2. DISTRIBUTIONDISTRIBUTION
Distribution has been defined as how toDistribution has been defined as how to
get the product or service to the customer.get the product or service to the customer.
It is one of the four aspects of marketing.aIt is one of the four aspects of marketing.a
distributor is the middleman between thedistributor is the middleman between the
manufacturer and the retailer.after amanufacturer and the retailer.after a
product is manufactured by a factory,it isproduct is manufactured by a factory,it is
stored in the distributors’s warehouse.thestored in the distributors’s warehouse.the
product is then sold to customer.product is then sold to customer.
3. DISTRIBUTION CHANNELDISTRIBUTION CHANNEL
Frequently there may be a chain of intermediariesFrequently there may be a chain of intermediaries,each,each
passing the product down the chain to the nextpassing the product down the chain to the next
organizationorganization before it finally reaches the consumer orbefore it finally reaches the consumer or
end-user. This process is known as the 'distributionend-user. This process is known as the 'distribution
chain' or the 'channel.'chain' or the 'channel.'
A number of alternate 'channels' of distribution may beA number of alternate 'channels' of distribution may be
available:available:
--Selling directSelling direct
-Mail order (including Internet and telephone sales)-Mail order (including Internet and telephone sales)
-Retailer-Retailer
-Wholesaler-Wholesaler
-Agent (who acts on behalf of the producer)-Agent (who acts on behalf of the producer)
4. CHANNEL MANAGEMENTCHANNEL MANAGEMENT
Suppliers’s job is to manage all the processesSuppliers’s job is to manage all the processes
involved in the distribution chain,until the productinvolved in the distribution chain,until the product
or service arrives with the end-user. This mayor service arrives with the end-user. This may
involve a number of decisions on the part of theinvolve a number of decisions on the part of the
supplier:supplier:
-Channel membership-Channel membership
-Channel motivation-Channel motivation
-Monitoring and managing channels-Monitoring and managing channels
5. CHANNEL MEMBERSHIPCHANNEL MEMBERSHIP
Intensive distributionIntensive distribution - Where the majority of- Where the majority of
resellers stock the `product' (with convenienceresellers stock the `product' (with convenience
products, for example, and particularly the brandproducts, for example, and particularly the brand
leaders in consumer goods markets) price competitionleaders in consumer goods markets) price competition
may be evident.may be evident.
Selective distributionSelective distribution - This is the normal pattern- This is the normal pattern
(in both consumer and industrial markets) where(in both consumer and industrial markets) where
`suitable' resellers stock the product.`suitable' resellers stock the product.
Exclusive distributionExclusive distribution - Only specially selected- Only specially selected
resellers (typically only one per geographical area) areresellers (typically only one per geographical area) are
allowed to sell the ‘product’.allowed to sell the ‘product’.
6. CHANNEL MOTIVATIONCHANNEL MOTIVATION
There are many devices for achievingThere are many devices for achieving
motivation. Perhaps the most usual ismotivation. Perhaps the most usual is
`bribery': the supplier offers a better`bribery': the supplier offers a better
margin, to tempt the owners in the channelmargin, to tempt the owners in the channel
to push the product rather than itsto push the product rather than its
competitors; or a competition is offered tocompetitors; or a competition is offered to
the distributors' sales personnel, so thatthe distributors' sales personnel, so that
they are tempted to push the product.they are tempted to push the product.
7. Monitoring and managing channelsMonitoring and managing channels
Activities of distribution chain areActivities of distribution chain are
monitored and managed as manymonitored and managed as many
organizations use a mix of differentorganizations use a mix of different
channels; in particular,they maychannels; in particular,they may
complement a direct salesforce,withcomplement a direct salesforce,with
agents, covering the smaller customersagents, covering the smaller customers
and prospects.and prospects.
9. HLLHLL
India’s Largest Fastest Moving ConsumerIndia’s Largest Fastest Moving Consumer
Goods.Goods.
Need Strong distribution channel toNeed Strong distribution channel to
support its Extensive Product Line of moresupport its Extensive Product Line of more
than 20.than 20.
Sales Turnover of Rs.11,000 Crores.Sales Turnover of Rs.11,000 Crores.
10. ObjectiveObjective
The corporate objective of HLL is "to meetThe corporate objective of HLL is "to meet
the everyday needs of peoplethe everyday needs of people
everywhere". This is met through aneverywhere". This is met through an
extensive distribution system that coversextensive distribution system that covers
the diverse geographical boundaries of thethe diverse geographical boundaries of the
country.country.
Company, almost touching the lives of twoCompany, almost touching the lives of two
out of three Indians with 35 power brandsout of three Indians with 35 power brands
and strong distribution channel.and strong distribution channel.
11. Distribution channelDistribution channel
Recognized as HLL’s one of the key strength.Recognized as HLL’s one of the key strength.
HLL enjoys a formidable distribution networkHLL enjoys a formidable distribution network
covering over 3400 distributors and 16 millioncovering over 3400 distributors and 16 million
outlets.outlets.
It Helps to maintain heavy volumes, and hence, fill theIt Helps to maintain heavy volumes, and hence, fill the
shelves of most outlets.shelves of most outlets.
Distribute products by network of about 7,500Distribute products by network of about 7,500
redistribution stockiest (RS) covering about oneredistribution stockiest (RS) covering about one
million retail outlets.million retail outlets.
They Sell to shops in urban areas and to villages accessibleThey Sell to shops in urban areas and to villages accessible
by road and with population of more than 2000.by road and with population of more than 2000.
12.
13. HLL – Multichannel DSHLL – Multichannel DS
Producer
Consumer Segment2
Retailers Retailers
Distributors
Consumer Segment 1 Consumer Segment 3
Zero – Level Channel
One Level Channel
Two Level Channel
14. Urban Distribution channelUrban Distribution channel
One is by theOne is by the Regular Retail Channel.Regular Retail Channel.
The other is throughThe other is through Direct Selling ChannelDirect Selling Channel inin
the name of Hindustan Lever Network (HLN).the name of Hindustan Lever Network (HLN).
It already has about 3.5 lakh consultants - allIt already has about 3.5 lakh consultants - all
independent entrepreneurs, trained and guided byindependent entrepreneurs, trained and guided by
HLN's expert managers.HLN's expert managers.
Spread over 1500 towns and cities, covering 80% ofSpread over 1500 towns and cities, covering 80% of
the urban population.the urban population.
At the SupermarketsAt the Supermarkets..
Health & Beauty Services.Health & Beauty Services.
15. Rural Distribution ChannelRural Distribution Channel
In India, with the total potential ofIn India, with the total potential of
3,800 towns and 627,000 villages.3,800 towns and 627,000 villages.
Hll distribution network reachedHll distribution network reached
300,000 villages.300,000 villages.
Dilemma was how to extend itsDilemma was how to extend its
network to the remaining villages innetwork to the remaining villages in
inaccessible rural areas.inaccessible rural areas.
Penetrating new markets would bePenetrating new markets would be
challenge.challenge.
17. Operation StreamlineOperation Streamline
One of the HLL’s growth initiatives toOne of the HLL’s growth initiatives to
penetrate rural markets that could not bepenetrate rural markets that could not be
reached by vehicle.reached by vehicle.
With the help of local stockiest called “StarWith the help of local stockiest called “Star
Sellers”, distribution network extended toSellers”, distribution network extended to
villages with fewer than 2,000 people.villages with fewer than 2,000 people.
In turn, Star Sellers sold the brands toIn turn, Star Sellers sold the brands to
retail outlets.retail outlets.
18. Rural Distribution Model-Rural Distribution Model-
StreamlineStreamline
Motorability not a constrained. 37% of
population serviced
19. Project ShaktiProject Shakti
Started in 2001,it targets small villages with population ofStarted in 2001,it targets small villages with population of
less than 2000 people.less than 2000 people.
It aimed to bring down distribution costs in rural market.It aimed to bring down distribution costs in rural market.
Save Distribution margin by cutting one layer ofSave Distribution margin by cutting one layer of
distribution- The local Distributors.distribution- The local Distributors.
It seeks to empower underprivileged rural women byIt seeks to empower underprivileged rural women by
providing income-generating opportunities.providing income-generating opportunities.
These saleswomen sell HLL products directly to theirThese saleswomen sell HLL products directly to their
communities.communities.
It already has about 25,000 women entrepreneurs.It already has about 25,000 women entrepreneurs.
It has already been extended to about 80,000 villages inIt has already been extended to about 80,000 villages in
15 states.15 states.
21. HLL - LogisticsHLL - Logistics
Marketing LogisticsMarketing Logistics –– It involves planning,It involves planning,
implementing and controlling the physical flow ofimplementing and controlling the physical flow of
goods , services and related information fromgoods , services and related information from
point of origin to point of consumption.point of origin to point of consumption.
Major Logistics Functions –Major Logistics Functions –
WarehousingWarehousing
TransportationTransportation
Logistics Information ManagementLogistics Information Management
22. Contd.Contd.
Warehousing –Warehousing –
250 suppliers250 suppliers
135 owned factories135 owned factories
70 depots or warehouses70 depots or warehouses
and over 7,500 stockiest.and over 7,500 stockiest.
Transport –TCI (Transport Corporation of India) providesTransport –TCI (Transport Corporation of India) provides
transport facility. Goods are transported by trucks.transport facility. Goods are transported by trucks.
Logistics Information Management –IT system has beenLogistics Information Management –IT system has been
implemented to supply stocks to RD. Stockiest haveimplemented to supply stocks to RD. Stockiest have
been connected with the company through an Internet-been connected with the company through an Internet-
based network, called RSNet, for online interaction onbased network, called RSNet, for online interaction on
orders, dispatches, information sharing and monitoring.orders, dispatches, information sharing and monitoring.
23. STYLE SPASTYLE SPA
Style Spa, one of the largest furniture chains inStyle Spa, one of the largest furniture chains in
India, will go international.India, will go international.
It is looking at the markets in the SAARCIt is looking at the markets in the SAARC
countries, and plans to open two outlets incountries, and plans to open two outlets in
Colombo next yearColombo next year
Style Spa has 85 stores of which 33 areStyle Spa has 85 stores of which 33 are
company operated and 22 exclusive franchises.company operated and 22 exclusive franchises.
This year the company is expanding in theThis year the company is expanding in the
smaller cities and towns such as Lucknow,smaller cities and towns such as Lucknow,
Udaipur, Aurangabad, Nashik, Ahmedabad,Udaipur, Aurangabad, Nashik, Ahmedabad,
Hubli and Rajkot.Hubli and Rajkot.
24. The company plans to open 15 stores in theThe company plans to open 15 stores in the
current year, of which 12 will be company ownedcurrent year, of which 12 will be company owned
and the other three company franchiseeand the other three company franchisee
operated. It has identified 10 locations where theoperated. It has identified 10 locations where the
stores will open for business by October.stores will open for business by October.
STYLE SPA has recently entered into aSTYLE SPA has recently entered into a
distribution tie-up with Welspun India and Porticodistribution tie-up with Welspun India and Portico
New York to market their home furnishingNew York to market their home furnishing
products through Gautier furniture showrooms inproducts through Gautier furniture showrooms in
India.India.
