Sales & Distribution Management”

Assignment

Submitted By: Submitted To:

Dibya Ranjan Nayak Prof. S.
Prathiar
19DM032
Sec- “A”
QN1. How do you think will the purchasing behavior of consumers change
post the covid -19 pandemic as compared to traditional purchasing habits?
 As social distancing becomes the new normal due to the COVID-19
pandemic, consumer habits are adapting in real-time to the new
environment and circumstances. Here, we’ll recap some of those key
patterns,

 Overall, 56% of consumers prefer to spend less and are only buying
what they need given the current landscape. What we have seen is a
shift in where consumers are spending, with a dramatic shift towards
e-commerce. e-commerce sales have doubled for Canadian
merchants since March 11 – the day the World Health Organization
announced a global pandemic.

 Following the COVID-19 pandemic, it is predicted that consumers

will be slow to come back to brick-and-mortar retailers and the
majority of the e-commerce business will continue to go to the
biggest players like Amazon.

 Consumers are deeply concerned about the impact of COVID-19, both

from a health and economic perspective. People are responding in a
variety of ways and have differing attitudes, behaviours and
purchasing habits. People across the globe are afraid as they strive to
adapt to a new normal. Fear is running high as individuals
contemplate what this crisis means for them, but more significantly,
what it means for their families and friends, and society at large.

 Consumers are responding to the crisis in a variety of ways. Some

feel anxious and worried, fuelling panic-buying of staples and
hygiene products. At the other extreme, some consumers remain
indifferent to the pandemic and are continuing their business as
usual, despite recommendations from government and health
professionals. CPG companies will need to understand how their own
consumers are reacting, and develop customized and personalized
 marketing strategies for each. The days of one-size-fits-all marketing
are over.

 Consumer priorities have become cantered on the most basic needs,

sending demand for hygiene, cleaning and staples products soaring,
while non-essential categories slump. The factors that influence
brand decisions are also changing as a “buy local” trend accelerates.
Digital commerce has also seen a boost as new consumers migrate
online for grocery shopping – a rise that is likely to be sustained post-
outbreak.

 In the weeks following the ‘Janata curfew’, sales of all categories of

consumer goods were impacted. Certain categories such as beverages
and confectionery were wiped out, but few categories such as
packaged foods and commodities are weathering the storm better.
Local brands and Indian kirana stores have shown resilience, with
recovery of almost 65 percent by the third week of the lockdown,” 
The lockdown effect on retailers

 While essential items continue to remain a key priority, the consumer

behaviour was well captured in retail outlets, which stocked up on
these items before the lockdown was announced. 

 While people resorted to hoarding essentials, data suggests that

Indian retailers did not get into panic mode of buying, but there was
a significant drop in demand.

 Some of the key indicators that might have influenced them not to
stock up includes higher availability of stock due to the orders placed
during the month-end, and festivals such as Holi and Ugadi. A small
clue regarding the impending lockdown also helped these retailers to
anticipate demand better and stock up.
 However, for most retailers, the sales were lukewarm even during
the festivals,
 since gatherings reduced due to social distancing concerns.

 However, in the first week of the lockdown, the demand form

retailers had reduced by 71 percent, with no orders from 95 percent
of the outlets. All categories, barring commodities, lost 60 percent
after the lockdown was announced, but recovered by 40 percent by
the third week of the lockdown, with the exception of personal care,
which saw a consistent demand from consumers,”

 Most brands have also taken a hit during the pandemic. Amazon
India's biggest skincare brand Wow Skin Science, which used to
receive 19,000 orders a day, has now seen its orders drop to less
than 2,500 per day.

 The lockdown order effectively forced people to switch to online

shopping because of movement restrictions and social-distancing
norms even for bare necessities such as vegetables and groceries.

 That, along with people re-evaluating their lifestyle choices with

more free time on their hands, bodes well for online sellers.

 Overall, consumers are dramatically reducing most discretionary

spending, which has grave consequences for some industries, such
 as restaurants, apparel, footwear, accessories, travel and
entertainment out of home. As many consumers are under stay-at-
home or shelter-in-place orders around the nation, they are likely
to continue reduced spending patterns in these and other product
categories

 In terms of behaviour changes, the rise in online buying,

specifically for groceries, is noteworthy. Among all age groups,
there is a large segment of consumers who tried online grocery
buying for the first time in March, and many will likely continue to
buy groceries online, at least as long as the pandemic continues

 whether a large share of consumers will remain loyal to online

shopping or go back to the brick-and-mortar store experience
once we feel safe to do so. Most of us have missed the social
experience of shopping for many weeks now, and the convenience
of the online channel may not make up for this.

Q2. What are the innovations in distribution channel implemented by various

industries (FMCG, Consumer Goods, Automobiles etc.) during the COVID – 19
pandemics in order to reach the customer?

FMCG

Fast moving consumer goods (FMCG) companies are making use of

technology to beat longstanding challenges and build on emerging
opportunities in an evolving marketplace.
 In addition, they also have to ensure that products are fresh, there
is enough market reach and that working capital ratios are
constantly improving
 These are the most important factors driving technology adoption
in this sector
 A couple of years ago, Mumbai-based consumer goods
company Marico, which sells the Parachute brand of hair oil and
the Saffola brand of edible oils, introduced a new route
optimisation system which geo-tagged the routes taken by its
salesmen. Since then, the company has increased its direct
distribution reach by 20%, but with the same number of
salespeople.
 Another initiative – to reduce the number of intermediate points
in the distribution channel – has cut down transit time by 30%,
said chief operating officer Sanjay Mishra. The company has also
completely automated its business review process for sales staff.
This has led to freeing up about 1,100 man-days. 
 “Advancements in technology and Internet of Things have made a
transformative impact across the supply chain process – from
assessing market demand using digital analytical forecasting to an
integrated operations planning strategy,” said Ankur Bhagat, Head
- Supply Chain, Procter & Gamble - Indian Subcontinent.
 P&G, best known for its Ariel detergent and Gillette range of
shaving products for men, has set up a dynamic delivery tool to
optimize its market delivery system. This has reduced delivery
time by up to 20%, cutting down on both costs and carbon
footprint.
 “Key challenges faced by growing FMCG firms are visibility of data
and tracking of efficiencies in the entire value chain. This is where
technology becomes absolutely essential in enhancing growth,
productivity and a robust company bottom line
 Emami has implemented a distributor management system that
has made transactions both speedy as well as more accurate. The
system is helping it track secondary sales daily, manage inventory
better through automated demand fulfillment, process claims
online and manage master data from a centralised location. 
 “After the introduction of the Goods and Services Tax (GST) we
changed a lot of processes in order to leverage its benefits, which
has resulted in a complete revamp of the supply chain,” said Lalit
Malik, chief financial officer, Dabur India, the Delhi-based largely
Ayurvedic brand known for its Chyavanprash health supplement
and Meswak toothpaste.
 The company is implementing a new system of end-to-end
automation, which will bring the entire chain — from
procurement to distribution — on the same platform. 
 Managing a large and disparate supply chain and a far-flung retail
network have always been a struggle at consumer goods firms. 
 The Indian market is highly fragmented – spread across modern
trade and different sizes of traditional retail outlets, with many of
them in hard-to-reach locations. 
 “Almost half of the world’s stores are in India. all the major global
and Indian e-commerce players competing in the India market.
Indian retail space is unique and has evolved rapidly unlike the
developed markets,” said Bhagat of P&G.
 As growth starts to slow in certain consumer goods segments,
companies are deepening their presence in rural India. Dabur has
expanded its reach to 51,000 villages, from 34,000 villages at the
start of the year, aided by the new system it is implementing. 

 Marico, too, is relying on newer technology tools to drive its push

into rural markets. By geo-clustering villages, it has drawn up a
roadmap to improve its direct distribution infrastructure.
 “To improve better utilisation of resources and cost-to-serve in
rural van operations, Marico is using technology such as geo-
tracking of van routes, which measures data of distance travelled
and time taken on every route daily. This helps identify inefficient
routes and re-deploy resources into high business potential routes
continuously,”
 Multi-national FMCG firms learn from their experiences globally,
but other companies are investing in their own technology teams
 ITC, which owns the Aashirvaad brand of wheat and the Sunfeast
range of biscuits, has a dedicated IT resources team that works
closely with the businesses and collaborates with a number of
partners. 

“ITC has the unique advantage of leveraging the expertise that lies
in our information technology arm - ITC Infotech - to develop
solutions that strengthen supply chain capabilities, including the
agricultural backend,”
 A number of startups specialising in specific areas have now
entered the field to help FMCG firms, driven by the potential to
drive efficiencies and reduce costs by optimising the supply chain
and distribution networks. 
 FMCG companies have always lagged in innovation and the use of
technology. Apart from the actual manufacturing and production
equipment, no other parts of the business have been automated
for the longest time, said Paramdeep Singh, the CEO of FieldAssist. 
 Another start up, Locus, provides route optimisation software
which factors in various scenarios based on flow, inventory and
location and cost-impact of the redesigned supply chain. On
average, the company has helped increase sales serviceability by
12% and reduced beat length by 20%. One of the key challenges
while working with traditional enterprises though is their reliance
on legacy processes.
 However, more and more companies are embracing technology to
gain an edge in this highly competitive environment,” said Nishith
Rastogi, CEO, Locus. “Another challenge we regularly face is the
resistance from the on-ground team to adapt to technology,”
 A couple of years ago, Mumbai-based consumer goods
company Marico, which sells the Parachute brand of hair oil and
the Saffola brand of edible oils, introduced a new route
optimisation system which geo-tagged the routes taken by its
salesmen. Since then, the company has increased its direct
distribution reach by 20%, but with the same number of
salespeople. 
 Emami has implemented a distributor management system that
has made transactions both speedy as well as more accurate. The
system is helping it track secondary sales daily, manage inventory
better through automated demand fulfillment, process claims
online and manage master data from a centralised location. 
 FMCG firms have also been spurred into action by some external
factors. 

“After the introduction of the Goods and Services Tax (GST) we

changed a lot of processes in order to leverage its benefits, which
has resulted in a complete revamp of the supply chain,” said Lalit
Malik, chief financial officer, Dabur India, the Delhi-based largely
Ayurvedic brand known for its Chyavanprash health supplement
and Meswak toothpaste
 Skincare brand Nivea, for instance, has developed a mobile app for
its sales force that captures data on consumer offtake almost in
real time. The app communicates that to a central server, which is
then accessed by the supply chain team. 

“Through this, we have been able to improve our new products fill
 rate by about 6-7% and reduce quality complaints in stores by
about 60% over the last 10 months,”
 ITC, which owns the Aashirvaad brand of wheat and the Sunfeast
range of biscuits, has a dedicated IT resources team that works
closely with the businesses and collaborates with a number of
partners. 
 FMCG companies have always lagged in innovation and the use of
technology. Apart from the actual manufacturing and production
equipment, no other parts of the business have been automated
for the longest time, said Paramdeep Singh, the CEO of FieldAssist. 
 Another startup, Locus, provides route optimisation software
which factors in various scenarios based on flow, inventory and
location and cost-impact of the redesigned supply chain. On
average, the company has helped increase sales serviceability by
12% and reduced beat length by 20%. One of the key challenges
while working with traditional enterprises though is their reliance
on legacy processes.
 “However, more and more companies are embracing technology
to gain an edge in this highly competitive environment,” said
Nishith Rastogi, CEO, Locus. “Another challenge we regularly face
is the resistance from the on-ground team to adapt to
technology,” 
 Companies, too, are actively working to get their vendors and
distributors on board since their involvement is critical in
ensuring that the system works. 
 The company has made a 10% gain in forecast accuracy and
reduced logistics cost (as a percentage of net sales) by 100 basis
points. It has also seen productivity increase across manufacturing
facilities, all of which have translated into direct cost savings. 
 CONSUMER GOODS

 Bain’s leading position in both the Chinese and Italian consumer

products industries has armed us to quickly assess the impact on
CPGs as the COVID-19 situation unfolds. We’ve identified several
features of the crisis that are likely to affect consumer products
companies in other countries as the virus expands globally.

 Perhaps the biggest factor is a company’s product category. It is

now well known that in areas affected by the virus, consumers
have hoarded necessities and key pantry and household items
 (such as disease-prevention products and packaged, shelf-stable
food) while reducing consumption of nonessentials (see Figure 2).
Based on our observations in China and beyond, four main
category archetypes have emerged as the disease has spread:

 Panic-buying of disaster-preparedness categories, such as

disinfectants, masks, hand sanitizer, instant meals and medical
supplies. There has been a huge spike in demand for these
categories, with products rapidly undersupplied across
channels―resulting in extremely tight turnover and frequent out-
of-stocks.
 Pantry-loading of daily essentials, such as infant food and formula,
shelf-stable groceries, daily hygiene products, and bottled water.
These products face constrained supply and below-average stock
levels.
 Short-term declines in household discretionary products, such as
traditional dairy, soft drinks, snack foods, personal care and pet
care.
 Intense declines in nonessentials and luxury products, such as cosmetics,
luxury beauty and skin care, confectionary, and alcoholic beverages.
Demand for these categories has rapidly collapsed, especially in alcoholic
beverages, which faces the additional headwind of heavy reliance on on-
trade sales (subject to temporary closures and social-distancing measures).
Automobiles
 As the COVID-19 pandemic broke out in China at the beginning of the
year, vulnerabilities in the global automotive supply chain were
exposed with nearly 85% of the world’s supplies dependent
on China in some way or another. The ripple effect was felt globally,
and most auto manufacturing came to a sudden halt as lockdowns
shut plants.
 Even before the pandemic, the industry was stressed financially from
increased emissions-related upgrade costs and increased R&D
investments in emerging technologies. As manufacturing operations
resume, the added burden of COVID-19 safety protocol compliance,
plummeting demand, and inefficiencies from underutilized capacity
are further exposing OEMS and suppliers to severe liquidity issues.
Further disruptions are likely to continue, bringing the possibility of
major consequences to specific segments of the auto ecosystem.

India
  With the lockdown of all showrooms and manufacturing facilities,
the Indian auto industry saw zero production and sales in passenger
and commercial vehicles (PVs and CVs) in April, which followed
March’s 50% and 88% drop in PVs and CVs, respectively.

 The largest carmaker in India, Maruti Suzuki, only managed export

shipments of 632 units during the month with port operations having
been partially resumed. Similarly, exports of Hyundai and Mahindra
stood at 1,341 and 733 units respectively last month, while having
reported zero domestic production and sales. Compared to April
2019, when the country reported total PV sales at around 320,000
and exports at 56,800 units, the current lockdown will surely leave
some deep economic wounds. With the partial opening of a few
plants allowed from last week subject to strict safety and social
distancing protocols, every auto manufacturer is working with
dealers and supplier partners to rebuild the ecosystem.

 With no clear definitive indication of when the social and economic

conditions in the country will get back to normal, Counterpoint is
holding to its base case scenario of 20% YoY decline in auto sales,
and revising the worst-case outlook to a 35% YoY decline should the
GDP growth outlook become negative.

Some car manufacturers get ready for the new

customer expectations and open up new sales
channels
Customers in the premium segment particularly want to have as many
channels to choose from, and use, according to individual preferences. An
integrated multi-channel strategy (combination of online and offline
channels) in sales is the logical response of OEMs and a way to differentiate
themselves from competitors
In addition to direct sales via own websites more sales channels such as
brand stores, call centers and specialised field staff (mobile sales advisors
or product experts) are used to provide customers with individual added
value.
At the same time, Flagship and Pop-up Stores are set up at strategic
locations in order to increase proximity to potential clients and to
strengthen the emotional connection with a brand. In contrast to a
traditional product distribution using authorised dealers and branch offices
only, OEMs are therefore more directly involved in the sales process. There
are three major challenges with this approach:
1. In contrast to the traditional sales channel – making use of
authorised dealerships only – the brand must be immediately
present – not just visible. They should shape the sales process of each
customer individually and they need to go along with him/her
through the entire sales journey. As a consequence, OEMs must build
up appropriate structures that define and fine-tune processes to
ensure the quality of customer care.
.  The new triangular relationship between the customer, brand and
retail requires a proper alignment – since even in case of a dedicated
focus on direct sales the retail organisation will nonetheless play a
prominent role in the new sales funnel process: Prospects will still
refer to sales advisors at dealerships in order to get individual
consultancy; test-drives need to be managed locally and, last but not
least, car delivery is actioned by the retail network. Hence, managing
a great customer experience holistically requires a seamless
interaction and harmonised cooperation between retail and
wholesale.

 Even in the future, branded dealerships will have a key role

when it comes to Customer Care and maintenance of a proper –
and close – emotional connection between consumer and
brand.  Customers’ experiences need to be managed
appropriately during the entire ownership lifecycle –
particularly when heading into the re-motorisation phase. At
this stage, the Dealer is the key contact and has the main
influence on a client’s repurchase decision. In the utilisation
phase before, it’s in the hand of retailers to establish the basis
for sustainable brand loyalty.

 Customer satisfaction measurement has to adapt to the new

environment and to respond to the changed conditions.
Converted customer needs in the buying process, and the respective
concomitant introduction of the multi-channel distribution, requires
thorough consideration and flexible solutions for lots of new issues in
the design of future customer satisfaction surveys.

 A multi-dimensional sales funnel concept must accommodate

the complexity of individual Customer Journeys adequately.
Previous surveying concepts primarily focus on client
 experiences made at a dealership or are aligned to retail
processes after car delivery.

QN.3 “Every could has a silver lining”.do you think that phrase can be apply
used for certain industries that are likely to benefit due to the COVID-19
pandemic in order to reach the customer?
 In terms of retailers benefiting financially from this crisis, there are
only a few that come to mind, such as large online retailers – in
particular, those that also sell household goods and groceries. Chains
with major grocery sales like Walmart, Target, Kroger and Costco are
presumably doing rather well.
 However, we need to consider that all retailers, whether brick-and-
mortar or online, have had to implement costly procedures to
increase the safety of their employees and customers. Most are
struggling with supply chain disruptions, which affect how they can
operate safely or what products they can offer to customers at what
times.
 Even for the grocery industry, the increased demand for staple
products causes difficulties, as this increased demand now means
less product availability for consumers in need, and a decrease in
sales of staple items in the weeks or months to come as consumers
will just deplete their inventory stocked at home. In addition, grocery
stores had to quickly increase their online offerings at a time where
many chains were still in semi-experimental stage due to relatively
low demand for online grocery delivery just a couple of weeks ago.
 In terms of a tentative outlook for the future, certain store formats,
such as department stores, may continue the decline that already
started prior to COVID-19, and specialty retailers remain under
pressure from online giants, given that more and more consumers of
all age groups get more familiar and comfortable with shopping
 online. This is in line with trends that started before the current
pandemic, which simply speeds up the need for adaptation.
 The largest major market for book stores is consumers, which
account for approximately 95% of industry revenue. he Australian
Government has implemented stricter social distancing rules and
asked parents with non-essential jobs to stay home with their
children. These measures are expected to significantly boost industry
demand as parents look for activities, books and other products to
keep their children entertained while at home. Some book retailers
have even introduced free delivery to increase online sales while
ensuring they remain compliant with social distancing rules to
protect readers from exposure to COVID-19. 
Online Grocery Sales

 The Online Grocery Sales industry is expected to increase by a

massive 56.0% in 2019-20, as the disruption of COVID-19
dramatically reshapes the way Australians shop for groceries. In
response to the pandemic,

 The Australian Government is encouraging Australians to stay home

whenever possible. A result of such isolation and social distancing
will incite a shift to online shopping, particularly groceries. While
supermarkets are considered essential and will remain open, many
consumers are expected to convert to online grocery shopping to
reduce their risk of exposure. Online searches for grocery delivery
services increased by over 300% in March 2020, although this result
isn’t expected to fully manifest in the industry’s revenue growth.
A new White Revolution: How

COVID-19 could benefit the dairy industry

 When the entire nation continues to be under lockdown due to the
Covid-19 pandemic, our dairy industry has proved to be more
resilient than many other sectors in terms of the extent of supply
chain disruptions. Millions of our animal-owning households, the
majority being smallholders, particularly those connected to
producer-centric institutions continued to milk their cows and
buffaloes, and sell the surplus to the village milk collection centres.

 Milk was then pooled, cooled, and transported to processing centres

where it was pasteurised, packaged and dispatched to thousands of
marketing outlets, finally finding its way to millions of homes

 during the initial phases of the lockdown restrictions, both milk

procurement and sales of milk were impacted in several parts of the
country due to supply chain disruptions. Information collected by
National Dairy Development Board (NDDB) from the dairy
cooperatives (see graphic) shows a decline in daily liquid milk sales
 by dairy cooperatives by about 15% in the Covid-19 lockdown period
between March 1-15 and April 8-14, and a drop in the proportion of
sales to procurement by about 8.8% during the same period. The
liquid milk sales are showing signs of steady recovery, thanks to the
policy and proactive support of central and state governments, and
the measures taken by producer-centric organisations to address
supply chain challenges.

 To enhance the marketing of milk and milk products, many dairy

organisations, initiated home delivery of milk and milk products
through mobile carts, vans, e-commerce, etc. All these measures
helped stabilise milk sales, opening up opportunities to use e-
commerce. Many smart and progressive dairy farmers converted
their surplus milk into khoa, paneer, ghee, etc, and sold it to the
neighbourhood markets through informal channels. All these
measures helped sustain dairy industry.

 Covid-19 pandemic has thrown up the real possibility for our dairy
industry to benefit as large sections of consumers may shift from
meat-based to dairy-based protein. Covid-19 has made people more
aware of the need to adopt a healthy diet.

 During these difficult times of the dairy farmers, our cows and
buffaloes must be taken care of, as any compromise on their feeding
and health care would impact reproductive efficiency and
productivity. Both governments and dairy cooperatives should
provide these inputs and services to the farmers on subsidised rates
or deferred payments basis. The country cannot afford to go through
another phase of supply disruption resulting in pressures on
availability and prices of milk.

 For millions of individuals and businesses, the threat of COVID-19 is

financial ruin, but there are parts of the technology industry that are
benefiting from the considerable changes forced on society
 The cloud computing segment has been on the rise for years, though
as more employees find themselves restricted to their homes more
workloads will have to be migrated to the cloud to ensure the
business can function as usual.

 For the cloud companies, the coronavirus outbreak is effectively

forcing some organisations through a very rapid digital
transformation project, to embrace the cloud and mobility trends.
From an IaaS perspective it means more money, from SaaS it means
more engagement and PaaS more opportunity.

 Amazon Web Services, Microsoft Azure and Google Cloud are the
obvious beneficiaries as market leaders, though for companies like
Oracle, who might be working with more traditional industries that
have resisted evolution to date, new conversations about enabling
the workforce will have to occur

 Although there is no substitute for a face-to-face meeting to progress

and complete complicated projects, alternatives have to be sought
today. Many businesses are encouraging more meetings to be
conducted via video links rather than email to not only ensure
effective communication but ensure well-being of employees. Contact
with colleagues via video link is not perfect by any stretch, but it
might assist some who are feeling the loneliness of remote working.

 Microsoft is an obvious beneficiary here, it announced last week the

number of daily active users for its Teams collaboration suite
increased by 12 million, though there are many others who are
financially better off also.

 Zoom Video Communications, a remote conferencing services

company headquartered in San Jose, has seen share price increase
130% since the beginning of the year, while more marketers are
turning to companies like ON24 to purchase webcasting and webinar
services to ensure lead generation projects can continue.
 As mentioned above, some companies are being forced into a digital
transformation project meaning some of the remote working
capabilities might be retained in the long-term, but virtual
alternatives are never going to be a complete replacement for face-
to-face meetings, where we can subconsciously pick up non-verbal
communication cues so easily.

 In terms of video platforms outside of streaming, YouTube is

enjoying particular success. 

 From a gaming perspective, this is back to the boredom conundrum.

With the usual entertainment venues shut down, consumers will
need to be entertained. The likes of Microsoft Xbox, Google Stadia and
PlayStation are likely securing additional subscriptions as well as in-
game purchases.

 Online shopping delivery service Ocado suspended its website last

week, telling customers demand exceeded its capacity to deliver. The
firm has said it would fulfil its orders and will soon reopen, with
rations placed on certain food items.

 The telecommunications industry is critical to today’s society

functioning seamlessly, though it has traditionally been ignored.
Consumers have simply expected the internet to work without
appreciating the importance of the telecommunications industry.