INTERNATIONAL MANAGEMENT INSTITUTE

Term Project
Initial Synopsis

Submitted to –

Prof. P C Mehra

Submitted by –

Prajith V M 08PGDM099

Prakhar Singh
08PGDM100

Rakesh M 08PGDM043

Somil Joshi 08PGDM113

Tarun Gupta 08PGDM118

Varun S Pilla 08PGDM119

Distribution Network: Conventional
Trade

Company
Company Factory
Factory

Regional
Company
Warehouse

CFA

Regional Regional Regional

Distributer Distributer Distributer
(Delhi) (Delhi) (Delhi)

Retailer D
Retailer A

Retailer B Retailer C
Distribution Network: Modern
Trade

Company Company
Factory Factory

Regional
Company
Warehouse

CFA

Regional
Regional Regional
Distributer
Distributer (Delhi) Distributer

Reliance
Big Bazaar Fresh

Spencer’s More
Reckitt Benckiser – About the
company
Reckitt Benckiser plc is a global consumer goods company, making and
marketing home, health and personal care products. The annual revenue of
Reckitt Benckiser was £6,563 million for the year 2008. Reckitt Benckiser
manufactures variety of power brands such as Dettol, Clearsil, Harpic etc.
Globally, the product line is divided into six categories such as surface care,
fabric care, dishwashing, home care, health and personal care, and food. In
Indian scenario, the product line analysis of Reckitt Benckiser yields us the
following result

Product Line Analysis – Reckitt benckiser

Health & Personal Fabric Care Surface Home

Care Care Care
Veet Calgon Harpic Mortein
Dettol Vanish Dettol Airwick
Clearasil Woolite Lysol
Strepsils

Functioning of the Channel

Reckitt Benckiser has its manufacturing units for different products at different regions of the
country. For example, Dettol is manufactured at Jammu and Harpic is manufactured at
Uttaranchal. The products from all of these manufacturing units are brought to a central
warehouse, for the northern region. From this central warehouse the products move to the
various Carrying and Forwarding Agents.

Distributor has with him 10 salesmen and 2 merchandisers. These numbers are fixed by the
company. The salesmen in company terminology are called Distributor Sales Representatives
(DBSR). The company prepares a weekly schedule which mandates the visits of each of these
10 salesmen in the distributor’s territory. The distributor’s territory is also decided by the
company.

Reckitt Benckiser works on a before-cash basis. Payments are required to be made up front,
and there is no credit policy. However, payments can be made on a per week basis, even if
the sales targets are set on a per month basis. (eg. If the sales target is set to Rs 2 crores for
the month of July, it is not necessary for the distributor to pay all of this 2 crore on July 1st.
He can pay Rs 20 lakh and take products equal to or less than 20 lakhs.)
All dealings of the distributor are with the C&FA. The dealer places his order via email, and
the payment can be made by either an RTGS fund transfer or a DD. Since DD procedure is
cumbersome, generally distributors makes all its transactions through RTGS. Once the order
is made, the C&FA agents ensure that the order is executed within 24 hours. All the carrying
cost, until the point where the products are stocked into the shelves of the distributor is born
by the C&FA. Any damages to the goods in transit are also born by the C&FA. The
distributor then signs, and takes ownership.

All the products the distributor is associated fetches him a margin of 5%.

Conventional Trade

The salesmen travel to the retail points, and procures orders from the retailers. The order is
then filled in to two software – one which is the dealers own software, and software of the
company. The dealer software is to keep track of the logistics, and the company software is
for the company to have a real time data. The dealer software then makes a dispatch summary
sheet, which contains information as to how much of which product to send to which retailer,
in what vehicle. On average distributors have has 8 - 10 vehicles of its own. The order is
taken to the retailer as per the dispatch summary, in one of these vehicles accompanies by a
driver, helper and the same salesman. Any damage in transit is born by the distributor. The
salesman collects the payment from the retailer, either as cash, credit, dd or cheque. Every
cash payment gets a discount of 2.5%.

It is to be noted that the company mandates the distributors to have 3 weeks of inventory
always in storage.

Modern Trade

Modern trade refers to the organized retail chains which sprouted in recent times, like the Big
Bazaar, More, Reliance Marts, etc. There are a few differences in the functioning when it
comes to modern trade.

There are no salesmen involved to deal with the modern trade. The order is placed by the
retail chain through email, and that initiates delivery. Different retail chains have different
methods of operation. For instance, Big Bazaar orders are made centrally, and the delivery is
always to the central warehouse of Big Bazaar. But when it comes to Spencers, each retail
outlet sends order separately, and the deliver has to be made individually to these outlets.

Reckitt Benckiser provides support to its distributors in terms of internal schemes and offers.
There are various schemes or lucky offers which the company floats on a timely basis for the
benefit of its dealers. Also, as a help, there is an area sales representative of the company to
overlook the sales and delivery procedures occurring at the retail points. Issues like conflict
between retailers, territory sneak-ins by other distributors, etc are handled by these area sales
representatives.
Bata India Limited
About the Company

Incorporated as Bata Shoe Company Private Limited in 1931, the company

was set up initially as a small operation in Konnagar (near Calcutta) in
1932. In January 1934, the foundation stone for the first building of Bata's
operation - now called the Bata. In the years that followed, the overall site
was doubled in area. This township is popularly known as Batanagar. It
was also the first manufacturing facility in the Indian shoe industry to
receive the ISO: 9001 certification.

The Company went public in 1973

when it changed its name to Bata
India Limited. Today, Bata India
has established itself as India's
largest footwear retailer. Its retail
network of 1250 stores gives it a
reach/ coverage that no other
footwear company can match. The
stores are present in good
locations and can be found in all
the metros, mini-metros and towns
Bata's smart looking new stores
supported by a range of better
quality products are aimed at
offering a superior shopping
experience to its customers. And
the new face of Bata India is now visible to the industry as well as its
customers. Today, backed by a brand perception of experience, the
company is working towards positioning itself as a vibrant and
contemporary young brand. It has significantly transformed its retail
formats to become more lifestyle-oriented, which has helped change
consumer perceptions to a large extent.

Bata India - Today

• Sells over 45 million pairs of footwear every year
• Serves over 120,000 customers every day
• Sells through over 1200 retail stores
• Operates 5 manufacturing facilities
• Employs more than 6800 people
Manufacturing
Bata India Ltd. has six manufacturing plants all over India. These factories
are responsible for the production of the entire range of BataTM products
apart from Sandak
sadals, which are
exclusively
manufactured in the
Sandak Factory. Apart
from the
manufacturing plants,
Bata India Ltd. also has
two raw material
processing plants: -

• Kottayam
Rubber Plant

• Mokhameghat
Tannery

These plants take care

of the major raw
material requirements of Bata.

Apart from these the raw material required are procured from quality
certified suppliers, who hold a long term relationship with the company.

Sl No Plant Name Location Work Done

1 Bata Nagar Factory Batanagar, West Complete

Bengal Manufacturing

2 Rubber Purchasing Kottayam, Kerala Rubber purchase and

Dept processing

3 Bataganj Factory Bataganj,Patna Bihar Complete

Manufacturing

4 Bata Tannery Mokamehghat, Bihar Leather Processing

5 Faridabad Factory NIT, Faridabad UP Complete

Manufacturing

6 Sandak Division Shivaji Marg, Sandak Sandak Footware

7 Bata Shatak Hosur, Tamil Nadu Complete Range

8 Bangalore Factory Bangalore, Karnataka Complete Range

Distributor Base
From the factory site the finished goods are moved by 3rd party CFA
agents which are logistics companies. These companies take care of
transportations from factory site to distributor points.

The distribution of Bata India Ltd is majorly controlled by the four

distributors located in four regions of the company.

1. East – Kolkata

2. West – Thane

3. North – Faridabad

4. South – Bangalore

These are the 4 major distribution points and are owned by the company
and manned by people on company payroll.

The given figure depicts roughly, the regions covered by the four major
distribution points.
Sub Distributors

The following diagram depicts the location of some of the major sub distributors
of the company. These sub distributors acts as company’s intermediaries in
places which are far off. The density of such sub distributors is much more in Tier
II and Tier III cities as they tend to be much farther away from the zonal
distribution point eg Udaipur falling under Faridabad region would have a sub
distributor serving the retailers/dealers in that region.

Sub Distributors In NCR

Retail Network
Bata India Ltd. has a huge network of retailers across the country. These outlets
can be classified in the following three categorised

• Bata Owned Stores – Operated and run on company property by company

employees

o Flagship City stores

o Family and Bazar outlets

• Bata Franchises - Operated and run by franchise owner on their own

property but adhering to company norms

• Multi-Brand Outlets – selling footwear of various kinds and also giving

shelf-space to Bata products

Bata Outlets in Delhi

Distribution Network
Bata Dealer requirements
Bata - Basic Requirements

• Availability of location in major semi-urban/ urban centres with at

least 30,000 inhabitants or in major shopping centres.
• Selling area of at least 500 sq. ft. fro half dealership or 1,000 sq. ft.
for full dealership.
• Start-up investment/ capital of minimum RM50,000.00
• Adherence to terms and conditions of dealership such as payment
terms and follow strict pricing policy.

Bata - Special Services

• Site and store evaluation, competitive analysis and turnover

forecast.
• Profitability calculation and feasibility.
• Store design, layout, furniture and fittings will be provided by Bata
on a cost sharing basis.
• Sales tracking and re-order.
• Full management support for new openings.
• Long term business and management support.

Bata - General Condition

• Exclusive selling areas dedicated to Bata products only.

• Management training will be provided.
• Point of Purchase (P.O.P) materials will be provided free of charge.
• DSP van/ artist assist in the in-store display of your shop.
Organisation Structure
Urban division

Urban Wholesale Division consists of 16 depots selling over 15.0 Million

pairs across the country through 150 distributors and over 20,000 dealers.
The focus is on selling volume products catering to complete family
needs.

Under Urban Bata have Wholesaler and Dealer.

Wholesaler

Shoe trader who buys merchandise to resell to dealers (multibrand

outlets) located in street markets of major cities / towns and rural areas.
They keep inventory of Bata products for replacement and sell on credit or
cash basis. Their focus is on volume products like basic closed shoes,
sandals / chappals, school shoes, Canvas shoes, Hawai, Sandak and
Batalite.

Dealers

Multibrand outlets located in major cities selling Bata products also.

Products consist of medium to high priced shoes for the whole family.
These shops deal in regional brands and unbranded footwear from small
manufacturers also. Some of the dealer stores are located in high streets
and are also air-conditioned.

Branding division

Dr Scholls Shoes India, Hush Puppies Shoes India, Power Shoes

India

Branding division consists of 15 distributors located in major metros

selling footwear under Hush Puppies, Dr Scholl's, Power & Bubblegummer
brands to departmental stores, footwear chains, specialty stores and high
street dealers.

Branding division

Dr Scholls Shoes India, Hush Puppies Shoes India, Power Shoes

India

Branding division consists of 15 distributors located in major metros

selling footwear under Hush Puppies, Dr Scholl's, Power & Bubblegummer
brands to departmental stores, footwear chains, specialty stores and high
street dealers.
Some Additional Moves
Utilizing Distribution Channel Capacity
 Bata partnering with Adidas, Reebok, M & B, Lee Cooper to
effectively utilize its distribution channel capacity

 Bata charges a direct commission on MRP

 Adidas – 40% - Footwear / 42% - Apparels

 Reebok – 36%

 M & B – 40%

 Sierra (Lotto) – 42%

 Puma* – 35%

Direct Sales Channel

 Bata Direct - Bata venturing into Direct Selling

 Sale through Catalogs

 Sales Force –

 Sales coordinators

 Bata sales consultants

 High end products on sale thorough this channel