Minor Project Report

On

A study on Distribution Practices of ITC, Britannia & Parle Industries Ltd. in
Noida Region

By

Sandeep Sindhu- A0102212131

Pankaj Pant- A0102212156

Tushar Upadhyay- A0102212230

Anshuman Bhardwaj- A0102212237

MBA M&S Class of 2014

Under the Supervision of

Ms. Swati Bhatnagar

Department of Marketing & Sales

In Partial Fulfillment of the Requirements for the Degree of
Master of Business Administration Marketing & Sales

At

AMITY BUSINESS SCHOOL
AMITY UNIVERSITY UTTAR PRADESH
SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA
2013
i


DECLARATION

Title of Project Report-
A study on Distribution Practices of ITC, Britannia & Parle Industries Ltd. in Noida Region.

I declare

(a)That the work presented for assessment in this Minor Project Report is my own, that it has not
previously been presented for another assessment and that my debts (for words, data, arguments
and ideas) have been appropriately acknowledged.

(b)That the work conforms to the guidelines for presentation and style set out in the relevant
documentation.




Date: Sandeep Sindhu
Pankaj Pant
Tushar Upadhyay
Anshuman Bhardwaj
MBA M&S Class of 2014







ii


CERTIFICATE

I hereby certify that Pankaj Pant, Tushar Upadhyay, Anshuman Bhardwaj, Sandeep
Sindhu, students of Masters of Business Administration M&S at Amity Business School,
Amity University Uttar Pradesh has completed the Minor Project Report on
A study on Distribution Practices of ITC, Britannia & Parle Industries Ltd. in Noida Region.







Ms. Swati Bhatnagar
Assistant Professor
Department of Marketing & Sales










iii

ACKNOWLEDGEMENT

Perseverance, inspiration and motivation have played a great role in the success of any venture.
It would be incomplete to submit this report without acknowledging the people behind this
endeavor and without whose support we wouldnt have able to achieve this. It gives us immense
pleasure to express my gratitude to everyone who shared with us their precious time and effort
during the project.
First of all, we thank Amity Business School, Noida for granting us the permission to work for
the research work. We are also thankful to:
Dr. SanjeevBansal, Director, Amity Business School, Noida for his patience and guidance,
encouragement and for sharing his expertise in writing this feasibility study.
Then to Ms. Swati Bhatnagar our faculty guide for giving his valuable time and precious
knowledge for guidance of this project.
Finally to Dr. PradeepNarwal whose guidance really proved helpful.
AnshumanBhardawaj
Pankaj Pant
SandeepSindhu
TusharUpadhyay
Amity Business School
Noida UP








iv

TABLE OF CONTENTS

Chapter 1: Introduction1
1.1 Biscuits Industry in India..4
1.2 About Companies.6
1.3 Product Range..8
1.4 Market Share...10
1.5 SWOT Analysis of FMCG Sector..11

Chapter 2: Review of the Literature...12
2.1 Review of researchers.13
2.2 Mechanism of Distribution Channels in FMCG.16
2.2.1 Distribution Channel of ITC..17
2.2.2 Distribution Channel of Parle....20
2.2.3 Distribution Channel of Britannia..21

Chapter 3: Research Methodology.27
3.1 Research Objectives....28
3.2 Type of Research....28
3.3 Methods of Data Collection....28
3.4 Sample Design....29
3.5 Instruments Used....29
3.6 Limitations..30

Chapter 4: Data Analysis and Interpretation......31
4.1 Analysis ..........32
4.2 Findings..41
Chapter 5: Suggestions and Conclusion...44
5.1 Recommendations...45
5.2 Suggestions.45
5.3 Conclusion......47
v

Bibliography.50
Annexure..52























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ABSTRACT

With increasing foray into various categories of the Foods business, ITC needs to determine the
best way to service the Grocery outlets and build equally strong distribution systems that
match the long term growth plans of the company in the FMCG (non-cigarette) business.
ITC has over the last 98 years established a very close business relationship with the farming
community in India and is currently in the process of enhancing the Indian farmer's ability to link
to global markets, through the initiative, and produce the quality demanded by its customers.
This long-standing relationship is being utilized in sourcing best quality agricultural produce for
ITC's Foods business.
The Foods business is today represented in 4 categories in the market. These are:
1. Ready To Eat Foods
2. Staples
3. Confectionery
4. Snack Foods

In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged
in assisting outsourced manufacturers in implementing world-class hygiene standards through
HACCP certification. The unwavering commitment to internationally benchmarked quality
standards enabled ITC to rapidly gain market standing in all its 5 brands:
1. Kitchens of india
2. aashirvaad
3. sunfeast
4. mint-o fresh
5. Bingo

This report provides a comparative study of distribution practices of Itc vis a vis Britannia &
Parle Industries Limited. The scope of the study is restricted to some selected areas of Delhi
NCR city. The analysis is based on retailer feedback on basis of retailer questionnaire and
vii

secondary survey done with the help of internet. Various parameters such as credit terms, quality
of service, delivery systems, knowledge of salesman etc have been studied.
The results bring out Parle Industries Limited as the preferred company, primarily on account of
high consumer demand & various other factors. The report concludes with recommendations to
improve the working of ITC WDs.


1

















CHAPTER 1
INTRODUCTION


2

INTRODUCTION


FMCG is an acronym for Fast Moving Consumer Goods, which refer to things that we buy
from local supermarkets on daily basis, the things that have high turnover and are relatively
cheaper.
A major portion of the monthly budget of each household is reserved for FMCG products.
The volume of money circulated in the economy against FMCG products is very high, as the
number of products the consumer use is very high.
Various FMCG Products and Categories are as follows:




Competition in the FMCG sector is very high resulting in high pressure on margins.
FMCG companies maintain intense distribution network. Companies spend a large portion of
their budget on maintaining distribution networks. New entrants who wish to bring their
products in the national level need to invest huge sums of money on promoting brands.
Manufacturing can be outsourced. A recent phenomenon in the sector was entry of
multinationals and cheaper imports. Also the market is more pressurized with presence of
local players in rural areas and state brands.
3


FMCG in INDIA
The Fast Moving Consumer Goods (FMCG) sector in India has been growing at a healthy
CAGR of 11 % over the last decade Riding on the back of increasing demand and changing
consumer preferences, thanks to higher disposable incomes and the retail revolution, the
sector has been posting double Digit growth over the past couple of years
The Industry is volume driven and is characterized by low margins. The Products are branded
and backed by skilled marketing, heavy advertising, slick packaging and strong distribution
networks
Also, Raw material prices play an important role in determining the pricing of the final
product Modern Retail formats too have contributed in major way in pushing the growth in
the FMCG Sector. With Rising income levels and the spread of modern retail, the FMCG
industrys future prospects look bright which is expected to further boost sales. Growth In the
sector is led by higher urban and rural demand Going Forward The governments growing
support to agriculture will drive long term growth in consumption from the rural sector In
Our view, amongst all the FMCG segments, the food segment will outperform over the
coming years.
Scope of the Sector
The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest sector in
the economy. A well-established distribution network, intense competition between the
organized and unorganized segments characterizes the sector. FMCG Sector is expected to
grow by over 60% by 2015. That will translate into an annual growth of 10% over a 5-year
period. Hair care, household care, male grooming, female hygiene, and the chocolates and
confectionery categories are estimated to be the fastest growing segments, says an HSBC
report. Though the sector witnessed a slower growth in 2002-2004, it has been able to make a
fine recovery since then.



4

1.1 Biscuit Industry in India

The total production of biscuits in India is estimated to be around 30 lakh MT, the
organized sector accounts for 65% and the unorganized sector accounts for 35% of
the total industry volume.
The organized sector is valued at above Rs 8000 crores.
The biscuit industry is estimated to grow over 15-17% in the next few years.
The per capita consumption of biscuits in India is 2.0 kg.
India is ranked 3rd after US and China amongst the global biscuits producers.
The imports are not significant amount as compared to the total consumption.
The penetration of biscuits in urban and rural market is 85% and 55% respectively.
The Biscuit industry employs almost 3.5 lakh people directly and 30 lakh people
indirectly.

Annual Growth
The biscuit industry in India witnessed annual growth as below:-
2004-05 - 14%
2005-06 - 14%
2006-07 - 13%
2007-08 - 14%
2008-09 - 16%
2009-10 - 14%
2010-11 - 11%
2011-12 - 11%
2012-13 - 09% (April-September 2012)
While the growth rate has been stagnating during last 4 years, it picked up momentum during
the 2008-09 mainly on account of exemption from Central Excise Duty on biscuits with MRP
up to Rs.100/per kg, as per Union Budget for 2007-08. However growth further declined
from 2009-10 to 2011-12 and the first half of 2012-13.

Annual Production:
The organized biscuit manufacturing industrys annual production figures are given below:
(In Lakh Metric Tonnes)
2004-05 - 12.55
5

2005-06 - 14.29
2006-07 - 16.14
2007-08 - 16.85
2008-09 - 17.50
2009-10 - 18.50
2010-11 - 19.00
2011-12 - 20.50
2012-13 - 10.50(April to September 2012)

Segments:
The organized and unorganized sector of the biscuit industry is in the proportion of
70%:30% ratio.
Exports of Biscuit was 14% of the annual production during the year 2010-11 which
declined to around 12.5% in 2011-12.
Imports of biscuits into India (mainly high end products) has not shown any significant
growth during the last five years and has not affected production/sales by the Indian Biscuit
industry.

Rural-urban penetration of Biscuit:
Urban Market : 75% to 85%
Rural Market : 50% to 65%

Marketing:
Wholesale and Retail marketing in the Biscuit industry is carried out with a network of C & F
Agencies (for States and specific Districts), Dealers / Wholesalers and Retail shops.

Consumption:

PER CAPI TA CONSUMPTI ON of Biscuits in the country is only 1.8 kg, as compared to 2.5
kg to 5.5 kg in South East Asian countries and European countries, and 7.5 kg USA




6


Pattern of Biscuit Consumption (On Zonal basis) in the country are as below:



Consumption of biscuits is even across the regions
Northern Zone - 25%
Western Zone - 23%
Southern Zone - 24%
East and North
East Zone - 28% (Including N.East)

1.2 About Companies

ITC

ITC was established on August 24, 1910 as the Imperial Tobacco Company of India
Limited in Kolkata. Initially, the company was involved in the trading of imported cigarettes.
In 1925, in a backward integration move, the company started a packaging and printing
business.
The name of the company was changed to India Tobacco Company Limited (I.T.C. Ltd.) in
1974.
In 1975, I.T.C. Ltd., through ITC-Welcome group, tied up with the US-based Sheraton
Corporation to enter the hospitality industry. It acquired its first hotel in Madras (later
renamed Chennai) in Tamil Nadu and called it the Welcome group Chola Sheraton.
7

I.T.C. Ltd established ITC Bhadrachalam Paperboards Ltd. (IBPL) in 1975. The company
started production at its integrated pulp and paper/board manufacturing facility at
Bhadrachalam, Andhra Pradesh, in 1979.
In 1990, I.T.C. Ltd. set up an International Business Division (IBD) for export of agri
commodities.
I.T.C. started a greeting cards business under the brand name Expressions in the year 2000.
In the same year, I.T.C. also entered the fashion retailing business by extending its well
known cigarette brand Wills. The retail outlets were called Wills Lifestyle and offered
premium leisure wear for men and women under the Wills Sport brand.
In September 2001, the company was renamed ITC Ltd (without full stops, and with no
meaning attributed to the alphabets).
In 2001, ITC made an entry into the foods business.
In 2003, ITC launched Sunfeast biscuits in India.

Parle

Parle Products has been India's largest manufacturer of biscuits for almost 80 years.
Makers of the world's largest selling biscuit, Parle-G, and a host of other very popular brands,
the Parle name symbolizes quality, nutrition and great taste. With a reach spanning even the
remotest villages of India, the company has definitely come a very long way since its
inception.
Parle biscuits are linked with factors of power and wisdom providing nutrition and strength.
Parle biscuits are indeed much more than a tea- time snack, they are considered by many to
be an important part of their daily food. Parle provides one and all with a basket of biscuits
which is not only satisfying but are also of good and reliable quality. Parle biscuits cater to all
tastes from kids to senior citizens. They have found their way into the Indian hearts and
homes.

8

Britannia
Britannia Industries Limited is an Indian food-products corporation based in Kolkata,
India. It sells its Britannia and Tiger brands of biscuit throughout India. Britannia has an
estimated 38% market share. It was started in 1892, Kolkata with a Net sales of 31,122
Million Rs. It has strategy to setup new contract manufacturing units at least at 35 locations
in the country. The present manufacturing units are located in Kolkata, Uttaranchal , Delhi,
Chennai. The total contract manufacturing units are 40. The company was established in
1892, with an investment of Rs.295. Initially biscuits were manufactured in a small house in
central Kolkata. Later, the enterprise was acquired by the Gupta brothers mainly Nalin
Chandra Gupta, a renowned attorney, and operated under the name of "V.S. Brothers." In
1918, C.H. Holmes, an English businessman in Kolkata, was taken on as a partner and The
Britannia Biscuit Company Limited (BBCo) was launched. The Mumbai factory was set up
in 1924 and Peek Freans UK, acquired a controlling interest in BBCo. Biscuits were in big
demand during World War II, which gave a boost to the companys sales. The company
name finally was changed to the current "Britannia Industries Limited" in 1979. In 1982 the
American company Nabisco Brands, Inc. became a major foreign shareholder.
1.3 Product Range
Britannia ITC Ltd Parle
Tiger
Nutrichoice Junior
Good Day,
50 50,
Treat
Pure Magic,
Milk Bikis
Good Morning.
Sunfeast
Marie
Dream cream
Milky Magic
Fit kit
Choco Nut
Butter Nut

Parle-g
Krack-Jack
Monaco
Kreams
Hide and Seek
Milk Shakti

9

1.4 Market Share

Indian Biscuits Industry seems to be the largest among all the food industries and has a
turnover of around Rs.3000 crores. Indian subcontinent is known to be the second largest
manufacturer of biscuits, the first being USA. The industry is classified under two sectors:
organized and unorganized.

ORGANISED
SECTOR
UNORGANISED
SECTOR
70% 30%
Fig: Market share sector wise

Parle, whose dominance of the glucose category was under threat from Sunfeast and
Tiger, is now regaining market share. While Britannias market share in the glucose category
(value terms) has fallen to 9 per cent in the year 2012 from 11.6 per cent two years ago, ITC
has seen its market share drop in the glucose segment to 8.6 per cent in 2012 from 9.4 per
cent in 2010. As glucose segment has been growing significantly lower than biscuit market
growth rates in the last couple of years. Consumers are upgrading to better options - superior
in sensorial delivery or superior in nutrition delivery to the ordinary glucose biscuit. Growth
rates for the glucose segment are around a third of the biscuit market growth rates.
Meanwhile, Parle Products has seen an increase of market share in glucose category to 78 per
cent in 2012 from 74.7 per cent in 2010.

10


Fig: Percentage of market share in revenues of 2011-12

Britannia enjoys four times relative market share of its next competitor in health-
focused biscuits (Nutrichoice) and is neck to neck with ITC in the premium cream segment.
In volume terms in glucose segment, Britannia has seen a drop in market share to 8.6 per cent
in the year 2012 from 12 per cent in 2010. Similarly, ITC has seen a dip in share to eight per
cent in 2012 from 9.2 per cent in 2010. Parle Products has increased in market share (volume)
to 79.3 per cent from 75 per cent in 2010.
In value terms, glucose category has increased by 7.5 per cent in 2012, cream and
cookies have increased by 39 per cent and 15.5 per cent respectively. While glucose category
has declined 1.5 per cent in 2012 (in volume term), cream and cookies categories have
increased by 21.8 per cent and 5.5 per cent, respectively.










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1.5 SWOT ANALYSIS OF FMCG SECTOR

Strengths:

1. Low operational costs
2. Presence of established distribution
networks in both urban and rural areas
3. Presence of well-known brands in
FMCG sector

Weaknesses:

1. Lower scope of investing in technology and
achieving economies of scale, especially in small
sectors
2. Low exports levels
3. "Me-too" products, which illegally mimic the
labels of the established brands. These products
narrow the scope of FMCG products in rural and
semi-urban market.

Opportunities:

1. Untapped rural market
2. Rising income levels, i.e. increase in
purchasing power of consumers
3. Large domestic market- a population
of over one billion.
4. Export potential
5. High consumer goods spending

Threats:

1. Removal of import restrictions resulting in
replacing of domestic brands
2. Slowdown in rural demand
3. Tax and regulatory structure

12
















CHAPTER 2
THEORETICAL FRAMEWORK


13


2.1 Review of Researchers:

Titus R., Sengupta D. (2013) conducted a research work to get an understanding of the
distribution process of ITC and also that of its competitors. The distribution process, although
being quite similar, differs in the schemes and offers provided to the retail outlets. The tough
competition in the FMCG sector makes it important to constantly revise the schemes as per
the market conditions. Understanding the taste and preference of the consumers provide the
useful insight into the market conditions and helps companies devise their schemes
accordingly.
The taste of the consumers change constantly and they need a change or newness in the
products that they use. They also look for value for their money and want the companies to
provide them with the best deals possible. Little differences in the products make the
consumer choose one product over the other and so the companies need to provide their
consumers with the best deals so that they increase their customer loyalty towards their
product and get more and more consumers to choose their product.
In the biscuit segment the major players are Britannia, Parle, Cadbury and ITC. Britannia and
Parle have the advantage of time as they have been in this sector for a very long time and
people relate to their brand due to this. ITC is a fairly new company to enter this sector but
their products have gained popularity and continue to do so.
The major findings based on information collected from the distributors, projects that
Britannia has a good hold on the market in terms of distribution strategies and also that
Britannia has managed to get a good market share in the biscuits category. People also
perceive Britannia as a very reliable brand. They provide the retail outlets with better offers
and also they have popular biscuits in the healthy snack section. When it comes to a
comparison with competition, the distribution process of Britannia, Parle and Cadbury is
pretty much the same as that of ITC. Orders are taken daily and the delivery is done the next
day. Daily remittances are paid to the company. The credit period allowed to the outlets is
also roughly a week. The distributors give training to the salesmen for their better
performance. The salesmen are taught how to talk to the outlet owners and how to convince
them on buying larger quantities of goods. There are a few stores that get more profit for the
14

companies as compared to the others and they are paid more attention to. Britannia takes
order twice a week for them and gives special discounts. Cadbury is focusing on only one
biscuit variant i.e. Oreo. It is mainly targeting the kids. Whereas Britannia and Parle have a
lot of variants, targeting people of all ages, and they also have Nutri Choice and Actifit
which is more of a healthy snack made out of ingredients like Wheat and Ragi. Britannia and
Parle also have milk cream biscuits whereas the competitors like ITC and Cadbury do not
have milk cream biscuits. The brand Britannia is very popular and the consumers already
have a positive perception about it. It is the most popular biscuit brand at present.
Jain M. (2012) in his research paper aims to study the Brand preferences and the factors
affecting Brand preferences of the age group 07-14 years. Findings of this research paper will
help marketers of FMCG industry in understanding behavior of the age group 07-14 years as
consumers and to design suitable marketing strategies.
Based on research most preferred brands among following product categories i.e. Toothpaste
pepsodent, Biscuits sunfeast, Health drinks bournvita, Chips lays. Prominent factors
driving brand choices in different product categories are advertisements, packaging, taste,
flavour and brand image. Kids today are exposed to plenty of brands through peer pressure,
kids empowerment (parents providing them enough pocket money to spend), and
advertisements whose objectives are: building brand preference, encouraging switching to
your brand & changing customer perceptions of product attributes.
Dala M. (2013) in his article, ITC Foods expanding distribution network in small towns &
villages describes the various opportunities exist in the rural India. ITC Foods, the fastest
growing business of cigarette maker ITC Ltd, is aggressively expanding distribution in small
towns and villages, where it trails rivals such as Britannia Industries Ltd and Parle Products
Ltd. It makes Sunfeast biscuits and Bingo chips, expects increased distribution in rural areas
and new product launches in biscuits and snacks to help it grow sales by 28-30% this year.
According to Chitaranjan Dar, chief executive ITC Foods, Were going to make products
available in small towns and rural areas, which were earlier confined only to cities. For
example, if we had 1,000 stocking points in a region, well now have 3,000 stocking points.
Were appointing new wholesalers, stockiest. Our strategy is to intensely market our products
in rural areas. ITC Foods gets about 30-35% of its business from the villages. The number
15

would increase to 35-40% in two years. Its not that growth in urban is saturated, its just that
the opportunity in rural areas is immense and consumers there are premium zing (trading up).
He also added, the increasing distribution in rural areas is important for ITC Foods, which
likely accounted for over 11% of ITCs sales last year, to keep up its strong growth rate as
Parle and Good Day maker Britannia are aggressively promoting their brands. ITC is Indias
third-largest biscuits maker after Parle and Britannia. For distribution clout, ITC Foods can
also tap into its parent companys e-Choupal network, which involves working directly with
farmers on obtaining materials and delivering products.
Apart from Sunfeast and Bingo, ITC Foods brands include Kitchens of India packaged food,
Aashirvaad flour, minto and candyman sweets and Sunfeast Noodles. These brands likely
brought in sales of over Rs.4,700 crore in the year ended March.
Dar said the unit will launch this year new brand variants under Sunfeast biscuits, its largest
business. It will also launch new products in chips and confectionary.The whole idea behind
launching new products in biscuits is to strengthen the Sunfeast brand at the premium level.
They are also looking at getting into the dairy business, which will be launched in a year from
now.
Bhushan R. (2010) in his article on Parle surges ahead of Britannia to become leader in the
Indian biscuit market describes Parle stronger distribution and ability to reach consumers
faster at lower distribution costs than Britannia.
Indians spend more on biscuits than on toothpastes, skin-care products, shampoos and instant
noodles put together, and Parle Products has surged ahead of Britannia Industries to become a
clear leader in the Rs 11,000-crore-plus market, say Nielsen data. The country spent Rs
11,295 crore on biscuits in the 12 months ended March 2010 compared with Rs 2,300 crore
on toothpastes, Rs 3,500 crore on skin-care products, Rs 2,400 crore on shampoos and Rs
1,300 crore on instant noodles. And in the first half of the current financial year, it has
already spent Rs 6,320 crore on biscuits, according to The Nielsen Company, the country's
largest market researcher.
Parle Products has played a better volumes game, backed by stronger distribution, especially
in rural markets, and more competitive pricing. Parle has had stronger distribution and has the
16

ability to reach consumers faster at lower distribution costs. They have also converted single
pack size consumption into snacking options. The Rs 11,000 crore-plus and growing Indian
biscuit market is set for increased competition with an assortment of brands entering the
category, from established players such as Parle, Britannia and ITC, to new entrants such as
GlaxoSmithKline and United Biscuits, the world's third-largest biscuit maker. Companies
have been targeting volumes and aggressively pushing biscuits priced at Rs 5 and Rs 10 to
counter inflationary pressures and prevent consumers from switching to cheaper brands.
A low-margin business, price hikes in the category are rare because even a marginal increase
negatively impacts consumer off take. Glucose is the largest-selling biscuit segment,
followed by cookies and cream.
2.2 Distribution Channel Mechanism in FMCG
The FMCG sector is witnessing demand growth again, driven by improving reach, organized
retail and innovative channels, higher usage driven by affordability and rising incomes
driving aspiration levels.
The supply chain of products in the FMCG market in India is one of the longest supply
chains an industry could really have. There are as many as 5 levels of intermediaries involved
in the entire supply chain through which a product passes before reaching the end consumer.
What has been observed is that even though these FMCG companies are big multinationals
and Indian but face a major challenge of making their products available in the market in the
right quantities and in the right time. This is simply because these companies dont really
have a wide network of sales agents and other force which is required and is ideal for catering
their products to the markets. This aspect is taken over by distributors, wholesalers and
retailer whose margins on these products actually double the price of these products when a
final consumer buys it.
The margins kept by these intermediaries range from 2% to 5%. The products in this industry
are transported from manufacturing units via c & f agencies or warehouse to distributors who
further sell the same to wholesalers or stockiest who finally sell it to the retailers in the
market. These products are transported either via roadways or railways within the domestic
markets and normally dont take more than a week to reach the retailers.
17

FMCG products are normally a high volume ball game and products have to essentially be
available in the market at all given points of time and at all given points of purchase and
therefore the distribution activities are highly volatile and dynamic.
Since its a volume game, manufacturers make all possible efforts to boost sales and promote
their distributors to earn more and more orders from the retailers and wholesalers.A close
check is maintained on the flow of the products on a daily, weekly, fortnightly and monthly
basis to determine the trend in the business and flow of products and consumption. This
activity also helps to find out drawbacks of the distribution system, if any, and rectify them
within time.
2.2.1 Distribution Channel : ITC
ITC provides products and services of superior quality and value by sourcing its technologies,
equipment and inputs from reputed international and Indian manufacturers and suppliers.
Common values, relating to human rights performance, are shared across the entire supply
chain because ITC is committed to the importance of a socially responsible and accountable
supply chain.
As a large and multi-product enterprise whose products are benchmarked nationally and
internationally, ITC's main supply chains can be grouped as follows:
1. For all its operations, technology, machinery and equipment are sourced from reputed
and globally benchmarked suppliers/vendors who are expected to follow
internationally accepted norms and standards on human rights.
2. ITC's major businesses are vertically integrated across several Divisions. A
substantial part of the supply chain is therefore internal through strategic backward
linkages. Common values relating to human rights performance are shared across this
supply chain.
3. Being a major agri-based company, the agriculture sector is a major supplier of inputs
for its operations. The bulk of agricultural commodities are procured from state
controlled trading platforms and the open market. A very small proportion of ITC's
business consists of supply chains comprising local vendors and suppliers. The policy
framework for such entities is enunciated separately in 'Policy to Ensure Respect for
Human Rights across the Supply Chain'.
18

DISTRIBUTION CHANNEL OF ITC


19

FLOW DIAGRAM

DISTRIBUTION SYSTEM
ITC uses FIFO method to reduce the wastage of goods due to expiry.
They also keep the good on constant move from low sales area to high sales area.
The company collects all the expired goods four times a year, and destroys them.
Retailers must return expired or damaged products within six months after the date of
expire.
Adjustment for them is done in three months time.
ITC provides their retailers with racks, hangers, etc to display the products.
The benefits received by the retailers depend upon their sales volume and also the
location of their shops.
ITC has hired IMRB to do the market research.

20

2.2.2 Distribution Channel : Parle
The Distribution Channel Network


















The Channel Members of the Distribution Network of Parle

The Parle distribution network for biscuits has essentially four levels as enlisted below:
Parle Depots
Wholesalers and Distributers
Carry Forward Agents (if required)
Retailers

Manufacturing Unit of Parle at Various Locations
Parle Depots
Wholesalers and Distributors
Retailers
Procurement: Customers
21

The Channel Members and Logistics

Parle has nearly 1500 wholesalers, catering to 425000 retail outlets directly or indirectly. A
two hundred strong dedicated field force services these wholesalers and retailers.
Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution
network. Parle has level 1, level 2, level 3 distribution channels levels.
Level 1:
Availability of Parle biscuits at all departmental stores across the length and breadth of the
country.
Level 2:
Since it's an FMCG product this channel exists for customers scattered throughout the
country.
Level 3:
Mass consumption and suitable for National and International coverage. For e.g. Parle's
international operations consist of serving markets in the Middle East, Africa, South
America, Sri Lanka, Australia and North America for which the 3 level distribution channel
exists.

2.2.3 Distribution Channel : Britannia
Supply Chain Entities
The Supply Chain entities of Britannia can be shown through the following-
CMU
(Central Manufacturing Unit)
Depot
Distributor
Retailer
Customer


22

The supply chain of Britannia is primarily based on two products. These are:
A) Imported products B) Domestic products. The Imported product Supply chain can be
explained by taking the following example -
Crude Palm oil comes from
Indonesia and Malaysia
Shipped to Kandla Port
Refining of Crude Oil
Traders supply refined
palm oil to Britannia


The Domestic product Supply Chain can be illustrated by the following example -
Supplier
(Wheat)
Procurement
Cycle
Replenishement
and
manufacturing
Cycle
Supplier Supplier
(Sugar) (Butter)
Company/CP
C NF
agent
Distributors
Wholesaler
Retailers
Customer
Cycle
Customers




23

Distribution Model
The distribution system of Britannia can be well illustrated through the following-
Distribution System
Britannia Factory
Distributor
(Institutional)
Institutions
Eg. Hospitals
Distributor
(Retailer)
Retailer
Customer


Britannia An I ntensive Distribution Framework
Britannia follows intensive distribution as biscuits and cakes need to reach the consumer at
their nearest locations so this type of distribution channel is issued. This type of distribution
helps customer looks for location convenience.

Britannia two different kinds of distribution networks one is for dairy products and other one
is Bakery products. Here distribution network of bakery products has been discussed. In
Bakery products Britannia applies two kind of distribution system. These are given below:

1) Mass Distribution 2)Selective Distribution

1. Mass Distribution
Britannia use to produce general FMCG products which are in form of packaged food and
which need not to have very special kind of distribution strategy. Like other FMCG
companies Britannia also use mass distribution system. Since all almost all the products of
Britannia are of low price, repeat purchase items, and does not require much of effort from
customer side. So ultimately these products are sold on mass distribution basis.


24

There are four C&F of Britannia in NCR region:
1)Mudka Bahadurgarh
2)Bakoli
3)Gaziabad
4)Kundali- Sonipat

49 distributors are working under these four C&F.

Distribution Network
The distribution network of Britannias products from top to bottom is given below:
First of all stock is sent to these C&F, and then this stock is sent to the various distribution
canters of Britannia. All of these distribution centres do not contain products of any other
brand. Now this supply of stock is based on full e-network. This system has been provided a
particular terminology i.e. UDAAN PACKAGE. In this system the accountant who is in
distribution centre submits an online order to the C&F. Then in C&F the order for a particular
distribution centre is automatically generated and further fulfills by C&F.
Britannia has established these C&F at very appropriate locations. As soon as there is a
demand generated in any distribution centre These C&F are able to fulfill the demand within
four to six hours. So it is clear that C&F provides quick delivery to the distribution centre.
But in order to meet this demand the C&F also has to keep some inventory with it.
Now if we talk according to the distribution point of view we will find that Distribution
Centre has to also make some inventory in order to meet any kind of scarcity or instant
demand. Under this distributor five sales men work and they cover the entire area which is
mentioned above. Here the distribution is again divided into two parts -
A). General Shops
Distribution to general shops is done by two sales men. They cover 30 to 40 outlets every
day. Now the number of these outlets is not content, it varies time by time as they are not
very loyal to the company and also does not contribute to very prominent sale.

B). Key Account Outlets (KAT)
These outlets are covered by two sales men and they take order from these outlets biweekly.
These sales men visit twenty to twenty five outlets every day. These outlets are very much
loyal to the company and provide prominent business to the company. So from the sales point
25

of view these outlets are very important. Now the stock is moved from distributor to the
retailers. For selling the stock on the retail outlets there are two processes:

a). Order Booking
There are separate sales teams who perform this task. For example one sales team has to go
for order booking. In this process the salesman first go to shop to shop and book the orders
from there. On the other day or some times on the same day the delivery van goes every
where in order to fulfill the orders. Now due to this method distributor not only gains the
sales as well as looses the sale. Order booking process is done in Britannia on Biweekly or
Weekly basis. Sometimes Order Booking and Ready Stock both the task are performed by the
same sales man.

Benefits of Order Booking
In this process the distributor always remains in better position to forecast the demand. As the
sales man has already an order list. This helps not only to the distributors but also to the C&F
as well as finally to the factory in order to make more realistic demand. Since the sales man
does not have to do more but to book the order, it enables the sales man to search out the new
opportunities in the market. It helps not only to the company but also to the sales man as sales
man gets special rewards from the company side. Since during this process the sales man gets
extra time in which he/she gets enough time to interact with the retailer which is again very
important. Actually the retailer does not want only profit but also a better respect and
courtesy from the salesman. So in such situations if the retailer is getting good time with the
salesman, surely he will be more loyal to the company. Also during this period the sales man
could increase the visibility of its products in the shelves of the shop keeper.
Drawbacks of Order Booking
Along with all these benefits there are some drawbacks also involved in this advance booking
process. Some times sales man takes orders from the shopkeeper and assures him that the
order will be fulfilled on next day. But during this period the sales man of other company
comes and provides the same product at some discounts or with some schemes in this
condition the shopkeeper takes the stock from that sales man.

b). Ready Stock
In this process the sales man carry the team along with him which contain a delivery van, a
driver, and one or two helpers. The sales man takes order from the shops and also places the
26

order at the spot. There are following benefits and drawbacks of this method. Almost thirty to
forty outlets are visited by this way.

Benefits of Ready Stock
The retailer gets stock on the spot without any delay. The sales man does not give a chance to
the retailer to switch any other brand. The defected stock is replaced on the spot.

Drawbacks of Ready Stock
The sales man does not get enough time; he simply dumps the stock and moves from one
store to another store. Even then he does not cover many retailers, as the delivery process
takes a lot of time. What amount of stock should be carried by the sales man is also can not
be predicted. The sales man moves to pre decided path and could not find new shops, so the
market penetration by the sales man is also very rare in this case.

2. Selective Distribution
Selective distribution is done for premium products of Britannia. There are eight SKUs, for
which Britannia uses selective distribution. These brands are:
a) Chochlor Intoxication
b) Almond Addiction
c) Chocolus Addiction
These products are very costly and lie between the prices ranges of Rs. 150 to Rs. 200. Now
these products are not supplied by the distribution centre but directly from C&F. These
distributions are done through the Merchandiser Team.











27
















Chapter 3
Research Methodology

















28

3.1 Research Objectives

Primary Objective
To study distribution practices of ITC, Britannia and Parle Industries Limited in contrast with
each other.
Secondary Objective(s)
To identify factors influencing retailers brand choice for biscuit products
To examine comparative service quality of ITC, Britannia and Parle across retailer
base.
To provide suitable recommendations to enhance distribution practices of ITC,
Britannia and Parle.
To provide suitable suggestions to increase retailer base of ITC, Britannia and Parle.
To know how the distribution strategies of ITC, Parle and Britannia are effective in
comparison to each other.

3.2 Type of Research: Descriptive

A descriptive design was followed. Parameters were derived from the personal interaction
with the retailers. Parameters were also derived from the secondary data analysis of various
research papers. In this the research process was formal and structured set of questions in the
form of questionnaire was there.

3.3 Methods of Data Collection
There are two types of data collection method Primary and Secondary.
Primary Data
This data is original in nature and is generated from results of personal interaction with
various retailers or respondents (in case of questionnaire).

Secondary Data
Secondary data was acquired through various research publications done in this particular
area.
29


Area Covered
Noida sec-51
Noida sec-44
Atta market
Noida sec-50

3.4 Sample Design

Sampling Unit: -
Departmental Stores
Kirana Stores
Convenience Store
Sample Size: - The sample size is 50.

Sampling Technique: - Normal Convenience sampling technique was followed.

3.5 Instruments Used
Questionnaire :
Nominal scale
Structured questions.
Analysis :
Pie Charts
Bar Graphs
Tables



30


3.6 Limitations

Though this study was taken up with sincere efforts to accomplish the objectives,
there were certain factors which created hurdles in accomplishing the work.
These factors are:-
1. Out of the total respondents surveyed some of them were not cooperative due to
which accurate prediction was not possible

2. The responses given by the respondent are assumed to be true however chance of
getting false and biased information cant be over look fully

3. Time constrain is the big limitation of the study. A comprehensive study could not be
made due to paucity of time. All the data and information had to be collected within
the limited days.

4. People were hesitant to disclose the true facts.

5. Environmental constraint.

6. Retailers did not cooperate when asked about their policies regarding credit policies
with the direct salesmen.












31





















CHAPTER 4

DATA ANALYSIS AND FINDINGS























32


4.1 Analysis

Q1. Which brand of biscuits do you stock in your store?

Inference:
Majority of the retailers stock ITC, Britannia and Parle at their store. Out of 50 retailers that
were visited, 46 of them were stocking all three brands of biscuits. Parle was being stocked in
almost every retail outlet.

Q2. Product Portfolio:
ITC (Sunfeast) BRITANNIA PARLE
Glucose 50-50 Parle-G
Nice Tiger Krack Jack
Mikly Magic Good Day Milk Shakti
Dark Fantasy Treat Hide & Seek
Dream Cream Marie Gold Monaco
Snacky Little Hearts Coconut
Marie Light Nice Time Marie

33

Rate the companies according to your preference which has the best varieties of biscuits?
(1 = Best, 2 = Good, 3 = Average)


Inference:
Out of 50 samples surveyed, 42% retailers consider ITC as best in varieties of biscuits
because of the large variety of biscuits in its product line. While 38% considers it good &
20% considers it average in providing the product variety in biscuits.
Out of 50 samples surveyed, 40% retailers consider Britannia as good in varieties of biscuits.
While 34% considers it best & 16% considers it as average in varieties of biscuits.
Out of 50 samples surveyed, 50% retailers consider Parle as average in varieties of biscuits.
While 30% considers it best & 20% considers it as good in varieties of biscuits.






34

Q3. Are there any other company products being carried by the Distributor
Salesman Delivery Van (Multi-brand Distributor or Exclusive Distributor) ?

Inference:
The DS van for ITC carries the least products of other companies and it is 10% of the total
DS van for ITC visiting the retailers .The DS van of Parle has the maximum of other
company products and it is 20% of the total DS van visiting the retailers for Parles
products .And 16% of the total Ds van for Britannia has other company products.

Q4. How often does a Distributor salesman visit you?


35

Inference:
The chart shows that the Distributor salesman of every company visits the Retailers Once a
Week. But on some shops the Distributor salesman of both ITC & Britannia visits once in
Two Weeks. Whereas Distributor salesman of PARLE visits twice a week in some areas,
while distributor salesman of ITC & Britannia visits some retailers on fortnightly basis.

Q5. What is the time gap between order capture and delivery?








Inference: 4% of the retailers surveyed agree that ITC delivers its orders on the same day
and 16%,72% and 12% of the retailers for ITC agree that the order is delivered after one, two
and three days respectively .For Britannia the order delivery after one , two and three days is
agreed by 24 %,52% and 20% respectively of the retailers surveyed for Britannia products .
For Parle the order delivery after one , two and three days is agreed by 12 %,72% and 14%
respectively of the retailers surveyed for Parle products of biscuits. Only 2% of the retailers
surveyed agreed that Parle delivers orders in a time of more than three days.





36

Q6. Are your orders always received OTIF (on time- in full)?


Inference: ITC has 51% of the orders not met in on time in full and 25% of orders in
Britannia and 20% of orders in Parle are not met in on time and in full. It can be seen that
Parle has most orders in OTIF followed by Britannia and then by ITC.
If No, then generally what % of quantity is being delivered?

37

Inference: The percentage of quantity delivered for ITC is the most for the range in (0-20)%
and the least for the range (more than 60)% .Britannia has almost same amount of quantity
delivered for all the ranges and lastly Parle has the most percentage of quantity delivered for
the range (more than 60)% and the least for the range(0-20)%.

Q7. What type of payment terms you get from the company?


Inference: For ITC, 51% of the retailers get payment in terms of cash and 32% of them get
only credit whereas 17% get both in cash and credit. For Britannia , 45% of the retailers get
payment in terms of cash and 30% of them get only credit whereas 25% get both in cash and
credit .Lastly for Parle, 48% of the retailers get payment in terms of cash and 36% of them
get only credit whereas 16% get both in cash and credit.

38

Q8. On the basis of following parameters, rate the companies?



39


Inference: For ITC , the margins, product packaging , promotional activity , return policy ,
easiness in placing order has average ratings of 2.56,3.16,2.16,3.92,4.04 respectively. For
Britannia , the margins, product packaging , promotional activity , return policy , easiness in
placing order has average ratings of 2.26,3.42,2.3,1.82,3.98 respectively. For Parle , the
margins, product packaging , promotional activity , return policy , easiness in placing order
has average ratings of 2.36,3.26,1.94,2.24,3.92 respectively.

Q9. How do the following companies promote their product at your outlet?

Inference: For ITC , the promotion done through posters, standees, contests, extra quantity ,
shelf space is 26%,14%,12%,36%,12% respectively of the retailers covered through the
survey study . For Britannia , the promotion done through posters, standees, contests, extra
40

quantity , shelf space is 36%,4%,22%,8%,28% respectively and for Parle , the promotion is
done through posters and extra quantity which is 6% and 12% respectively of the retailers
surveyed for Parle as the preferred company.
Q10. What kind of problems do you come across?




41

Inference: Stock replacement issues for ITC, Britannia, Parle are 3%,54%,43% respectively
of the total retailers surveyed . Promotional issues for ITC, Britannia, Parle are
22%,35%,43% respectively of the total retailers surveyed . Quality issues for ITC, Britannia,
Parle are 32%,18%,50% respectively of the total retailers surveyed .Delivery issues for ITC,
Britannia, Parle are 0%,25%,75% respectively of the total retailers surveyed . Stock return
issues for ITC, Britannia, Parle are 6%,53%,41% respectively of the total retailers surveyed .

4.2 Findings
Some of the findings from the study are :
1) All the retailers are stocking almost all the three brands of biscuits. Parle-g is the
oldest among the other brand of biscuits so it has a unanimous choice amongst the
retailers covered through the survey study. The markets share of Parle is the
maximum as compared to Britannia and ITC. But ITC has the widest product variety
followed by Britannia and then by Parle.
2) The frequency of visits of the Distributor salesman once in a week is the most for
ITC, followed by Britannia and then by Parle .Although the distributor salesman of
Parle prefers visiting the retailers twice a week. Thus it can be incurred that ITC,
Britannia has more frequency of DS visiting the retailers but the frequency of visits of
the DS for Parle is more than the other two companies.
3) The distributor delivery van for ITC has the least other company biscuit products
followed by Britannia and then by Parle. The DS van for Parle has the maximum
other company brand of biscuits as it is less preferred by the retailers to stock in
.From the survey study it can be incurred ITC performs its distribution practices
through exclusive distributor and Parle has a multi brand distributor pattern for its
distribution practices .
4) From the study it was found out that the average time gap between the order
placement and its delivery is 2 days for all three companies. According to the
retailers, after the order is placed, most of the times each company takes 2 days for
delivery. In few cases ITC is able to deliver the order on the same day (although a
42

very less percentage of orders are being delivered ) whereas in other few cases the
time gap for order capture and delivery is more than three days for Parle.
5) Parle has the most number of orders met in on time and in full and then followed by
Britannia and lastly by ITC. As mentioned above the survey study clearly indicates
that ITC is the most preferred company by the retailers to stock in orders and thus the
frequency of problems in stocking orders on time in full is more as compared to
Britannia and Parle. Parle has the least preference amongst the retailers to stock its
products thus it has less on time in full stock issues. Also the quantity of delivered
order for ITC is least and very less percent of the total order is delivered in time .The
order delivery for ITC is majorly done in fractions as the distributor has to cover a
large segment of retailers. Britannia has an average percentage of orders delivered in
time and Parle has the maximum percentage of orders being delivered in time and in
good quantity as a result of distributors visiting the retailers twice a week which is not
followed by DS of Britannia and ITC.
6) The payment terms in cash to the retailers is the most for ITC followed by Parle and
then by Britannia .Payment in Credit is mostly practiced by Parle followed by ITC
and then by Britannia. Both cash and credit terms of payment is given mostly by
Britannia first and then by ITC and lastly by Parle. Thus it can be incurred that ITC
tries to pay the retailer in time which is a result of its increasing brand value and
choice among retailers and the end consumers .Parle on the other hand prefers to give
credit payment so as to have future orders from the retailers trying to keep the
retailers as their potential customers .
7) In terms of margin almost every company is providing similar margins to the retailers
due to competitive reasons. Britannia has the best product packaging followed Parle
and then by ITC. Retailers when asked about the promotional activities provided by
the companies , they revealed that in some cases the distributors do not pass the
promotional benefits to them .However Britannia leads in promotional activities as
they regularly come up with contests for promotion. ITC has the best return policy
amongst the retailers as ITC is quick in returning damaged and expired products
whereas Britannia has maximum stock related problems among the retailers. Through
the conducted survey it was found that easiness in placing the order is almost the
same for all the three companies.
43

8) ITC does major of its promotion through the retailers in the form of providing extra
quantity in the products and through posters, banners. Standees, contests and shelf
space are considerably chosen as a less tool for the promotion activity. ITC being a
growing brand of biscuits tries to amuse the retailers which are basically the kirana
shop retailers and local shopkeepers through posters, banners and hoardings and as
these retailers have scarcity of space in their shops standees, shelf spaces are
neglected by a major set of retailers. Britannia does it promotion activity majorly
through contests like Britannia Future Minds Contest, Bourbon Star of the Year
Contest and through banners and posters. Parle on the other hand follows only a
specific set of promotional tools like posters, banners and providing extra quantity in
the products.
9) ITC has problems with the retailers on promotional support issues as it follows its
promotional activities through all of the tools of promotion so the frequency of issues
arising on promotional means are more. Britannia has problems on stock replacement
and return issues as it is facing fierce competition from the other leading brand of
biscuits thus creating more stock return and replacement issues. Also from the survey
it can be incurred that Parle has problems on both stock return and promotional
support from the retailers.












44











CHAPTER 5
SUGGESTIONS AND CONCLUSIONS











45


5.1 RECOMMENDATIONS:

1) All DS should be provided with the mobile phones so that in case of Stockouts in
retail shops the retailers can contact DS and place their orders. So buying of
substitute products by the retailers can be avoided.
2) ITC needs to improve its working primarily on the service and delivery front. The
company is also suffering as OTIF levels are very low, and this lack of regular
supply is turning retailers against our products.
3) During the visit into the market, it was found that in most of the shops, the
complaints against old stock being delivered by Britannia and Parle were
registered, which constitute a major portion of the Distribution and Delivery
stock. So, to get rid of it, the companies should work upon their logistic system
and stock reach the market soon and will also reduce dissatisfaction level among
the retailers as well as consumers against expired stock.
4) Point of Purchase & Display activities should be on regular basis.
5) It was also found during the market-visit that many retailers complained that they
are not getting the stock what they ordered previous day, so before the market-
visit, it should be strictly checked that DS palm top are fed with proper Stock on
hold.

5.2 SUGGESTIONS
Work Processes
A) A daily attendance record to be maintained for salesman at the WD point for all the
companies. This would help in tracking the time the DS spends at the WD point
before leaving for the market and help to minimize the wastage of time and
inefficiencies while issuing stocks.
B) A daily stock chart should be displayed and fed into the Palm-top carried by DS of the
company that would provide information as regard the SOH for various categories
and the expected arrival time for the next set of deliveries. This would make the DS
aware of SOH of various categories and facilitate accurate order booking. This is
important, as a large number of respondents feel that DS undertake orders without
being aware of supply of stocks and hence have low OTIF levels at retail outlets.
46

C) Delivery chart to be prepared the previous evening and stocks to be sorted
accordingly. This would help to minimize time for loading of stocks into the delivery
vehicle the next morning.
D) DS Incentive should be at the end of the month on basis of Time level stock delivery,
especially for slow moving categories.
E) Distribution and delivery tracking should be undertaken for retail outlets also. This
would help to ascertain outlets where are stocks are not moving and also help to
understand the stock trends for particular routes.
F) Daily Stock Register should be monitored on a weekly basis by the Area Executive.
G) Display space should be purchased in big retail outlets and volume class A & B
outlets. These outlets have a high visibility potential and also have higher off take for
slower mover biscuit products of the company.

Recruitment & Training of DS
Care needs to be taken as regards recruitment of DS and also their training as the salesman is
the face of the company at the retail outlet.
Basic guidelines should be provided for recruitment of new DS. Also the minimum
criteria should be specified for qualification.
Area Executive should play a supervisory role in the recruitment and selection of new
DS.
AE to provide training inputs to new DS on the following aspects :
Range-selling
Merchandising
Time-planning
Objective setting
Target setting
Rapport building with trade
Accurate order capture






47

5.3 Conclusion:
ITC, Britannia and Parle try to increase its retailer base through the distribution
practices it follows. Although the market share of Parle-g, a product of the brand Parle
is comparatively more than the other brands, ITC is able to provide a large set of
product variety to the retailers. Parle being an old brand of biscuit has an extensive
reach throughout the urban and rural market but with the advancing time it has faced
fierce competition from both Britannia and ITC.

The distribution practices for the companies is decided on the basis of distributor
salesmans frequency of meeting the retailers, the role of distributor salesman as an
intermediary between the retailer and the company , the type of distributor single-
brand or multi-brand ,easiness in placing orders, on-time in full orders , order capture
and delivery time gap , payment terms of the company , promotion of the company
brand of biscuits through retailers and the fulfillment of the retailers grievances
regarding the companys products.

ITC, Britannia has more frequency of distributor salesman visiting the retailers but the
frequency of visits of the distributor salesman for Parle is more than the other two
companies.ITC has maximum number of distributor salesman visiting the retailers
once in a week whereas Parle has the maximum number of DS visiting the retailers
twice in a week ,although the number of distributor salesman for Parle visiting the
retailer is lesser than the other two companies. So it can be concluded that ITC tries to
keep a frequent contact relationship with its retailers whereas Parle fails in doing so.
Parle on the other hand tries to keep a strengthened bond of relationship with the
retailers only during the time when it gets order from the retailers thus explaining the
act of visiting twice the retailer in a week. The growing competition between
companies has made ITC to follow exclusive single-brand distribution practices when
other companies like Britannia and Parle follow multi-brand distribution.


The frequency of problems for ITC in stocking orders on time in full is more as
compared to Britannia and Parle. With the change in customers choice ,in spite of
having the maximum market coverage and share , Parle has the least preference
amongst the retailers to stock its products thus having less on time in full stock issues.
48

The order delivery for ITC is majorly done in fractions as the distributor has to cover
a large segment of retailers. Britannia has an average percentage of orders delivered in
time and Parle has the maximum percentage of orders being delivered in time and in
good quantity as a result of distributors visiting the retailers twice a week which is not
followed by DS of Britannia and ITC. Thus it can be concluded that Parle has the
maximum number of orders on time- in full. ITC follows payment terms with its
retailers in cash , Parle does the same in credit terms of payment whereas Britannia
follows both cash and credit terms of payment to the retailers. Thus it can be
concluded that ITC tries to pay the retailer in time which is a result of its increasing
brand value and choice among retailers and the end consumers . Parle on the other
hand prefers to give credit payment so as to have future orders from the retailers
trying to keep the retailers as their potential customers.

ITC has the least time gap for order delivery but the frequency of order delivery is
very less. On the other hand all the three companies are able to deliver the orders after
a time gap of two days with most of the orders being fulfilled and delivered. Thus it
can be incurred that time gap for large quantity of orders delivered is the same for all
the three companies i.e after two days but for a very less frequency of order delivery
ITC delivers orders on the same day and on the contrary Parle takes more than three
days . ITC does major of its promotion through the retailers in the form of providing
extra quantity in the products and through posters , banners. Standees ,contests and
shelf space are considerably chosen as a less tool for the promotion activity.ITC being
a growing brand of biscuits tries to amuse the retailers which are basically the kirana
shop retailers and local shopkeepers through posters ,banners and hoardings and as
these retailers have scarcity of space in their shops standees, shelf spaces are
neglected by a major set of retailers. Britannia does it promotion activity majorly
through contests like Britannia Future Minds Contest, Bourbon Star of the Year
Contest and through banners and posters. Parle on the other hand follows only a
specific set of promotional tools like posters ,banners and providing extra quantity in
the products.ITC has problems with the retailers on promotional support issues as it
follows its promotional activities through all of the tools of promotion so the
frequency of issues arising on promotional means are more.

49

Britannia has problems on stock replacement and return issues as it is facing fierce
competition from the other leading brand of biscuits thus creating more stock return
and replacement issues and Parle has problems on both stock return and promotional
support from the retailers. In terms of margin almost every company is providing
similar margins to the retailers due to competitive reasons. Britannia has the best
product packaging followed Parle and then by ITC. Retailers when asked about the
promotional activities provided by the companies, they revealed that in some cases
the distributors do not pass the promotional benefits to them .However Britannia leads
in promotional activities as they regularly come up with contests for promotion.ITC
has the best return policy amongst the retailers as ITC is quick in returning damaged
and expired products whereas Britannia has maximum stock related problems among
the retailers. Through the conducted survey it was found that easiness in placing the
order is almost the same for all the three companies.


Thus it can be concluded that to give older brands of biscuits a severe competition in the
market , ITC is far more efficient in providing better distribution practises as compared to
Britannia and Parle but the market share of Parle is maximum as it is the oldest brand and has
an extensive reach in the urban as well as the rural market. In terms of payment to the
retailers, time gap between order capture and delivery and return policies of stock , ITC leads
the other two brands of biscuits making it mass favourite among the retailers. However
Britannia leads in product packaging and in promotional activities through retailers in the
form of contests. Parle on the other hand is majorly favoured for its on time- in full orders.











50


BIBLIOGRAPHY

REFRENCES

BOOKS:
Stern L., Ansari A., Anderson E., Coughla A. (7
th
edition 2009) Marketing Channels,
Distribution & Logistics Management, Pearson.

Malhotra Naresh K., Dash S. (6
th
edition 2012) Marketing Research, Descriptive Research
Design, Pearson.

Havaldar K., Cavale V. (2
nd
edition 2008) Sales & Distribution Management, Channel
Institutions, Tata McGraw Hill.


ARTI CLES & CASE STUDY:

Titus, Sengupta (February 2013): Leveraging distribution networks for competitive
advantage: A Case of FMCG Channel Management at ITC Ltd, Asia Pacific Journal of
Marketing & Management Review.

Dala Mihir (April 2013): ITC Foods expanding distribution network in small towns &
villages, Live Mint & Wall Street Journal.

Bhushan Ratna (December 2010): Parle surges ahead of Britannia to become leader in the
Indian biscuit market, ET Bureau.

RESEARCH PAPERS:

Jain Mudit (December 2012): Analysis of Children Preference in Select FMCG Products in
Indore Region, Asia Pacific Journal of Marketing & Management Review.


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WEBSI TES:
http://www.itcportal.com/businesses/fmcg/foods.aspx
http://www.britannia.co.in/
http://www.parleproducts.com
http://www.livemint.com/Consumer/xlrm1t7W5MSenJsxCMXqJJ/ITC-Foods-
expanding-distribution-network-in-small-towns-vil.html
economictimes.indiatimes.com/.../ITC...biscuit.../4493619.cms
www.financialexpress.com/.../itc...biscuits.../328459/ - Angola
www.flex-news-food.com/.../ITC/itc-foods-plans -own-facility-biscuits.html
http://im.rediff.com/money/2006/jun/28spec.htm






















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ANNEXURE 1
Retailer questionnaire
Outlet Name: _______________ Location: ________

1. Which brand of biscuits do you stock in your store?(Multiple choice)
A) ITC B) Britannia C) Parle D) All of them


2. Product Portfolio:
ITC (Sunfeast) BRITANNIA PARLE
Glucose 50-50 Parle-G
Nice Tiger Krack Jack
Mikly Magic Good Day Milk Shakti
Dark Fantasy Treat Hide & Seek
Dream Cream Marie Gold Monaco
Snacky Little Hearts Coconut
Marie Light Nice Time Marie

Rate the company according to your preference which has the best varieties of biscuits?
(1 = Best, 2 = Good, 3 = Average)
ITC
Britannia
Parle

3. Are there any other company products being carried by the Distributor Salesman Delivery
Van (Multi-brand Distributor or Exclusive Distributor) ?
A) Yes B) No



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4. How often does a Distributor salesman visit you?

ONCE A WEEK TWICE A
WEEK
THRICE A WEEK OTHERS
ITC
Britannia
Parle

5. What is the time gap between order capture and delivery?
Same Day 1 Day 2 Day 3 Day More than 3 days
ITC
Britannia
Parle

6. Are your orders always received OTIF (on time- in full)?
Yes No
ITC
Britannia
Parle

If No, then generally what % of quantity is being delivered?
(0-20)% (21-40)% (41-60)% More than 60%
ITC
Britannia
Parle
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7. What type of payment terms you get from the company?
Only Cash Only Credit Cash + Credit
ITC
Britannia
Parle

8. On the basis of following parameters, rate the companies.
(1- Excellent, 2- Very Good , 3- Good, 4- Average, 5-Poor

Margins Product
Packaging
Promotional
Activities
Return
Policies
ITC
Parle
Britannia


9. How do the following companies promote their product at your outlet?
Poster/Banner Standees Contests Extra
Quantity
Shelf space
ITC
Britannia
Parle



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10. What kind of problems do you generally come across?

Stock
Replacement
Issues
Stock
Return
Issues
Delivery
Issues
Behavioral
Issues
Quality
Issues
Pricing
Issues
Promotional
Support
Issues
Others
ITC
Britannia
Parle