UNILEVERCHANNEL DISTRIBUTION PROJECT

Dr/ HEBA SADEKMBA -2016

Team work

Haytham Mohamed

Islam Gomaa

Moan Refaat

Asmaa Hussein

Dina Ismail

ABOUT UNILEVER

Unilever is one of the world’s leading suppliers of fast-moving consumer goods.

190COUNTRIES IN

WHICH OUR PRODUCTSARE SOLD

GLOBAL TURNOVER OF

€49.8 BILLION

AT END OF 2013

EMPLOYEES GLOBALLY

174,0007,500

EMPLOYEES IN THE UK & IRELAND

UNILEVER FAST

FACTS

Unilever VisionGrowing the business

•Sales•Margin•Capital efficiency

Improving health and well-being•Nutrition•Health and hygiene

Enhancing livelihoods

•Fairness in the workplace•Opportunities for women•Inclusive business

Reducing environmental impact

•Greenhouses gases•Water•Waste•Sustainable sourcing Unilever aim to achieve consistent,

Competitive, Profitable and responsible growth

COMPANY PROBLEM The problem

Decline in Personal care products (Dove family brand ) market share value and volume by 600 pbs during last 4 quarters in Drug stores channel

Personal care categories:-Deodorant- Hair Care- Skin cleansing- Skin care – Oral care categories)

This decline happened due to majors troubles in distribution channel system.

Dove Distribution Channel

Modern Trade General trade Drug store

Key retailers

Supermarkets

Hypermarkets Pharmacies

BoutiquesExpress market

Manufacture

DirectIndirect

Unilever has 33 authorized distributors responsible for distribution Food & beverage and personal care products including (Dove beauty brand)Across all regions

**And distribute to Modern trade channel is directly ( No intermediaries)

Distributors

Service outputs

Service outputs Demand Level Descriptor

Bulk breaking High Dove brand has high bulk breaking Ex Shampoo Dove 700ML,400,200ML to satisfy target shopper needs (family or individuals)

Spatial Convince High Shoppers need to buy Dove products from nearest pharmacy ,so all dove product has high level of distribution in more than 10K Pharmacies and boutiques in Egypt .

Waiting and delivery time

Medium The shopper mission in this channel is Top up mission so shopper can`t wait more time till deliver the dove specific variant

Sharing information Medium Shopper needs more information about Dove new products and what is the variant that deliver the best solutions

Customer service Law Dove is a convince product and their is no need for after sales service

Assortment and variety

High Dove as a brand has a fairly large breadth and depth. Under the family of personal care the brand offers skin care, hair care, deodorants and such. Ex:The depth under the subcategory of hair include 8 variants for each size

SWOT analysis

Strengths Strong product line with large breadth and depth  Highest profitable channel among all other channel.1st Distribution channel system in Egypt vs competitorsStrong customer relationship (CRM )providing monthly trade activities for customer and shopper.brand knowledge sessions for pharmathistes .

dedicated sales force team (high capabilities).

CCFOT system to enhance customer service .

WeaknessHigh ECP(end consumer price) & high dist. cost

Supply chain availability issue & OOS

lack of focus on PC distribution to this channel from distributor manager side.( more focus on wholesale)

Threat

Economic recession and decreasing purchasing power

New competitor distribution channel system

Change in competitors sales terms

Gray market

Opportunity

Rout to Market (coverage expansions some rural areas)        Using technology hand held system to boost channel performance and accelerate growth .

high level of demand on PC product in pharmacies and boutiques .

Drug Channel Definition

Drug Stores : An outlet selling personal care or beauty products and sometimes medicines, although small amounts of.

Examples: AS Watson, Mercury Drug (Mainstream Drugstore) Premium Beauty/Cosmetic format)

Drug Channel Role

Unilever’s ambition is to be the world’s leading personal care business, helping people look good, feel good and get more out of life. Drug Channel plays a unique role in delivering Unilever’s personal care ambition

Drug channel objectives achieves

Consistent and profitable growth

Increase the effective coverage CRM

Achieve competitive edge Perfect store USLP

Drug channel redesigning alternative

Based on channel marketing segmentation and target customersWe identifies 2 major alternative to enhance the performance of channel

Alternative 2Alternative 1

Outsourcing wholesaler for PC Channel distributionAs ELMotahed, Farma,

Ebn Sina)

Redesigning the current distribution channel by

making exclusive distributors for Drug stores

channel

Cost effective but out of company control- not

effective for end user Cost effective

Cost effective and more benefits for all channel

members

Manufacture

Drug stores

Distributors

Cairo Alex Delta UE

1 2 3 4 5 6 7 8 9 10

11

12

1 1 1 1 1 1 11 1 1 1 1

24 Contact line

Manufacture

Drug stores

Distributors

Cairo

1

1 1 1

16 Contact line

Exclusive distributors

Current Dist. system

Alex

2

1 1 1

Delta

3

1 1 1

UE

4

1 11

Types and number of intermediaries

Responsibilities for each channel member

Channel Functions

Manufacture Distributors Drug stores End User

Physical Possession & Ownership

Has 2 main warehouse

–Food & Beverage-Home Personal care

-Third party company for transportation Company

.- Receiving weekly bulk of products based on primary sales plan.

-responsible for distribute the products to all outlets using SAS system

Receive the products and make it available with all variety to end consumer

End users finally own the products

Promotion Channel Captain is responsible for preparing all promotional tools:-monthly trade letter -Schemes -promotions-new innovations

- Distributors manager cascade all activities to the sales force and follow up them to ensure achieving all KPI`s .

- Sales force deliver all

activities to outlets such as

- Consumer and trade promotions

- Slabs

Finally end users receive all product benefits

Negotiation

Manufacture and distributor negotiate the product availability and sales forecast – volume

Sales person negotiate the sales plan , prices, activities ,with Drug store manager

The sales person inside outlet offer all activities to shopper (promotion-information)

May be little negation from end-user side

Responsibilities for each channel member

Channel Functions

Manufacture Distributors Drug stores End User

Financing

Mainly about payments terms with suppliers

-Inventory turn over -payments terms with Drug stores

Receive the orders pay within 15 days for

Risk Risk of increasing the cost of raw material- Risk of barraging of supplier

- Risk of low turnover for some items .- Risk of returns allowances between Dist and Drug stores

-Risk from law demand due to economy situation

-Risk of expire date.-Return policy

The end user may switch to another competitors because of the price.

Sharing information

Manufacture provide product informationTo distributor sales force as ingredients -benefits

Dist. sales force attend sessions and share info with customers

Pharmacist attend brand knowledge session t provided by company new innovation & new brands

Sharing info to end-users by Pharmacist Printed flyer'sUshers

Ordering and payment

Manufacture received the required orders from dist. Using auto replenishment system

Dist. receive the sales plan divided to 4 weeks And pay weekly to company

The sales person make orders to drug stores every 2 weeks

Finally, The End user pay the required price.

Efficiency Template

Functions Importance Weights for Flows Proportional Flow Performance of Channel MembersTotal

Channel Flow Cost Benefit Potential Final Weight Manufacturer Wholesaler Retailer End-user

Physical possession 25 High 35 25 25 25 25 100

Ownership 12 Medium 15 25 25 25 25 100

Promotion 20 High 8 60 20 20 0 100

Negotiation 5 Low 4 20 25 50 5 100

Financing 15 Medium 20 25 25 25 25 100

Risking 5 Low 2 20 25 50 5 100

Ordering 6 Low 6 20 50 25 5 100

Payment 7 Low 6 20 20 50 10 100

Information Sharing 5 Low 4 25 20 30 25 100

Total 100 N/A 100 N/A N/A N/A   N/A

Normative Profit Share N/A N/A N/A 27% 26% 33% 14% 100%

Question 5

Level of intensity

A brand can be purchased from many drug stores or outlets.

A brand is kind of convenience goods.

The manufacture is always seeking to maximize coverage and availability for his brand to be available to end user at drug stores or outlets.

The channel captain deal with many outlets to carry the offers to distributes and drug stores to avoid Shifting end user to another competitors.

The manufacture uses Resale price maintenance (RPM) that help the distributes and drug stores to get the acceptable margin and be highest profitable channel among all other channel.

Finally, The conflict is always that The Manufacture prefers Intensive, On the other hand the distributes and drug stores prefer exclusivity for the products.

The needed level of intensity of distribution is Intensive distribution because:

Thanks