Sales and Distribution Management : An Assignment on Durex,

Reckitt Benckiser
Group Number

Amit Kumar Thakur

8B

Rabeeh Abdul Jabbar

36B

Sandipkumar Gorasiya

41B

Saurabh Saini

43B

Sharath Alva

43C

Vishal Gupta

54B

Table of Contents
About Reckitt Benckiser .......................................................................................................................... 2
History................................................................................................................................................. 2
Product Category Performance ........................................................................................................... 2
Health Category Profile ....................................................................................................................... 3
Category brands .................................................................................................................................. 3
Market Scenario and Competition .......................................................................................................... 4
Customer Segments and their Expectations............................................................................................ 5
Channel design ........................................................................................................................................ 6
Choice of Channels and Rationale ....................................................................................................... 6
Typical distribution channel ............................................................................................................ 6
Broad categories of channels .......................................................................................................... 6
Changing distribution strategy in India............................................................................................ 7
Channel Members and their Functions as well as Compensation........................................................ 8
Channel Motivation and Engagement ................................................................................................. 9
Maintaining a Channel Ecosystem ....................................................................................................... 9
Issues in Channel Motivation and Engagement................................................................................. 10

About Reckitt Benckiser

Reckitt Benckiser plc (LSE: RB) is a multinational consumer goods company headquartered in Slough, Berkshire,
England. It is a major producer of health, hygiene and home products. It was formed in 1999 by the merger of the
UK-based Reckitt & Colman plc and the Netherlands-based Benckiser NV.
Reckitt Benckiser's brands include Dettol (the world's largest-selling antiseptic), Strepsils (the world's largestselling sore throat medicine), Veet (the world's largest-selling hair removal brand), Air Wick (the world's secondlargest-selling air freshener), Calgon, Clearasil, Cillit Bang, Durex, Lysol, and Vanish. It has operations in around 60
countries and its products are sold in almost 200 countries.
Reckitt Benckiser is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market
capitalization of approximately 34.75 billion as of 12 February 2014.

History
Johann A. Benckiser founded a business in Germany in 1823. Its main products were industrial and consumer
goods industrial chemicals. Benckiser went public in 1997.
Reckitt & Sons started in 1840 when Isaac Reckitt rented a starch mill in Hull, England. He diversified into other
household products and after his death in 1862, the business passed to his three sons. In 1886, Reckitt opened its
first overseas business in Australia. Reckitt & Sons was first listed on the London Stock Exchange in 1888. Harpic
Lavatory Cleaners was acquired in 1932, and that same year, Dettol was launched.
In 1938 Reckitt & Sons merged with J. & J. Colman, which had been founded in 1814 when Jeremiah Colman began
milling flour and mustard in Norwich, England, to become Reckitt & Colman Ltd. The company made several
acquisitions, including the Airwick and Carpet Fresh brands (1985), the Boyle-Midway division of American Home
Products (1990), and the Lehn & Fink division of Sterling Drug (1994).
Reckitt & Colman sold the Colman's food business in 1995.

Product Category Performance

RB's 19 Power brands are globally leading brands in high growth categories. These high-performing categories are
Health, Home, Hygiene, Portfolio Brands, Food and Pharmaceuticals.

Health Category Profile

Products in this category relieve common health problems. Analgesics, cold/flu/sore throat and gastro-intestinal
are generally over the counter medications for common ailments such as pain, fever, cold, flu, sore throat or
heartburn. Condoms are for both safe and pleasurable sex and a range of foot care products addresses
malfunction of foot, skin and nail conditions.

Category brands
Durex has been making highest quality condoms for nearly 80 years. With over 30% of
the global branded condom market, it's the no. 1 condom brand in the world.
Development of Durex has led to an expansion of the product range to include Durex
Play lubricants and vibrators. Durex condoms continue to go from strength to strength
with new products such as Durex Tingle, Pleasure max and Performax Intense.
Gaviscon is a well-established heartburn and indigestion remedy which provides long
lasting relief though its unique raft-forming mode of action. It is prescribed by doctors
and recommended by pharmacists and sufferers alike. Gaviscon Advance is stronger and
offers longer lasting relief. Following its UK launch in 1997, it is now available in a
number of countries globally. Product innovations like Double Action have strengthened
Gaviscon's performance.
Mucinex is the USA's leading cough and decongestion remedy, and No.2 worldwide for
cold and flu

Available in over 40 countries, Nurofen is the fastest growing analgesic brand globally
and the leading analgesic brand in UK, Australia and New Zealand. Nurofen is available
in a variety of formats including tablets, gel caps and liquids. Its range includes Nurofen
for Children and heat patches for back pain and menstrual pain.
Scholl foot care focuses on consumer-led innovation. A range of products address: foot,
skin and nail conditions; the feet and the body's inherent malfunction; changes to the
foot condition due to body function or activities; invaders to the conditions of feet e.g.
wart/verrucas and athlete's foot. Scholl footwear is the brand's most important retail
sector and is also expanding into high street shops.
Strepsils is the world's leading sore throat medicine. Trusted by consumers and
pharmacists alike, this leading brand is now present in over 50 countries. From its
inception as a sore throat gargle in 1950, the range has grown to a wide range of both
lozenges and sprays, giving consumers the choice they want for treating their sore
throats.

Market Scenario and Competition

India being the second most populous country in the world with a population of over 125 crores, it would not be
incorrect to say that there is a lot of sexual activity in India making it a natural and huge market for products in
contraceptive and sexual well-being category. The Indian market is estimated at Rs 1100 crores with plenty of
players battling it out for market share. However, the socio-cultural realities of India forbid a more explicit
approach to sex and sex education since ancient times and nobody is willing to talk about it explicitly.
Durex has been making the highest quality condoms for nearly 80 years. With over 30% of the global branded
condom market, it is the number 1 condom brand in the world. However despite having a dominant market
position globally, the brand faces a challenge to change the perception of Indian consumers and channel partners
regarding sexual well-being (male contraceptive) in order to normalize the category and drive growth. The current
market share of Durex in India is a mere 4% in a market which is under developed compared to other markets in
terms of the category size and growth.
In India, condom usage was not part of the culture before the AIDS epidemic. This is despite attempts made to
promote the use of contraceptives as a tool for family planning in the country, which was largely driven by the
government through awareness creation programs. The use of condoms has been slow in receiving acceptance.
Even though condoms are
widely
available,
its
Market Share Of Leading Condom Brands In India
penetration in India is only
Durex
about 5% which reflects the
4%
Kohinoor
stigma attached to the
16%
Others
purchase of the product.
35%
Over time, many national
and international brands
have forayed into the Indian
condom market but none of
Manforce
them have been able to
24%
achieve
a
substantial
Moods
increase in category sales.
10%
Kamasutra
Also regional disparity is
11%
observed in the usage of
condoms within the country
Region Wise Market Share of Different Leading
with Durex not having a
leading market share in any
Brands In India
specific geography which is
shown in the below chart
60
(2012 figures)
40
It has been a prevalent
20
perception amongst men
0
(and women too) that the
Durex
Kohinoor Manforce Kamasutra Moods
Others
use of condoms interferes
with pleasure during sex,
North
South
West
East
though much has been done
to overcome this in the recent past by making various product innovations and improvisations. In pursuit of
fighting this perception, brands in this category have been trying to come up with product innovations like thin
Condoms, stimulating condoms, flavored condoms etc.

Customer Segments and their Expectations

There are two main reasons for using condoms: to prevent pregnancy and to prevent sexually-transmitted
diseases (STDs). While the spread and fear of HIV/AIDS in the 1980s resulted in the first mass television
advertisements for condoms, the messaging has shifted in the last few decades to advertise pleasure over
protection. As a generation has grown up understanding the need for condoms to protect against disease and
unwanted pregnancy, the selling point becomes which condom within a wide range of options is most pleasurable.
There are four main communication channels: the Durex websites (Durex.com and thatsmypleasure.com),
consumer engagement, traditional advertising (primarily print ads), and advocacy and education.
The Pareto rule states that, in most cases, approximately 80% of revenue is generated from 20% of customers; in
the case of Durex, the 20% of customers would be single individuals who are sexually active with multiple partners.
Customer segmentation on durex products are done keeping in mind the following factors:

The largest group of condom users is in the 18-44 age range, with those in the 25-34 range representing
35% of all condom users.
Kinsey Institute reports that 18-29 year olds have sex an average of 112 times per year, 30-39 year olds
an average of 86 times per year, showing a marketed decline as individuals grow older.
Once in their late 30s and into their 40s, individuals condom use drops, as committed or married couples
use female contraception, such as birth control, over condoms.
Sexually active adults in their 20s, 31% of men and 20% of women report having more than one sexual
partner in the last year; by their 30s and 40s, most report only one sexual partner.
The largest consumers of condoms are heterosexual couples, with the Centre for Disease Control (CDC)
reporting approximately 95.9% of women and men ages 18-44 in 2002 as heterosexual.

Behavioral data begins the segmentation process for the

Demographic
condom marketcertainly sexual activity is the first Behavioural
Segmentation
Segmentation
defining factor. While sexual orientation is a demographic
factor, engaging in heterosexual sex can also be
Sexual Activity
Marital Status
considered a Behavioral characteristic in this
Age Group
segmentation process. Similarly, although marital status
Gender
is a demographic factor, the behavior of the unmarried
individual engaging in sexual activity with multiple
Education
partners also increases likelihood of condom usage.
Income
Education of customer is also a demographic factor and
this segment is targeted by considering that more educated group has limited focus on the health benefits of
condoms, as those concerns are most likely already
known or easier to communicate, and a greater focus on
the pleasurable characteristics. Emerging Users
although the heterosexual union requires individuals of
both sexes using the product, a reported 70% of condom
purchasing is done by men. However, young women are
a growing demographic of purchasers. Durex realized
that targeting women directly with a separately-branded

product, especially when considering package options, opened up more market options. The number of women
in the 18-25 age group that had purchased condoms increased by 16% from 2002-2013. As sexual attitudes in
younger generations continue to grow less stringent, women will represent a growing market of condom
purchasers. This focus on two key audiences within the emerging user category: women who fit the competitive
customer model of college-educated, higher-volume condom users in the 25-34 age group and the emerging
audience of 18-25 year old females, with both groups practicing heterosexuals and sexually active.

Channel design
Choice of Channels and Rationale
Typical distribution channel

Broad categories of channels

1.

Direct channels
a. Personal Selling: - Personal selling of Durex is done by arranging meetings with the procurement
departments/owners of Stores, Pharmacies, Hotels, Clubs, small retailers and NGOs. Knowledgeable
sales personnel would visit these businesses and convince them to stock Durex in their stores.
Rationale: - As condoms category is still not talked about openly in many countries, Durex sells it
personally by going to various businesses rather than businesses coming to Durex.
b. E-Catalogue: - E-catalogue would have detailed descriptions for the products offered and from those
offering the business can order according to the need of the final consumers.
Rationale: - As the penetration of e-commerce is increasing at a great pace, Durex is also venturing
into online space to make use of the huge opportunity.
c. Trade Shows and Conferences: - Products are displayed in various trade shows and benefits are
explained to the potential businesses and NGOs.
Rationale: - Many NGOs into social activities like AIDS awareness and other STD awareness takes part
into various trade shows and conferences. Durex takes these shows as a chance to showcase the
quality and social benefits of their condoms thus convincing NGOs to purchase their product.

2. Indirect Channels: a. Durex sells indirectly through distributors so that they can supply to the small businesses and
businesses in remote areas.

Rationale: - This is one of the traditional distribution model and Durex also partners with various
distributors and is selling its products via distributors to increase its reach and making use of the
supply chain and expertise of those distributors
b. Durex vending machine (A modern sales medium) Vending Machine is an Automatic Self-Service
Vending Machine that Dispenses a
Modern trades contribution to total
Durex Condom Box against receipt of
Bank Notes and Coins. The machine is
sales within the category in India
configured with a bank note validator 15.00%
to
accept
bank
notes
of
denominations of 10, 20, 50 and 100 10.00%
Rs. When the user selects one of the
5.00%
condom box, the machine displays
the value of the condom box and
0.00%
2010
2011
2012
prompts user to insert bank notes and
coins. Upon receipt of exact value of
Sanitary Napkins
Condoms
FMCG
the product, machine dispenses the
required product.
c. Modern trade contribution to condom sales in India: - Whereas modern trades contribution to
various FMCG products are increasing but it has been stagnant for condoms at 1.2% in India.

Changing distribution strategy in India

While Durex was earlier distributing its products offline
via distributors, it has recently realized the potential of
online medium in selling condoms and recently ventured
into online space. It has launched an online portal, Durex
India for selling its products in the country. Along with
this, Durex has also partnered with Healthkart to offer its
products on their store.

Durex changed distribution strategy in China as the

strategy that had worked elsewhere did not work here
All social and all digital strategy for China
1.

2.

RB mainly focused on its big ecommerce

platforms like Alibaba to reduce distribution
costs
Leverage Weibo, one of Chinas twitter
equivalents, to get cheap advertising.

Rationale behind it: - Firstly, the Shy factor which is

Rationale:always there when someone has to make the purchase
1. Distribution is very expensive in China as
from a physical outlet, plus though the market size is
Chinas retail largely depends on mom and pop
huge but still there are few physical outlets available
stores.
and it often happens that the products are not readily
2. Advertising costs are very high
available, thus, less variety for the buyer and also
sometimes the customers end up paying higher costs.
Secondly, though moving on the lines of west there are various types of Sex products that have been made
available in the country but still, lack of knowledge about their use and availability act as a barrier while buying
these products. Making people aware of the variety and usage of these products is a big time issue, thus an online
store as a medium not only makes one aware about the availability of these products but, also provides them with
additional knowledge too.
Choice of channels (Online vs offline):- Durexs choice of online, offline or mix of both depends on various factors:-

Sexual education imparted

Openness of the residents

Penetration of internet and e-commerce

Distribution costs

Retail structure

Demographic profile

Channel Members and their Functions as well as Compensation

SO

DS

Retailer

Wholesaler

secondary target
achievement(CD to
market)
Ensuring execution of all
strategies
managing relations with
wholesalers and retailers
training and development
of distributor salesman

achieve daily targets by

selling in retail and
wholesale
provide other services to
shops-merchandising etc
collect info on market and
competition
increase enrollment of
more shops

selling company products

to end consumer
maintain freshness by
following FEFO
proper execution of
inshop marketing activities
introduce new products to
consumer

selling company products

to smaller outlets
maintain freshness of
product by following FEFO
Ensuring the price stabilty
and market

RSM

ASM

overall p&l of assigned territory

ensuring maintaince of company
policies
ensuring cohesive team
training and development of ASMs

CD

primary target achievement(Company

to CD)
Ensuring company best practices at
CD
Managing relationships
training and development of sales
officers

buy and hoard stocks for selleing in

market
provide infra for retailing services
managing relationships with local
administration
managing business and goodwill for
self and company

Zonal Sales
Manager North
Zonal Sales
Manager South

National Sales
Manager

Zonal Sales
Manager East

Zonal Sales
Manager West

Zonal Sales
manager Central

Regional Sales
Manager

Sales
administration
executive

Pallet salesman

Area sales
manager

Territory Incharges

Distributor
Salesmen

Channel Motivation and Engagement

Employee and customer engagement have become high management
priorities over the past several years and rightly so. Its also important
to remember that channel partners are subject to the same drivers and
emotions as employees and customers in fact, they have added
distractions. They often work with numerous source manufactures or
service providers and naturally will favor some over others.
Like customers, the reasons channel partners favor some relationships
more highly than others is based on a variety of factors. Certainly
financial motivations are key among them. Just as the lowest price cant
be the only customer engagement strategy (or the most effective) and
margins arent the only ingredients to engaged relationships with
partners.

Maintaining a Channel Ecosystem

For channel partners to talk about durex and to be proud of the association with RB, a Channel Ecosystem is
maintained.
Channel Ecosystem is the mix of paths to the consumer and how theyre aligned and integrated. Whether the
ecosystem is harmonious or in conflict depends a great deal on engagement.
The channel partners are encouraged to make suggestions or identify innovative ways to extend durex and boost
sales because their level of engagement and strength of engagement is directly related to the strength of the
brand which in turn increases the brand value. To maintain a successful channel partner the following are
required:Recruiting the right partners
Enablement of the channel partners
RB takes care and caution in recruiting
RB on boards the partners proactively and
the right partners.
methodically to reduce that partners
time to contribution.
Getting the right kind of partners depend
on
In the spirit of engagement and
maintaining a harmonious Channel
The organizations position in the market,
Ecosystem, RB offers support to get them
The brand strength
up and running with minimal effort on
The reach of the internal sales and
their part.
marketing capabilities.

A great deal of this is accomplished by

To what extent the channel partner have
assigning a strong partner advocate to
a sales strategy aligned with the
work with them.
organization types of consumers,
Qualified leads are also provided who
values, etc.
offer co-marketing programs and product
or technology/sales & marketing training.
RB also provides its channel partners an
MDF (Market Development Fund),an
allowance provided to partners to offset
marketing costs and/or go toward

Effective Management of the partners

Both the dealer principals and their
employees problems are addressed, as
its often the employees who make the
difference.
For maintaining a positive channel
partner culture RB makes the channel
partners sure that they are easy to do
business with.
Both parties have an individual who is
committed to the other partners success
an advocate.
RB thinks more on how to drive the
success of the channel partner and less
about how they can squeeze the most
out of the relationship for themselves
which in turn, drives engagement and
better results for both partners over
time.

Rewards both monetary and non-monetary

Well-designed and professionally run
reward and recognition program for
partners is established to build a strong,
emotional connection over time
In addition to margins and equity rebates,
RB also provides non-cash rewards for
meeting and exceeding goals.
RB also implement non-cash reward and
recognition programs for their channel
partners which actually increased annual
revenue and sales. These are combined
with regular, verbal recognition and
acknowledgement of partners.

Issues in Channel Motivation and Engagement

Channel Conflict When higher members sell their products directly to the last level, bypassing
intermediaries. Occurs due to overproduction and dumping of goods
Undercutting by Wholesaler When a wholesaler undercuts his margin and supplies to retailers directly
their by cutting the potential customers for the distributor
Invasion of Territory Certain ASMs and super stockists indulge in this malpractice of invading neighboring
territories
Lack of transparency between partners Stock at hand at different levels in chain not clear to members
above them

..***
The End