What is ChangingThe Indian RetailerIndia Retailer values Margin but also Service &

ConvenienceComparison of service level of paints & welding

Indian Retailer is slowing beginning to understand the ‘Velocity of Sales ‘ conceptMake 2% but on a brand which sells faster vs. 5 %

on brand that takes long timeIncreasing Retail Penetration makes it

important to retain customers and increase service levels

Growth in retail in semi-urban and rural Needs distribution infrastructure & market

development

What is ChangingIndian LogisticsRadio Frequency Identification (RFID)

technology where everything that moves can talk to everyone, everywhere all the time. Cartons of milk, bottles of wine, clothes, wallets,

tyres, cars, pets and people sending out radio signals about what they are, where they are, and possibly what they are doing

GPRS controlled trucksInvestment in Road & Railway InfrastructureMore Organized Third Party Logistic Providers

What is ChangingIndian Tax RegimeGST will make ‘India’ a single market

Most important tax reform in India since 1947Eliminate the cascading impact of multiple taxes

 Remove irrecoverable taxes such as CST, complex documentation of inter State movement of goods, entry barriers at State borders -long transportation times & entry taxes and octroi

Benefit states that propagate consumption since the final tax would be enjoyed by state that helped sell to the consumer.

Goods across states would be flowing with more ease

Distribution topology should hence be purely transportation and logistics led than taxation led

WHAT IS NOT CHANGING

Relationships Matter. Even More

Distribution is much more than trucking & storing

Fulfillment of changing customer needs at optimal cost

Sustainable, Distribution in Changing Times

High Customer Satisfaction & Low Cost

TO ACHIEVE HIGH SATISFACTION & LOW COST

4 Cs for Sustainable DistributionCoverageCapabilityCost ControlCommunication

CoverageService LevelWe need to benchmark against the best in our

channelAsian Paints ’s service level is more than 85 %

whereas that of other large paint companies falls between 50 and 60 percent

High Service Level (Availability of All Sizes & Products)

Zero Stock-outs: Every Stock-out gives an opportunity for competitor to come inWould a customer wait for a day to get company

brand?Would he travel an extra KM?

CoverageContinuous ImprovementSemi-urban and rural areas need to be priority

marketIncreasing coverage in the current markets is a

continuous activityThe more we increase our coverage, the less

the power unorganized and cheap brandsBringing more & more dealers in direct retail

will decrease power of wholesalers and un-organized brands

Cost Control Need to Balance High Service Level with

Distribution Cost ControlEffective inventory management

How many inventory days of stocks you keep ? Effective control of credit outstanding

How many days of credit , how much interest cost paid to banks., proportion of Cash/DD to cheque ?

Better Sales Forecasting leads to better cost management

Analyze past trends to arrive at a 90 per cent accurate sales forecast. Sales statistics by month, salesman, market, region and dealer.

Capability People ManagementHow do you assess performance. How can a Salesman say I had a good day or a

bad day ? Roles & Responsibilities ?How do you incentivize your sales force?

Besides money what do you think will motivate the sales force

Need for high quality training and recruitment of staff

How do you balance territories & cut travel time.

Are you satisfied with number of customers contacted every day

CapabilityHow Do You/Salesmen Spend Time ?

CapabilityEffective MerchandisingHot-Spot act as a CONSTANT SALESMAN and

provides incentives to buyDisplaying related items together builds

impulse salesShaving Cream & Shaving Razors

The best selling area on any display is between belt and eye level : 40” to 72”

Better export box packing presents attractive merchandising opportunity

Communication Communication builds relationship.

Communication improves channel management

Basic Software to do a small customer relationship managementSend dispatch details after the material dispatchSMS on birthday & marriage anniversary Orders received through SMS Payment reminders after 7/14 daysCommunicate price and other market information

Measures for High Customer SatisfactionHigh Shelf AvailabilityHigh Shelf Visibility High Reach Higher ‘Share of Business’ of OutletImproving Sales

Measures for Low CostLow Logistics CostLow Total Inventory Low Total Credit Days High Staff Productivity

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