Learnings from Parle's Distribution Network

 (Pondicherry University - Mahesh Sherkhane - Project Guide - Dr R.Rajeshwari ---

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DISTRIBUTION CHANNEL NETWORK OF PARLE-G

Manufacturing Unit of

Parle- G at various Locations

Parle- G Depots

Wholesalers and

Distributors

Transportation to next level

Retailers: Small shop / City

stores

Procurement: Customers7

Distribution channel of Parle

 Intensive distribution: Parle uses, Intensive Distribution for Parle G. This is the ideal

strategy for the market leader as intensive distribution has the following advantages;

 Increases coverage and sales.

 Increases product availability

 Encourages retailers to compete aggressive. Higher competition leads to narrower

margins for the retails hence, increases the ultimate margin for the manufacturer.

 Channel members of the distribution network: The Parle distribution network for

biscuits has essentially four levels as enlisted below:

 Parle Depots

 Wholesalers and Distributers

 Carry Forward Agents (if required)

 Retailers

 Channel members and logistics Parle has nearly 1500 wholesalers, catering to

425000 retail outlets directly or indirectly. A two hundred strong dedicated field force

services these wholesalers and retailers. Additionally, there are 31 depots and Carry

and Forward agents supplying goods to the wide distribution network. Parle has level

1, level 2, level 3 distribution channels levels.

LEVEL 1

LEVEL 2

LEVEL 3

Availability at all

departmental stores across

the length and breadth of the

country.

Channel exists for customers

scattered throughout the

country.

Mass consumption and

suitable for National and

International coverage.

 Channel Dynamics: Parle has a multi-channel marketing system since it uses more

than two marketing channels to reach all its customer segments.8

Distribution channel of Parle

5. PARLE DISTRIBUTION NETWORK LOGISTICS

 Selection of Channel Members: Parle takes into consideration a host of factors while

selecting the channel members. This is because it believes that selection of channel

members is a long run decision and the rest of the decision regarding the supply chain

depends upon the efficiency and coverage by the channel members.

The following are the host of factors considered by the company in selecting the channel

members:

 Authentication is required by the regarding the identity of the channel members,

which includes the name and address, photograph of the location.

 Proof of solvency which requires name and address of the channel member’s bankers

 Safety of the inventory, which means that the distributor/ dealer should get the stock

of the company insured.

 Inventory or the perishable goods kept by the distributor/ dealer should be in good

condition which means a detail of storage space and Refrigeration facility is to be

provided.

 Details of the delivery vehicle, which includes the following.

 Light Commercial Vehicles:

 Matador

 3 Wheeler Van,

 Tricycle Van and Hand/Push cart.

 The number and model of each of the vehicle needs to be furnished to

the company.

 Company acknowledges the fact that it needs to be sensitive to the market demands.

For this it requires that a number of salesmen needs to be present on the field.

 The salesmen too are divided into various categories like,

 The Field salesmen

 Counter salesmen9

Distribution channel of Parle

 The details of Clerical Staff and labour are to be provided. The technical competence

of the salesmen needs to be mentioned.

 Details of the various products of other companies that the channel member keeps

have to be provided. The following also need to be furnished with the above:

 The annual sales of these products have to be mentioned.

 Details of complementary products and product lines need to be

mentioned.

 Dealers of the company must carry a good reputation. This is due to the fact that Parle

believes that the reputation of the dealer affects the clientele in the long run.

 Market coverage by the distributors needs to be defined which includes details of

Geographic coverage and Outlets per market area.

 The company also requires the dealers to furnish any Advertising and Sales initiative

undertaken by them on behalf of the company.

 Channel Members Of The Parle Distribution Network :

a. The Distributors:

 One of the main factors, which keep the distributors motivated, is the margin. Usually

the margins offered by Parle are 8%. Now-a-days it has been raised to 8.5%.

 Volume wise this comes out to be a big figure since Parle’s product has a good

demand in the market. However compared to the other companies the margins are still

lower since the new players in the market offer a much higher margin. But the very

fact that Parle’s products have good demand in the market motivates the distributors

to stock it.

 Parle Products being a cooperative cannot afford to give heavy monetary incentives.

Parle”s products are considered to be value for money since the company does not

believe in charging high margins. In fact all monetary incentives are just the short run

means to promote thecompany’s product.10

Distribution channel of Parle

b. The Retailers:

 Trade schemes: these are undertaken by the company only for the hard selling items

 Glow boards: the company puts up glow boards at the retailer and pays the major

portion of the cost.

 Schedule of the salesmen: they provide the retails with this schedule so the retailers can pre

-estimate the quantities of the various products needed.

 Infrastructure facilitation: the company facilitates the retailers to buy beautiful stalls by

formulating an easy payment program and a commitment to buy back the equipment

at a reasonable price when the value of the equipment has depreciated.