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Final Report on Sales and Distribution Management Retail Audit and Distribution system on P&Gs Hair Care Products

Submitted to Dr. Dindayal Swain

Submitted by:
Group-4 Abhilash Das (001) Shovan Dash (002)

The perception of the project Retail audit and distribution system on P&Gs Hair care products was very enchanting and interesting for us to undertake. We finished this assignment in presence of guidance, cooperation, inspiration & unforgettable blessing of our teacher Prof. Dindayal Swain (Faculty, Sales and distribution Management). We would like to express our heartfelt gratitude and immense respect to Prof. Dindayal Swain. We wish to thank him for making us understand the concepts related to Sales and distribution Management in a lucid and simple manner and for his patience in clearing all our doubts. His feedbacks at various stages to us were really fruitful for the completion of this assignment.


Abhilash Das Shovan Dash

Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Introduction Research Methodology Product portfolio and SKUs Pricing Sales Promotion Channel Study Competitors scanning Analysis and Interpretation Findings, Recommendation& Conclusion Bibliography & Webliography Annexure

Chapter 1
Procter & Gamble Co. (P&G, NYSE: PG) is a Fortune 500, American multinational corporation headquartered in Downtown Cincinnati, Ohio, USA that manufactures a wide range of consumer goods. As of 2008, P&G is the 8th largest corporation in the world by market capitalization and 14th largest US Company by profit. It is 10th in Fortune's Most Admired Companies list (as of 2007). P&G is credited with many business innovations including brand management and the soap opera.

William Procter, a candle maker and James Gamble, a soap maker, immigrants from England and Ireland, respectively, who had settled earlier in Cincinnati, who met as they married sisters, Olivia and Elizabeth Norris, formed the company initially. Alexander Norris, their father-in law, called a meeting in which he persuaded his new sons-inlaw to become business partners. On October 31, 1837, as a result of the suggestion, Procter & Gamble was born.

In India Proctor & Gamble has two subsidiaries. They are P&G Hygiene and Health Care Ltd. and P&G Home Products Ltd. P&G Hygiene and Health Care Limited is one of India's fastest growing Fast Moving Consumer Goods Companies with a turnover of more than Rs. 500 crores. It has in its portfolio famous brands like Vicks & Whisper. P&G Home Products Limited deals in Fabric Care segment and Hair Care segment. It has in its kitty global brands such as Ariel and Tide in the Fabric Care segment, and Head & Shoulders, Pantene, and Rejoice in the hair care segment. Procter & Gamble's relationship with India started in 1951 when Vicks Product Inc. India, a branch of Vicks Product Inc. USA entered Indian market. In 1964, a public limited company, Richardson Hindustan Limited (RHL) was formed which obtained an Industrial License to undertake manufacture of Menthol and de mentholised peppermint oil and VICKS range of products such as Vicks VapoRub, Vicks Cough

Drops and Vicks Inhaler. In May 1967, RHL introduced Clearsil, then America's number one pimple cream in Indian market. In 1979, RHL launches Vicks Action 500 and in 1984 it set up an Ayurvedic Research Laboratory to address the common ailments of the people such as cough and cold. In October 1985, RHL became an affiliate of The Procter & Gamble Company, USA and its name was changed to Procter & Gamble India. In 1989, Procter & Gamble India launched Whisper - the breakthrough technology sanitary napkin. In 1991, P&G India launched Ariel detergent. In 1992, The Procter & Gamble Company, US increased its stake in Procter & Gamble India to 51% and then to 65%. In 1993, Procter & Gamble India divested the Detergents business to Procter & Gamble Home Products and started marketing Old Spice Brand of products. In 1999 Procter & Gamble India Limited changed the name of the company to Procter & Gamble Hygiene and health care limited. P&G Home Products Limited was incorporated as 100% subsidiary of The Procter & Gamble Company, USA in 1993 and it launched launches Ariel Super Soaker. In the same year Procter & Gamble India divested the Detergents business to Procter & Gamble Home Products. In 1995, Procter & Gamble Home Products entered the Hair care Category with the launch of Pantene Pro-V shampoo. In 1997 Procter & Gamble Home Products launches Head & Shoulders shampoo. In 2000, Procter & Gamble Home Products introduced Tide Detergent Powder - the largest selling detergent in the world. In 2003, Procter & Gamble Home Products Limited launched Pampers - world's number one selling diaper brand. Today, Proctor & Gamble is the second largest FMCG Company in India after Hindustan Unilever Limited.

Objective To find out the Stock position and sales promotion. To analyze the position in the Hair Care Segment with respect to its competitors.

To find out the payment system of P&G Hair Care products to retailers. To trace out the different channels and profitability factors concerning retailer.

Scope To study the distribution channel of Procter and Gamble in the twin city of Cuttack and Bhubaneswar 100 retail stores were observed and surveyed. The study is done in the stipulated time period of four weeks to fulfil the above objectives as best as possible. Limitation In this project, stipulated time factor was the biggest limitation due to its criticality. The response and behaviour from retailer was another factor, by which we had collected the information. Typically the project was mostly done in Bhubaneswar and some part of Cuttack, in the project around 75% retailer from Bhubaneswar where as only 25% retailer from Cuttack was covered.

Chapter 2
Research Methodology
For carrying out our sample survey report on Procter & Gamble, we have under taken different methodology for our research objectives. Following are the methodology, we have carried out and they have been highlighted in this project. Data Requirement Our entire survey was on the basis on primary data. The primary data is available based on the random sample survey. Process of Collecting of Data To collect our primary data, we have a direct face to face interaction with the retailers of Cuttack and Bhubaneswar. In Cuttack, we covered Jobra and College Square where as in Bhubaneswar we covered Unit-6, Unit- 8, Baramunda and Khadagiri. Formulation of Questionnaire The basis preliminary thing we have carried out that we have formulated a set of questionnaire. The questionnaire consists of both quantitative and qualitative analysis. The questionnaires were mostly closed ended questions. Methodology Target Retailer identification in terms of SKU. Distribution Channel awareness & Profitability Assessing the competition and Cavin Kare. channels w.r.t.o Hindustan Uniliver

Identifying preference /satisfaction criteria Determining strengths & weakness of distribution channel Analyzing past & current product perception and experience

Feedback on distribution channel and improvement areas

Chapter 3
Product portfolio and SKUs
P&G has divided its market into three parts i.e. P&G Health Care Ltd., P&G Home Products Ltd., & Gillette. The company has put the hair care segment into P&G Home Products Limited. P&G Home Products Limited is one of India's fastest growing Fast Moving Consumer Goods Companies that has in its portfolio P&G's global brands such as Ariel and Tide in the Fabric Care segment and in the Hair Care segment: Head & Shoulders - world's largest selling antidandruff shampoo; Pantene - world's No. 1 beauty shampoo; and Rejoice - Asia's No. 1 shampoo. P&G Home Products Limited is a 100% subsidiary of The Procter & Gamble Company, USA that in India, has carved a reputation for delivering superior quality, value-added products to meet the needs of consumers. In the twin city of Cuttack and Bhubaneswar, Procter and Gamble has started his own distribution network due to some internal reasons and it is mainly controlled by the depot at Gopalpur at Phulnakhara and they stopped the supply of Rejoice shampoo to the retailer. So the company is supplying and Pantene to the retailer. only two brands i.e. Head & Shoulders

The stock keeping unit of both shampoos are as follows. Head & Shoulders 180ml 90ml 7.5ml 5ml Pantene ProV 200ml 100ml 7.5ml 5ml

Both shampoos are having 6 variants. These variants are as follows.

Pantene ProV Volume & Fullness, Smooth & Silky Long Black, Hair Fall Control , Lively Clean, Goodness of Coconut Oil.

Head & Shoulders Smooth & Silky, Refreshing Menthol, Clean and Balanced, Silky Black, Naturally Clean, Nourishing Aloe Vera

Chapter 4
In dictionary the meaning of pricing would likely to be, the evaluation of something in terms of its price. Always price is a determinate factor for any product or services. Companies are usually charging the price as per the nature of the product and pricing strategy is based on the quality and price. In FMCG like hair care, people are purchasing the product on the basis of two variables i.e. price and nature of the product. Cavin Kare had started the sachet revaluation in India around 18 years back. And this economical packaging strategy is playing a determinant role in the companys revenue. Mostly decision of buying a shampoo depends upon various variables. So as per the behavior and need, the shampoo can be treating as both high level and low level involvement product. P&G has been positioning their shampoos in various segments. Pantene Pro Vs main target is to capture hair fall segment (Beauty Shampoo) where as Head and Shoulder is targeting Anti-Dandruff segment. As per AC Nielsen survey, shampoo market is highly saturated among major 4 giants i.e. Hindustan Unilever, Procter and Gamble, Cavin kare and ITC. As per company website Rejoice price is as same as Pantene-proV where as company is treating slightly different to the Head and Shoulder. The pricing chart is as follows.

Pantene ProV SKU(ML) 200ml.(Bottle) 100ml.(Bottle) 7.5ml(Sachet) 5ml(Sachet) Price(Rs) Rs98 Rs51 Rs3 Rs1.5

Head and Shoulder SKU(ML) 200ml.(Bottle) 100ml.(Bottle) 7.5ml(Sachet) 5ml(Sachet) Price(Rs) Rs115 Rs69 Rs3 Rs1.5

A peculiar pricing strategy adopted by the company is that the both brands sachet price is same but the price and quantity in bottle is very significantly differentiated. The strange behaviour in the sachet segment is that the 5ml sachet which is being sold at a price of Rs.1.50 is the most selling entity in the shampoo market of both the P&G product but company is still having the 7.5 ml one priced at Rs.3 and charging more than double. But quantity is less than 10ml.

Chapter 5 Sales Promotion

Sales promotion describes promotional methods using special short-term techniques to persuade members of a target market to respond or undertake certain activity. P&G and HUL both are not giving any type of sales promotion in twin cities market. The small companies like Cavin Kare and Dabur are providing facilities like extra money to the retailer for keeping their bottle and this giving in terms of discount. P&G is providing some incentive on huge sales like the profit percentage can vary in some season and it may touch up to 9%-15%. Company also give some offer that someone can return back the product if product expired. Cavin Kare, ITC and Dabur is giving various posters, wall hangings and leaflets to the retailer. But P&G is not giving any sales promotion in hair care but they are giving the posters for their new skin care products OLAY which is another million dollar brand of P&G.

Chapter 6
Channel Study With the help of a Distribution channel study you can get a detailed overview of the distribution structures of present market. Channel study enables us to find out the flow of the product in the market and how it works. In twin cities, the company has established his own distribution network and supplied the order on the basis of sales man report or the basis of the order supplied by the shop keeper over the phone. So the distribution system should likely to be as follows.


Company Depot


Company had previously distributed the products to the product through the M/s OM Associate, Khapuria. Due to heavy credit, the company had started its depot in between twin cities and supplied through this depot by their sales person. But there are some problems their system that they usually collect the money in form demand draft and supplied the product after that. So some retailers are not interested to keep their product from company. So

they collect the product from a big retailer and that retailer behaves like wholesaler. That retailer is doing the work of bulk breaking and supplied the products to the small retailer by keeping some margin on the total products. So the distribution ship likely to be as follows.

Small Retailer Company Depot Big Retaile r

Small Retailer

And this type of big retailer are in Malgodown(CTC) Area and Unit-8 area(BBSR). Some retailer has directly picked up their goods from company depot and they are usually made payment through the DD. But there is a money limit and quantity limit to take the goods. The goods should be more than 5 Boxes and the amount should be more than Rs 35,000. Even some retailers have been collecting their products through their association and bulk breaking between them. This type of distribution system has adopted by some retailers in suburb of Bhubaneswar where a significant demand would likely to be there. But companys sales person is not visiting these places. So the distribution system in graphical from would likely to be as follows.

Company Depot


Small Retailer

Small Retailer

Chapter 7
Competitors scanning
Competitor can be dividing into two categories i.e. Leader and Follower. Hair care market is very much saturated by four major players. And HUL is having the biggest share on this market. And P&G is in second position where as the Chennai based Cavin care is the market follower. And the market share As per AC Nielsen is as follows. Company HUL P&G CavinKare ITC Market Share (%) 47.8% 23.7% 12% 4%

Hindustan Unilever ltd. Hindustan Unilever Limited (HUL) (BSE: HUL) is India's largest fast moving consumer goods company, touching the lives of two out of three Indians with over 20 distinct categories in home & personal care products and food & beverages. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of over Rs. 13,000 crores. HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading House by the Government of India. Hindustan Unilever's distribution covers over 1 million retails outlets across India directly and its products are available in over 6.3 million outlets in India, i.e., nearly 80% of the retail outlets in India. It has 39 factories in the country. Two out of three Indians use the companys products and HUL products have the largest consumer reach being available in over 80 per cent of consumer homes across India.

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands. Some of its brands include Kwality Wall's ice cream, Knorr soups & meal makers, Lifebuoy, Lux, Breeze, Liril, Rexona, Hamam and Moti soaps, Pureit water purifier, Lipton tea, Brooke Bond tea, Bru coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta, Pond's talcs and creams, Vaseline lotions, Fair and Lovely creams, Lakm beauty products, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim dishwash, Ala bleach, Domex disinfectant, Rexona, Modern Bread, and Axe deosprays. HUL Hair care Market HUL is having major 4 brands in the market and it had stopped production of LUX shampoo some years ago. HUL main brands are Clinic All Clear, Clinic plus, Dove and Sunsilk. HUL is having different distribution system comparing to P&G. Previously HUL had his own distribution network and supplied. Due to vast market, HUL is depending on the stockist and wholesalers for reaching 6 million outlets in India expect organised retailer. Company has been positioning its 4 brands into 4 categories. These categories are as follows. Category Mass market brand Mid-price Premium Anti-Dandruff Brand Clinic SunSilk Dove Clinic All Clear

The distribution system would likely to be as follows.



Wholesaler/ Distributor




Clinic All Clear brand The Clinic All Clear brand was launched in 1980 in India. It was known as Clinic Special then and its name was later changed to Clinic All Clear in 1996.The brand is also present as Clear in 14 other countries worldwide. To align itself to the international quality standards this year Clinic All Clear has been relaunched this year as Clear by HUL. Clear is available in 5 variants. Clear Active Care Clear Ice Coo Clear Hair fall Defences Clear Soft Gloss

Clear Radiant Black Price Range: - Rs 110 for 200 ml Clinic Plus This is the most saleable shampoo In India over 20 years. The brand has constantly evolved to meet the hair care needs of millions. Clinic Plus appeals the most to mothers and daughters who are most concerned about the health of their hair. Variants: Clinic Plus Clean and Thick Shampoo Clinic Plus Anti-Dandruff Shampoo Clinic Plus Naturals Shampoo Price Range: - Rs 63 for 200ml bottle Sunsilk Sunsilk brand was launched in 1964 and is a global brand with its presence across 80 countries. The Sunsilk hair care range provides a complete hair care solution and functions as a 3-step combination of cleansing, nourishing and manageability. The main target market is urban girls. Variants: Sunsilk Thick & long shampoo Sunsilk soft and smooth shampoo Sunsilk hairfall solution shampoo Sunsilk damage repair shampoo Blackshine shampoo Anti-dandruff shampoo Sunsilk Straight n sleek shampoo

Sunsilk Curls & waves bounce shampoo Sunsilk layers & texture definition shampoo Price Range:-Rs 87 for 200ml DOVE Dove hair care range was introduced in 1998 in Europe and in 2003 in North America. In India, Dove hair care range was launched in 2007. Within 15 months of its launch, dove has become the fastest growing shampoo brand in the country. The range has highly conditioned formulation which delivers the moisture promise of Dove to the consumer. Variants: Dove Hair Fall Therapy Dove Dry Therapy Dove Daily Shine Dove Intense damage Therapy Price Range: - Rs 115 for 200 ml

The retailer would likely to get around 9%-14% on hair care products. And some time they would likely to get more than 15% on offer. There is no sale promotion offer to the retailer.

Cavin kare
Chennai based FMCG manufacture Cavin Kare is having 2 brands i.e. Nyle and Chick. Both brands have been penetrating the market by using price and packaging. Nyle and Chick both are capturing around 12% market share in India and 20% in rural India. The company is distributing the goods as same as HUL. Company is providing a fair amount of margin on sachet segment. Profit is around 25% on sachet where 30% on bottle. The 200ml bottle is around Rs56 which is very economical comparing to any big established brand. Company is also proving some sale promotional offer like Buy 2 Get 1 free frequently.

Chapter 8
Analysis and Interpretation
Out of 100 retailers surveyed during the four weeks survey, we found out that no of satisfied retailer regarding distribution system and sales promotion are nearly about 40% and remaining 60% are dissatisfied for the company policy and distribution system.

Retailer Perception about P&G hair care segment

Avalibilty Of Different variants of Pantene and Head and Shoulder in Reatil Outlets There are 6 variants of Pantene and also 6 variants avilable in Head and Shoulder. Most of retailer are keeping sachet and these retailers are small in terms revenue. But the middle level retailers are trying to keep both but they only keep demanded product of each brand. Like Head and shoulder black is the no 1 favourite brand for the retailer. These Graps are as follows.

Variants Of Pantene

Here only 17 retail outlet is keeping all variants where as 70 retail outlet are keeping more than 2 varints. Variants of Head and Shoulder

Here only 14 retailer are keeping all varints where as 59 retailers are keeping only 2 variants.

Availibility Of Bottle in retail store

Bottle is the most profitable SKU for the retailer but from total survey, we found out that only some retailers are keeping these bottles.

Chapter 9

Main Problem as Per Retiler Credit System: - Company is not giving any credit facilities to the retailer where as the competitors like HUL and Cavin Kare is giving credit to the retailer. Payment System: - Company is taking the money in form of Demand Draft and the draft made in the favour P&G home products Ltd. The company sales executive is following particular route map for selected retailers satisfying profitability and sales criteria as decided by the company.

Demand Of the retailers Sachet profit should be more. Sales promotion should likely to be more. Point of Purchase advertisement should be more and it should be covered to all product range.

Chapter 10
Bibliography And Webilography
Sales And Distribution Management: An Indian Perspective By Pengali Venugopalan Sales management by Basnta and Krishna Sales distribution by Aftan Alam Sales distribution by Tapan k Panda, Sunil Sahadev


N.B:-The specimen Of DSR and Stores name had attached with the report. Original data sheet could not attached due to lengthiness of the report.