Parle G Sales and Distribution
Parle G Sales and Distribution
Parle G Sales and Distribution
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Table of Contents
1. Acknowledgement 2. About the B s i cuit Industry 3. Parle: History and More 3.1 About Parle 3.2. History of the company 3.3. Parle Biscuits 3.4. The Production Units of Parle 3.5. Parle Annual Production (Biscuits) in Million Metric Tonnes 4. The Macro-environmental Factors 5. Porters Value Chain: Parle G 6. The Perceptual map 7. Product Life Cycle 8. The Distribution Channel Network: Parle 9. The Parle G Distribution Network 9.1. Intensive Distribution 9.2. The Channel Members of the Distribution Network of Parle 9.3. The Channel Members and Logistics 9.4. Channel Dynamics 10. The Parle Distribution Network Logistics 10.1. Selection of Channel Members for Parle 10.2. Motivation of Channel Members 10.3. The Channel Members of the Parle Distribution Network 10.3.a. The Distributors 10.3.b. The Retailers 10.4. Evaluation of the Channel Members 11. Conflicts and Co-Operation 11.1 Conflicts among the Channel Members 11.2. Co-operation among the Channel Members 12. The Distribution Channel and Parle 13. Suggestions for the Parle Distribution Channel
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Acknowledgement
Parle: Distribution, Logistics and Management a Report would not have been possible without the support of the various distributors and Channel Members who were interviewed in the due course. We would like to acknowledge the valuable feedback from the factory unit of Parle: Parle Agro Foods in Garia, Kolkata, West Bengal. A Special mention needs to be made for Mr. Bizeet Kumar, Production Executive, Quality Control Division, Parle Agro Foods, Garia, Kolkata. He was very helpful in furnishing the intricate details of how the distribution logistics of Parle actually work. Thank you, to Mr. Debanjan Sengupta, Production, Quality Control, Keventor Agro, Subsidiary of Parle Agro, Kolkata. He was really kind to share details of the distribution channel prevalent therein. A special mention for Prof. Nalin Jain, teaching us the vital concepts of Channel Design and Logisti cs. Wed sincerely like to acknowledge all the help that we got from various domains in the successful execution of this project report. Thanking All
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Even today the Indian Biscuit Industry is dominated by the unorganized sector with a composite market share of 55%.
Organize d Secto r 45 %
Britania 30%
Parle 40%
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In 1929 a small company by the name of Parle products emerged in British dominated India. The intent was to spread joy and cheer to children and adults alike, all over the country with its sweets and candies. The company knew that it wouldn t be an easy task, but they decided to take the brave step. A small factory was set up in the suburbs of Mumbai, to manufacture sweets and toffees. A decade later it was upgraded to manufacture biscuits as well. Since then, the Parle name has grown in all directions, won international fame and has been sweetening people's lives all over India and abroad. Apart from the factories in Mumbai and Bangalore Parle also in Bahadurgarh in Haryana and Neemrana in Rajasthan, which are the largest biscuit and confectionery plants in the country. Additionally, Parle Products has 7 manufacturing units and 51 manufacturing units on contract. 3.3. Biscuits Parle
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 FMG XVIII A senior citizens. They have found their way into the Indian hearts and homes.
Parle G is a source of strength for both body and mind due to the sumptuous amount of milk and wheat. It is the Largest selling Biscuit Brand in the world.
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Negatives
Rigid Standards and Measures act. Conformance to size. Production and distribution licenses are difficult to attain.
Political Factors
Huge gap between the Wholesale Price Index and the Consumer Price Index.
Technological Factors
Social Factors
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The power of substitutes to affect the prospects of Parle G is also very high: The growing packaged snack industry is become a real cause for concern for the biscuit industry. This is for this reason that most members of this industry have ventured into the confectionary and packaged snack business as well. The traditional home cooked Indian snacks are always a threat.
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The Indian Biscuit Industry Price
As per the above perceptual map, Parle G scores the best. It has the best distribution network among the competitors. It also has the best lowest pricing strategy. Britania is the nearest to Parle, and its no surprise that Britania has 30% market share only after Parle at 40%. ITCs Sunfeast and Priya Gold are somewhere in between in price and distribution network. A market share in the region of 10% is evidence to the fact. Marino and Horlicks are niche players hence, have a higher price and a less intensive distribution strategy.
Presently, Parle G is in the maturity stage of its PLC. Having said this, the brand is going strong.
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Parle Depots
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distribution channel exists. 9.4. Channel Dynamics Parle has a multi-channel marketing system since it uses more than two marketing channels to reach all its customer segments.
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The annual sales of these products have to be mentioned. Details of complementary products and product lines need to be mentioned. Dealers of the company must carry a good reputation. This is due to the fact that Parle believes that the reputation of the dealer affects the clientele in the long run. Market coverage by the distributors needs to be defined which includes details of Geographic coverage and Outlets per market area. The company also requires the dealers to furnish any Advertising and Sales initiative undertaken by them on behalf of the company.
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of
Channel
Parle strongly believes in maintaining a good relationship with the channel members so that they are genuinely motivated to work for the company. For the company, motivating its channel members is of utmost priority because of the following reasons: If the channel members are motivated, they can also initiate advertising and sales promotion schemes on behalf of the company. However to keep the channel members motivated to work, the company has to incur certain costs but the benefits of it are felt in the long run.
Members
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10.3.a. The Distributors One of the main factors, which keep the distributors motivated, is the margin. Usually the margins offered by Parle are 8%. Now-a-days it has been raised to 8.5%. Volume wise this comes out to be a big figure since Parles product has a good demand in the market. However compared to the other companies the margins are still lower since the new players in the market offer a much higher margin. But the very fact that Parles prod ucts have good demand in the market motivates the distributors to stock it. Parle Products being a cooperative cannot afford to give heavy monetary incentiv es. Parles products are considered to be value for money since the company does not believe in charging high margins. In fact all monetary incentives are just the short run means to promote the companys product. In order to keep the Channel members motivated in the long run, Parle has build on the concept of Trade Marketing which makes the dealers and the distributors believe that the companys products are worthy of being pushed in the market. The company is organizing various Total Quality Management initiatives and workshops. Here various counseling measures are undertaken by the company to improve the overall working of the distribution network. Vision and mission statement: the company cascades down the vision to FMG XVIII A the various channel members; this is done through various events organized by the company at different locations where the values of the company are made
clear and enforced to the channel members. Also the fact that Parle being a cooperative society cannot afford to spend exorbitantly on such events therefore it has a very traditional way of organizing these get together which leaves an impact on the members.
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10.3.b. The Retailers Trade schemes: these are undertaken by the company only for the hard selling items e.g. Biscuits and Snacks etc. for these the company raises the margins by 2%, also schemes like good packaging incase of butter and cheese is undertaken by the company. However this is only a short-term initiative to push the products of the company. Glow boards: the company puts up glow boards at the retailer and pays the major portion of the cost. Schedule of the salesmen: they provide the retails with this schedule so the retailers can pre estimate the quantities of the various products needed. Infrastructure facilitation: the company facilitates the retailers to buy beautiful stalls by formulating an easy payment program and a commitment to buy back the equipment at a reasonable price when the value of the equipment has depreciated.
Summary of the monthly potential sales of markets. Summary of the product wise monthly sales potential of institutions.
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Credit policy: Compared to the market, the companys credit period is less that specially incase of institutional sales is very important. Packaging: The channel members for easy storing demand a better quality of packaging. Replenishment: The replenishment of the stocks is not prompt in case of Parle cheese Biscuit and all hard selling items.
Margins: The Company provides least margins to all the channel members. For e.g. The retailers margin in case of Parle G is 8% as compared to Britannias 12%
11.2. Co-operation among the Channel Members Parle quality circles: The members of the local channel meet together every month to share issues and the achievements of the channel members. This is an ongoing activity facilitated by the company offices in different locations; this enables the channel members to learn together and reduces the horizontal conflicts among the wholesalers and the distributors. Pilot salesmen scheme: To reduce the financial burden of the distributors this scheme is run whereby half the cost of the salesmen is born by the company and the rest half by the distributor Scheduling of sales: The wholesalers and the distributors provide their respective schedules of their sales men to the retailers so that the retailers FMG XVIII A can plan out and place the orders in advance.
Agreement defining rights: The company makes the distributors sign an agreement where the areas of operation for each of the distributors are defined, therefore avoiding any conflict amongst the distributors regarding their areas of operation.
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The following are the suggestions that Parle can implement to better its distribution channels: Increase the margins: In order to motivate the channel members it is also very essential for the company to increase the margins for the hard selling items.
Pushcarts: These should be increased in number in order to increase the market reach (especially the rural market). This can provide with a very effective channel.
Parle should also go in for Parle Zones: It is primarily for big city retail outlets. Here all the Parle products can be stalked. This can be an effective mode of umbrella marketing. This strategy can be implemented in regions where the footfalls are large in number. The advantages of this alternative channel would be as follows: Full range display. Easier to promote new products. Easy to push impulse purchase products. The Parle Brand building exercise will be enhanced.
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