Distribution Channel In FMCG

INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

PRESENTATION TOPIC-

Presented By-

ANANT SIROHI (15810003)

Distribution Channels in FMCG Industry

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What is FMCG?

• Fast Moving Consumer Goods.• Also Known as CPG- Consumer Packaged Goods.• Short Shelf life.• Low Margin and High Volume.• Examples- Cold Drinks, Soap, Processed Food, etc. • Major Companies- Nestle, ITC, HUL, GSK, P&G, etc.

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FMCG PRODUCTS

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FMCG COMPANIES

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FMCG MARKET IN INDIA

• Market is Excepted to reach US$ 12.5 Billion in 2015 and US$ 20.6 Billion by 2020.

• Urban Markets account for 65% of Total Revenues.

• In Terms of Products:-Food Products - 43% of Overall MarketPersonal Care - 22% of Overall MarketFabric Care - 12% of Overall Market• Government Policies and Regulatory

Frameworks are major growth drivers.

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DISTRIBUTION CHANNEL

• Path or Pipeline through which Goods and Services flow.• It can be Short or Long.• In Long Channels, Price increases till the Product reaches

the Consumers.

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WHY STRONG DISTRIBUTION CHANNEL?

• Large Market to Cover. • Products are Confined to Day to Day Basic.• Perishable Items have Low Shelf life.• High Profitability can be achieved through High Sales

Volume.• Minimize Inventory Cost.

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TYPES OF DISTRIBUTION CHANNELS

1. Manufacturer to Customer2. Manufacturer to Retailer to Customer3. Manufacturer to Wholesaler to Retailer to Customer

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MANUFACTURER TO CUSTOMER

• Direct selling.• No Middleman is Involved.• Example- Bata.• Simplest and Shortest Channel.• Fast and Economical.• Adopted by Both Small producers and Big Firms.

Manufacturer Customer

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MANUFACTURER TO RETAILER TO CUSTOMER

• One Stage Distribution Channel.• One Middleman i.e. Retailer.• Producers Sell to Big Retailers, Departmental Stores or

Chain stores.• Retailers sell the Products to Ultimate Consumers.• Retailers purchase in Large Quantity.• Example- Refrigerators, TV Sets, Washing Machines, etc.

RetailerManufacturer Consumer

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MANUFACTURER TO WHOLESALER TO RETAILER TO CONSUMER• Traditional Channel of Distribution.• Two Middleman i.e. Wholesaler and Retailer.• Suitable for products with Widely Scattered Market.• Example- Groceries, Drugs, Cosmetics, etc.• Suitable for Small Producers with Narrow Product Line.• Service and Promotional Support given by Wholesaler.

Manufacturer ConsumerRetailerWholesaler

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THANK YOU