End term Project

Stationery
productsnotebooks
Sales and Distribution
Management by Prof.
P.C. Mehra
Group 3 :
Punyatoya Panigrahi
Gaurav Sardana
Viswanadha Sandeep

TABLE OF CONTENTS

Objective: ____________________________________________________________________________________ 3
Company Profiles _____________________________________________________________________________ 3
ITC Limited- Classmate ______________________________________________________________________ 4
Classmate Notebooks _____________________________________________________________________ 4
Distribution channels __________________________________________________________________________ 5
ITC Classmates Distribution Channel Structure ______________________________________________ 5
Local Brands Distribution Channel Structure _________________________________________________ 6
Distribution channel and terms of sale ___________________________________________________________ 7
Customer preferences _________________________________________________________________________ 8
Comparative analysis of brands ________________________________________________________________ 8
Credit terms ________________________________________________________________________________ 9
Delivery time _______________________________________________________________________________ 9
Channel operation _________________________________________________________________________ 10
Beat cycle ________________________________________________________________________________ 10
Guarantee ________________________________________________________________________________ 10
Growth areas ______________________________________________________________________________ 10
Condition for retailer sale ___________________________________________________________________ 10
Strategy for sale ___________________________________________________________________________ 10
Psychology behind Sales and Relationship Management _________________________________________ 11
ITC_______________________________________________________________________________________ 11
Local brands ______________________________________________________________________________ 11
ITC Distributors Territories ____________________________________________________________________ 12
Territory of 2 distributors for ITC classmate on either side of NH. ________________________________ 12

Date: 3rd Septemeber 2014

Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
2

OBJECTIVE:
To find and study the sales and distribution structure, strategy and modes of operation of
various brands dealing with paper based stationery

COMPANY PROFILES
We studied the following brands
List of brands and their locations (distributors/manufacturers)

ITC - Main depot at Jagatpur, near Cuttack

Uphar - Laxmisagar in Bhubaneswar
Manorama - Budheswari colony in Bhubaneswar
Navneet - Krishna Kripa Agency Jagannath Nagar
Krishna - Hi-Tech road- (distributor) in Bhubaneswar
Times and Today - Bargarh near Sambalpur
Power - Bhimtangi, in Bhubaneswar
Ganapati - Jatni on the outskirts of Bhubaneswar
Popular Jharpada, in Bhubaneswar

The detailed company profiles of the local manufacturers are not available as they do not have
any presence on the internet.

Date: 3rd Septemeber 2014

Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
3

ITC LIMITED- CLASSMATE

Classmate is the lead provider of all student stationery needs. ITC launched its Classmate
brand in 2003 with the notebooks category. Subsequently, Classmate added new products to its
portfolio which now consists of pens, pencils, mechanical pencils and geometry boxes, erasers
and sharpeners.
CLASSMATE NOTEBOOKS

Classmate is India's No. 1 Notebook brand. Its range of more than 300 variants is custom made
to take care of varying needs in notebooks, long books, practical books, drawing books &
reminder pads segments. These notebooks reach more than 90,000 outlets across the country.
The Classmate Notebook range builds in regional preferences and caters to the requirements of
All India & State Education Boards. Every Classmate notebook carries ITC's Corporate Social
Responsibility message on its back. For every four Classmate Notebooks purchased, ITC
contributes Re. 1 to its social development initiative that supports, among other projects,
primary education.
Classmate recently launched the Classmate Composition notebooks which are 60GSM
notebooks with magenta ruling and with increased spacing for superior writing experience.
Apart from notebooks ITC Classmate also deals with the following items:

Classmate Pens
Classmate Pencils
Classmate Mechanical Pencils
Precision Instruments
Erasers and Sharpeners

Date: 3rd Septemeber 2014

Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
4

DISTRIBUTION CHANNELS
ITC CLASSMATES DISTRIBUTION CHANNEL STRUCTURE

Manufacturer
CFA
Distributor
Wholesaler
Retailer
Manufacturer: - ITC has its manufacturing plants located in Bhadrachalam- Telangana and
other southern states like Karnataka and Tamil Nadu. Most of its paper products are produced
in these manufacturing plants and then the products are moved to a central warehouse location
in Chennai.
Carrying and Forwarding agent (CFA):- Odhisha has one CFA located at Jagatpur. This CFA
maintains its stocks by ordering from the Chennai office and he needs to pay the cash in
advance for the stocks he is ordering. This CFA is responsible for meeting the supply
requirements of all the distributors from the entire state. CFA gets the order from the individual
distributors and receive the cash payments in advance. Then from the Jagatpur location
supplies are provided to the individual distributors.
Distributors: - There are two distributors in the Bhubaneswar region. As per their territory one
is located on the left hand side of NH-5 and other on the right hand side of the road. These both
Date: 3rd Septemeber 2014
Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
5

distributors provide their depot order to the CFA in Jagatpur whenever there is a shortage of
inventory. While ordering, a distributor needs to tell the code of each notebook he requires to
the CFA. No credit is given to them by the CFA and they need to make full payment in advance.
Distributor goes to the wholesalers to take their orders in the 15 days cycle. So a top down
approach is followed while replenishing the stock. A distributor provides a margin of 25% + 3%
to the wholesalers and 25% to the retailers if any retailers are approaching directly to him.
Wholesalers: - There are around 10 wholesalers in the Unit 1 wholesale market. These
wholesalers maintain their stocks from the regular supplies carried out by the distributor every
15 days. Wholesaler gets the classmate stock at a margin of 25%+3% and he sells it to the
retailers at a margin of 25%. Retailers visit the wholesalers for their stock replenishment
following a bottom up approach. No credit is provided to the retailers and they need to pay in
cash.
Retailers: - Retailers fulfill their stock requirements from the wholesalers following a bottom up
approach. They get their products from wholesalers at a margin of 25% and sell these to
customers at a margin of 15%.
LOCAL BRANDS DISTRIBUTION CHANNEL STRUCTURE

Manufacturer/Distributor
Wholesaler
Retailer
Manufacturer/CFA/Distributor:- For local brands like Brilliant, Popular, Uphar, Sampark,
Mastermind, The manufacturer, distributor are same they cover the entire market of
Bhubaneswar and Cuttack. So for every local brand there is one distributor in the city. Sales
people appointed by these distributors will visit all the wholesalers stores to take the orders
from them.
Wholesalers :In the unit 1 wholesaler market there are 2 wholesalers for each local brand. The locations of
these two particular wholesalers who is carrying the same brand is two different ends in order to
Date: 3rd Septemeber 2014
Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
6

avoid horizontal conflict. The company sales people of these local brands daily visit these stores
from 6pm onwards. These local brands generally give high margins to these wholesalers in
order to push their product into the market. Brilliant gives the highest margin of 30% to
wholesalers among these local brands. Other brands usually give a margin of 25-30%. However
the quality and quantity of brilliant is more than other local brands.
Retailers:Retailers usually fulfill their stock requirements by using bottom up approach. They gets
a margin of about 10% less than what wholesaler gets from the distributor.

DISTRIBUTION
CHANNEL
TERMS OF SALE

AND

Vertical channel conflict- Wholesalers or Dealers also engage in retailing. They sell
with lower margins, this puts the retailers at a loss. However, this is minimal as the
wholesalers also do not give huge differences in margins in comparison with the
retailers to the end customers. Margins or discounts are purely decided on the basis
of volume buy.
Horizontal channel conflict- No wholesaler kept all the local brands. Classmate
was the only shared brand which all wholesalers had. The rights for selling the local
brands were shared by 2-3 wholesalers maximum under the condition that they are
geographically distant. This is done purposefully and the distributors also be a party
to this because, too many wholesalers for their products would lead to unhealthy
competition and undercutting each others margins to gather more sales. The few
wholesalers for the local brand have some sort of an agreement which is facilitated
by the distributor to sell at a single price retaining same margins.
No guarantee/coverage to wholesaler or retailer. Only severe manufacturing
defects in bulk are returned and replaced by the manufacturer for select wholesalers
having higher turnover.

Date: 3rd Septemeber 2014

Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
7

CUSTOMER PREFERENCES

Customers generally do not have preferences for specific brands except for paper
quality. Hence the retailer/wholesaler push the brands for which they get higher
margins
The margins remain same across all the varieties (on the basis of page quality,
number of pages etc) in all the brands
Classmate is on the high price segment and is not affordable for low/middle class
students. Allegedly(by the wholesalers and retailers), Classmate engages in
clandestine tie ups with English medium schools whose students specifically
demand classmate

COMPARATIVE
BRANDS

ANALYSIS

OF

Components

ITC

Other

Guarantee Coverage

Only for Severe Damages

Only for Severe Damages

Credit Terms

No Credit

Depends on the Relationship

Delivery Time

5 days

1 day

Beat Cycle

Once in 1 month by ASM

Every day at 7pm

Margins of wholesalers

Margins of about 25%+3%

Margins of about 30-40%

Strategy for Sales

Pull Strategy

Push Strategy

Date: 3rd Septemeber 2014

Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
8

Sl. No
1

Names
of
brands
NavneetStandard
Notebooks
ClassmateStandard
Notebooks

Price
category
High

Margin

Availability
(20 stores)
2

Channels

Credit

NA

NA

High

15-20%
Retailers
25%wholesalers

18

No Credit

25%
(notebooks),
30%
(registers)
25%

20

CFADistributerwholesalerretailercustomer
Distributerwholesalerretailercustomer
Distributerwholesalerretailercustomer

BrilliantStandard
Notebooks
and registers
ManoramaMastermind&
SamparkStandard
Notebooks
ShivaStandard
Notebooks
and registers
CamelWired
Notebooks
Bilt-Wired
Notebooks

Med

Low

40%
customers
do not want

NA

NA

High

NA

NA

No Credit

High

NA

NA

No Credit

Low

20%

10

Credit
to
Wholesaler
(15 days)
Credit
to
Wholesaler

CREDIT TERMS
Credit terms given to each wholesaler vary on the basis of their relationship with the distributor.
The older it is, the more reliable it is and accordingly credit is given. ITC never supplies any
goods on credit. A few local manufacturers provide credit. A few brands extend credit terms
during peak season(March-June) of the year. In all other normal transactions, goods are issued
on PDC.
DELIVERY TIME
The wholesalers opined that the local manufacturers had prompt response and faster delivery
as compared to ITC- Classmate.

Date: 3rd Septemeber 2014

Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
9

CHANNEL OPERATION
Irrespective of the brand, all distributors send their salespersons to the wholesalers to take or
supply orders. The retailers also visit to the wholesaler to buy their requirements

ITC, follows a prescribed channel structure as mentioned.

All other local manufacturers directly supply to the wholesalers acting as manufacturers
cum distributors.

BEAT CYCLE

For ITC particularly the distributors salespersons visit 2-3 times a week.
The company appointed ASM visits monthly once.
The immediate superior of the ASM/ the regional sales manager visits once a year to
enquire about issues if any.

GUARANTEE
Only products with severe manufacturing defects in a large volume are replaced. The same
applies for all brands
GROWTH AREAS
The wholesalers opined that there could be tremendous potential if the government could
include them in their structure for distributing notebooks in rural areas(free notebooks for
students from Standard 1-8). The end customers could hugely benefit by not having supply
scarcity. The wholesalers could also benefit by drawing a small margin.
CONDITION FOR RETAILER SALE
They do not generally ask for TIN numbers. Margins and discounts are decided purely on
volume purchase basis.
STRATEGY FOR SALE
ITC classmate follows a pull strategy for increasing its sales and invests heavily into advertising
and promotions
Local brands follow a push strategy by engaging the channel partners through an array of
discounts, offers, concessions, festive margins and competitive margins.

Date: 3rd Septemeber 2014

Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
10

PSYCHOLOGY BEHIND SALES AND

RELATIONSHIP MANAGEMENT
ITC

Wholesalers do not want to sell classmate products. However, since customers come with
specific demands asking for classmate only, they are bound to keep stocks to cater to the
increasing market demand. Given a chance all the channel partners would like to sell local
brands or any brand that gives them higher returns or profits. However the only activity they do
is they arrange for local meets or conferences for all wholesalers and major retailers and
throw parties once a year. Some major wholesalers (providing higher turnover) also got
discretionary Diwali gifts.

LOCAL BRANDS

Amongst the local brands again, the best brand maintaining personalised relations with all its
partners is Brilliant. There was seemingly competition amongst the wholesalers to get the
dealership for Brilliant products because, they gave the highest margins. The icing on the cake
was that apart from that they also maintain cordial relations and apparently have the best
climate management. As a result of this, the respective wholesalers for Brilliant, reportedly said,
if given a chance, they proactively push Brilliant products.

Date: 3rd Septemeber 2014

Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
11

ITC DISTRIBUTORS TERRITORIES

TERRITORY OF 2 DISTRIBUTORS FOR ITC CLASSMATE ON EITHER SIDE OF
NH.

Date: 3rd Septemeber 2014

Submitted by: Punyatoya Panigrahi, Gaurav Sardana,Viswanadha Sandeep
12