Page |1 A Report on Study of distribution channelSubmitted to: Submitted by:Global institute of mgt. (16) Komal DulamProf. Dharmendra (38) Sandhya KogantiPh.D. (MBA)
Page |2 ACKNOWLEDGEMENT I take this opportunity to express my gratitude and profound thanks to our DirectorKISHOR BHUNSALI. I express our sincere thanks and deep sense of gratitude Studies for providing me withan opportunity to study and to do this report. I express a deep sense of gratitude to my Guide Department of Management Studies,for his encouragement, support and guidance to complete this project work successfully. I extent my heartful thanks to Prof.DHARMENRA for their valuable co-operation oncollecting all information and data regarding this Project Report. Finally, I express our sincere thanks and deep sense of gratitude to my parents andfriends for giving timely advice in all the ways and in all aspects for doing the project.
Page |3 EXECUTIVE SUMMARY Distribution channels are behind every product and service that consumers and Businessbuyers purchase everywhere. Usually, combination on institutions specializing in manufacturing,wholesaling, retailing and many other areas join force in Distribution channels. Distributions channels are a set of inter dependent organization involved in the Processof making a product or service available for use or consumption. Distribution channels decisions play a role of strategic importance in the overall Presenceand success a company enjoys in the market palace. This project report entitled “a study on distribution channel with special Reference toBirla cement in thiruvarur district”. To determine the dealer satisfaction of the product and futuredemands, needs, wants. The study starts with an introduction of the distribution channel, company Profile,important of the study, review of literature and objectives are set out for the Study. Researchmethodology, data analysis and interpretation, findings and suggestionsOf the study follow. The response given by the dealers and analyzed and interpret using different Types ofstatistical tool such as percentage analysis, chi-square method.
Page |4 INDEXCHAPTER TITLE PAGE NO. INTRODUCTION 5 1 1.1 IMPORTANT OF THE STUDY 2 11 OBJECTIVE 3 12 RESEARCH METHODOLOGY 4 15 DATA ANALYSIS AND INTERPRETATION 5 16 FINDINGS OF THE STUDY 6 17 SUGGESTION 7 LIMITATIONS OF THE STUDY 18 8 SCOPE OF THE FURTHER STUDY 19 9 ANNEXURE 20
Page |5 CHAPTER – I INDRODUCTIONPlace, Distribution, Channel, or Intermediary.A channel of distribution comprises a set of institutions which perform all of the activitiesutilized to move a product and its title from production to consumption.Bucklin - Theory of Distribution Channel Structure (1966)Another element of Neil H.Bordens Marketing Mix is Place. Place is also known aschannel, distribution, or intermediary. It is the mechanism through which goods and/orservices are moved from the manufacturer/ service provider to the user or consumer.There are six basic channel decisions: Do we use direct or indirect channels? (e.g. direct to a consumer, indirect via a wholesaler) Single or multiple channels Cumulative length of the multiple channels Types of intermediary (see later) Number of intermediaries at each level (e.g. how many retailers in Southern Spain). Which companies as intermediaries to avoid intrachannel conflict (i.e. infighting between local distributors)
Page |6 Selection Consideration - how do we decide upon a distributor? Market segment - the distributor must be familiar with your target Consumer and segment. Changes during the product life cycle - different channels can be Exploited at different points in the PLC e.g. Foldaway scooters are Now available everywhere. Once they were sold via a few specific Stores. Producer - distributor fit - Is there a match between their polices, Strategies, image, and yours? Look for synergy. Qualification assessment - establish the experience and track record of Your intermediary. How much training and support will your distributor require? Types of Channel Intermediaries. There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to use without an intermediary), and many others. The main modes of Distribution will be looked at in more detail.1. Channel Intermediaries – Wholesalers They break down bulk into smaller packages for resale by a retailer. They buy from producers and resell to retailers. They take ownership or Title to goods whereas agents do not (see below). They provide storage facilities. For example, cheese manufacturers seldom wait for their product to mature. They sell on to a wholesaler that will store it and eventually resell to a retailer. Wholesalers offer reduce the physical contact cost between the producer and consumer e.g. customer service costs, or sales force costs.
Page |7 A wholesaler will often take on the some of the marketing responsibilities. Many produce their own brochures and use their own telesales operations.2. Channel Intermediaries – Agents Agents are mainly used in international markets. An agent will typically secure an order for a producer and will take a Commission. They do not tend to take title to the goods. This means that Capital is not tied up in goods. However, a stockiest agent will hold consignment stock (i.e. will store the stock, but the title will remain with. The producer. This approach is used where goods need to get into a market soon after the order is placed e.g. foodstuffs). Agents can be very expensive to train. They are difficult to keep control of due to the physical distances involved. They are difficult to motivate. 3. Channel Intermediaries – Retailers Retailers will have a much stronger personal relationship with the Consumer. The retailer will hold several other brands and products. A consumer will expect to be exposed to many products. Retailers will often offer credit to the customer e.g. electrical wholesalers, or travel agents. Products and services are promoted and merchandised by the retailer. The retailer will give the final selling price to the product. Retailers often have a strong brand themselves e.g. Ross and Wall-Mart In the USA, and Lisper, Modulo, and Jumbo in Portugal. 4. Channel Intermediaries – Internet The Internet has a geographically disperse market. The main benefit of the Internet is that niche products reach a wider Audience e.g. Scottish Salmon direct from an Inverness fishery. There are low barriers low barriers to entry as set up costs are low. Use e-commerce technology (for payment, shopping software, etc) There is a paradigm shift in commerce and consumption which benefits distribution via the Internet
Page |81.1 IMPORTANTS OF THE STUDY The study is very significant to understand the distribution channels. The study is important to know the dealers satisfaction level for the dealership. The study is important to know the dealers satisfaction level in the price of the Cements. The study is important to know the dealers preference for the quality. The study is very important to know the sales volume. The study is also analyses the effective media for improving the sales. The study is important to know availability of the cement. The study is important to know margins in the cement industries.
Page |91.2 COMPANY PROFILE Mr. Kumar Mangalam Birla is the Chairman of the Aditya Birla group, which isamong Indias largest business houses. Among its major Companies in India are Grasim,Hindalco, Indo Gulf, UltraTech Cement and Aditya Birla Nuvo. Its JVs include IdeaCellular (Birla-Tata, [Telecom]), Birla Sun Life (Financial Services) and Birla NGK(Insulators). While Mr. Birla is the Chairman of all of the Groups blue-chip Companies in India,he serves as a Director on the Board of the Groups International Companies spanningThailand, Indonesia, Malaysia, Philippines and Egypt. The Groups operations extend toCanada, China, USA, U.K. and Australia as well. He is also on the Board of Tata Iron & Steel Company (TISCO), and Maruti UdyogLimited. Additionally, he is on the Board of the G.D.Birla Medical Research &Education Foundation and a Member of the Board of Governors of the Birla Institute ofTechnology & Science (BITS), Pilani, and the prestigious Indian Institute ofManagement, Ahmedabad as well. He is a Member of the LondonBusiness Schools AsiaPacific Advisory Board, which provides counsel on the Schools strategy and curriculum.He is "Honorary Fellow" of the London Business School (LBS), a title conferred uponhim by the Governing Board of The LBS.
P a g e | 101.3 PRODUCT PROFILE: Cement is the basic binding material, which is used for construction purpose and it is a commodity which has become a part of our life and will find demand till time stands still. The Indian cement industry is on a roll. Riding on increased activity in real estate, cement production has registered a growth of 7.24 per cent in April, 2005, at 11.41 million tones as against 10.49 million tons in the corresponding period a year ago. The growth trend has been on for some time now. In the April-January 2004-05 periods, the sector registered a rise of 7.1 per cent, producing 108.06 million tones. If these trends are anything to go by, it will not be long before the sector meets the production target of 133 million tones set by the government in the fiscal 2004-05. During the Tenth Plan, the industry, which is ranked second in the world? In terms of production, is expected to grow at 10 per cent per annum adding a Capacity of 40-52 million tons, according to the annual report of the Department of Industrial Policy and Promotion (DIPP). The report reveals that This growth trend is being driven mainly by the expansion of existing plants and Using more fly ash in the production of cement. A number of cement industry leaders have reported increase in dispatches Ranging from 5.44 per cent to around 10 per cent for the year ended March 31, 2005. CEMENT PERFORMANCE Cement performance of the Aditya Birla Group for April 2006: Production at 26.76 lakh mt — up by 8.53 per cent Dispatches at 26.28 lakh mt — up by 6.08 per cent The Aditya Birla Groups cement production for April 2006 grew by 8.53 percent at 26.76 lakh mt as against 24.66 lakh mt during April 2005. Despatches moved up by 6.08 per cent at 26.28 lakh mt in April 2006 as against 24.77 lakh mt in the corresponding period last year. Cement performance of the Aditya Birla Group for May 2006: Production at 26.09 lakh mt up 3.68 per cent. Despatches at 28.26 lakh mt up by 7.92.
P a g e | 11 OBJECTIVES OF THE STUDYPRIMARY OBJECTIVES:To find out the distribution channels of Birla cement in Thiruvarur district.To compare the distribution system of Birla cement with other cements.SECONDARY OBJECTIVES:To find out the advertisement efficiency of Birla cement.To find out the marketing situations of Birla cement from others.To find out the present problems faced by dealers.To find out the any new scheme required by the dealers.To give valuable suggestions to the company for increase the sales volume
P a g e | 12 RESEARH METHODOLOGY Pilot study tells about the completeness, accuracy convenience of the Sampling fromwhich it is proposed to select the sample.4.1 RESEARCH DESIGN:On analysis the condition the researcher found that descriptive research Design is appropriate forthe research for the study.DESCRIPTIVE RESEARCH: Descriptive research includes surveys and fact-finding enquiries of Different kinds. Themajor purpose of descriptive research is description of the state of affairs as it exists at present.In social science and business research we quite often use the term Ex post facto research fordescriptive research studies. The main characteristic of this method is that the researcher has nocontrol over the variables; he can only report what has happening.4.2 PRE-TEST:The researcher tested the questionnaire with Hundred respondents chosen from differentconsumer at random and checked whether this questionnaire was understandable.4.3 SAMPLING TECHNIQUES:The researchers select the judgment sampling model for his researcher Work.4.4 SAMPLE SIZE:The researcher selected the 100 respondents for the present study in Ahmedabad District.4.5 DATA COLLECTION TECHNIQUESThe researcher used a Questionnaire, which was self developed after having Session ofdiscussion with marketing manager. The statistical techniques such as On the way of analysis ofvarious chi-squares were applied to draw meaningful.
P a g e | 15 FINDINGS OF THE STUDY (26%) of the respondents are having Chettinadu cement dealership. And16% of respondents are having Birla cement dealership. (26%) of the respondents feel that Chettinadu cement is having high salesvolume. At the same time Birla cement is having less sales volume. (26%) Chettinadu cement most valuable suppliers from dealer’s point ofview. And Birla cement (16%) of respondents is considering most valuable suppliers. (92%) of the respondents feel that quality of the product is excellent. And(8%) of the respondents feel that quality is poor. (14%) of the respondents satisfied with price of the products. And (86%)Of the respondents not satisfied with price of the products. (26%) Chettinadu cement and (26%) Dalmia cement they are moving fastin cement industry. And (12%) Birla cement is moving slowly. (6%) of the respondents feel that order and replacement is highlysatisfied. And (62%) of the respondents feel that average. (28%) of the respondents highly satisfied with availability of the product.And (10%) of the respondents not satisfied. (12%) of the respondents satisfied with margins offered by the product.And (68%) of the respondents feel that margins of the product is average. (62%) of the respondents satisfied with Birla cement dealership. And(38%) of the respondents not satisfied.
P a g e | 16 SUGGETIONBirla cement should concentrate in credit facility of the dealers.Fixed the standard price of the productBirla cement should concentrate on sales man visit for wide marketing.Birla cement should concentrate to attract the dealers.Birla cement should improve their sales promotional efforts.Birla cement does a market research and gets feedback.Birla cement should concentrate to give incentives to the sub-dealers also.Birla cement should concentrate to fulfill the service for dealers required.
P a g e | 17 LIMITATION OF THE STUDYOne of the important of the study was lack of time. Though the respondent to the studywas vast due to the time constraints the sample size was limited.The researcher has difficulty with most of the respondents who was not willing tocooperate with the study, as they were very busy with their work.The research had also difficulty in getting some information, which the respondents werenot interested to give.The researcher had difficulty with the respondents because they did not fill up thequestionnaire in proper time.Another limitation of the study was confined with not only retailers but also consumersfor survey of this study.
P a g e | 18 SCOPE OF THE FURTHER STUDYThe scope of the study is confirmed to distribution channel with special reference to the“BIRLA CEMENT” in Thiruvarur district.The study can help to the management to know the factors why their sales volumes arelow.The study will help to improve the sales volumes of the “BIRLACEMENT”The recommendation and suggestion of the study can also be applied to the similarproject or similar situation
P a g e | 19 CONCLUSION After analysis the data we have concluded that Chettinadu cement, Sankarcement, and Dalmia cement they are captured first three place and Birla cement is infourth place. Because the sales volume of the Birla cement is very low compare thanothers and the aware of the Birla cement is very less in Thiruvarur dist. Moreover Birlacement has limited dealership with dealers. So automatically there is lack of availability creates. Therefore Birla cement hasto improve its sales promotional efforts as well as follow some strategies througheffective market research and get feedback from their consumers andcustomers(dealers).And give more advertisement so that move powerful than others andfixed the standard price. At the same time quality (life time of the cement) delivery time of the Birlacement is good. “IN SIMPLE WORDS BIRLA CEMENT IS UNDER DEVELOPING STAGE IN THIRUVARURDIST”
P a g e | 20 ANNEXURE A STUDY ON DISTRIBUTION CHANNELS SURVEY WITH SPECIAL REFERENCE TO “BIRLA CEMENT” IN THIRUVARUR DISTRICT QUESTIONNAIRE1. Name :2. Age :3. Education qualification :4. Address :5. What are the cement dealership do you have? a. Ramco b. Chettinadu c. Sankar d. Birla e. Dalmia 6. Which company gets high sales volume in cement industry? a. Ramco b. Chettinadu c. Sankar d. Birla e. Dalmia 7. What is your opinion about the quality of birla cement? a. Excellent b. Very goodc. Goodd. Averagee. Poor8. Which is the fast moving brand in your town?a. Ramcob. Chettinaduc. Sankard. Birla
P a g e | 21 e. Dalmia .9. Please rate the availability of birla cement?A. Highly satisfiedB. SatisfiedC. AverageD. DissatisfiedE. Highly dissatisfied10. Are you satisfied with the margins offered by birla cement?A. Highly satisfiedB. SatisfiedC. AverageD. DissatisfiedE. Highly dissatisfied11. Do you satisfied to take the birla cement dealership?A. YesB. No12. Please mention advertisement offered by birlaCement?A. Too highB. HighC. ModerateD. LowE. Too low13. Please mention sales promotional efforts of the birlaCement?A. ExcellentB. Very goodC. GoodD. AverageE. Poor
P a g e | 22 BIBLIOGRAPHYBOOKS1. Marketing Management “Philip Kotler” [PRENTICE HALL OF INDIA PVT, LTDNEW DELHI-110001, 2003.] 11th EDITION2. Research Methodology “C.R.Kothari” [NEW AGEINTERNATIONAL(P)LIMITED,HYDERABAD]2ND EDITION.3. Marketing “Dr N. Rajan and sanjith.R.Nair”[SULTAN CHAND&SONSDaryaganj New Delhi-110002,1987]6th EDITION.4. Marketing Management S.A.Sherleker[PRENTICE HALL OF INDIA PVT,LTDNEW DELHI-110001,2003.] 1stEDITIONINTERNET:www.google.comwww.grasim.comwww.birla.com