The document discusses distribution channels for fast-moving consumer goods (FMCG) in India. It defines distribution channels and FMCG goods. FMCG goods have quick shelf turnover and relatively low costs. The FMCG market in India grew at 15% annually in the 1990s but then declined. Companies have innovated new distribution channels to reduce the role of intermediaries and benefit both companies and customers. Distribution channels must maintain strong inventory across India's large geographical area to be prominently present and fulfill customer demand. Channels include companies, carrying agents, redistribution stockists, wholesalers, and both rural and urban retailers and consumers.

1. Distribution channel for FMCG goods
Presented by….
Malovika Sanyal
Pamela Sarkar
Srestha Das
Subhasis Das
Sharmini Ghosh
Baishakhee Ghosh

2. Definition of Distribution Channel
Path or pipeline through which goods and services flow in one
direction (from vendor to the consumer), and
the payments generated by them flow in the opposite direction (from
consumer to the vendor).
A distribution channel can be as short as being direct from the
vendor to the consumer or may include several inter-connected
(usually independent but mutually dependent) intermediaries such
as wholesalers , distributors ,agents , retailers.
Each intermediary receives the item at one pricing point and moves
it to the next higher pricing point until it reaches the final buyer. Also
called channel of distribution or marketing channel.

3. Definition of FMCG goods
FMCG are products that have a quick shelf turnover,
at relatively low cost and don't require a lot of time and
financial investment to purchase. The margin of profit
on every individual FMCG product is less. Examples-
Pepsi, Lux, Colgate,etc.

4. FMCG goods in Indian market
In 1990s FMCG market grew up at 15% p.a.
The growth slowed down and decline for next
few years.
Interest rates drop from 18% to 8% in durables
increases the demand for durables and
decreases the demand for FMCG goods.
In 2004 the FMCG market shows a revival and
it capture 6.4% of total market capitalization.
To lessen role intermediaries the companies
innovate new distribution channels.

5. Importance of strong distribution channel in
FMCG sector
 Though the FMCG companies are big
multinational or Indian companies , they face
some market challenges in the face of
intermediaries.
 The intermediaries obtain a profit of 2%-5%.
 To benefit both the companies and the
customers, the companies innovate new
distribution channel.

6. Distribution Channel in Maintaining Inventory
 Increasing demand for FMCG.
 Huge geographical location
like India.
 Fast information sharing.
 To be prominently present
across the country.
 To maintain the inventory to
fulfill the demand of the
customers.

7. Distribution structure
company
company
Carrying and
Carrying and
forwarding agents
forwarding agents
Redistribution
Redistribution
stockiest
stockiest
wholesalers
wholesalers
Rural
Rural Urban
Urban
retailers
retailers retailers
retailers
consumers
consumers

8. Distribution channel for rural India
Rural india buys 46% of all soft drinks
sold, 49% of motorcycles and 59% of
cigarettes.
11% rural women use lipstick.
Empowering women- self help group,
shakti
ITC’s e-choupal.
Coverage of village.
Use of cooporative.
Mandi towns.

9. Some Important Facts for Modern Distribution Channel
 Maintaining favorable trade relations, providing innovative incentives
to retailers and organizing demand generation activities among a
host of other things.
 Today, the goods are transferred from the factory to the company
warehouses and are sent to the distributor from there on a daily
basis.
 From the distributor, the stock reaches the market through daily
sales.
 These include the salesman registering the order of a retail outlet
and delivering the goods the next day.
 Modern trade
 Kiosk.

10. Distribution chain for rural market

11. Distribution chain for urban
market

12. Evaluation of distribution model
• Phase1-
• Large retailers and wholesalers placed large
orders.
• Companies grouped salesmen to selected
region.
• Salesmen distributed the goods.

13. • Phase2-
• Companies aimed at distribution of both
product and service.
• One “Registered Wholesalers” in each maket.
He was assigned to 1% margin to cover
warehousing cost .
• Salesmen used to distribute the products from
him.

14. • Phase3-
• Redistribution stockist
• Company depots

15. • 2,3,4,-malovika
• 5,6,-suvasish
• 7,8,9,10-baisakhee
• 11,12,13,14-pamela