Description
this report gives an overwiew of indian ice cream market insights......
Content
• • • • • • • •
Acknowledgement 2 • Abstract 3 • Purpose of study 4 • Methodology 4 • Software Used 5 • Modus Operandi 5 • Obstacles/difficulties faced 6 • Supply Chain of Mother Dairy 7 Overview of Ice-cream market in India 8 Overview of Ice-cream market in Delhi 9 Analysis of distribution strategy 12 Analysis of distribution channel 13 Analysis of East Delhi v/s South Delhi 15 Study of players in East Delhi 16 Regression Analysis 24 Recommendations 27 1
•
Acknowledgement
This Summer Project at Mother Dairy was an extraordinary experience with plethora of erudition and learning which would be instrumental in shaping my career as a future manager. This project would have been impossible without the support and guidance of various individuals and institutions, about which I would like to mention. With a great gratitude I realise that I was privileged to have the valuable guidance, constant encouragement, keen interest, suggestions and constructive criticism of Mr. Abhishek Sharma, National Sales Manager, Mother Dairy. I deeply express my heartiest thanks to Mr. Santosh Rai and Mr. Hansraj for their valuable suggestions and cooperation during the study and field visits. I would be failing to deliver my duties if we had not record the deep sense of appreciation for encouragement and cooperation from Mr. Sanjay Nagar and Mr. Deepak Gupta, the distributors of Mother Dairy in East Delhi. I would like to convey my special thanks to all the D.S.M’s of Mother Dairy of East and South Delhi. I heartily thank all the retailers and distributors I have met during the project for welcoming me into their midst, and sharing their experiences with me; it has been an enriching and humbling experience.
With Warm Regards, Date: 20th June, 2009 Ankur Sharma Xavier’s Institute of Management, Bhubaneshwar
~
2
~
Abstract
The demand and consumption of the ice-cream in India have witnessed a considerable increasing trend in the last two decades. This can be attributed majorly because of the alteration in the consumption pattern of the people (especially middle class) due to the wave of globalisation. Moreover, Indian subcontinent lies in the subtropical geographical region where the summer season is of higher duration as compared to the world’s average. These facts have made India a lucrative market with high growth potential for the ice-cream manufacturers. The ice-cream market in the country can be broadly categorised into branded and grey market, the latter consisting of small and cottage industry players. The total market is Rs 2000 crore, of which the branded market at present is 100 million litres per annum valued at Rs 800 crore. Year 1997 can be considered as a watershed in the history of the icecream market in India. Up-to 1997 the manufacturing of the ice-cream was reserved exclusively for the small scale industries in the country. However, with the wave of economic liberalisation and globalisation this sector was de-served for small scale industries in the year 1997. This opened the flood gates for the opportunities and competition in this sector. With the relaxation of the entry barriers, gradually various big players including various Multinational companies entered the icecream business. Today there is cut throat competition in the ice-cream sector to enhance their respective market share among the players like Amul, Mother dairy, Vadilal, Kwality Wall’s, Cream Bell etc. It becomes quintessential in such a scenario for a player to be aware of the strength and weaknesses of its own as well as of its competitors to, survive, compete and excel in such a cut throat competition. This study is an attempt to analyse the distribution channel of the organised ice-cream players in Delhi. The study has tried to highlight the strength and weaknesses of these players keeping their
~
3
~
distribution strategy at the centre. The study also throws the light on the performance, potential, strengths as well as the grey areas and constraints in functioning of the distributors of Mother Dairy ice-cream in Delhi.
Purpose of Study
The main purpose in carrying out this study has been to gain a holistic understanding of the ice-cream market in Delhi. The study has been undertaken to highlight the distribution strategy of the major organised players manufacturing and selling ice-cream in Delhi. The underline objective of this study is to do a cross-comparative analysis of the distribution strategy of these major players so that their strengths and weaknesses in distribution channel could be understood in detail. The paramount purpose of the study is to streamline the distribution channel of the Mother Dairy ice-cream by understanding the strengths and weaknesses of its own as well as the competitors.
Methodology
The study has been conducted in two phases. In the first phase the study focuses upon the distributors of Mother Dairy ice-cream in East Delhi and South Delhi. In the second phase of the study the point of focus shifts from distributors to their respective retailers. The following are the methodological details adopted in the two phases. PHASE I In the first phase of the study the distribution strategy of various icecream players is viewed from the perspective of the respective distributors. The information for this study in this phase has largely come from informal interviews/interactions from the distributors and their employees. The interactions with the sales-men of the distributors have also proved to be an immensely valuable information source. The insights provided by the company officials
~
4
~
have helped a lot in understanding the holistic picture of the distribution channel and strategy. PHASE II In this phase the focus of study was on the retailers of the ice-cream located in East Delhi. The information for this phase of study has come from the interviews/interaction with the 180 distributors of East Delhi and South Delhi. These interviews/interactions were based upon a well defined questionnaire dealing with nearly all the pertinent issues influencing the distribution of the ice-cream. The paramount purpose of this questionnaire was to capture the performance of the various distributors of Mother Dairy ice-cream and to suggest the remedial measure for performance improvement and customer’s satisfaction.
Software Used
For performing univariate and multivariate analysis of the data obtained from the Phase II of the study a software package namely SPSS has been used. SPSS stands for Statistical Package for the Social Sciences. Many people assume that use of SPSS software is limited to statistics or social science applications. However, it is a powerful application that allows you to read almost any kind of data, analyze data, and create reports and graphs. SPSS allows us to manipulate data in different ways. SPSS performs many different types of data analysis, from simple descriptive statistics to logistic regression to reliability measures.
Modus Operandi
The statistical analysis of the data collected during the two phases of this study is done using the univariate and multivariate analysis. The
~
5
~
univariate and multivariate analysis could be understood in the following way: UNIVARIATE ANALYSIS: This subject of univariate analysis deals with the statistical analysis of the data in which only one variable is dealt with at a time. For instance when we ask a particular question aiming to elicit the required information the question is dealt separately from rest of the other question. That is while we do univariate analysis on one response variable we do not take into account the impact of the other factors and questions. Thus at one time only one question is taken into account. MULTIVARIATE ANALYSIS: The subject of multivariate analysis deals with the statistical analysis of the data collected on more than one (response) variable. These variables may be correlated with each other, and their statistical dependence is often taken into account when analyzing such data. In fact, this consideration of statistical dependence makes multivariate analysis somewhat different in approach and considerably more complex than the corresponding univariate analysis, when there is only one response variable under consideration. Response variables under consideration are often described as random variables and since their dependence is one of the things to be accounted for in the analyses, these response variables are often described by their joint probability distribution. This consideration makes the modelling issue relatively manageable and provides a convenient framework for scientific analysis of the data. Multivariate normal distribution is one of the most frequently made distributional assumptions for the analysis of multivariate data.
(Source:http://support.sas.com/publishing/pubcat/chaps/56903.pdf)
Obstacles/Difficulties faced
While direct interaction/interviews with the actors involved has provided a broad understanding of the ice-cream market in Delhi, there have been several obstacles to carrying out full and in depth case studies. Prima facie at times various ice-cream players, other than Mother Dairy, were reluctant to share the information. Thus to overcome this triangulation of data is done from various other sources along with approximation. Secondly various players, when told that the purpose of the study is academic, try to manipulate the data and at various occasion have portrayed the altered picture in order prove themselves to be superior over the others.
~
6
~
Despite these obstacles, I have, I hope, managed to gain some sort of understanding of the situation regarding ice-cream market in Delhi, and of the main factors affecting it.
~
7
~
Supply Chain of Mother Dairy
The supply chain plays a pivotal role in the FMCG sector. Mother Dairy ice-cream has two different models of supply chain. First model which has 3 Intermediarieries is applicable for whole India except Delhi. While the second model that has 2 Intermediarieries is applicable exclusively for Delhi. Diagrammatically the two models could be represented as follows:
Abbreviations
~
8
~
D: R:
Distributors Retailers
An Overview of Ice-cream Market
The ice-cream market in the country can be broadly categorised into branded and grey market, the latter consisting of small and cottage industry players. The total market is Rs 2000 crore, of which the branded market at present is 100 million litres per annum valued at Rs 800 crore. The major branded players are Mother Dairy, Amul, Kwality Wall’s, Cream Bell and Vadilal. The market shares of these major branded players are as:
Source:http://www.moneycontrol.com/india/news/business/mother-dairy-catching-uphllicecream-market/283352
The demand and the consumption of the Ice-cream has shown high inter regional variations. The demand for the ice-cream, in the western and northern parts, account for about 60% of the total demand of the ice-cream in the country. The regional demand is as follows:
~
9
~
~
10
~
An Overview of Ice-cream market in Delhi
The per capita consumption and demand for ice-cream is greater in the urban areas as compared to the rural ones. The big cities of the country account for the maximum demand and the per capita consumption of the ice-cream. Capital city Delhi is foremost among the big cities which have maximum demand for the ice-cream. Delhi alone accounts for nearly eighteen percent of the total demand for the ice-cream. Mother Dairy is market leader in icecream sales in Delhi. Statistically this can be represented as:
~
11
~
~
12
~
Source: Interviews/Interactions with company officials and distributors of various branded players.
~
13
~
A comparative analysis of distribution strategy of different players
The distribution strategy of the four major branded player of icecream in Delhi was analysed. It was found that there are few points of similarity as differences in the strategy adopted by these players. The stark differences were found in the basic strengths which are leveraged by these players to gain their respective market share and motivate the channel partners. Strategy of Various Players PLAYER Mother Dairy Amul Kwality Wall’s Cream Bell STRATEGY Market Penetration Pricing and Promotion schemes Brand Image, Innovations Incentives to channel partners
During the interactions/interviews with the distributors, their employees and company officials of the different branded ice-cream players in Delhi, the above strategies were inferred. For instance, Mother Dairy leverage upon the market penetration, as in addition to the retailers and vendors there are around two thousand dedicated booths of Mother Dairy across the city. This have helped Mother Dairy ice-cream to be easily available to the consumers. Amul on the other hand has relied upon the lucrative schemes and providing the products at the most economical prices to the consumers. Kwality Wall’s has tried to capture the market share with its brand image as a multinational company which has its presence as branded ice-cream player in 130 counties across the globe and the regular innovations in its products according to the local taste and preferences. Likewise Cream Bell, which is a relative new player in the arena of the icecream players, is trying to make its presence felt by providing the high incentivise/margins to its channel partners. The margin offered by Cream Bell to its distributors and retailers are highest among the all these players.
~
14
~
A comparative analysis of distribution channel of different players
The distribution channel of these branded players can be classified into two categories. This classification is based upon the number of intermediaries present in the channel. The categories could be represented as:
Abbreviations
C&FA: R.S: Carry and Forward Agents Redistribution Stockists
Mother Dairy and Amul have adopted the model with 2 intermediaries namely distributor and retailers. Whereas Kwality Wall’s and Cream Bell have the supply chain model with 3 intermediaries, with Carry and Forward Agents (C&FA) in addition to the distributors and retailers. Channel partners play a pivotal role in filling the demand supply gap and ensuring the customer’s satisfaction. The channel partners must be motivated periodically in order to have a smooth functioning of the supply chain. Paying incentives (margins) to the channel partners is the most common and sublime way to motivate
~
15
~
the channel partners. The following table indicates the incentives (in percentages on M.R.P), paid by the different branded players to their channel partners.
It can be inferred from the above table that Mother Dairy pays the lowest margins to its channel partners relative to the other branded players. However, the demand of the mother dairy is highest in Delhi therefore in-spite of low margin because of the high volume of sales and demand coupled with the outstanding brand image Mother Dairy has remained to be popular among the retailers and distributors. The role of sales-man (DSM) is very crucial in the whole supply chain. It’s the sales man only who act as the interface between the company and the retailers. He has the dynamic responsibility to cover the entire market which is divided logically on the basis of beat-plans. He has the in-depth knowledge of the demand and market forces well as the loop holes present in the entire channel of distribution. Also since he is the one who regularly remains in contact with the retailers he is presumed to be the face of the company by the retailers. Thus
~
16
~
keeping in mind his dynamic role it becomes quintessential to analyse the ways he is remunerated, motivated and treated by company and the distributors. The table below highlights the various attributes related to the treatment of the sales-man by distributors and the company.
From the interviews/interaction with the company officials and distributors of the various branded players it could be easily inferred that Cream Bell is treating its sales-man very differently than the other branded players. The sales-men in Cream Bell are the employees of the company whereas in case of the other players they are on the pay roll of the distributor. Moreover their job is permanent in nature, whereas majority of sales man in the case of the other players have ad-hoc or seasonal jobs. It was also found that the incentives to the sales man are most lucrative in the case of Kwality Wall’s. One completion of the specified target, the sales man gets lucrative incentives monthly and annually.
~
17
~
This is one of the areas where Mother Dairy needs improvement. Mother Dairy does not provide any incentive to the sales man. Moreover there is no other mode of motivation used by Mother Dairy to motivate the sales man. Keeping the crucial role of sales man in mind it is recommended that they should be optimally incentivised and motivated. This would streamline the supply chain and sales volume of the company.
Comparative analysis of East and South Delhi
Distributor Analysis Location Mother Dairy Amul Kwality Wall’s Cream Bell South 4 4 2 3 East 2 3 2 2
Retailer Analysis Location Mother Dairy Amul Kwality Wall’s Cream Bell South 485 East 360
650* 200
450* 200
150
120
~
18
~
(* includes dormant retailers as well)
In the retailer analysis there was an anomaly observed in the retailers of Amul ice-cream. The distributors claimed to have about a total of 650 and 450 retailers in South Delhi and East Delhi respectively. However on delving deeper into the analysis it was found that the numbers of retailers who are actively involved in selling the Amul icecream are much lower in number. The optimist figure of 650 and 450 in South and East Delhi includes the dormant retailers who put the demand only once or twice in 6 months, these include small provisional stores and betel sellers. Thus if the dormant retailers of Amul are excluded from the list the actual number would come down to 360 and 275 in South Delhi and East Delhi respectively.
~
19
~
Comparative Study of various players in East Delhi
In order to have an explicit idea of the distribution strategy of the four major ice-cream players the study was conducted in East Delhi. The following are the major features of the study: • The area of East Delhi was sub-divided into two parts as per the distribution area of the two distributors of Mother Dairy in the area, i.e. Gupta Agency and Nagar Agency.
•
The study was conducted as per a well defined questionnaire which covers nearly all the distribution parameters.
•
Around 180 retailers were interviewed. The scales used to capture the various parameters during the study were ratio and interval scale,
•
•
The comparison is through cross-tabulation, regression and factor analysis.
•
Around 30 retailers of each brand were questions in order to elicit the information.
•
The retailers were selected on the basis of the simple random sampling.
The following are the variables used during the study: 1. 2. 3. 4. 5. 6. 7. Supply Timings Communication with distributors Responsiveness of distributors Transportation by distributor Replacement policy Temperature Abuses Shortages in supply
~
20
~
8. 9. 10.
Supply of stocks near to expiry dates Billing Issues Disputes with distributors
~
21
~
Questionnaire
Name of the Retailer......................................................................................... Location..................................... Counter............................... Type of
Name of the Distributor......................................................................................
Overall liking for the brand (On the scale of 1 to 5)
Mother Dairy Amul Cream Bell Kwality Walls
Variables Supply (TIMINGS) after the order Communication with the distributors Responsiveness of distributor Transportation of delivery by distributor Replacement policy by the distributor
V. Poor
1
Poor
2
Satisfac tory
3
Good
4
Excell ent
5
Regular ly
V. Often
Often
Someti mes
Rarely
Temperature abuses during the supply Shortages in supply Supply of stocks near to expiry dates
~
22
~
Billing issues with distributors Disputes (if any) with distributors
Based upon the above questionnaire the following observations were made:
Variable 1: Supply Timing
Definition: This variable refers to the time taken by distributor in supplying the stock of ice-cream after the order has been placed by the retailer.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.267 2.933 3.83 3.63
Nagar Agency 3.667 2.89 3.87 3.733
Variable 2: Communication with distributor
Definition: This variable tries to capture the easiness with which the retailers are able to communicate and place orders with the distributor.
Brand Name
Gupta Agency
Nagar Agency
~
23
~
Mother Dairy Amul Cream Bell Kwality Wall’s
3.43 3.67 3.33 3.23
3.69 3.66 3.52 4.43
Variable 3: Responsiveness by distributors
Definition: This variable refers to the extent to which the distributor is able to respond to the needs, demands and grievances of the retailers.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.267 2.933 3.83 3.63
Nagar Agency 3.667 2.89 3.87 3.733
Variable 4: Transportation by distributor
Definition: Under this variable the retailer’s satisfaction with the way (means of transport) ice-cream is supplied to them is tried to capture.
~
24
~
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.43 3.67 3.33 3.23
Nagar Agency 3.69 3.66 3.52 4.43
Variable 5: Replacement policy
Definition: This variable underlines the policy which is applicable for the replacement of the stock with the defect from the retailers.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 2.2 2.73 1.97 2.1
Nagar Agency 2.72 2.9 2.3 2.16
Variable 6: Temperature Abuses
Definition: This variable tries to capture the extent to which the melted ice-creams are sent to the retailers by the distributors.
Brand Name Mother Dairy
Gupta Agency 2.73
Nagar Agency 3.24
~
25
~
Amul Cream Bell Kwality Wall’s
3.63 3.13 3.77
3.43 3.55 3.6
~
26
~
Variable 7: Shortage in supply
Definition: This variable refers to the gap between the demand (order) by the retailer and the supply sent by the distributor.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.4 2.67 3.53 3.8
Nagar Agency 3.28 2.36 3.34 3.63
Variable 8: Supply of stocks near to expiry date
Definition: This variable tries to capture the extent to which the stocks near to the expiry dates are sent to the retailers.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 4.06 4.56 4.74 4.67
Nagar Agency 4.27 4.37 4.34 4.4
~
27
~
Variable 9: Billing issues
Definition: This variable refers to any kind of issues related to money/billing faced by the retailers from the distributor’s side.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 4.86 4.77 4.64 4.7
Nagar Agency 4.82 4.77 4.57 4.73
Variable 10: Disputes with distributor
Definition: This variable tries to capture the overall channel conflicts between the distributors and the retailers.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 4.97 4.9 4.8 4.77
Nagar Agency 4.83 4.80 4.87 4.76
Overall Liking ~ 28 ~
Definition: This variable refers to the overall perceived liking for the ice-cream brand by the retailer keeping the distribution channel at the centre.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.06 3.2 3.87 3.57
Nagar Agency 3.37 3.4 3.77 3.97
Average of all ten variables
Definition: This variable tries to capture the average of all the ten of the above variables.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.58 3.70 3.61 3.62
Nagar Agency 3.80 3.68 3.6 3.75
~
29
~
Regression Analysis
The regression was done in order to find the variables which are most crucial for the overall liking of the brands. The “Overall Liking” was treated as the dependent variable where as the other ten variables were considered as the independent variables. The following results were obtained:
Model Summary Adjusted R Model 1 R .558a R Square .312 Square .278 Std. Error of the Estimate .95930
The R Square value for the model is 0.312. The value is not very high but from the research point of view is sufficient to explain the linkages.
~
30
~
Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) Supply Timings after order Communications with distributors Responsiveness of distributor Transportation used by distributor Replacement policy by distributor temprature abuses dumping shortages in supply supply of exp date stock billing issues disputes a. Dependent Variable: overall liking for MD B .334 .354 .004 Std. Error .947 .066 .069 .328 .004 Coefficients Beta t .353 5.404 .062 Sig. .724 .000 .951
.161
.070
.142
2.297
.023
-.006
.072
-.005
-.089
.929
-.026 .231 -.069 .196 -.021 -.121 .165
.061 .069 .064 .054 .093 .128 .173
-.024 .198 -.063 .209 -.013 -.058 .059
-.431 3.348 -1.076 3.631 -.226 -.945 .950
.667 .001 .283 .000 .821 .346 .343
~
31
~
As per the output obtained from the S.P.S.S the following variables are considered to be crucial deciding factors in the Overall liking of the distribution channel of a brand: • • • • Supply Timings after order Responsiveness of the distributor Temperature Abuses Shortages in supply
As these variables are very crucial and deciding factors for the Overall liking of the distribution channel by the retailers thus an average of all these variables were taken in order to understand how the different players are performing on these crucial variables.
Average of all regressed variables
Definition: This variable tries to capture the average of all four of the above variables.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.17 3.10 3.38 3.53
Nagar Agency 3.47 3.02 3.48 3.47
~
32
~
Recommendations
1. Motivation/Incentives to the sales man The distributor’s sales man (DSM) has a dynamic role to play in the ice-cream market. He is the interface between the retailers and the distributors, hence is the crucial link between the channel partners. He not only connects the channel partners but also knows about the minute details of the market. He can play a pivotal role in expansion in number of retailers. On comparing the remuneration/incentives given to the sales man of Mother Dairy vis-a-vis other players, it could be inferred that the remuneration given by the distributors of Mother Dairy to its sales man are least lucrative. There is no incentive, neither from the company nor from the distributors, to reward the performing Sales man. In the absence of any such incentives the performing and non-performing DSM’s are treated equally, therefore there is nothing to motivate the DSM to perform. Moreover, the job of DSM is ad-hock in nature and many of them are forced to leave the job during winters, which is the lean period for the ice-cream market. Thus it can be concluded that the job of DSM is ad-hock and seasonal in nature with negligible rewards and incentives. The DSM can be the weakest link in the supply chain if not motivated optimally. Therefore some system of incentives must be designed in order to reward the performing DSM’s and to motivate the others. Beside monetary rewards and incentives the company should come up with some policies of reward/recognition for the DSMs to enhance their self-worth and to make them emotionally connected with the company.
2. Improvement in the Overall liking of Mother Dairy brand among retailers
~
33
~
One of the issues of the grave concern for the company is that, among all the four foremost branded players of ice-cream the overall liking for the Mother Dairy brand was found to be least. This trend was observed in the area of both the distributors of East Delhi. This could have serious implications on the sales of the ice-cream of Mother Dairy brand. It implies that given a choice retailer would like the other brands to be sold prior to Mother Dairy. This could induce retailer to do publicity through “word of mouth” for other brands giving an undue disadvantage to the brand Mother Dairy. The most prominent reason for this is low profit margins given to retailers by Mother Dairy relative to the other players. The cost of procuring the ice-cream for all the brands is approximately same to the retailer. However, the margin to the retailer is lowest in the case of Mother Dairy. Thus it is natural that a retailer would like to sell the brand for which the margin is highest. Apart from that, the cooling infrastructure offered by players like Kwality Wall’s and Amul are at very affordable and lucrative terms and conditions for the retailers. Moreover the cooling infrastructures provided by these players are given to the retailers without any time lag and in a hassle free manner with minimal formalities. Mother Dairy is lacking in all this, hence it depletes the overall liking for the brand. Thus immediate steps are required to overcome these grey areas.
3. Defining measurable performance indicators/benchmarks for the channel partners There are no indicators to evaluate and measure the performance of the channel partners. Thus there is no accountability for any of the channel partners. In the absence of such performance indicators a non performing distributor/retailer can tarnish the brand image of Mother Dairy. Apart from that in this era of cut-throat competition it’s quintessential to measure the performance of all the channel partners so that channel partners and the organisation can adapt and evolve. The performance indicators will also help in weeding out the non performers and will minimise the wastages, externalities, time delays and customer’s grievances.
~
34
~
4. Temperature issues during the transportation of icecream to retailer One of the major sources of dissatisfaction faced by the retailers is the issue of temperature while delivery of the ice-cream by the distributors of Mother Dairy. Both the distributors in of Mother Dairy were rated least among all the competitors on this parameter. Many retailers complained that the ice-cream supplied by the distributors melt during the transportation. The company should ensure that the distributors should take immediate action to avoid such complaints from the retailers. The ice-cream should be supplied to the retailers in proper ice boxes or with optimum amount of dry ice to avoid temperature abuses. The distributors should avoid transportation of icecream on two wheelers like bicycle and scooter in order to restrict temperature abuses.
5. Supply of ice-cream on time to the distributors The distributors want that the supply of ice-cream by the company should be on time. They complaint that, very often, the ice-cream is supplied during the odd hours in night. The transporters supplying the ice-cream also changes rampantly as a result there is lack of coordination with them. At times due to the supply of the ice-cream during the late hours in the night it becomes impossible for the staff of the distributors to supply the ice-cream on time to the retailers. Thus the organisation must ensure that the ice-cream must not be supplied to the distributors during the late hours. Moreover, the transporter supplying the ice-cream to one distributor should not change so that a proper coordination is developed among the distributors and the transporters.
6. Improvement Agency
in
means
of
transportation
by
Gupta
~
35
~
Among all the players in the distribution area of Gupta agency, Mother Dairy was rated least by retailers in quality of means of transportation. This parameter is very crucial because it has direct linkages with the temperature abuses as well. As Gupta agency is rated least on this parameter, optimum steps/directives must be taken to ensure that the ice-cream supplied by Gupta agency ensures proper quality. Gupta agency must avoid supply ice-creams to distributor without iceboxes and on two wheelers.
7. Promotional schemes for retailers
The company must offer promotional schemes for the retailers. This would motivate the retailers to procure the stock in order to be the beneficiary of the schemes. This would help in two ways. Firstly, when the retailer would have ample stock of Mother Dairy, it’s very natural that he would want it to be sold at the earliest. As a result he would go for publicity by word of mouth and at times would push the consumer to buy Mother Dairy brand. This would automatically result in enhanced sales volume. Secondly, in order to be benefitted from the scheme the retailer would be induced to keep an extra stock. This would minimise the transportation cost of the distributor as well, because distributor would be asked to send the ice-cream in bulk rather than according to daily/biweekly demand.
~
36
~
doc_735140608.doc
this report gives an overwiew of indian ice cream market insights......
Content
• • • • • • • •
Acknowledgement 2 • Abstract 3 • Purpose of study 4 • Methodology 4 • Software Used 5 • Modus Operandi 5 • Obstacles/difficulties faced 6 • Supply Chain of Mother Dairy 7 Overview of Ice-cream market in India 8 Overview of Ice-cream market in Delhi 9 Analysis of distribution strategy 12 Analysis of distribution channel 13 Analysis of East Delhi v/s South Delhi 15 Study of players in East Delhi 16 Regression Analysis 24 Recommendations 27 1
•
Acknowledgement
This Summer Project at Mother Dairy was an extraordinary experience with plethora of erudition and learning which would be instrumental in shaping my career as a future manager. This project would have been impossible without the support and guidance of various individuals and institutions, about which I would like to mention. With a great gratitude I realise that I was privileged to have the valuable guidance, constant encouragement, keen interest, suggestions and constructive criticism of Mr. Abhishek Sharma, National Sales Manager, Mother Dairy. I deeply express my heartiest thanks to Mr. Santosh Rai and Mr. Hansraj for their valuable suggestions and cooperation during the study and field visits. I would be failing to deliver my duties if we had not record the deep sense of appreciation for encouragement and cooperation from Mr. Sanjay Nagar and Mr. Deepak Gupta, the distributors of Mother Dairy in East Delhi. I would like to convey my special thanks to all the D.S.M’s of Mother Dairy of East and South Delhi. I heartily thank all the retailers and distributors I have met during the project for welcoming me into their midst, and sharing their experiences with me; it has been an enriching and humbling experience.
With Warm Regards, Date: 20th June, 2009 Ankur Sharma Xavier’s Institute of Management, Bhubaneshwar
~
2
~
Abstract
The demand and consumption of the ice-cream in India have witnessed a considerable increasing trend in the last two decades. This can be attributed majorly because of the alteration in the consumption pattern of the people (especially middle class) due to the wave of globalisation. Moreover, Indian subcontinent lies in the subtropical geographical region where the summer season is of higher duration as compared to the world’s average. These facts have made India a lucrative market with high growth potential for the ice-cream manufacturers. The ice-cream market in the country can be broadly categorised into branded and grey market, the latter consisting of small and cottage industry players. The total market is Rs 2000 crore, of which the branded market at present is 100 million litres per annum valued at Rs 800 crore. Year 1997 can be considered as a watershed in the history of the icecream market in India. Up-to 1997 the manufacturing of the ice-cream was reserved exclusively for the small scale industries in the country. However, with the wave of economic liberalisation and globalisation this sector was de-served for small scale industries in the year 1997. This opened the flood gates for the opportunities and competition in this sector. With the relaxation of the entry barriers, gradually various big players including various Multinational companies entered the icecream business. Today there is cut throat competition in the ice-cream sector to enhance their respective market share among the players like Amul, Mother dairy, Vadilal, Kwality Wall’s, Cream Bell etc. It becomes quintessential in such a scenario for a player to be aware of the strength and weaknesses of its own as well as of its competitors to, survive, compete and excel in such a cut throat competition. This study is an attempt to analyse the distribution channel of the organised ice-cream players in Delhi. The study has tried to highlight the strength and weaknesses of these players keeping their
~
3
~
distribution strategy at the centre. The study also throws the light on the performance, potential, strengths as well as the grey areas and constraints in functioning of the distributors of Mother Dairy ice-cream in Delhi.
Purpose of Study
The main purpose in carrying out this study has been to gain a holistic understanding of the ice-cream market in Delhi. The study has been undertaken to highlight the distribution strategy of the major organised players manufacturing and selling ice-cream in Delhi. The underline objective of this study is to do a cross-comparative analysis of the distribution strategy of these major players so that their strengths and weaknesses in distribution channel could be understood in detail. The paramount purpose of the study is to streamline the distribution channel of the Mother Dairy ice-cream by understanding the strengths and weaknesses of its own as well as the competitors.
Methodology
The study has been conducted in two phases. In the first phase the study focuses upon the distributors of Mother Dairy ice-cream in East Delhi and South Delhi. In the second phase of the study the point of focus shifts from distributors to their respective retailers. The following are the methodological details adopted in the two phases. PHASE I In the first phase of the study the distribution strategy of various icecream players is viewed from the perspective of the respective distributors. The information for this study in this phase has largely come from informal interviews/interactions from the distributors and their employees. The interactions with the sales-men of the distributors have also proved to be an immensely valuable information source. The insights provided by the company officials
~
4
~
have helped a lot in understanding the holistic picture of the distribution channel and strategy. PHASE II In this phase the focus of study was on the retailers of the ice-cream located in East Delhi. The information for this phase of study has come from the interviews/interaction with the 180 distributors of East Delhi and South Delhi. These interviews/interactions were based upon a well defined questionnaire dealing with nearly all the pertinent issues influencing the distribution of the ice-cream. The paramount purpose of this questionnaire was to capture the performance of the various distributors of Mother Dairy ice-cream and to suggest the remedial measure for performance improvement and customer’s satisfaction.
Software Used
For performing univariate and multivariate analysis of the data obtained from the Phase II of the study a software package namely SPSS has been used. SPSS stands for Statistical Package for the Social Sciences. Many people assume that use of SPSS software is limited to statistics or social science applications. However, it is a powerful application that allows you to read almost any kind of data, analyze data, and create reports and graphs. SPSS allows us to manipulate data in different ways. SPSS performs many different types of data analysis, from simple descriptive statistics to logistic regression to reliability measures.
Modus Operandi
The statistical analysis of the data collected during the two phases of this study is done using the univariate and multivariate analysis. The
~
5
~
univariate and multivariate analysis could be understood in the following way: UNIVARIATE ANALYSIS: This subject of univariate analysis deals with the statistical analysis of the data in which only one variable is dealt with at a time. For instance when we ask a particular question aiming to elicit the required information the question is dealt separately from rest of the other question. That is while we do univariate analysis on one response variable we do not take into account the impact of the other factors and questions. Thus at one time only one question is taken into account. MULTIVARIATE ANALYSIS: The subject of multivariate analysis deals with the statistical analysis of the data collected on more than one (response) variable. These variables may be correlated with each other, and their statistical dependence is often taken into account when analyzing such data. In fact, this consideration of statistical dependence makes multivariate analysis somewhat different in approach and considerably more complex than the corresponding univariate analysis, when there is only one response variable under consideration. Response variables under consideration are often described as random variables and since their dependence is one of the things to be accounted for in the analyses, these response variables are often described by their joint probability distribution. This consideration makes the modelling issue relatively manageable and provides a convenient framework for scientific analysis of the data. Multivariate normal distribution is one of the most frequently made distributional assumptions for the analysis of multivariate data.
(Source:http://support.sas.com/publishing/pubcat/chaps/56903.pdf)
Obstacles/Difficulties faced
While direct interaction/interviews with the actors involved has provided a broad understanding of the ice-cream market in Delhi, there have been several obstacles to carrying out full and in depth case studies. Prima facie at times various ice-cream players, other than Mother Dairy, were reluctant to share the information. Thus to overcome this triangulation of data is done from various other sources along with approximation. Secondly various players, when told that the purpose of the study is academic, try to manipulate the data and at various occasion have portrayed the altered picture in order prove themselves to be superior over the others.
~
6
~
Despite these obstacles, I have, I hope, managed to gain some sort of understanding of the situation regarding ice-cream market in Delhi, and of the main factors affecting it.
~
7
~
Supply Chain of Mother Dairy
The supply chain plays a pivotal role in the FMCG sector. Mother Dairy ice-cream has two different models of supply chain. First model which has 3 Intermediarieries is applicable for whole India except Delhi. While the second model that has 2 Intermediarieries is applicable exclusively for Delhi. Diagrammatically the two models could be represented as follows:
Abbreviations
~
8
~
D: R:
Distributors Retailers
An Overview of Ice-cream Market
The ice-cream market in the country can be broadly categorised into branded and grey market, the latter consisting of small and cottage industry players. The total market is Rs 2000 crore, of which the branded market at present is 100 million litres per annum valued at Rs 800 crore. The major branded players are Mother Dairy, Amul, Kwality Wall’s, Cream Bell and Vadilal. The market shares of these major branded players are as:
Source:http://www.moneycontrol.com/india/news/business/mother-dairy-catching-uphllicecream-market/283352
The demand and the consumption of the Ice-cream has shown high inter regional variations. The demand for the ice-cream, in the western and northern parts, account for about 60% of the total demand of the ice-cream in the country. The regional demand is as follows:
~
9
~
~
10
~
An Overview of Ice-cream market in Delhi
The per capita consumption and demand for ice-cream is greater in the urban areas as compared to the rural ones. The big cities of the country account for the maximum demand and the per capita consumption of the ice-cream. Capital city Delhi is foremost among the big cities which have maximum demand for the ice-cream. Delhi alone accounts for nearly eighteen percent of the total demand for the ice-cream. Mother Dairy is market leader in icecream sales in Delhi. Statistically this can be represented as:
~
11
~
~
12
~
Source: Interviews/Interactions with company officials and distributors of various branded players.
~
13
~
A comparative analysis of distribution strategy of different players
The distribution strategy of the four major branded player of icecream in Delhi was analysed. It was found that there are few points of similarity as differences in the strategy adopted by these players. The stark differences were found in the basic strengths which are leveraged by these players to gain their respective market share and motivate the channel partners. Strategy of Various Players PLAYER Mother Dairy Amul Kwality Wall’s Cream Bell STRATEGY Market Penetration Pricing and Promotion schemes Brand Image, Innovations Incentives to channel partners
During the interactions/interviews with the distributors, their employees and company officials of the different branded ice-cream players in Delhi, the above strategies were inferred. For instance, Mother Dairy leverage upon the market penetration, as in addition to the retailers and vendors there are around two thousand dedicated booths of Mother Dairy across the city. This have helped Mother Dairy ice-cream to be easily available to the consumers. Amul on the other hand has relied upon the lucrative schemes and providing the products at the most economical prices to the consumers. Kwality Wall’s has tried to capture the market share with its brand image as a multinational company which has its presence as branded ice-cream player in 130 counties across the globe and the regular innovations in its products according to the local taste and preferences. Likewise Cream Bell, which is a relative new player in the arena of the icecream players, is trying to make its presence felt by providing the high incentivise/margins to its channel partners. The margin offered by Cream Bell to its distributors and retailers are highest among the all these players.
~
14
~
A comparative analysis of distribution channel of different players
The distribution channel of these branded players can be classified into two categories. This classification is based upon the number of intermediaries present in the channel. The categories could be represented as:
Abbreviations
C&FA: R.S: Carry and Forward Agents Redistribution Stockists
Mother Dairy and Amul have adopted the model with 2 intermediaries namely distributor and retailers. Whereas Kwality Wall’s and Cream Bell have the supply chain model with 3 intermediaries, with Carry and Forward Agents (C&FA) in addition to the distributors and retailers. Channel partners play a pivotal role in filling the demand supply gap and ensuring the customer’s satisfaction. The channel partners must be motivated periodically in order to have a smooth functioning of the supply chain. Paying incentives (margins) to the channel partners is the most common and sublime way to motivate
~
15
~
the channel partners. The following table indicates the incentives (in percentages on M.R.P), paid by the different branded players to their channel partners.
It can be inferred from the above table that Mother Dairy pays the lowest margins to its channel partners relative to the other branded players. However, the demand of the mother dairy is highest in Delhi therefore in-spite of low margin because of the high volume of sales and demand coupled with the outstanding brand image Mother Dairy has remained to be popular among the retailers and distributors. The role of sales-man (DSM) is very crucial in the whole supply chain. It’s the sales man only who act as the interface between the company and the retailers. He has the dynamic responsibility to cover the entire market which is divided logically on the basis of beat-plans. He has the in-depth knowledge of the demand and market forces well as the loop holes present in the entire channel of distribution. Also since he is the one who regularly remains in contact with the retailers he is presumed to be the face of the company by the retailers. Thus
~
16
~
keeping in mind his dynamic role it becomes quintessential to analyse the ways he is remunerated, motivated and treated by company and the distributors. The table below highlights the various attributes related to the treatment of the sales-man by distributors and the company.
From the interviews/interaction with the company officials and distributors of the various branded players it could be easily inferred that Cream Bell is treating its sales-man very differently than the other branded players. The sales-men in Cream Bell are the employees of the company whereas in case of the other players they are on the pay roll of the distributor. Moreover their job is permanent in nature, whereas majority of sales man in the case of the other players have ad-hoc or seasonal jobs. It was also found that the incentives to the sales man are most lucrative in the case of Kwality Wall’s. One completion of the specified target, the sales man gets lucrative incentives monthly and annually.
~
17
~
This is one of the areas where Mother Dairy needs improvement. Mother Dairy does not provide any incentive to the sales man. Moreover there is no other mode of motivation used by Mother Dairy to motivate the sales man. Keeping the crucial role of sales man in mind it is recommended that they should be optimally incentivised and motivated. This would streamline the supply chain and sales volume of the company.
Comparative analysis of East and South Delhi
Distributor Analysis Location Mother Dairy Amul Kwality Wall’s Cream Bell South 4 4 2 3 East 2 3 2 2
Retailer Analysis Location Mother Dairy Amul Kwality Wall’s Cream Bell South 485 East 360
650* 200
450* 200
150
120
~
18
~
(* includes dormant retailers as well)
In the retailer analysis there was an anomaly observed in the retailers of Amul ice-cream. The distributors claimed to have about a total of 650 and 450 retailers in South Delhi and East Delhi respectively. However on delving deeper into the analysis it was found that the numbers of retailers who are actively involved in selling the Amul icecream are much lower in number. The optimist figure of 650 and 450 in South and East Delhi includes the dormant retailers who put the demand only once or twice in 6 months, these include small provisional stores and betel sellers. Thus if the dormant retailers of Amul are excluded from the list the actual number would come down to 360 and 275 in South Delhi and East Delhi respectively.
~
19
~
Comparative Study of various players in East Delhi
In order to have an explicit idea of the distribution strategy of the four major ice-cream players the study was conducted in East Delhi. The following are the major features of the study: • The area of East Delhi was sub-divided into two parts as per the distribution area of the two distributors of Mother Dairy in the area, i.e. Gupta Agency and Nagar Agency.
•
The study was conducted as per a well defined questionnaire which covers nearly all the distribution parameters.
•
Around 180 retailers were interviewed. The scales used to capture the various parameters during the study were ratio and interval scale,
•
•
The comparison is through cross-tabulation, regression and factor analysis.
•
Around 30 retailers of each brand were questions in order to elicit the information.
•
The retailers were selected on the basis of the simple random sampling.
The following are the variables used during the study: 1. 2. 3. 4. 5. 6. 7. Supply Timings Communication with distributors Responsiveness of distributors Transportation by distributor Replacement policy Temperature Abuses Shortages in supply
~
20
~
8. 9. 10.
Supply of stocks near to expiry dates Billing Issues Disputes with distributors
~
21
~
Questionnaire
Name of the Retailer......................................................................................... Location..................................... Counter............................... Type of
Name of the Distributor......................................................................................
Overall liking for the brand (On the scale of 1 to 5)
Mother Dairy Amul Cream Bell Kwality Walls
Variables Supply (TIMINGS) after the order Communication with the distributors Responsiveness of distributor Transportation of delivery by distributor Replacement policy by the distributor
V. Poor
1
Poor
2
Satisfac tory
3
Good
4
Excell ent
5
Regular ly
V. Often
Often
Someti mes
Rarely
Temperature abuses during the supply Shortages in supply Supply of stocks near to expiry dates
~
22
~
Billing issues with distributors Disputes (if any) with distributors
Based upon the above questionnaire the following observations were made:
Variable 1: Supply Timing
Definition: This variable refers to the time taken by distributor in supplying the stock of ice-cream after the order has been placed by the retailer.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.267 2.933 3.83 3.63
Nagar Agency 3.667 2.89 3.87 3.733
Variable 2: Communication with distributor
Definition: This variable tries to capture the easiness with which the retailers are able to communicate and place orders with the distributor.
Brand Name
Gupta Agency
Nagar Agency
~
23
~
Mother Dairy Amul Cream Bell Kwality Wall’s
3.43 3.67 3.33 3.23
3.69 3.66 3.52 4.43
Variable 3: Responsiveness by distributors
Definition: This variable refers to the extent to which the distributor is able to respond to the needs, demands and grievances of the retailers.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.267 2.933 3.83 3.63
Nagar Agency 3.667 2.89 3.87 3.733
Variable 4: Transportation by distributor
Definition: Under this variable the retailer’s satisfaction with the way (means of transport) ice-cream is supplied to them is tried to capture.
~
24
~
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.43 3.67 3.33 3.23
Nagar Agency 3.69 3.66 3.52 4.43
Variable 5: Replacement policy
Definition: This variable underlines the policy which is applicable for the replacement of the stock with the defect from the retailers.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 2.2 2.73 1.97 2.1
Nagar Agency 2.72 2.9 2.3 2.16
Variable 6: Temperature Abuses
Definition: This variable tries to capture the extent to which the melted ice-creams are sent to the retailers by the distributors.
Brand Name Mother Dairy
Gupta Agency 2.73
Nagar Agency 3.24
~
25
~
Amul Cream Bell Kwality Wall’s
3.63 3.13 3.77
3.43 3.55 3.6
~
26
~
Variable 7: Shortage in supply
Definition: This variable refers to the gap between the demand (order) by the retailer and the supply sent by the distributor.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.4 2.67 3.53 3.8
Nagar Agency 3.28 2.36 3.34 3.63
Variable 8: Supply of stocks near to expiry date
Definition: This variable tries to capture the extent to which the stocks near to the expiry dates are sent to the retailers.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 4.06 4.56 4.74 4.67
Nagar Agency 4.27 4.37 4.34 4.4
~
27
~
Variable 9: Billing issues
Definition: This variable refers to any kind of issues related to money/billing faced by the retailers from the distributor’s side.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 4.86 4.77 4.64 4.7
Nagar Agency 4.82 4.77 4.57 4.73
Variable 10: Disputes with distributor
Definition: This variable tries to capture the overall channel conflicts between the distributors and the retailers.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 4.97 4.9 4.8 4.77
Nagar Agency 4.83 4.80 4.87 4.76
Overall Liking ~ 28 ~
Definition: This variable refers to the overall perceived liking for the ice-cream brand by the retailer keeping the distribution channel at the centre.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.06 3.2 3.87 3.57
Nagar Agency 3.37 3.4 3.77 3.97
Average of all ten variables
Definition: This variable tries to capture the average of all the ten of the above variables.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.58 3.70 3.61 3.62
Nagar Agency 3.80 3.68 3.6 3.75
~
29
~
Regression Analysis
The regression was done in order to find the variables which are most crucial for the overall liking of the brands. The “Overall Liking” was treated as the dependent variable where as the other ten variables were considered as the independent variables. The following results were obtained:
Model Summary Adjusted R Model 1 R .558a R Square .312 Square .278 Std. Error of the Estimate .95930
The R Square value for the model is 0.312. The value is not very high but from the research point of view is sufficient to explain the linkages.
~
30
~
Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) Supply Timings after order Communications with distributors Responsiveness of distributor Transportation used by distributor Replacement policy by distributor temprature abuses dumping shortages in supply supply of exp date stock billing issues disputes a. Dependent Variable: overall liking for MD B .334 .354 .004 Std. Error .947 .066 .069 .328 .004 Coefficients Beta t .353 5.404 .062 Sig. .724 .000 .951
.161
.070
.142
2.297
.023
-.006
.072
-.005
-.089
.929
-.026 .231 -.069 .196 -.021 -.121 .165
.061 .069 .064 .054 .093 .128 .173
-.024 .198 -.063 .209 -.013 -.058 .059
-.431 3.348 -1.076 3.631 -.226 -.945 .950
.667 .001 .283 .000 .821 .346 .343
~
31
~
As per the output obtained from the S.P.S.S the following variables are considered to be crucial deciding factors in the Overall liking of the distribution channel of a brand: • • • • Supply Timings after order Responsiveness of the distributor Temperature Abuses Shortages in supply
As these variables are very crucial and deciding factors for the Overall liking of the distribution channel by the retailers thus an average of all these variables were taken in order to understand how the different players are performing on these crucial variables.
Average of all regressed variables
Definition: This variable tries to capture the average of all four of the above variables.
Brand Name Mother Dairy Amul Cream Bell Kwality Wall’s
Gupta Agency 3.17 3.10 3.38 3.53
Nagar Agency 3.47 3.02 3.48 3.47
~
32
~
Recommendations
1. Motivation/Incentives to the sales man The distributor’s sales man (DSM) has a dynamic role to play in the ice-cream market. He is the interface between the retailers and the distributors, hence is the crucial link between the channel partners. He not only connects the channel partners but also knows about the minute details of the market. He can play a pivotal role in expansion in number of retailers. On comparing the remuneration/incentives given to the sales man of Mother Dairy vis-a-vis other players, it could be inferred that the remuneration given by the distributors of Mother Dairy to its sales man are least lucrative. There is no incentive, neither from the company nor from the distributors, to reward the performing Sales man. In the absence of any such incentives the performing and non-performing DSM’s are treated equally, therefore there is nothing to motivate the DSM to perform. Moreover, the job of DSM is ad-hock in nature and many of them are forced to leave the job during winters, which is the lean period for the ice-cream market. Thus it can be concluded that the job of DSM is ad-hock and seasonal in nature with negligible rewards and incentives. The DSM can be the weakest link in the supply chain if not motivated optimally. Therefore some system of incentives must be designed in order to reward the performing DSM’s and to motivate the others. Beside monetary rewards and incentives the company should come up with some policies of reward/recognition for the DSMs to enhance their self-worth and to make them emotionally connected with the company.
2. Improvement in the Overall liking of Mother Dairy brand among retailers
~
33
~
One of the issues of the grave concern for the company is that, among all the four foremost branded players of ice-cream the overall liking for the Mother Dairy brand was found to be least. This trend was observed in the area of both the distributors of East Delhi. This could have serious implications on the sales of the ice-cream of Mother Dairy brand. It implies that given a choice retailer would like the other brands to be sold prior to Mother Dairy. This could induce retailer to do publicity through “word of mouth” for other brands giving an undue disadvantage to the brand Mother Dairy. The most prominent reason for this is low profit margins given to retailers by Mother Dairy relative to the other players. The cost of procuring the ice-cream for all the brands is approximately same to the retailer. However, the margin to the retailer is lowest in the case of Mother Dairy. Thus it is natural that a retailer would like to sell the brand for which the margin is highest. Apart from that, the cooling infrastructure offered by players like Kwality Wall’s and Amul are at very affordable and lucrative terms and conditions for the retailers. Moreover the cooling infrastructures provided by these players are given to the retailers without any time lag and in a hassle free manner with minimal formalities. Mother Dairy is lacking in all this, hence it depletes the overall liking for the brand. Thus immediate steps are required to overcome these grey areas.
3. Defining measurable performance indicators/benchmarks for the channel partners There are no indicators to evaluate and measure the performance of the channel partners. Thus there is no accountability for any of the channel partners. In the absence of such performance indicators a non performing distributor/retailer can tarnish the brand image of Mother Dairy. Apart from that in this era of cut-throat competition it’s quintessential to measure the performance of all the channel partners so that channel partners and the organisation can adapt and evolve. The performance indicators will also help in weeding out the non performers and will minimise the wastages, externalities, time delays and customer’s grievances.
~
34
~
4. Temperature issues during the transportation of icecream to retailer One of the major sources of dissatisfaction faced by the retailers is the issue of temperature while delivery of the ice-cream by the distributors of Mother Dairy. Both the distributors in of Mother Dairy were rated least among all the competitors on this parameter. Many retailers complained that the ice-cream supplied by the distributors melt during the transportation. The company should ensure that the distributors should take immediate action to avoid such complaints from the retailers. The ice-cream should be supplied to the retailers in proper ice boxes or with optimum amount of dry ice to avoid temperature abuses. The distributors should avoid transportation of icecream on two wheelers like bicycle and scooter in order to restrict temperature abuses.
5. Supply of ice-cream on time to the distributors The distributors want that the supply of ice-cream by the company should be on time. They complaint that, very often, the ice-cream is supplied during the odd hours in night. The transporters supplying the ice-cream also changes rampantly as a result there is lack of coordination with them. At times due to the supply of the ice-cream during the late hours in the night it becomes impossible for the staff of the distributors to supply the ice-cream on time to the retailers. Thus the organisation must ensure that the ice-cream must not be supplied to the distributors during the late hours. Moreover, the transporter supplying the ice-cream to one distributor should not change so that a proper coordination is developed among the distributors and the transporters.
6. Improvement Agency
in
means
of
transportation
by
Gupta
~
35
~
Among all the players in the distribution area of Gupta agency, Mother Dairy was rated least by retailers in quality of means of transportation. This parameter is very crucial because it has direct linkages with the temperature abuses as well. As Gupta agency is rated least on this parameter, optimum steps/directives must be taken to ensure that the ice-cream supplied by Gupta agency ensures proper quality. Gupta agency must avoid supply ice-creams to distributor without iceboxes and on two wheelers.
7. Promotional schemes for retailers
The company must offer promotional schemes for the retailers. This would motivate the retailers to procure the stock in order to be the beneficiary of the schemes. This would help in two ways. Firstly, when the retailer would have ample stock of Mother Dairy, it’s very natural that he would want it to be sold at the earliest. As a result he would go for publicity by word of mouth and at times would push the consumer to buy Mother Dairy brand. This would automatically result in enhanced sales volume. Secondly, in order to be benefitted from the scheme the retailer would be induced to keep an extra stock. This would minimise the transportation cost of the distributor as well, because distributor would be asked to send the ice-cream in bulk rather than according to daily/biweekly demand.
~
36
~
doc_735140608.doc