistics Information Management –IT system has been
    implemented to supply stocks to RD. Stockiest have
    been connected with the company through an Internet-
    based network, called RSNet, for online interaction on
    orders, dispatches, information sharing and monitoring.
                  STYLE SPA
   Style Spa, one of the largest furniture chains in
    India, will go international.
   It is looking at the markets in the SAARC
    countries, and plans to open two outlets in
    Colombo next year
   Style Spa has 85 stores of which 33 are
    company operated and 22 exclusive franchises.
    This year the company is expanding in the
    smaller cities and towns such as Lucknow,
    Udaipur, Aurangabad, Nashik, Ahmedabad,
    Hubli and Rajkot.
   The company plans to open 15 stores in the
    current year, of which 12 will be company owned
    and the other three company franchisee
    operated. It has identified 10 locations where the
    stores will open for business by October.
    STYLE SPA has recently entered into a
    distribution tie-up with Welspun India and Portico
    New York to market their home furnishing
    products through Gautier furniture showrooms in

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