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Distribution system of parle agro in manipal udupi region
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PARLE GROUP Parle Products was founded in 1929 in British India.
Owned by the Chauhan family of Vile Parle, Mumbai.
The original Parle Company was split into three separate companies owned by the different factions of the original Chauhan family
PARLE AGRO- COMPANY PROFILEFounded in 1984.
Owned by Chauhan Family.
Parle Agro, today, is a '2,500 Cr organization‘
76 manufacturing facilities both in India and overseas
Widespread network of 3,500 channel partners that cater to more than 6 lakh outlets in the country
Beveragesfruit drinks,
nectars, juice, sparkling
drinks
WaterPackaged
drinking water
Foodsconfectionery,
snacks
PET Preforms
4 Business verticals
BEVERAGES MKT. SHAREMAJOR BRANDS
DISTRIBUTION CHANNELSFACTORY
HUB
DEPOT/C&F
DISTRIBUTORS
RETAILERS
WHOLESALERS
Parle Agro Ltd.
CFA
Retail Stockist
Multi-brand Outlet
Customer
DISTRIBUTORS & RETAILERS (UDUPI-MANIPAL REGION)
DISTRIBUTOR : SR Enterprise
RETAILERS: Amita Bakery, Friends General Store, Kini General Store, Shenoy Stores, Manipal Stores, etc.
Product Sales/week (in rs) Distributor's margin Retailer's margin
Frooti / Appy 200000 7% 12-15%
Biscuits 200000 5% 10-12%
Confectionaries 100000 5% 10-12%
Snacks / Wafers 100000 5% 10-12%
Total 600000
CHANNEL POLICIES Distributor
selection
Damage Policy
Distributor order management
Market development
Based on ability to cover the market and Financial stability
Distributor to Retailer : instantly/within 1 week
Parle Agro to Distributor: around 6 months Distributor has to pay by RTGS in advance
Special schemes & offers for retailers and distributors
Quality Auditing Regular quality checks done by Parle Agro- twice a year
DISTRIBUTOR’S PROFILE SR Enterprise Owner: Mr. Sushant Kumar
Location: Parkala
Market covered: Udupi-Manipal-Parkala-
Retailers reach: around 800 retailers
Retailer type: All types (Big, Medium, Small, Wholesaler)
Distribution frequency: weekly
Distribution lines: Parle Agro (80-85%), Nestle and Horlicks
DISTRIBUTION PROCESSBangalore
Manufacturing Unit
C&F
Distributor Ware house (Parkala)
Retailers
Parley Agro
Distributor Ware house
(Parkala)
Retailers
Weekly delivery
Weekly delivery
Advance payment through RTGS/NEFT & Credit
Advance payment through RTGS/NEFT
75%
25%
CHALLANGES
Product delivery – Delivering stock to wide range of retailers (rural
area)
Seasonal demand- Demand of some products, like Frooti is seasonal
(Apr-Jun)
Damage of product- Due to moisturous conditions
Order tracking- To avoid misallocation and reduce unwanted inventory
space
Workforce- Lack of motivated workforce, High attrition rate
Financial AnalysisProducts Sales/week (in rs) Distributor margin
Distributor margin/week
Frooti / Appy 200000 7% 14000
Biscuits 200000 5% 10000
Confectionaries 100000 5% 5000
Snacks / Wafers 100000 5% 5000
Total 600000 34000
Distributor's margin per day Distributor's margin per month
4857.142857 145714.2857
Continue..Assets Value Asset life (in years)
Depreciation per year
Depreciation per month
PC 20000 10 2000 167Van 350000 10 35000 2917AC 50000 10 5000 416
Furniture 20000 10 2000 167Total 440000 40500 3375
Expenses per monthEmployee's salary 70000Rent + electricity 7000
Fuel in transportation 4000Maintenance 2000Miscellaneous 2000Depreciation 3375
Total 88375
Investment
Stock 800000Market credit 150000
Assets 440000Warehouse security 5000Security to company 400000
Total 1795000
Continue..
ROI
For 100% OH allocation 80% OH allocation
38% 50%
ROI = (Net earnings- Expenditure)/Investment
ROI is 38 % p.a. if all the OH is allocated to Parley Agro line only
Whereas ROI is 50% when 80% OH is allocated to Parley Agro line and 20% to Nestle and Horlicks line
INSIGHTS/LEARNINGS Return policy is not good
Changing lifestyle and low salary
PARLE AGRO is taking 6 months to clear returns of distributors
Difficult to maintain workforce
Distributor’s issues PARLE AGRO not paying proper attention despite of annual distributors meet, unresolved issues
Lack of promotion Very less promotional activities by PARLE AGRO through distribution channel in this region
Low Motivation to expand
Workforce issues and flat demand
Slow moving product :
Fast moving product :
Medium moving product :
Thank You !
Questions ?