New Paradigm of Distribution for FMCG Companies

Presented By:- Group 5

Overview of FMCG Sector.• Fast Moving Consumer Goods(FMCG) goods are

popularly named as consumer packaged goods.• The most common in the list are toilet soaps,

detergents, shampoos, tooth paste, shaving products, shoe polish, packaged food stuffs, household accessories and extend to certain electronic goods.

• These items are meant for daily of frequent consumption and have high return

Top 10 Companies in FMCG Sector1. Hindustan Unilever Ltd(HUL)2. Indian Tobacco Company(ITC)3. Nestle India4. GCMMF(Amul)5. Dabur India6. Asian paints(India)7. Cadbury India8. Britannia Industries9. Procter and Gamble(P& G) 10. Marico Industries

Summary

• FMCG Companies discussed in this case:-HLLP&GNestleDabur• Except HLL other FMCG companies going in for a

revamp of their strategies.• Emphasis on shoring up bottom lines rather than

concentrating on top line growth• HLL model has a million retail points, 7500

distributers and huge varieties of products.• HLL focuses on virtually every income & geographical

segment in the country

• P&G is moving towards demand based model which enables to reduce the quantum of waste.

• Nestle emphasis is on products in which it was traditionally strong & weeding out low profitability products.

• Dabur is focusing on reducing the number of distributers and appointing “super stockist”.

Q.1. What are the strengths and weaknesses of HLL’?

• STRENGTHS:-• Presence of established distribution network in

Urban as well as Rural areas.• 1 million retail points & 7,500 distributers.• Presence of well known brands.• Focuses on every possible price point.• WEAKNESSES:-• Low export level• “Me- too” Products • Establishing new products at different price points

takes both time & money.

Q.2. Compare HLL’s distribution model with that of other FMCG companies.

HLL’s Distribution Model:-• Setting up rural and small town marketing distribution

network.• Establishing new products at difference price points.P&G Distribution Model:-• Streamlining its distribution network in an exercise code

named “Operation Golden Eye”• Getting out of rural market.• Focusing on class A & B towns.• Moving to a demand based model which enables to

reduce the quantum of waste.• Reducing the no. of price points at which it offers its

products.

Nestle’s Distribution Model:-

Dabur’s Distribution Model:-• Following the basic HLL’s track i.e. every possible

price point.• Reducing the no. of distributors where population

of the town is less than 20,000.• Appointing super-stockist.• Instead of expanding distribution to increased

demand for a product, demand should drive distribution.

Thank You…