1. Rural Expansion, Inorganic Growth in Punjab
A Summer Project Proposal for
Post-Graduate Diploma in Management
By
Imad Ahmad Khan
140201054
26th
June, 2015
2. Rural Expansion, Inorganic Growth in Punjab
By
Imad Ahmad Khan
Under the guidance of
Dr. Jayanthi Ranjan Mr. Mayank Pandey
Professor Branch Sales Manager
Institute of Management Technology Perfetti Van Melle
Ghaziabad Gurgaon
26th
June, 2015
3. Certificate of Approval
The following Summer Project Report titled "Rural Expansion, Inorganic Growth in Punjab" is
hereby approved as a certified study in management carried out and presented in a manner satisfactory to
warrant its acceptance as a prerequisite for the award of Post-Graduate Diploma in Management for
which it has been submitted. It is understood that by this approval the undersigned do not necessarily
endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve the
Summer Project Report only for the purpose it is submitted.
Summer Project Report Examination Committee for evaluation of Summer Project Report
Name Signature
1. Faculty Examiner _______________________ ___________________
2. PG Summer Project Co-coordinator _______________________ ___________________
4. Certificate from Summer Project Guides
This is to certify that Mr. Imad Ahmad Khan, a student of the Post-Graduate Diploma in
Management, has worked under our guidance and supervision. This Summer Project Report has the
requisite standard and to the best of our knowledge no part of it has been reproduced from any other
summer project, monograph, report or book.
Dr. Jayanthi Ranjan Mr. Mayank Pandey
Professor Branch Sales Manager
Institute of Management Technology Perfetti Van Melle
Ghaziabad Gurgaon
26th
June, 2015 26th
June, 2015
5. i
Abstract
Rural Expansion, Inorganic Growth in Punjab
By
Imad Ahmad Khan
Perfetti Van Melle India is a fully owned subsidiary with operations in India along with taking care of
operations in South Asian countries. PVMI has an exceptional market share of approximately 25% in the
Indian Confectionery Market. PVMI has been able to amass such a huge chunk of Market Share by
innovation driven ideas in marketing and implementing them effectively. They are responsible for the
launch of some of the most creative marketing campaigns and advertisements which have definitely
boosted their brand image.
Perfetti Van Melle has some 15 odd brands under its confectionery portfolio with multiple flavors in each
brand, each of these flavors has been developed to appeal and please the Indian taste buds. PVMI has
always been known to adopt the polycentric approach towards marketing and product development. They
believe in attracting the customers based on the tastes and preferences relevant in the host country.
The purpose of this study was to create a working model to derive the feasibility of approaching a new
town/village for proposing a local Sub Distributorship. The research was focused to gain useful insight
into the local market conditions of the FMCG sector as well as understanding the PVMI way of working.
The project brief was to create a model for identifying new towns for creating distribution footprint using
the census town list, Nielsen hit list, Google maps and various elements of the surrounding habitat
(number of households, feeder towns, towns/villages across important road networks etc).
The model was developed on the premise of certain variables and their importance to the whole process
of opening new Sub Distribution Agencies. These variable were –
Population
Number of Retail Outlets
Presence of Wholesale Outlets
Presence of Coke/Pepsi Distributorship
Presence of any other FMCG brand’s Sub DB
Distance from the Super Stockist
The major conclusions that were drawn from this study were in terms of the importance of these variables
in the performance of the model.
Population – this was the most important variable for the town opening model. FMCG sales are
determined majorly on the population size of the village/town. If the population is huge the demand
generated from that town will also be huge. Hence we need to determine the correct population of a town
before visiting it in order to rightly gauge the potential.
Number of Retail Outlets – this is the second most important variable factor in determining the potential
of a town. It is hard to determine the actual number of retail outlets in a town/village without actually
visiting one but for the initial potential analysis of a town we can use the calculation to find the number of
town retail stores by dividing the total population by the population per retail calculation. In case of Rural
Punjab it is close to 243 people per retail store.
6. ii
Presence of Wholesale Outlets – this is an important variable but not one which has high impact on the
opening of Sub Distributorship. Wholesalers usually don’t comply with the company’s policy of
undertaking active distribution. Company requires the Sub DB to do regular market service whereas
wholesalers tend to just sell from their shop and are reluctant to do market service. Hence they are not
company’s first choice of Sub DB.
Presence of other FMCG brand’s Sub DB – This is one of the most important factors in determining
the feasibility of visiting a new town to offer Sub Distributorship. If a village/town already has a working
Sub DB of some other FMCG company then he is already aware of what will be required of him. He is
already distributing goods for another company and Perfetti’s products will just enhance his product
portfolio. It has also been noticed that these are the kind of people who are more open to taking
company’s distributorship readily.
Data was collected from 44 towns and the research was done using a questionnaire. The methodology
adopted was –
Analysis of the company data, i.e. Census Town List and Nielsen Hit List.
Questionnaire building
Collection of data
Analysis of the collected data
7. iii
Table of Contents
Abstract............................................................................................................................................i
Acknowledgement .........................................................................................................................iv
List of Figures.................................................................................................................................v
List of Tables .................................................................................................................................vi
Abbreviations ...............................................................................................................................vii
Chapter 1 ....................................................................................................................................... 1
Introduction................................................................................................................................... 1
Chapter 2 ....................................................................................................................................... 3
Confectionery Industry ...............................................................Error! Bookmark not defined.
Chapter 3 ....................................................................................................................................... 4
Literature Review ......................................................................................................................... 4
Chapter 4 ....................................................................................................................................... 6
Rural Expansion, Inorganic Growth in Punjab......................................................................... 6
A. Objective ......................................................................................................................... 6
B. Tools Used......................................................................Error! Bookmark not defined.
C. Research Methodology..................................................Error! Bookmark not defined.
D. Analysis ........................................................................Error! Bookmark not defined.8
E. Success and Shortages.................................................Error! Bookmark not defined.1
Chapter 5 ................................................................................................................................... 122
Conclusion and Recommendation ............................................................................................. 12
A. Conclusion..................................................................................................................... 12
B. Recommendations ........................................................................................................ 12
References.................................................................................................................................... 13
8. iv
Acknowledgement
I would like to express my deepest gratitude and special thanks to Dr. Jayanthi Ranjan, Professor,IMT
Ghaziabad, for providing me with immense guidance and support throughout the duration of my summer
internship and for the development of this project report.
I wish to express my sincere thanks to Mr. Mayank Pandey, Senior Branch Sales Manager, PerfettiVan
Melle India, for his constant engagement in the project and for the way he taught me all the concepts
involved and used in the making of this project report. He was always there for me and never once I felt
out of place under his active guidance. Most importantly I would like to thank him for the time he
provided me despite of his busy schedule.
I would also like to thank Mr. Ajay Singh (ASM), Mr. Sanjeev Kumar (DSE), Mr. Ashok Kumar (DSE),
Mr. Rishi Mehra (DSE) and Mr. Sunil Nagpal (PSR) at PerfettiVan Melle India who I came in contact
with over my tenure in Punjab, for giving me this wonderful opportunity of working with them and to
achieve such a huge milestone in my professional as well as academic life.
Last but not the least I would like to thank IMT Ghaziabad, for providing me with this wonderful
opportunity and the right platform to shape my career and excelin my academic knowledge through this
summer internship. I wish to express my gratitude to all my fellow students, especially Farhan Habib who
helped me in completing the project successfully.
Imad Ahmad Khan
140201054
PGDM-DCP
9. v
List of Figures
Figure No. Description Page
Figure 1 – Hub and Spoke Model.........................................................................................................4
__________________________
10. vi
List of Tables
Table No. Description Page
Table 1 – Survey Sheet........................................................................ Error! Bookmark not defined.
Table 2 – Population per Retailer........................................................ Error! Bookmark not defined.8
Table 3 – Distributor/Sub DB of another company................................................................................9
Table 4 – Population Rating .................................................................Error! Bookmark not defined.
Table 5 – Number of Retailers Rating ................................................... Error! Bookmark not defined.
Table 6 – Wholesalers Present Rating ................................................... Error! Bookmark not defined.
Table 7 – Coke/Pepsi Distributor Rating ..............................................................................................9
Table 8 – Distance from Super Stockist Rating .....................................................................................9
Table 9 – New Town Opening Model ................................................................................................10
Table 10 – Total Retailers ....................................................................Error! Bookmark not defined.
________________________________
11. vii
Abbreviations
PVMI – PerfettiVan Melle India
FMCG – Fast Moving Consumer Goods
SS – Super Stockist
Sub DB – Sub Distributor
DSE – Distribution and Sales Executive
PSR – Pilot Sales Representative
DPO – Display per Outlet
12. 1
Chapter 1
Introduction
About the company:
PefettiVan Melle India Pvt. Ltd. is the manufacturer of various high quality confectionery products.
PVMI undertakes manufacturing, distribution and marketing of various brands under its umbrella across
various segments (i.e. hard boiled candies, chewing gums, functional gums and chewies). PVMI is a fully
owned subsidiary of PerfettiVan Melle, headquartered in Lainate, Italy and Breda (the Netherlands).
Center Fresh was the first brand launched by PVMI in 1994, when it entered the Indian market, followed
by Alpenliebe and Big Babool. With severalbrands such as Alpenliebe, Alpenliebe POP,Centre Fruit,
Juzt Jelly, Mangofillz/Creamfills, Chlormint, Chocoliebe, Happydent, Marbels and Mentos in its
portfolio, PVMI has an estimated market size of Rs. 5,500 cr. and growing.
PVMI follows an aggressive approach to maintain its market position backed by its wide network of sales
force and distributors (10,000 sub-stockists) covering 7,000 towns.
PVMI looks after operations in severalneighboring countries including Bangladesh, Sri Lanka, Nepal,
Bhutan, Pakistan, Maldives and Myanmar.
Vision Statement:
We will enhance our world leadership in confectionery by creating value for consumers through
innovative and gratifying high-quality products.
Mission Statement:
We at PERFETTI VAN MELLE
Develop, manufacture and market high-quality and innovative products for our consumers
through the efficient use of our resources and in collaboration with our business partners;
Create a fulfilling workplace for our employees built on trust, mutual respect,and appreciation of
their diversity;
Value the role we play in our communities, as a socially and environmentally committed
organization;
Generate economic value through superior growth and profitability.
Continuous focus on these principles will lead us toward Our Vision.
Some ofthe major brands:
Alpenliebe: PVMI’s flagship brand and a market leader in the confectionery sector. It is a milk-
caramelbased toffee which has a very rich flavor and texture. It was launched in 1995 in its
original caramelflavor and is now available in Lollipop, Strawberry,Mangofillz and Creamfills
variants.
Center Fresh: Another flagship brand from PVMI,was the first brand launched by PVMI in
1994. It is currently the most selling chewing gum in India and is a pioneer in the liquid filled
chewing gums segment. Spearmint, Sweetmint, Peppermint and Endless are the four flavors
Center Fresh is currently available in.
13. 2
Center Fruit: Launched in 2006, it quickly gained the maximum market share in the Bubble
Gum segment. Center Fruit also has a liquid filled center like Center Fresh. Tutti Fruity, Mingle,
Strawberry, Maharaja Mango, Watermelon, Xplod are some of the most selling flavors. Out of
these Tutti Fruity is the most selling PVMI bubble gum flavor.
Happydent: PVMI’s functional gum, it was launched in 2009. It is available in Wave and White
variants. It contains baking soda which helps in maintaining white healthy teeth. It is more
focused towards urban population with a very small rural market presence.
Mentos: Launched in 2004, it is PVMI’s chewy toffee for the Indian audience. It is available in
Mint, Strawberry,Watermelon, Cola, Lemon and Orange. It is hard from the outside but chewy
from the inside. PVMI changed the price from 50 Ps. to 1 Rs. recently which has resulted in
considerable loss of market share to ITC’s Mint-O.
Juzt Jelly: Launched in 2012, it is PVMI’s jelly offering to the Indian market. Available in
Guava, Litchi, Orange and Strawberry flavors.
14. 3
Chapter 2
Confectionery Industry
Confectionery in India is categorically divided into three broad segments:
Chocolate confectionery
Moulded
Count Segment
Panned Segment
Éclairs
Premium chocolate
Sugar confectionery
Hard Boiled candies
Toffees
Gum-based confectionery
Mints
Gum based confectionery
Chewing gums
Bubble gums
Functional gums
Indian confectionery market is valued at close to INR 9000 cr. and is expected to grow at a constant rate
of 8% each year. Sugar confectionery holds the major chunk of the confectionery market in India at
around 46% followed by chocolate and gum segment.
Perfetti Van Melle’s Competitors:
Parle Products Pvt. Ltd.
Candico India Ltd.
Wrigley India Pvt. Ltd.
Cadbury India Ltd.
Lotte India Corporation Ltd.
Godrej Hershey Ltd.
Nestle India Ltd.
15. 4
Chapter 3
Literature Review
A. Hub-Spoke Model
Hub-Spoke model is similar to a chariot wheel where the Super Stockist is the central base from which
are connected various spokes, i.e. the Sub Distributors. The Super Stockists are appointed by the
company, they maintain a considerable level of the company’s stock and are responsible for the delivery
of company’s products to various Sub Distributors in their region.
This particular form of distribution arrangement allows the company to farther its reach in the rural
market as it cannot undertake direct supply to the local stores in the villages/towns due to time constraint
and lack of transportation resources. For this very reason this Hub-Spoke Model becomes highly relevant
for the company’s operations. FMCG companies can now ensure that their product reaches the market
constantly and efficiently.
In a Hub-Spoke model, the company supplies the Super Stockist from its depot. This Super Stockist in
turn supplies the Sub DBs from time to time. The supply to a Sub DB can also be done in a cluster, i.e.
when a cluster of villages lying together can be supplied together so that the Super Stockist doesn’t have
to service a single Sub DB which would be a waste of both time and resources. By catering to cluster of
villages/towns the Super Stockist can avail the benefit of economies of scale.
(Figure 1)
A single Super Stockist will cater to its surrounding towns and hence will be centrally located to them,
hence a Hub. In most of the FMCG companies, the Hub i.e. the Super Stockist is not allowed to sell the
company’s products in the market, their sole purpose is to distribution to the spokes i.e. Sub Distributors.
The Super Stockist gets a fixed margin on the products, in case of PerfettiVan Melle India Ltd. it was 2%
margin. Super Stockists are also paid freight charges based on different fixed or percentage basis. In case
of PerfettiVan Melle India it was 17 Rs. per carton.
16. 5
The Sub DB’s responsibility is to distribute products to the retailers and wholesalers. Sub DB also get a
fixed margin, which in case of PerfettiVan Melle India is 3.5%. The margin given to Sub DB is usually
higher than the margin of a Super Stockist due to the difference in the volume.
B. Pilot Sales Representatives (PSR) and Distribution & Sales Executives (DSE)
The company usually has representatives appointed to assist the Sub Distributor in generating sales.
These representatives are on the company’s payroll and are called PSRs (Pilot Sales Representatives).
PSRs are the company’s foot soldier and are a focal point of contact between the retailers/wholesalers and
the company. They are allotted various towns and they have to visit them frequently to boost the sales of
the retailers and wholesalers. Other than generating sales and acting as a link between the Super Stockist
and the Sub DB they are also responsible for opening new towns and increasing the company’s reach.
They have to stimulate the sales of focus brands and ensure range selling rather than booking sales for
company’s flagship brands which already have a ready market.
DSEs on the other hand are responsible for organizing and controlling the PSR’s town visits. They are
expected to review the PSR’s work and usually have between 3 to 5 PSR per DSE. The PSR carries out
the market survey in case of new town openings and then the DSE visits the targeted town to finalize on
any suitable Sub Distributor. DSE’s role is more of a managerial nature since he has to organize the Super
Stockists activities also. Every Super Stockist has a DSE assigned to them to keep an eye on the PSR’s
working and to increase the reach of the company by increasing the spokes i.e. creating more Sub
Distributors.
C. 3P Distribution Model
While most big FMCG companies have footprints in rural towns and villages, they service the market
only once a week through their PSRs. Whereas at PerfettiVan Melle, the product portfolio has been
divided into three parts P1/2/3. Based on the potential of the town the company allots the portfolio. If it is
a big town with a huge population base then there can be multiple Sub Distributors for different portfolio,
i.e. one Sub DB will be allotted P1 portfolio and another will be allotted P2 and P3. This reduces the
burden on one Sub DB in terms of billing and maintaining high inventory. It also serves another purpose
which is multiple market service by their Sub DBs. This ensures that the market has been serviced atleast
thrice, atleast once by each P1,P2 or P3 Sub DB. This increases the brand visibility and also helps in
boosting sales at small retail shops such as Keryana stores and Paan/Bidi shops who though are
responsible for majority of company’s sales but don’t have enough capital to keep all the products/flavors
at once.
17. 6
Chapter 4
Rural Expansion, Inorganic Growth in Punjab
A. Primary Objective
Create a model for identifying new towns for creating distribution footprint.
B. Tools used
1. Census Town List
2. Nielsen Hit List
3. Google Maps
4. Local Survey
C. Research Methodology
The research was conducted in three phases:
1. Analysis of the company data, i.e. Census Town List and Nielsen Hit List: raw data was provided
to us by the PerfettiVan Melle’ MIS team regarding the geographical area we were going to work
in. In my case it was Rural Punjab. They gave us two reports, Census Town List and Nielsen Hit
List. Census Town List provided us with the population of all the towns in Rural Punjab. This
was very helpful since it helped in determining which towns to target. Nielsen Hit List on the
other hand gave us hands on information about all the towns that were opened and the ones that
were yet not opened along with crucial competitor’s information. With this we were able to get
the basic understanding of the town before visiting the town.
2. Questionnaire building: Since my work required me to create a working model to benchmark data
and to determine whether it is feasible to visit a town for creating Sub Distribution based on the
data collected by the PSR,I had to design and develop a basic Questionnaire that would help in
recording all the data about the town. This would help in collection of the data in a standardized
manner and input of this collected data in the model would be easier. The survey conducted in the
proposed towns would provide us with the required variable inputs proposed model. Some of the
variable inputs for the model are- Population, Number of Retail Outlets, Presence of Wholesale
Outlets, Presence of Coke/PepsiDistributorship, Presence of any other FMCG brand’s Sub DB,
Distance from the Super Stockist.
3. Collection of Data:After successfully designing a relevant questionnaire it became easier to
collect data from the market. For this I had to set out in the market and survey local keryana
stores. Based on the variables, information was collected. In this whole process some 44 towns
were visited and surveyed. During these visits I was able to successfully open nine new Sub
Distributors for PerfettiVan Melle India.
18. 7
Survey Sheet
Date
Name of Town Visited
Tehsil
District
Distance fromSuperStockist
FeederTown
Population
Numberof Retail outletsinthe town
Numberof Wholesale outletsinthe town
Coke/Pepsidistributor
Distributors/SubDBof othercompaniesmet
PVMbrandseen
Source of Purchase
KeyFMCG brands(Confectionery/NonConfectionery) seeninthe town
Source of purchase
Telephone numberof Retailers/Wholesalers/Distributorsmet
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
Recommendation(OpenSubDB/Ignore)
(Table 1)
19. 8
D. Analysis
Population of Punjab according to Census 2011 is approximately 27 million out of which
approximately 65% (17 million) resides in rural Punjab. This just shows the potential of FMCG
companies in rural India since majority reside in rural.
Below is the table for calculating Population per Dealer-
Markets Company
Total
Retailers
Population
per Dealer
Punjab
CONFECTIONERY - SUPER
CATEGORY 138389 200
Punjab PERFETTI VAN MELLE 102418
Punjab – Urban
CONFECTIONERY - SUPER
CATEGORY 67139 155
Punjab – Urban PERFETTI VAN MELLE 49716
Punjab – Rural
CONFECTIONERY - SUPER
CATEGORY 71250 243
Punjab – Rural PERFETTI VAN MELLE 52702
(Table 2)
This table assisted in arriving at the number of retailers in a town since the population was readily
available from the Census Town List. This was helpful in arriving at the prospective retail outlets
before actual town visits. According to the calculations, there is approximately one retailer per 243
people in rural Punjab.
Below is the table which is the model that was developed after the data collected in the survey was
entered and analyzed.
The variable taken for the model are-
Population
Number of Retail outlets in the town
Wholesale Outlets present in the town
Coke/Pepsi Distributors present in the town
Distributors of other FMCG brands present in the town
Distance from the Super Stockist
Each of these variables were assigned weights according to their importance to the model and their
contribution to the successfulopening of a new Sub Distributor in a town not already covered by Perfetti
Van Melle India.
Each variable was categorically rated (between 1 to 5) for convenience according to their importance.
20. 9
Distributors / Sub
DB of other
companies Rating
Yes 5
No 1
Table (3)
Population Rating
<5000 1
5000-7500 2
7500-10000 3
10000-12500 4
12500< 5
(Table 4)
Number of
Retailers Rating
<10 1
10-15 2
15-20 3
20-25 4
25< 5
(Table 5)
Wholesaler
Present Rating
Yes 5
No 1
(Table 6)
Coke / Pepsi
distributor Rating
Yes 5
No 1
(Table 7)
Distance from
SS Rating
<40 5
40-60 4
60-80 3
80-100 4
100< 1
(Table 8)
21. 10
Each rating was then multiplied to the weights assigned to the variable which gave us the credit rating for
the variable. The Total Credit Rating was calculated by adding all the credits from each variable for a
town. We could determine a threshold credit level using historical data as well as the data from the towns
I had visited and collected information from. This threshold level would help the company’s DSE to
decide whether it was feasible to visit the town in question. While working on the model I came to a
successfulcredit level of 3, above this level I was able to successfully open a new Sub Distributor in a
town not covered by PerfettiVan Melle. The Yellow highlighted area denotes the towns opened by me
while the Green highlighted area is the historical data used to verify the model’s accuracy.
(Table 9)
Weights
Town Population
Population
Credit
No of
retail
outlets in
the town
Retail
Credit
Wholesale
outlets in
the town
Wholesale
Credit
Coke /
Pepsi
distributor
Coke/Pepsi
Credit
Distributors
/ Sub DB of
other
companies
Other
Distributor
Credit
Distance
from SS
Distance
Credit
Total
Credit
Shutrana 11000 0.8 28 1.5 No 0.1 Yes 0.5 Yes 1.25 110 0.05 4.2
Kakrala 7000 0.4 18 0.9 No 0.1 Yes 0.5 No 0.25 50 0.2 2.35
Ghular 4500 0.2 13 0.6 No 0.1 No 0.1 No 0.25 115 0.05 1.3
Kularan 5800 0.4 16 0.9 No 0.1 Yes 0.5 Yes 1.25 80 0.1 3.25
Alohran 3000 0.2 6 0.3 No 0.1 No 0.1 Yes 1.25 40 0.2 2.15
Said Kheri 4100 0.2 12 0.6 No 0.1 No 0.1 No 0.25 50 0.2 1.45
Sehra/Sehri 2100 0.2 8 0.3 No 0.1 No 0.1 No 0.25 35 0.25 1.2
Badrukhan 7800 0.6 20 1.2 No 0.1 Yes 0.5 Yes 1.25 90 0.1 3.75
Mehlan 7200 0.4 18 0.9 No 0.1 Yes 0.5 No 0.25 60 0.15 2.3
Chhahar 5500 0.4 15 0.9 Yes 0.5 Yes 0.5 No 0.25 95 0.1 2.65
Ubhawal 2400 0.2 6 0.3 No 0.1 Yes 0.5 No 0.25 85 0.1 1.45
Kanjhla 4900 0.2 13 0.6 No 0.1 Yes 0.5 Yes 1.25 85 0.1 2.75
Sialba/Khizrabad 9000 0.6 25 1.5 Yes 0.5 Yes 0.5 Yes 1.25 50 0.2 4.55
Gharuan 5000 0.4 15 0.9 No 0.1 Yes 0.5 Yes 1.25 65 0.15 3.3
Sohana 9000 0.6 25 1.5 Yes 0.5 Yes 0.5 Yes 1.25 50 0.2 4.55
Joga 10000 0.8 28 1.5 No 0.1 Yes 0.5 Yes 1.25 60 0.15 4.3
Sehna 15000 1 35 1.5 No 0.1 Yes 0.5 Yes 1.25 65 0.15 4.5
Sekha 6000 0.4 15 0.9 No 0.1 No 0.1 No 0.25 75 0.15 1.9
Thikriwala 9000 0.6 22 1.2 No 0.1 Yes 0.5 Yes 1.25 70 0.15 3.8
Bhai Rupa 15000 1 30 1.5 No 0.1 Yes 0.5 Yes 1.25 50 0.2 4.55
Guru Kotha 10000 0.8 20 1.2 No 0.1 Yes 0.5 No 0.25 40 0.2 3.05
Mehma Sarja 5000 0.4 15 0.9 No 0.1 Yes 0.5 No 0.25 20 0.25 2.4
Kot Shamir 13000 1 27 1.5 No 0.1 Yes 0.5 Yes 1.25 13 0.25 4.6
Kot Fatta 7000 0.4 17 0.9 No 0.1 Yes 0.5 No 0.25 20 0.25 2.4
Pakho 3000 0.2 7 0.3 No 0.1 No 0.1 No 0.25 55 0.2 1.15
Langeana 4000 0.2 15 0.9 No 0.1 No 0.1 No 0.25 60 0.15 1.7
Singhanwala 5000 0.4 15 0.9 Yes 0.5 Yes 0.5 No 0.25 65 0.15 2.7
Raoke 6500 0.4 15 0.9 No 0.1 No 0.1 No 0.25 85 0.1 1.85
Manuki 10000 0.8 25 1.5 Yes 0.5 Yes 0.5 No 0.25 80 0.1 3.65
Chirak 7000 0.4 15 0.9 No 0.1 Yes 0.5 No 0.25 70 0.15 2.3
Ronta 8000 0.6 19 0.9 No 0.1 Yes 0.5 No 0.25 95 0.1 2.45
Samadbhai 8500 0.6 18 0.9 No 0.1 Yes 0.5 No 0.25 85 0.1 2.45
Lopon 10000 0.8 25 1.5 Yes 0.5 Yes 0.5 No 0.25 85 0.1 3.65
Buttar 5500 0.4 16 0.9 No 0.1 Yes 0.5 No 0.25 75 0.15 2.3
Gholia Kalan 5000 0.4 15 0.9 No 0.1 Yes 0.5 No 0.25 75 0.15 2.3
Gholia Khurd 3500 0.2 13 0.6 No 0.1 Yes 0.5 No 0.25 75 0.15 1.8
Bilaspur 5500 0.4 15 0.9 No 0.1 Yes 0.5 No 0.25 95 0.1 2.25
Himmatpura 5000 0.4 15 0.9 No 0.1 Yes 0.5 No 0.25 100 0.05 2.2
Dhudike 6000 0.4 13 0.6 No 0.1 Yes 0.5 No 0.25 80 0.1 1.95
Rode 6000 0.4 18 0.9 Yes 0.5 Yes 0.5 No 0.25 65 0.15 2.7
Ghal Kalan 8000 0.6 20 1.2 No 0.1 Yes 0.5 No 0.25 50 0.2 2.85
Khokri Kalan 8300 0.6 25 1.5 No 0.1 No 0.1 No 0.25 75 0.15 2.7
Saidhoke 6000 0.4 18 0.9 No 0.1 Yes 0.5 No 0.25 95 0.1 2.25
Machhike 5000 0.4 15 0.9 No 0.1 Yes 0.5 No 0.25 100 0.05 2.2
Bhagibandar 7000 0.4 15 0.9 No 0.1 Yes 0.5 No 0.25 25 0.25 2.4
Bhalaiana 7000 0.4 15 0.9 No 0.1 No 0.1 Yes 1.25 42 0.2 2.95
Boha 12000 0.8 30 1.5 Yes 0.5 No 0.1 Yes 1.25 98 0.1 4.25
Khoiya Sarwar 6000 0.4 25 1.5 Yes 0.5 No 0.1 Yes 1.25 115 0.05 3.8
Kot Bhai 13000 1 20 1.2 No 0.1 No 0.1 Yes 1.25 32 0.25 3.9
Mehal Kalan 8000 0.6 15 0.9 No 0.1 Yes 0.5 Yes 1.25 92 0.1 3.45
DHANOLA 20000 1 22 1.2 Yes 0.5 No 0.1 Yes 1.25 78 0.15 4.2
Roranwali 2000 0.2 20 1.2 No 0.1 No 0.1 Yes 1.25 90 0.1 2.95
Ghallu 5000 0.4 20 1.2 No 0.1 Yes 0.5 Yes 1.25 94 0.1 3.55
Rupana 9000 0.6 30 1.5 Yes 0.5 No 0.1 No 0.25 65 0.15 3.1
Sitto gunno 5000 0.4 20 1.2 Yes 0.5 Yes 0.5 Yes 1.25 78 0.15 4
Raman mandi 22000 1 50 1.5 Yes 0.5 No 0.1 Yes 1.25 50 0.2 4.55
Bhikhi 18000 1 30 1.5 Yes 0.5 No 0.1 Yes 1.25 70 0.15 4.5
0.050.20 0.30 0.10 0.10 0.25
22. 11
E. Success and Shortages ofthis Model
The model has delivered 75% positive response conducted on the data collected by me and has also
verified all the data provided by a DSE. Out of the 24 towns shortlisted above the 3 credit, 18 have been
successfully opened while I was unable to open 6. This only proves that the model can actually provide
useful insight when deciding whether it would be fruitful for the DSE to visit a particular town to open a
Sub Distributor network. Since all the variables taken for this model are highly relevant to the process of
Sub Distributor appointment, it only signifies the importance of the model where currently the DSE’s
working resembles a Hit/Miss approach where he has no prior knowledge about the town. With this
model he can be better prepared and will know what credit the town is and hence will perform better to
achieve the expected results.
This model can act as a supporting tool for analyzing potential towns along with Nielsen Hit List and
Census Town List.
Allocation of the weights is based on the importance of the factors and in each market different factors
might be relevant. The factors chosen by me were relevant for the Punjab Rural Market and will not
necessarily be relevant for any other market.
The model does not include Distance from Feeder Town, though this is an important deciding factor in
some cases,it is unfortunately irrelevant in many others. In some cases the distance from a feeder town is
a lot, in such a case the possibility to open a Sub Distributor of the company in that cluster would be
easier since the local retail store owners would have to travel huge distance to buy company products. A
local Sub Distributor hence would be a welcome change for them.
The local market conditions also play a huge role in determining the final outcome. Sometimes there is
intense rivalry among the local retailers and as a result they refrain from purchasing stocks/products from
each other, in such a case sub distributorship is bound to fail since all of them would go to big towns to
purchase inventory.
23. 12
Chapter 5
Conclusion and Recommendation
A. Conclusion
Below is a table showing the number of retail outlets in Punjab along with the number of outlets already
covered by PerfettiVan Melle.
Markets Company
Total
Retailers
Punjab
CONFECTIONERY - SUPER
CATEGORY 138389
Punjab PERFETTI VAN MELLE 102418
Punjab - Urban
CONFECTIONERY - SUPER
CATEGORY 67139
Punjab - Urban PERFETTI VAN MELLE 49716
Punjab - Rural
CONFECTIONERY - SUPER
CATEGORY 71250
Punjab - Rural PERFETTI VAN MELLE 52702
(Table 10)
From the above calculations we can see that there is a clear advantage in terms of potential of opening
new towns, especially in the Rural sector where the company has not been able to tap approximately
20,000 retail stores. Hence using the above model the company can derive the feasibility of a certain
cluster of villages/towns and then target them accordingly.
B. Recommendations
1. Retail stores in small towns are incapable of affording Sub Distribution Agencies, they neither
have the Financial resources nor the workforce to undertake distribution activity.
2. Towns like these should be catered by the Super Stockist directly since the retailers are willing to
purchase company’s products but can’t afford dealership. Such practice has been successfully
implemented by Coca Cola in which their dump supplies all the retail stores directly in case
where the town has no company appointed Sub Distributor. This ensures the company’s footprint
in even the remotest towns/villages.
3. Sales in Rural market is negatively affected by the delivery salesmen from the cities who provide
extra margin. This is because they purchase their goods from the company’s modern trade centers
like Best Buy and Big Bazaar where they get better margins. Most times the margin is more than
what the company is offering through the distribution network. Hence they are able to pass on the
benefit of better margin to the retailers. Rural market is lost in such a case and no one is willing to
take up Sub Distributorship Agency of the company.
4. A clear decision should be taken regarding sales and price equity. So PerfettiVan Melle India
must decide whether they want to sell cheap or sell more.
24. 13
References
Businessteacher.org.uk,. (2015). Perfetti Van Melle Italian Global Manufacture. Retrieved 4
July 2015, from http://www.businessteacher.org.uk/essays/marketing/perfetti-van-melle-
italian-global-manufacture.php
Perfettivanmelle.in,. (2015). Perfetti Van Melle » PVM in India. Retrieved 4 July 2015, from
http://www.perfettivanmelle.in/about-us/pvm-in-india
IBEF.org,. (2015). Retrieved 4 July 2015, from
http://www.ibef.org/download/Perfettivan_01feb08.pdf
