sSales and Distribution Network of Parle Agro

Gaurav-93017Manik -93026

Monika-93031Shashwat-93048

Richa-93060

Chauhan Family (Parle Brand)

Parle Products Parle Agro Parle Bisleri

About the company

•Parle Agro commenced operations in 1984

•Mr. Prakash Chauhan is the Executive Chairman of Parle Agro

•Manufactures,distributes and exports fruit drinks

•Entered into snacks and confectionery business recently (2008-09)

•Headquarters: Mumbai

•Annual turnover : Rs 1000 Cr

•12 company-owned factories across India

•Reaches out to around 5 Lakh outlets across India.

About the company

Brands•Beverages

Brands•Packaged Drinking Water

•Snacks and confectionery

Territory Design

Business of Parle Agro is divided into following forms:

General retailModern TradeHoReCaInstitutional

Structure of Delhi Office

Business Head

Business Manager(General

Retail)

Business Manager (HoReCa

)

Business manager

(Inst.)

Business Manager (Modern

Trade)

Marketing Team

Business Manager (General Retail)

Premium Line Team Head

RSM

ASM

Growth Officer

Normal Line Team Head

RSM

ASM

Growth Officer

Regions

For all the four trades, Delhi is divided into five regions

North Region Central Region South Region West Region East Region

Delhi

North

North 1

North 2

Central

Central

1

Central

2

South

South 1

South 2

South 3

West

West 1

West 2

East

East 1

East 2

East 3

General retail Distribution

HoReCa, Institutions and Modern Trade

Delhi

North Central South West East

Coverage plan followed by distributors

For Delhi Beverage Factory Location –GhaziabadWarehouse –Alipur, North Delhi

Parle Agro has a wide product line with Frooti as their flagship product. Frooti has such an impact that almost every distributor is involved and the rest of the products are carried along with the distribution of Frooti.

Penetration of Frooti is to the level of outlets such as small kiosks, telephone booths and even stationery shops now sell Frooti.

For Delhi the company has two approaches

(models).

• Model-1 Factory

Company warehouse(Alipur)

Disrtributor

General retailer wholesaler

Factory(Ghaziabad)

company warehouse

(Alipur)Modern Retailers

(Food Bazzar, Vishal

etc)

Model-2

These two models are implemented through their sales team & Distributors.

Company reaches out to 15000 retailers in Delhi directly.

Distributor Requirements

1) General trade distributer: Fees : Initial fees of Rs 5 lakh through draft Space requirement: Min.100 sq metre Transportation required: commercial vehicles depending

upon the area such as: Tata Ace, Vikram etc. I.T infrastructure: No requirement Inventory management capability: Done manually Manpower requirement: 1auto driver multi tasking and

educated(12th pass)

2) Institutional Distributor:

Fees : Initial fees of Rs 15 lakh through draft.

Space requirement: Min.300 sq. mt

Transportation required: commercial vehicles

depending upon the area such as: Tata Ace, Vikram etc

(2-3).

Inventory management capability: Computerized,

centrally monitored from Alipur Warehouse.

I.T infrastructure: 2-3 computers

Manpower requirement: 1auto driver per vehicle multi

tasking and educated(12th pass) & 1computer operator.

Company initiatives in Distributors:

PARB: A lot of support is provided by the company’s

active research wing, Parle Agro Retail Barometer

(PARB)intelligence, the company supports its franchisees

with an array of support systems which include,

quality control,

periodic technology up gradation,

fresh distribution patterns

even the installation of new machinery.

Channel Partners Category

Parle Agro has divided its Channel partners into 3 categories:-

General Trade Premium Distributor Normal Distributor

Modern Retail HORECA & Institutional

Support provided to Distributors by Company

Some general Support provided by Company is:-

Company Offers many types of incentives based on sales like 1% to 2% incentive on total sales or Gifts like LCD T.V on achieving sales target.

Company take care of their Channel partners by sending their sales representatives to discuss any kind of issue they are facing in sales of particular product also by monitoring the promotional needs in particular area.

Company educate their channel partners with knowledge of new systems like inventory management software etc and also educate them about their product and its benefits

Company also come up with some attractive schemes like expensive gifts for ex Air conditioning for retailers on achieving particular sales target these schemes act as an external motivation to retailers so they try hard to sell more

Category Specific Support provided by company

General Trade Growth officer of Parle Agro will accompany the

Distributor person on his vikram This Growth officer will not only take orders from the

Retailers but also will push them to buy more of the different kind of products

Modern Retail Company provide retail outlets with Support merchandiser

inside their stores who will monitor the shelves in which their products are and also will take care of stock

HORECA & Institutional Incentive based on bulk deals are given to them apart from

general benefits

Payment/Credit terms given to distributor by company

Every distributor would want to have some credit period

But It solely depends on few parameters like Past records of the distributor in terms of both payment and sales

It also depends on the size of the distributor and the territory it is handling, Company distributor relationship is also a very big factor in this

Normally all the goods delivered to the distributor are on some advance basis but depending upon the above factors and also to promote distributor to sell their goods in the market company usually gives 0 – 15 days of credit period

Margins given to Distributors are4-6% in General Trade6% in HORECA & Institutional

Usually products of lower size like 250 ml Mango frooti or 200 ml Appy Fizz have lower margins as compared to 1 liter bottle of the same

Credit /Payment terms for retailers

Every Retailer wants some credit period on purchase from distributor.

It is Retailer’s relationship with distributor and their past records of payment and sales that determine credit period

In case of Parle agro normally there is no credit period given but to some special case it can go up to 7-10 days depending upon the distributor

But in case of big retail stores like big bazaar they have to give some extended Credit purchase period because much of their sales come from these outlets also such big stores can some times dictate terms

Sales margins for the retailers varies in 10-12% in General Retail20-25 % bracket in Modern Retail20% in HORECA & Institutional

As retailers can sell up to any price till the MRP so margins are higher than those of distributors

No. of players at each level

Distributors – 25 distributors in Delhi

Retailers – Approx 15000 retail outlets

Wholesalers – Unaccounted

Modern Trade Centers – Approx 40 – 45

Role of each intermediary

Distributors Take orders Maintain Accounts Deliver Goods

3 types – 1) Catering to Institutions and HoReCa 2) Premium line distributors 3) Normal line distributors

Sales Team – Retail selling or push Retail Sales

Growth Officer – Retail selling in General trade

Merchandiser – Supervision at Modern Trade Shelf Space provided Positioning FIFO Checking Stock

Wholesalers – Do bulk buying at heavy discount

or credit. Retailers come to them

A few Practical Insights

• Target-days for Growth Officers– Daily routes fixed– Clear territory division based on roads

• The role of wholesalers– Complementary to the organized distribution– Channel Conflict

• The case of Modern Retail– Bargaining power of sales team: Piggybacking on brand

‘Frooti’

Pain areas of distribution

• Coordination between marketing and distribution team.

• Timely supply to all retailers.

• Channel conflicts due to wholesalers.

• Coverage conflicts among different teams.