P&G Sales and

Distribution

Presented by-
Sayantani Ray (A91801920012)
Rahul Kundu (A91801920013)
Tanusree Das (A91801920014)
Piyasa Ghosh (A91801920029)
Adwait De (A91801920032)
Joydeep Samanta (A91801920047)

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 INTRODUCTION
TO “PROCTER &
GAMBLE”
 *P&G, is an American multinational consumer
goods company

* It was founded in 1837

*Headquartered in downtown Cincinnati, Ohio,

United States, founded by William Procter and
James Gamble, both from the United Kingdom.
*Its products include cleaning agents and
personal care products.
*Purpose is to provide branded products and
services of superior quality and value that improve
the lives of the consumers.
*One of the most successful consumer
packaged goods company in the world ($40
billion in sales revenue) that runs most of its
core business processes on SAP
applications.

*Started using the enterprise resource

planning system (ERP) which was
implemented by SAP.

*It implemented a centralized ERP and supply

chain base that delivers significant economies
of scale while still being able to support the
company’s business plans.
Typical Distribution of P&G Products
Manufacturer

Marketing Agents- State Wise

Retailer/Wholesaler/Distributors

Chemist Shop/ Retail Outlets/ Big Markets

Agents
 P&G products are distributed through a network of redistribution stockists RS)
(covering both urban and rural population).

 There are 35 C&FAs (Carrying and Forwarding Agents) in the country who feed
these redistribution stockists regularly.

 The general trade comprises grocery stores, chemists,

wholesale, kiosksand
general stores.

 The C&FA act as buffe stock‐points (at

company s to r
depot) ensure that
stock‐outs did not take place.
Intensive Distribution
 P&G follows this strategy in India. As the company manufactures
FMCG convenience/necessity goods, hence there is lesser/no brand
loyalty from customer side.
 These products are typically purchased impulsively and frequently and
required to be widely available to customers.
 The distribution network of the company needs to be very strong and
proactive.
 As the products are relatively small and easily transported, they are
easy to box up a great number of units to many different channel
intermediaries
Extensive Distribution

 Sold in retail stores such as Walmart, Target, and other convenient

stores all over the world

 Company requires extensive distribution to obtain big sales volume

 The Procter and Gamble owns a series of distribution

centers in Texas, Ohio, and more
Vertical Marketing System

Corporate Vertical Marketing System: Wella Professionals have joined

with P&G and are exclusive distributors of their hair and skincare products.

They are only sold within their own stores.

 Diagrammatic Presentation of Channel

PRODUCER
RETAILER CUSTOMERS
S

PRODUCER WHOLESELLER RETAILER CUSTOMERS

S
 Old Distribution
Channel of P&G in
India
Distribution System
• Imitating Hindustan Lever
Distribution System
• Using many distributors in limited
area
• Applying every possible method to Frequency of Increase in cost due to increase in
match lever 01
• Spent extensively on distribution
replenishment was distribution cover

network low
03

Problems
05 03 01
Problems faced by P&G in old
Volume demand was 05
not available as
distribution System
distributors were
trying to push up the
volume 04 02
04 02 Due to many distributors, ROI of
85% of sales come from
distributors decreased
top 30 towns

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 Project Golden Eye
Resulted in
Initiative in Rationalizing its
increasing ROI by
Sales and Distribution
reducing costs

Reducing its number of

distributors by one-tenth of
the current size

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 Manufacturing plant
Distribution Channel
Institutional Buyer (Big)
Office Impulse
Driven
Company warehouse Confectionery
Institutional Buyer(Small) Adopted
Sessional- Party Wholesale

distribution
Distributer (Vicks)
Ensuring a better ROI,
P&G is now able to make
distributors invest more

By offering more
Retailer
Distribution: Focus on key
Benefits volumes, shaving
distributor’s margin by
urban markets 2%

This 2% can be
Customer effectively used in
advertising
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 Benefits from new Distribution system

Provided Better ROI to the Reduced the number of stockists and

01
distributors moving to Super Stockist

03

03 01
05 Better Reduced stockists
ROI
Revised margin 0
M ar
rates resulted in
saving and that can
be used for
5gin 04
Cost Saving

advertising
02 02
04 More volume of
stock Less number of distributors result in good
Will Result into Cost volume of stock
saving

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RURAL DISTRIBUTION STRATEGIES FOR P&G
4
Strategic Winning in the Ensuring direct
Focus market place coverage

Sub-Distributor Model Typical sales = Rs. 5-10

lakhs
> 50 km from existing branch or Salient
Features
1 sales exec. per Sub-D
difficult to reach
What is
it?
Increasing reach in villages
350 stores per Sub-D
with < 20,000 population

Future of Rural Model at P&G

Power Villages Focus on Rural Bihar

• Identified 70,000 villages • Target power villages = 7,086

• Cost to serve < 10% of Revenue • Current Business = Rs. 11.2 Cr./month
• Current reach = 10% of such villages • Added 25 new Sub-D in Bihar
• Plans to increase 5-10% per year • Total ACV of Power Villages = 54.1%
Campaign in Rural India
8
HUL P&G

Cost Parameters % of Sales Increasing • Live demonstration on use of

product products like diapers
awareness in • Coverage of 40,000 villages
Fixed Cost 4.00 rural areas in 2010

Commission 1.00

DSE Salary 2.50 • Make products more

affordable for rural
Reduction in consumers
App. Salaries 2.63 SKU size • Reduction in price of
whisper
Wholesale Margin 0.60 to Rs.25

Others 1.00
Introduction of • Launch of Tide Naturals in
more 2010
Total 11.7%
affordable • Increase in pack size without
brands increasing price
Challenges in Increasing Distribution - Logistics
10

• Lack of Pukka Roads

• Narrow roads (only certain vehicles
can reach these places)
• Problems during rainy season
• Uneven Terrain
• Lack of warehouses to lease
• Pilferage
• Safety of products
• Legal requirements (only specified
value of products allowed per vehicle)
• Rising fuel costs
Other Challenges
11

Lack of Awareness - Promotion (Sales Promotion and

Advertising) Strategy

Restricted Purchase Power

Additional Personnel Requirement to Increase Reach

Technology to Reduce Challenges
12

Both P&G and HUL leverage the hand-held wireless PDA device
in rural areas to take orders; this helps the company to get real
time information on demand patterns and trends, manage
inventory and production better, as well devise efficient sales
promotion programs to drive sales

Both companies also leverage geo-tagging (GPS) technology to

map individual retailers and to find the approximate distance
and time required to reach these shops from the nearest
highway
Recommendations
13
P&G
• P&G is a relatively new entrant in the Indian FMCG market .
• Therefore, the company has been focusing on a high cost, high quality
model direct reach model in rural India.
• In low throughput regions, the company should focus on sub-
distributors
regions to decrease costs
• In high throughput regions, P&G should look to increase the number of
distributor branches to increase its reach
• Multiple sales executive per sub-distributors will help reduce fixed
costs and
will help increase total margins
• The company should also make sure that the incentives of the employees
are linked to shops covered
– Moreover, the fake billing problem can be reduced by ensuring
 Conclusion

 The company uses its absolute control power to design more effective distribution channels.

 It streamlines the number of distributors so that making the distributors is more stable and competitive.

 P&G Company is investing in a more agile and faster distribution network to optimize inventory and
reduce out-of-stocks.

 It reasonably allocates resources across channel options.

 It is also investing in its sales force to more profitable

establish distribution system (Annual Report of P&G,
2020)
 Thank

You
!

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