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TIMES OF INDIA

Methodology
Analyzing the distribution structure of Times of India
Identifying the roles (Primary and secondary) of all the
intermediaries
Analyzing the promotion schemes followed by TOI
Conducting a detailed study of the flow of the product and
relationship between these existing intermediaries
Interviewing intermediaries to get insights about problems
in the existing system
After identifying the inefficiencies in the channel,
conducting research for probable solutions
Making recommendations

Company Background
Owned and managed by Bennett, Coleman & Co.
45 dailies and periodicals
108 editions from 9 centres
16 Special Interest offerings targeted at groups of
consumers ranging from photography to education to
annuals on beauty, fashion etc.
Readership of 76.43 lakhs
Times of India is ranked as the top English daily in India by
readership

Industry Overview
More than 1,30,000 printing presses in India
More than 1om families involved in the industry
INR 20 bn+ turnover
Per capita consumption of paper & boards 4.5 kgs
Machinery - new & second-hand predominately from
China, France, England, Germany





Channel Members
Printing Press
It takes the content from the editorial team and prints
using high capacity advanced press machines that deliver the
product in packaged condition

Every press in major cities has a capacity to print over
10 lac copies
Printing starts around 1-1:30 am usually
After Printing, stacking is done before dispatching
newspapers to depots
Labeling done to match stacks with destination
Usually stocks for depots situated the farthest are
dispatched earliest
Depots
The distribution centre receives the copies from the
transporter and stocks it for a short duration
Close to 100 depots in Delhi
Keep publications (newspaper + magazines) for
various companies
Serviced by salespersons who are company
employees
Unorganized keep newspapers / magazines
scattered on pavements or on steps of some malls etc
Records are kept at depots in the following format:-
Agents
Employed where distribution is not organized
Exclusive agents of TOI
Work on commission, themselves act as salesmen
Vendors
Like retailers. Link between depot and end consumer
Go to nearest depot every day. Pick out publications
they want
They sell via : door-to-door beat boys/single point
newspaper stands
Beat Boys
The delivery boys have demarcated regions/housing societies,
which they serve
Hawkers are individuals who do not have established
customers and sell at road sides, bus stands etc. They make
small quantity purchases
Deliver required publications to proper destinations
Have route-wise list of addresses and their required
newspaper/publications
3-4 beat boys cover an area via their routes
Channel Margin
Margin given by TOI to channel members is around 30%
More or less uniform rate across the industry
Agents get 5-10%, salesmen on payroll get fixed salary
Vendor receives 20-25%, to cover the costs incurred due
to travel, beat boys etc. It depends on the type and
language of newspaper. (Hindi 25%; English 20%)
Credit periods
30 day credit period to distributor is offered, subject
to 3 month security deposit
For Vendors, on an informal basis, 1-2 days is offered.
Vendors buy a fixed, large amount of newspapers
daily and pay in cash on a day-to-day basis
2% of the papers which remain unsold at the end of
the day can be returned back
Packaging
Automatic & manual packaging, both are used in industry
Manual Packaging has lot of inefficiencies associated
Delays could cascade on to delays in loading,
delivery
Human Errors could lead to incorrect quantities or
editions being packed
Onus to make up is on distributor, as error is detected
usually after leaving printing premises
Distributor has to bear costs of transporting
replenishments to aggrieved vendors


PARLE-G


192- The number of times you can cover Earth's
circumference if you line up all the Parle-G biscuits
consumed annually, end to end.
Rs 5010 crore - The worth of biscuit sales registered by
Parle-G in 2012
400 million - The number of Parle-G packs that are
produced daily. Equivalent number of dollars were made
by Kevin Systrom when he sold off Instagram to
Facebook. That took him two years though.
6 million - The Number of retail stores that Parle-G's
distribution network had covered by Jan'13.
Today, the great strength of Parle Products is the
extremely widespread distribution network. Even at
the remotest places, you can buy Parle biscuits and
sweets from the local grocer. It has taken years to
create this extensive network. Parles sales force
started with one salesman in Bombay and some
agents in few other cities. Gradually, Parle Products
expanded. Soon sweets and biscuits were being sent
by rail to Calcutta, Delhi, Karachi, Madras and other
major cities. As production increased, distribution
was amplified. Full time salesmen were appointed in
different areas. Currently, Parle Products has over 33,
00,000 distribution outlets.







Priyagold(12%) Sunfeast(9%) others(9%)


Britania(30%) PARLE (40%)





It is the Largest selling Biscuit Brand in the world

The Production Units of Parle
Parle G scores the best. It has the best distribution network
among the competitors. It also has the best lowest pricing
strategy.
Britania is the nearest to Parle, and its no surprise that Britania
has 30% market share only after Parle at 40%.
ITCs Sunfeast and Priya Gold are somewhere in between in
price and distribution network. A market share in the region of
10% is evidence to the fact. Marino and Horlicks are niche
players hence, have a higher price and a less intensive
distribution strategy.


Distribution Channel Network

Intensive Distribution

Parle uses Intensive Distribution for Parle G. This is the
ideal strategy for the market leader as intensive
distribution has the following advantages:

Increases coverage and sales
Increases product availability
Encourages retailers to compete aggressive. Higher
competition leads to narrower margins for the retails
hence, increases the ultimate margin for the
manufacturer.

The Channel Members of the Distribution Network of
Parle
The Parle distribution network for biscuits has essentially
four levels as enlisted below:

Parle Depots
Wholesalers and Distributers
Carry Forward Agents (if required)


Retailers The Channel Members and Logistics
Parle has nearly 1500 wholesalers, catering to 425000
retail outlets directly or indirectly. A two hundred strong
dedicated field force services these wholesalers and
retailers. Additionally, there are 31 depots and Carry and
Forward agents supplying goods to the wide distribution
network.
Parle has level 1, level 2, level 3 distribution channels
levels.
Level 1:

Availability of Parle G biscuits at all departmental stores
across the length and breadth of the country.
Level 2:

Since it's an FMCG product this channel exists for
customers scattered throughout the country.
Level 3:

Mass consumption and suitable for National and
International coverage. For e.g. Parle's international
operations consist of serving markets in the Middle East,
Africa, South America, Sri Lanka, Australia and North
America for which the 3 level distribution channel exists.
Channel Dynamics

Parle has a multi-channel marketing system since it uses
more than two marketing channels to reach all its
customer segments.
The Parle Distribution
Network Logistics Selection of
Channel Members for Parle

Parle takes into consideration a host of factors while
selecting the channel members. This is because it
believes that selection of channel members is a long run
decision and the rest of the decision regarding the supply
chain depends upon the efficiency and coverage by the
channel members.

The following are the host of factors considered by the company
in selecting the channel members:

Authentication is required by the regarding the identity
of the channel members, which includes the name and
address, photograph of the location.
Proof of solvency which requires name and address of
the channel members bankers
Safety of the inventory, which means that the distributor/
dealer should get the stock of the company insured.
Inventory or the perishable goods kept by the
distributor/ dealer should be in good condition which
means a detail of storage space and Refrigeration
facility is to be provided.

Company acknowledges the fact that it needs to be
sensitive to the market demands. For this it requires that
a number of salesmen needs to be present on the field.

Dealers of the company must carry a good reputation.
This is due to the fact that Parle believes that the
reputation of the dealer affects the clientele in the long
run.
Market coverage by the distributors needs to be defined
which includes details of Geographic coverage and
Outlets per market area.
The company also requires the dealers to furnish any
Advertising and Sales initiative undertaken by them on
behalf of the company.

The Distributors

One of the main factors, which keep the distributors
motivated, is the margin. Usually the margins offered by
Parle are 8%. Now-a-days it has been raised to 8.5%.

Volume wise this comes out to be a big figure since
Parles product has a good demand in the market.
The transport channel is another strong point for
Parle. As these transporters have grown with the
company overtime; the bonding with them enables the
company to give least margins when it comes to the
distributors in the industry, lowering the costs.

Parle is able to provide products at the least price in
the industry, and is able to give least channel margins
as the channel members earn through volumes and
not through high margins

AMWAY

Started in US in 1959 with 1 product
Global turn over of Rs.30000 crs.
Debt free company
Largest direct selling company of the world
600 patents, 450 products
100% money back guarantee on products
32000 product training session each yr
The Amway opportunity foundation supports more that
800000 visually impaired children

Supply chain in India

Third Party manufacturing
7 manufacturers in India, largest being Sarvottam Care,
Baddi.
4 main regional warehouses
Bangalore
Kolkata
Delhi
Mumbai
55 smaller warehouses across 4000 towns and cities
130 offices
5,00,000 Amway Business owners (ABO)



Distribution network
Amway globally follows a combined strategy of direct
selling and multi-level marketing for distribution.
Every ABO becomes a part of Amways distribution
network.
Amway business owners can earn income and other
incentives in a variety of ways.
They fall under the categories of:
Retail Markup,
Volume Rebates,
Leadership Bonuses and
Higher Awards and Incentives.










Distribution Chain













Raw Materials
Amway Manufacturing and Distribution
ABOs
End Consumers
Amway
ABO 1
END
CONSUMER
SPONSOR
ABO 2
END
CONSUMER
SPONSOR
ABO 3
Every ABO & Sponsor has to register
with Amway






















MANUFACTURER
STOCKIST
WHOLESALER
RETAILER
CUSTOMER
MANUFACTURE
DISTRIBUTOR
CUSTOMER
PHYSICAL DISTRIBUTION
INTELLECTUAL
DISTRIBUTION




Retail Markup
ABOs can buy products directly from Amway at wholesale
prices and sell them at retail prices directly to customers
or add a mark up and sell them to other ABOs. the
difference is earned by the ABO.
The retail markup for Amway is 20%

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