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Sales Department is the only revenue generation Center for the organization. Other departments are considered as expense centers for the organization. In todays, competitive parlance the selling activity is very critical. It requires lots of brainstorming to occupy the mind share and heart share of the customers or end users. In most of the Indian companies the sales and marketing activities are carried out together to have better results. Sales executives participate in and are jointly responsible for formulating strategies on product line, on pricing, physical distribution, marketing channels and promotional activities. The primary responsibility is to manage the sales team & maintenance of the relationship with distributive organizations. More or less Ice cream is having seasonal demand and it requires continuous sales efforts from the organization. Distribution system, which is prime concern for the Ice cream manufacturers, as it is low involvement and perishable product. Vadilal is a market leader in the branded Ice cream market in Ahmedabad. Due to highly competitive structure of market, Vadilal is continuously doing sales and promotional activities to boost the sales and retain leadership. We are given opportunity by the Vadilal Industries Limited to fill the gap between classroom study and practical application.

For successful completion of this project, we owe a great deal to many people. We convey our gratitude to VADILAL INDUSTRIES LIMITED for giving us opportunity to do project with them. In allowing us to visit the organization and study the various sales & distribution aspects, they have provided us valuable information. We are thankful to Mr. Jyotiendra Vyas for spending time from his busy schedule. We are thankful to office staff for their kind cooperation. We take this opportunity to thank our H.O.D. Mr. B. N. Mehta We are grateful to Mrs. Neha Patel who helped us to elevate our insight and knowledge of sales and distribution and giving us guidance throughout the project. Last but not least, we are very thankful to all those persons who directly or indirectly helped us in preparing this project.

NAME Bijad Shah

ROLL NO. (179)

Preface Acknowledgement Chapter 1: Introduction Chapter 2: Sales Management Chapter 3: Sales Related Marketing Policies Chapter 4: Competitive Structure and Policies Chapter 5: Sales Department Relations Chapter 6: Sales Force Management Chapter 7: Sales Budget, Quotas, Assigning territories, Claim settlements Chapter 8: Logistic Systems Chapter 9: Analysis of Distributors Chapter 10: Findings and Suggestions Bibliography

Chapter 1: Introduction
About Vadilal Group 1.1 Organizational Structure


VADILAL GROUP had its humble beginning, more than 95 years ago, when its founder, late Shri Vadilal Gandhi, started manufacturing Ice cream with a hand cranked machine. Today it is a diversified Business Group with major interests in Ice creams, Food Processing, Real Estate Development and Specialty Gases.

Head Quartered in Gujarat, the most industrialized State in India, the Group had a turnover (1998-99) exceeding Rs.1500 million. Major companies of the Group are listed in several Stock Exchanges of. India. The Group has a large investor base and its brand name "Vadilal" commands an excellent equity. The "Vadilal" philosophy of providing its customers with quality products and services at affordable prices has resulted in the brand being a household name in India. I ICE-CREAM DIVISION: VADILAL the name conjures up images of ice cream laden bowls and a plethora of new flavours. Starting from one man show with a hand cranked machine in 1926 as a small retail outlet, the ice cream division now has a production capacity of 1 lac ltrs/day at 3 sophisticated plants, located at Ahmedabad, Pundhra and Bareilly. These ISO 9002 certified plants for Pundhra and Bareilly are established in such a way that they are in consonance with the market expansion strategies of the division.

Vadilals ice-cream manufacturing facility at Pundhra is one of the most modern facilities in country. With the eye on the export market the company is maintaining hygiene as per international standards in procuring milk directly from the farmers to improve the microbiological quality. A wide range of products in all segments like premium ice cream, regular ice creams and frozen desserts are being manufactured at this plant. Vadilal has one of the largest cold chain networks in India, comprising of 12 C&F agents, 250 distributors and 16,000 retailers. The network is kept alive by a large fleet of refrigerated vehicles. Refrigeration equipments and retail freezers are sourced from world leaders in the technology so as to deliver quality products to the consumers, which is a commitment at Vadilal. Vadilal has 25% of the Indian ice cream market as its share. But that's no surprise considering that the group has the largest range of ice creams in the country in a variety of flavours, packs and forms. The group has a product matrix of over 200 SKUs comprising of cones, cups, candies, family and party bricks and bulk packs. Vadilal introduced the concept of "flavors of the month" under which the company develops and markets one new flavor every month for its customers delight. PROCESSED FOOD DIVISION: Vadilal has entered in the horticulture processing industry in May 1991. Keeping in view the tremendous export potential for processed foods, Vadilal has set up a manufacturing unit having an installed capacity of 5,400 tons per annum. About 80% is exported to USA, Middle & Far East Asia. Vadilal has also been awarded with ISO 9002 quality certificate, by M/s Underwriters Laboratories Inc. USA. Vadilal was also awarded the certificate if

merit fir excellent exports performance by APEDA (Agriculture and Processed Foods Export Development Authority). FOREX ADVISORY SERVICES & FFMC DIVISION: Vadilal has entered in this business in April 1996, offering non-banking financial services. The main activities are: Forex Advisory and Forex Exposure Management to Importers and Exporters. Bullion informative service on Gold Silver. A complete useful guidance to bullion traders, importers and jewelers. LME-Metal informative service ibn base and Scrape metals. A complete useful guidance and information to metal traders, importers, and Metal scrap indenting agents. RBI authorized full-fledged moneychanger FFMC related transactions: Sale/Purchase of foreign currency and travellers cheques coffee, pepper rice, and tea informative service reports.


Vadilal is mainly divided in two parts. VADILAL

VIL Vadilal Industries Limited VIL:

VEL Vadilal Enterprise Limited

Vadilal industries limited are one part of Vadilal, which is manufacturing division of Vadilal. Along with manufacturing, it also looks after the Quality Control, Research and development, Dispatch, and storage related activities. VEL: The Sales and Marketing related activities has been performed by the Vadilal Enterprise Limited. VEL is liable to handle the relationship with the C&F agents (Clearing and Forwarding Agents), Distributors and Dealers.

Chapter 2: Sales Management

Organizational Structure of the Sales Department 2.1Responsibility and Authority of Individual at different hierarchy level


General Manager (Sales and Marketing)

Senior Sales Manager

Regional Sales Manager

Dy. Regional Sales Manager

Area Sales Manager

Sales Executive

Joint Sales Executive

Sales Coordinator



General Managers Responsibilities and Authority: Sales Administration Advertising and Media Product Management Recruitment and Selection at higher Authority level Designing Sales promotional Programs Responsibilities and Authority of Senior Sales Manager, Regional Sales Manager and Area Sales Manager: Generate Sales Assigning targets to SE, JSE, and SC Recruitment Maintaining relationship with distributors and C&F Agents Assisting in designing of Promotional Programs Responsibilities and Authority of Sales Executives, Joint Sales Executives and Sales Coordinators: Appointing Distributors/Dealer Provide Machines Handling Dealer/ Distributor complaints Give the promotional tools to the Dealers and Distributors Dealer/distributor Communication


Chapter 3: Sales related Marketing Policies

3.1 Product line 3.2 Promotional Measures Taken By Vadilal 3.3 Pricing Policies 3.4 Marketing Channel 3.5 Distribution Intensity 3.6 Types of Power in Channel



Vadilal offers two types of Products. One is Ice cream and another is Frozen desserts. Vadilal has the maximum range of ice-cream products in India i.e. over 200 SKUs. It has preference for tastes as per budgets. There are rich creamy ice creams for the connoisseurs and low fat frozen desserts for the health conscious. There are plain favorites, chocolate ecstasies, romantic ripples, nutty delights, fresh fruit fantasies and are guaranteed to spark your taste buds. Vadilal has priced its products on the principle of real value for money. Product range offered: Cones, Candies, Cups, Family packs, Party-packs, Bulk packs, Chocobar, Juices, Candies in 3 flavors, Sundaes, Kulfies, Frozen Deserts, Fresh fruit Ice-cream, Ice-cream pizza


At Vadilal, commitment to Quality is an Attitude. Vadilal Ice Creams contains only the best ingredients, be it cashew nuts, almonds, pistachio chocolate or fresh fruits. Great pains are taken to find the finest ingredients from around the globe. State-of-the art-technology ensures that each scoop is dense, rich and filling, with no extra air or ice-flakes. Special care is taken during packaging, storing, transit and delivery so that consistency in quality is maintained. This is why when the end product reaches the customer, he is convinced that quality shines through in everything the group does.


Vadilal has run promotional schemes throughout the year. Different promotional schemes for Customers, Dealers and Distributors are as below. Promotional schemes for Dealers: Vadilal had offered scheme for purchasing of Deep Freezers for dealers on occasion of Diwali. Company Western/Carrier Western/Carrier Voltas (3 Doors) Capacity 300 ltrs. 400ltrs. 400 ltrs. Price (Rs.) 19,000* 23,000* 24,000* Free Ice-cream (Rs.) 5,000* 6,000* 5,000* *Condition applied

Promotional schemes for customers:


1) One scheme, which Vadilal is running for the entire year, is offering

ComboPack. Combo pack is the package of two Party Packs. Customers are getting two party packs by paying price for just one party pack. One party pack is absolutely free. Vadilal get tremendous response of this scheme and that is why they have decided to run this scheme for the entire year. Under this scheme sometimes Vadilal offers two different flavors at price of one. For example: Purchase Ice-cream Free Ice-cream Price (Rs.) Vanilla Vanilla 65 Kaju-Draksh* Kaju-Draksh* 100 Butter scotch* Butter scotch* 100 Fresh Strawberry* Fresh Strawberry* 100 Fresh Litchee* Fresh Litchee* 100 Black Current Strawberry* 100 Fresh Sitafal Real Vanilla* 100 Swiss Cake Chocolate sundae* 100 Khandala special Mango Ripple* 100 Fresh Orange Fresh Mosambi* 100 Above party packs are available in 900ml and Sundae is 500ml *Frozen desserts

2) Vadilal had launched Diwali Special scheme. Under this scheme Vadilal

had offered two choices to the customers:

PanchRatna Ice-cream + Cellos hot lunch Tiffin = Rs. 225/-

Rs. 140/-

Rs. 285/-

= Rs. 425/-


BadamBahar Ice-cream + MILTONs 4 container set = Rs.125/(900 ml)

3) Chocolate Sauce with Vanilla: The consumer scheme of 50g Chocolate

Sauce Free on Purchase of one liter party pack of Super Vanilla became a Trendsetter scheme in the market. The response to this offer was enormous.

Promotional tools:
Promotions only through paper advertisements such as in


Promotions provided to dealers through Wall painting, Freezer painting,

Hoardings, Acrylic boards, Glow sign boards, Attractive boards for the newly introduced flavors or schemes.


The pricing policies followed by the Vadilal are as below. 1) Policy on pricing relative to Costs: Vadilal follows Full-Cost/Cost Plus pricing, for the states where their manufacturing plants are situated. Under Full-Cost pricing, no sale is made


at a price lower than that covering total costs, including the variable costs and allocated fixed costs. For Example: X X+Y X+Y+6% = MRP
2) Geographical Pricing:

cost of production cost of goods sold to VEL cost of goods sold +Distributor margin (Consumer Price)

X+Y+6%+(12% to 20%) Dealer margin added to above

Vadilal charges extra penny as Geographical pricing from the states where the manufacturing plants are not located. Here, the margin of the C & F agent is added to the MRP of the Ice Cream. Also the distribution cost is higher for such states so these states have to pay somewhat higher charges for the Vadilal Ice-cream. Example: X+Y+Z Cost of goods sold + C&F agents margin Distributors margin + Dealers margin X+Y+6%+Z+(12% to 20%) Cost of goods sold + C&F agents margin









The above channel strategy defines the channel members and whether they are part of VIL or VEL. As shown the Manufacturers and C&F agents are handled by the VIL, whereas serving the Distributors, Dealers and Customers are the responsibility of the VEL.



There are basically three types of distribution intensity.
1. Selective Distribution: Selective distribution means selecting only those

outlets/retailers that can best serve the manufacturers interest.

2. Exclusive Distribution: Exclusive distribution means distribution of

manufacturers product or products within particular area is to be confined solely to the retailer/outlet with whom the manufacturer has made written or oral agreement of distributing the product/products.
3. Intensive Distribution: The manufacturer following the policy of mass

distribution or intensive distribution aims for maximum sales exposure by securing distribution through all those outlets from which customers might expect to purchase the product/products. Vadilal has adopted the intensive distribution to have maximum sales by availing Ice cream at the nearest location to the customers. This way Vadilal is getting maximum business. The manufacturer using this distribution strategy needs several marketing channels. The channel strategy followed by Vadilal is as shown below.



Vadilal is using Coercive Power with dealers. Vadilal forces dealers, to not

to keep other brands Ice cream in their freezers.

Vadilal uses Reward Power, to offer intermediaries(C&F agents,

Distributors, Dealers) extra benefits in the form of incentives, discounts, tours etc. for achieving targets and for better performance.
Vadilal uses Reward Power, to customers by providing attractive product

offerings like free schemes.

Vadilal uses Expert Power in developing new flavors of Ice-creams and

that way to help Dealers/Distributors for better sales.

Vadilal has very strong brand image in the Ice-cream market. People are

getting good reference from customers. This way it uses Referent Power.


Chapter 4: Competitive Structure & Policies

4.1 Competitive Position Of The Market 4.2 Promotional Assistance Provided by Manufacturers 4.3 Advertising 4.4 Distribution



CHANGES IN THE LEVEL & KIND OF COMPETITION: Consumer, who used to have a particular brand of ice cream no matter whenever it is available, now has changed his preferences as per the changing economic circumstances. The competition is more towards the prices of the product. Today, with the entry of loose ice cream manufactures, the branded ice cream manufacturers had to reduce its prices to such an extent that now the price of an ice cream more or less equals to the price of a soft drinks and in some cases even lesser. This has not only tremendously increased the sales of the company, but also has diverted the preference of consumers from soft drinks to ice creams to be served at any delighted occasion. The distributors are also benefited as per the areas provided to them for the distribution of stock. The competitive structure of the Indian Ice-cream market is as below Brands Kwality walls Amul Vadilal Others Market shares (%) 35 30 25 10


Market share of Ice-cream companies in India

vadilal 25% Amul 30%

others 10%

Kwality Walls 35%

The above graph reveals that the Kwality walls is the national number one player having 35% of the total market share. Vadilal is having the 25% market share and giving tough competition to major brands like Kwality Walls and Amul. MARKET SHARE OF ICE CREAM MANUFACTURERS IN GUJARAT: Brands Vadilal Amul Havmor Others Market shares (%) 52 25 13 10

market share of Ice-cream companies in Gujarat

Amul 25% vadilal 52% others 10%

Havmor 13%

The graph shown above depicts that in Gujarat Vadilal stands at the first place with 52% of the market share followed by Amul and Havmor with market share of

25% and 13% respectively. The market share reveals the strong position in the mind and heart of the people. MARKET SHARE OF ICE CREAM MANUFACTURERS IN AHMEDABAD: Brands Vadilal Havmor Amul Kwality walls Loose ice creams Source of information: Market share (in %) 35 25 20 5 15

Market share of Ice-cream companies in A'bad

Kwality Walls 5% vadilal 35% Havmor 25% Amul 20%

others 15%

If we see the scenario of the Ahmedabad Ice cram market then we find Vadilal at is at first position having market share of 35%. However, number one national player Kwality Walls is having just 5% of the total market share.



The promotional assistance provided by the manufacturer has improved and increased as compared to 3 years before. The promotional assistance is given to the distributors to deliver the same to their dealers. The posters, glow sign boards, posters for newly launched flavors or schemes, wall paintings are provided to the dealers at the beginning of their business. The same is supplied even whenever demanded by the dealers themselves. Thus the supply of such POP displays have been done free of charge to all the dealers, but sometimes too small dealers may not be given all the available promotion as depending upon his sales. The promotional assistance also depends upon the annual sale of a dealer, the location of his shop and the market he covers. PROMOTIONAL MEASURES TAKEN DURING THE YEAR: 1. Schemes introduced by Havmor Scheme throughout year: Purchase Ice-cream Bonanza (1000ml) Butter Scotch (1000ml) Free Ice-cream Pista (1000ml) Vanilla (1000ml) Price (Rs.) 100 100

Scheme for Diwali festival: Madhumalti Ice cream + Asean companys 4 = Rs.299/(1000ml) container Tiffin box

2. Schemes introduced by Amul:

Amul has also introduced the Combo Pack schemes to attract the

customers/consumers against the competitors. The schemes are as under:


Combo Pack SantraMantra +Vanilla Fruit Bonanza + Vanilla Alphonso Mango + Vanilla Butter Scotch + Vanilla

Price (Rs.) 100 100 100 100 Flavor contains 900ml each

Amul was selling the Vanilla Party Pack (900ml) at just Rs.40 and Party Packs (900ml) of Kaju Draksh and Butterscotch at just Rs.60 each.

EFFECTS OF SCHEMES ON SALES: The disturbed situation in Ahmedabad since last 3-4 years plays a major role in decreasing of the sales. But due to the introduction of schemes, the sales have been maintained and has supported remarkably. The schemes have increased the sales to a considerable level that has benefited all the intermediaries. Increase in sales Year 2001-02 2002-03 Sales Average/below Average Increased by 50%

Market Reaction to Vadilal's activities The recent promotional schemes have a tremendous response from the consumers. Consumers have been writing letters with requests for the extension of the scheme period. The growth in sales during the scheme period was ten times over the normal sales.


The advertising is done mainly through 2 ways. Television Newspaper Since last two years, the Television advertising share has been abased and Advertising through Newspaper has been spurted. The reason is that nowadays, Companies are coming with different promotional schemes in different states. So the Newspaper is the easier and cheaper way to convey the promotional schemes.


All the competitors have adopted the Intense distribution policy. The no. of retail outlets served by is shown in the below table. Competitors Approximate increase in the retail outlets in the last 3 years June01 1600 800 380 160 60 June02 2000 1100 450 50 100 Appro.% Increase or decrease Vadilal Amul Havmor Kwality walls Loose ice cream parlors 60% inc 50% inc 45% inc 70% dec 50% inc

Vadilal has been serving approximately 2500 retail outlets in the current year. NUMBER OF DISTRIBUTORS FOR EACH BRAND OF ICE CREAMS: Number of distributors of the leading brands of ice cream in Ahmedabad as on June 02 Brands Vadilal Amul Havmor Kwality walls Number of distributors 9 7 Doesnt have any distributor 5


Chapter 5: Sales Department Relation

5.1 Relationship With Other Departments 5.2 Sales Department External Relations 5.3 Relations with Customers



Synergy amidst the different departments is required to improve the performance of any organization. To have synergy, coordinating the activities of all departments so that maximum progress is made toward overall company objectives is top managements responsibility. Although the primary responsibility of top sales executives is to manage the sales department, they know the operations of other departments. There are basically two interdepartmental coordination methods: Formal Coordination Methods Informal Coordination Method Vadilal prefers and follows Informal Coordination method. In practice, we do not find very good relationship between Sales Department & Production department, and Sales Department & Finance Department. But the condition is that much adverse in Vadilal industries. However, the top managements are succeeded in maintaining good relations amongst the above three departments. 1. RELATIONSHIP OF SALES WITH ADVERTISING: Coordination must be required between sales department and advertising agency for achieving an optimum promotional mix. Whenever, Vadilal launches new schemes that time the advertising agency provides the promotional materials like p-o-p, glow sign boards, select the media to convey the scheme, purchase media time and design the schemes. If there is no coordination between these two departments then the launched schemes may get failure.


2. RELATIONSHIP OF SALES WITH SERVICE: The relationship of sales with the service is very vital. As far as service is concerned, Vadilal makes a contract with the service contractors for repairing the Freezers that Vadilal has provided to the Dealers and Distributors by charging some annual fix amount. 3. RELATIONSHIP OF SALES WITH PHYSICAL DISTRIBUTION: Proper packing, accurate freight rate quotation, promptness in delivery are the activities carried down by Physical Distribution. Timely delivery is something, which is very vital in the perishable products like Ice cream. Packaging is also a factor, which is considered into account when Ice cream has been sent to different states from the three manufacturing plants. 4. RELATIONSHIP OF SALES WITH PRODUCTION DEPARTMENT: Manufacturing department is continuously assisting the sales department in launching the schemes. As per the scheme launched manufacturing department keeps ready the stock of that particular flavor to fulfilling the demand generated due to the schemes. 5. RELATIONSHIP OF SALES WITH R&D: Vadilal has committed to launch new flavor every month for the consumers. This required strong R&D and thus R&D stimulates the demand and helps Sales to achieve the targets and eat the major pie of Ice cream market.


By following the standards which government has recommended for the food products for the societal concern. Vadilal has also maintained good relationship with external bodies like Industry members, Educational institutions, and media.



Expectation of customers in a present channel: Vadilal fulfills the need and requirements of the customers time to time. Vadilal offers more than 200 flavors in the present product line. Vadilal also takes care about the pack size of the Ice cream. It offers Ice cream in the packing of 50ml, 100ml, 150ml, 500ml, 1 litter party pack, bulk packs. PREFERANCE FOR THE BRAND: The changes in the preferences of various branded as well as loose ice creams were known for the last 3 years. The choice of the consumers were fluctuating with that of the changes in the various features of ice creams such as prices, quantity quality, flavors and product range. Rank as per the brands Change in preferences of the ice cream brands in the last 3 years June 02 Amul Havmor/Vadilal Loose ice creams Kwality Walls

1 2 3 4

While as per students, we do prefer branded ice creams provided by Vadilal, but now with the introduction of souffls, mousses, sundaes & desserts which we get at dairy den is more preferred . Today, most of the young consumers prefer to have low fat as well as less sweet ice creams,


due to increasing health consciousness. They also prefer to have diet ice creams if provided with good taste. Though the market conditions worst affected in the city of Ahmedabad, still there is a demand for quality products especially among the young population. There is a noticeable demand for expensive sundaes, puddings or Souffls, though if generally a cost around Rs.30 to Rs. 60, but the young generation orders it as easily as they order for a glass of water. PREFERANCE OF CONSUMERS FOR VARIOUS ATTRIBUTES IN CHOOSING AN ICE CREAM: A consumer figures out various attributes before choosing a particular brand of ice cream. These attributes decide the preferences that the consumer gives to each brand according to his convenience of choice.

Preferences of attributes Attributes Price Quantity Quality Flavors Brand % 30 25 20 15 10


Chapter 6: Sales Force Management

6.1 Choice Of Basic Selling Style 6.2 Determine Sales Force Size 6.3 Recruiting, Selection, and Training 6.4 Performance Evaluations, Compensation, and Motivation Program



The Basic selling style adopted by the Vadilal is Trade selling. The salesperson is known as Trade Salesperson. Reason: Vadilals salespersons develop and maintain long-term relations with stable group of Dealers and Distributors. Vadilal applies this selling style for wellestablished Ice-cream market. Advertising and other form of promotions are more vital to overall marketing strategy then is personal selling. One important responsibility of the trade salesperson is to help customers build-up their volume through providing promotional assistance.


Following are the methods to determine the sales force size. Work Load Method Sales Potential Method Incremental Method Vadilal does not use any such formal method to determine the sales force size. The factors they are considering for appointing sales force are Market size Requirement to cover the geographical area



1. Recruiting and Selection: Vadilal has a separate Human resource department, which looks after the Recruiting and selection process. Human resource department gives advertisements or consult the different consulting agencies, once the top authorities, sales manager, and territory incharge have decided the required sales people. Vadilal receives the bio-data from incumbent and scrutinizes the eligible candidates and conducts the personal interview with these candidates. Finally they select the potential candidate who best suits their requirements. 2. Training and Supervision: After selecting the sales force, Vadilal provides mostly the On Job Training as per the requirement. The supervision of the sales people has been conducted as per the previously defined hierarchical structure of the Sales Department.


6.4 Performance Evaluations, Compensation, and Motivation Program

1. Performance Evaluation: In Vadilal the performance has been evaluated yearly basis. In Vadilal the evaluation pattern is somewhat different as below: The person evaluates Himself/Herself Head of the department or immediate supervisors Without knowing to the concerned person one can evaluate that person and it is kept confidential 2. Compensation and Motivation Programs: Vadilal motivates the sales force by Cash Rewards Distributing certificates to achievers Giving incentives to achievers Sometimes gives more 20% of the total incentive Sponsoring tours to outstanding performer


Chapter 7: Sales Budget, Assigning Territories, and Claim Settlement

7.1 Sales Forecasting And Devising Budget 7.2 Assigning Territories 7.3 Claim Settlement



Vadilal considers following factors for forecasting the Sales: Observing Market trends Past figures related to consumption pattern Deciding the future strategy Using the above factors, Experts in the sales field use their expertise and give their opinion for the next years sales. Thus Vadilal use Jury of Expert Executive Opinion. After deciding the Sales forecast, they are devising the Sales Budget. They allocate budget for promotional schemes, for incentives to the sales people, advertising etc.


Vadilal considers factors for assigning sales territories are as under: Market Potential Future Growth Vadilal has decided 13 different territories for their operation. 1) Gujarat Central South North Saurashtra 2) Rajasthan Udaipur Jaipur

Jodhpur 3) Madhya Pradesh 4) Uttar Pradesh Eastern U.P. ( Meruth, Noida, Faridabad) Western U.P. 5) Uttaranchal, Dehradun 6) Delhi 7) Haryana, Punjab, Chandigadh, Himachal pradesh 8) Jammu & Kashmir, Nepal 9) West Bengal 10)Orrisa 11)Chattisgarh 12)Tamilnadu 13)Bihar, Jarkhand


Damaged Goods: The distribution company follows from the company clearing & forwarding agents distribution dealers. The distribution channel has to be well managed as unlike any other product the problem actually stars when the product leaves the factory and passing through distribution channel reaches the consumer. The company has been co-operative in the complains, if any, for the replacement of the damaged goods. If a distributors receives damaged goods then a QCD Department in charge is called for detection to check


the quantity and the level of damages. There is a normal paperwork procedure for the replacement of goods, which has not been changed since last 10 years. If there are any damages found by the dealers, then the same has to be equally borne by the dealers and the distributors. But generally the changes of damages are one in 50 orders, and it hardly happens due to a well-managed distribution channel. Due to technically advanced freezers & cold storages, the changes of damages to such products is least as per the sale personnel. Schemes for Discounts: Claims for the discounts offered to the Dealers/Distributors are settled Monthly, Quarterly, Half yearly, and yearly. Driver Advance Van Expenses

Expense (all expenses done for the company by

Dealer/Distributor) Claims by Sales Force: Quarterly incentive policy Conveyance (monthly) Touring Payment terms and conditions: Vadilal is providing the credit of 45 days to the Distributors. Some times they also give some more credit period depending upon the situation and type of Distributor. The payments of the dealers are the responsibility of the Distributors.


Chapter 8: Logistic Systems

8.1 Warehousing 8.2 Order Processing 8.2 Inventory 8.3 Transportation


8.1 WAREHOUSING: As Ice cream is a perishable product and it must be kept

in cool place to maintain its quality for few days, Vadilal has Cold storages at different ends. These ends are Factories, C&F agents, Distributors, and Dealers. The temperature kept in these storage houses is as low as 45 degree centigrade.

8.2 ORDERS: Vadilal has defined MOQ (Minimum Order Quantity) for the
distributors to make order to the company. As far as order of the dealers are concerned that is the headache of the distributors. Here, the job of the Vadilals sales staff is to assist the distributors in selling the Ice cream. Vadilal is having MIS system installed in the organization. MIS helps Vadilal to know the status of a certain Distributors.

8.3INVENTORY: For the raw material Vadilal keeps the inventory and do not
follow the exact JIT. The biggest problem Vadilal facing right now, is inventory of raw material. Vadilals purchase department is always trying to keep the inventory as low as possible but they are not achieving significant success in this matter. The inventory of the packaging material is kept as low as possible and according to the demand forecasted and growth rate of the market.

8.4 TRANSPORTATION: Ice cream requires very low temperature in terms of

45 degree centigrade, so the Van used for the transportation are having the chillers.


Chapter 9: Analysis Of Distributors



THE LEVEL OF MARGIN OFFERED TO THE DISTRIBUTORS: Company Vadilal Amul Havmor Kwality Walls Level of margin (%) 6% 5% No distributor 5%

% Profit Margin Provided by different Brands 8% 6% 4% 2% 0%


5% 0





Kwality Walls

Interpretation: The distributors margin has not been changed since last 8 years. The distributors have been given the same margin even if there would be any increase or decrease in the price of ice cream. Infect, they are the most benefited though their margin has not increase since last 8 years. As the cold storage room is fully utilized due to schemes introduced on various packs as well as there is increase in sales for the same.


1. THE LEVEL OF MARGIN OFFERED TO THE DEALERS: Table Company Vadilal Amul Havmor Kwality Walls Level of margin (%) 15%-20% 20% 18%-20% 20%

% profit margin provided by different Brands

25% 20% 15% 10% 5% 0% vadilal Amul Havmor Kwality Walls 15% 20% 20%


Interpretation: Above Graph depicts that the profit margin provided by different brands to the dealers is almost equivalent. Vadilal is providing least profit margin to its Dealers but Dealers are satisfied with it because of high sales. As the Freezers are fully utilized due to schemes introduced on various packs as well as there is increase in sales for the same.


2. Overview of the investment made by the distributors:

Criteria Changes in the investment made by a distributors of Vadilal ice creams on various criteria June 02 20-25 Lakh (3 times increased) 7-8 130-140 20-25% Approx. 1.2 cr. increased by 35% (due to schemes)

Investment Areas covered No. Of dealers covered Expenses Sales

3. Sales as per the area covered by the distributors:


Preferences of packs as per the area and type of population as per a Vadilal Areas ice creams distributor Types of area Types of population Naranpura, Navrangpura, Paldi. Satellite, Thaltej Well developed but have many loose ice cream parlours Developing Middle class & higher middle class as well as rich class Middle class, higher middle class as well as rich class Juhapura, Nava Wadaj Developed Majority lower class & middle class but also very few higher middle Sabarmati, Ranip. Developed class found Majority lower class & middle class Preferences of packs as per population All even the one which are expensive like Rollcut, Rajbhog and even novelties All types of packs in demand but especially takeaways such as party packs Generally low priced ice creams such as candies sticks cups cones and chocobar with schemes. Generally low priced ice creams such as candies sticks cups cones and chocobar with schemes.

4. Analysis based on only ice cream parlors:

Analysis on only ice cream parlours of Vadilal ice creams in Ahmedabad Annual sales Proportion of ice No. of outlets Other products stocked cream in the in their outlet

Company outlets (annual sales of at least 7-8 lakh) Above s lakh 1-5 lakh 50000-1 lakh

whole business 95%


Soft drinks, snacks mineral water

70% 60% 55%

150 230 160

Soft drinks, snacks mineral water Soft drinks, snacks mineral water Stocks almost all dairy of major brands, products and other eatables Stocks almost all dairy of major brands, products and other eatables Stocks almost all dairy of major brands, products and other eatables such as Soft drinks, snacks as well as ice creams of other brand.




Below 25000



LOCATION OF AN OUTLET: During last 3-4 years the policy of keeping a minimum distance of 500 meters between the outlets seems to no more exist, as now in many parts of the city one can find 5 to 6 outlets at a stretch, which hardly have a distance of 200 meters. This probably provides consumers with the best availability of the product, but it may create a problem for small dealers who have competition next door.



New Launches

Recently the group has launched Fresh Fruit Icecream with ripples under the Fantasy range viz. Fresh Orange Fantasy, Fresh Mango Fantasy, Fresh Strawberry Fantasy and Fresh Black Currant Fantasy.

Three new Koolfi's have hit the market. Namely Mango Koolfi, Mava Koolfi and Pista Koolfi, these koolfis priced at Rs.10/- is a big hit in the market place.

Two new Sundaes ---- Chocolate Sundae & Strawberry Sundae at Rs. 10/each have been introduced.


Happinezz Parlour Vadilal introduced exclusive ice cream parlours under the name "Happinezz Parlours" to meet the expectations of our valued customers. Happinezz provides cozy, nice & cool ambience where one can enjoy world-class ice creams, ice-cream sundae, shakes and other various ice cream concoctions to his heart's content. Presently Vadilal has 23 such parlours in India and it expects to increase its number very soon. To open a Happinezz parlour following requirements have to be met.

Operational Requirements 1. A place at a prominent location with at least 15' frontage and at least 400 sq.ft. Area reserved for ice creams only. 2. Minimum two-display dispensers- one storage deep freezer unit and one soda fountain freezer unit as equipment are required. 3. Proper space for sitting or standing for serving ice creams. 4. Inside parlour walls should be clean and may have product display to enhance the general mood and give feeling of excitement. 5. Translate of products with their prices and attractive photograph should be displayed properly to create the right ambience in the parlour.


Chapter -7 Conclusion


The prices of the packs have increased hardly by 15-20% but the quantity offered has almost doubled, as per the schemes. There has been a touch competition among the branded ice cream manufacturers & the loose ice cream makers regarding the price of the product. Ice cream manufacturers came out with a concept of specially designed store to sell only ice cream or dominantly ice cream, which was given a lable of ice cream parlours. The parlour was characterized by the preference of a display machine through the glass panes of which the stock flavours were visible. The recent trend among the young generation is towards sundaes & desserts, which are prepared at the very moment as per the taste & preference of the consumer. Vadilal has its happinez parlours situated on few of the citys most happening areas: it has an advantage of serving the consumers from its own outlets to serve varieties of desserts and sundaes. Ice cream served with a combination of sauce of different flavours can be a big hit in the market. These parlours do serve sundaes & desserts or even souffls but it is mixed with artificial flavored sauce & fruits, which is less preferred as compared to fresh frit flavor. As the consumers views have also been known as a part of the survey, they do not prefer ice cream which are more sweet, which the company serves through happinez parlours by adding canned fruits and that too, sweet. Thus it could be profitable as per the demand of consumers to serve less sweet & fresh fruit sauce in sundaes or desserts.