Modern Confectionery Ltd: Streamlining the Distribution Channel Business Plan

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2.Prior Experience

Prior experience of the distributor in FMCG distribution will help in followings.

Distributor will take less time in understanding the functioning of various members of the channel. Less time to build good rapport with retailers/institutions.

3. Infrastructure

Infrastructure required like manpower, redistribution vehicle, godown space should be available of required quality and quantity.

4. Market reputation

Market reputation of the distributor in terms of relationship with retailers will help in efficiency of his work.

5. Market knowledge

Distributor’s knowledge of the prevailing market conditions, retailers’ attitudes, competitors’ products etc. will help in getting good hold on the market. Also important is distributor’s interest in knowing day-to-day information & happenings of the market.

6. Synergy

If distributor also has some other good FMCG product distribution with him, it helps in getting more retail space for your product. That brings synergy in retail penetration.

7. Technology

Use of various new technologies like SMS, computing, internet in various aspects of the distribution process will help in getting better efficiency in communication, operations etc.

8.Attitude

Distributor should possess basic managerial skills and should have a positive attitude. He should be willing to experiment with new products and take risks.

9. Social profile

Age and education level of the distributor are important. Young distributor will have many more years as active life which gives us stability for long term in that territory. Also, well-educated distributor will be more adaptive to the changing environment, technology etc.

10. Future plans

As appointment of the distributor is longer term, it’s important to know the future plans of the distributor for his business.

6. Should he fix, and if so what, Performance indicators for the new distributors.

Yes for the success of the distributors company should the following performance indicator. They should meet the minimum threshold level.

1. Sales target achievement:

- Primary sales

- Secondary sales

- Sales target achievement

- Sales growth

- Market share

2. Inventory management:

- Average inventory

- Inventory turnover

- Age of inventory

- Warehousing quality

3. Sales infrastructure

- Number of sales personnel

- Adherence to market working norms

- Achievement of targets

4. Market coverage

- Actual callage vs. norms

- Call productivity

- Market credit – number of days

- New product launches & promotions – interest & enthusiasm

5. Back office support

- Availability & quality of hardware

- Reliability of manpower & their training to use the system

- Availability of reports

- Records and their maintenance hygiene

7. Also what steps should he take to bring the current distributors in the same operating discipline?

Distributors are a critical link between the manufacturer and end user of a product. No matter how well made the product, the manufacturer cannot succeed if the distributor lacks the motivation to make the product available at the right time and location.

1) Set targets – A dealer is an entrepreneur and not an employee. Thus in general, they do not have targets. It is the work of the company to set targets for the dealers and ensure that they achieve them. Communication of these targets is important so that the channel dealer has a definite goal in his mind.

2) Be available – Many dealers need constant support of the company in day to day activities. For example – Whether the company has stock available, whether any special discount is possible, what steps can be done to defeat competition on field, so on and so forth. The best support a company person can offer their dealers is to be available for them, if not in person, then at least on phone, at all times. Sales can drastically increase just because you are always available for the dealer, and he can rely on you, whenever he needs support from the company.

3) Train dealer staff regularly – Trained people can help the dealer to do more business and generate more revenue. However, you will get to know the real capability of dealer’s staff and executives only when you ask them product questions and sales related questions. If the executive answers correctly then he can be an asset. However if your dealer sales executive is unable to grasp the sales process, then he is a liability and can cause loss of sales which will ultimately affect the company too. So help the dealer in selling more by training his staff for better sale of products.

4) Visit end customers and sub dealers – As a company guy, your visiting card always carries weight. So it would help the dealer immensely if you visit his key customers and sub dealers along with him to boost his morale as well as the morale of sub dealers and customers. With your visit, the key customers and sub dealers are likely to have more confidence and are likely to promote / buy your products in better quantities. This also helps you with word of mouth which is till date the best form of marketing in the New world.

5) Support dealer with schemes