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A STUDY ON DISTRIBUTION CHANNEL

IN MAHINDRA & MAHINDRA LIMITED


AUTOMOTIVE SECTOR AT ZAHEERABAD, MEDAK DIST.

Dissertation report submitted to the OSMANIA UNIVERSITY. Hyderabad in partial


Fulfillment for the award of

MASTER OF BUSINESS ADMINISTRATION

Submitted By

B.RACHAIAH

H.T.No: - 91-05-105
DECLARATION

I declare that this dissertation report entitled “DISTRIBUTION CHANNEL”


in Mahindra & Mahindra Limited (Automotive Sector), Zaheerabad submitted to
MRKT Department, college of HOLY MOTHER P.G COLLEGE(Affliated to
Osmania University)Hyderabad is Originally done by me. The findings of the report are
based on the information collected by me during this study.

Date:

Place:

(
B.RACHAIAH)
ACKNOWLEDGEMENT

The completion of this study makes me to recall with gratitude several persons
who have extended their co-operation in one way or the other in this venture.

I am very much thankful to MR.SANJAY LAL, principal of HOLYMOTHER


P.G College, Osmania University, Hyderabad.

I express my sincere thanks to our marketing lecturer MR.NAGA RAJU, under


whose supervision and guidance this work was carried out.

I am indebted to Mr.K.P.N Rao, DGM – HR & IR. Mahindra & Mahindra


Limited, Zaheerabad, for allowing me to undertake my In-plant training (project work)
in their esteemed organization. First and foremost I acknowledge my deep sense of
gratitude to Mr.G.S. Naidu, Senior Manager – Sales Support for his valuable
guidance and all other members of the organization for having given me their untiring
timely support and helped me to successfully complete my project report.

.
(B.RACHAIAH)
DISTRIBUTION CHANNEL
CONTENTS

CHAPTER – I Page No

1. INTRODUCTION 1-2
1.1 . Objectives of Study
1.2 . Scope of Study

CHAPTER – II 3-5

2. UNIT PROFILE

CHAPTER – III 6 - 21

3. COMPANY PROFILE

STRUCTURE OF MARKETING DEPARTMENT 22

CHAPTER – IV 23 - 25

4. RESEARCH METHODOLOGY

CHAPTER – V 26 - 41

5. DISTRIBUTION THEORY

CHAPTER – VI 42 - 48

6. DATA ANALYSIS

CHAPTER – VII 49 - 50

7. CONCLUSION & SUGGESTIONS

APPENDIX 51 - 54

• QUESTIONNAIRE
• BIBLIOGRAPHY
CHAPTER – I

INTRODUCTION
DISTRIBUTION CHANNEL

1.1.OBJECTIVES

The survey is conducted in favor of MAHINDRA & MAHINDRA Ltd.


It is the one of the top automotive sector.

The survey was done with the following objectives.


• To deliver the goods [vehicles] in time.
• To study the most effective channel of distribution of vehicles.
• To give suggestion to develop companies performance in the marketing field.
• To find out the motivation factors which influence the buying behavior of the
customer.
• To get recognition in international level.
• To establish and maintain laboratories for purpose of research and development.

M.B.A, Osmania University 1


DISTRIBUTION CHANNEL
1.2.SCOPE OF THE STUDY

The Study was conducted to find out the problems faced by the dealers and to
know the attitude of dealers as well as suggestion from the dealers on the performance of
MAHINDRA & MAHINDRA Ltd. The present study is conducted in the Twin Cities
(Hyd & Sec), Zaheerabad and Gulbarga. The sample size was selected to be 5 with a
view that the time is a major constraint. The study is conducted in the following areas in
the following cities.

 VARIETY AUTOMOTIVES
Nagole-Uppal Ring Road, Hyderabad – 39.

 BHAVANI MOTORS
Mumbai Highway (NH-9),
Beside Indian Oil Pump, Miyapur, Hyderabad – 500 049.

 AUTOMOTIVE MANUFACTURE LTD


8571, RP road,
Secendarabad – 500003.

 PAVITH AUTOMOBILE
Near R.T.O. Check Post. X Road.
ZAHEERABAD – 502 220.

 AVINISH & COMPANY


Nehru Gunj, Gulbarga.

M.B.A, Osmania University 2


CHAPTER -II

UNIT PROFILE
DISTRIBUTION CHANNEL

UNIT PROFILE

• Unit Scenario:

The MAHINDRA & MAHINDRA Company is located at 108 Kilometers From the

State capital of Hederabad in AP at Zaheerabad. It has an area of 350 hectors land including

all facilities.

In July 1983 Hyderabad Allwyn Limited (HAL), a State Public Sector Undertaking of

A.P. Government entered into a technical and financial assistance Agreement with Nissan

Motor Company (NMC) Limited of Japan for manufacturingOf new generation of Light

Commercial Vehicles (LCVs) in India. The scope of Transfer stocks of imported kits procured

at favorable rates during the year 1962 Vehicles were sold. Although company achieved a

60% localization in its products, yet the raising value of yen continued to adversely effect its

financial performance.

At the same time the State Government was facing a severe financial crisis and both

the Financial Corporation and Industrial Development Corporation were facing massive cuts

in government findings. Therefore, in order to cover the closing down of units, the State

Government indifference to the State Industrial Policy decided to sell Allwyn Nissan Ltd.

(A N L) to capable of business houses, in this case preferably and established automobile


company.

M.B.A, Osmania University. 3


DISTRIBUTION CHANNEL

After that an intensive negotiation MAHINDRA & MAHINDRA LTD., the Country’s

leading manufacturing of Jeeps and Tractors entered into a Memorandum of Understanding

with HAL on 10th June 1988 and agreed to acquire 26% of share capital in ANL and there after

take control of the company’s management with this transfer of shares and management. The

Joint venture between HAL & NISSAN Motor Company was terminated and a fresh joint

venture Agreement was entered in to 7th November 1988 by M & M with NMC.

The name of the company was changed to MAHINDRA ALLWYN NISSAN LTD.

M & M finally took entire control of the operation of the Plant on 1992.

 Product Details:

Mahindra & Mahindra has modern facility at Zaheerabad, Near Hyderabad where

some of the important products are

• Mahindra FJ 470 DS4 High Roof Minibus.


• Mahindra Cabking 576
• Mahindra DI 3200
• Mahindra FJ Minibus
• Mahindra Tourister
• Mahindra Cab king 576 DI
M.B.A, Osmania University 4
DISTRIBUTION CHANNEL

• Mahindra Champion
• Mahindra Load King DI
• Mahindra Load King Super
• Mahindra Marshall 2000 Delux
• Mahindra Marshall DX Royale

 Future Focus:

Mahindra & Mahindra Company was to gain number one position in automotive

sector.
M.B.A, Osmania University 5

CHAPTER - III

COMPANY PROFILE
DISTRIBUTION CHANNEL

COMPANY PROFILE

 General Profile:

The Automobile Sector is one of the fastest growing manufacturing sectors in

India. In the 1990’s the industry witnessed an average growth rate of above 20% .

Indian Automobile Industry is characterizzzed by a very high 21% (75%) of two

wheeler production, ranking second only to Taiwan. India is also the largest

Manufacturer of Tracotrs. The world leaders in the sector are evincing keen interest in

establishing Manufacturing facilities for manufacturing and assembling components.

A politically stable and vibrant state, Andhara Pradesh is centrally located with the

support of Seaports, International Airports, assured and reliable power supply,

abundant water, broad base of auto component manufacturers, highly trained, skilled

and disciplined manpower and is therefore, the preferred location for Automobile

industries.

M/s. Ford, Mercedes, Benz, Daewoo, Fiat, Honda, Hyundai, Suzuki,

Mitsubishi, Opal, Peugeot, Proton, Skoda, Toyota etc., have already set up their

units in India. In the last two years, several joint ventures and collaborations have

been set up with investments to the tune of US $ 500 Million. About 10 percent of the

production in value terms are exported all over the world.


M.B.A, Osmania University 6
DISTRIBUTION CHANNEL

Company Product Details:

 Mahindra Scorpio

Bolero Range:

 Mahindra Bolero
 Mahindra Bolero Caper

Pick-up Range:

 Mahindra Utility
 Mahindra pick-up
 Mahindra NC 640 DP
 Mahindra pick-up CBC

Maxx Range:

 Mahindra Maxx
 Mahindra Maxx LX

CL Range:

 Mahindra MM 540/550 DP
 Mahindra MM 540/550 XDB
 Mahindra MM 540 DP
 Mahindra MM ISZ-Petrol Soft-Top.

Commander Range:

 Mahindra Commander 650 DI


 Mahindra Commader 750 ST

Hard Top Range:

 Mahindra Economy
 Mahindra Marshal
 Mahindra MM775 XDB
 Mahindra Three and Five Door Hard Top
 Mahindra Marshal 2000 Delux
 Mahindra marshal DX Royale

M.B.A, Osmania University 7


DISTIBUTION CHANNEL

Alternative Fuel Range:

 Mahindra CNG – Three Door


 Mahindra Bijlee
 Mahindra FJ CNG Mini Bus

Army Range:

 Mahindra Rakshak (Bullet – Proof Vehicle)


 Mahindra MM550 XD

Three Wheeler Range:

 Mahindra Champion DX
 Mahindra Champion

Business:

The main business of Mahindra & Mahindra Limited is to manufacture the utility

Vehicles and Light Commercial Vehicles and Tractor to market these Vehicles for customers.

The Mahindra Group is divided into 6 sectors and these are the strategic core business units.

♦ Automotive Sector
♦ Farm Equipment Sector
♦ Automotive Component Sector
♦ Trade and Finance Sector
♦ Infrastructure Development Sector
♦ Telecom Software Exports Sector

Location:
Automotive Sector:

It is nothing but the manufaturing and marketing of Light Commercial Vehicles and

Utility Vehicles. The Plants are located at the following places.


M.B.A, Osmania University 8
DISTRIBUTION CHANNEL

♦ Kandivili Plant is located at Mumbai.


♦ Nasik Plat is located in the State of Maharashtra,
♦ Ligature Plant is located in the State of Maharastra.
♦ Zaheerabad Plant is located at Zaheerabad, Andhra Pradesh.

 Mission:

At M &M, will design, manufacture and market Internationally Competitive, Automotive

Vehicles farm equipment and products.

Our customer’s needs – especially the requirement of safety, reliability value for

money and farm productivity will be our primary concern. In our Business operations are will

– ensure sustained profitability and growth we will create a dynamic collaborative in which

our people will feel challenged and cared or and build an organization that is re-silient flexible

and productive.

As an organization we will be recognized for high Ethical Standards and

responsiveness to the social environment we will continue to be.

• Objectives:

The main objective of Mahindra is that they want to maintain none to second

position. Best top company by maintaining talented people.

Customer Focussed:

People Culture:
• By Encouraging team work
• By providing a healthy and good work environment
• By Sake practices
• By appraisal and Reward System.
M.B.A, Osmania University 9
DISTRIVBUTION CHANNEL

Community Culture:

• By setting high ethical standards.


• By responsible to environmental needs.
• By to community welfare.

Time Discipline:

• By Meeting set targets


• By delivering on time
• By ensuring service on time
• By quick response to needs

Quality Discipline:

• By positive reputation for quality


• By following international quality assurance, systems and procedures.
• By delivering right time and every time.

Cost Discipline:

• By elimination of non-value added work.


• Through continues improvement.
• By productive use of assets.

 History:

Mr. J.C. Mahindra and Mr. K.C. Mahindra established the company in 1945 and

named as “ Mahindra & Mahindra Limited ”.

Mr. Mohammed name was included in the name of the company as Recognition of his

Enormours help for the establishment of the company. After the divergence of India and e

Pakistan Mr. Mohammed has become the First Finance Minister of Pakistan and the company

was incorporated in 1945.

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DISTRIBUTION CHANNEL

The company renamed as “ Mahindra & Mahindra Limited “in 13 Jan, 1948. Upto

Jan 14, 1955 it was continued as private company which covered under the Companies Act,

1923. It has become public limited company on 15th Jan 1955 and the shares were listed in

BSE in 1956. It was initially formed to manufacture the utility vehicles to Indian People and it

was initially assembling and importing “ Willy Over Land Corporation “.

The Mahindra & Mahindra Limited has started manufacture of Utility Vehicles firstly

the “ Willis Jeep “ in 1954 and later in 1965 it has concentrated on manufacturing the

Light Commercial Vehicles by producing “Successor”. New Part of Diamler Chrysler

corporation. In year 1963 the International Tractor Company.

In 1969 Export of Vehicles started and the company started to export

the spare part to Yugoslavia. Exports also made to Ceylon, Singapore, Philippines and

Indonesia. In 1987 M & M 540 D P Metal Body Wagonette introduced. In 1993

Mahindra launched Armada and LCV Vehicles were shifted from Nasik to

Zaheerabad. In 1995 Cab King D I 3150 were introduced and classic vehicles were

launched. In 1997 Voyager was launched at Zaheerabad Plant. In 1998 complete

localization of Cab King Model at Zaheerabad Plant.


M.B.A, Osmania University 11
DISTRIBUTION CHANNEL

Unique Achievements:

1945:
On October 2, Mahindra & Mohammed formed.

1948:
The Company was renamed Mahindra & Mahindra Limited (M & M) Steel

Trading business was started in association with Suppliers in U K Business

connections in USA through Mahindra Wallace.

1950:
The first business with Mitsubishi Corporation (for 5000 Tons) for Wagon

building plates for supply from Yawata Iron & Steel.

1954:
Technical & Financial Collaboration with Willys Overland Corporatin.
1956:
Shares listed on the Bombay Stock Exchage Dr. Beek & Co. Formed a JV with

Dr. Beck & Co., Germany.

1958:
Machine Tools Division started.
1960:
Mahindra Sintered Products Ltd. Formed – a JV with the GKN’s Group, UK.
1963:
Iinternational Tractor Co. of India (ITCI) formed – a JV with International

Harvester Co., USA

1965:
Vickers sperry of India Ltd., a JV with Sperry Rand Corporation, USA Roplas

(India) a collaboration with Rubery Owen, UK Manufacture of Light Commercial

Vehicles commenced.
M.B.A, Osmania University 12
DISTRIBUTION CHANNEL

1970:
Mahindra Engineering & Chemical Products Ltd. (MECP) commenced

operation.

1971:

International Harvester Collaboration ended.

1977:

ITCI merges with M & M, to become its Tractor Division.

1979:

License from Automobile Peugeot, France for manufacture of XDP Engines.

1982:

License from KIA for manufacture of 4 Speed Transimissions “Mahindra”

Brand of Tractors born Siro Plast formed.

1983:

M & M becomes market leader in Indian Tractor Market.

1984:

Mahindra Hellenic Auto Industries S.A. formed – J V in Greece to assemble

and market utility vehicles in Europe.

M.B.A, Osmania University 13


DISTRIBUTION CHANNEL

1986:

Mahindra British Telecom (M B T) formed – a JV with British

Telecommunications plc (BT), UK.

1987:

Acquired international instruments Ltd.

1989:

Automotive Pressing Unit acquired from GKW.

1992:

Triton over Water Transport Agency Ltd. Formed.

1993:

Mahindra Steel Service Centre limited formed in association with Mitsubishi

Corporation and Nissho Iwai Corporation of Japan. Mahindra Acres Consulting

Engineers Ltd. (MACE) formed.

1994:

Mahindra Realty & Infrastructure Developers Limited. (MRIDL) formed

Mahindra USA Inc., formed, for distribution of Tractors in the USA EAC Graphics

(India) Ltd., formed in collaboration with The East Asiatc Company Ltd. Mahindra

Sona Ltd., Mahindra Nissan Allwyn Limited merged with the Company.

M.B.A, Osmania University 14

DISTRIBUTION CHANNEL
1995:

Mahindra Holding & Finance Ltd. ( M H F 1 ) becomes a subsidiary of M & M

to carry out business as an investment company technical collaboration with

Mitsubishi / Samcor to manufacture L300.

1999:

Launch of ‘Bijlee’ a battery – operated, 3 – Wheeler environmenta friendly

vehicle. The largest online used vehicle web site in India launched by Mahindra

Network Services. The business of Inter Trade Division and Mahindra Exports Ltd.m

Combined and renamed Mahindra Inter Trade Ltd. The Company acquired major stake

in Gujarat Tracors. Mahindra & Mahindra Financial Services Ltd. Becomes a

subsidiary of M & M.

2000:

The Company unveils new logo.

Mahindra Auto Specialties Ltd., a new 100% subsidiary is formed.

M & M sets up its first satellite tractor plant at Rudrapur.

The Company launches New Age Tractor, the Mahindra Arjun 605 DI.

The Company launches Bolero GLZ a utility Vehicle a response to needs of urban
Consumer.
M.B.A, Osmania University 15

DISTRIBUTION CHANNEL

2001:
A 3 – Wheeler diesel vehicle “ Champion “ is launched. The Company

Launches Mahindra MaXX a MUV positioned with the caption Maximum Space,

Maximum Comfort. M & M ties up with Renault for petrol engines. M& M

established a separate division to provide Defence Solutions.

2002:

M & M launch SCORPIO – A sprots utility vehicles.

2003:
Scorpio – Recipient of prestigious Awards – “car of he the year” award from

Business Standard Motoring, “Best SUV of the year” and “Best car of the Year”

Award from BBC on Wheels, “Car of the Year” Award from CNBC Auto Car.

M & M launch the “Invader” – a sporty open top vehicle.

M & M open a second tractor assembly plant USA.

M & M launches MaXX Pik Up.

M & M Tractors awarded the prestigious deming Prize for excellence in Quality.

The first tractor company in the world to receive the award.

M & M launches India’s first Turbo Tractor, Scorpio wins National Award for R & D.

M & M venture into Industrial Engine business.


M.B.A, Osmania University 16
DISTRIBUTION CHANNEL

 Functional Profile:

Organization Chart:

The Mahindra & Mahindra Limited is headed by General Manager (Operations)

Who is assisted by Deputy General Manager from Production Department, Quality

Assurance, Finance Department, PHRD Department, Supply Module Department, and

Ancillary Administration Department. The General Manager (operation) is also assisted

by Senior Managers from Service Department, Administrative Department, and

Vehicle Engineering Department and also assisted by manager from Product Control

Department. The Senior Manager Production and Senior Manager Maintenance assist

the Deputy General Manager Quality Assurance is assisted Senior Manager Quality

assurance and Senior Manager Pre Delivery Inspection.

The Deputy General Manager Finance Department is assisted by the senior

Manager Accounts, Senior Manager Finance and Senior Manager of Excise Cell. The

concerned Senior Manager assists the Deputy Manager of Ancillary Development

Department.

Departmentalization:

In “Mahindra & Mahindra Limited” the departmentalization is divided into:

1. Direct Departments.

2. Indirect Departments.
M.B.A, Osmania University 17
DISTRIBUTION CHANNEL

 Direct Departments:

The Department, which directly involves in the production process, comes under this

Category. The Core Departments are as follows:

♦ Production Planning and Control Department


♦ Vehicle Engineering Department (VED)
♦ Paint Shop.

Production Planning and Control Department:

The Core Function of this Department is target setting. This Department seeks

information from Mumbai regarding the requirements of vehicles depending on the targets for

which the company has to strive to achieve. To achieve the targets Mahindra & Mahindra at

ZHB get engines from Igathpuri Plant and spare parts from other plants.

The Chief Functions is: -

• Realize plans for model of the Vehicle, based on marketing.


• Control on the moving models.
• Total control and coordination with other departments.
• Coming up with contingency plans, in case of any problems.

Vehicles Engineering Department:

The Main objective of the Department is customer satisfaction Research and a design

activity of the organization depending on customer wants. Taking consideration as privations

and with of customer this Department designs required vehicles with the help of Corporate

R & D.

• Looks after the new products units it goes into production.


• Responsible for bringing out manual for different vehicles.
• Testing the vehicles for ascertaining its functioning.]
• Incharge / handles the technical library.
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DISTRIBUTION CHANNEL

Paint Shop:

Paint shop is used to give a high technology paint to the body of the vehicles.

 Indirect Departments:

The Departments, which are not directly, involve in production process, and give more

assistance comes under this category. The Core Departments are as follows:

• Administrative Department.
• Finance Department.
• Personnel and HRD Department.
• Service Center
• Material Control Department of Ancillary Development Department.
• Industrial Engineering Department.
• Maintenance Stores Department.

Administrative Department:

Administrative Department is one of the important, which looks after various aspects

like house keeping, provision of transport facilities, maintenance of security, safety aspects and

maintenance exchanges.

Finance Department:

The Department looks after allocation of funds, costing and accounting of the financial

resources of the organization. A Part from these functions the Finance Department looks after

the Provident Fund Trust as the Treasurer, Capital Purchase, Taxation and final Accounts.

Personnel and HRD Department:

The Department looks after HRD activities they are

• Training for apprentices


• Internal and external training and development
M.B.A, Osmania University 19
DISTRIBUTION CHANNLE

• Induction programs
• House magazines and Mahindra news
• Suggestions schemes
• Sports and Games
• Quality circles
• Increment Policy
• Staff performance appraisal

The above HRD activities are conducted by Personnel Department. The quality circles

program conducted with the assistance of Production Department and Industrial Engineer. This

organization greatly concentrates on training aspects.

Service Center:

This center comes under the MARKETING Department it provides services to

customers to field officers and dealers. The various functions of this Department are as under:

• Provides service training to dealers and field officers.


• Feed back to various departments about the products.
• Warranty processing.
• Makes service trails.
• Technical sale and collaboration with foreign companies.
• Sales of manuals and operators instructions.

Material Control Department of Ancillary Development Department:

The ADD and MCD Departments are linked to one another the control focus of these

Department is too. Indigenous localizes the components of various parts used in the vehicles.
M.B.A, Osmania University 20
DISTRIBUTION CHANNLE

Industrial Engineering Department:

The IED is an important Department, which totally coordinates with all the other

Departments it is responsible of the manpower planning of each section and also arranges, the

tools needed for production of the vehicles in this Department they will self the production

targets and inform to all the Departments. They also draw the process sheets, charges from time

to time. The implement of TACT and MOST will be looked after through this Department.

Maintenance Stores Department:

In M & M Maintenance Department which take care of the maintenance of the various

machinery equipment assets and instruments the Department does the following functions.

• Up Keeping of the plant and machinery for high productivity.


• Spare part planning, stocking, inventory control of the maintenance stores.
• Break down maintenance.
• Periodical inspection of factory equipment’s and installations.
M.B.A, Osmania University 21

STRUCTURE OF MARKET

DEPARTMENT
STRUCTURE OF MARKETING Dept (SALES SUPPORT)
22

CHAPTER – IV

RESEARCH METHODOLOGY
DISTRIBUTION CHANNEL

RESEARCH METHODOLOHGY

DATA COLLECTION METHODS:

The information which has collected through the processes of

• Personal Interview
• Questionnaire
• Previous records (like Dealers data record of the company).

SOURCES OF DATA:
The data which was collected for the study is of the following two types,

those are

a. Primary Data:

The primary data is collected through survey method by administering a

Structured questionnaire.

b. Secondary data:

The secondary data is collected from the printed material provided by

the SPL and from journals and magazines.

SAMPLING METHOD:

Sample is picked from the total dealers by adoption Random Sampling Method.
M.B.A, Osmania University 23

DISTRIBUTION CHANNEL

SAMPLE SIZE:

The sample size is selected to 5. The total 5 Dealers were covered in some

selected cities.

DURATION OF STUDY:

The study was carried on for 45 days i.e., from April 25 to June 8, 2005

AREA OF STUDY:

The study is conducted in

 VARIETY AUTOMOTIVES
Nagole-Uppal Ring Road, Hyderabad – 39.

 BHAVANI MOTORS
Mumbai Highway (NH-9),
Beside Indian Oil Pump, Miyapur, Hyderabad – 500 049.

 AUTOMOTIVESECTOR
8571, R.P.Road, Secenderabad – 500 003.

 PAVITH AUTOMOBILE
Near R.T.O. Check Post. X Road.
ZAHEERABAD – 502 220.

 AVINISH & COMPANY


Nehru Gunj, Gulbarga.
M.B.A, Osmania University 24

DISTIVBUTION CHANNEL

LIMITATIONS:
It would be inappropriate to say that the survey conducted is perfect and

accurate. Infact like other surveys, it also faced some limitation due to which the

outcome may have certain deviations. These limitations were:

1. The area, which is the researcher, covered for the particular research will not be

suitable for entire marketing area of the product.

2. The conclusions drawn are subjected to the information provided by the various

dealers contacted.

3. The Dealers are very busy with business activities. Due to the limitation Dealers

may not be able to provide correct information.

4. The researcher cannot specify the data which has collected is purely right,

because some of the Dealers may not have given the actual information.

Inspire of all above limitations, a sincere attempt is made in this to assess the

significance of distribution of the Mahindra & Mahindra vehicles.


M.B.A, Osmania University 25
`

CHAPTER – V

DISTRIBUTION CHANNEL
DISTRIBUTION CHANNEL

A THEORATICAL APPROACH

DISTRIBUTION CHANNEL: (Def)

A set of interdependent organizations in the process of making a product or

service available for use or consumption by the consumer or business users.

The distribution channel transport & store goods & services from producers to

consumers.

Distribution channels can be described by the number of channel levels involved.

CHANNEL LEVEL:

A layer of intermediaries that performs some work in bringing the product and its

ownership closer to the final buyer is Channel level.

Because the producer and the final consumer both perform some work, they are

part of every channel.

We use the number of intermediary levels to indicate the length of a channel.

There are two types of marketing channel.

a). Direct Marketing channel

b). Indirect Marketing channel


M.B.A, Osmania University 26

DISTRIBUTION CHANNEL

a). A market channel that has intermediary levels is called “Direct marketing

channel”.

b). A market channel containing one or more intermediary level.

Below figure shows several consumer distribution channels of different lengths

CHANNEL 1.

Channel 1 Called a direct marketing channel, has no intermediary levels. It

consists of a company selling directly to consumers.

Ex: - AMVAY---etc; sell their product door to door or through home and office sales

parties. The remaining channels in figure are indirect market channels.

CHANNEL 2.

Channel 2 contains one intermediary level. In consumer market this level is

typically a retailer.

Ex: - The makers of televisions, cameras and many other products sell their goods

directly to large retailers. Such “Wal-Mart” and “Sears” which then sell the goods to final

consumers.
M.B.A, Osmania University 27

DISTRIBUTION CHANNLE

CHANNEL 3.

Channel 3 contains two intermediary levels, a wholesaler and a retailer. Small

manufacturer of food drugs, hard ware and other products often uses this channel.

CHANNEL 4.

Channel 4 contains three intermediary levels. In the meat packing industry.

For example, Jobbers buy form wholesalers and sell to smaller retailers who generally are

not served by larger wholesalers.

Figure 1:

M.B.A, Osmania University 28


DISTRIBUTION CHANNEL

A. CUSTOMER MARKETING CHANNEL

Figure 2: -

Consumer and business marketing channel

B. Business Marketing Channel

In the past many companies used a single channel to sell to a single market or

market segment.

To day with the proliferation of customer segments and channel possibilities,

more and more companies have adopted “Multi channel” distribution system often called

“Hybrid marketing channel”.

Multi Channel: (Def)


A distribution system in which a single firm sets up two or more marketing

channels to reach one or more customer segments is called “Multi Channel” distribution

system.

M.B.A, Osmania University 29

DISTRIBUTION CHANNEL

Functions and Distribution [Marketing] Channels perform: -

This channel performs many key functions. Some help complete transactions by

gathering and distributing information needed for planning and aiding exchange by

developing and spreading persuasive communication about an offer

by performing contact work  finding and communicating with prospective

buyers;

by matching  shaping and fitting the offer to the buyer’s needs and by entering

in to negotiation to reach and agreement on price and other terms of the offer so that

ownership can be transferred.

Other functions help to fulfill the completed transaction by offering “Physical

Distribution” transporting and storing goods.

Financing  acquiring and using funds to cover the costs of the channel work.

Risk taking  assuming the risks of carrying out the channel work.

 DEALERS PERCEPTION: -

Dealer Selection:
Marketing take great care in the selection and appointment of dealers granting

franchise to under serving dealers will be detrimental to the business interests or the firm.

M.B.A, Osmania University 30

DISTRIBUTION CHANNEL

The firm should take for a number of essential qualities and qualification in their

prospective dealer. Some of these qualifications are irrespective of products lines and

such alitiesare financial strength, credit worthiness, salesmanship, experience and reties,

business capacity; etc. in practice, the firm may some times find it difficult to locate

dealers possessing all the desired qualifications and attributes. Out of the available

candidates dealers should be selected care fully. In the case of specialty.

Products, selections of dealers require elaborate efforts.

Qualities to be looked for while selecting dealers:

• Credit worthiness

• Financial soundness & willingness to invest in line

• Previous experience in the field

• Business reputation

• Business capacity & salesmanship

• Willingness to provide credit

Capacity to offer:
• Required assortments of product

• Required service

M.B.A, Osmania University. 31

DISTRIBUTION CHANNEL

Capacity to provide: -

Good relation with:

• Concerned government officials, sub – dealers if any, consumers,

Banks and other financial institutions.

• Storage facilitates, Show rooms, Shops, Service Workshops, Sales and

serviceman, consummate with expected business.

• Social status.

Positive attitude towards the company on the part of the dealer and his key personnel.

Dealer motivation: -

To be effective the dealers have to the constantly motivated. The firm should

constantly strive the needs of the dealers. It is applied said that a wise firm gets a good

band of dealers settle down with firm. Dealer’s motivational elements are as follows.

1. Harmonious dealer’s motivation is very important in dealer motivation.

2. Ensuring good store image and deriving promotion advantage though the store

image.
3. An attractive trade margins is not doubt. The primes factor in dealer motivation.

M.B.A, Osmania University. 32

DISTRIBUTION CHANNLE

4. Ensuring dealers support in merchandising is another important aspect of dealer’s

management and dealer’s motivation.

5. Prompt delivery, efficient service and incentives.

Managing the dealer network:

The designing of the channel and the creation of the channel are not everyday

tasks in channel management. It is the administration of the dealer’s network that

constitutes every day tasks channel management. In the broadest sense, managing the

dealer network will include the dealer servicing, dealer administrating, co – dealer

compensation, dealer motivation and dealer development.

Performance appraisal of individual dealers: -

Periodical evaluation of the performance of the dealers is yet another important

Aspect of channel management. The performance appraisal must be done with a view to

identifying the specific strengths and weakness of the dealers. If the performance is

below the desire level, remedial action must be taken promptly

Criteria for dealer appraisal: -


 Market awareness

M.B.A, Osmania University. 33

DISTRIBUTION CHANNEL

 Sales point facilities

 Public relation

 Storage space provided

 Inventory handling support

 Market intelligence

 Efficient of service provided to customers

 Sales intensity

 Enrollment of new accounts

 Promotional support

 Submission of reports

 Timely payment of bills

 Maintaining of business records

The appraisal of dealer’s performance should lead an important in their

performance in addition to proper performance appraisal of individual dealers,

periodic review of the dealer network as a whole and removal of weakness in the
network must also be take – up. Hence, we can say that dealer’s job is a

continuous job.

M.B.A, Osmania University 34.

DISTRIBUTION CHANNEL

Dealer – principal relation: -

The relations between a firm and a dealer revolve largely around the following

factors.

1. Services or functions to be performed by the dealer.

2. Territory of operation.

3. Services or functions to be performed by the principal.

4. Remuneration to the dealer.

The firm normally expects a dealer to establish the product in the market,

maintain fair trade practices, and provide serviced to consumers and help in promoting

the products. The dealer in turn expects the firm to delivery a quality product, make

adequate and reasonable profits for the Delaware in the price structure and render good

sales promotion support.

Dealer induction: -
Proper induction of the dealer in to the organization is another important part of

dealer management. Many firms view dealers as synonymous with dealer training. While

induction does include a training component, it needs to be handled as a distinct function.

It should lead to the smooth assimilation of the dealers in to the organization.

M.B.A, Osmania University 35

DISTRIBUTION CHANNEL

About area offices and their addresses, and Dealers address and distance

from ZAHEERABAD.

NORTH ZONE: -

AREA OFFICE CHANDIGARH NEW DELHI/ JAIPUR LUCKNOW

KARNAL
ADDRESS Sco33,sector Mahindra Tower 408,4th floor, Mahinra Towers,
26G,Madhya 2A, BIKAJI GANAPATHI gopal Tirath plaza,
Marg,chandigarh CAMAPLACE, PLAZA,MI Road Auto Sector,Opp-
160 026 NewDelhi/ Jaipur – 302 006 HALL, Fizabad
Road,Lucknow,22
sco-15,sector 6 016
8,Main
market,karnal-
132 001
Distance from Km km Km Km
ZAHEERABAD

By Own power 1950 1609/2000 1730 1494


2010/2060 1730 1627
By Carrier/Trucks 2100
24 Dealers attached to the CHANDIGARH area office in those 8 main dealers

(MD), 5 mahindra authorized dealer branch (MADB), 5 mahindra authorized service

center (MASC), and 5 stockiest.

M.B.A, Osmania University. 36

DISTRIBUTION CHANNEL

31 Dealers attached to the NEW DELHI/KARNAL area office in that 10 main

dealers (MD), 1 mahindra authorized dealer branch (MADB), 7 mahindra authorized

service center (MASC), 7 stockiest.

36 Dealers attached to the JAIPUR area office in those 10 main dealers (MD), 8

mahindra authorized dealer branch (MADB), 12 mahindra authorized service center

(MASC), and 2 stockiest.

39 Dealers attached to the LUCKNOW area office in those 34 main dealers (MD),

0 mahindra authorized dealer branch (MADB), 0 mahindra authorized service center

(MASC), and 2 stockiest. Totally 129 dealers attached to the north zone.

EAST ZONE: -

AREA OFFICE CALCUTTA GUWAHATI PATNA


ADDRESS 7,KYD Street, 3rd 1st floor, consultancy 3rd floor,J-J complex,

floor, kolkatta-700 house, mani ram East Boarding, conal

deven road, bamuni road, patna – 800


016.
maidan. 001.
Distance from Km Km Km

ZAHEERABAD
By own power 1765 2956 1632

By trucks/carrier 1767 3300 1632

M.B.A, Osmania University. 37

DISTRIBUTION CHANNEL

16 Dealers attached to the CULCUTTA area office in those 5 main dealers (MD),

0 mahindra authorized dealer branch (MADB), 7 mahindra authorized service center

(MASC), and 3 stockiest.

14 Dealers attached to the GUWAHATI area office in that 7 main dealers (MD),

1 mahindra authorized dealer branch (MADB), 3 mahindra authorized service center

(MASC), 2 stockiest.

10 Dealers attached to the PATNA area office in those 10 main dealers (MD), 0

mahindra authorized dealer branch (MADB), 0 mahindra authorized service center

(MASC), and 0 stockiest.

3 Dealers attached to the AGARTALA area office in those 2 main dealers (MD),

15 mahindra authorized dealer branch (MADB), 5 mahindra authorized service center

(MASC), and 5 stockiest.

21 Dealers attached to the BHUBANESHWAR area office in those 5 main

dealers (MD), 8 mahindra authorized dealer branch (MADB), 4 mahindra authorized

service center (MASC), and 3 stockiest. Totally 64 dealers attached to the east zone.
M.B.A, Osmania University. 38

DISTRIBUTION CHANNEL

WEST ZONE: -

AREA MUMBAI/ PUNE NAGPUR BHOPAL AHMEDAB

OFFICE GOA AD
nd
ADDRESS Mahindra 6, Jagatap A1- 2 floor, APG
Towers, marg, indrasagar, quality bungalow
ground floor, ambedkar ravindranath business no.12,
worli road tagore road, center, plot N.C.marg,sha
road,pune-
no. 13, civil lines, no: 7, zone II, hibaug,
411 001
mumbai- nagpur-440 M.P. nagar, ahmedabad-
4000 018 001. commer 380 004
complex,
Bhopal.
Distance Km Km Km Km Km
from
Zaheerabad
By own
Goa-730 1025 1150
power
By
Goa-730 1025 1150
trucks/carrier

16 Dealers attached to the MUMBAI/GOA area office in that 8 main dealers

(MD), 1 mahindra authorized dealer branch (MADB), 1 mahindra authorized service

center (MASC), 5 stockiest.


M.B.A, Osmania University. 39

DISTRIBUTION CHANNEL

21 Dealers attached to the PUNE area office in those 12 main dealers (MD), 4

mahindra authorized dealer branch (MADB), 2 mahindra authorized service center

(MASC), and 0 stockiest.

10 Dealers attached to the NAGPUR area office in those 7 main dealers (MD), 0

mahindra authorized dealer branch (MADB), and 0 mahindra authorized service center

(MASC), 0 stockiest.

27 Dealers attached to the BHOPAL area office in those 3 main dealers (MD), 6

mahindra authorized dealer branch (MADB), 6 mahindra authorized service center

(MASC), and 3 stockiest.

17 Dealers attached to the AHMADABAD area office in that 12 main dealers

(MD), 1 mahindra authorized dealer branch (MADB), 2 mahindra authorized service

center (MASC), 1 stockiest.

14 Dealers attached to the COHIN area office in that 1 main dealer (MD), 8

mahindra authorized dealer branch (MADB), 2 mahindra authorized service center

(MASC), and 2 stockiest.Totally 105 dealers attached to the west zone.


M.B.A, Osmania University. 40

DISTRIBUTION CHANNEL

SOUTH ZONE: -

Area office BANGOLORE CHENNAI HYDERABAD


Address APH, Raheja APG,Bharat Mahindra house,
chamber, 1st floor, Insurance TSR complex,1-7-
husum road, Buld,129,annasalai, 1,Park
bangalore-560 001. chennai-600 002 lane,secenderabad-3
Distance from Km Km Km

ZAHEERABAD

By own power 750 825 120

By trucks/carrier 850 900 ---

15 Dealers attached to the BANGALORE area office in those 8 main dealers

(MD), 2 mahindra authorized dealer branch (MADB), 5 mahindra authorized service

center (MASC), and 0 stockiest.

18 Dealers attached to the CHENNAI area office in that 15 main dealers (MD), 2

mahindra authorized dealer branch (MADB), 1 mahindra authorized service center

(MASC), 0 stockiest.

19 Dealers attached to the HYDERABAD area office in those 7 main dealers

(MD), 3 mahindra authorized dealer branch (MADB), 6 mahindra authorized service

center (MASC), and 2 stockiest.


M.B.A,Osmania University. 41

CHAPTER - VI

DATA ANALYSIS
1Q. Since how long you are taken dealer ship of M & M vehicles?

RESPONSE PERCENTAGE
a) Before 1 year 10%
b) Before 2 years 0%
c) Before 3 years 20%
70%

LINE CHART
PIE CHART
80%
60% a)PERCENTAG
Before 1 year
40%
20% E
0% b) Before 2 years
a) b) c) d)
Before Before Before More c) Before 3 years
1 year 2 years 3 years than 3
years d) More than 3
years

d) More than 3 years

Most of the Dealers taken their Dealer ship more than 3 years.

20 % Dealers taken their Dealer ship before 3 years.

And 10 % Dealers taken their Dealer ship before 1 year.

42

2Q. What is the present position of M & M in the market?

RESPONSE PERCENTAGE
a) Excellent 95%
b) Good 5%
c) Average 0%
0%
C O L U M N C H AR T

10 0% BAR CHART
8 0%
6 0% d) Poor
P E RC E NTA GE
4c)0%
Average
Series2
2 0%b) Good
Series1
a)0%
Excellent

RESPONSE a) b) Goo d c) A verag e d) P oo r


E xcellent
0 0.2 0.4 0.6 0.8 1

Most of the Dealers said that present position of M & M company is Excellent.

Remaining 5 % of the Dealers said present position of M & M Company is good.

43

3Q. Will you get the vehicles from the “ R.S.O” intime?

RESPONSE PERCENTAGE
a) Yes 90%
10%

PIE CHART

a) Yes
b) N o

b) No
Most of the Dealers said that they would get the vehicle from R.S.O intime.

10 % of the Dealers said no.

44

4Q. Will Company people assist you in advertisements?

RESPONSE PERCENTAGE
a) Yes 90%

LINE CHART

1
0.8
0.6 Series1
0.4 Series2
0.2
0
RESPONSE a) Yes b) No
b) No 10%

RADAR CHART

RESPONSE
1
Series1
0
b) No a) Yes Series2

Most of the Dealers said that company people assist them in advertisement.

10 % of the Dealers said that no.

45

5Q. What is your expectation of sales target?

LINE CHART

1
0.8
0.6 Series1
0.4 Series2
0.2
0
RESPONSE a) Yes b) No
RESPONSE PERCENTAGE
a) Reach the goal 100%
b) Other factor 0%

LINE CHART

120%
100%
80% PERCENTAG
60%
40% E
20%
0%
a) Reach the b) Other factor
goal

All of the Dealers said that their expectation sales target is Reach the goal.

46

6Q. Are you satisfied with the margins given by the company?

RESPONSE PERCENTAGE

PIE CHART

RESPONSE
a) Reach the goal
b) Other factor
a) Yes 100%
b) No 0%

RADAR CHART

RESPONSE
1
Series1
0
b) No a) Yes Series2

All the Dealers said that they satisfied with the margins given by the company.

47

7Q. Are you conducting any survey regarding customer satisfaction?

COLUMN CHART

1.2
1
0.8 Series1
0.6
0.4 Series2
0.2
0
RESPONSE a) Yes b) No

RESPONSE PERCENTAGE
a) Yes 90%
b) No 10%

COLUMN CHART

1
0.8
0.6 Series1
0.4 Series2
0.2
0
RESPONSE a) Yes b) No

Most of the Dealers said that they are conducting survey regarding customer satisfaction.

Remaining 10 % of the Dealers said that they have no time.

48

PIE CHART

RESPONSE
a) Yes
b) No
CHAPTER – VII

CONCLUSION & SUGGESTIONS

CONCLUSION
The Project has been taken – up to find out the what are the problems faced by the

Dealers and what is the present company position in Twin Cities (Hyd, Sec), Zaheerabad

and Gulbarga and what are the other suggestions to the company to increase the sales. I

did the survey with the sample of 5 Dealer points in the given cities.

• Actually in the market Mahindra & Mahindra have very good name.

• In a survey I can conclude that the transportation (Dispatching) of the

vehicles of M & M Company is very good.

• Dealers are showing their good response.

• Most of the Dealers opinion is that the company advertisement is not good

in Cities. They are telling that the management is not showing interest to

increase the advertisement.

• Maximum number of dealers are satisfied with the services of the

company.

49
SUGGESTIONS

After Through analysis of the findings researcher offers following suggestion to

the Management of the Mahindra & Mahindra for their improvement.

• The most of the dealer’s suggestion is the management has to maintain to

their increase the company sales.

• Maximum numbers of Dealers are satisfied with the transportation. But

some are not satisfied. Because they are telling that the management is doing

some delay in transportation. Dealer’s suggestion is to avoid the time delay.

• And most of the Dealer’s suggestion is to conduct the Dealers at least once

in a month.

• Some of the Dealers telling that in the Regional Sale office (R.S.O)

[AREA OFFICE] is no good response. So my suggestion is the management

have to concentrate on the Area Office, which is in city.

• My best suggestion is that the management has to increase the

advertisement of their vehicles. They have to concentrate on advertisement

very much.

50
APPENDIX
QUESTIONNAIRE ON DISTRIBUTION CHANNEL

Dealer perception in terms of “DISTRIBUTION CHANNEL”.

Dealer point:

1Q. Since how long you are taken dealer ship of M & M vehicles?
a) Before one year b) Before 2 years
c) Before 3 years d) More than 3 years

2Q. What is the present position of M & M in the market?


a) Excellent b) Good
c) Average d) Poor

3Q. What is the reason to sell exclusively for M & M vehicles only?

4Q. Will you get the vehicles from the “RSO” in time?
• Yes { }
• No { }

5Q. How many types of vehicles maintaining in your dealer shop?

6Q. At present which one is the highest selling vehicle? What is the reason?

7Q. Who are your competitors?

51
8Q. What is the equal range of competitors of your vehicles?
M & M vehicles Competitor vehicles

9Q. Will Company people assist you in advertisements?


• Yes { }
• No { }

10Q. Are you satisfied with the margins given by the company?
• Yes { }
• No { }

11Q. Will you tie up with any banks for giving vehicle loans to the customers and why?
Do you choose that particular bank?
• Yes { }
• No { }

12Q. How do you provide the service to make the customer satisfaction?

13Q. Are you conduction any survey regarding customer satisfaction?


• Yes{ }
• No { }

14Q. Have you observed any increasing sales on particular vehicle & why?
What is the reason?
52

15Q. The company gives what is your actual target to selling the vehicles that?

16Q. What is your expectation of sales target?


a) Reach the goal
b) Other factor

17Q. How do you promote the vehicles?

18Q. What is your sales Index & Sales growth?

19Q. What is the perception towards M & M vehicles?

20Q. On which factor emphasize for which vehicle?

53
BIBLIOGRAPHY

 BOOKS

TITLE AUTHOR

1) Marketing Management  PHILIP KOTLER


McGraw – HILL EDITION

2) Principles of Management  KOONTZ


McGraw – HILL EDITION

 BASIC MATERIALS

1. Profile of Mahindra and Mahindra Ltd.


2. Product Profile of Mahindra and Mahindra Ltd.

 WEB SITE ADDREESS


• www.indiainfoline.com
• www.automartindia.com
• www.automotive.mahindraworld.com
54