DISTRIBUTION CHANNEL STUDY

Submitted to: Submitted by:

Prof. Prantosh J. Banerjee Group 8
Section C
Kavya Gupta (PGP09194)
Kirti Dang (PGP09195)
Nandini Gupta (PGP09204)
Neha Kumari (PGP09210)
Rahul Arora (PGP09221)
Rajat Bhatia (PGP09223)
Shreyans Jain (PGP09237)
 DISTRIBUTION CHANNEL STUDY

SALES & DISTRIBUTION MANAGEMENT

PROJECT:1
STUDY OF DISTRIBUTION CHANNELS

Selected Brands:
1. CONSUMER DURABLES: TIMEX WATCHES
2. FMCG: HALDIRAMS
 DISTRIBUTION CHANNEL STUDY

TIMEX WATCHES INDIA

Timex Group is a private company with its headquarters in Middlebury, Connecticut, U.S.
It manufactures timepieces around the world and was founded in 1854, and is currently employing
over 3000 employees worldwide. Timex Group companies produce watches under well-known brands
including Timex, Nautica, GUESS, GC, Versace, Versus and Salvatore Ferragamo. It started in 1854
as Waterbury Clock Company which manufactured clocks for the masses at $6 for 40 years.

In 1901 it started selling Yankee Pocket watch for $1, even Mark Twain was a fan of it
From 1914-1936, the Timex started wristwatch manufacturing, 2 million kids bought the Mickey
Mouse wristwatch, after which the focus shifted to wristwatches and the brand evolved to what it is
now known as “Timex Group.”
First came to India in collaboration with “Titan Company Limited” in the year 1990 and later on
started operating individually and the first manufacturing plant was set up in Noida with a production
capacity of 2.5 million wristwatches per annum.
 DISTRIBUTION CHANNEL STUDY

Timex had 15% growth rate last financial year and is expecting to grow at 20% this financial year. The
Company continues to focus on growth by further increasing its distribution footprint. Special focus
on Tier 2 and 3 markets has yielded better than expected results. Franchisee led expansion will increase
Showrooms in their 2 cities. The Company is investing significantly in retail fixtures and visual
merchandising to improve retail presence and increase consumer shopping experience. The increased
brand perception amongst consumers has helped increase market share in large retail formats like
department stores.

Moreover, E-commerce business has seen exponential growth. To strengthen this business, the
Company plans to introduce exclusive products for the E-commerce channel. The Company is also
working on a channel strategy to unlock higher value.

Distribution Channel: Multi-channel Distribution System

TIMEX India

Timex Direct
Institution CSD Distributors Online portal
World Dealers
(www.shop.time
xindia.com
Institutional Defence
Customers Customers Retailers
Customers Personnel
Customers
E-Commerce
Customers
websites

Customers
 DISTRIBUTION CHANNEL STUDY

Study of Distributor Side:

Distribution Channel: Timex Group – Veekay Industries Limited – Retailers – Consumers

Purchase cycle: Twice a week (Monday and Thursday)

Order size: 400-500 pcs
Order amount: 10-12 lacs per purchase
Purchase terms: Cash and Carry (Prepaid)
Inventory Management System: Busy Accounting Software
Buffer Stock: 1 Week at least but during September to October it increases significantly
Return Policy: No Return Policy
Gross Margin: 4% (Approx.), other benefits such as Incentive tours annually
Order process: 2 salespeople are there who divide the region and visit every retailer at least once a
week (more visits can be made if any issue faced by retailer)
Order: Taken manually
Personal visits: Within 10 days a visit to each retailer to check if any problem faced by retailer
Demand (Retailer): Regular (but a good spike in demand between October and November due to
Diwali)
Retailer’s payment terms: 30-45 days credit
Cash discount: 1% for cash and carry retailers
Return management (Retailer): No Return policy
Adjustments for defective products: If the product is defective Timex Groups service agents visits
retailers every week, the retailer can directly send the product to company and company would issue
a replacement along with the customer complaint watches
Gross Margin (Retailers): Roughly 18% along with other incentives depending on retailers target
achievement and turnover of the retailer (Salesman incentive scheme, price off on specific models,
foreign trips – subject to achievement of specific targets)
Payment Modes: (Big retailers – NEFT/RTGS, small one's Cheque)

Details of distributor:

Contact Person: Vikas Jain

Firm name: Veekay Industries Limited
Distributorship: Timex Watches for 15 years
 DISTRIBUTION CHANNEL STUDY

Region: Central Delhi and Some Part of North Delhi

Office: B-8, Kalindi Colony, New Delhi -110065
No. of Customers (Retailers): 20 – (5 big ones over 1 cr purchase per annum)
Annual Turnover: 12Cr
Number of SKU: 450-500
Other Distributors: 2 More (In Delhi)

Key Benefits of having a Distributor as the middle man (for retailers):

1. The flexibility of Payment terms (credit period of usually 30-45 days)

2. Variety at the doorstep (physically selecting what to buy is possible)
3. Easier for nontech savvy people

Key benefits of being a Direct dealer (for retailers):

1. More margins (at least 1% extra)

2. During short term schemes, the distributor is not able to cater to all of its retailers, whereas
direct dealer gets the opportunity to select from the company’s stock list what to buy and how
much to buy
3. Daily stock sheet updates from company enable the retailer to buy even lower quantities more
frequently
4. Order cycle is reduced and so is the time required from placing an order to the delivery of the
product
5. Transparency in a scheme launched by the company
6. Inventory management is better when the retailer buys directly from the company
 DISTRIBUTION CHANNEL STUDY

Study of Sales Management

Distribution Channels Used

Timex
Institution
World

Direct E-
Dealers Commerce

Modern
Trade Retailers
outlets

Total number of Dealers and Distributors

Dealers Distributors
North India 25 700
Delhi Only 8 100

Most Profitable Channel

Distributors and Direct dealers

Product Range

• Timex helix: Its range starts from Rs895/- to 4995/- ( fashion segment)
• Timex Empera: Its range starts from Rs795/- (regular range) - This is the range usually used in
institutional sales for Diwali and new year and such festivals
• Value for money: It range starts from 2195/- targeted towards youth for formal and casual wear and
middle-aged people also (some traditional golden models are even there )
• Premium range: Starting from Rs12995/- both for men and women up to 24995/- and then higher
range Salvatore Ferragamo 70895/- up to Rs 163695 only available at very few selected stores as in
Dlf Emporio Vasant Kunj
 DISTRIBUTION CHANNEL STUDY

Promotional Strategies

• Print media, Social media, and Electronic media and they also organize time to time event/ activities

Criteria for selling distributor

• Usually, it is decided by the management, depending upon

• How much they want to invest
• Background of the distributor and its holding in the market
• Organization vision should match with the vision of the distributor

Highest sales

• Usually happens in 1st and the 4th quarter of the year, i.e., in the month from (Jan – Mar) and (Oct-Dec) as
these are the marriage and festive season

Average Revenue

• In north India Revenue from the premium segment is 20 crores and from economy and middle segment is 70
crores

Major Competitor
• In premium segment Guess and Fossil and In the Economy segment is Titan and Casio and Fastrack for the
fashion segment, sonata for the regular range

Smartwatch Segment
• Timex is planning to enter in the race of Smartwatch as well to compete with Google watch and Apple watch.
• Planning to launch the watch by the end of next year having features like calling in the price range of Rs
10000
• Currently, they have Activity Tracker watches namely Timex IQ
 DISTRIBUTION CHANNEL STUDY

Salesforce Hierarchy of Timex

Area Sales Manager

Regional sales manager

Sales coordinator

Sales Persons

Compensation Proportion

• Usually, it is dependent upon the designation and slabs, but on an average, it revolves around 75% Fixed and
25% variable

Motivation of Salesforce

• Usually, they give cash incentives based on their target, quarterly sales and also the cash collection
• Sometimes if the dealer is not able to complete the target, the company supports a dealer by routing an
institutional sales through the dealer so that the dealer feels like being part of a family and hence it also
becomes a motivation to sell more Timex products next time
• They keep interacting with the dealers as well by organizing at least 2 meets in a year apart from the incentive
tour (on the achievement of the target) and is constantly focusing on building a good rapport and bond with the
dealers and distributors
• In these meets, even family members of the dealer or distributors are invited
• The company provides an incentive to the salesman of the dealer, Rs 30/- incentive on every sale of Timex
watches up to 4995, beyond that 100, 150 on Versus flat

Salesforce Management

• Every store has to be visited at least once a week, so they ensure they set the routine accordingly
• Many times companies salespeople coordinates with the distributor's salesperson and visit the store together so
that company also know both how the dealer is satisfied with the company and distributor assigned

Customer demographics

• Gender: Major sales come from Male customers approximating 65% revenue from Males and 35% from
Female customers
• Age: Majorly customer from age group from 20 to 35 provide a significant share of sales
 DISTRIBUTION CHANNEL STUDY

Details of Area Sales Officer

• Contact Person Name: Abhishek Pathak

• Territory North India ( Delhi, Haryana, Himachal, Chandigarh, Srinagar, Jalandhar, Amritsar)
• Working since 2005
• 18 Salesman are under him and have 18 stores in Delhi NCR
 DISTRIBUTION CHANNEL STUDY

Haldiram’s
Introduction

Haldiram's is a major Indian sweets and snacks manufacturer based out of Delhi and Nagpur. It has
over 400 products. Its product range includes traditional namkeens, western snacks, Indian sweets,
cookies, sherbets, papads, and pickles. The company also produces ready-to-eat food products. The
company has manufacturing plants in a wide variety of locations such as Nagpur, New Delhi, Gurgaon,
Rudrapur, and Noida. Haldiram's has its own retail chain stores and a range of restaurants.

Haldiram's was founded in 1937 by Shri Ganga Bhishen Agarwal as a retail sweet and namkeen shop
in Bikaner, Rajasthan. In 2003, the company began the process of developing convenience foods to be
marketed to consumers. The company has grown at a tremendous pace over the years, and in 2017 it
was crowned as the country’s largest snack company, surpassing all other domestic and international
competitors. In addition to local success, the country has found global success with its products being
available at more than 80 countries including Sri Lanka, Germany, United Kingdom, United States,
Canada, United Arab Emirates, Australia, New Zealand, and Japan

This segment of the project includes the entire distribution of Haldiram’s in Rohtak city. For this, we
interviewed Mr. Rakesh Khurana, a Haldiram’s Distributor in Rohtak, Haryana. He took agency of
Haldiram’s Namkeen and Wafers in 2017. He operates through his single warehouse.
 DISTRIBUTION CHANNEL STUDY

Distribution Channel

Company

C&F

Distributors

Retailers

Customers

Company

The company manufactures different Haldiram’s Product and sends it to its different distribution
channels.

C&F

It stands for Carrying & Forwarding agency. They are directly controlled by the company and use to
supply distributors and wholesalers according to their demands.

Distributors

An entity that buys products or product lines, warehouses them, and resells them to retailers or direct
to the end-users or customers.

There are a total of 10 distributors of Haldiram’s in

Rohtak. Their annual turnover is around 1Cr.

Retailers

A retailer is an entity which sells products directly to consumers.

Mr. Rakesh sells products to 300 retailers in Rohtak.

 DISTRIBUTION CHANNEL STUDY

Supply Chain Management

To ensure proper tracking of products and its distribution, Mr. Rakesh uses Busy accounting software.
GST Ready BUSY Accounting Software is an integrated business accounting

Company to Distributor

• Order is on daily Basis and next day delivery is done

• Lot size varies according to demand

Distributor to Retailers

• There are 2 salespeople appointed by Mr. Rakesh for supply chain management at the
distributor level
• This salesperson takes orders from retailers
• The orders are usually taken manually, and same-day delivery is done

Mode of Transportation

• Products come in trucks at the distributor's warehouse

Defects Policy

• Defected products are replaced through purchase returns

• Defected pieces are transported through same transportation medium
• Money is credited to Distributors accounts

Products

• Mr. Rakesh took agency of Haldiram’s Namkeen and Wafers

• Total 8 SKUs of Namkeen and 4 SKUs of Wafers were available

Inventory Handling

• Stock of 1 week is kept in inventory

Mode of Payments

1) Company to Distributors- Distributors pay in Advance through Cheques

 DISTRIBUTION CHANNEL STUDY

2) Distributors to Retailers – Retailers, pay in cash, cheques or through Online payment means
like Paytm

Credit Policy

• There is no credit policy offered by Haldiram’s to its distributors

Distributors Association

• Haldriram’s annually keeps a distributors meet in the month of April

• Based on previous year sales, the reward is given to the top 3 Distributors

Seasonality Affect

• As both the products are routine products, hence there is not much effect of seasons in its sales

Margins

• Haldiram’s gives a margin of 7% to its distributors

Study of Sales Management

Product Range includes

Traditional Namkeen & Sweets

Western Snacks

sherbets

Papads & Pickles

The products at Haldirams have three verticles namely

500gms or more

200- 500gms

Small Packaging (100gms)

 Market Share SKU-wise

• Total namkeen sale = 4744 m.t

• Total western snacks= 593 m.t

For Namkeen

Share in %
3
11 20Gms
31
42 Gms

37 200 Gms
18
400 Gms
1Kg

Major Contributing SKU is 200 Gms, followed by 20gms, 42 Gms & 1 Kg.

For snacks

% Share

9
44
Chips

47 Takatak
Whoopies

Major Contributing SKU is 20 Gms, followed by 200gms, 42 Gms & 400 gms.
 rs
100 The most demanding SKU
(1kg
rs 70-75 rs 5
)
(400gms) (20gms)
8%
5% 18%

rs 40-45 rs 10
(200gms) (45gm)
41% 28%

Top ten contributing products (Namkeen- focused product)

Growth
Growth
130

64
41
25 18 24 17
10 15 11

4395M 1381 MT

• Also, the traditional snacks are doing the maximum business as compared to the other category.
• For smaller Packaging SKUs (20gms & 42gms), highway networking is stronger.
• Generally larger SKUs (500gms- 1kg) is displayed maximum in shop windows (45% approx.), in the
shelf (41%), and rest on cartons, tabletops, etc.
• Smaller SKUs are placed in hangers by 77% of the outlets, and rest on counters or tables
• Also, 65% of the retailers believe that receiving discounts is the best way of boosting a product’s sale
at the dealer counters
• According to the retailers, the replacement of expired products takes a lot of time, irregular supplies
of smaller SKUs to the dealers, issues in certain batches based on the taste at times, frequent changes
in packaging
 Promotional Strategies

• Print media in Festive seasons→ For combo offers

• College Fest and other regional fests (E.g., Janakpuri Diwali Fest & Delhi University fests) → For
smaller packaging
• Banners and tile boards at retail outlets (POP display) → All SKUs at different outlets\
o Haldiram Restaurants
o GTOs and MTOs
• In Movies like, Prem Ratan Dhan Payo

Area and Territory Management and significant roles

• Mr. Kailash Chandra is the area sales manager for West Delhi, and under Mr. Vikram Verma who is
currently heading sales for North region, areas like Chandigarh, Punjab, Haryana, Delhi, some part of
Himachal Pradesh and Jammu Province are included.
• This includes components like handling sales for Chandigarh, Punjab, Haryana (NH-1), Jammu
Province handling General Trade /SAMT/HoReCa along with all MT channels like (Wal-Mart,
Metro, Reliance CnC, Reliance Retails, Easyday, Big Bazaar - FVRL, Spencer’s, More – Aditya
Birla Group ABRL, Hyper City and all SAMT Channels among Other with turnover of 2.5 Crore PA,
1 CSAs, 14 distributors etc.

SalesForce Management techniques followed by Managers at Haldirams

• Every Area Sales Manager has 3-4 Territory sales manager under him who in turn have 2-3 sales
officer dependent on the type of product category
• Each Sales officer has to visit 15-18 shops in a day to check whether the banners have been correctly
displayed, communicating different schemes and targets, as well as getting updates about SKUs and
collecting orders at times
• The area managers divide the target based upon the growth projections by the regional managers and
accordingly the division is done to the sales officers
• The performance of a Sales Officer is judged based on number of calls made per account, amount of
sales generated per area, sales record in the past 6 months, type of market, service, sales to credit
ratio, SKU wise sale in a category
• The employees who are not performing are personally attended to understand the causes of not
performing. They are made to understand the importance of target & motivated for further sales by
the respective manager as explained by Mr. Kailash Chandra and assured the same strategy is
followed pan organization
• Though the supply of products from C&F agents to the distributors is inconsistent from some SKUs