Conversation with distributors to know about the preference for PARLE-G

Me: What is the exact distribution flow for Parle-G?

D:

Manufacturing unit of Parle- G at

various location

Parle G Depots

Wholesalers & Distributors

Transportation to next level

(Agencies)

Retailers: Small shops/ city stores

Procurement: Customers

Me: What are the factors company consider while giving distributorship?
D: Company takes into account a host of factors while considering the selection of distributors.
Before giving the distributorship following things are required with the distributors:
1. Authentication in term of ID card that includes name and address, photograph of location.
2. Proof of solvency which requires name and address of distributors bankers
3. Safety of Inventory, which means the distributor/dealer should get the stock of the company
insured.
4. Details of the storage space and refrigeration (in case of any perishable items) facility is to be
provided by distributors/ dealers.
5. Details of delivery vehicle which includes the following:
a. Light commercial vehicles
b. Matador
c. 3 wheeler vans
d. Tricycle Van and Hand/Push cart
e. The number of models of each of the vehicle needs to be furnished to the company
6. Details of salesman present in the field for a distributor is also mentioned by distributor
7. Details of clerical staff and labour are to be provided.
8. The distributors/dealers have to furnish details of any advertising and sales initiative
undertaken by them on behalf of the company.

Me: How much margin does Parle offers to distributors?

D: It was 8 % earlier but recently it has been increased to 8.5%
Me: How is this margin as compared to that offered by competitors?
D: It is low as compared to competitors as competitors like Sunfeast, Britannia give higher
margin to penetrate into the market further.
Me: How do you manage to achieve targeted sales figures?
D: Incentives are given to salespersons and CFA to push Parle-G in market. However as the
demand is high, high margins need not to given always.

Conclusions drawn from the conversation:

Less margin compensated by high volume demands: Even though Parle just offers 8-8.5% margin on
biscuits which is less as compared to competitors, the very fact that Parles products have good
demand in the motivates the distributors to stock it.
Minimal Incentives given: Parle products being a cooperative cannot afford to give heavy monetary
incentives. Parle products are considered to be value for money since the company does not believe
in charging heavy margins i.e. all monetary incentives are short run mean to promote products.
Strong & long term bond: The distributors and transporters and grown with the company over the
time, this bonding enables the company to give lesser margin to distributors in the industry lowering
the cost. Distributors earn through high volumes not by margins.