To Compare, Understand and Analyze the Complete Sales and Distribution Functioning of BINGO and FRITO-LAY

Shivesh Rai 162 Navin Kr. Ghosh 199

Saurabh Kumar 201

Saikat Chakraborty 238 Dipanjan Mitra 134
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Overview of snacks Industry

According

to the ministry of food processing Snacks food

industry

Rs 100 billion (in value) & Over 4,00,000 tones (in volume)

Almost

1,000 snack items and 300 types of savouries are sold across India. snacks are sold at least 25% higher than the unbranded products.
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Branded

Continued.
The

industry has been growing around 10% for the last three years. branded segment is growing around 25% per annum to stand at Rs 5,000-Rs 5,500 crores. reasons for this rise is due to Multiplex culture, snacking at home while watching TV, pubs and bars .

The

The

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Major Players in the Snack Industry

Snacks Industry
Frito lay Bingo Parle Haldirams

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Frito-Lay

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Frito-Lay
Frito-Lay

North America (FLNA) is a division of PepsiCo, Inc. which manufactures, markets and sells a variety of corn chips, potato chips and other snack foods. The company's current form is the result of a 1965 merger of Frito-Lay, Inc. and the Pepsi-Cola Company, which resulted in the formation of PepsiCo, Inc.

Products

sold under the Frito-Lay name are now recorded by two PepsiCo divisions: Frito-Lay North America (North American sales) and PepsiCo International (international sales).
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ITC-Bingo

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Bingo
The

launch of Bingo represents ITC Foods fifth major line of business after the highly successful staples, biscuits, ready-to-eat and confectionery products, Introduced in the market in March 2007. initial offerings from Bingo include an array of products in both Potato Chips & Finger Snacks segment. Aim to capture 25% market share Challenge to the monopoly of Frito Lays

The

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Market Share

10% 25% Haldiram Lays Others 65% 45%

12% 27%

Haldiram

Bingo
Lays

16%

Others

Market Share Before the Launch of BINGO

Market Share After the Launch of BINGO

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Why Company go for Distribution Channel

Product

availability where and when customers want

them.
To

get Feedback customer.

and other

information

from the

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Distribution network followed by Frito-lay and Bingo

Wholesalers

Manufacturing Unit

CFA

Distributor

Retailer

End User Or Customer

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Trades Used by Frito-lay for Distribution

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Total no. of Sales force that includes all frontline Peoples (SE, SO, RSA, PSR, Merchandiser, Loader etc)

Information Gathered from Frito-lay Company

Entire India Approximately 25000 North Region Approximately 2500-3000 Perform Well Achieve Target Product should reach to Market No Conflict etc.

Expectation of the Company from Channel members

Performance evaluation of the channel members by the company

Both way i.e. Quantitative and Qualitative But give more stress on Quantitative
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Bingo Distribution Network In Gurgaon

CFA in Gurgaon (G.S Roadlines, near Pasco)

In Gurgaon, there are 3 Distributors of Bingo. Shri Ram Sales Corporation near Sadar Bazar Banke Bihari near Pasco Automobiles. Multimode near Naman farms, Delhi Road
Total monthly turnover of Shri Ram Sales Corporation is around 15- 20 lakh.

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Frito-lay Distribution Network In Gurgaon

One CFA (Anchor Roadlines) exists in Gurgaon at Kaadipur

CFA gets 4% commission on each loaded truck dispatched to distributor

CFA has given 50 lakh bank guarantee to Company for doing business Bank guarantee is irrevocable It can be revoked only and when

Contract or Agreement is fulfilled (terminated)

Mutual consent of both the parties
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Bank guarantee is renewed every year

Operations of CFA in Frito-lay

No fund involvement for CFA as

Warehouse rent is being paid by the company

Only invested in trucks as conveyance is being paid by the company.

Total no. of Trucks 15 CFA only takes the order from the company authorized personnel i.e. Sales officer of the particular distributor Sales Officer gives the order through mail or phone CFA maintains the Stock Statement to inform company about when and which SKU is being supplied to particular Distributor.
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Continued

Near by manufacturing unit is in Punjab

Stock reaches to CFA by Companys Vehicle from manufacturing unit

Manufacturing Unit Primary Freight

CFA

Distributor Secondary Freight

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Frito-lay Distributor
In Distributor

Gurgaon, there are 3 Distributors Trade Following Address of Lays.

Emerging Channels Modern Trade Traditional Trade New Railway Road Sector-5, Gurgaon DLF Phase-1

Shiva Sales Agency Baba Enterprises Uppal Agencies

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Selection Procedure (Frito-lay and Bingo)

Distributor:

Availability of Fund (Financial Strength)

Business experience and knowledge of Local Markets

Goodwill in the market Availability of Space (Warehouses) and infrastructure Type and number of Warehouses Availability of sales force and Transportation Past Record and Current business

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Continued..
Salesmen (PSR and RSA) : Minimum high school pass out Must have Past experience Age limit Driving skill Logical and Analytical skill Accountant: Minimum Commerce graduate Past Experience Management skills Data Operator:Minimum of High School Computer Proficiency in Microsoft office, Tally, etc
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Information gathered from Shri Ram Sales Corporation (Bingo)

Owner Mr. Ashok Kumar Ahuja

Territory assigned Inner Gurgaon

Shri Ram Sales Corporation

10 Wholesalers
400 Retailers (Approx)
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Continued..

No. of ware house one (Private) Vehicles used for Supply Three wheelers (open) and four wheelers Margin 3.5% Monthly turnover 15-20 lakh Payment is made through RTGS/DD to Company Credit time period is 7 to 10 days given by distributor to retailers

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Beat Plan is used by the salesmen for covering the territory.

Salesmen Days Monday /Thursday Market Coverage Sector 14,17,Sukrali etc

Salesmen 1 (RSA 1)

Tuesday/Friday Wednesday/Saturd ay Monday /Thursday Tuesday/Friday

Sector 15, Jail road, Jharsa road etc

Rajiv Nagar, Mata road, Delhi road etc Ram Nagar, Arjun Nagar, Madanpuri etc New railway Road, Railway station ,New Colony etc. Old Railway station, Sector 4,7,9,10 , Khansa road, Model Road etc
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Salesmen 2 (RSA 2) Wednesday/Saturd ay

Continued..

PSR usually take orders in Phone or sometimes personally by visiting retailers Technology used

SIFFY software (centralized) used by distributor for uploading daily sales record. PSR takes the order using PDA(Personal Digital Assistance) .

Every alternate day truck of Company comes for delivering the stock
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Information gathered from Shiva Sales Agencies (Frito-lay)

Owner Mr. C.S.Kumar Territory Assigned (Emerging Channels) Entire Gurgaon Target is given in units i.e. 20 tones and 45 lakh(approx) monthly

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Cinema Halls

Railway & Metro Station

Corporate (TucShops)

Vendors

Shiva Sales Agency

Busstands

Educational Institution & Hospitals

Trolleys
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Continued..

No. of ware house Two (Private) Vehicles used for Supply Three wheelers (Five) and four wheelers(two) Margin 5.5% Monthly turnover 43 - 45 lakh Payment mode 30 blank Cheques is submitted to CFA Credit time period depends on customer to customer (Ranging from one week from 2 months)

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Beat Plan
Salesmen Coverage 30 Trolleys (Ranjeet Trolley, Mahesh Trolley, Tiwary Trolley, Hari Shankar Trolley, Satyam Trolley, Kailash Trolley, Chandershekher Trolley etc) 30 trolleys (Sanjay Trolley, Nishant Trolley, Rajesh Trolley, Mitlha Pan Trolley, Pahalwaan Trolley, Shiv Trolley, Satyanarayan Trolley etc) Hospitals, Vendors, Corporate, Educational Institutions, Cinema halls, Railway and metro Stations, Bus Stands etc Days Area Covered Signature tower road, Shankar Chowk, IFFCO Chowk to Sahara Mall Road, Shikendarpur Circle etc

RSA-1

Monday Saturday

RSA-2

Monday Saturday

Bristol Chowk, Jukaso Chowk, Nathupur Circle, Sector-55,56 golf course road etc

PSR-1

Depends on order of different parties

Huda city Centre, Palam Vihar, Cyber City, Udyog vihar, MG Road, Reliance Big Cinemas, Manesar DLF phase -1 ,2 etc
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Continued..

PSR usually takes the order using phone and also visit the store for punching the order using Palmtop.

Technology used SAMNA software (centralized) used by distributor for uploading daily sales record. PSR takes the order using PDA device.

Every alternate day truck of Company comes for the stock

delivering

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Hierarchy of Bingo
Regional Manager (Company Appointed)

Zonal Manager (Company Appointed)

ASM (Company Appointed) Sales Officer (Company Appointed) Supervisor (Distributer Appointed) Salesmen 4 (RSA 2)
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Salesmen 1 (PSR 1)

Salesmen 2 (PSR 2)

Salesmen 3 (RSA 1)

Hierarchy of Frito-lay
Regional Manager

(Company Appointed)
Zonal Manager (Company Appointed)

Area Sales Manager

(Company Appointed)

Sales Officer (Company Appointed) Salesmen 1 (PSR 1) Salesmen 3 (RSA 2)

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Salesmen 2 (RSA 1)

Target Setting for BINGO Distributor

How Company decides target for distributor?

By identifying the total no. and types of vendors in particular territory.

8 to 12% growth from last Year

Targets is given in units i.e. 5 tones monthly

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Target Setting for Frito-lay Distributor

Through Market Mapping By identifying the no. of stores of different category (i.e. A+, B+ )

Target is always given in 10 to 15 % more than the actual estimation

Past Performance Market Performance at present
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Continued

Market Capacity Market Potential Companies Strategy (Aggressive) Company production policy Productivity and Coverage Value Based

Target is set in two ways i.e.

I.

II.

Volume Based

Both ways are equally preferred

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Discounts & Offers of BINGO

Distributors

In order to increase the sales company gives several and regular basis offers and schemes. Retailer
Rupees 0-500 501-999 1000-1499 1500-1999 2000 and above Discount 2% 3% 4% 5% 6%

Free Samples during the launch of new flavor

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Discounts & Offers of Frito-lay

Distributor

If target is achieved then Foreign trip is offered

Retailers
SKUS Rs 5 Pack Rs 10 Pack Discount 6% 5%

Rs 15 Pack Rs. 20 Pack

Rs. 50 Pack (for selected channels )

0% 4%
4%

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Incentives and Conveyance for BINGO

For Supervisor and Salesmen

If achieved target more than assigned than incentives is given by distributor.

1 mopped and 1 cycle is given to PSR by Company

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Incentives and Conveyance for Frito-lay

Shiva Sales Agency is top in entire India in terms of number of bills cut by PSR

Company has given PSR a pair of Reebok Shoe worth Rs. 3000
Distributor is given with expense for foreign trip

1 Bike (Pulsar) is given to PSR by Distributor and Conveyance of Rs.1000 is being given by the Company.

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Reimbursement by Company (BINGO)

For Air leak and Expired packs but not for damage done by Rats Salary of Supervisor i.e. Rs. 9500 Discounts given by the distributor to retailers

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Reimbursement by Company (Frito-lay)

Salary of PSR (Rs 8000) and RSA (Rs 11000)

Reimbursed by supplying the stock equivalent to salaries at the end of the month.

Damages and Expiry stock

Reimbursed by supplying the equivalent unit of Stock at the end of the month

Discount given to the retailer

Reimbursed by crediting the amount in the account of distributor at the end of the month
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Satisfaction level of Distributor for different parameter

Satisfaction Level of Bingo Distributor

Distributor are Highly Satisfied with quantity of stock received as per order.

Distributors are Satisfied with the time taken by the Company for Delivery.

Distributor are Satisfied with the procedure of Order taking. Schemes and offers available to Distributor as per current company policy, hence Satisfied.

Distributor are satisfied with the Margins received.

Distributor is satisfied with the claims (Damages, Salary) reimbursement procedures of the company.
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 Satisfaction level of Retailer for different

Satisfaction Level of Bingo Retailers

parameter

(1 - Least satisfied, 2- Satisfied, 3 Highly Satisfied)

Most of the retailers are Satisfied with the time taken by the Distributor for Delivery. Retailers are Satisfied with quantity of Stock received as per order. Retailers are Satisfied with the procedure of Order taking.
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Continued..

Schemes and offers available to retailers as per current company policy, hence Satisfied. Retailers are satisfied with the Margins received. Satisfied with the credit policy availing by the distributor. Satisfied with the merchandising tools given by their distributor.
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Satisfaction Level of Frito-lay Distributor

Distributor is Satisfied with the time taken by their Company for Delivery.

Distributor are Highly Satisfied with quantity of stock received as per order.
Distributor are Highly Satisfied with the procedure of Order handling. Schemes and offers available to Distributor as per current company policy, hence Highly Satisfied. Distributor are satisfied with the Margins received.

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Satisfaction Level of Frito-lay Retailers

Satisfaction level of Retailer for different parameter

(1 - Least satisfied, 2- Satisfied, 3 Highly Satisfied) Most of the retailers are Satisfied with the time taken by their Distributor for Delivery. Retailers are Highly Satisfied with quantity of stocks received as per order. Retailers are Highly Satisfied with the procedure of Order taking.
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Continued

Schemes and offers available to retailers as per current company policy, hence Satisfied. Retailers are satisfied with the Margins received. Satisfied with the credit policy availing by the distributor Satisfied with the merchandising tools given by their distributor.

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