s Cadbury India

Sales and Distribution

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Introduction:

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DetailsSubsidiary of Kraft Foods.

Began its operations in India in 1948.

Corporate head office is in Mumbai Manufacturing facilities in Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal Pradesh)


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DetailsMARKET SHARE-72%

Sales offices in New Delhi, Mumbai, Kolkata and Chennai SOME PRODUCTS: Cadbury Dairy Milk, 5-Star, Perk, Gems, Eclairs ,Oreo


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CHANNEL STRUCTURECOMPANY

MOTHER

GODOWN

C&F

DISTRIBUTORFree Powerpoint TemplatesGroup No.-10

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Channels

MODERN

TRADITIONAL


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SELECTION CRITERIAINFRASTRUCTUREInitial investment-Rs 50 lakh+ stock worth Rs 25 lakh. Modern---1500 sq feet. Traditional --- (700-800)sq feet.

Warehouses with cooling unitInsulated vans for transportation provided by company (MODERN). Own pick-up vehicles for delivering chocolates (TRADITIONAL)

Technology-PDA


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SELECTION CRITERIAOTHER CRITERIASPast Experience 2 years

Current Business

Products handled.(tropicana,parle,marico,colga te,godrej)Not allowed Yes(Gurgaon, North Delhi) Minimum Stock-Rs 20 lakh worth products

Conflicting Business Coverage Inventory Management


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Distributor DetailsModern Order are taken on fixed days Sales person visits various hyper and super market store for taking the order. PDA devices are allotted to sales force. Very next day orders are delivered to the stores. Traditional Orders are taken once in a week . Sales person visit different retail shops to take their orders. PDA devices are allotted for taking orders. Next day orders are delivered.

Orders are delivered via insulated van.Order size is not fixed

Orders are delivered through normal pick-up van.Order size is not fixed


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CONTINUED..COMPANY DISTRIBUTOR Hypermarket distributor : advance payment through DD/RTGS. Retail distributor : Advance payment through DD/RTGS. MARGIN Fixed margin for stockiest of 4.5% DISTRIBUTOR - RETAILER Payment is made after receiving orders. In case of small retail shops credit period reduces to 7 days. MARGIN Fixed margin for stockiest of 4.5%

Incentive of 1% on achieving targets

Incentive of 1% on achieving targets


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SALES FORCEModern Strength - 2 One person is hired for maintaining accounts & for utilizing ERP software efficiently & effectively. Second person keeps track of order processing. Time & again company provides training to the sales force Sales force have their own PDA device. Traditional Strength - 6 All for order processing

A formal training is provided to the staff after hiring Each of them has a PDA device provided by the company.

Companys S.O visit the distributors office every alternate day

Companys S.O visit the distributors office every alternate dayPage 11


Details Subsidiary of Nestl S.A. of Switzerland.

Began its operations in India in 1912.

Head office is located in Gurgaon, Haryana. Seven manufacturing facilities in Moga (Punjab), Choladi (Tamil Nadu), Nanjangud (Karnataka), Samalkha (Haryana), Bicholim (Goa), Pantnagar (Uttarakhand)


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DetailsMARKET SHARE-21%

Branch offices in Delhi, Mumbai, Chennai and Kolkata. SOME PRODUCTS: Kit Kat, Munch,Milky Bar, Bar-One, Polo, Eclairs, Dark Chocolate.


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CHANNEL STRUCTURECOMPANY

MOTHER GODOWN

CNF

DISTRIBUTOR AS PER ASSIGNED TERRITORYFree Powerpoint TemplatesGroup No.-10

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Channels

TRADE

CHOCOLATE

WHOLESELLER

RETAILERS


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SELECTION CRITERIAINFRASTRUCTURE

Initial investment-Rs50 lakh+Stock worth 50 lakh. Godowns / storage space Air conditioned godown space (with wooden padding will be required).

Own delivery vehicles Technology-PDA


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SELECTION CRITERIAOTHER CRITERIASPast Experience Prior experience as a channel member in the FMCG sector. Existing distributor of other products of Nestle.

Current Business

Conflicting Business

Not allowed

Coverage Inventory Management

Yes Minimum Stock-Rs 30 lakh worth products


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Distributor Details

A representative of distributor goes to the various outlets, once or twice a week (depending upon the area).

Delivers the goods there and then, or on the same day.

Operation STING For deeper reach and penetration into the small, reserved & unserved outlets.


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Credit Policy & MarginDISTRIBUTOR Payment is done online before the stock is delivered. 4.5-5.8% Negotiable with retail shops. Monitory Additional 2% margin. Flat panel television. Certificates of acknowledgement. WHOLESELLER 1-2 week credit period(depends on the Distributor). 2-3% 1-2% margin on selling to retail shops. CTV or flat panel television.


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SALES FORCEStrength (3-6)person. Distributor trains his own sales force.

The remuneration and all other expenses are borne by the distributor.Companys S.O visit the distributors office once in a weak.


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Promotion

Company follows the policy of both Company follows consumer trade as well as consumer promotion. promotions but trade promotion is negligible. S.O personally looks after the visual Not much attention paid. merchandising or branding.

Once in a weak company representative visits retail shops for shelf space vigilance.

Representatives are very reluctant about the visual merchandising.


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TARGET & DEAD STOCKSMonthly targets are assigned. If the target is not achieved then it is shifted to next month. Monthly targets are assigned. Heavy dumping on distributors. Due to which stock gets blocked till expiry date.

Dead stocks are taken back by the company.

The bad goods are separated and marked marketable or unsalable appropriately.


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TARGET & DEAD STOCKS

Expiry & damaged products are destroyed by third party in front of distributor.

Return policy -done with cash and happens at the end of every six months.

Targets are increased during festive seasons.

Targets are increased during festive seasons.


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RETAILCREDIT PERIOD CREDIT PERIOD

21 days forhypermarket & days for retail shops

3.5weaks for bigshops.

7

7 days for small retailshops.


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Order Placing Distributors salesman visit shops twice in a week. Orders are also placed through phone calls. Orders are delivered on the same day or the next day. Distributors salesman visit shops twice in a week. Orders are also placed through phone calls. Orders are delivered on the same day or the next day. Small retail shops often take chocolates from whole sellers.


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Incentive Extra margin provided by the distributor. Free cooling units and display. Free visicoolers. Extra units of chocolates. Free visicoolers.


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Logistics Distributors take care of the logistics. Insulated vans as well as small pick up trucks are used for delivery. Distributors logistics. Insulated vans & small pickups are used. Bicycles are used for delivering stocks to the small and unserved retail shops.


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Visit Sales force of distributor visits 2-3 times a week. Visual merchandiser visits once in a week. Distributors staff visit twice in a week. Visual merchandisers visits after every 2-3 weeks.


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Promotional Tools POP materials are provided by the company and the distributor. Small & attractive cooling units provided by the company. POP materials are provided by the company and the distributor. Laid back attitude.


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Conclusion..Dairy milk was the most preferred (Both by adults & kids) & Sold brand as said by 8 to 9 retailers followed by Munch, Five star, Kit-Kat and so on.

Selling at price points was a huge advantage as many customers asked for 5 Rs. 2 Rs. Chocolates and felt easy to pay change

There was lot of brand loyal customers for Bar One and Milky Bar who specifically asked for these brands. (E.g. There is a customer in complete bazaar who buys 10 Bar One chocolate every day regularly. Some college students bought Milky Bar)


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Conclusion..Retailers look at the profit margin and decides what to & what not to keep near the counters and otherwise in case of space constraints.

Nestle Assets were not monitored properly by merchandisers as it is done for Cadburys. There were lot of other products kept inside Nestle..


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Continued..There was more branding and shelf space for Munch (50%) and Kitkat

(30%) compared to other chocolates like Bar One, Milky Bar.

When there is no proper plan in place for shelf arrangement of chocolates,It is done on the basis of eye sight of the Target Customer. -Lower rack with Milky Bar, Gems, Kinder Joy etc. -Middle rack with Munch, Kitkat, Dairy Milk etc. -Upper rack with Bar one, 5 Star, Bourneville etc.


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Continued..The target sales of each Distributors is set based on the routes they are

selling but promotional schemes were the same.Some retailers said Cadburys schemes (Bulk purchase offers) are good compared to Nestle (Though percentage margin is almost same), Hence they prefer keeping Cadburys products in the available space for chocolates.

Some customers buys Munch & Kit Kat bulk/family packs regularly andhence order for Munch boxes & Kit Kat family packs is high compared to other chocolates.


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Continued..Considerable amount of shelf space is given to chocolates like Snickers,

Ferrero, Delfi, Bounty, Mars etc. almost equal to that of Nestle chocolateswhen kept in common racks Some kids of age range 4-6 years recognize the chocolate brand names or any names related to the brand name

Super markets had lot of imported chocolates including some of Nestlebrands Chocolates with different type of packaging and the different type of racks/dispensers used for displaying chocolates & other products attracts more customers (Impulse purchase increases there by). Free Powerpoint TemplatesGroup No.-10

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