Distribution & Channel Management Course Overview

DIST.
MGMT
Competitive Edge Consultants

Enablers For Excellence...
DIST. MGMT
Welcome To Collective Exploration
Distribution & Channel Management
Veena Kumar
DIST. MGMT
Importance of Man
You can take my factories,

burn up my buildings, but give
me my people and I will build
the business right back again
- Henry Ford
On Leadership and Human
Resources
20 November 2016
Veena
DIST. MGMT
Objectives
To equip the students with appropriate conceptual tools and

principles to manage Distribution function in an organization
To familiarize the students with the different practices adopted
in the industry with respect to Distribution and Channel
Management.
To develop the ability to analyze various problems related to
this functional area and to be able to provide workable
solutions for the same.
Appreciate the role of an effective channel manager and
understand the trends in channel management in the effort of a
modern day business organization through discussions, lecture,
cases, assignments, & project work presentations.
November 20, 2016
Enablers For excellence
DIST. MGMT
Internal Assessment
Course Delivery:
Group Presentations of Field work by the students
Interactive faculty inputs
Role-plays
Cases& Readings
Videos
Assessment
Term End Exam 40 marks 3 Hrs. Exam pattern*
A case study
Objective Type Questions
Descriptive Questions
*Based on the coursework and discussions held in the class
Internal Assessment 60 marks
Group Presentation 15
2 Class Quizzes
15
Case Discussion
10
CP & Attendance
10
Role-plays
10
November 20, 2016
Enablers For excellence
DIST. MGMT
Field Project
Students would be divided into groups and

assigned different organizations to study a
particular type of company (e.g. Distributors of
FMCG, Dealers of FMCD, Retail chains of
FMCD, Dealers of Electrical sector etc.)
Students need to meet the dealers & distributors
and collect detailed information.

20 November 2016
Veena Kumar
6
DIST. MGMT
---Contd
1. Channel structure of the company
2. Terms and conditions for appointing channel members
3. Growth expectations of the parent company in terms of
target
4. Payment terms & cash discount policy
5. Promotion policy and support from parent company
6. Recognition & other motivation done by the parent
company
7. After sales service of the company
8. Accounts reconciliation efforts of the parent company
9. Product issues in the company
10. Logistics issues in the company
11. Performance evaluation of the channel members
20 November 2016
Veena Kumar
DIST. MGMT
Presentations will start from 11th

session on wards.
Hope to see great presentations!!
20 November 2016
Veena Kumar
DIST. MGMT
Marketing Channels
Marketing channels are sets of interdependent
organizations involved in the process of making a
product or service available for use or consumption.
The external contractual organization that
management operates to achieve its distribution
objectives.
Why Channels?
Time Utility
Assortment Utility
Breaking the Bulk

Economic Reasons
November 20, 2016
99
DIST. MGMT
Channel Members Functions
Information Flow
Proper rotation in order to
Promotion Flow
earn maximum benefits.
Negotiation Flow
Make the brand available in
Ordering
Warehousing, Financing
Risk taking
Cash flow
Title flow
Customer Support
November 20, 2016
rural areas.
Brand promotion with respect
to other brands.
Customer satisfaction &
retention.
10
10
DIST. MGMT
Channel Functions
A marketing channel performs the work of moving goods from producers

to consumers. It overcomes the time, place, and possession gaps that
separate goods and services from those who need or want them
Transactional Functions
Contacting/Promotion
Negotiating
Risk Taking
Logistical Functions
Physically distributing
Storing
Sorting
Facilitating Functions
Researching
Financing
20 November 2016
Veena
11
DIST. MGMT
Marketing Channel Functions

Creates greater efficiency
Specialization and
Division of labour
Provides lower production cost

Aids producers who lack resources to market directly
Builds good relationships with customers
Quantity: The difference between the amount of product
produced and the amount an end user wants to buy
Overcoming
Discrepancies
Assortment: The lack of all the items a customer needs to

receive full satisfaction from a product or products
Temporal: A situation that occurs when a product is
produced but a customer is not ready to buy it
Spatial: The difference between the location of a producer
and the location of widely scattered markets
20 November 2016
Veena
12
DIST. MGMT
Contd
Providing
Contact
Efficiency
20 November 2016
Veena
13
Channel Design Decision Paradigm

DIST. MGMT
Recognize need for

channel design
decision
Evaluate the
relevant variables
Set and coordinate

distribution objectives
Choose the best

channel structure
Specify the
distribution tasks
Select the channel

members
Develop alternative
channel structures
20 November 2016
Veena
14
DIST. MGMT
Channel Structure
Types
Ways to reach the
customer
November 20, 2016
Number
The number of
intermediaries between
the manufacturer and the
customer
15
DIST. MGMT
Marketing Channels for Consumer Products

Direct or Zero-level Channel:
Door-to-door sales
TV selling/ Internet selling/ Mail order
Telemarketing/ Home parties
Manufacturer-owned stores
Retailer or One-level Channel:

Contains one selling intermediary, such as a retailer
Wholesaler-Retailer or Two-level Channel:
Contains two selling intermediaries, such as a wholesaler
and retailer
Common in consumer market
20 November 2016
Veena
16
iPhone Distribution Channel
DIST. MGMT
Manufacturer
(Apple,Inc.)
Mobile Phone
Service Providers
Wholesale
club
(Sams
club)
General
Mass
(Walmart)
Apple retail
stores
(company
owned)
Apple Online Store

(Company Owned)
Consumer
electronics
store (best
buy)
Online
Marketplace
(eBay,
Amazon)
Consumers
Physical
Channel
20 November 2016
Online
Channel
17
Sony Music Distribution Channels

DIST. MGMT
Online
Marketplace
(Amazon, eBay,
BestBuy Online,
WalMart
Online)
Producer
(sony music entertainment, Inc.)
Sony music
online store
(companyowned)
Online download
(iTunes, Pandora)
Wholesale
clubs
(Sams Club,
BJs)
Consumers
electronics
superstores
(BestBuy,
CompUSA)
Sony music
retail store
(companyowned)
Bookstores
(Borders,
Barnes &
Noble)
General mass
merchandiser
s
(WalMart,
Target)
Music &
entertainmen
t stores
(F.Y.E.)
Consumers
20 November 2016
18
Marketing Channels For Consumer Electronics Products

DIST. MGMT
Manufacturer
Independent
merchant
wholesalers
Manufacturers
representatives
Medium-scale
moderate-volume
retailers
Large-scale
high-volume
retailers
Small-scale
low-volume
retailers
Consumers
20 November 2016
19
Alternative Channel Structures For B2B Markets
DIST. MGMT
Manufact
urer
Direct sales
Distributor
network
Direct
marketing
Telemarketing
Direct mail
Licensing
Private
label
Joint distributor
agreements
20 November 2016
Representat
ives
Dealers
Retail
outlets
Brokers
Computer to
computer
Enablers
For Excellence...
Consumer
Segments
Veena
20
DIST. MGMT
Channel Participants
Retailer
A channel intermediary that Buys,

takes title to, and resells mainly to
customers
Merchant Wholesaler
An institution that buys goods from

manufacturers, takes title to goods,
stores them, and resells and ships them
Agents
Intermediaries (Brokers,
Manufacturers Representatives, Sales
Agents) who facilitate the sale of a
product on behalf of the producer/
channel members but do not take title
to the goods
Facilitators
Transportation companies, warehouses,

banks assist in distribution process but
neither take title of goods nor negotiate
purchases or sales
20 November 2016
Veena
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DIST. MGMT
Channel Types
Distributors
Dealers
Dealers
Steel Wheels
CEAT Shoppe
22
DIST. MGMT
Five Types Of Channels- Durables

Traditional Channel
Direct Dealers
Distributors
Institutional Channel
Modern Trade
Sales & Service Dealers
Brand Shops
November 20, 2016
23
DIST. MGMT
HUL Distribution Network
Companys corporate purpose To meet the everyday

needs of people everywhere.
HULs distribution network - Key Strengths about 7000
redistribution stockiest covering around 6.4 million retail
outlets.
Objective Right product is available at the right place in
right quantities in the most cost effective manner.
7,500 distributors serve 4,000 Redistribution stockiest.
35 C&FAs in the country
40 manufacturing plants - 2 million square miles territory
Direct supply to 2 Million,6.4 Million retail outlets
About 250 million rural consumers
Project
Shakti
DIST. MGMT
RS Net
Initiative
NEW
INNOVATIVE
DISTRIBUTION
CHANNEL
Project
Streamline
Go To
Market
November 20, 2016
25
DIST. MGMT
November 20, 2016
26
Supporting Projects
DIST. MGMT
Project Vani Trained communicators visit schools and village meetings to drive
messages on sanitation, good hygiene practices, and womens empowerment.
This serves as a rural communication vehicle and helps the Shakti Ambassdor
in increasing her sales.
i- Shakti an IT initiative includes computer education and spoken-English

tutorials.
A partnership between Project Shakti and a mobile phone operator is also
under consideration. Mobiles helps business logistics and provide the women
with additional income.
Hindustan Unilever Network A direct marketing initiative
Deals with Unilever range of laundry products and Aviance personal care range.
E-Tailing services by home delivery for orders over phone and internet.
November 20, 2016
27
DIST. MGMT
Market Factors
Customer Profiles Target customer considerations, such as these questions:
Who are the potential customers? What/where/when/how
do they buy?
Consumer or
Industrial
Customer
Consumers buy in small quantities and dont require much

service, whereas industrial customers purchase in larger
quantities and require more customer service
Size of Market
If the target market is concentrated in specific areas, direct

selling is appropriate. If widely dispersed, intermediaries
would be less expensive
Geographic
Location
20 November 2016
In general, a large market requires more intermediaries
Veena
28
DIST. MGMT
Channels & Marketing Strategy

Push versus pull marketing
20 November 2016
Veena
29
Channel Strategy Decisions
DIST. MGMT
Factors
Affecting
Channel
Choice
Level of
Distributio
n
Intensity
Market Factors
Intensive Distribution
Product Factors
Selective Distribution
Producer Factors
Exclusive Distribution
20 November 2016
30
DIST. MGMT
Factor
Merchants
Agents/ Brokers
Nature of product
Standard
Nonstandard, custom
Complexity of product
Simple
Complex
Products gross margin
High
Low
Frequency of ordering
Frequent
Infrequent
Time between order and receipt of

shipment
Shorter lead time
Longer lead time
Number of buyers
Many
Few
Concentration of buyers
Dispersed
Concentrated
Factors Suggesting Type Of Intermediary To Use
20 November 2016
Veena
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DIST. MGMT
Product Factors
Product Complexity
Product Price
Products that are more complex, customized, and

expensive benefit from shorter and more direct
marketing channels and through a direct sales force
Product
Standardization
Standardized products can be sold through longer

distribution channels with greater numbers of
intermediaries
Product Life Cycle
As products become more common, producers turn

from a direct channel to more alternative channels
Product Delicacy
20 November 2016
Perishable items and fragile products require fairly

short marketing channels and a minimum amount of
handling
Veena
32
DIST. MGMT
Producer Factors
Producer
Resources
Number of
Product Lines
Producers with larger financial, managerial, and marketing

resources are able to use more direct channels. These
producers can maintain their own sales force, warehouse
their own goods, and extend credit to customers
Producers with several products in a related area choose

channels that are more direct, and sales expenses can be
spread over more products
A producers desire to control pricing, positioning, brand

Desire for
Channel Control image, and customer support may avoid channels in which
discount retailers are present Furthermore, manufacturers
of upscale products may sell only in expensive stores to
maintain an image of exclusivity
20 November 2016
Veena
33
Distribution Network- General Trade

DIST. MGMT
Factory
CFA
Distributor
Urban Area
Re Distribution
Stockist(RS)
November 20, 2016
Rural Area
Redistributor(
RD)
Star
Seller
34
DIST. MGMT
Distribution Network: Modern Trade- HUL

Factory
C&F
Big Box Retailer
Customer
November 20, 2016
35
DIST. MGMT
Distributors
Sell 3 categories only:
All range of motorcycle tyres.

Scooter tyres.
Last mile (auto, tempo & Tata Ace tyres).
Minimum deposit:
Rs. 3 lakhs & can rotate business as many times as he wants.
Target
Minimum sale of 500 motorcycle tyres (units) per month.
Value target different for different distributors.
36
DIST. MGMT
Dealers
Sell all category of tyres.
Have to rotate business 3 times in a quarter.

Minimum Deposit
3 lakhs
1.5 lakhs (sell only 5 categories of tyres)
Criteria for selection:
Any one can become a dealer. 10% per annum interest is given on
minimum deposit.
Total 4% per month discount.(10% p.a interest & 24% p.a additional
discount)
Various quarterly or half yearly schemes .
37
DIST. MGMT
Exclusive Dealer
Has to sell all types of tyres, particularly 50 (units) truck
tyres.
Minimum deposit of Rs.8 lakhs.

Ratio between deposit and product is 1:1.25.
Benefits: More than normal discount (6% per month).

If the dealer sells 200 tyres of passenger car radial (p.m),
cost of machinery is reimbursed by the company.
38
DIST. MGMT
CEAT Shoppe
Dedicated CEAT counter with all automobile facilities.

Good ambience
Has to maintain inventory of Rs.30 lakhs.
Deposit: Rs.8 lakhs

Machines: Rs.8-10 lakhs
Infrastructure: Rs.8-10 lakhs
Should have at least 1000 sq. ft of area.
39
Dealers
DIST. MGMT
Sell all 4 categories of tyres:
Cars
Trucks & buses
Tractors
Light trucks
Minimum Deposit
1.5 lakhs 3 lakhs & have to rotate business at least 3 times a
quarter.
Incentives
Total 5.5% per month discount.
Various additional schemes every quarter.
40
DIST. MGMT
Steel Wheels
Dedicated JK tyre counter with all automobile facilities.

Good ambience
Deposit : Rs 10 Lakhs.
Cost of machinery & infrastructure born jointly
Should have at least 750 sq. ft of area.

Benefit
Total 7% discount per month.
41
Channel Structure-Jaypee Cement

DIST. MGMT
Company
Warehouse
CFA
Dealer/Distributor
Exclusive
Retailer
Multi Brand
Retailer
Priority
Dealer
Customer
November 20, 2016
42
DIST. MGMT
Retailer Formats-Ultratech Cement
Exclusive :
Margin : 3-5%
Sells only company products
MultiBrand:
Margin : 2-3%
Sells competitor products as
well
Priority :
November 20, 2016
Margin : 5%
Mostly Company Owned
No link with distributor
43
DIST. MGMT
Types Of Dealers-DULUX
Dealers
Dulux
Decorator
centers
November 20, 2016
Dulux Stores
Shinning star
Shinning Star- 50 lakhs
Rising Star
Rising Star- 30-40 lakhs
44
DIST. MGMT
Channel Structure - LG India

Company
Website
LG Shoppe
Direct
Dealers
Distributor
Retailers
Customer
November 20, 2016
45
45
DIST. MGMT
O General : Classification of Dealers:

A+ , A ,B & C.
A+ is min 8000 Acs or 2.25 Crores of
annual sales
A is 2 Crores annual sales.
P & G : Classification of retailers :
Platinum Sales above 50,000 per month
Gold & Silver Sales above 30,000 per
month
November 20, 2016
46
DIST. MGMT
Types of Dealers- Asian Paints
Service
Provider
Dealers
Colour Idea
Store
November 20, 2016
Colour world
Dealers
Sub- Dealers
Kids World
Colour Next
Store
Home
Solution
47
DIST. MGMT
Colour Ideas Stores
Color Ideas stores:

T1 counters
Sales turnover- 2.5- 3 crores
Only 4 in Delhi
Selection Criteria:
Potential
Location
Experience (10 Yrs),
Good Relations with company
Technologically upgraded:
Texture paints panel
Some Painted Walls
Complete shade cards
Complete Product Range (Royale shine, Royale Play)
November 20, 2016
48
Differences (Asian Paints)
DIST. MGMT
Difference
Objective
Colour Ideas
Expose new ideas n
concepts
Retailer
Sales
Promotion Samplers,Radio and NP Newspapers
Services-Pre Trial zone n attention
Lack of Resources n
Time
Services-Post Interior Designers +
Regular painters
Warranty
Display
November 20, 2016
Entire Range with

Wall
Few Packed Tins

49
DIST. MGMT
Contd
Difference
Customers
Profit Margin
Staff
Price
November 20, 2016
Colour Ideas
Weekdays:100125
Weekends:80-100
3-6%
Colour consultants
Customization
costs
Retailer
Weekdays: 50-70
Weekends: 70-80
2%
Retailer and regular
staff
MRP
50
DIST. MGMT
Colour World Dealers

Color world dealer
Critical Retail Counter

Sales turnover- above 50 lakhs
Complete shade cards
Complete Product Range (Royale shine, Royale Play)
Additional Benefits apart from CN @ end of the year
Special Services through TSO and AM

Foresite
Visualizers
Painting Planner
Samplers
November 20, 2016
51
DIST. MGMT
Location
Kids World
Only 2 in India
Ahmedabad
Kolkata
Different Themes
Glow theme &Ceiling theme
Chalk board theme
Special Services:
Samplers
Visualizers (Colour Dezigner)
Painting Planner
Colour Consultants and Painters
Training by company
Salary
75 % company, 25 % dealers
November 20, 2016
52
DIST. MGMT
asian paints HOME SOLUTION

Service
Provider
Free of cost
Appointment
for site visit
Contact APHS
Courier of
the invoice
Introduction with
Relationship Associate & warranty
card
Sales
Associates
visit responsible for the execution of
the job
Supervise painting activities
Covering and masking of nonpaintable surfaces, ensuring a
clean job, taking care of furniture
and fixtures, etc.
National toll free no

SMS
e-mail
web forms.
November 20, 2016
53
DIST. MGMT
Samsung Retail Stores
Samsung Digital Plaza

Samsung Smart Caf
Samsung Brand Stores
11/20/2016
54
DIST. MGMT
All the 3 formats are franchisees
Samsung Digital Plaza: 1100 Sq Feet Can

operate and cover all the products.
Samsung smart cafe Deals with mobiles
only. Operates in all the cities and towns.
Area should be 10.5 feet by 14 feet.
Premium Brand Stores Operate only in
tier 1 & 11 cities.
Store Classification (2014 Nov)
November 20, 2016
55
DIST. MGMT
Digital Plaza
SAMSUNG
Minimum required carpet area,

1100 2400 sq.ft
Single Plate on Ground Floor
Not more than two levels with
entrance from the ground floor
Minimum ceiling height
required, 10.5 ft
Minimum Frontage required,
14 ft
Located in a good retail
market
Metros and Tier I, II and III
cities need apply
All product categories
available for retailing
11/20/2016
SAMSUNG Smart Caf

Minimum required carpet
area, between 450 600 sq.ft
Minimum ceiling height
required, 10.5 feet
Minimum Frontage required,
14 feet
Located in a good Retail
market
Metros and Tier I, II and III
cities can apply
56
DIST. MGMT
Samsung Brand Stores

Minimum required carpet area, 1100 sq.ft
Minimum ceiling height required, 10.5 ft
Minimum Frontage required, 14 ft
Only for shops located in A+ markets and
malls in Metro cities
Following product categories available
for retail-Mobiles, Tablets, Laptops,
Cameras, and Accessories
20 November 2016
Veena
57
TOTAL NUMBER OF OPERATING UNITS

DIST. MGMT
SAMSUNG
PREMIUM
BRAND
STORES
DIGITAL
PLAZA
PEPSICO
BOTTLING
UNITS
14 COBO
11/20/2016
IN
DEL
HI
120
20
38
24 FOBO
58
DIST. MGMT
Concept Stores - Objectives

Comprehensive display
Value added Services.
Simplifying the buying decisions
Customer feels Important
Banking on leisure, developing interest.
Interactive and educative.
Zero risk level.
Visible and tangible face.
Highly involved shopping experience.
Tap demand through innovative design.
Induce trial and build preference.
Reveal all the images of the brand
Make an expert out of everyone.
November 20, 2016
DIST. MGMT
Canon In India
Japanese MNC founded in 1937.

Leader in photographic and digital imaging
solutions.
18% market share India, 40%-Asia.
Guided by its kyosei (Living & working together for
the common good) philosophy.
Main competitors Nikon,Kodak, Sony and
Panasonic.
Presence :65 cities and 130 CIS (Cannon Image
Square)retail outlets .
60
Differences
DIST. MGMT
Concept store
Objective
Enhance
Communication
Multi Brand
Sales
About 101 imaging

products
Limited Range
Sales Team
Grand promoters
Not Well-versed
Word of mouth
Services-Pre
Demonstrations,
Touch and trial
Services-Post
Workshops and repair

free of charges
Display
November 20, 2016
Repair with charges
DIST. MGMT
Colour Next Store (Concept Store)

Location
Only 2 in India
Mumbai and Delhi
Company owned and managed stores

No selling
Only service
Technologically upgraded
Stimulation effect of colour and textures
Employees: 10+2
Color Consultants( female), 6 days training from Mumbai, Interior
Designing Course
Tour Guides
Receptionists
Incentives
Product Knowledge, conversion rate, Organizing Store
November 20, 2016
62
DIST. MGMT
CFA Terms Of Agreement Jaypee Cement
Time period of
agreement
5 years
Initial Deposit
10 lakhs
Infrastructure
Requirements
1. Godown with a minimum capacity of 1500-2500 sq.ft.

initially which is to be enhanced eventually, as per
requirements
2. Sufficient telephones and fax machines
3. The C & F Agent should also agree to install / operate
computers / software for computerization of
documentation, accounts, data processing
Promotional Activities 1. The C & F Agent has to display signboard at the godown
premises and inside the godown premises indicating that
he is the C & F Agent of the Company.
2. In case the Company announces schemes / gifts / discounts
etc. ,the C & F Agent has to make them available to
customers / stockiest as per the terms of the Company.
November 20, 2016
63
DIST. MGMT
Jaypee Cement Contd.
Assistance given by the

company:
1. A Power of Attorney is executed in favor of the

C & F Agents to enable them to represent the
Company
1. The Company supplies blank invoices / delivery
forms and other stationery
2. Company provides training to CFAs on the
basics of maintaining books of account
3. Provides help in the installation and operation
of company prescribed inventory management
software
4. The Company provides an operation manual to

the C & F Agent which has to be strictly
adhered by the C & F Agent.
5. The C & F Agent is entitled for reimbursement
of expenditure incurred on behalf of the
Company, duly authorized by the company
November 20, 2016
64
DIST. MGMT
Jaypee Cement Contd.
In the event of loss,

damage, shortage or
spoilage of goods
C & F Agent procures certificate of loss, damage,

shortage or spoilage from the transporter and also
arranges for insurance surveys. In the event of failure
to comply with this condition, the liability of financial
loss entirely rests on the C & F Agent.
Theft of goods
The C & F Agent is responsible for all damages / losses

due to improper storage and / or bad handling of the
Products or shortage or theft of the Products from
their godown
Book keeping
The C & F Agent has to allow the Companys Auditors

to inspect / examine the said accounts, books, records
and documents relating to storage / collection of money
by the C & F Agent.
November 20, 2016
65
contd
Parameters
DIST. MGMT
Nestle
ITC Sunfeast
Turnover Discount
NO, only credit period

extended.
No
Performance Evaluation
of Channel Member
Target Assigned
Delivery Period of
Products
Sales force
Same
Technological Devices
Samsung Phone (S/W

installed)
LapTop
Margins
5-6 % Distributor
3 4 % Distributor
Minimum Order Size
3-4 lakhs Trade

50,000 Chilled products
3.5 7 Lakhs
Minimum Stock
Maintained
4 Months Trade
1.5 days - Chilled
3 Months
Normal & Bad Goods
100% Back (Not After

Expiry Date)
2% - Months Invoicing
70 % Back (Maximum)
November 20, 2016
66
DIST. MGMT
Financial Terms
Parameters
asian paints
DULUX
a.) Initial Deposit
3-4 Blank Cheques
3-4 Blank Cheques
b.) Margins
2-20% depending
upon
Products
M/c installed
Dealer Type
2-20% depending
upon
Products
M/c installed
Dealer Type
c.) Credit Period
3 Days billing
14 Days
d.) Discounts & credit

Notes
Within 24 hrs- 5 %
cash discount
C.N:
3 Days billing 5%
of amt of order
placed
21 Days billing
3.5 %
Monthly Schemes:
Slabs, fixed
C.N:
(reimbursement on next
billing)
November 20, 2016
Within 24 hrs 5.75 %

14 Days billing- 5%
Monthly Schemes:
Slabs, fixed
67
DIST. MGMT
Financial Terms
Parameters
asian paints
DULUX
Payment Method
Cheque to the delivery boy

or driver
SMS, Email, website
notification
3-4 blank cheques every

monthsPhone to clarify dates,
SMS, Email, website
notification
Dishonoured Cheque
C.N is cancelled
Billing for special products
will be closed for 5-6 months.
C.N is cancelled
Billing for special products
will be closed for 5-6 months.
Handling of defective
Merchandise
Sample is taken
Adjustment in next billing
Dealers can keep that
product
Sample is taken
Adjustment in next billing
November 20, 2016
68
Functions & Other Terms-CFA

DIST. MGMT
Parameters
asian paints
Dulux
Functions
Labour
Billing
Account Settlements
Issue of credit notes
Conflict resolution b/w
transporter and dealers
Implementation of schemes
Distribution of gifts
Vendor Management
(stationary)
Demand Planning with AM
Order placing
Order tracking
Supply to Dealers
Feedback to the company
Distribution of Promotional
Material
Billing of Transporter
Payment Collection
Labour
Billing
Account Settlements
Issue of credit notes
Conflict resolution b/w
transporter and dealers
Implementation of schemes
Distribution of gifts
Vendor Management
(stationary)
Demand Planning
Order placing
Order tracking
Supply to Dealers
Feedback to the company
Payment Collection
Transportation
Arrangement and
management
November 20, 2016
69
DIST. MGMT
Financial Terms : Distributor & Retailer

Selecting Dealer
Selecting Retailer
Property of 50 lakh
Working Partners
Bank Guarantee
instead of PDC
November 20, 2016
A/c : 1 lakh
Security : 2 lakh
50% percent work
cost borne by the
company
Increase in target
on monthly basis
70
Financial Terms
DIST. MGMT
Credit period: 27 days
Credit period: 30 days
Grace period: 3 days
Grace period: Nil
Discount
on
prompt
Discount
on
prompt
payment: 2%
payment: 1%
Interest on late payment:
Interest on late payment:

18% (p.a)
18% (p.a)
Mode of payment: Cheque,
Mode of payment: Cheque,
RTGS.
RTGS, NEFT.
Group: 8
71
DIST. MGMT
Contd
MRF TYRES
APOLLO TYRES
Average credit period of 30
days
Interest rate of 10% is
charged in case of non
payment by due date
Target based discount fixed @
2%
If a dealer is able to achieve
quarterly target rather than
monthly he gets discount @
1.5%
November 20, 2016
Average credit period of 30

days
Interest rate of 11% is charged
in case of non payment by due
date
Target based discount fixed @
1.5%
Dealers with investment of
more than 15 lakhs are eligible
for sales productivity discount
72
DIST. MGMT
Financial Terms
APOLLO Tyres
MRF Tyres
RAS(Recurring Advance
Scheme)
Under this scheme, dealers

have to maintain a security
deposit between Rs 100000150000
Interest rate of 9% P.A is
given to the dealer
Minimum Inventory to be
maintained worth Rs 30 lakh
November 20, 2016
Dealers have to maintain a

security deposit between Rs
50000-100000
Interest rate of 8%-9% P.A is
given to dealer
Inventory to be maintained
worth Rs 10-30lakhs
73
Panasonic
DIST. MGMT
Financial Terms
Exclusive
Showrooms
Multi Brand
Outlets
Distributors
Initial Deposit
25-35lacs inventory
30-40 lacs inventory
About 1 cr
inventory
Margin
2-5%
3-4%
5-6%
Credit Period
15 Days
20 Days
20-25 Days
Interest Charged
No interest charged
No interest charged
No interest charged
because of good terms because of good terms because of good
terms
Turnover
40,00,000 50,00,000 20,00,000-25,00,000

for LED/LCD TV
for LED/LCD TV
1cr -1.5 cr
LED/LCD TV
Incentive
Not disclosed
5cr - 5% on total
sale
10cr-8% on total
sale
November 20, 2016
Not disclosed
74
Financial Terms
DIST. MGMT
Parameters
Profit Margin
To Distributors
To Retailers
Pepsi
Coke
5%
7-8%
4.75%
7-8%
Advance Payment
To Company
5,00,000
1,00,000
Discounts Provided
Cash Discount
1. To distributors
2. To retailers
No
No
No
No
1 bottle free on every

9 bottles (2 lt.)
1 bottle free on every
23 bottles ( 300ml )
Varies
No
No
7 days (1.5% interest

charged thereafter)
7 Days (1.5% interest

charged thereafter)
Trade Discount
Credit Amount
Company to
Distributors
Distributors to
Retailers
November 20, 2016
75
DIST. MGMT
Terms Of Association- Different Egs
LG gives no credit to distributors , but distributors give 10-15 lacs

worth credit to retailers
For Samsung, minimum Order from distributors is 1-1.5 Crores , for
LG 75 Lacs to 1 Crore.
LG accepts returns from the retailers.
For Cadbury & Nestle, Distributor must carry an Inventory of 50
Lacs at any given point.
HUL Distributor Min. Inventory of 1 Crore (400 Kg of Goods) , ReOrdering at 350 Kg
P & G Distributor Min .Inventory of 2 Crore & 1 Month stock
Capacity
P & G-100 SKUs of 1 product ( Min order size )
Parle & Britania Min. Order 10-15 Lacs
(Target never achieved by the Distributor and always pushed by the
company.)
November 20, 2016
76
Channel Management
DIST. MGMT
Selecting Channel Members

Training Channel Members
Motivating Channel Members
Evaluating Channel Members

Modifying Channel Members
20 November 2016
Veena
77
DIST. MGMT
Distributor Selection Framework

Parameters
Rating
(1-5)
Weight age
Financial status
50
Market standing or
Goodwill
Infrastructure
Location in the
Town
Present businesses
Market coverage
capability
Involvement in the
business, influence,
innovativeness,
market friendliness
Total
15
November 20, 2016
Score
10
10
5
5
5
100
78
DIST. MGMT
Distributor Selection: Coke

Criterion
Weight age
Investment
28%
Godown ownership
25%
Manpower
35%
Vehicle ownership
7%
Personal involvement
5%
November 20, 2016
79
DIST. MGMT
Selection Criteria
Financial Soundness of
Distributor(min. 1 CR
investment other than land)
Good social network

Well known goodwill
Good entrepreneurial drive

Excellent managerial &
administrative qualities
November 20, 2016
80
DIST. MGMT
Dealers Selection Criteria : MRF & Apollo Tyres

Similar type of parameters:
Prospective location
Ample showroom space with at least 20 ft wide
front
Financially sound with a scope for long term
partnership with the company
All the equipment and machinery like
alignment machine, tyre fitting machine etc
should be owned by the dealer
November 20, 2016
81
DIST. MGMT
Distributors Selection Criteria
Should work only

for CEAT.
Should have
maximum reach,
minimum 75 sub
dealers under him.
Must have their
own vehicle for
distribution.
Should have maximum

reach.
Must have their own vehicle
for distribution.
Should have sound
financial position.
Should be in the same
business
82
Dealer Selection Criteria

DIST. MGMT
Parameters
asian paints
Dulux
Selection Criteria
Good will and Reputation

in the market
Financial Strength- strong
Bank statements
Experience (new Players
can also apply)- Watch and
wait strategy
Potential
Good will and Reputation

in the market
Financial Strength- strong
Bank statements
Footfall
Location
Experience (new Players
can also apply)
Documents Required
( Unique Dealer Code
(DC) are generated)
A promissory Note is signed

Blank Cheques
Photograph
Photo ID Proof
Agreement
M/c Agreement
Sales Tax
Income Tax
Address Proof
Account Statement
PAN Card
Registration with VAT
November 20, 2016
83
DIST. MGMT
Channel Members Selection Criteria

Mother Dairy
Amul
Naik up to JCO
(Equivalent in Navy and IAF)
Location of the shop.
Below 50 yrs of age
Shop area: 100 - 300 sq. ft
Civ-10thPass or
Def-Army Cert I
Business potential.
Exemplary/Very Good character
Willingness to sell the entire range of

Amul Products.
Capable to provide Security deposit of

Rs 1,00,000/- and Rs. 50,000/- for
product inventory.
Security deposit of Rs. 25,000
Market Reputation
Creditworthiness
Market Experience
Past business experience.

November 20, 2016
DIST. MGMT
Cadburys: Selection Criteria
Infrastructure
Other Criteria
Initial investment-Rs 50 lakh+

stock worth Rs 25 lakh.
Modern---1500 Sq Feet.
Traditional --- (700-800) Sq Feet.
Warehouses with cooling unit
Insulated vans for
transportation (Modern Trade)
Own pick-up vehicles for
delivering chocolates
(Traditional Trade)
November 20, 2016
Past Experience -2 years

Current Business
Products handled.(
Tropicana, Parle, Marico,
Colgate, Godrej)
Conflicting Business -Not
allowed
Inventory Management Minimum Stock-Rs 20 lakh
worth products
85
DIST. MGMT
Distributorship of Patanjali.. A Golden Opportunity:
For prosperity
For service of nation
For economic independence
To make Mother India most prosperous
New Distributors For New Divisions: The District & Tehsil Level
Home Care
Natural Personal Care
Natural Food
Natural Beverages & Healthy Food
20 November 2016

Kumar
Veena
86
DIST. MGMT
Qualifications, Terms & Conditions
1. At District level minimum Rs. 50 Lakh capital, godown of

5 to 10 thousand square feet, minimum two-to-three
salesmen & two-to-three vehicles for transportation.
2. At Tehsil level, minimum Rs. 25 to 50 Lakh capital & at
small Tehsil level, initial capital of Rs. 20 Lakh &
adequate above resources.
3.The goal of Patanjali is not only business, rather this is most
sacred mission for sawdeshi. In coming few years Patanjali
will be bigger brand than these multinationals.
Patanjali will use the profit for education, medical & other
social, religious & spiritual fields & help in expansion of
these through charitable work. Therefore only able,
patriotic person should become part of this mission.
20 November 2016
Veena
87

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DIST.

Competitive Edge Consultants

Welcome To Collective Exploration

Distribution & Channel Management

You can take my factories,

Enablers For Excellence...

To equip the students with appropriate conceptual tools and

November 20, 2016

Enablers For excellence

November 20, 2016

Enablers For excellence

Students would be divided into groups and

Enablers For Excellence...

Enablers For Excellence...

Presentations will start from 11th

Hope to see great presentations!!

Enablers For Excellence...

Breaking the Bulk

Enablers For Excellence...

Channel Members Functions

earn maximum benefits.

Make the brand available in

Enablers For Excellence...

A marketing channel performs the work of moving goods from producers

Enablers For Excellence...

Marketing Channel Functions

Provides lower production cost

Assortment: The lack of all the items a customer needs to

Enablers For Excellence...

Enablers For Excellence...

Channel Design Decision Paradigm

Recognize need for

Set and coordinate

Choose the best

Select the channel

Enablers For Excellence...

November 20, 2016

Enablers For Excellence...

Marketing Channels for Consumer Products

Retailer or One-level Channel:

Enablers For Excellence...

iPhone Distribution Channel

Apple Online Store

Sony Music Distribution Channels

Enablers For Excellence...

Marketing Channels For Consumer Electronics Products

Alternative Channel Structures For B2B Markets

A channel intermediary that Buys,

An institution that buys goods from

Transportation companies, warehouses,

Enablers For Excellence...

Five Types Of Channels- Durables

Enablers For Excellence...

HUL Distribution Network

Companys corporate purpose To meet the everyday

Enablers For Excellence...

November 20, 2016

Enablers For Excellence...

i- Shakti an IT initiative includes computer education and spoken-English

Hindustan Unilever Network A direct marketing initiative

November 20, 2016

Enablers For Excellence...