NEW PARADIGM OF DISTRIBUTION FOR FMCG COMPANIES

GROUP-8
GARGI,GIRISH,DEEPAK,SAPTHAMI,NAMIT,VAIBHAV aNAND

SUMMARY

The case deals with different distribution strategies adopted by FMCG companys that is- HUL,P&G,NESTLE and DABUR. How these companys are different in their distribution strategies from each other.

QUESTIONS
1.What are the strengths and weaknesses of HUL s distribution model?
STRENGTHS: HUL off-load the products on a large wholesaler, usually at larger discounts. Smaller retailers buy the products directly from the wholesaler, this leads to the need for a distributor with a large sales force ------- This results in lower cost for manufacturing company. HUL provide its product for every income and geographical segment in the country. HUL maintains the heterogeneity in products for Indian markets.

CONTI
WEAKNESS:
Wholesale distribution lead to a reduction in cost, brand building and customer recognition suffer in the long term.

CONTI..
2.Compare HULs distribution model with that of other FMCG companies?

HUL Distribution model:

The first phase of the HUL distribution network had wholesalers placing bulk orders directly with the company. The second phase, was to provide desired products and quality service to the company's customers. The third phase was the concept of "Redistribution Stockiest.The RS was required to provide the distribution units to the company salesman.

DISTRIBUTION NETWORK OF HUL

DISTRIBUTION MODEL OF P&G

Company focuses on demand based model, which enables to reduce the quantum of waste. P&G is getting out of rural market and focusing on class A and B towns.

DISTRIBTION MODEL OF NESTLE

It added on roughly Rs.3,50,000 retail points to its network, the bulk of them is in smaller towns and rural areas. Also added a slew of new products and variants. Company has identified about households as its target groups. 1443 million

DISTRIBUTION MODEL OF DABUR

It reduced the number of distributors in small towns , as it was uneconomical.

Company has appointed a system called superstockists.

A superstockist differ from a distributor in that he services 10 to 15 sub stockiest, who intern supply the retailer. Dabur focused on a mantra called-instead of expanding distribution to increase demand for a product, demand must drive distribution.