P&G’s new S&D system

Group 2
 Case - Situation Analysis
• Industry Background
– Only benchmark – HUL’s distribution network.
– FMCG – High volumes & low margins.
– General belief – Bigger the network, Higher the
sales.
• Nature & Extent of demand
– Largely arising from urban markets.
– High end products more successful than lower
ones. (Ariel, H&S, Mach 3 etc)
• Competitor Scenario
– HUL – Greater presence in geographies as well
as product categories.
– Number of other smaller players – Johnson &
Johnson, Colgate Palmolive etc.
Product Portfolio
 Assumptions
• Distribution channels not lean.
• Reach and volume targets over ride
associated costs assessments.
• Identification of key customer
segments missing
– Geographies
– Demographics
• Channel partners unhappy
– Lesser ROI, high inventories
– Lesser credit period for retailers
 Key Problem Areas
• Distribution system not based on
P&G’s requirements.
– Lifted from HUL’s practices.
• High margin and Low volume products
in a large network meant
– High servicing costs.
– Lesser ROI for the distributors.
– Focus on primary sales (company to
distributor)
 Alternative Strategy
• Target – To create and sustain a
distribution system more suited to
the product categories P&G caters
to.
– Scaling down the existing network –
while holding on to market share.
– Reduction of costs (Inventory &
Logistics).
– Increased channel partner focus and
their ROI.
 Road Map
• Consolidation of distributors
– More profitable for one instead of
“scraping” returns for many.
– Reduced investments in C&F agents.
• Customer focus
– Urban markets
– Higher end products
• Brand building & strategizing with
strong brands
– Vicks, Whisper, Gillette Mach 3.
THANK YOU