Hi, This case is really interesting and i hope you like it.. sorry for not keepin it open download.. Credits for TAPMI - Mr. Pramod Khandelwal and Mr. Syed Reza Salis Naqvi (PGP2) have won the 1st prize in the International Case Masters competition - a flagship event of IIMA for their case, “ Mehta Soya: A Promotional Conundrum”after 3 intense rounds (2 offline and 1 on-campus). Rgds, Tushar

1. DistributionManagement
Case Study-1
Group no. - 4
Mehta Soya : a promotional conundrum
Amit Balki (013)
Ashutosh Ghule (031)
Tushar Bhadalkar (106)
Ketaki Kawale (111)
Prakhar Roy (112)
Ganesh Shirude (114)
Vivek Arya (116)
Submitted By:

2.  MSIL is among the top 5 FMCG companies in the edible/non-edible oil segment,
with its main focus on a high-volume and low-margin strategy.
 Among other edible oils, palm oil (46%), soya bean oil (16%), and mustard oil (14%)
are the three largely consumed oils in India.
 The imports of oil account to 45-50% of total consumed volume in India.
The ‘Popular’ brand of MSIL was not so popular despite the fact that they targeted
the lower, middle, and upper-middle income groups.
The kirana stores account for 70 percent of the edible oil annual sales, and
organised account for 30%.
 MSIL has an 22 percent market share in edible and non-edible oil.
 MSIL Delhi sales team comprised 11 salespeople as compared to a team of 50
salespeople with the largest competitor.
 Mr Arnab Dasgupta, Head - North Zone of ‘Popular’ product division of MSIL,
challenge is expansion to achieve a market share of 25 % or more in the North
Zone within two years. Budget of Rs. 4 crore is approved to achieve this target.

3.  One major concern is how to popularize the 'Popular' products of MSIL (Moksh,
Swaad, and Safal) and generate awareness among the target customers.
 Channel partners have ranked MSIL as average in comparative ranking where as
their competitors are ranked much higher.
 Packaging quality of MSIL is not satisfactory.
 Channel Partners don't push MSIL products because of the lack of incentives & low
profit margins (Popular products).
 Lack of sales personnel for building long-term relationships with the channel
partners.
 No compensation policy whereas competitors offer compensation for both transit
as well as damaged packaged goods.
 MSIL sells directly to wholesalers and retailers. It is not appreciated by the
distributors.
 Channel members face difficulties in matching the supply with demand because of
the big orders are not fulfilled
 The fluctuation in oil rates causes the wholesalers to buy at high and sell at low
prices.

4. When large businesses operate under multiple different brands, services and
companies, a brand portfolio is used to encompass all these entities under one
umbrella.
It is very useful to identify weak brand and drop them. MSIL can reconsider its
brand portfolio in light of cost benefits analysis and after using the portfolio the
company can identify and drop on any weak brand which is not that much
profitable or beneficial for the growth of company.
Carrying 3 brands under one product category requires huge promotional budget to
build separate brand identity.
The company should have one brand for each category of products like, Popular-
Swaad, Popular-Moksh, Popular-Safal. So it is very important to promote 'Popular'
brand. Which can be very useful for further categorization.
Such a strategy would result in optimum utilization of the promotional budget.

5. MSIL have 21% market share in edible/non-edible oil industry. MSIL have three
product divisions, viz., Popular, Premium and Specialty.

6. Dog: Product category having low market share but low overall business growth.
Moksh (Mustard oil): Has seasonal demand & low pricing strategy resulting in low
profit margin. It is famous in Western Zone.
Question Mark: Product category having low market share but high overall
business growth.
Swaad (Palmolein): 50% share of total sales in popular category but market share is
not strong. Its awareness is low hence more advertising is required.
Star: Product category having high market share but high overall business growth.
Vishesh under Premium category has established presence and with high market
share as well as business growth with 5.5cr turnover for MSIL.
Cash Cow: Product category having high market share but low overall business
growth.
Due to inadequate information in case study it is difficult to categorize cash cow which
Safal (Soyabean).

7.  As we know from the case study that the retails stores dominate the
retailing of edible oil, accounting for almost 70% of its annual sales.
Next is Hub & Spokes Model -
Organised
Sellers
• 30% share
• Big Bazaar, D-
Mart
Unorganised
Sellers
• 70% share
• Mom & Pop
stores

8. The Hub & Spoke model is used in the context of multi location sourcing wherein a
central consolidator called the ‘Hub’ provides a single face to the customer while
seamless extensions called ‘Spokes’ are leveraged to provide the services,
distributed across multiple locations. In a wider role, the Hub is expected to take on
management responsibilities including those of customer, quality, risk and
performance management, training & development, manpower management and
regulatory compliance.
MSIL Distribution Network
Depots 110
Distributors 3300
Retail
Stores
6.8 lacs
Sales Force 300

9. Areas For Improvement Description
Responsibility  Channel partners bridge the time, place, and
possession gaps that help the producer to reach
the consumers.
 To not only distribute the products but also
create brand awareness & image of the
products using promotions offers and benefit.
Customer Management  Understand Customer Requirements from the
spokes (channels) and strategizing according to
the same.
Quality Risk & Performance Management  Set quality, risk & performance standards for
the channel members
 Monitor performance (Cost Savings)
 Report or initiate corrective actions wherever
required
Training & Development  Train the sales force to deploy uniform
standards and pricing policy through out the
channel members
Manpower Management  Ensure continuous manpower planning across
hub (Depots)

10.  Roles & Responsibility: It is not clearly defined by MSIL for distributors,
wholesalers and retailers. Nor does 11 sales person able to handle their
channel; efficiently.
 Compensation: MSIL wants greater market share through a low-price
strategy whereas retailers want greater margins to achieve short-run
profitability.
 Direct & Indirect Conflict: MSIL sells directly to wholesalers and retailers by
skipping the distributors for market share.
 Competition: Channels are selling packaged products Big size – ADL &
COL, Midsize - Medha & Mint along with MSIL which contribute 30% and
also unpacked products which have major market share i.e. 70%.
 Channel Composition: According to the below graph the composition of
channels is given which is not evenly balanced for 4 zones.

11. It is clearly seen that the ratio of Wholesalers & Distributor is unevenly
balanced for the Retailers.
We propose that the Distributors & Wholesaler are in ratio 1:3, Hence the
network of D&W 61 will reduce to 48.
Area Zone Wholesaler + Distributor Retailers
North 10+4 = 14 45
South 5+3 = 8 15
East 15 + 10 = 25 50
West 8+6 = 14 40

12. Benefits for reducing the network:
 Sales force is increased to 23 which means 1 sales person will handle only 2
either Distributor or Wholesaler.
 MSIL Sales force will have more control over 48 D&W.
 Hub & Spokes model will be more effective.
 To monitor the compensation for wastage & spillage is given to channels.
 To monitor monthly/quarterly targets.
 Assist with Promotional activities like Billboards, banners, etc.
 The sales force will be able to use Push methodology through their channels.

13. According to Exhibit-7 the Insights of Channel Partners are as below:
 The important concerns highlighted in RED are about schemes, packaging and
incentives of MSIL.

14. Packaging:
MSIL should invest in good packaging on primary level even if its increases the
cost of the product
It influences the brand image of the product. Companies today have specialized
packaging experts who not only design attractive packages but also make it easy to
handle it for end user.
Packaging for Oil is very crucial not only from spillage/wastage point of view but
also for dangers & hazards it can lead to during transportation and storage.
Transporter is accountable for the safe delivery of goods. Hence any damage
during transit should be deducted from Transporters account.

15. Pricing:
The channel members are facing below issues on pricing:
 The profit margins for MSIL products are lower than its competitors.
 The rates of oil fluctuated on a day-to-day basis and hence D&W buy at higher
price and has to sell at lower price according to markets.
Volume Discounted Pricing: Order Slabs should be established according to
volumes. E.g. 1000ltr of order 5% discount, 5000ltr of order 10%.
Forward Contracts: A forward contract is an agreement to buy an asset at a
future settlement date at a forward price specified today. Wholesaler can order
in advance for the current price and the orders will be delivered as schedule in
future.
This will increase profit margins, lower the impact of price variations and also sell in
higher volumes.

16. Its is mentioned in case “The marketing department of MSIL was not active in
devising market campaigns to expand the reach of popular products and was in
turn heavily dependent on the sales team for the increased product sales/volumes.”
& there is no schemes or display promotion incentives for Billboards & Banners
given to retailers.
We Suggest:
 The advertising & promotional plan for MSIL products for Delhi is to be constructed
by focusing on retailers, sales personnel & intermediaries.
 MSIL is going to need a brand building hence campaign for that we need to focus
more on the reach via the ATL medium.
 The plan is to be divided into ATL & BTL mediums. We suggest adapting to a 35-
65 ratio approach for the ATL & BTL activities respectively.
 Moksh and Safal are the products which are going to be advertised on TV & Print.
 Radio is not much advisable here since it will be a waste because of two reasons:
1.) In ATL campaign we are focusing for brand building, if this was to be a sales
driven campaign then radio would have been a good choice. 2.) Limitation of funds.
(4 Cr. Budget).

17.  ATL Plan
Target Group for these products would be masses i.e. females, 25+ SEC A, B.
Total spends = Rs. 1,49,99,608
Medium Rate Cost Decision for the year Channels/Publication
Television
Rs 2.05 lacs/ 10 sec
Rs 2.80 lacs/15 sec
Rs 1.75 lacs/ 10 sec
Rs 2665000
Rs 2240000
Rs 2100000
13 primetime spots
8 primetime spots
12 non-primetime spots
Sony, Zee TV, Star Plus.
Regional Channels with
highest GRPs and lowest
affinity.
Print
Rs 4838/sq. cm
Rs 2599/ sq. cm
Rs 2,90,000/ half
page
Rs 1387584
Rs 1497024
Rs 1160000
3 ads
6 ads
4 ads
TOI
Hindustan Times
India Today
(can consider local
tabloids and Hindi
newspapers)
Radio
Rs 9000/ 10 sec
Rs 7000/ 10 sec
Rs. 5000/ 10 sec
Rs 900000
Rs 700000
Rs 500000
300 spots
Radio Mirchi
Billboards Rs. 150/ sq. ft. Rs 1950000 65 billboards for 4 zones

18.  BTL Plan
Swaad is the product in the popular category which is mainly consumed by
restaurants/hotels & Dhabas hence it will be mainly advertised & promoted BTL
Total Spends= Rs. 2,50,00,000
Medium Rate Cost Decision for the year
Incentives - Rs. 12000000 To be provided as per the performance
Sales
personnel
Rs. 8000/mth Rs. 2304000 Additional 12 salespersons( 3 per zone)
Free Gifts
Rs. 3500 per
retailer
Rs. 6300000 Rs 3500 per retailer for 150 retailers
Store
Banners
Rs.100/sq. ft. Rs. 600000 5 banners for 150 retail stores
Display
Promotions
Rs. 3000 per
retailer
Rs. 450000 For all 150 retailers
Events &
Trials
Rs. 3346000
Free trial packs, free coupons, promotional activities
outside movie theatres, competitions for consumers.

20. Thank You