Distribution Management MKT380. Cover Sheet and Declaration

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Name of Student Student ID

1. Asad Kabir 1020361

2. Rayana Rahman 0620297

3. Ishtiak Amir 0910226

4. M. Shakawat Hossain 1010595

Lecturer Name: Mr. Suman Prosad saha

Day/Time of Class: ST 5:00-630

Date Submitted: 25 july 2013Your assignment should meet the following requirements.

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Introduction1

Partex Group started its journey in 1959 .M.A Hashem, founder chairman of the group. M.A

Hashem, the living legend steered the group with such incomparable dynamics and skills, that

the group attained prolific growth over a period of 50 years conglomerating 60 companies

most of which are diverse manufacturing units. The enormous growth and fulfillment of

anticipated success caused eventually a natural exodus from patrimonial management system

while using the Partex as a springboard that has been held in high respect both at home and

abroad for last 50 years for our adherence to values, quality products and business ethics.

With the passage of time and advent of business, the pioneering spirit of Partex has been

showcased by family generation comprising Mr. Aziz Al-Kaiser, Mr. Aziz Al-Mahmood, Mr.

Aziz Al-Masud, Mr. Showkat Aziz Russell & Mr. Rubel Aziz. Significantly enough, Partex

Star Group an offshoot of Partex Group steering business successfully with Mrs. Sultana

Hashem at Chairperson and Mr Aziz Al Kaiser as Vice Chairman. Partex Group steered by

Mr Showkat Aziz Russell at the helm, operating in business sectors like communications and

information technology, energy, materials, services and consumer products. The major Partex

Group manufacturing units are Partex Denim, Amber Cotton Mills Limited, Partex Board

Mills Limited, Partex Sugar Mills Limited, Partex Rotor Spinning Mills Limited, Partex

Energy Limited and service providing companies are Partex Holdings Limited, Dhaka

Limited. When he returned, a wide range of marketing research was carried out by Partex as

well as RC International. After positive results, in 1996, the Corporate Head and the Directors

formed Partex Beverage Ltd. Mr. Rubel Aziz, one of the pioneers of the concept of RC, was

given the position of Managing Director. Funds worth Tk. 10 Core were raised as part of

Equity from the Group. Although registered as a Public Limited Company, no public

offerings have been made as yet. The factory was setup in Rajendrapur, 40km away from

Dhaka city. The company commenced commercial production on 6th October 1997, and RC

was launched in Dhaka on 20th October 1997. This is the story of how Partex Beverage

Limited became the sole official bottler of Royal Crown Cola Co. International. PPL began its

commercial production in the year 2004 with an objective to produce high quality plastic

products for both industrial and home use. These products include: Pipes, Furniture and

Storage Boxes. PPL has now become one of the largest producers of plastic products in

Bangladesh. PPL mission is to become an internationally recognized manufacturer of plastic

products.

2

Partex Beverage ltd

3

Distribution Channel:The path through which goods and services travel from the vendor to the consumer or

payments for those products travel from the consumer to the vendor. A distribution

channel can be as short as a direct transaction from the manufacturer to the consumer,

or may include several interconnected intermediaries along the way such as

wholesalers, distributors, agents and retailers. In Partex Beverage Limited they are

using both direct and in indirect channel. They have 290 indirect channels and some

direct channel. In direct channels they are distributing the products all over the

Bangladesh and direct channels are distributed Dhaka and its surrounding places.

Channel Design Sequence and Selection criteria:

Managers frequently complain about a lack of communication between their

marketing and sales executives, often caused by a poorly designed or implemented

distribution channel strategy. A well-designed distribution channel strategy takes into

account both the salespeople's activities with channel partners and the marketing

managers' efforts to better reach and serve end-users. Channel design is creating a

totally new channel or modifying an existing channel of distribution structure. There

are eleven steps involved in creating a channel design. Partex Beverage is following

all the eleven steps of creating a channel design sequentially.

Channel Design Criteria are what manufacturer and end user want distributor to look

like. Partex Beverage ltd looks some basic selection criteria to set up a new channel.

Reputation: They only select those distributors who have a strong reputation

in the market. Like Eagle distributor.

Financial Strength: They select those distributors who are financially solvent.

Sales Revenue Performance: They want their distributors to be good in sales

performance.

Knowledge of local market conditions: They want their distributor to have

strong knowledge about local market.

Employee quality: They select those distributors who have better quality

employees.

4

Enticements and Inducements:

The enticements they are offering to their distributors are given below.

Quality Products: Partex beverage ltd always offer quality products to their

distributors. Like MUM is the most selling mineral water in Bangladesh and

RC is very well known in suburban areas.

Full Product Line: They offer full product line to their distributors. In

Beverage they have RC cola, RC lemon, RC orange, Upper 10 and MUM.

Damaged Products Replacement: They do not offer product warranty to

their distributors. But the distributors have product replacement option. If any

distributor finds damage product then they returns the product to the company.

Company immediately replaces that product.

Payment terms: Partex Beverage always takes their full payment in advance.

Distributors pay their payment along with their order.

Communicate with channel member:

Company has ten retailer managers all over the Bangladesh. Their job is to

communicate with the distributors and manage them. If distributors face any problem

then they contact with their area’s retailer manager.

Distribution Layer:

They have two layers in their distribution channel for both direct and indirect and

indirect channel. Manufactures give products to the distributors and then distributors

distribute their product to the retailers.

Distributor quantity:

In total Partex beverage has 290 indirect distributors and 30 direct distributors.

Point of sales:

Point of sale is the place where a retail transaction is completed. It is the point at

which a customer makes a payment to the merchant in exchange for goods or services.

At the point of sale the retailer would calculate the amount owed by the customer and

provide options for the customer to make payment. The merchant will also normally

issue a receipt for the transaction. Partex Beverage has 1, 35000 shops for their

distributors. All these shops are for both direct and indirect channel.

5

Field Force:

Number of total sales representative for beverage is 110, 36 Area sales manager and 9

Regional manager.

Product flow:

The Product flow is a graphical representation of the order by which a sequence of

products is created according to Product based planning principles. It is related to the

Product breakdown structure. The Product Flow is typically created iteratively with

Product Descriptions and the Product Breakdown Structure because as a project

manager works through the logic they will identify missing products and additional

information about products. The Company sells their product to the distributors; in

turn the distributors sell to the retailers and cash & carry as well. Cash & carry are

nothing but wholesalers. Cash & Carry are needed because at times the retailers may

not have adequate funds to buy the required quantity.

Distribution Coverage:

A marketer needs to consider various factors before he decides upon the right level of

distribution coverage. It is well understood that distribution always increases company

costs. A part of this cost is covered by the customer for instance shipping costs but the

rest cannot be passed on to the customer. The marketer can determine the right level

of distribution by comparing the profit made (example, more sales) with the cost

incurred in achieving the profit. There are three levels of distribution coverage mass,

selective and exclusive. They are covering all over the Bangladesh. In every district

6

they have a company depot. Manufacturers send their products to the company depot.

From the depot distributors take delivery of their order.

Commission Modality:

Distributor Commissions can vary based upon local factors such as retail

requirements, logistics costs, financing fees, and complexity of servicing a

manufacturers business. Contact Export Solutions to discuss typical

margins/commissions for a specific country or brand. Partex Beverage does not give

any kind of commissions to their distributors.

Intensives Modality:

A marketing strategy under which a company sells through as many outlets as

possible, so that the consumers encounter the product virtually everywhere they go:

supermarkets, drug stores, gas stations, and the like. Soft drinks are generally made

available through intensive distribution.

To motivate intermediaries the firm can use positive actions, such as offering higher

margins to the intermediary, special deals, premiums and allowances for advertising

or display. On the other hand, negative actions may be necessary, such as threatening

to cut back on margin, or hold back delivery of product. Every year partex beverage

gives an estimated target to their distributors. If any distributor achieve that target

then the distributor get free tickets to foreign trip, refrigerator etc.

Distribution USP:

Strengths Weakness

Effective channel. Not eagle distributors.

Expert & experienced employee No insurance coverage

Continuous growth in net income and

sells

Insufficient transport facility

High knowledge of the product.

Ability to make quick decision

Well motivated and high skilled

7

Manpower Details:

Total distributor manpower for Partex Beverage is 1400.

Logistic requirement:

Logistics is the management of the flow of resources between the point of origin and

the point of consumption in order to meet some requirements, for example, of

customers or corporations. The resources managed in logistics can include physical

items, such as food, materials, equipment, liquids, and staff, as well as abstract items,

such as time, information, particles, and energy. The logistics of physical items

usually involves the integration of information flow, material handling, production,

packaging, inventory, transportation, warehousing, and often security. The complexity

of logistics can be modeled, analyzed, visualized, and optimized by dedicated

simulation software. The minimization of the use of resources is a common

motivation.

All the delivery vans are owned by the dealers to assure the supply of RC on the door

of wholesalers and retailers just according to their demand. There are two types of

delivery vans. One is Pickup van and another is Rickshaw van. But for the direct

distributors company provide pick up vans. All distributors have their own warehouse,

where RC can be kept safely while not degrading its product quality. Distributors buy

RC from the Company and from that point ownership and all responsibilities of the

products go under the distributors.

8

Company organogram:

9

Indirect DistributorIndirect Distributor

RetailerRetailer

RetailerRetailer

Company DepotCompany Depot

Direct DistributorDirect Distributor

Carrying Contractor Carrying Contractor

End UserEnd User

End UserEnd User

Partex Plastic Ltd

10

Distribution Channel:

The path through which goods and services travel from the vendor to the consumer or

payments for those products travel from the consumer to the vendor. A distribution

channel can be as short as a direct transaction from the manufacturer to the consumer,

or may include several interconnected intermediaries along the way such as

wholesalers, distributors, agents and retailers. In Partex Plastic Limited they are using

both direct and in indirect channel. They have 590 indirect channels and 60 direct

channels. In direct channels are distributing the products all over the Bangladesh and

direct channels are distributed Dhaka and its surrounding places.

Channel Design and selection criteria:

Managers frequently complain about a lack of communication between their

marketing and sales executives, often caused by a poorly designed or implemented

distribution channel strategy. A well-designed distribution channel strategy takes into

account both the salespeople's activities with channel partners and the marketing

managers' efforts to better reach and serve end-users. Channel design is creating a

totally new channel or modifying an existing channel of distribution structure. There

are eleven steps involved in creating a channel design.

There are eleven steps involved in creating a channel design. Partex Plastic is

following all the eleven steps of creating a channel design sequentially.

Channel Design Criteria are what manufacturer and end user want distributor to look

like. Partex Plastic ltd looks some basic selection criteria to set up a new channel.

Reputation: They only select those distributors who have a strong reputation

in the market. Like Eagle distributor.

Financial Strength: They select those distributors who are financially solvent.

Sales Revenue Performance: They want their distributors will be good in

sales performance.

Knowledge of local market conditions: They want their distributor will have

strong knowledge about local market.

Employee quality: They select those distributors who have better quality

employees.

11

Enticements and Inducements:

The enticements they are offering to their distributors are given below.

Quality Products: Partex beverage ltd always offer quality products to their

distributors.

Full Product Line: They offer full product line to their distributors.

Damaged Products Replacement: They do not offer product warranty to

their distributors. But distributors have product replace option. If any

distributor finds damaged product then they returns the product to the

company. Company immediately replaces that product.

Payment terms: Partex Plastic always takes their full payment in advance.

Distributors pay their payment along with their order.

Communicate with channel member:

Company has ten retailer managers all over the Bangladesh. Their job is to

communicate with the distributors and manage them. If distributors face any problem

then they contact with their area’s retailer manager.

Distribution layer:

They have two layers in their distribution channel for both direct and indirect and

indirect channel. Manufactures give products to the distributors and then distributors

distribute their product to the retailers.

Distributor quantity:

Indirect channel number is 590 and direct channel number is 60.

Point of sales:

Point of sale is the place where a retail transaction is completed. It is the point at

which a customer makes a payment to the merchant in exchange for goods or services.

At the point of sale the retailer would calculate the amount owed by the customer and

provide options for the customer to make payment. Partex Plastic has more than 1

lac shops for their distributors. All these shops are for both direct and indirect

channel.

Field Force:

Number of total sales representative for plastic is 95, 30 Area sales manager and 8

Regional manager.

12

Product flow:

The Company sells their product to the distributors; in turn the distributors sell to the

retailers and cash & carry as well. Cash & carry are nothing but wholesalers. Cash &

Carry are needed because at times the retailers may not have adequate funds to buy

the required quantity.

Distribution Coverage:

They are covering all over the Bangladesh. In every district they have a company

depot. Manufacturers send their products to the company depot. From the depot

distributors take delivery of their order.

Commission Modality:

Distributor Commissions can vary based upon local factors such as retail

requirements, logistics costs, financing fees, and complexity of servicing a

manufacturers business. Partex Plastic does not give any kind of commissions to their

distributors.

Incentive Modality:

A marketing strategy under which a company sells through as many outlets as

possible, so that the consumers encounter the product virtually everywhere they go:

supermarkets, drug stores, gas stations, and the like. Soft drinks are generally made

available through intensive distribution.

13

To motivate intermediaries the firm can use positive actions, such as offering higher

margins to the intermediary, special deals, premiums and allowances for advertising

or display. On the other hand, negative actions may be necessary, such as threatening

to cut back on margin, or hold back delivery of product. Every year partex plastic

gives an estimated target to their distributors. If any distributor achieve that target

then the distributor get free tickets to foreign trip, refrigerator etc.

Distribution USP:

Strengths Weakness

Effective channel. Not eagle distributors.

Expert & experienced employee No insurance coverage

Continuous growth in net income and

sells

Insufficient transport facility

High knowledge of the product.

Ability to make quick decision

Well motivated and high skilled

Manpower Details:

Total distributor manpower for Partex Plastic is 1100.

Logistic requirement:

Logistics is the management of the flow of resources between the point of origin and

the point of consumption in order to meet some requirements, for example, of

customers or corporations. The resources managed in logistics can include physical

items, such as food, materials, equipment, liquids, and staff, as well as abstract items,

such as time, information, particles, and energy. The logistics of physical items

usually involves the integration of information flow, material handling, production,

packaging, inventory, transportation, warehousing, and often security. The complexity

14

of logistics can be modeled, analyzed, visualized, and optimized by dedicated

simulation software. The minimization of the use of resources is a common

motivation.

All the delivery vans are owned by the dealers to assure the supply of plastic products

on the door of wholesalers and retailers just according to their demand by Pickup van.

But for the direct distributors company provide pick up vans. All distributors have

their own warehouse, where plastic products can be kept safely while not degrading

its product quality. Distributors buy plastic products from the Company and from that

point ownership and all responsibilities of the products go under the distributors.

Distribution Organogram:

The End

15

Indirect DistributorIndirect Distributor

RetailerRetailer

RetailerRetailer

Direct DistributorDirect Distributor

Carrying Contractor Carrying Contractor

End UserEnd User

End UserEnd User