Varanasi, Uttar Pradesh

Retailers- 3700 approx

Wholesalers- 280-300
Distributors- 6 Total (4 Urban 2 Rural)

Most Selling Products- Lifebuoy, Fair & Lovely, Lux and Sunsilk

Distribution Channel-
1. Vijeta/Sambandh – Wholesale
2. Family Grocer – Urban
3. Shakti – Rural
4. Rest of Retail – Pharmacy, Over the counter sales from distributor

Gaps-
Normal Days – The main problem faced by the company is the coverage by the distributor.
Distributors don’t want to sell in rural areas. The expenses of selling in rural areas (small
retailers) are higher and the sales are lower compared to the urban areas. For ex- to distribute
stocks valued at 1lakh, the distributor might have to get it delivered to 20 different retailers in
the rural areas. Whereas in urban areas, they can sell stocks worth 5 lakhs directly to a
wholesaler and unload the stock at 1 particular place rather than unloading it at 20 different
retailers. This reduces the distribution cost of the distributor.
During Covid-19- They are not allowed to operate on Saturdays. They have to adhere to the new
work timings of 10am-5am. Disruption in production and supply chain management.

Measures to fulfill the gaps (by the company)-

Company has been trying to keep a balance in the distribution of products to the retailers as
well as the wholesalers. They are trying to keep a strict check on the distributors and asking
them not to prioritize wholesalers only.
The company has certain parameters under which the distributor has to operate. The
distributor has to generate an invoice for every shop/retail outlet at least once every month. For
ex- if there are 100 shops under 1 distributor, he/she should have an invoice generated at least
once for all the 100 shops in 1 month. The company keeps a track record of all these things and
if they find any shop/retail for which no invoice was generated then they contact the distributor
and ask them why that particular shop is not being served by them because the possibility of
not supplying any product of HUL is very less due to the vast product range offered by the
company. The company also has kept some variable margins for the distributors to overcome
this problem. If the distributor sells more range of products and to every shop/retail outlet,
then they are incentivized accordingly to encourage them to expand the distribution of their
products.
The other gap mentioned was the credit system prevailing in the rural areas. The shops in rural
areas work on the credit system and hence the distributors face problems in the collection of
payment (delay in payments, bad debts) and added expenditure (petrol, employee expenses
etc.)

Suggestions to fulfill the gaps-

1. In this pandemic, distributors can focus more the supply of soaps like Lifebuoy, Lux and Liril
since these soaps have a good image in rural areas (especially Lifebuoy).
2. Since the city is full of ghats and most rural people have businesses near the ghats, they can
push more products in those areas.