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DISTRIBUTION

DISTRIBUTION. DISTRIBUTION. Distribution has been defined as how to get the product or service to the customer.

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DISTRIBUTION

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  1. DISTRIBUTION

  2. DISTRIBUTION • 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.

  3. DISTRIBUTION CHANNEL • 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 available: -Selling direct -Mail order (including Internet and telephone sales) -Retailer -Wholesaler -Agent (who acts on behalf of the producer)

  4. CHANNEL MANAGEMENT • 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 supplier: -Channel membership -Channel motivation -Monitoring and managing channels

  5. CHANNEL MEMBERSHIP • 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’.

  6. CHANNEL MOTIVATION • 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.

  7. 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.

  8. HLL distribution channel

  9. HLL • India’s Largest Fastest Moving Consumer Goods. • Need Strong distribution channel to support its Extensive Product Line of more than 20. • Sales Turnover of Rs.11,000 Crores.

  10. Objective • 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 country. • Company, almost touching the lives of two out of three Indians with 35 power brands and strong distribution channel.

  11. Distribution channel • Recognized as HLL’s one of the key strength. • HLL enjoys a formidable distribution network covering over 3400 distributors and 16 million outlets. • 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.

  12. HLL – Multichannel DS Producer Two Level Channel One Level Channel Distributors Zero – Level Channel Retailers Retailers Consumer Segment 1 Consumer Segment2 Consumer Segment 3

  13. 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.

  14. 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 challenge.

  15. Rural Distribution Model Only Motorable villages covered. 25% of rural population serviced.

  16. 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.

  17. Rural Distribution Model- Streamline Motorability not a constrained. 37% of population serviced

  18. 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 communities. • It already has about 25,000 women entrepreneurs. • It has already been extended to about 80,000 villages in 15 states.

  19. Project Shakti Woman entrepreneur selling HLL products

  20. 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

  21. Contd. • 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.

  22. 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.

  23. 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 India.

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