A Presentation on Sales and Distribution ofParle Submitted By: Swapnil Lazarus Vinita Gadkari Wahid Noor Rehman
About – Parle Agro Parle Agro is an Indian private limited company founded in 1929. It owns the brands including Frooti, Appy, LMN, Hippo and Bailley. Parle Products has been Indias largest manufacturer of biscuits and confectionery, for almost 80 years. Makers of the worlds largest selling biscuit, Parle-G, and a host of other very popular brands, the Parle name symbolizes quality, nutrition and great taste Parle enjoys a 40% share of the total biscuit market and a 15% share of the total confectionary market, in India
History Parle Products was founded in 1929 in British India. It was owned by the Chauhan family of Vile Parle, Mumbai. The Parle brand became well known in India following the success of products such as the Parle-G biscuits and Thums Up soft drink The original Parle company was split into three separate companies owned by the different factions of the original Chauhan family: Parle Products, brands Parle-G, Melody, Mango Bite, Poppins, Monaco and KrackJack Parle Agro, brands such as Frooti and Appy Parle Bisleri All three companies continue to use the family trademark name "Parle".
Parle Biscuits Parle biscuits are linked with factors of power and wisdom providing nutrition and strength. Parle biscuits are indeed much more than a tea- time snack, they are considered by many to be an important part of their daily food. Parle provides one and all with a basket of biscuits which is not only satisfying but are also of good and reliable quality. Parle biscuits cater to all tastes from kids to senior citizens. They have found their way into the Indian hearts and homes. Parle G is a source of strength for both body and mind due to the sumptuous amount of milk and wheat.It is the Largest selling Biscuit Brand in the world.
The Parle G Distribution NetworkIntensive DistributionParle uses Intensive Distribution for Parle G. This is the ideal strategy for themarket 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 ParleThe Parle distribution network for biscuits has essentially four levels as enlistedbelow: Parle Depots Wholesalers and Distributers Carry Forward Agents (if required) Retailers
The Channel Members and LogisticsParle has nearly 1500 wholesalers, catering to 425000 retail outlets directly orindirectly. A two hundred strong dedicated field force services these wholesalersand retailers. Additionally, there are 31 depots and Carry and Forward agentssupplying 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 andbreadth of the country.Level 2:Since its an FMCG product this channel exists for customers scattered throughoutthe country.Level 3:Mass consumption and suitable for National and International coverage. For e.g.Parles international operations consist of serving markets in the MiddleEast, Africa, South America, Sri Lanka, Australia and North America for which the3 level distribution channel exists
The Parle Distribution Network LogisticsSelection of Channel Members for ParleParle takes into consideration a host of factors while selecting the channelmembers. This is because it believes that selection of channel members is a longrun decision and the rest of the decision regarding the supply chain depends uponthe efficiency and coverage by the channel members.The following are the host of factors considered by the company in selecting thechannel members: Authentication Proof of solvency which requires name and address of the channel member‟s bankers Safety of the inventory 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.
The Parle Distribution Network Logistics Details of the delivery vehicle, which includes the following: Light Commercial Vehicles, Matador, 3 Wheeler Van, Tricycle Van and Hand/Push cart. The number and model of each of the vehicle needs to be furnished to the. company 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. The salesmen too are divided into various categories like The Field salesmen Counter salesmen The details of Clerical Staff and labour are to be provided. The technical competence of the salesmen needs to be mentioned.
The Parle Distribution Network Logistics Details of the various products of other companies that the channel member keeps have to be provided. The following also need to be furnished with the above: The annual sales of these products have to be mentioned. Details of complementary products and product lines need to be mentioned. 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 Channel Members of the Parle Distribution NetworkThe DistributorsOne of the main factors, which keep the distributors motivated, is the margin. Usuallythe margins offered by Parle are 8%. Now-a-days it has been raised to 8.5%.The Retailers Trade schemes: these are undertaken by the company only for the hard sellingitems e.g. Biscuits and Snacks etc. for these the company raises the margins by2%, also schemes like good packaging incase of butter and cheese is undertaken bythe company. However this is only a short-term initiative to push the products of thecompany. Glow boards: the company puts up glow boards at the retailer and pays themajor portion of the cost. Schedule of the salesmen: they provide the retails with this schedule so theretailers can pre estimate the quantities of the various products needed. Infrastructure facilitation: the company facilitates the retailers to buy beautifulstalls by formulating an easy payment program and a commitment to buy back theequipment at a reasonable price when the value of the equipment has depreciated
Evaluation of the Channel MembersParle has a three pronged process to evaluate its channel members. These are theBeat Plan, the Cumulative Performance plan and Target versus Achievement Plan. Beat plan: this plan is generated for the various product categories. A weeklyschedule is prepared for various markets and the retailers the turnover for each of theproduct is calculated for the wholesale dealers. Cumulative performance: the performance of the dealers is averaged out over aperiod of three years where a comparison is made of the present performance vis-à-visthe previous ones. Target versus achievement: the performance and the targets are compared andtherefore the gaps are identified which help in evaluating the wholesalers and thedistributors and planning for the next year as well. This is done for each of the productcategory.
Other criteria: these need to be fulfilled by the channel members of Parle. Details of the bank guaranty Photographs of the offices Details of the wholesalers and the distributors‟ salesmen and the product lines they deal in. The computerization facility available. The storage space. Stall facility with photograph. Details of the delivery vehicle with photograph. Summary of the monthly potential sales of markets. Summary of the product wise monthly sales potential of institutions.
The Distribution Channel and Parle The company‟s strength is in the procurement of raw materials and essentially not the distribution of its product. Even though Parle is the market leader in biscuits. But, distribution logistics is the industry‟s main problem. While the other companies fail to replenish demand due to lack in procurement of raw material, Parle‟s inventory management is sound. Parle has loyal cooperatives that provide products only to them, over time the relationship of trust has built up with these people that Parle leverages now. 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 believes that there is an ongoing demand in the market and therefore no promotions are needed to increase the sales, also the fact this would affect the cost of the product the company doesn‟t undertake many promotion schemes.
The Distribution Channel and Parle 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. The company has been able to push its new products into the market by hooking them onto the fast moving products like Parle butter bite. Because of the strong relationship that Parle shares with the constituent channel members, it forces the channel members to carry all its new products.