Conflicts in channel

 Credit policy: As compared to the market, Parle credit period is less, it provides
credit period of 4 days only which is less for institutional sales. ITC gives a credit
period of 7 to 15 days.

 Packaging: The channel members are asking for better quality of packaging for
easy storing.

 Ownership of assets: Earlier, the company used to give the products to the
retailers on lease, but when the company wanted the stuff back; the retailer didn’t
agree to comply and created issues of ownership.

 Margins: The Company provides less margins to all the channel members. For
e.g. The retailer’s margin in case of Parle G is 9% as compared to Britannia’s
13%.

 Replenishment: The replenishment of the stocks is not prompt for peak sales in
case of Parle cheese Biscuit and all hard-selling items. With 4,551 Parle-G biscuits
consumed every second, the company’s endeavour should be to make certain that
distributors’ stocks are replenished quickly.

 Stocking issues: Parle doesn’t want the retailers to stock the competing brand in
the company leased stall, which at times is hard to manage as retailers often tend
to do it.

 Replacement of products: One major issue is the deterioration in the product

calls for fail in replacement by the company.
 Co-operation in Channel

The company strongly believes in maintaining a good relationship with the channel
members so that they are always motivated to work for the company. It has been seen
that for Parle, motivating its channel members is of utmost priority because they feel that
motivated channel partners can also initiate various advertising and sales promotion
schemes on behalf of the company. However, to keep the channel members motivated,
the company has to incur certain costs but the benefits of it are felt in the long run.

 Agreement defining rights: The distributors have to sign an agreement where

the areas of operation for each of the distributors are defined, thus avoiding any
conflict amongst the distributors regarding their areas of operation.

 Parle quality circles: Every month the members of the local channel meet
together to share issues and the achievements of the channel members. This is
an ongoing activity facilitated by the local company offices which enables the
channel members to learn together and reduces the horizontal conflicts amongst
them.

 Pilot salesmen scheme: Under this scheme, half the cost of the salesmen is born
by the company and the rest half by the distributor. This scheme is run to reduce
the financial burden of the distributors.
 Scheduling of sales: The wholesalers and the distributors provide the schedules
of their respective sales persons visit to the retailers so that the retailers can plan
out and place the orders in advance.

 Increase in margin: The margin offered by Parle has been raised to 9% from
8%. Though the margin is still lower compared to other companies but volume
wise this comes out to be a big figure since Parle’s product has a good
demand in the market which motivates distributors to stock it.

 Trade Marketing: Parle has built on the concept of “Trade Marketing”, to keep
the Channel members motivated in the long run. This makes the dealers and
the distributors believe that the company’s products are worthy of being
pushed in the market.

 Total Quality Management: The company organises various Total Quality

Management initiatives and workshops where various counselling measures
are taken to improve the overall working of the distribution network.

 Vision enforcement: To communicate the vision to the various channel

members, various events organized by the company at different locations where
the values of the company are made clear and enforced to the channel
members. Being a cooperative society, Parle cannot afford to spend
exorbitantly on such events so it has a very traditional way of organizing these
events which leaves an impact on the members.

 Trade Scheme: For hard selling items, company raises the margin by 2%. This
is only a short-term initiative to push the product.

 Glow Boards: The company puts up glow boards at retailer’s place and bears
the major portion of the cost.

 Infrastructure facilitation: Parle encourages and make process easier for

retailers to buy to buy beautiful stalls with easy payment schemes and a buy
back offer at a reasonable price when equipment’s value has depreciated.
 The Distribution Channel and Parle

 Parle’s real strength does not lie in its distribution system but it lies in the
procurement of raw materials. Parle has a very sound inventory management
while other companies struggle to replenish demand due to lack in procurement
of raw material.

 Parle has some very loyal cooperatives which provide products only to them, and
over time a unique relationship of trust has built up between them which Parle
leverages now.

 The transport channel of Parle is another strength for them. As these

transporters have grown with the company overtime; the old relationship of trust
with them enables the company to give least margins when it comes to the
distributors in the industry, thus lowering the costs for Parle.

 Parle doesn’t undertake many promotion schemes because they believe that
there is an ongoing demand in the market and therefore no promotions are
needed to increase the sales, also the fact that such schemes would affect the
cost of the product.

 The company 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.

 Parle has been able to push new products into the market by hooking them onto
the fast-moving products like Parle butter bite.

 Parle shares a strong relationship with the constituent channel members which
forces the channel members to carry all its new products.
 Suggestions


 Increase the margins: it is also very essential for the company to increase the
margins for the hard-selling items and make the margins comparable with that of
the other companies in order to motivate the channel members.

 Pushcarts: Increase efforts to penetrate deeper in rural market with an effective

channel. These pushcart efforts should increase in number in order to increase
the market reach.

 Parle should go in for ‘Parle’ Zones: In Parle zones, all the Parle products can
be stalked, which can be an effective mode of „umbrella marketing‟. This strategy
can be implemented in regions where the footfalls are large in number, primarily
for big city retail outlets.
This alternative channel would have following advantages:
1. It will help in full range display.
2. It will be easier for the company to promote new products.
3. It will be easy for Parle to push impulse purchase products.
4. It will enhance the “Parle Brand” exercise.