EVALUATION & MAXIMIZATION OF

DISTRIBUTION NETWORK

PRESENTED TO, PRESENTED BY ,

MR. ANIL WANARSE PATIL,
INTERAVION
IIPMB.
INTRODUCTION

P&G is the world’s largest daily consumer products

company.
Employing 98000 people in 80 countries worldwide.
Largest and strongest portfolios of trusted, quality
brands, including Pampers, Tide, Pantene, Crest, Olay.
CORE STRENGTHS: Branding, Innovation and Scale.
7,500 Ph.D.s and researchers working in 20 technical
centers on four continents, and more than29,000
patented technologies for products.
CONT …
Ø PRODUCT LINE (SIX BUSINESS UNITS).
EVALUATION & STRATEGIES

INDIA CHINA
EXECUTIVE SUMMARY
P&G has long maintained a strong presence in
China,(1988) Through strategic distribution ,planning
and product positioning.
China, however, is an ever-changing market place,
especially since their recent WTO(2001) entry.
STRATEGIES OF THE PAST MAY NOT BE
THE BEST STRATEGIES FOR THE FUTURE.
( Truth for distribution).
How do you know the distribution method you are
currently using, is the best method?
RA Solutions offers the skill and knowledge to analyze
the market in China.
MARKET TRENDS AMONG DIFFERENT TIERS(CHINA)

Ø Massive Market- 1.2 billion mouths to feed, 2.4

billion hands to wash, 30 billion teeth to clean, and 1/3
of the world’s hair to wash.
Ø Vast Demographic Diversity of China.( 5 main group).
POPULATION DISTRIBUTION
INDIA
Ø Vast Demography.
Ø City after china for population.
INDIA & CHINA

Ch ina an d India,
increasingly ref err ed to as
the w orld's e merging
giants amon g emerging
ec ono mie s, repr esent th e
sec ond an d four th lar gest
ec ono mie s in th e w orld,
CONT…..

Ø 80 : 20 RULE-( Rural & Urban).

Ø 80 – Rural
Ø 20 – Urban.
Ø ( 80 % Business is gathered by 20% of Area).
Ø Tiers 1 & 2 :- 8% of population, which translating
only 20% of the country’s disposable income.
Ø Because- of that Local and regional manufacturers and
distributors therefore dominate the remaining 80% of
the country’s disposable income.
CHALLENGES FACED BY MARKET PLACE
CONDITIONS
Ø Many companies have tried to position themselves to
capitalize on this potential. However, many
multinationals have failed to due to the numerous
challenges accompanied by entering this emerging
market.-
Ø Knowledge about the market place.
Ø Understanding of the local market place.
Ø Little respect for intellectual property.( For Innovations)
Ø Counterfeit products.(P& G- said it is losing $150 million a
year to Chinese counterfeiters).
2. DISTRIBUTION SITUATION
Ø Earlier Poor infrastructure of china.
Ø Industry fragmentation.
Ø Probable consolidation of logistics providers.
Ø Market condition.
Ø Communication .
Ø Competitors strategies. (World class global technology).

Ø So it leads to Starts giving various logistics problems bec of

that:
Ø No single logistics provider commands more than 2 percent of
the market.
THE PROBLEM

Tier 1 and 2 - national brands, and account 20% of

China’s disposable income.
Tier 3, Tier 4 and rural markets:-regional and local
brands, account for the 90% of population and the
remaining 80% of disposable income., competition is
rising.
2001 sales revenue - 9 billion Yuan (US$1.09 billion)
1997 – Similar.
MANAGER – (Liang ) -declining market share " But
the total market is bigger than before."
THE BEST FIT DISTRIBUTION STRATEGIES MODEL

Ø It includes activity associated with movement

of goods.( Finish goods from manufacture to customer).
Ø FUNCTIONS – Transportation
- Warehousing
- Material Handling
- Inventory Control
- Location Analysis
- Packaging
- Data Processing
- Communication Network.
 SHIP MEN T
THE BEST FIT
DI STRIB UT IO N
STRA TEGIE S PRIMARY
MODE L HUB

R WATER AIR WAY TRAN SPORT ATI

OAD S ON

OWN OR HIRE ( 3PL )

VEHI CLES

MAIN UP PER TIER

HUB DC

RE GIONA L CU ST OM ER
FL OW CE NT RE
CENT RE LOWER TIE R
DC

RE VE RS E
LOGIS TICS
APPLICATION
SHIP ME N
T PRIMARY
HUB
JAL GAON, NA GP UR,
SOLAP UR, SANG P NASH I AURANG ABAD
LI, UNE K
SA TARA
MAIN
HUB
MUM BA
I

RET AIL E CUS TOME

RS RS

RE VE RS E
LOGIS TICS
CONCLUSION
Ø STRATEGIES OF THE PAST MAY NOT BE
THE BEST STRATEGIES FOR THE
FUTURE.
Ø Even as India is poised to compete with china in the
international business space, there are problems in the
country's distribution system & supply chain network –
Due to infrastructure woes. Lack of sophistication in
the market.
Ø So, companies should re-evaluate their distribution
system in order to stay ahead of the curve.
THANK YOU……
……