SALES & DISTRIBUTION

MANAGEMENT
PROJECT

Submitted to-: Submitted by-:

Prof. Jayanthi Thanigan Group-9

Illa Sharma (17F316)
Priyank Jain (17F333)
Uddipan Chakraborty (17F349)
Bibin Savio (17S416)
INTRODUCTION
The Indian consumption patterns are slowly converging with global norms. There has been
an impressive growth of the middle class. Around 70 per cent of the total households in India reside in
the rural areas. Rural areas have a huge potential market in the world with 153 million households.
Consumer electronics market is forecasted to be a US$29 billion market by 2020 which is currently
US$10 billion. Also, the Indian consumer durables market has traditionally been a high spend priority
sector and major Indian and global consumer durable companies have announced investment of
around US$1.4 billion over the coming years in India.
Urban markets account for the major share (65 percent) of total revenues in the consumer durables
sector in the country. Demand in urban markets is expected to increase for non-essential products
such as LED TVs, laptops, split ACs, beauty and wellness products. In rural markets, durables like
refrigerators as well as consumer electronic goods are likely to witness growing demand in the
coming years as the government plans to invest significantly in rural electrification.
PLACE & GEOGRAPHY
Udupi is a major city of Karnataka and District Headquarter. It is located 7kms west from Manipal.
Udupi is one of the top tourist attractions in Karnataka. It is notable for the Krishna Temple. Udupi is
situated about 60 km north of the industrial hub Mangalore and about 422 km west of state
capital Bengaluru by road.

Udupi is becoming a major town in Karnataka. Udupi is the birthplace of the Syndicate
Bank, Corporation Bank and Harsha Retail, the leading retailer of coastal Karnataka. Udupi's
economy also consists of agriculture and fishing.
The population of Udupi city is 1.65 Lakhs in which 55% are females while 45% are males. The
major language spoken are Kannada, Tulu, Konkani, English and Hindi. Small-scale industries like
the cashew industry, food industries and milk industries are the most prominent. Udupi is also
developing as a hub of real estate industry just like neighbouring city Mangalore. Nearby Town
Manipal is education hub for Engineering, Medical and Business studies.

Udupi is well connected by roads. NH 66 passes through Udupi and it is major connecting city
between Bengaluru and Mangalore. It has well developed Railway station which connects city to
major cities throughout India like Mumbai, Bengaluru and Delhi. Cities like Mysuru, Kozhikode,
Kochi and Trivandrum are also connected through Udupi.

RESEARCH METHODOLOGY
SAMPLING TECHNIQUE:
Non-Probability Sampling
This type does not rely on randomization. This technique is more reliant on the researcher’s
ability to select elements for a sample. Outcome of sampling might be biased and makes
difficult for all the elements of population to be part of the sample equally. This type of
sampling is also known as non-random sampling.
Referral /Snowball Sampling
This technique is used in the situations where the population is completely unknown and rare.
Therefore, we will take the help from the first element which we select for the population and
ask him to recommend other elements who will fit the description of the sample needed. So
this referral technique goes on, increasing the size of population like a snowball.

Referral /Snowball Sampling

We spoke to a random retailer in Udupi caleed Harsha Electronicss and enquired about the
details of the products and the process followed. The retailer than directed us to the
distributor called Shiddas. This distributor distributes to both Udupi and Manipal.
The details gathered are mentioned below.,

Information Needs:
The nature of information needed is primarily qualitative that will further helped us to get an
understanding of the distribution system of white goods. The information will broadly cover
the following:
Volume of lighting material sold
Price sensitivity of the target segment
Dependence on distributor to supply the material
Margin available to the retailer
DISTRIBUTION & ANALYSIS
DISTRIBUTION FLOW OF PRODUCTS
After talking the retailer and distributors, we found that the normal flow of products from
Manufacturer to the end consumer consists of following stages

Manufacturer: The manufacturers here are giants like Samsung, Sony, LG, etc. The other
manufacturers include small local players. This is the entry point in the ecosystem of channel
distribution.
Super-Stockist: They are used when there is complex distribution network. It’s like a warehouse for
company. Its job is to bill the product as per the money received from the distributor, supply it to
distributor using a transporter. The one who buys the stocks from Company by cash, this will take
care of company's money flow. Minimum 2 months of stocks which market/distributor needs. Bills to
distributor at cash/very limited timeframe for payment. This intermediary is not followed by all the
companies. Some company prefer including Super stockist in their distribution channel.
Distributor: Distributor is the one who on behalf of the company distribute the products in market to
retail outlet in the designate area for him. They provide schemes to retailers, consumer promotions to
retailers on behalf of company. They hire sales man who goes to market, take orders, supply is done
next day on specific routes. This is included by all the companies usually.
Retailer: He is a local store owner from where consumers purchase products according to their needs.
All the retailers get a fix margins on all products. There are trade schemes which are operated in
market, which are operated to provide higher margins to retailer on buying a certain quantity.
End Consumer: These are finally the people buy lighting products according to their needs.
Consumers are very choosy with respect to price, quality, loyalty and convenience.

COMPETITION
Competition between local and national players exists. The major competitors are Samsung,
Panasonic, O-general and Godrej. Retailers are neutral over choice of brands while suggesting it to
consumers and do not have bias towards any brand.
The competition between retailers is also intense. The driving factors for a retailer to be successful is
price, convenience, availability and loyalty of customers. Harsha has edge over other retailers due to
multiple outlets throughout Coastal Region of Karnataka and offers attractive discounts, hence it is
more popular among customers.

RESULTS

LIMITATIONS
Lack of Retailer’s Co-operation
Very few retailers in the region which limits diversified responses
Very few distributors in the region
Market was dynamic hence, there was possibility of polarity in responses.
 APPENDIX 1

Retailer: Harsha Electronics

Product: Television
Brand: Samsung
Town: Udupi

Retail Margin 40% overall

( Margins vary with models)

Monthly Sales 40 TVs per outlet

Supply Source Bangalore (Company’s exclusive dealer)

Manipal ( Shiddas’ authorised distributor)

Supply Frequency Once a week

Cycle Stock 15-20 TVs (1 week’s stock)

Seasonality 50%-100% increase on festivals like

Diwali, Harshotsav- March 1st week

Competing Brand Sony with sales of 30 TVs, Less shelf space

Inventory Maintained On Credit for 30 days

Replacement Policy Servicing or repair borne by company

Schemes Bulk order discount, Free gift during peak

demand, EMI schemes

Channel Relationship Formal relationship

Supply Terms Weekly visits

 APPENDIX 2

Distributor: Shiddas Manipal & Mangalore

Product: Television
Brand: Samsung
Town: Udupi

Distributor Margin 45-50% overall

Monthly Sales 700 TVs per month (Average 25 TVs per

outlet)

Supply Source Bangalore (Company’s exclusive dealer)

Mangalore ( ‘Shiddas’ authorised
distributor)

Supply Frequency Once a week

Credit Extended 40-50 TVs (1 week’s stock)

Opex for all lines 30-35%

Opex Allocation for this line 15-20%

Inventory Maintained On Credit for 30 days

Replacement Policy Servicing or repair borne by company

Schemes Bulk order discount, Transport cost discount

ROI 32-35%

Company support Transport subsidy for certain zones,

Servicing, Promotional activities