Marico's Distribution Network

Marico's distribution width and penetration is acknowledged as one of the best in the industry and is a leverageable strength.
Every month, 56 million consumer packs are sold to about 1.8 million households through 1.6 million retail outlets spread across the country.
Marico's distribution network covers almost every Indian town with a population of over 20,000. The chart below depicts Marico's distribution network in the urban & rural markets:

Thus, 1 out of every 10 Indians is a Marico consumer.

Distribution Alliance:
Our distribution strength has been recognised by Indo Nissin Foods Ltd. through their association with us for the distribution of Top Ramen products on a national basis.

Rural Sales & Distribution:
Marico's parallel rural sales and distribution network ranks among the top three in the industry and contributes 24% to the company's topline.

Their infrastructure comprises 882 direct distributors, 153 super distributors, catering to 2393 small stockists and 4523 van markets. A dedicated team of Territory Sales Executives and Pilot Sales Representatives distribute Marico's as well as alliance brands through this vibrant network.

Sales Capacity:
They have made significant progress in the areas that enhance sales capacity. Quality of our distributors Quality and number of the distributor field force Upgradation in the role of the company's front-line sales force.

Technology (IT) in Sales:
Marico has been making investments in IT to ensure:
Supply Chain efficiencies
Availability of the SKU at the right distributor point,
at the right time in right quantities
Timely availability and reliability of Sales
MIS, which help in taking prudent decisions on a real time basis.

In order to reap maximum benefits from its sales and distribution network, Marico embarked on an internet-enabled application - MI-Net - to establish a network between Marico and its distributors through a web interface. This project is aimed at providing real time information on the status of various business operations between Marico and its distributors. This initiative is expected to provide business benefits in the form of increased penetration by the sales force, reduced communication costs, reduced working capital requirements, etc. The project went live on April 1, 2002 with connectivity to 330 urban distributors, who together account for about 3/4th of Marico's domestic turnover. The business benefits are expected to accrue over a period of time.

Non Sales Revenue in Modern Retail

Non Sales Revenue form a good percentage of the revenue generated for Organized retailers. This concept is ever prevalent in the US where in-store advertising and the fight for best visible shelf space has been around for a while.

The non sales revenue earn upto 45% of the operating profits in the case of big retailers like Big Bazaar and even smaller ones like ITC's Choupal Saagar.

In Store:

• Shop - in - Shop
  
• Gandola advertising
• Glow Signs
• Display Signage
• Impulse bins
• Product display space

Outside Store:

• Show Window
• Store front-facia
• Kiosk

All these modes bring in money in the form of non-core activities. The leveraging power of the Retailer kicks in here.

There are certain brands which are strong enough to be placed where they want to be placed and still pay minimal if any to the Retailer.
A simple example is Cadbury's: Majority of the retailers place Cadbury coolers at impulse points and near the cashier without the company having to pay retailer for that space.








An example of a Shop-in-Shop is shown here, where Music World has set up a counter inside a bigger Retail outlet.









There is also a famous case of Allen Solly and Shoppers Stop, where the latter stopped stocking the famous former brand because of the low non-sales revenue agreement. Allen Solly wanted the best space in the store since it is perceived to be one of the best premium brands, but the premium it offered to Shoppers Stop was significantly low.