A Study on Distribution Channel of Britannia, ITC and

Parle Biscuits in Bangalore

Submitted towards partial fulfilment of completion of course on

Sales and Distribution

Submitted by
Students MBA 2012-14
Jain University

Under the guidance of

Internal Guide:
Prof. Mohan Kuruvilla
Professor
School of Business

Jain University
School of Business
Bangalore
MAY 2013
 Distribution Channel of Britannia
History

Type Public
Founded 1892
Area Served India
Key people Vinita Bali (MD)
Prashant Vatkar (CEO)
Industry Food
Products Biscuit, Cake, Rusk
Revenue Rs. 5650 Crores
Parent Wadia Group
Company

Distribution Network

Britannia is Bangalore based company situated in Britannia Garden, Vimana

Pura Bangalore.

To reach consumers at their nearest locations Britannia follows intensive

distribution.

Channels are different to cover the mass markets. They are as follows

 For institutional trade such as in IRCTC, flights, and hotels etc the
distribution channel is direct.

Company
Depot

Hotels/flights
The direct marketing channel of Britannia is through tie ups with corporate
canteen, kiosk, railway station and coffee day express.

 Urban customers the distribution channel is

Company Depot

Wholesaler/Distributer

Retailer

Customers

 Rural Customers the distribution channel is

Company Depot

Agent Wholesalers

Wholesalers

Retailers

Customers
They use same channel to reach Kirana store and provision stores so that it will
be available every point.

The wholesaler gets the product for 80% of MRP and sells to retailer for 85% of
MRP. Finally retailer sells to customer at 1.5-2% of profit margin after
deducting all expenses.

Distributors are selected on the basis of space for stock, financial viability and
customer (retailer) database.
 Distribution Channel of ITC Biscuits (Sunfeast)
History
Type Public
Founded 1910
Area Served India
Key people Y C Deveshwar (Chairman)
Industry FMCG, Service
Products Biscuit, Cake, tobacco, Services
Revenue Rs. 45102 Crores

Distribution Network

Sunfeast has a manufacturing unit in Whitefield, Bangalore and products are

distributed to all over Bangalore from there through distributors. It uses FIFO
method to reduce wastage.

The distribution objectives of Sunfeast is as follows

 Fast and effective sales ordering processes

 Availability
 Flexibility
 Quick reaction

To achieve above said objectives ITC has 2 plans

 Beat plan for general stores

 Route plan for modern trades

Beat plan is where sales person visit a particular area on weekly basis and main
outlets are visited twice a week. Sales person will cover 30to 40 stores daily.

Route plan is where purchase orders is received and supply it on next day
through transportation.
Distribution Channel

They follow direct distribution to institutions such as hospitals, hotels and reach
customers through their own hotels

Manufacturer

Hotels/flights/customers

To reach rural customers it use 3 level channel

Manufacturer

Distributor

Wholesaler

Retailer

Customer
For urban customers ITC follows 2 level distribution channels where distributor
will supply to retailers and retailer will sell it to customers.

Manufacturer

Distributor

Retailer

Customer

Distributors are selected on following basis

 Intense Competition
 Strict compliance standards
 Space available

The factors which motivates the distributor are as follows

 Constant movement of biscuits from low sales area to high sales area.
 The company collects all the expired Biscuits from market and destroys
them.
 Retailers must return expired or damaged products within time before the
date of expire.
 ITC provides their retailers with racks, fod’s, (face on display), standees
and Glow shine board, etc to display the products.
 ITC has hired merchandiser to promote Biscuits
 The benefits received by the retailers depend upon their sales volume and
also the location of their shops
 Distributors are given cash or credit of 7 to 15 days.
 Distribution Channel of Parle Biscuits
History

Type Private
Founded 1928
Area Served India
Key people Mr. MOHANLAL DAYALJI (Founder)
Mr. KANTILAL CHAUHAN (CMD)
Industry Food and Beverage

Parle opened its manufacturing unit at Bangalore in 2001. First started

manufacturing KrackJack biscuit and after 2 years it started 2 more biscuits i.e.
Parle G, and Hide & Seek.

Distribution Network

Parle has manufacturing unit in Bangalore (K.M.Stone, Tumkur Road) but it is

closed its unit in Bangalore (Sept 29) because of labour strike and illegal
activities. Now Parle has only one manufacturing unit in Karnataka i.e. in Hubli.
It uses intensive distribution for its product available to customers.

The distribution objectives are as follows

 Increases coverage and sales

 Increases product availability
 Encourage retailers to compete aggressive.

Channel levels

Parle has a multi-channel marketing system since it uses more than two
marketing channels to reach all its customer segments.

They use direct distribution or 0 levels to those customers such as schools,

hotels, flights etc. they have tie with these institutions.
 Parle depots

Hotels/flights/customers

Parley uses one level distribution channel to all departmental stores.

Parle Depot

Retailer

Customer

Parley uses two level distribution channels to all Kirana and provisional stores.

Parle Depot

Wholesaler/carry
forward Agents

Retailer

Customer
Parley uses three level distribution channels for National and International
coverage. For e.g. Parle's international operations consist of serving markets in
the Middle East, Africa, South America, Sri Lanka, Australia and North
America.

Parle Depot

Agents

Distributors

Retailes

Customers

Distributors are selected on following basis

 Authentication is required by the regarding the identity of the channel

members, which includes the name and address, photograph of the
location.
 Proof of solvency which requires name and address of the channel
member’s bankers.
 Safety of the inventory, which means that the distributor/ dealer should
get the stock of the company insured.
 Inventory or the perishable goods kept by the distributor/ dealer should be
in good condition which means a detail of storage space and
Refrigeration facility is to be provided.
Motivation to channel members is as follows

 Margins offered by Parle are 8%. Now-a-days it has been raised to 8.5%.
 The demand for Parle product also motivates distributor to keep stock of
the product.
 Total Quality Management initiatives and workshops to channel members
to improve the network
 Schedules of the sales man for retailers to estimate the quantities of
various products needed.

Parle evaluates its distribution channel in 3 ways. They are

 Beat plan: This plan is generated for the various product categories. A
weekly schedule is prepared for various markets and the retailers the
turnover for each of the product is calculated for the wholesale dealers.
 Cumulative performance: The performance of the dealers is averaged
out over a period of three years where a comparison is made of the
present performance vis-à-vis the previous ones.
 Target versus achievement: The performance and the targets are
compared and therefore the gaps are identified which help in evaluating
the wholesalers and the distributors and planning for the next year as
well. This is done for each of the product category.
Learning Experience

In this study we learnt

 How distribution channel is designed

 How level of channel changes according to distribution objectives
 How companies select channel members
 How manufacturer motivates channel members to achieve the objective
and maximize the sale
 How company evaluate a channel