Parle Products Distributorship Opportunities

Distributorship Channel Network of Parle - G.

Intensive Distributorship : Parle uses Intensive Distribution for Parle G. As intensive distribution has the following benefits, this is the best solution for the market leader;

• 1. Enhances coverage and revenues.
• 2. Increases the supply of goods.
• 3. Encourages manufacturers to compete aggressively. Higher competition results in smaller retail margins, thereby increasing the manufacturer's final margin.

Channel members of the Distributorship network: As mentioned below the Parle distribution network for biscuits basically has four levels:

• 1. Depots Parle.
• 2. Distributors and Wholesalers.
• 3. Carrying Forward Agents (if required).
• 4. Storekeepers.
  

Parle has about 1500 wholesalers, catering directly or indirectly to 425,000 retail stores, channel members and logistics. These wholesalers and retailers have a two hundred strong dedicated field force operation. Additionally, the large distribution network has 31 depots and Carry and Forward agents delivering items. Parle has level 1, level 2, level 3 tiers for distribution networks.

Channel Dynamics: Since it uses more than two marketing platforms to meet all its consumer segments, Parle has a multi-channel marketing strategy.

PARLE Distributorship NETWORK LOGISTICS

Selection of Channel Members: When choosing channel members, Parle takes into account a number of considerations. This is because it assumes that the choice of channel participants is a long-term decision, and the remainder of the supply chain decision depends on the effectiveness and coverage of the members of the channel.

The following are the host of factors considered by the company in selecting the channel members:

• 1. Authentication is required by the regarding the identity of the channel members, which includes the name and address, photograph of the location.
• 2. Proof of solvency which requires name and address of the channel member’s bankers.
• 3. Safety of the inventory, which means that the distributor/ dealer should get the stock of the company insured.
• 4. 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.
• 5. Details of the delivery vehicle, which includes the following:
•  1. Light Commercial Vehicles: Matador, 3 Wheeler Van, Tricycle Van and Hand/Push cart.
• 6. The number and model of each of the vehicle needs to be furnished to the company.
• 7. 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.
• 8. The salesmen too are divided into various categories like.
• 9. The Field salesmen.
• 10. Counter salesmen 8.
  

The details of Clerical Staff and labour are to be provided. The technical competence of the salesmen needs to be mentioned.

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:

• 1. The annual sales of these products have to be mentioned.
• 2. 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.

Channel Members Of The Parle Distributorship Network :
1. a. The Distributors: One of the main factors, which keep the distributors motivated, is the margin. Usually the margins offered by Parle are 8%. Now-a-days it has been raised to 8.5%.

Volume wise this comes out to be a big figure since Parle’s product has a good demand in the market. However compared to the other companies the margins are still lower since the new players in the market offer a much higher margin. But the very fact that Parle’s products have good demand in the market motivates the distributors to stock it.

Parle Products being a cooperative cannot afford to give heavy monetary incentives. Parle”s products are considered to be value for money since the company does not believe in charging high margins. In fact all monetary incentives are just the short run means to promote thecompany’s product.

2. b. The Retailers: Trade schemes: these are undertaken by the company only for the hard selling items.
Glow boards: the company puts up glow boards at the retailer and pays the major portion of the cost.
Schedule of the salesmen: they provide the retails with this schedule so the retailers can pre -estimate the quantities of the various products needed.
Infrastructure facilitation: the company facilitates the retailers to buy beautiful stalls by formulating an easy payment program and a commitment to buy back the equipment at a reasonable price when the value of the equipment has depreciated.

Distributorship 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.

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.

SUGGESTIONS FOR Distributorship CHANNEL

The following are the suggestions that Parle can implement to better its distribution channels:

Increase the margins: In order to motivate the channel members it is also very essential for the company to increase the margins for the hard selling items.

Pushcarts: These should be increased in number in order to increase the market reach (especially the rural market). This can provide with a very effective channel.

Parle should also go in for ‘Parle’ Zones: It is primarily for big city retail outlets. Here all the Parle products can be stalked. This can be an effective mode of „umbrella marketing. This strategy can be implemented in regions where the footfalls are large in number.

The advantages of this alternative channel would be as follows:

• Full range display.
• Easier to promote new products.
• Easy to push impulse purchase products.
• The Parle Brand building exercise will be enhanced.