Britannia Industries Ltd.

• Incorporated in 1918 as Britannia Biscuits Co.

Ltd in Calcutta
• Jointly controlled by Nulsi Wadia group and
Groupe Danone of France, (holding 22% stake)
•Market leader in the organized biscuit and
bakery product market.
• Focus on value added products instead of low
margin products.
• Around 70 production facility across INDIA
• Rationalized its product portfolio from 35 to 25.
 Britannia Industries Ltd
•Ranked highly on the top 100 FMCG brands.
• Biscuits contribute to 80% of the total turnover.
• Leader in 4,000 crore biscuit market with 30% of
the total share.
• Other products include breads and cakes.
• Diversified in dairy products which includes
cheese, butter, dairy whitener etc.
 SALES DATA
Year Net Sales Growth
1999 7248
2000 8621.6 18.95%
2001 9783.7 13.48%
2002 11073 13.18%
2003 13985.12 26.30%
2004 12958.28 -7.34%

SALES

13985 12958
15000
11073
SALES (mn)

8622 9784
10000 7248

5000

0
1999 2000 2001 2002 2003 2004
YEAR
Market share of major players in
biscuits
Market share

GSKCH Others
5% 8%
Bakeman's
8%

Parle Britannia
20% 59%
 Distribution network

• An extensive retail distribution network

• Has 2500 distributors in 2200 towns

• Caters to around 4,00,000 retail outlets

Distribution Network

Factory

Depot

Distributors (Auth Wholesalers)

Sub distributor

Retailers
 List of Factories in North India for
Britannia Industries Limited

City State Number

Ghaziabad Uttar Pradesh 4
Faridabad Uttar Pradesh 2
Kundli Haryana 3
Delhi Delhi 1
Pathankot Punjab 1
Jammu Jammu and Kashmir 1
Kanpur Uttar Pradesh 1
 Location of C&FA depots for Britannia
Industries ltd in North India
State City
Delhi 2 depots
Harayana Kundli
Punjab/Chandigarh Chandigarh
Himachal Parvana
J&K Jammu
Punjab Jirahpur
Rajasthan Jaipur
West UP Ghaziabad
Cental UP Lucknow
East UP Kanpur
Uttaranchal Haldwani
 Margin to Retailers

Product Percentage(%)
   
TIGER 12
GOOD DAY 14
GOOD DAY (FAMILY) 18-25
MARIE GOLD 12
   
   
PARLE 10
   
Margin to distributor 4-5%
Policy of salesmanship for Britannia
Industries Limited
Regional Sales Manager (RSM)

Area Sales Manager

Sales officer

Territory sales In charge (TSI)

Pilot Sales Man (PSM)

A/W Salesman
BRANCH OFFICES
Branch Offices
 Organisational Structure of Branch
Office
General Manager

Sales (RSM) Factory Accounts Standards Prod Plan

Area Sales Mgr

Sales Officer

Terr Sales
Incharge
Pilot Salesman

A/ W Salesman
 Territory Management
• Territory divided by ASM & SO.

• Depends on capacity of TSI in tones

(volumes) & experience

• 1 PSM can be given to support the TSI

 Route Planning

• Depends on the required days with the

distributor’s and towns

• Beats within the town to retailers done

geographically
Breakup of Margin at different levels of
distribution network

Subdistributors Distributors Retailers

3% of Co. & 2% of
4.5% to 5% 12%-25%
Dist.
Breakup of margins to retailers by
different players

Good
day Bour
Tiger Parle Marie Fami bo
ly n
Pack

18 to
12% 10% 14% 12%
25%
 Backward Channels
Biscuits are perishable goods. Basically, the spoilage
can be attributed to the following two reasons:
– Transport defect
– Manufacturing defect
Agreement with distributors with respect
to Payment schedules

• The following two points must be borne in mind with

respect to the payment policies followed by
Britannia Industries Limited.

• The dispatch of goods is done in lieu of advance

paid on form of Demand Draft’s.

• The invoice is issued by the depots.

 Regional Sales Manager

S O (Admin) ASM S O (Independent)

S O (Field)
SELECTION, MOTIVATION
AND EVALUATION OF
CHANNEL MEMBERS
 Basis of selection of distributors

• Non-Competitor

• Infrastructure

• Existing distribution network

• Financial Muscle

• Reputation and word of mouth reference

 Motivation of distributors

• The distributors are motivated by providing them with

certain incentives. Contests are organized on a timely
basis to motivate the distributors.

• Just for example, a recent trip to Bangkok was

organized for the distributors and the TSI’s who were
best able to meet the target set by the company.

• More than these kinds of contests, the company

believes in making on schedule dispatch, cordial and
long term relationship with the distributors in order to
motivate them.
 Evaluation of Channel Partners

• - C&FA Agents
– The C&FA agents are evaluated based on the
following parameters:
– Regularity in dispatch.
– Proficiency in handling of goods: Number of
complaints, spoilage etc.
– Adhering to FIFO.
– Feedback from ASM’s and Sales officer on
attitude of C&FA agents.
• Distributors

– The evaluation of the distributors is done

based on past records and observation by
the TSI’s which is communicated to the
sales officer. The distributors are
evaluated once a year based on the
following factors.

– Attitude of the distributor, in terms of his

dealings with the TSI’s and the PSM’s.
– Willingness of the distributors to cater to
the needs of the retailers. Complaints from
retailers would work against the
distributors.

– Payment schedules: On time, hassle free

payment schedule by the distributors.

– Current sale by the distributor and the

market growth maintained.
 Conflict and cooperation among
channels
• Once the distributors receives the goods from the
Authorized transporter (Selected by the company),
the distributor gives a Good Received note (GR) with
a satisfactory slip to the transporter which in turn
has to be given to the depot by the authorized
transporter.

• At times, when the goods are not received in the

ideal condition by the distributors, the GR might
have a complain note attached to it.

• To get over this problem, many a times a settlement

is reached between the authorized transporter and
the distributor over the damaged goods.
 Undercutting

• There is a huge problem of undercutting in

BIL’s

• To take stock of the practice of undercutting

the company has adopted a method that
would identity the distributor whose stock is
being stocked by the retailer .
 Undercutting
• Every distributor has a mark in a particular
place on the product packet. If a different
mark is found in a distributor’s territory the
material can be traced to the original
distributor.
X Y Z
Market Logistics and Supply Chain
management

Cumulated forecast from the

Sales dept

Production planning dept

(Prodn plan)

Material Plan

Procurement plan
• The objective of maintaining the above supply chain
is to achieve the lowest investment for the purpose
of procurement.

• Forecasting is a very important tool for sales

organization.

• Forecasting in Britannia is done by the Territory

Sales In charge in consultation with the Sales Officer
and Area Sales Manager.

• Forecasting is done with the help of the secondary

data of the last month and also taking the secondary
sales data of the current month of last year.
• The peak season for biscuits is in the months of
JULY, AUGUST, SEPTEMBER, and OCTOBER. If the
festival of Diwali is in November then peak is till
October otherwise till mid- October. There is a drop
in sales of biscuits just after the Diwali because of
over spending by people during Diwali.

• The start of the activities is at the Sales department

where the requirement from the TSI is gathered
(Depot wise and SKU wise). The cumulative forecast
is then calculated and communicated to the
production planning department. The production
plan depends upon:
– Plant capacity
– Area wise requirement
• The material plan is both for the raw materials and
packaging material. The inventory for packaging is
maintained for a period of 30 days. BIL prefers to
buy flour from mills and not from traders for cost
optimization

• The material plan is communicated for the

preparation of the procurement plan. To avoid
monopoly, at least 2 suppliers are maintained by the
company.

• Britannia Industries Limited lays heavy emphasis on

Vendor Managed Inventory system when it comes to
managing flour.
• The following are the areas where raw materials are
procured from:
• FLOUR: Delhi (From Mills and not from the traders)
• Packaging: Mumbai and Hyderabad
• The following are the average period for which the
inventory is stored.
• Finished goods: 7 days
• Flour: 4 days (2 days at suppliers end and 2 days at
BIL’s end)
• Packaging material: 45 days (As lead time is 30
days).
 INTEGRATION THROUGH SAP

• The business process for BIL is integrated through SAP.

• Every movement of material is reflected in the software

and is updated in SAP in real time.

• All the depots are connected to the head quarter via

SAP to have a real time update about the status at the
depots.

• This integration of financial transaction makes the BIL’s

a very robust system whereby the value at any point is
known.
 Recommendation

• Britannia should go in for e-sales i.e. it should

develop a B2C business model through which it
could interact with the customers. This would help in
institutional selling.

• The company can go in for a split range distribution

system resulting in improvement of poorly serviced
and uncovered outlets.
 Details of split strategy

PUSH (Indulgence) PULL (Need

Pure Magic Tiger

Little Hearts Marie
Nutrichoice Milk Bikis
Cream Treat 50-50
Cakes Time pass
Nicetime Goodday
Vita Marie  
 Logic of the SPLIT

• Low penetration of Push varieties

• Higher gross margin

• Low resistance from AW

• Untapped market for indulgence

• The Company should be more aggressive in
marketing & sales with the influx of newer brands
e.g. ITC Foods.

• Newer and a standard way of removing undercutting

should be followed across the country.

• Visibility should be maintained in urban areas so as

to keep out competitors.

• Visibility should be increased in rural India which is

rather low at present
THANK YOU