Reckitt & Bata

8/14/2019 Reckitt & Bata

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INTERNATIONAL MANAGEMENT INSTITUTE

Term ProjectInitial Synopsis

Submitted by

Prajith V M 08PGDM099

Prakhar Singh

08PGDM100

Rakesh M 08PGDM043

Somil Joshi 08PGDM113

Tarun Gupta 08PGDM118

Varun S Pilla 08PGDM119

Submitted to

Prof. P C Mehra


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Distribution Network: ConventionalTrade

Company

Factory

Company

Factory

Regional

Company

Warehouse

CFA

Regional

Distributer

(Delhi)

Regional

Distributer

(Delhi)

Regional

Distributer

(Delhi)

Retailer A

Retailer B

Retailer D

Retailer C


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Distribution Network: ModernTrade

Company

Factory

Regional

Company

Warehouse

CFA

Company

Factory

Regional

Distributer

Regional

Distributer

(Delhi)

Regional

Distributer

Big Bazaar

Spencers

Reliance

Fresh

More


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Reckitt Benckiser About thecompanyReckitt Benckiser plc is a global consumer goods company, making and

marketing home, health and personal care products. The annual revenue of

Reckitt Benckiser was 6,563 million for the year 2008. Reckitt Benckiser

manufactures variety of power brands such as Dettol, Clearsil, Harpic etc.

Globally, the product line is divided into six categories such as surface care,

fabric care, dishwashing, home care, health and personal care, and food. In

Indian scenario, the product line analysis of Reckitt Benckiser yields us the

following result

Product Line Analysis Reckitt benckiser

Health & PersonalCare

Fabric Care SurfaceCare

HomeCare

Veet Calgon Harpic Mortein

Dettol Vanish Dettol Airwick

Clearasil Woolite Lysol

Strepsils

Functioning of the ChannelReckitt Benckiser has its manufacturing units for different products at different regions of the

country. For example, Dettol is manufactured at Jammu and Harpic is manufactured at

Uttaranchal. The products from all of these manufacturing units are brought to a central

warehouse, for the northern region. From this central warehouse the products move to the

various Carrying and Forwarding Agents.

Distributor has with him 10 salesmen and 2 merchandisers. These numbers are fixed by the

company. The salesmen in company terminology are called Distributor Sales Representatives(DBSR). The company prepares a weekly schedule which mandates the visits of each of these

10 salesmen in the distributors territory. The distributors territory is also decided by the

company.

Reckitt Benckiser works on a before-cash basis. Payments are required to be made up front,

and there is no credit policy. However, payments can be made on a per week basis, even if

the sales targets are set on a per month basis. (eg. If the sales target is set to Rs 2 crores for

the month of July, it is not necessary for the distributor to pay all of this 2 crore on July 1st.

He can pay Rs 20 lakh and take products equal to or less than 20 lakhs.)


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All dealings of the distributor are with the C&FA. The dealer places his order via email, and

the payment can be made by either an RTGS fund transfer or a DD. Since DD procedure is

cumbersome, generally distributors makes all its transactions through RTGS. Once the order

is made, the C&FA agents ensure that the order is executed within 24 hours. All the carrying

cost, until the point where the products are stocked into the shelves of the distributor is bornby the C&FA. Any damages to the goods in transit are also born by the C&FA. The

distributor then signs, and takes ownership.

All the products the distributor is associated fetches him a margin of 5%.

Conventional Trade

The salesmen travel to the retail points, and procures orders from the retailers. The order is

then filled in to two software one which is the dealers own software, and software of the

company. The dealer software is to keep track of the logistics, and the company software is

for the company to have a real time data. The dealer software then makes a dispatch summary

sheet, which contains information as to how much of which product to send to which retailer,

in what vehicle. On average distributors have has 8 - 10 vehicles of its own. The order is

taken to the retailer as per the dispatch summary, in one of these vehicles accompanies by a

driver, helper and the same salesman. Any damage in transit is born by the distributor. The

salesman collects the payment from the retailer, either as cash, credit, dd or cheque. Every

cash payment gets a discount of 2.5%.

It is to be noted that the company mandates the distributors to have 3 weeks of inventory

always in storage.

Modern Trade

Modern trade refers to the organized retail chains which sprouted in recent times, like the Big

Bazaar, More, Reliance Marts, etc. There are a few differences in the functioning when it

comes to modern trade.

There are no salesmen involved to deal with the modern trade. The order is placed by the

retail chain through email, and that initiates delivery. Different retail chains have different

methods of operation. For instance, Big Bazaar orders are made centrally, and the delivery is

always to the central warehouse of Big Bazaar. But when it comes to Spencers, each retailoutlet sends order separately, and the deliver has to be made individually to these outlets.

Reckitt Benckiser provides support to its distributors in terms of internal schemes and offers.

There are various schemes or lucky offers which the company floats on a timely basis for the

benefit of its dealers. Also, as a help, there is an area sales representative of the company to

overlook the sales and delivery procedures occurring at the retail points. Issues like conflict

between retailers, territory sneak-ins by other distributors, etc are handled by these area sales

representatives.


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Bata India Limited

About the Company

Incorporated as Bata Shoe Company Private Limited in 1931, the companywas set up initially as a small operation in Konnagar (near Calcutta) in1932. In January 1934, the foundation stone for the first building of Bata'soperation - now called the Bata. In the years that followed, the overall sitewas doubled in area. This township is popularly known as Batanagar. Itwas also the first manufacturing facility in the Indian shoe industry toreceive the ISO: 9001 certification.

The Company went public in 1973

when it changed its name to BataIndia Limited. Today, Bata Indiahas established itself as India'slargest footwear retailer. Its retailnetwork of 1250 stores gives it areach/ coverage that no otherfootwear company can match. Thestores are present in goodlocations and can be found in allthe metros, mini-metros and townsBata's smart looking new stores

supported by a range of betterquality products are aimed atoffering a superior shoppingexperience to its customers. Andthe new face of Bata India is now visible to the industry as well as itscustomers. Today, backed by a brand perception of experience, thecompany is working towards positioning itself as a vibrant andcontemporary young brand. It has significantly transformed its retailformats to become more lifestyle-oriented, which has helped changeconsumer perceptions to a large extent.

Bata India - Today

Sells over 45 million pairs of footwear every year Serves over 120,000 customers every day Sells through over 1200 retail stores Operates 5 manufacturing facilities Employs more than 6800 people


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ManufacturingBata India Ltd. has six manufacturing plants all over India. These factories

are responsible for the production of the entire range of BataTM products

apart from Sandak

sadals, which are

exclusively

manufactured in the

Sandak Factory. Apart

from the

manufacturing plants,

Bata India Ltd. also has

two raw material

processing plants: -

Kottayam

Rubber Plant

Mokhameghat

Tannery

These plants take care

of the major raw

material requirements of Bata.

Apart from these the raw material required are procured from quality

certified suppliers, who hold a long term relationship with the company.

Sl No Plant Name Location Work Done

1 Bata Nagar Factory Batanagar, West

Bengal

Complete

Manufacturing

2 Rubber PurchasingDept

Kottayam, Kerala Rubber purchase andprocessing

3 Bataganj Factory Bataganj,Patna Bihar Complete

Manufacturing

4 Bata Tannery Mokamehghat, Bihar Leather Processing

5 Faridabad Factory NIT, Faridabad UP Complete

Manufacturing

6 Sandak Division Shivaji Marg, Sandak Sandak Footware


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7 Bata Shatak Hosur, Tamil Nadu Complete Range

8 Bangalore Factory Bangalore, Karnataka Complete Range

Distributor BaseFrom the factory site the finished goods are moved by 3rd party CFA

agents which are logistics companies. These companies take care of

transportations from factory site to distributor points.

The distribution of Bata India Ltd is majorly controlled by the four

distributors located in four regions of the company.

1. East Kolkata

2. West Thane

3. North Faridabad

4. South Bangalore

These are the 4 major distribution points and are owned by the company

and manned by people on company payroll.

The given figure depicts roughly, the regions covered by the four major

distribution points.


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Sub Distributors

The following diagram depicts the location of some of the major sub distributors

of the company. These sub distributors acts as companys intermediaries in

places which are far off. The density of such sub distributors is much more in Tier

II and Tier III cities as they tend to be much farther away from the zonal

distribution point eg Udaipur falling under Faridabad region would have a sub

distributor serving the retailers/dealers in that region.

Sub Distributors In NCR


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Retail NetworkBata India Ltd. has a huge network of retailers across the country. These outlets

can be classified in the following three categorised

Bata Owned Stores Operated and run on company property by company

employees

o Flagship City stores

o Family and Bazar outlets

Bata Franchises - Operated and run by franchise owner on their own

property but adhering to company norms

Multi-Brand Outlets selling footwear of various kinds and also givingshelf-space to Bata products

Bata Outlets in Delhi


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Distribution Network


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Bata Dealer requirements

Bata - Basic Requirements

Availability of location in major semi-urban/ urban centres with atleast 30,000 inhabitants or in major shopping centres.

Selling area of at least 500 sq. ft. fro half dealership or 1,000 sq. ft.for full dealership.

Start-up investment/ capital of minimum RM50,000.00 Adherence to terms and conditions of dealership such as payment

terms and follow strict pricing policy.

Bata - Special Services

Site and store evaluation, competitive analysis and turnoverforecast.

Profitability calculation and feasibility. Store design, layout, furniture and fittings will be provided by Bata

on a cost sharing basis. Sales tracking and re-order. Full management support for new openings. Long term business and management support.

Bata - General Condition

Exclusive selling areas dedicated to Bata products only. Management training will be provided. Point of Purchase (P.O.P) materials will be provided free of charge. DSP van/ artist assist in the in-store display of your shop.


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Organisation Structure

Urban division

Urban Wholesale Division consists of 16 depots selling over 15.0 Millionpairs across the country through 150 distributors and over 20,000 dealers.The focus is on selling volume products catering to complete familyneeds.

Under Urban Bata have Wholesaler and Dealer.

Wholesaler

Shoe trader who buys merchandise to resell to dealers (multibrand

outlets) located in street markets of major cities / towns and rural areas.They keep inventory of Bata products for replacement and sell on credit orcash basis. Their focus is on volume products like basic closed shoes,sandals / chappals, school shoes, Canvas shoes, Hawai, Sandak andBatalite.

Dealers

Multibrand outlets located in major cities selling Bata products also.Products consist of medium to high priced shoes for the whole family.

These shops deal in regional brands and unbranded footwear from smallmanufacturers also. Some of the dealer stores are located in high streetsand are also air-conditioned.

Branding division

Dr Scholls Shoes India, Hush Puppies Shoes India, Power Shoes

India

Branding division consists of 15 distributors located in major metrosselling footwear under Hush Puppies, Dr Scholl's, Power & Bubblegummerbrands to departmental stores, footwear chains, specialty stores and highstreet dealers.

Branding division

Dr Scholls Shoes India, Hush Puppies Shoes India, Power Shoes

India

Branding division consists of 15 distributors located in major metrosselling footwear under Hush Puppies, Dr Scholl's, Power & Bubblegummer


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brands to departmental stores, footwear chains, specialty stores and highstreet dealers.


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Some Additional Moves

Utilizing Distribution Channel Capacity

Bata partnering with Adidas, Reebok, M & B, Lee Cooper to

effectively utilize its distribution channel capacity

Bata charges a direct commission on MRP

Adidas 40% - Footwear / 42% - Apparels

Reebok 36%

M & B 40%

Sierra (Lotto) 42%

Puma* 35%

Direct Sales Channel Bata Direct - Bata venturing into Direct Selling

Sale through Catalogs

Sales Force

Sales coordinators

Bata sales consultants

High end products on sale thorough this channel

Documents

Reckitt & Bata