A Project Report On
“To
Study on Sales and Distribution Channel”
Submitted in partial fulfilment of the requirements for the Degree Certificate of
Master of Business Administration(M.B.A.) By Vikrant Ashok Munde
A Study Conducted for the Company:
Pidilite Industries Pvt Ltd. At
International Institute of Management Science Chinchwad, Pune-411033
DECLARATION I, Mr.Vikrant Ashok Munde hereby declare that this project is a record of authentic work carried out by me during the academic year 2016-2017 and has not been submitted to any other University or Institute for the award of any Degree or Diploma.
Signature of the student (Vikrant Ashok Munde)
2
DECLARATION I, Mr.Vikrant Ashok Munde hereby declare that this project is a record of authentic work carried out by me during the academic year 2016-2017 and has not been submitted to any other University or Institute for the award of any Degree or Diploma.
Signature of the student (Vikrant Ashok Munde)
2
ACKNOWLEDGEMENT I am deeply indebted to many people for the successful completion of this project. I would like to take this opportunity and go on record to thank them for their help and support. I am thankful to the International Institute of Management Science for all the support provided for this project. I express my deep sense of gratitude and sincere feelings of obligation to my Project Guide Dr. Sagar Bhadange who helped me in overcoming many difficulties and who imparted me the necessary conceptual knowledge. I also wish to acknowledge the excellent support of my Company Guide Mr.Sachin Madiwale for this work. I wish to thank all my teachers and friends too, for their helpful inputs, insightful comments, steadfast love and support.
3
Executive Summery The objective behind this project is to gain an understanding how the selling and distribution are carried out in Pidilite Sales office in Pune. The report requires thorough study of the various section at all the levels and to conduct the detail study, a print questionnaire was prepared for the retailer, customer and the distributor of Pidilite company of my area also some questionnaire were prepare for Pidilite products but only to the retailers, that we come to know the that what is the actual market of Piidilte and camel this helps us to know the market share of Pidilite company the questionnaire helps me to know what the reaction of the retailers about Pidilite product. I suggested some good method to the retailer which helps them to increase the sales and keep a demand before the completion of the stock which helps them at the time of urgency. Also I suggested some good techniques to pressurize the sales executive to give attention on retailer. Many more things were that help him to know how to keep a good relation between all the sales executive, sales man, and the distributor so that every help each other in every activity to increase sales. A conclusion was that there is a very big communication gap between the retailer and all the sales men who give the retailer the Pidilite products. Based on questionnaire dada collected from the survey made some recommendation were put across to the company for improving in Pune.
4
INDEX INTRODUCTION:-................................................................................................................. 6
OBJECTIVES .......................................................................................................................... 7
CHAPTER 1:-COMPANY PROFILE ................................................................................... 8
CHAPTER NO. 2:-LITERATURE REVIEW ....................................................................33
CHAPTER NO. 3:-RESEARCH METHODOLOGY ........................................................ 43
CHAPTER NO.4:-DATA ANALYSIS ................................................................................. 46
CHAPTER 5:- SCOPE & LIMITATIONS OF PROJECT ............................................... 60
CHAPTER NO.6:-LEARNING OF THE PROJECT ........................................................ 63
CHAPTER NO.7:-FINDING AND SUGGESTION ........................................................... 65
CHAPTER NO. 8:-ANNEXURE.......................................................................................... 69
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INTRODUCTION:-
Generally in the market it is known that Pidilite is facing tough competition from camel product in a market. The retailers are facing major problems in margin, service and supply and demand. Generally, demand pattern of fevicol and acrylic colour regular but it special occasions, like in Ganapati season. SELECTION OF SUBJECT:-
The subject which I preferred for my research is sales and distribution channel of Pidilite Company in Pune region. When I sales stationery product in Shop they keep in mind all time the services provided by that particular company like delivery of goods on time and if the delivery of goods will not be done on time then the retailer is going on lose the sales of that product. A channel of distribution is a structure of inter-company organisation, units and intercompany agents and dealers, Wholesalers and retailers through which a commodity, products or service is marketed. There are so many types so many distribution channels are being used by Pidilite company in at Pune region. In recent this year the Pidilite company was developed two more product and more competitive due to various schemes and offers provided by the company. These two product names are 1) 3D colouring book kit, 2) A+ fevicol.
6
OBJECTIVES
To study the effectiveness of channels of distribution.
To understand the Distribution channel of Pidilite Industries Ltd in pune market.
To study the problems faced by the dealers with respect to Pidilite.
To study the satisfaction level of dealers regarding Pidilite.
7
CHAPTER 1:-COMPANY PROFILE
8
HISTORY OF PIDILITE COMPANY
1969 - The Company was incorported as a private limited company on 28th July under the name of Parekh Dychem Industries Pvt. Ltd., to acquire and take over on a going concern the business carried on by a partnership firm M/s. Parekh Dychem Industries established in 1961 and having a factory in Mumbai. The Company was promoted by Balvantray Kalyanji Parekh along with his brothers. The brand names, are being Fevicol, Fevibond, Fevigum, Pidifix, Pidivyl,
Pidicryl,
Acrolise,
etc.
- The Company undertook to set up synthetic resin project with a capacity resin project with a capacity of 3000 TPA at Mahad Industrial area in Raigad district, Maharashtra. Also undertook to set up a constructions chemicals project at Taloja industrial area, Taloja, Maharashtra. 1984 - Three other companies in the same group viz., Kodivita Pvt. Ltd., erstwhile Pidilite Industries Ltd., and Triveni Chemicals Ltd. were amalgamated with the Company effective 1st
July,
1st
April
1989
and
1st
April
1992
respectively.
- Effective 1st July, Kondivita Pvt. Ltd. amalgamated with the Company after necessary approvals. The shareholders of erstwhile Kondivita Pvt. Ltd., were allotted 41,000-15% preference
share
of
Rs
10
each
and
19,500
shares
of
Rs
10
each.
- 54,000 I and II Pref. - 4% shares allotted to promoters. 26,000 No. of equity shares allotted to promoters originally: 26,000 Rights shares issued in prop. 1:1 in 1980, 52,000 bonus shares
issued
in
prop.
1:1
in
1981
- I & II Pref. 4% shares redeemed. 12% redeemable shares upgraded to 15%. 19,500 No. of equity shares and 41,000-15% Pref. shares allottee to Kondivita Pvt. Ltd. on amalgamation. 54,000-15% Pref. shares allotted to promoters & in lieu of 1st and 2nd 4% Pref. shares. 1986 - The Name of the Company was changed to PDI chemicals private limited on 1st July, and then to PDI chemicals limited, on 28th October, 1988. Name was once again changed to Pidilite
Industries
Ltd.,
on
1989
9
21st
February,
1990.
- Effective 1st April, Pidilite Industries Ltd. was amalgamated with the Company. As per the scheme of amalgamation, 1,93,500 No. of equity shares of Rs 10 each and 72,000-15% preference shares of Rs 10 each were allotted to the shareholders of erstwhile Pidilite Industrial
Ltd.
1992 - As per the Scheme of Amalgamation approved by High Court of Mumbai, Triveni Chemicals Ltd., (TCL) was merged with the Company effected 1st April. Accordingly 90588 No. of equity shares of Rs 10 each and 40,000-15% preference shares of Rs 10 each were allotted to the erstwhile shareholders of TCL. 38,49,034 shares allotted in prop. 72:10 to promoters
on
29.1.93.
1993 - 15,36,378 shares issued at a premium of Rs 100 per share in October. Of which 1,50,000 shares issued on preferential allotment basis to Viny Chemicals India Ltd. (only 1,35,000 shares taken up). Balance 13,86,378 shares along with 1,50,000 shares not taken up were issued
to
the
public
(all
were
taken
up).
1994 - The projects for SBR Latices, AZO Pigments and Carbazole Dioxiene Violet Pigments were commissioned. - Apuraj Chemicals Ltd., was amalgamated with the Company. As per the scheme of amalgamation, 66,000 No. of equity shares of Rs 10 each were allotted to the shareholders of erstwhile
Apuraj
Chemicals
Ltd.
- Vapkon Finance & Industries Ltd., Fevicil Adhesives & Chemicals Ltd. and Pidifin Finance and
Investment
Ltd.,
are
subsidiaries
of
the
Company.
- 60,000 No. of Equity shares of Rs. 10 each to be issued and allotted to equity shareholders of the erstwhile Apuraj Chemicals Ltd. pursuant to the scheme of amagalamtion. 1995 - Expansion project at Taloja was commissioned with an overall plant capacity of 2400 TPA of
construction
chemical.
- The Company's technical collaboration agreement with Schomburg & Co., KG. Germany for transfer of technical process know-how and specifications of the plant etc., was extended till
8th
September.
1996
10
- The first phase of grass root plant for manufacture of synthetic resins of various types was commissioned in March at Mahad with a capacity of 7800 TPA. In the second phase, a loop process plant for continuous emulsion polymerisation was to be commissioned. - Introduction of several new products in technical collaboration with M/s. Crown Berger Ltd.,
U.K.
- The Company allotted 61,17,200 No. of equity shares of Rs 10 each as bonus shares in the ratio of 1:1. 3,800 shares were kept in abyeance due to dispute relating to the title of the same. 1997 -
600
bonus
shares
allotted
from
Bonus
Share
Issue
Suspence
Account.
- The company has set up three wind mills of 230 kv each at Village Pransla near Dhank In Gujarat. - The Pedilite Industries Limited, manufacturer of the popular Fevicol brand of adhesives, is actively scouting around for buyers for its chemical and specially resins business. The company has been in talks with several international players in a bid to either sell off the business
or
enter
into
a
joint
venture.
1998 - Triveni Chemicals, another group company was also merged with PIL in 1992. PIL's consumer
products
division
was
set
up
in
1984.
- The Board of Directors gave their approvals for the amalgamation of PGP Engineering works Ltd and Pidilite Finance Ltd. with the company itself effective 1-4-99. Also, Nebula Chemicals Ltd. manufacturers of certain grades of adhesives, was to be amalgamated with the company -
2,800
subject bonus
to shares
necessary kept
in
abeyance
approvals. allotted.
1999 - Pidilite Industries is re-engineering itself into a pure brand-oriented marketing company and is hiving of its manufacturing facilities into a joint venture with a strategic partner. 2000 - The Company has acquired from Mahindra Engineering & Chemical Products Ltd (MECP), subsidiary of Mahindra & Mahindra Ltd, their adhesives and sealants business consisting of the brand M-Seal and Mr. Fixit along with goodwill of MECP's adhesives and sealants business.
11
2001 -Pidilite Industries Ltd has posted 5.76% lower net profit at Rs.12.76cr for the second quarter as
compared
to
Rs.13.54cr
in
the
same
period
last
year.
2002 -Income Tax Department has issued a notice to Pidilite Industries Ltd, for an additional income
tax
liability
of
Rs.16cr.
-Pidilite Industries has taken over an insulation tape brand called Steel Grip, for Rs.8cr from Bhor
Industries.
-Pidilite Industries is expanding its presence in Fabric care, car care and stationery segments as
part
of
its
strategy
to
broadbase
its
produt
portfolio.
2003 -Pidilite Industries has tied up with Chota Jadugar, the 3D movie distributed by Srinagar films
to
help
-Pidilite
its
new
unveils
-Pidilite
new
unveils
-Pidilite
launch
enters
liquid Fevicol
into
AcronRangeela
snack
Colours
pipe
sealant
Marine market
2005
with
'Chikkers'
-Pidilite Industries has acquired Dubai-based company UCC, manufacturer of construction chemical -Company
brand has
splits
"Probuild" its
Face
for value
of
an Shares
undisclosed from
Rs
10
amount. to
Re
1
2006 - Pidilite Industries Ltd has informed that the Board of Directors of the Company at its meeting held on October 17, 2006 has noted the resignation of Shri Amit Roy, Director and Whole
time
director
with
effect
from
December
31,
2006.
-Pidilite Industries Ltd has informed that the Board of Directors of the Company at its meeting held on December 02, 2006, Shri. V S Vasan has been appointed as an Additional Director and also as Whole Time Director of the Company with effect from December 02, 2006. 2007 -Pidilite Industries Ltd has appointed Mr.Mandar M.Tambe as the Company Secretary, Compliance Officer under Clause 47(a) of the Listing Agreement and Compliance Officer under SEBI (Prohibition of Insider Trading) Regulations, 1992 in place of Mr.P.C.Patel, who was
holding
the
said
position
12
till
30/11/2007.
2008 - Pidilite Industries Ltd has appointed Shri. Bharat Puri as an Additional Director of the Company
with
effect
from
May
28,
2008.
2009 - Pidilite Industries Ltd has informed that Shri. Debu Bhattacharya has been appointed as an Additional
Director
of
the
Company
with
effect
from
February
26,
2009.
2010 -Pidilite
Industries
has
given
the
Bonus
in
the
Ratio
of
1:1
-Ms. Savithri Parekh has been appointed as the Company Secretary and Compliance Officer. 2011 -PidiliteInds - Appointment of Foreign Currency Convertible Bonds (Share Allotment). -Shri Sanjeev Aga has been appointed as an Additional Director of the Company. 2012 -Pidilite Industries Ltd has entered into a Joint Venture Agreement with Hybrid Coatings for manufacture of construction chemicals and to establish a Joint Venture Company in India for this
purpose.
-Pidilite Industries Ltd has the name of the Registrar & Share Transfer Agent (RTA) of the Company has been changed from "TSR Darashaw Limited" to "TSR Darashaw Private Limited". 2013 -Pidilite Industries incorporated a subsidiary Company in the name of "Percept Waterproofing Services Ltd" for the purpose of carrying on business of services relating to waterproofing
including
consultancy
and
project
based
services
etc.
2014 -Pidilite Industries Acquisition of Adhesive Business of Blue Coat Private Ltd. - Pidilite Industries alongwith its Wholly owned subsidiary Pidilite International Pte Ltd. has incorporated a pvt ltd subsidiary Company in Ethiopia in the name of "PIDILITE CHEMICAL PLC" for manufacture of adhesives, mastics, paints, varnishes or similar coatings,
printing,
writing
and
painting
inks
etc.
2015 -Pidilite Industries Limited along with its Wholly owned subsidiary Fevicol Company Limited has incorporated a Company in the name of "WOOD COAT PRIVATE LIMITED"
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BOARD OF DIRECTORS:-
S.No Name
Designation
1
Mr.M B Parekh
Executive Chairman
2
Mr.N K Parekh
Vice Chairman
3
Mr.Bharat Puri
Managing Director
4
Mr.A B Parekh
Whole Time Director
5
Mr.A N Parekh
Whole Time Director
6
Mr.Sabyaschi Patnaik
Whole Time Director
7
Mr.B S Mehta
Director
8
Mr.Ranjan Kapur
Director
9
Mr.Sanjeev Aga
Director
10
Mr.Uday Khanna
Director
11
Mrs.Meera Shankar
Director
12
Mr.Vinod Dasari
Director
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COMPANY PROFILE IN BRIF:-
Pidilite was established as a partnership firm with parekh Dyechem Industries in 1961 Name changed to PDI industries after manager with kondivita industries in 1989. Pidilite has become the largest manufacturer of adhesive.
Pidilite‟s mainstay of earnings is consumer and industrial adhesives and sealants. Fevicol is the company‟s largest brand. Expansion of product portfolio has lead it to be recognized as a leading FMCG player. Company has in total 40 brands spanning 400 industrial and consumer products. Some leading brands fevicol, fevistick, fevigum, acrylic color, ramgeela, etc. It has launched several new products in last few years like fevistrick, feviseal.
15
PRODUCTS:-
Year
1703
Months Product name
12
Consumer
Family
Sales
Sales unit of
Sales
value Product
quantity
measurement
(Rs. Crores)
Mix(%)
0
4366.9
82.41
Products 1703
12
Industrial Products
0
882.72
16.65
1703
12
Others
0
49.03
0.92
PRODUCT NAME OF PIDILITE INDUSTRIES LTD. 1)
Fevicol
Fevicol is India’s Most Trusted Brand of Adhesives
Pidilite‟s biggest bond is through the Fevicol family of products. Fevicol has become a household name that is today synonymous with adhesives. The brand has introduced many innovative products which have transformed the way carpentry trade operates in India.
16
2) Fevicol MR
For The Love of Art And Craft
Explore your creative side
Fevicol MR‟s biggest strength is its high bonding strength. It is used to bond a variety of substrates like cardboard, paper, polystrene, wood and other material. Loved for its superior quality, ease of application and distinguished advertising, this synthetic white adhesive has made its way to the hearts and minds of millions. The iconic brand is trusted by consumers of all age groups, and suits the needs of children, offices and households. Fevicol is available in over 5 lakh outlets in India, and on an average, 4 units of Fevicol MR are sold per second!
17
3) Fevistick
Born To Make India Mess-Free
Fevistik pulls consumers out of sticky situations. There was a time when adhesives were only available in liquid form and paper-to-paper sticking meant sticky fingers and an overall messy experience. Pidilite, being the pioneers in adhesive segment, addressed this issue 20 years back t hrough the launch of Fevistik. Fevistik made sticking clean and convenient through its innovative rotary gluestick form.
Today, Fevistik is India‟s highest selling gluestick and is synonymous with the category. It is available in four convenient pack sizes of 5g, 8g, 15g and 22g
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4) Fevigum
Fevigum – Synthetic Gum
Fevigum is a non- toxic, hygienic synthetic gum. It comes in different coloured “squeezy” bottles with lovely fragrance options. Its attractive packaging and non-toxic nature makes it perfect for kids. It has excellent paper-to-paper bonding.
5) Gluedrops
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6) Rangeela:-
Rangeela comprises of a range of colours primarily aimed at satisfying the art & craft needs of students. Major products include Rangeela Tempera colours and Rangeela – Safe Moulding Dough and Paper Glitter. Rangeela Tempera colours are ideal for easy art and craft ideas and can enhance personalised handmade gifts. They can be used to decorate greeting cards, pots, paintings, thermocol products, and more. They are extremely easy to use and are safe for children. These colours are economical, washable, available in bright shades, safe and non-toxic.
i)
Rangeela tempracolor
20
ii)
Rengeela paper gliter
iii)
Rangeela Modelic dough clay
21
7) Hobby idea Fulfilling Every Creative Need
A unique and complete experience for art & craft enthusiasts There was a time when art & craft lovers across India had to make do with substandard products to fulfill their creativity. Good quality products were either rarely available or overpriced as these were mostly imported. To fulfill this gap, Pidilite launched Hobby Ideas
in February 2002 as India‟s first chain of art, craft and hobby stores offering over 2500 products, expert advice and exciting workshops. It currently has 5 stores across Mumbai and Pune. HobbyIdeas enjoys a strong online presence too via its website www.hobbyideas.in and Youtube, Instagram and Facebook handles. Consumers from all across the world reach out to share their DIY ideas, experiences and ask our experts queries who are available round the clock to help them.
i. Fabric glue
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ii. 3D Outliner
iii.
Shilpkar
Clay Crafting Takes Innovative, New Shapes
Fevicryl Shilpkar is a simple and easy to use epoxy compound specifically formulated to meet the clay crafting needs of hobbyists. Its easy pliability helps hobbyists create any shapes or forms in minutes. Paint the creation with Fevicryl acrylic colours and watch it transform into a masterpiece!
23
iv. Glass color
v. Fevicryl color
Ideal For Painting On Fabric
Fevicryl Acrylic Colours is the category leader as it can be used on an endless variety of surfaces. A range of variants – Pearl, Pearl, Pearl Metallic and Sparkling Pearl – suit suit every creative expression and are available in different pack sizes to serve the varying needs of the hobby consumer.
24
8) Colouring books for adults
25
VISION AND MISSION
Vision
To Be The Most Innovative Research and Technical Competence Center for
Sustaining “Innovation-Driven” Growths for Pidilite Group of Companies globally.
Mission
Invite, invest, and embrace talented people and scientists for great challenges ahead
Support, serve, and satisfy all valuable customers with our innovative products and excellent technical competency
Innovate with our customers to provide total product satisfactions and business growths
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COMPETITORS:-
Regional brands Small players in unorganized sector Large companies like jubilant organises PIL Export Internationally To
Europe
UAS
Middle east
Africa
Asia
Australia
Japan
27
STRENGTHS:-
Pidilite‟s min strength is their strong marketing advertising skills. Fevicol is an immensely strong brand. It is so strong that an ything that has a prefix
„Fevi‟ to is sells without any effort by the shopkeeper. Pidilite earns 50% plus revenues from adhesives segment whose brand have excellent recall value. OPPORTUNITIES:-
One can see signs of „3m of India‟ in Pidilite. And 3M is a $60 billion company. Pidilite can become a big company if things go well. Growth in the retail sector in India is a positive for Pidilite, especially the future growth of home specific store like home town and home shop.
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DISTRIBUTION STRUCTURE OF PIDILITE INDUSTRIES
Manufacturing Units
Mother Go dawns
C&F Agents
Company Depots
WSS (Whole sale Stockiest)
Wholesaler
Retailer
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TRANSPORTATION SYSTEM:-
Factory (Maharashtra) Trucks
Mother Godown Trucks
Trucks
Kanpur Company (Depot)
Ghaziabad C&F Agent
Trucks
Trucks
WSS (42)
WSS (46)
Wholesaler
Retailer
Retailer
Retailer
30
Retailer
DISTRIBUTORS ALL OVER IN PUNE
Criteria for selecting the distributors: The company looks at the prospects before permitting/Authorizing for distributor. Therefore
the criteria‟s are as follows,
He should have a godown
Vehicles
Manpower
Deposit for cases/crates at the rate of 200 each
Liquid value
NAMS OF THE DISTRIBUTORS IN ALL OVER PUNE
1.Maxa 2.RJ 3.Shree Traider 4.Ratnamurthi 5.Chakradhar 6.Shree Ram agency Working of distributors The distributor first has to maintain the following
The Brand pack separately after unloading the vehicle i.e. the brand order in the following sequence -Fevicol -Fevistick -AcrylicColur -Hobby Idea - Other Products of Pidilite
31
DISTRIBUTORS ROUTE PLANNING:
Distributors identify two routes they are,
Potential route Non Potential route
Note: For Potential the vehicle goes daily and for non potentials it goes once in a week The potential routes are those routes in which the distributor gets maximum business as the number of outlets will be more and therefore the vehicle goes daily to meet the market demand. Ex: If a distributor has 300 outlets in his area he has to plan accordingly as per his route where in he has to visit 40 outlets per route. The role of distributor in market:
The distributors‟ salesman is trained properly with respect to his behaviour with the retailers. As soon as the vehicle goes to the outlet it is the duty of the sales person to 1. Greet the retailer and have a look at the display of brand. 2. He has to suggest the retailer about the stock needed 3. Convince him for purchase 4. Follow up and handle complaints Support from the company to the distributor The company supports the distributors in terms of incentives during the off season
32
CHAPTER NO. 2:-LITERATURE REVIEW
33
LITERATURE REVIEW:-
Most producers do not sell their goods directly to the final user, betweenthem a s tand a set of i ntermedi aries performing variet y of functions. Theintermediaries are a chain each passing the product down to the chain to the ne xt or ga ni za ti on, be fo re it fina ll y
rea ch
the
cons umer or
end
user .
This
process
is known
as the
“distribution chain” or the “distribution channel”. Eachof the el ement in this chai n will ha ve their own specif ic nee ds which th eprod ucer must take into account along with those of all the important end-user. A distribution channel includes
several inter-connected
intermediaries
suchas -
farmer service center, cooperative societies, distributors, whole seller etc.Each intermediary receives the goods at one pricing point and moves it to thenext higher pricing point until it reaches the final buyer. A channel of
distribution
is a bridge to
cover
the gap between
manufacturer and consumer. So, it is very important for the company to have aneffective channel of distribution. Distribution channel often require the assistanceof others in orders to enable the market to reach its target market. Accompany can he handle its own distribution functions in a better position to ex er ci se th e co nt ro l over produ ct sal e and poten tia lly earn highe r prof it. At present, internet has made it much easier to distribute products thus lessening the need for others to be involved in selling a company‟s product
34
CHANNEL OF DISTRIBUTION:Definition:
“ A channel of distribution or marketing channel is the structure of intra company organisation units and extra company agents & dealers, wholesale and retail through which a
commodity, product or service is marketed” ----American Marketing Association
“Distribution Channel is a set of interdependent organisation involved in the process of making a product or service available for use or comsumtion by consumer or business use”. ----Phillip Kotler
Producers produce fewer products in large quantities and customers want more product in smaller quantities and broader assortments wanted by the customers and break them into smaller and broader assortments wanted by the customers Means used to transfer merchandise from the manufacturer to the end user.Intermediaries
in
the channel are called middlemen. Those who actually take title toothed merchandise and resell the goods are merchant middlemen. Those who act as Broker but do not take title are agent middlemen. Merchant middlemen include wholesalers and retailers. Agent middlemen include Manufacturer's Representatives, brokers, and sales agents. Whether these exchange processes
occur
between
manufacturers
and
their
suppliers,
retailers and consumers, or in some other buyer-seller relationship, marketingchannels
offer
an important way to build competitive advantages in today's global marketplace. This is so for two major reasons:
• Distribution strategy lies at the core of all successful market entry and expansion strategies . The globalization of manufacturing and marketing requires the development of exchange relationships to govern the movement of goods and services. Marketing is the key factor of business. It is a very exciting field. The modern concept of marketin is different from the traditional concept. The old conceot was based on the physical movement of goods. In the modern concept, marketing is human activities directed to satisfying needs and wants through exchange process . So Philip Kotler has defined “
35
Marketing is a social and managerial process by which individual and group obtain what they
need and want through creating and exchanging product and value with other.” In the following study, an attempt has been made to study the promotional strategies and market position of Stationary product (fevicol, hobby idea)carried by Pidilite Pvt. Ltd. This eight week training in the organisation was of great help. Through in eight weeks it was not possible to understand it deeply but an overall idea was developed regarding the market envoirement. DISTRIBUTION SYSTEMS:-
A channel of distribution or marketing channel is a structure of inter-company organization, units and inter-company agents and dealers, wholesalers and retailers through which a commodity, product or service is marketed defined by(AMA). Various types of distribution channel methods are being used by Pidilite Company in Pune 1) One level
2) Two level
Manufacturer
Manufacturer
Retailer
Distributor
Consumer
Retailer
Consumer
36
Nature and Importance of Channels
Most businesses use third parties or intermediaries to bring their products to market.
They try to forge a "distribution channel" which can be defined as “All the organizations through which a product must pass between its point of production and consumption“ Why does a business give the job of selling its products t o intermediaries? The answer lies in efficiency of distribution costs. Intermediaries are specialists in selling. They have the contacts, experience and scale of operation which means that greater sales can be achieved than if the producing business tried to run a sales operation itself.
Channel Design Decision
Understand the consumer requirement
Farming Channel Objective
Identifying Alternatives
Evaluating of Alternatives Understand the consumer requirement
Consumer is interested in different services from the company and the channel must deliver value to the consumer. We need to identify his needs and satisfy it. Consumer convenience, the mode of delivery, credit, service, installation, place of purchase, type of product assorment. All these factors required here. Farming Channel Objective
Nature of the company, product characteristics, type of channel memebers, competitors and the prevailing business envornment should be considered by the company. Legal conditions and macro ecnomic situation of the country should also be considered. It is bas ed on PLC 37
Identifying Alternatives
After setting the channel objectives the company should identify channel alternatives in terms of types of intermediaries, number of intermediaries, and the responsibilites of each member. Types of Intermediaries:
1. Company Sales Force 2. Manufacturing Agency 3. Industrial Distributor (region wise ex. Supermarket, mail orders, exclusive show rooms) Number of Marketing Intermediaries: 1. Intensive Distribution (Tooth paste in Many outlets) 2. Exclusion Distribution 3. Selective Distribution
Evaluating of Alternatives
The company should select the best channel which will suit its long term objectives. It should consider the factors like probability, share of control and adaptive nature of each of the channel Cost of transaction is low for direct marketing channels like internet and telemarketing but value addtion also very low. With direct sales channel like company sales force the cost per transtion is high and the value addition is high Indirect channels like retailers, distributors the cost per transaction is moderate and the value addition is also moderate.
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Functions of distribution channels:-
1. The primary function of a distribution channel is to bridge the gap between production and consumption. 2. A close study of the market is extremely essential. A sound marketing plan depends upon thorough market study. 3. The distribution channel is also responsible for promoting the product. Awareness regarding products and other offers should be created among the consumers. 4. Creating contacts or prospective buyers and maintaining liaison with exist ing ones. 5. Understanding the customer's needs and adjusting the offer accordingly. 6. Negotiate price and other offers related to the product as per the customer demand. 7. Storage and distribution of goods 8. Catering to the financial requirements for the smooth working of the distribution chain. 9. Risk taking for example by stock holding Objective of distribution channel:-
1. Provide convenience to customers in getting the product at the right time and at the right place. 2. Achieve optimum distribution coast. 3. Give choice of selection of goods to customers. 4. Effective display and storage of goods. 5. Resolve the channel conflict successfully. 6. Motivate channel member for effective promotion and selling of products. 7. Maintain competitive advantage for the manufacturer. 8. Ensure best possible coverage of the target market.
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Advantages and Disadvantages of Distribution Channel Advantages
When a customer is considering buying a product he tries to access its value by looking at various factors which surround it. Factors like its delivery, availability etc which are directly influenced by channel members. Similarly, a marketer too while choosing his distribution members must access what value is this member adding to the product. He must compare the benefits received to the amount paid for using the services of this intermediary. These benefits can be the following: Cost Saving
The members of distribution channel are specialized in what they do and perform at much lower costs than companies trying to run the entire distribution channel all by itself. Time Saving
Along with costs, time of delivery is also reduced due to efficiency and experience of the channel members. For example if a grocery store were to receive direct delivery of goods from every manufacturer the result would have been a chaos. Everyday hundreds of trucks would line up outside the store to deliver products. The store may not have enough space for storing all their products and this would add to the chaos. If a grocery wholesaler is included in the distribution chain then the problem is almost solved. This wholesaler will have a warehouse where he can store bulk shipments. The grocery store now receives deliveries from the wholesaler in amounts required and at a suitable time and often in a single truck. In this way cost as well as time is saved. Customer Convenience
Including members in the distribution chain provides customer with a lot of convenience in their shopping. If every manufacturer owned its own grocery store then customers would have to visit multiple grocery stores to complete their shopping list. This would be extremely time-consuming as well as taxing for the customer. Thus channel distribution provides accumulating and assorting services, which means they purchase from many suppliers the various goods that a customer may demand. Secondly, channel distribution is time saving as the customers can find all that they need in one retail store and the retailer 40
Customers can buy in small quantities
Retailers buy in bulk quantities from the manufacturer or wholesaler. This is more cost effective than buying in small quantities. However they resell in smaller quantities to their customers. This phenomenon of breaking bulk quantities and selling them in smaller quantities is known as bulk breaking. The customers therefore have the benefit of buying in smaller quantities and they also get a share of the profit the retailer makes when he buys in bulk from the supplier.
Resellers help in boosting sales
Resellers often use persuasive techniques to persuade customers into buying a product thereby increasing sales for that product. They often make use of various promotional offers and special product displays to entice customers into buying certain products. Customers receive financial support
Resellers offer financial programs to their customers which makes payment easier for the customer. Customers can buy on credit, buy using a payment plan etc. Resellers provide valuable information
Manufacturers who include resellers for selling their products rely on them to provide information which will help in improving the product or in increasing its sale. High-level channel members often provide sales data. On all other occasions the manufacturer can always rely on the reseller to provide him with customer feedback. Disadvantages Revenue loss
The manufacturer sells his product to the intermediaries at costs lower than the price at which these middlemen sell to the final customers. Therefore the manufacturer goes for a loss in revenue. The intermediaries would never offer their services to the manufacturer unless they made a profit out of selling his products. They are either made a direct payment by the manufacturer, for instance shipping costs or as in the case of retailers by selling the product at
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costs higher than the price at which the product was bought from the manufacturer (also known as markup). The manufacturer could have sold at this final price and made a greater profit if he had been managing the distribution all by himself. Loss of Communication Control
Along with loss over the revenue the manufacturer also loses control over what message is being conveyed to the final customers. The reseller may engage in personal selling in order to increase the product sale and communicate about the product to his customers. He might exaggerate about the benefits of the product this may lead to miscommunication problems with end users. The marketer may provide training to the salespersons of retail outlets but on the whole he has no control on the final message conveyed.
Loss of Product Importance
The importance given to a manufacturers product by the members of the distribution channel is not under the manufacturers control. In various cases like transportation delays the product loses its importance in the channel and the sales suffer. Similarly a competitor‟s product may enjoy greater importance as the channel members might be getting a higher promotional incentive.
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CHAPTER NO. 3:-RESEARCH METHODOLOGY
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REARCH METHODOLOGY:-
“Marketing Research is the systematic designing, collection, analysis, and reporting of data and finding relevant to a specific marketing situation facing the company.” The present study of markets in Pune is based on survey methods. In survey methods, there are two types of survey. One is Census Method and another is Sampling Method. In this sample survey methods I have taken only a small part of the whole and data collected from the small part are made applicable to the whole i.e. I have taken Pune and some adjacent area of Pune like Karve Nagar Pune City etc. Within the time limit, I tried my best to select the sample representative of the whole group. During my training, I maintained different chart for different routes during my dealer survey. I have collected data from the distributor in Pune. RESEARCH DESIGN:-
Method of Research Design: Exploratory Research Design.
1) SURVEY:-
For the survey purpose the entire Pune city was divided into some parts, 1. Karve nagar 2. Sadashiv peth 3. ABC 4. F.C. Road 5. Aundh 6. Baner Balewadi 7. Pashan Bavdhan 8. Poud Road As per the route planner provided by the company the survey.
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2) IMPLEMENTATION:-
After the survey was conducted the Implementation work was carried out for the surveyed outlets, during the remaining period. In this procedure the visits were made to the outlets along with the vehicle and seen that the different problems encountered with the outlets during the survey were sorted out and seen to it the promotional activities were actually implemented. The problems of display, Credit etc was known during survey. So these problems were solved during the implementation part. It was also seen that every outlet survey had a proper display of the company‟s product.
DATA SOURCES AND SAMPLING:-
Primary data collection involved distributors, retailers and consumers Research Approaches
:
Survey
Research Instrument
:
Questionnaire
Sampling Unit
:
Retail Outlet/shop
Sampling size
:
100
Sampling procedure
:
Convenient Sampling
Sampling Plan
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CHAPTER NO.4:-DATA ANALYSIS
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DATA ANALYSIS:-
The process of evaluating data using analytical and logical reasoning to examine each component of the data provided. This form of analysis is just one of the many steps that must be completed when conducting a research experiment. Data from various sources is gathered, reviewed, and then analyzed to form some sort of finding or conclusion. There are a variety of specific data analysis method, some of which include data mining, text analytics, business intelligence, and data visualizations.
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1) Do you know about Pidilite as a company?
Particular
Respondents
Percentage
Yes
60
60
No
40
40
100
100
Total
Sales
40
Yes No 60
Interpretation
The above information received from the survey We observed that only 60% of people know about Pidilite.
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2) How is the relationship with the distributor? Opinion
Frequency
Percentage
Good
99
99%
Bad
1
1%
Total
100
100%
Frequency 2
Good Bad 99
Interpretation
The above chart shows that 99% of the retailers had good opinion towards the distributors. Only 1% of the retailers had bad opinion therefore the distributors have to control this aspect because the word of mouth plays a very important role and they should try to make their relationship 100%.
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3) How many times the distributor visits outlets per week. Particular
Frequency
Percentag e
Once
7
7%
Alternativ
47
47%
Daily
46
46%
Total
100
100%
e
Frequency 8
7 Once Altenative 40
45
Daily Other time
Interpretation
The above chart reveals the frequency of visit made by the distributor in the market. This chart shows that to 47% of the outlets surveyed the visit was on alternative days, 46% of the outlets surveyed the visit was on daily basis and 7% of the outlets surveyed the visits are made once a week. This shows that the company is mostly following the Alternative and daily routes.
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4)
How many times they are is expected to visit by you. Particular
Frequency
Percentage
Once
3
3%
Alternative
36
36%
Daily
61
61%
Total
100
100%
Frequency 3 36 Once Alternative
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Daily
Interpretation
The above chart shows that there is a huge demand for Pidilite Products in Pune city and therefore 61% of the retailers are expecting daily visits from the distributors in order to meet the demand from the consumers, therefore the company has to look to this aspect seriously. 36% expect an alternative days visits instead of daily visits, the outlets which are non potential outlets expect the distributor to visit once a week.
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5) Are you satisfied with the profit margins you are getting? Particular
Distributor
Percentage
Highly Satisfied
40
40%
Moderately
35
35%
25
25%
100
100%
Satisfied Less Satisfied Total
Distributor
25 40
Highly Satisfied Moderately Satisfied Less Satisfied
35
Interpretation
The above chart shows that the Distributors in Pune 40% is the Highly Satisfied Distributor, 35% Moderately Satisfied Distributors and 25% Distributors are less satisfied.
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6) Which type of delivery channel you would prefer? Particular
Percentage
0 level
No. of responses 5
1 level
60
60%
2 level
20
20%
3 level
15
15%
100
100%
Total
5%
No. of responses 60 40 60
No. of responses
20 20 5
0
0 level
1 level
2 level
15 3 level
Interpretation
From the above information received from the respondents we can sa y that the preference for Channels of Distribution that Reta ilers look for Pidilite
product is “Level One”. As we can see 60% of respondents agree with “Level One”. Hence, preference for Channels of Distribution that Retailers look for Pidilite product is “Level One”.
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7) When a customer comes to your shop which brand does he/she demands?
Particular
Stationary Percentage shop
Fevicol
60
60%
Fevistick
40
40%
100
100%
Total
Respondents 60 50 40 Respondents
30 20 10 0 Fevicol
Fevistick
Interpretation
Most of the respondents say that the customer demand is fevicol and fevistick in a shop.
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8) Which company‟s Acrylic color‟s demanded most?
Particular
Demand
Percentage
Pidilite
55
55%
Camel
40
40%
Other
5
5%
Total
100
100%
Sales 5
Pidilte 40
Camel 55
Other
Interpretation
The above chart shows most of the demand as compare these two company 55% pidilite company and 40 camel company and other 5% demand in a pune market
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9) How effectively your distributors help in promoting the Pidilite product. ? Particular Helps in Visibility of Product Conducting dealer meets Road show & exhibitions Total
No. of Responses 40
Percentage
50
50%
10
10%
100
100%
40%
No. of Responses 50 40 30 20 10
No. of Responses
0 Visibility of Conducting Product dealer meets
No. of Responses Road show & exhibitions
From the above table shows the 40% Responses of Visibility of Product 50% Responses of conducting dealer meet 10% Responses of Road show and exhibition
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10) Do you receive the delivery of Pidilite products in time?
Particular
Yes No Total
No of response s 70 30 100
Percentage
70% 30% 100%
No of responses 30
Yes 70
No
Interpretation
From the above table 70% respondents receive the delivery at time and 30% respondents are self of delivery is delay
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11) How much are you satisfied with the Pidilite products?
Fully satisfied Partially satisfied Not Satisfied Total
Total Response 85
Percentage
5
5%
10
10%
100
100%
85%
Total Reaspons 100 80 60 40
Total Reaspons
20 0 Fully Partialy None of satisfied satisfied the above
Interpretation
The above data shows the reviews of the clients regarding the Pidilite products. The good thing about the products is 85% clients are satisfied.
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12) Any suggestion for improving stock for high sales? No of responses To introduce scheme chart 40 Regular Visit
20
Modification in any products Develop designable product
10 30
No of responses 40 35 30 25 20 15 10 5 0
No of responses
Interpretation
The above Chart it clearly shows that the 40% To Introduce Scheme chart 20% Visit to regular 10 % Modification In any Products and 30 % Develop designable product
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CHAPTER 5:- SCOPE & LIMITATIONS OF PROJECT
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RESEARCHER POINT OF VIEW SCOPE:
To learn more on the practical aspects of implementation of a research project.
To learn more on the practicality of the marketing concepts.
To get more confidence by interacting with field personnel.
To improve analytical thinking and ability of decision making.
To gain knowledge of negotiation skill.
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LIMITATION:-
As I was asked to carry on my vocational training I found the following limitations during my training period. So I could not collect all information regarding my topic. i)
Shortage of time factor was one of the biggest constr aints.
ii)
Most stress was given on the primary data as it was difficult to collect secondary data from the organization and distribution since it is difficult to ascertain the authenticity of their statements.
iii)
All the observation and recommendation will be made on the feedback obtained from survey.
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CHAPTER NO.6:- LEARNING OF THE PROJECT
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LEARNING OF THE PROJECT:-
By the help of project I come to know about the channel of pidilite industries ltd. Different type of channel, retailer perception towards Pidilite distributors i have studied. Overall experience with company and work allotted was reall y good.
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CHAPTER NO.7:-FINDING AND SUGGESTION
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FINDINGS:-
1. I observed that only 60% of people know about Pidilite. 2. 99% of the retailers had good opinion towards the distributors. 3. Only 1% of the retailers had bad opinion therefore the distributors have to control this aspect because the word of mouth plays a very important role and they should try to make their relationship 100%. 4. The frequency of visit made by the distributor in the market. This chart shows that to 47% of the outlets surveyed the visit was on alternative days, 46% of the outlets surveyed the visit was on daily basis and 7% of the outlets surveyed the visits are made once a week. This shows that the company is mostly following the Alternative and daily routes. 5. A huge demand for Pidilite Products in Pune city and therefore 61% of the retailers are expecting daily visits from the distributors in order to meet the demand from the consumers, therefore the company has to look to this aspect seri ously. 6. 36% expect an alternative days visits instead of daily visits, the outlets which are non potential outlets expect the distributor to visit once a week. 7. The Distributors in Pune 40% is the Highly Satisfied Distributor, 35% Moderately Satisfied Distributors and 25% Distributors are less satisfied.
8. Preference for Channels of Distribution that Retailers look for Pidilite product is
“Level One”. As we can see 60% of respondents agree with “Level One”. Hence, preference for Channels of Distribution that Retailers look for Pidilite product is
“Level One”. 9. Most of the respondents say that the customer demand is fevicol and fevistick in a shop. 10. The acrylic colour demand as compare of two company 55% Pidilite company and 40 camel company and other 5% demand in a Pune market 11. 70% respondents said they receive delivery on time and 30% respondents are self of delivery is delay 12. The reviews of the clients regarding the Pidilite products. The good thing about the products is 85% clients are satisfied. 13. 40% Respondents suggested to Introduce Scheme chart 20% Visit to regular 10 % Modification In any Products and 30 % Develop designable product 66
SUGGESTIONS:-
1. The company must have a super stockiest in Pune city so that this can not only the need of the Pune market but also the surroundings places. 2. The transportation department should concentrate on its faster deli very of products. 3. Company has to promote Pidilite as company while promotion as of Pidilite is Low 4. Most of the customer are demanding daily visit so distributor should focus on daily delivery. 5. Distributor should have focus on profit margin as per customer demand.
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CONCLUSION:-
Distribution Channel plays a very important role especially with respect to the Pidilite industry because if the product is not available on time the consumers will switch on to other brands and the company will lose its market share and hence an effective distribution channel is the need of this industry. The distribution channel of Pidilite Industries is effecti ve
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CHAPTER NO. 8:-ANNEXURE
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BIBLIOGRAPHY:-
www.google.com www.Pidilite.com www.wikipwdia.com BOOKS:-
1) Naresh K. Malhotra, Marketing Research, (2016), 7th edition ,Pearson India
2) Philip Kotler and Kevin Keller, Marketing Management, (2014), 15th Edition, by Pearson
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QUESTIONNAIRE:-
1) Do you know about Pidilite as a company? a) Yes b) No 2) Which Pidilite product do you sell in your store? a) Fevicol b) Fevistick c) Fevigum d) Acrylic Colour e) Rangeela 3) How is the relationship with the distributor? a) Good b) Bad 4) How many times the distributor visits outlets per week. a) Once b) Alternative c) Daily 5) How many times he is expected to visit. a) Once b) Alternative c) Daily 6) Are you satisfied with the profit margins they are getting? a. Highly Satisfied b. Moderately Satisfied c. Less Satisfied 7) Which type of delivery channel you would prefer? a) 0 level b) 1 level c) 2 level d) 3 level
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