CHAPTER 1

INTRODUCTION
The marketing mix is the set of controllable, tactical marketing tools that a company uses to
produce a desired response from its target market. It consists of everything that a company
can do to influence demand for its product. It is also a tool to help marketing planning and
execution.
The four Ps of marketing: product, price, place and promotion
The marketing mix can be divided into four groups of variables commonly known as the four
Ps:
1. Product: The goods and/or services offered by a company to its customers.
2. Price: The amount of money paid by customers to purchase the product.
3. Place (or distribution): The activities that make the product available to
consumers.
4. Promotion: The activities that communicate the products features and benefits
and persuade customers to purchase the product.
Marketing tools
Each of the four Ps has its own tools to contribute to the marketing mix:
Product: variety, quality, design, features, brand name, packaging, services
Price: list price, discounts, allowance, payment period, credit terms
Place: channels, coverage, assortments, locations, inventory, transportation,
logistics
Promotion: advertising, personal selling, sales promotion, public relations
Marketing strategy
An effective marketing strategy combines the 4 Ps of the marketing mix. It is designed to
meet the companys marketing objectives by providing its customers with value. The 4 Ps of
the marketing mix are related, and combine to establish the products position within its
target markets.


Weaknesses of the marketing mix
The four Ps of the marketing mix have a number of weaknesses in that they omit or
underemphasize some important marketing activities. For example, services are not explicitly
mentioned, although they can be categorized as products (that is, service products). As well,
other important marketing activities (such as packaging) are not specifically addressed but are
placed within one of the four P groups.
Another key problem is that the four Ps focus on the sellers view of the market. The buyers
view should be marketings main concern.

The four Ps as the four Cs
The four Ps of the marketing mix can be reinterpreted as the four Cs. They put the customers
interests (the buyer) ahead of the marketers interests (the seller).
Customer solutions, not products: Customers want to buy value or a solution to
their problems.
Customer cost, not price: Customers want to know the total cost of acquiring,
using and disposing of a product.
Convenience, not place: Customers want products and services to be as
convenient to purchase as possible.
Communication, not promotion: Customers want two-way communication with
the companies that make the product.

IMPORTANCE OF THE STUDY:
Promotional and marketing strategies are often first brainstormed and written as part of an
organization's marketing plan. If your small business doesn't have a marketing plan, you
should seriously consider developing one. Most marketing plans include the current or
expected strategies you have for your products, the price points of those products, how you
intend to distribute the products, and your advertising and marketing tools. A marketing plan
is also important for developing a promotional strategy as it helps your business identify its
target markets and to set measurable goals. It is vital to the success of the organization that
you implement a marketing plan that aims for growth and positive change in the bottom line.

OBJECTIVES OF THE STUDY:
1. To study the marketing strategies followed by sai ram distributors.
2. To find out the effectiveness these marketing strategies on customer purchase decisions


CHAPTER 2
COMPANY PROFILE:
Sai ram distributors basically a distributor of ITC business particularly FMGC sector related
to food products.
ITC's Branded Packaged Foods business is one of the fastest growing foods businesses in
India, driven by the market standing and consumer franchise of its seven popular brands -
Aashirvaad, Sunfeast, Bingo!, Kitchens of India, mint-o, Candyman and Yippee! The Foods
business is today represented in 4 categories in the market - Staples, Snack Foods, Ready To
Eat Foods and Confectionery.
It is ITC's policy that its food products should provide nutritious, tasty, hygienic and
convenient options to the consuming public.
ITC will offer food products across multiple categories, price points, delivery formats and
segments as dictated by the needs of the consumer.
ITC's portfolio of food products will be continuously improved and modified to -
1. offer new products that meet the aspiration of the changing consumer,
2. offer food products with affordable and appropriate nutrition,
3. offer food products with micronutrient fortification,
4. drive reduction of sodium, sugar and fat in Products,
5. offer trans-fat free products,
6. offer functional food products with focus on India specific metabolic disorders,
7. follow a strict code for making product functional claims,
8. follow the highest standards in nutrition labelling and reporting,
9. follow responsible marketing and consumer communications practices,
10. create and sustain R&D focus in development of new products and processes,
11. follow the highest standards of hygiene and manufacturing practices in all delivery
formats,
12. collaborate with experts and institutions and
13. ensure widespread accessibility to healthy products through appropriate pricing and
wide distribution.
VISION:
Sustain ITC's position as one of India's most valuable corporations through world class
performance, creating growing value for the Indian economy and the Company's stakeholders
MISSION:
To enhance the wealth generating capability of the enterprise in a globalising environment,
delivering superior and sustainable stakeholder value

Board of Directors

Chairman
Y C Deveshwar
Executive Directors
Nakul Anand P V Dhobale K N Grant
Non-Executive Directors
A Baijal A V Girija Kumar S H Khan

R E Lerwill S B Mainak S B Mathur

P B Ramanujam S S H Rehman Anthony Ruys

Meera Shankar K Vaidyanath



CHAPTER 3
FUNCTIONS AND ACTIVITIES OF THE SRI RAM DISTRIBUTORS
Sairam distributor generally has exclusive rights of distributing all products or a set of
products as ITC distributor is also appointed to serve a particular clientele base like hotels,
canteens, restaurants etc. Traditionally a distributor is treated like a trader in the distribution
channel. But now many organizations have started seeing distributors playing much bigger
role. Following are some of the functions a distributor plays in modern FMCG channel.
Basic role of Sri ram distributor is to purchase/stock products in bulk from the manufacture
and sell/distribute them to retailers in smaller quantity.
Distributor takes orders from the retailers and institutions and ensures timely and quality
delivery of products.
Distributor maintains stock of the products to absorb the supply fluctuation from
manufacturer.
Distributor provides required financing for allowing credit to the retail market.
Distributor is the person who will provide ground level data on demand estimation for the
products.
Distributor expands the retail universe (by opening new outlets) as well as the retail
penetration of various products.
Distributor takes up field level marketing activities like H2H promotions, in shop
promotions etc.
Distributor helps in minimizing consumer complaints and resolving them.
This basically clarifies the broad role of the Sairam distributor in modern FMCG channel.
We will see the functions and daily routine of a typical distributor in the next part to finally
derive the criteria for selection of a good FMCG distributor.

Roles and Responsibilities:

To invest in the company of which Stockistship he acquires. He should also invest in
ensuring adequate manpower and infrastructure(Godown, sales staff, vehicle for timely and
adequate supply of companys products to his customers in his area) which goes a long way
in development of the business. His lack of investment in any of the factors mentioned will
affect the sales negatively.

To maintain 15days stocks (of months sales target) during entire month. Maintaining
sufficient stocks will ensure that stock outs of companys different SKUs are minimum and it
will also enable him to supply full orders of his customers.

To keep and maintain stocks of companys products in safe and hygienic conditions. It is
necessary that the Stockist must have fire safety measures in his godown. He must also
ensure to keep his godown pest free by using pest control devices and services. Many
Stockists consider this a wastage of money. But having safety and hygiene in his godown not
only helps in safety of products of company but it also builds up his reputation and thus many
good companies may be willing to do business with him.

To place orders to super stockist or CFA (if the company is operating thru super stockist/CFA
network) or directly to company as per demands of market. He must maintain sufficient
stocks in his go down always to avoid sales loss due to stock shortage.

To make timely payments to SS or CFA or directly to Company against his old pending bills.
Company's lose 5 to 10% of their sales due to poor or late payments by Stockists. So a
Stockist with growth mind-set must always have sufficient funds at his disposal always to
ensure timely payments to SS/CFA or direct to company.

For continuous business growth in today's competitive market place he should maintain
cordial relations in the market. His regular market visits will help him make progress on this
front.In an age with more competition and more or less similar products, cordial and
productive relationships will go a long way in sales growth.

To visit his market on regular basis. These market visits will help him know about the
competitors practices in market. These visits will also make him aware of problems of
retailers and wholesalers in market relating to pending schemes of company or damage or un-
saleable stocks of company's products lying with them and this knowledge will help Stockists
solve problems of his customers. These visits will also help him develop good relations with
retailers and wholesalers in market.

For continuous business growth He must minimize and resolve complaints of his
customer(retailer and wholesaler) in his area. His regular market visits will take care of this.

To ensure timely and full order supplies to the customers i.e. retailers and wholesalers in his
area of operation to avoid sales losses due to late or insufficient supplies.
To extend credit to his customers as per market norms. In today's competitive market with
more and more companies entering market every day, extension of credit has become a must
for survival in market and to fuel growth. Retailers and wholesalers prefer buying on credit,
so they will prefer buying from a Stockist who gives credit to them.

It is his duty to provide product wise stock status to the company staff as and when they ask
for it.
He must maintain month wise purchase record of all of his customers, ready with him all the
time and provide the same to company as and when asked and required by company officials
from time to time. Availability of this purchase data with him will help him plan growth of
sales of companys products.

To have full contact details of all of his customers and provide the same to company.

To help in execution of Below The Line (BTL) activities in the market with or without help
or support from company staff. Below the line activities include:
(1) On shop promotion
(2) Canopy activity in his area.
(3) Door to door or home to home activity.
(4) Insertion of leaflets into newspapers etc.
Execution of these BTL activities will go a long way in increasing awareness and sales of
companys products.

To increase his turnover and sales he should make all efforts to promote and sell all of
companys products to all his customers.

To take all steps to increase the width and depth of distribution of companys products in his
area. Increasing Width of distribution means to sell companys products to more no of
retailers and wholesalers in his area and increasing depth of distribution means to sell more of
companys products to his existing customers.

To pass on schemes, as being run and operated by company from time to time, to his
customers. He should not try to increase his profit by not passing on scheme of company to
his customer. Companies plan schemes and inputs to grow the sales of their products so
passing on schemes to his customers by the Stockists will help Stockist increase his sales and
thus his turnover and thus his profit in the long run.

To provide timely information to company on competitor practices and activities to help
company plan its sales strategy to safeguard and/or increase the sale of its products.

To abstain from selling companys products to his customers on prices which are more than
the company price list.

It is the moral responsibility to Not to sell or trade companys products in the area of other
Stockist of company.

Again on ethical grounds he should not be a Stockist of competitors products.

ITC one of the leading FMCG in the country which operates in Foods, Personal Care,
Cigarettes and Cigars, Branded Apparel, Education and Stationery Products, Incense Sticks
and Safety Matches, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and
Information Technology, Category, has come a long way from the when it started. The
biggest harbinger in the ITC growth story has been Cigarettes, The category in which ITC
still is the major player in the country.
ITCs highly popular portfolio of brands includes Silk Cut, Insignia, Lucky Strike, Classic,
Bristol, Gold Flake, Players, India Kings, Scissors, Capstan, Berkeley, Flake, Duke & Royal,
Navy Cut. The Company has been able to maintain its Market leadership through complete
focus on ceaseless value creation for consumers through substantial investments in creating &
bringing innovative product designs to market, ensuring consistent & superior quality, state-
of-the-art manufacturing technology, & superior marketing and distribution.
However the effect of cigarettes as a category has not been limited to making ITC a Cash
Surplus company. What Cigarette as a category did was it laid the foundation for the
Marketing channel of ITC, which arguably is considered the Best in the country? In the early
days cigarette consumption was confined to the urban centers in the country however ITC
saw an immense potential for growth in semi urban and rural India. Thus began the expansion
of the channel, ITC gained inroads into the remotest of the places of the country eventually
leading up to the E-chaupal model. Cigarettes owing to the Inelastic nature of demand
provided ITC with a lot of bargaining power to further push their other products and hence
turned out to be very instrumental in establishing The ITC Marketing Channel.

Channel Design
MANUFACTURING UNIT
CUSTOMER
HAWKERS
RETAILERS
HAWKERS
WHOLESALERS
DISTRIBUTORS
WAREHOUSE


Data/Information Flow in the ITC Distribution Channel
Information flow plays an important role in communicating strategies from the top
management to the ground staff who are responsible for the ultimate implementation of these
strategies. In case of FMCG business these information flow can be in the form of gaining
more market share strategy (taken by the top management) to lowering product prices to
achieve the said strategy at the lower level.
The Information flow in ITC generally follows a hierarchical structure where it percolates
down from the top management to the area executives through several layers. Most of this
information flow is in the form of changes in strategy that ultimately changes to volume of
sales and other review metrics.
The following figure shows the information flow as it happens in the ITC organization:
If we look at the information flow particularly in the cigarette business we find the way
information flows from the top to bottom of the organizational pyramid. It starts with the
General Manager for the particular business vertical which in this case is the Cigarette
business. This information is typically in the form of strategy measures that the top
management takes. An example can be a strategy communication from the
general manager to improve the market share in the cigarette business. In such a case the next
line managers who would typically be the product managers would translate this strategy into
implementable product strategies (e.g. new product development or cutting prices based on
the particulars of the strategy). In case of simpler strategy like improving sales, zonal
managers would be communicated this strategy. From the zonal managers this information
will flow to the branch managers who typically manage specific branches within a zone. This
information next flows along to the assistant manager and from there to area managers who
deal with the wholesalers in implementing these changes. In the organizational hierarchy the
information flows to the area executives who interact directly with the retailers.
After this initial information flow there is data flow in the reverse direction as well to help the
managers to evaluate the attainment of strategy objectives. These are mainly in the form of
sales report that are produced in a weekly, monthly and yearly basis.
Example of sales position report:
These reports are generated on a weekly basis
These reports are generated by the managers at the distributor level
Reports are submitted to the Areas sales manager or Asst. Manager
Typical contents of the report include Opening stock, closing stock, ordered stocks, received
stock and damaged stock.
Document regarding the flow of information
A sales position report is generated weekly by the manager (cigarettes) at the distributor
level. This report is submitted either to the area sales manager or the assistant manager.
The report contains the following:
Opening stock : It is the stock of an item (cigarettes) present at the beginning of the week .
The stock which is left at the end of the week becomes the opening stock for the following
week. The distributor takes the order every week whereas the retailers take the order after
every two week. At the point of delivery distributors need to pay cash and collect stock, no
credit is given on cigarettes.

Received stock : It is the stock which each distributor obtains at the beginning of the week
from the godown( Area manager) and further distributes it to the wholesalers (maximum 1
month credit) and hawkers( 1 day credit).
Sale of the stock : This includes the total sale done by the distributors and the retailers from
the stock in a week.
Damaged stock : Cigarettes have a shelf life of 3-6 month as they are highly hygroscopic. All
damaged or unsold stock is bought by the company and sent to the factories where the
tobacco is extracted, processed and new cigarettes are produced.
Closing stock: The stock which is left at the end of the week .
Channel member management
Monetary and non-monetary methods of rewarding: According to the HR policy of ITC there
are no monetary or non-monetary rewards given to the channel members i.e. the distributors
and the retailers. No benefits, no freebies or paid vacations etc are provided to the channel
members. Very rarely cash gifts are given which is related to the performance. No credit is
given to the distributors for the purchase of stock (cigarettes). Even the retailers do not get
any credit from the wholesalers and have to pay cash. The wholesalers however get a
maximum of one month credit from the distributor.
Target setting mechanism: There is a certain target which is set for the distributors. For the
retailers there are no targets set. The target for the distributors is in terms of M-S, where 1 M-
S is equivalent to 12000 sticks and 1 case is equivalent to 12 M-S. The distributors are given
a target of 200 M-S per week.
Monitoring Mechanisms : The distributors are monitored by the Area Sales Manager and the
retailers are monitored on by the Area Executives. The parameters on the basis of which the
distributors are monitored are the following:
(a) Visibility of the products
(b) Availability of the products
(c) Maintenance of the existing.
Training and HR Inputs : The distributors are not given any training or HR inputs by ITC.
Management of Field Force
Monetary Method of Rewarding: As per the HR policy of ITC Ltd the field force is
monetarily rewarded on the basis of the number of bills drawn on the distributors.
Non-Monetary Method of Rewarding: The field force of ITC Ltd is given unlimited medical
benefits in terms of non-monetary methods of rewarding.
Target setting Mechanism: The field force is given targets in terms of the number of bills
generated by an individual.
Monitoring Mechanism: The members of the field force reports to their immediate supervisor
and this follows throughout the hierarchy.
Training and HR Inputs: The sales men of the distributors are under the payroll of ITC ltd. In
case of mass recruitment the new sales force is given training by the HR department of ITC
Ltd. As per the HR norms, ITC Ltd provides training to its own employees of the distribution
network at regular intervals.
Transportation and Logistics:
Company sourced 3rd party truck
Company sourced 3rd party truck

Distributor Sourced third party Vehicles
Distributor Sourced third party Vehicles
Third party owned trucks are used to transport the cigarettes from the production plant to the
company depot/warehouse. Similarly, third party owned trucks are also used to transport the
goods from the warehouse to the distributors. All these transportation costs are borne by the
company. From the distributors place, the cigarettes are distributed to the wholesalers & the
retailers (panwalas) through the user delivery vans, rickshaw, cycles, motorcycles, autos. All
these transportation costs are borne by the distributor. ITC Cigarettes have consolidated their
inventory by deploying SAP module of Information technology in their warehouses. The
stock positions are automatically updated in the database as & when goods are sold from the
warehouse. Accordingly, replenishment orders are generated to the company when the stock
level goes below the benchmark level which takes into account the order lead time as well.
This way ITC cigarette reduces its inventory holding costs by deploying proper inventory
management.
If a manufacturer decides to adopt an exclusive or selective strategy they should
select a intermediary which has experience of handling similar products, credible
and is known by the target audience.








CHAPTER 4
CONCLUSION:

Distribution channel Marketing Strategies followed by the company:
Depending on the type of product being distributed there are three common distribution
strategies available:
1. Intensive distribution Used commonly to distribute low priced or impulse purchase
products eg chocolates, soft drinks.
2. Exclusive distribution Involves limiting distribution to a single outlet. The product is
usually highly priced, and requires the intermediary to place much detail in its sell. An
example of would be the sale of vehicles through exclusive dealers.
3. Selective Distribution A small number of retail outlets are chosen to distribute the
product. Selective distribution is common with products such as computers, televisions
household appliances, where consumers are willing to shop around and where manufacturers
want a large geographical spread.
Function Of Physical Distribution Systems at sairam
The key function within the physical distribution system are:
Customer service
Order processing
Inventory control
Transportation and logistics
Packaging and materials


Customer Service
The customer service function is a strategically designed standard for consumer
satisfaction which the business intends to provide its customers. As an example, a customer
satisfaction approach for the handbag business mentioned above may be that 75% of all
custom handbags are delivered to the customer within 72 hours of ordering. An additional
approach might include that 95% of custom handbags be delivered to the customer within
96 hours of purchase. Once these customer service standards are set, the physical
distribution system is then designed to attain these goals.
Order Processing
Order processing is designed to take the customer orders and execute the specifics the
customer has purchased. The business is concerned with this function because it directly
relates to how the customer is serviced and attaining the customer service goals. If the order
processing system is efficient, then the business can avoid other costs in other functions,
such as transportation or inventory control. For example, if the handbag business has an
error in the processing of a customer order, the business has to turn to premium
transportation modes such as next day air or overnight to meet the customer service
standard set out, which will increase the transportation cost.
Inventory Control
Inventory control is a major role player in the distribution system of a business. Costs
consider investment into current inventory, loss of demand for products, and depreciation.
There have been inventory control systems implemented such as first in-first out (FIFO) and
flow through, which are methods for businesses to handle products.
First in-first out, or FIFO, is a method in which the new products coming into the
warehouse replace existing products of the same SKU so that merchandise is cycled and
does not expire or become old as more recent production is available. Flow through, on the
other hand, is product that does not get processed in the warehouse. It is off loaded from an
inbound trailer, pushed across the warehouse and onto outbound trailers for departure
without being stored in the warehouse.
For example, a handbag business has a direct ship on custom handbags but also controls
inventories for retail orders at a warehouse. The production considers what units are on
hand and what demand is in the market. For higher demand the products can move into the
warehouse and be prioritized on store delivery trucks without being stored in the warehouse
(the flow through approach). Another example would be the most recent production being
stored into the warehouse and products already available pulled for store delivery, the FIFO
approach.
Marketing Strategies recommended for Sairam Distributors:

1.) Find out who your customers are and what they are seeking.

2.) Profile your customers by age, income, occupation, etc.

3.) Know the reasons why customers shop at your store? (service, convenience,
dependability, quality, promptness, or competence).

4.) Understand the market forces affecting the consumer's attitude when it comes to price and
what they expect to pay.

5.) Emphasize areas of appeal such as: special sizes, lower prices, better service, wider
selection, good location, or convenient hours.

6.) Offer unique products at prices your customers can well afford.

7.) Have a tracking system for how many customers shop your store every day.

8.) Seek suggestions from your best customers on ways you can boost business.

9.) Try to re-establish lost or inactive customers.

10.) Use a store questionnaire to aid you in determining customers' needs.

11.) Plan on making any changes to satisfy the new value-conscious consumer.

12.) Improve your return policies.

13.) Make it a policy to give cash refunds when requested by the customer.

14.) Offer customers a satisfaction guarantee.

15.) Use a suggestion box and customer want slips.

16. Extend your store hours.

17.) Accept Visa, MasterCard, Discover, and American Express.

18.) Analyze complaints and take action to prevent recurrence.

19.) Train employees to service and work with customers in a professional manner.

20.) Call customers to let them know when new items have arrived.

21.) Have lots of convenient parking for customers to use.

22.) Have a clean bathroom available for customers to use.

23.) Grade your store's location every year in regards to and accessibility.

24.) Create a system to let customers know how much you appreciate their business.


25.) Use advertising techniques to create urgency and motivate customers to buy now.

26.) Test different aspects for promoting business: -- new offers --new items -- new prices --
special announcements -- stronger ads and better headlines.

27.) Know what type of advertising methods work the best to attract customers (direct mail,
newspaper, television, radio).

28.) Use memorable advertising that sets your business apart from the competition.

29.) Create new opportunities for customers to purchase more frequently from your store.

30.) Implement proven business formulas of other successful retail firms.

31.) Replace outdated methods with new techniques and better resources for retailing in
today's high-tech, fast-moving, and competitive marketplace.

32.) Set up an inventory control system in regards to shrinkage, performance, amount of
merchandise, mark-up, profit and turnover.

33.) Determine whether to price certain items below, at, or above the market.

34.) Utilize a system for tracking slow-moving merchandise and those products that are your
best-sellers.

35.) Use different ways to arrange and display merchandise that will make it easier for
customers to buy.

36.) Know your average sales transaction and what you can do to increase it.

37.) Increase your sales transactions by offering better prices, more value, sales incentives, or
add-ons.

38. Know which products are price-sensitive to your customers, that is, when a slight increase
in price will lead to a drop-off in demand.

39.) Know the maximum price customers are willing to pay for certain items.

40.) Computerize your business to help streamline everyday tasks such as inventory control,
point of sale, and overall business analysis.

41.) Evaluate the amount of inventory you carry, and fine tune your operating expense ratios
on a regular basis.

42.) Buy distinctive merchandise that fits into a niche your competitors don't have.

Marketing Strategies
Place the main emphasis of your marketing plan on the strategies section, where you will lay
out your specific plans for advertising, sales promotions, public relations, pricing and
customer service. Combine these marketing disciplines to leverage your store's strengths,
nullify or avoid its weaknesses, take advantage of opportunities and nullify or avoid threats.
For example, if your SWOT analysis reveals that you have a very low cost structure and there
are no other discount grocery chains in the area, consider a comprehensive strategy that
includes advertisements focusing on lower prices and in-store sales to attract value-seekers.
Reducing customer service levels can allow you to lower consumer prices even further, but a
small business always has to be careful not to reduce customer service so much as to drive
customers away. Rather than eliminating customer service indiscriminately, create innovative
ways to provide excellent service with fewer employees and streamlined processes.


Marketing Budget
Cap your marketing plan off with a budget regulating all expenses required by your
marketing strategies. You may decide to start with a budget before developing your strategies
to give yourself clear boundaries to work within, or you may decide to create a budget after
developing your strategies; regardless, calculate the total cost of implementation and revise
your marketing strategies as necessary to work within your financial means.