Final Project Report Dabur

A REPORT
ON
EXPANDING THE DISTRIBUTION

NETWORK IN RURAL AND
UNTAPPED MARKET
OF DELHI
IN
DABUR INDIA LIMITED
By
KunalKapoor
11BSPHH010422
IBS, Hyderabad
Summer Internship Report
Page 1
A PROJECT REPORT
ON
EXPANDING THE DISTRIBUTION NETWORK IN
RURAL AND UNTAPPED MARKET
OF DELHI
By
KunalKapoor (11BSPHH010422)
A Report submitted in partial fulfillment of the
requirements of MBA program of IBS, Hyderabad
Submitted To:
Mr. TanmayThaker
Regional Sales Manager
DABUR INDIA (Company Guide)
&
Mr. Raja shekhar Reddy
IBS, HYDERABAD (Faculty Guide)
In
DABUR INDIA
Page 2
INTERNSHIP CERTIFICATE
Page 3
AUTHORIZATION
The project report titled as expanding the distribution network in rural and untapped market of
Delhi has been authorized by DABUR INDIA LTD as a part of the evaluation for Summer
Internship Program.
The project has been submitted as a partial fulfillment of the requirement of Masters of Business
Administration (MBA) program of IBS, Hyderabad.
Submitted By:
Submitted To:
KunalKapoor
(11BSPHH010422)
Mr. TanmayThaker
Regional Sales Manager
DABUR INDIA
Mr. Raja Shekhar Reddy

Faculty Guide
IBS, Hyderabad
Page 4
ACKNOWLEDGEMENT
Summer Internship Program(SIP) aims to provide every student with an opportunity to apply
theoretical concepts to the real business scenarios. The wealth of knowledge and experiences
shared by all involved in completion of successful internship is valuable.
I feel privileged to be associated with DABUR INDIA. I would like to put on record my deep
sense of gratitude towards the organization for providing me with this unique learning
experience and the requisite infrastructure.
I express sincere gratitude to my company guide and mentor Mr. TANMAY THAKER for his
encouragement, support and valuable guidance throughout the project duration.
At this point of time, I would also like to thank all members including Regional heads, Territory
heads, Sales officer DABUR INDIA, my faculty guide Mr. Raja Shekhar Reddy, friends and
my family who provided me valuable insights and has been very supportive and friendly in
providing an environment for learning.
Page 5
TABLE OF CONTENTS
Internship Certificate ............................................................................................................................................................. 3
AUTHORIZATION ................................................................................................................................................................. 4
ACKNOWLEDGEMENT ...................................................................................................................................................... 5
EXECUIVE SUMMARY ....................................................................................................................................................... 8
Methodology ......................................................................................................................................................................... 8
Findings .................................................................................................................................................................................. 9
Conclusions ........................................................................................................................................................................... 9
List of illustrations ................................................................................................................................................................ 10
Introduction ............................................................................................................................................................................... 12
Purpose and scope of the report: ............................................................................................................................... 12
Limitations........................................................................................................................................................................... 13
Industry Analysis of FMCG Sector ................................................................................................................................... 14
FMCG Industry Economy ............................................................................................................................................... 14
Structural Analysis Of FMCG Industry....................................................................................................................... 14
Distinguishing features of Indian FMCG Business: ................................................................................................ 15
Market potentiality of FMCG industry ........................................................................................................................ 17
Major segments of FMCG industry .............................................................................................................................. 18
The Top 10 companies in FMCG sector: .................................................................................................................. 19
Comparison of few consumer goods across different companies ....................................................................... 20
SWOT ANALYSIS ............................................................................................................................................................... 22
Growth drivers for FMCG sector .................................................................................................................................. 23
FMCG Growth Story ......................................................................................................................................................... 23
Following is the table summarizes pre and post liberalization scenario ........................................................... 24
Indian Consumer Spending Pattern .............................................................................................................................. 24
Sales Promotion Introductory Ideas .............................................................................................................................. 25
CHALLENGES .................................................................................................................................................................. 26
One big Opportunity and advantage ............................................................................................................................. 27
Company Analysis DABUR INDIA.............................................................................................................................. 28
Dabur Overview .................................................................................................................................................................. 28
Organizational Structure of DABUR INDIA ............................................................................................................ 28
Presence in FMCG categories ........................................................................................................................................ 29
Distribution Network......................................................................................................................................................... 30
Business Structure .............................................................................................................................................................. 31
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On Site Project ......................................................................................................................................................................... 36

Name of the project- Lakshya .................................................................................................................................... 36
Penetration level sufficient headroom.......................................................................................................................... 37
Project in detail.................................................................................................................................................................... 39
Mapping of villages and forming of clusters ............................................................................................................. 41
Collection of information ................................................................................................................................................. 47
Recording of information ................................................................................................................................................. 48
Findings ..................................................................................................................................................................................... 52
Findings from the questionnaire ........................................................................................................................... 52
Conclusion and recommendation ....................................................................................................................................... 57
Classification of villages stockiest vise ....................................................................................................................... 58
Learning fROM THE PROJECT .......................................................................................................................................... 61
References ................................................................................................................................................................................ 62
ANNEXURES............................................................................................................................................................................. 63
Questionnaire 1 ................................................................................................................................................................. 63
Questionnaire 2 ................................................................................................................................................................. 64
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EXECUIVE SUMMARY
Title of the project- Expanding the distribution network in the rural and untapped market of
Delhi
Objective of the project- To tap potential new rural markets in the outskirts of Delhi and setting
up sustainable distribution network
Description of the report in brief:First part of the report talks about industry analysis of FMCG
sector giving details about the structural analysis of FMCG sector along with few distinguishing
features of the FMCG sector it also talks about market potential of FMCG sector and its future.
Leaving this there is a list of top 10 FMCG players in India. There are bar graphs showing
leading firms and their contribution in few specific consumer goods. Followed by SWOT
analysis of FMCG sectors its growth drivers and its growth story. There is also pre and post
liberalization scenario showing new companies entering after the liberalization into different
consumer goods category.
Second part of the report talk about company analysis of Dabur India limited starting with
background about the company its organizational structure its market share in different consumer
goods. It also talks about the importance of distribution along with the distribution network
followed of Dabur Company. Detail about the business structure of the company, its three basic
units there description and there revenue share.
The third part of the report talks about the onsite project which basically was to tap new potential
rural market in the outskirts of Delhi after studying about their growth, distance from the nearby
distributor and their FMCG turnover.
METHODOLOGY
Visit to different markets were made to understand the working. How the distribution of
goods take place from the company to carry forward agents (CFA) to the
distributors/stockiest to the retailers and ultimate consumers.
A list of villages was provided by the company, which was divided according to sub
district they fall under, and detail about village population and number of household was
given.
The project started by analyzing the census data.
After which mapping of villages took place with respect to the distributor they lie under
and there distance from the distributor was recorded.
The market/village was surveyed by administering a questionnaire from the retail outlets
in that very village.
Knowing about the distance from the stockiest, growth and FMCG turnover of the
village it was easy to say if the village was good enough to be tapped or not.
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Finally how to cover the potential market either through existing stockiest, sub-stockiest
or through ready stock was suggested.
FINDINGS
It was noticed that retailers were quite satisfied with the present services provided by
Dabur Company they were happy with once a week visit and had no complaints against the
company. In few areas where there was twice a month visit retailers of that area wanted
the visit to increase to once a week. Retailers had one issue which they wanted to be solved
as soon as possible that is discount for window display ( window display is when a retailer
reserves a particular section in his store for a particular company only )
Talking about retail outlets where there was no services provided by the company,
retailers of that area wanted the salesmen to visit them at least twice a month but there
were few retailers who were quite satisfied purchasing products from nearby wholesale
shops as they have the following benefits from there:
Purchase as and when required

Cheaper than the company price
Pay as and when comfortable
CONCLUSIONS
The project has helped to gain insights into the FMCG sector and different distribution
channels adopted by different companies for example P&G has only one distributor in the
whole of Delhi Bharat Distributor where as Dabur has 9 distributor for entire Delhi. After
the completion of the project it was noted that there is great potential in the rural market
and should be tapped by the companies which have still not entered the rural segment.
Companies like Parle, Ghadi have a good level of penetration in the rural market, Britania
has also started to expand its distribution in the rural market. With increasing income and
awareness in the rural areas people are demanding branded products they are ready to
spend more for better satisfaction. There is better sale of small sachets in rural area than
packing of 50ml 100ml. Another finding was that drug store has better sale for products
relating to health category than a retail outlet.
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LIST OF ILLUSTRATIONS
List of figures
Figure 1-Pie Chart: Major segments of FMCG Industry
Figure 2-Table: Top 10 FMCG companies in India
Figure3: Comparison of few consumer goods across different industry
Chart 1: Hair oil

Chart 2: Shampoo
Chart 3: Oral Care
Chart 4: Skin Care
Figure 4-Table: SWOT Analysis of FMCG Industry

Figure 5-Chart: Growth drivers of FMCG sector
Figure 6-Chart: FMCG growth story
Figure 7-Table: Pre and post liberalization scenario
Figure 8-Pie Chart: Indian consumer spending pattern
Figure 9- Types of sales promotion
Figure 10-Chart: Challenges faced by FMCG sector
Figure 11-Bar graph: Labor cost in different countries
Figure 12-Chart: Porters five forces model
Figure 13-Hierachial chart: Organizational structure of DABUR India
Figure 14-Chart: Presence of DABUR in different FMCG categories
Figure 15-Chart: Distribution network of DABUR
Figure 16-Chart: Business structure of DABUR
Figure 17-Bar graph: Consumer care division overview
Figure 18-Bar graph: Consumer care sales
Figure 19-Table: Key Brands under consumer care division
Figure 20- Table: Consumer health division
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Figure 21- Process Chart: International business division

Figure 22-Bar graph: Penetration level sufficient headroom
Figure 23-maps: Mapping of villages
Figure 24-Graphs: Finding from questionnaire
Figure 29Graphs: Number of villages range vise
Figure 30-Pie chart: Number of villages stockiest vise
Figure 31-Table: Name of villages stockiest vise
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INTRODUCTION
FMCG stands for fast moving consumer goods these goods have quick turnover and relatively
low cost these gets replaced within an year few example of FMCG are toiletries, soap, cosmetics,
detergents etc.
This sector is the fourth largest sector in the economy and gives employment to three million
people in downstream activity. Any FMCG firms can have an edge over the other if it is able to
expand its distribution network and by reducing cost of production.
The FMCG industry is volume driven and is characterized by low profits but the products are
branded and backed by heavy advertising and marketing.
FMCG segment can be classified under two segments premium and popular premium catering to
upper middle class who are not price sensitive but are brand conscious. People who are sensitive
to price and are not brand conscious are the one who fall under semi urban and rural segments
prices of goods for popular category are less than that of premium one.
Definition of FMCG may vary, but in generalthe terms FMCG is used for branded products
which are:
Used directly by end consumer
Non durable in nature
Sold in packaged form
Used at least once a month
PURPOSE AND SCOPE OF THE REPORT:

The basic purpose of the report is to provide insight into the FMCG sector how this sector
accounts for the development of the nation by providing jobs to lakhs of people. This sector has a
continuous growth; high growth rate was accounted in fiscal year 2006 to 2010. This report also
helps in analyzing the percentage share of different FMCG companies in different consumer
goods by checking the data it is easier to conclude which FMCG firm is dominating in different
consumer goods. By a thorough study of the report companies can work on the areas or fields
they lag. It also throws light on consumer spending pattern which can help companies to focus
on areas which have more demand. Discussing about the challenges faced by the FMCG sector
companies can work on weak areas before they have to face one such situation.
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LIMITATIONS
Long distances of rural areas was one basic limitation few of the villages which were to
be surveyed were 40 to 45 km away from the maim city. And there were times when
travelling 40 km was of no use as there was no retail outlet from where information could
be collected.
One basic limitation of FMCG sector is that no exact conclusion about the dominating
firm could be made as one firm can have a good market coverage in urban areas whereas
the other firm may have good market coverage in rural areas. For example Parle has a
good tap in the rural market but Britania has a better tap in urban market than rural now
which firm is dominating under the biscuit category cannot be concluded.
One big limitation while collection information was lack of cooperation by the retailers
they didnt provide information for few questions like sale per month? From where do
you purchase?
Talking about language used by people living in villages also acted as a limitation while
collecting information.
Travelling kilometers away from the main city when company car was not available was
also a task as it was not easy to cover villages on foot or by public transport.
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INDUSTRY ANALYSIS OF FMCG SECTOR
FMCG industry, alternatively called as CPG (Consumer packaged goods) industry primarily
deals with the production, distribution and marketing of consumer packaged goods. The Fast
Moving Consumer Goods (FMCG) is those consumables which are normally consumed by the
consumers at a regular interval. Right product at the right place, right price and at the right time
is the number one business imperative of all consumer goods companies. Regardless of
geography, as markets become more complex and consumers become more demanding,
consumer goods need to adapt fast to put in place processes and systems that are able to handle
all the emerging challenges and also exploit market opportunities as they come up.
FMCG INDUSTRY ECONOMY

FMCG industry provides a wide range of consumables and accordingly the amount of money
circulated against FMCG products is also very high. The competition among FMCG
manufacturers is also growing and as a result of this, investment in FMCG industry is also
increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector.
Of the entire FMCG sector food is 52% non food 45% and OTC is 3%.
Of the 7.8 million retail outlets for FMCG, grocers are the dominant format.
Modern trade accounts for 6% of the FMCG sales.
STRUCTURAL ANALYSIS OF FMCG INDUSTRY

Typically, a consumer buys these goods at least once a month. The sector covers a wide gamut of
products such as detergents, toilet soaps, toothpaste, shampoos, creams, powders, food products,
confectioneries, beverages, and cigarettes. Typical characteristics of FMCG products are: 1. The products often cater to 3 very distinct but usually wanted for aspects - necessity, comfort,
luxury. They meet the demands of the entire cross section of population. Price and income
elasticity of demand varies across products and consumers.
2. Individual items are of small value (small SKU's) although all FMCG products put together
account for a significant part of the consumer's budget.
Page 14
3. The consumer spends little time on the purchase decision. He seldom over looks at the
technical specifications. Brand loyalties or recommendations of reliable retailer/ dealer drive
purchase decisions.
4. Limited inventory of these products (many of which are perishable) are kept by consumer and
prefers to purchase them frequently, as and when required.
5. Brand switching is often induced by heavy advertisement, recommendation of the retailer or
word of mouth.
DISTINGUISHING FEATURES OF INDIAN FMCG BUSINESS:

FMCG companies sell their products directly to consumers. Major features that distinguish this
sector from the others include the following: A. Design and Manufacturing
1. Low Capital Intensity - Most product categories in FMCG require relatively minor
investment in plant and machinery and other fixed assets. Also, the business has low working
capital intensity as bulk of sales from manufacturing take place on a cash basis.
2. Technology - Basic technology for manufacturing is easily available. Also, technology for
most products has been fairly stable. Modifications and improvements rarely change the basic
process.
3. Third-party Manufacturing - Manufacturing of products by third party vendors is quite
common. Benefits associated with third party manufacturing include (1) flexibility in production
and inventory planning; (2) flexibility in controlling labor costs; and (3) logistics - sometimes its
essential to get certain products manufactured near the market.
B. Marketing and Distribution
Marketing function is sacrosanct in case of FMCG companies. Major features of the marketing
function include the following:
1. High Initial Launch Cost - New products require a large front-ended investment in product
development, market research, test marketing and launch. Creating awareness and develop
franchise for a new brand requires enormous initial expenditure on launch advertisements, free
Page 15
samples and product promotions. Launch costs are as high as 50-100% of revenue in the first
year. For established brands, advertisement expenditure varies from 5 - 12% depending on the
categories.
2. Limited Mass Media Options - The challenge associated with the launch and/or brandbuilding initiatives is that few no mass media options. TV reaches 67% of urban consumers and
35% of rural consumers. Alternatives like wall paintings, theatres, video vehicles, special
packaging and consumer promotions become an expensive but required activity associated with a
successful FMCG.
3. Huge Distribution Network - India is home to six million retail outlets, including 2 million
in5,160 towns and four million in 627,000 villages. Super markets virtually do not exist in India.
Thismakes logistics particularly for new players extremely difficult. It also makes new product
launchesdifficult since retailers are reluctant to allocate resources and time to slow moving
products. Criticalfactors for success are the ability to build, develop, and maintain a robust
distribution network.
C. Competition
Significant Presence of Unorganized Sector - Factors that enable small, unorganized players
with local presence to flourish include the following:
1. Basic technology for most products is fairly simple and easily available.
2. The small-scale sector in India enjoys exemption/ lower rates of excise duty, sales tax etc.
This makes them more price competitive vis--vis the organized sector.
3. A highly scattered market and poor transport infrastructure limits the ability of MNCs and
national players to reach out to remote rural areas and small towns.
4. Low brand awareness enables local players to market their spurious look-alike brands.
Common FMCG products:
Some common FMCG product categories include food and dairy products, glassware, paper
products, pharmaceuticals, consumer electronics, packaged food products, plastic goods, printing
and stationery, household products, photography, drinks etc. and some of the examples of FMCG
products are coffee, tea, dry cells, greeting cards, gifts, detergents, tobacco and cigarettes,
watches, soaps etc.
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MARKET POTENTIALITY OF FMCG INDUSTRY

Some of the merits of FMCG industry, which made this industry as a potential one, are low
operational cost, strong distribution networks, presence of renowned FMCG companies.
Population growth is another factor which is responsible behind the success of this industry.
Growth is also likely to come from consumer 'upgrading' in the matured product categories. With
200 million people expected to shift to processed and packaged food by 2012, India needs
around US$ 28 billion of investment in the food-processing industry. It has a strong MNC
presence and is characterized by a well-established distribution network, intense competition
between the organized and unorganized segments and low operational cost. Availability of key
raw materials, cheaper labour costs and presence across the entire value chain gives India a
competitive advantage.
The future of FMCG:
It has been estimated that the FMCG industry will grow at least 12 per cent annually to become
Rs 400,000 crore in size by 2020. Additionally, if some of the factors play out favorably, say,
GDP grows a little faster, the government removes bottlenecks such as the goods and services
tax (GST), infrastructure investments pick up, there is more efficient spending on government
subsidy and so on, growth can be significantly higher. It could be as high as 17 per cent, leading
to an overall industry size of Rs 620,000 crore by 2020.
Based on research on industry evolutions in other markets and discussions with industry experts
and practitioners, Booz & Company has identified some important trends that will change the
face of the industry over the next ten years. Some key ones related to evolution of consumer
segments are as follows:
Decentralization
Evolving categories
Accelerating Premiumisation
Value at the bottom
Increasing Globalisation
Growing Modern Trade
Focus on Sustainability
Technology as a Game Changer
Page 17
MAJOR SEGMENTS OF FMCG INDUSTRY
FMCG Industry
Household care
Lighting
Personal Care
Tobacco
Food and Beverages
2%
15%
10%
20%
53%
Household care:
With rapid urbanization, emergence of small pack size and sachets, the demand for the
household care products is booming. HUL is the leader with ~38 per cent of market share. Other
major players are Nirma, and Proctor & Gamble.
Personal care:
Personal care segment includes personal wash products, hair care products, oral care products,
cosmetics etc. The Indian skin care and cosmetics market is valued at $274 million and is
dominated by HUL, Colgate Palmolive, Gillette India and Godrej. The skin care market is at a
primary stage in India. With the change in life styles, increase in disposable incomes, greater
product choice and availability, people are becoming more alert about personal grooming. The
oral care market can be segmented into toothpaste - 60 per cent; toothpowder - 23 per cent;
toothbrushes - 17 per cent. This segment is dominated by Colgate-Palmolive with market share
of ~49 per cent, while HUL occupies second position with market share of ~30 per cent. In
toothpowders market, Colgate and Dabur are the major players.
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Food and Beverages:

This segment comprises of the food processing industry, health beverage industry, bread and
biscuits, chocolates & confectionery, Mineral Water and ice creams. The three largest consumed
categories of packaged foods are packed tea, biscuits and soft drinks. Indian hot beverage market
is a tea dominant market. The major share of tea market is dominated by unorganized players.
Leading branded tea players are HUL and Tata Tea. Major players in food segment are HUL,
ITC, Godrej, Nestle and Amul.
THE TOP 10 COMPANIES IN FMCG SECTOR:
SR.NO.
Company
1.
2.
3.
4.
Hindustan Unilever Ltd.

I.T.C ( Indian Tobacco Company )
Nestle India
Amul
5.
6.
Dabur India
Asian Paints India
7.
Cadbury India
8.
9.
10.
Britannia Industries
P&G Hygiene And Health Care
Marico Industries
Page 19
COMPARISON OF FEW CONSUMER GOODS ACROSS DIFFERENT

COMPANIES
Market Share
Hair oil
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
SHARE
Bajaj
Dabur
Marico
Emani
Others
8%
15%
42%
5%
30%
Shampoo
50%
45%
40%
Market Share
35%
30%
25%
20%
15%
10%
5%
0%
Shampoo
Cavinkare
Dabur
HUL
P&G
Others
10%
6%
46%
24%
14%
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Oral Care
60%
Market Share
50%
40%
30%
20%
10%
0%
Oral Care
Colgate
HUL
Dabur
Others
50%
23%
13%
14%
Skin Care
70.00%
60.00%
Market Share
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Skin Care
Hindustan
Lever
Emani
Dabur
Loreal
Cavin Care
Others
58.90%
6.80%
6.60%
6.40%
3.20%
18%
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SWOT ANALYSIS
Strenghts:
Weaknesses:
Low operational cost.
Lower scope of investing in

technologies.
Presence of established distribution

network in both urban and rural
market.
Less scope of achieving economies

of scale.
Low exports levels.
Presence of well known brands in

FMCG sector.
Favorable government policies.
Foreign direct investment.

Opportunities:
Untapped rural market changing

lifestyle.
Rising income level.
Threats:
Removal of import restriction

resulting in replacing of domestic
brands.
Tax and regulatory structure.
Rural demand is cyclic in nature.
Rising population.
High consumer goods spending.
Rise in awareness among

consumers.
India is under penetrated in many

FMCG categories.
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GROWTH DRIVERS FOR FMCG SECTOR
FMCG GROWTH STORY
Page 23
FOLLOWING IS THE TABLE SUMMARIZES PRE AND POST

LIBERALIZATION SCENARIO
FMCG SECTOR
Soaps
MAJOR BRANDS 1970s-1980s
NEW BRAND 1990s ( Indian

Brands)
Lifeboy , Liril , Cinthol , Lux ,

Rexona
Nirma Beauty Soap
Fair and lovely , ponds
Dabur Himalaya
Surf , Nirma , Wheel
Fena
Maggie, Kisaan , Parle, Britania
MTR , Ashirwad , Haldiram
Beverages
Nescafe , campa ,Thumsup
Haldiram , Tata tea ,Bisleri
Cigarettes
Wills , India Kings
Menthol
Creams and
Lotions
Detergents
Processed food
INDIAN CONSUMER SPENDING PATTERN
2% 1%
2%
5%
Accessories
Books and Music
8%
10%
4%
Grocery
Personal care
7%
40%
7%
Home textile
Saving and Investment
4%
8%
Clothing
Consumer Durables
2%
Vacations
Eating out
Page 24
SALES PROMOTION INTRODUCTORY IDEAS

A typical sales promotion budget covers almost 70% of the total consumer sales promotional
budget. It is also considered as a brand differentiator by many big players like Coca-Cola, Pepsi,
Heinz and many more. For many business experts and academics, sales promotion is regarded as
typical marketing techniques that add value to a product in order to achieve specific marketing
goals. The primary purpose of sales promotion is to induce the consumers to make a quick
buying-decision in order to create increases sales. Typical example of sales promotion is to offer
customers to take chance of winning a prize or offering some extra products with the same price.
Sales promotion and marketing are inter-related but not have the similar purpose. It is advertising
which makes a platform for sales promotion where customers can see the direct added value of
buying your product. On the other hand, advertising is an intangible promotion of your products
to send the marketing message to the customer-base
Trade sales
promotion
B2B and
Industrial
sales
promotion
Consumer
sales
promotion
Type of
sales
promotion
Page 25
CHALLENGES
Some of the top of mind challenges faced by the CPG industry today is illustrated in the
following:
In addition, increasing customer identification with Health and Wellness and resultant affinity
towards brands that portray such traits is a trend that CPG firms have to integrate into their entire
product innovation, marketing and advertising processes. Market reach and diverse consumption
patterns across the globe are other significant issues that consumes much top management time
& attention today.
Page 26
ONE BIG OPPORTUNITY AND ADVANTAGE

Labour cost in India is amongst the lowest in emerging Asian countries. Easy raw material
availability and low labor costs have resulted in a lower cost of production. Many multi-nationals
have set up large low cost production bases in India to outsource for domestic as well as export
markets.
Page 27
COMPANY ANALYSIS DABUR INDIA
DABUR OVERVIEW
Established in 1884- more than 125 years of trust and excellence.

Among top 5 FMCG companies in India.
Worlds largest in Ayurveda and Natural Healthcare.
Revenue of Rs.41.1 billion and profit of Rs.5.7 billion in fiscal year 2010-11.
Wide distribution network covering 2.8 million retailers across the country.
Strong brand equity.
Dabur ranked 200 in the fortune 500 list.
Dabur ranked most trusted brands in India, according to brand trust report, India study
2011.
Dabur ranked as an organization that offers the best return to investors by the 6th social
and corporate governance awards, presented by the Bombay Stock Exchange.
ORGANIZATIONAL STRUCTURE OF DABUR INDIA
Chairman-Anand Burman
Vice chairman- Amit Burman
Whole time director
Whole time director
PD Narang
Sunil Duggal
Non whole time promoter

Mr. Mohit Burman
Non whole time promoter

Mr. Saket Burman
Page 28
PRESENCE IN FMCG CATEGORIES
Page 29
DISTRIBUTION NETWORK
Distribution channel helps in moving products and services from business to other businesses
and consumers. Channels of distribution consist of the following members wholesalers, retailer
and sales agents who help in delivering the final good to the consumer for consumption. In a
distribution channel major work of mangers is to decide how much to order and when to order
depending upon inventory consideration and internal purchasing.
Channel structure ranges from two to five levels:
Two level structure- goods move directly from provider or manufacturer to the consumer.
Three level structure- in three level structure retailer acts as middle men between
manufacturers to the consumer. The retailer order directly from the manufacturer and
sells to the consumer.
Four level structure- in this structure between manufacturer and retailer wholesaler act a
middlemen retailer orders to the wholesaler and then sells to the consumers.
Five level structure-In this structure there is manufacturer, wholesaler, retailer, jobber and
consumer. Here jobber service small retailers whom wholesalers cannot reach.
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BUSINESS STRUCTURE
Dabur operates through three focused strategic business units.
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Consumer care division(CCD) overview:

30
Percentage Share
25
20
15
10
5
0
Food
Category wise share in %
15
Health
Hair care Oral care suppleme Digestive Skin care
nts
28
17
20
Home
care
6
Page 32
Key brands under consumer care categories:
Hair Oil
Shampoo
Dabur Amla
Dabur Vatika
Oral Care
Health
Supplements
Food
Dabur Red
Honey
Dabur Real
Dabur Vatika
Dabur Babool
Glucose
Real Active
Dabur Anmol
Meswak
Chyanwanpash
Skin Care
Digestives
Fem
Bleach
Dabur
Hajmola
Odonil
Uveda
Hajmola
Candy
Odomos
Dabur
Gulabari
Home Care
Sani
Fresh
Page 33
Consumer Health Division
CHD
OTC 64%
ETHICAL
36%
Repository of Dabur healthcare knowledge.

Range of over 260 products.
Focusing on multiple therapeutic areas.
Distribution coverage of 200000 chemists, 12000 vaidyas and 12000 ayurvedic
pharmacies.
Focus on growing the OTC healthcare portfolio aggressively.
Products:
Honitus
Pudinhara
Dabur Ayurveda
International business division:
1980-Started as
an exporter
1990-Set up
franchisee in
dubai,leading to
setting up of
manufacturing
2003-Renamed
franchisee as
dabur
international
limited
Today-Builiding
scale 22% of
overall dabur
sales.
Page 34
Focus markets:
Egypt
Nigeria
Turkey
Bangladesh
Nepal
U.S
Dabur overseas business contributes 22% to consolidated sales led by CAGR of 32% in last 6
years.
New products contribute significantly to overseas sales.
Page 35
ON S ITE PROJECT
NAME OF THE PROJECT- LAKSHYA

With the presence of 12.2% of the world population in the villages of India, the Indian rural
FMCG market is something no one can overlook. Increased focus on farm sector will boost rural
incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure
facilities will improve their supply chain. FMCG sector is also likely to benefit from growing
demand in the market. Because of the low per capita consumption for almost all the products in
the country, FMCG companies have immense possibilities for growth. And if the companies are
able to change the mindset of the consumers, i.e. if they are able to take the consumers to
branded products and offer new generation products, they would be able to generate higher
growth in the near future. It is observed that the rural income has grown, boosting purchasing
power in the countryside.
Rural marketing could open the doors of paradise, but the path is paved with thorns. One major
limitation here is this: most FMCG players just do not have the critical size for going all out for
rural marketing. That is why most FMCG players are expected to concentrate both on rural and
urban marketing: focus on urban markets for value and focus on rural markets for volumes. One
result-oriented marketing strategy here is this: offer value-additions to existing lines to lure the
urban consumer and alongside offer the rural consumer wide-ranging choices within a single
product category in a bid to generate high volumes.
Page 36
PENETRATION LEVEL SUFFICIENT HEADROOM
Talking about the urban and rural penetration in most basic consumer goods like toothpaste,
shampoo, hair oil etc. there is a huge gap to bridge. This gap is one good opportunity for the
existing players to increase their profits by tapping this untapped market. Seeing the above table
it is clear that there is a minimum gap of 15 % between urban and rural penetration in all basic
consumer good excluding hair dyes.
Objective of the project
To tap potential new rural markets in the outskirts of Delhi.

Setting up of distribution network in these areas.
To increase the portfolio of Dabur products.
Page 37
Methodology
Analyzing the census data of 252 villages in Delhi. A study was done on this data in
terms number of people living there and number of households in that area.
Mapping of villages- after the analysis of the census data the villages were mapped in
order to form clusters.
Visit to the market and collection of data- after the villages were marked and clusters
were formed, market was visited and information was collected from the retail outlets in
that respective village.
Checking of potential- after the collection of data potential of the villages was noted in
terms of total FMCG turnover.
Comparison with existing market- after noting the potential of the market comparison
was done with the market which is already tapped by the company.
Implementation of the distribution channel- after seeing the growth and potential of the
market, implementation of the distribution channel was done whether to be distributed
from the existing stockiest or through any other mean.
Page 38
PROJECT IN DETAIL
A list of 252 villages in Delhi was provided along with their:
Population.
Number of households.
District name.
Sub district name.
Stockiest they fall under.
Following is a snapshot of the excel file so received:
This data was first analyzed and studied and the list of 252 was brought down to 193 as the data
had few villages which were lying in UP and few were not applicable.
Page 39
Total Number Of Villages

Not Applicable
Gross Villages
Not Found
In Uttar Pradesh
Other Errors
Net Villages to be
surveyed
252
34
218
22
1
2
193
Not applicable- these were the villages which were named as DMC , NDMC and were there
under each stockiest.
Not found- these were the villages which were not identified on the maps and were not known by
the residents of the sub district it was coming under.
Other errors- these were the villages which were repeated or were coming under a particular sub
district but not under the given stockiest.
To start with, one stockiest was selected and villages lying under his area were mapped.
Mapping was done to see which villages form clusters and to see the distance of villages from
the existing stockiest. Villages which were already tapped by the existing stockiest were marked
as covered and which were not were marked as to be surveyed this information was taken from
the stockiest itself. A different set of information was required for both:
Particulars
Already covered by the stockiest
Market to be surveyed
Information required
Last month secondary sales data + the area had
to be surveyed to see if there is full coverage.
FMCG turnover, growth and potential.
* Secondary sales- sale of goods from distributor to the wholesalers and retailers.
To get data from the already covered markets, software named Dhrishti had to be on the
computers of stockiest. This software has been provided to them by Dabur India. Once secondary
sales data was collected the market was visited and a sample of retail outlets were selected and
following questionnaire was filled with the help of the retailers In this way 64 villages out of 193
villages were there which were covered by one of the 9 stockiest and data for these 64 were
collected.
Page 40
For collecting data for the untapped market the first step was mapping of villages with respect to
the stockiest they fall under:
MAPPING OF VILLAGES AND FORMING OF CLUSTERS
Jyoti prasad
The above map is of stockiest Jyoti Prasad and villages coming under his area. The blue colour
indicator is where the stockiest sits and the green colour indicators are the villages coming under
his area. Each of the green colour indicator had to be covered these were the villages which were
easily found and were to be surveyed in order to get the information regarding the growth and
potential of the village so concerned,
Page 41
RBGK
Pal and Co
Page 42
Murti - Satvik
Radhika
Page 43
Laxmi Ent
Satvik -Ishika
Page 44
SA Trading
Page 45
Vijay Laxmi
With the help of the above maps it was easy to form clusters of villages and start with the survey.
It even helped to check the distance of different villages from the existing stockiest.
Distance is one factor out of the many, which help the distributor in deciding whether to tap the
market or not as more the distance more the cost. If a distributor is having an income which is
less that the cost which he has to bear to cover the market it is not logical for the distributor to
tap that market.
My project focused around one such factor which helps the distributor to decide whether to tap
the market which was distance hence the mapping played a very important role. Along with
distance also the total FMCG turnover of that particular village played an important role to check
the potential of that market.
Page 46
COLLECTION OF INFORMATION
After the mapping of villages, stockiest wise area was surveyed and information was collected
and recorded. Each village had different number of retail outlets for villages having retail
outlets between 10 15 were tried to be surveyed fully but for villages having retail outlets
above 15 were not surveyed fully but a sample of retail outlets were selected and surveyed.
Information was collected by filling a questionnaire with the help retailers.
I am conducting a survey distribution of Dabur Products and would like to know your views and
opinions. Kindly spare a few minutes helping us by completing this questionnaire. The data
entered will be highly confidential and will be limited to the use of completion of the objective
of this survey. Your support will be highly appreciated.
The basic purpose of survey was to check the FMCG turnover of these untapped retail outlets.
Growth and potential was also to be checked which was done with the help of other questions
in the questionnaire. For example if other companies are providing services on continuous basis
there is some potential in the market or they would have also stopped sending salesmen if they
were not able to cover their expenses. By asking how often do you visit the nearby mandi to get
goods multiplied by purchase per visit can give an idea of the FMCG turnover in a month so the
authenticity of the answer given by the retailer on sales per month could also be verified .
Page 47
RECORDING OF INFORMATION
Once the information of all retail outlets or sample of retail outlets was collected an excel file
was prepared for that particular village in the given format.
Following is a snapshot of the excel file so prepared:
In the above excel sheet village name zindpur was surveyed having a population of 5057 and its
distance from the stockiest Vijay Laxmi was 1 km. A total of 15 outlets were surveyed in this
village and an FMCG turnover of 14, 25,000 was recorded in this market. This village was
covered by other companies likes P&G, Britani, Everyday, HUL, Parle but not by Dabur.
This was one village out of the list where Dabur could easily expand its distribution from the
existing stockiest after seeing the growth, potential and distance.
In similar way remaining 129 villages (193 64 covered by the existing stockiest) were surveyed
and data was collected in terms of:
Growth
Potential
Dabur basket
Page 48
FMCG turnover
Other companies visiting
Current portfolio of products.
Nearest wholesale mandi
A sum total of 1922 retail outlets were surveyed from 129 villages located in the outskirts of
Delhi.
And a final excel was prepared which showed the following information:
Village name
Sub district name
Total population
Stockiest area
Surveyed
Covered by stockiest
Total counters
Outlets surveyed
Distance from stockiest
FMCG turnover
Coverage by other companies
Other information
Page 49
Following is a snapshot of the excel file so prepared:
Page 50
Page 51
FINDINGS
FINDINGS FROM THE QUESTIONNAIRE
From questionnaire 1 which was filled with the help of the retailers of shops where there was
continuous supply of Dabur products through the distributor a sample of 25 retail outlets were
selected to check the satisfaction of retailers in respect of services provided to them by Dabur
company.
20
Retailers
15
10
5
0
Series 1
Satisfied
19
Not Satisfied
6
Interpretation
From the above chart it was concluded that maximum retailer are satisfied with the services
provided to them. On asking reason from the not satisfied retailers maximum said they face a
problem during exchange of expiry of goods and also when it comes to cut discount for window
setting.
Page 52
To check if there is good coverage by the distributor a sample of 25 retail outlets were selected to
see if there is a visit by the Dabur salesmen and following result was out.
18
16
14
Retailers
12
10
8
6
4
2
0
Series 1
Yes
18
No
7
Interpretation
From the above chart it was concluded that there is good coverage by the distributor in the areas
which are under him. The retail outlets which gave answer as no were small counters and thats
why were ignored by the distributor these small counters do not have much demand of goods and
keep very limited stock.
Page 53
To check if the salesmen visits twice a month or 4 times a month another sample of 25 was
collected and checked and the following result was out.
16
14
Retailers
12
10
8
6
4
2
0
Series 1
Twice a Month
10
Four Times a Month

15
Interpretation
From the above result it was concluded that areas with twice a month visit and four times a
month visit were more or less the same. Areas which were having twice a month wanted the visit
to increase to once in a week. This could be one suggestion for the company to check with the
distributor why is he providing services twice a month and not four times in a month.
Page 54
From questionnaire 2 which was filled with the help of the retailers of the area which was not
tapped by the company.
Out of 1922 retail outlets which were visited a sample of 25 was collected to see which company
has the maximum presence in rural areas. A chart was prepared to compare the presence of
different companies.
30
25
Outlets
20
15
10
5
0
Parle
Ghadi
HUL
Colgate
P&G
Britania
Marico
Nestle
Reckit
Comapnies
Interpretation
From the above chart it was clearly visible that Ghadi Company has the maximum coverage in
rural areas followed by Parle. Whereas companies like Marico Nestle Reckit have the least
coverage in these areas this could be because products of these companies are not consumed
much by people living in rural.
But due to rising income in rural market leading to an increase in demand of goods, companies
which have still not tapped the rural market should start with it to increase their sale and profits.
Companies which tap rural market first can have the first mover advantage.
Page 55
Another sample of 25 was selected to see what the approx monthly sales in rural market are and
the following results were out
12
10
Retailers
8
6
4
2
0
Series 1
1-10000
2
10000-20000
7
20000-40000
11
40000-80000
5
Interpretation
From the following graph it could be seen that maximum retail outlets have a sale within the
range of 20000-40000 this means if Dabur tap these outlets taking the average 30000 and Dabur
sale as 4% of the total FMCG turnover Dabur could increase their sale of 1200 pm per outlet.
Page 56
CONC LUS ION AND RECOMMENDATION
After the collection and recording of the information a final conclusion in order to set up
distribution network in new rural and untapped market having good potential and growth,
following table and chart was prepared.
Note- Dabur sales were taken to be 4% of the total FMCG turnover.
A range for the FMCG turnover was created and villages lying within that range were classified
accordingly.
FMCG Turnover Range
Number of villages
1-99999
66
100000-400000
41
400001-600000
600001 and above
Classification
Should not be tapped as there is

not much potential
Should be tapped either through
ready stock or existing stockiest.
Twice a month.
Should be tapped through existing
stockiest, sub stockiest or ready
stock twice a month
Should be tapped through existing
stockiest, sub stockiest or ready
stock four times a month.
Page 57
number of villages
66
41
1-99999
100000-400000 400001-600000
600001 and
above
CLASSIFICATION OF VILLAGES STOCKIEST VISE
Amit Traders, 1
Vijay Laxmi, 15
jyoti pershad vijay
kumar, 19
S.V, 2
RBGK, 3
Radhika sales, 3
Murti
Traders
Pal &
,5
comp, 6
Laxmi Ent, 1
Page 58
Following is the excel file giving detail about:
Stockiest.
Number of villages to be tapped by him.
Name of the village.
Stockiest
Amit Traders
Jyoti Pershad Vijay Kumar
Number of villages
1
19
LaxmiEnt
Murti Traders
1
5
Pal & comp
Village name
Ghandhinagar
ghummanhera
JharodaKalan
MundhelaKhurd
Mitraon
Paprawat
ShikarPur
Isa Pur
Malik Purzer-Najafgarh
NangliSakrawati
Raota
DichaonKalan
GoylaKhurd
Hastsal
Ujwa
Roshanpura
Dhansa
JaffarPurKalan
Chhawala
Surera
Gharoli
TajPul
MithePur
PulPehlad
Molar Band village
Aali
Ghoga
JaffarPur alias
HiranKudna
TilangPurKotla
Gheora
ShafiPurRanhola
Nilothi
Page 59
Radhika sales
RBGK
S.V
Vijay Laxmi
15
Malik PurKohi alias

Rang Puri
FatehPurBeri
Dera
MadanPurDabas
Rani Khera
Punjab Khor
JonaPur
Deoli
MukandPur
JagatPurilaqa Delhi
Bhalswa Jahangir Pur
Shah PurGarhi
Darya PurKalan
NangalThakran
Nangli Poona
Kamal PurMajraBurari
MamoorPur
TikriKhurd
PehladPurBangar
PoothKalan
Palla
Singhu
ZindPur
From the above results stockiest named Vijay Laxmi and Jyoti Pershad Vijay Kumar has the
maximum number of villages coming under them which have good potential and growth.
The following list of villages has a total FMCG turnover of Rs18089900
Another Recommendation for the company is that it should not use push strategy which is being
currently followed by the company while dealing with the distributors in this case the company
makes it mandatory for the distributors to maintain a minimum stock of a certain amount which
keeps increasing once the target is achieved. They should follow pull strategy that is the
distributor decides how much amount of stock they want to keep.
Page 60
LEARNING FROM THE PROJECT
The motive behind choosing this project and FMCG industry was to gain insight about
how this sector works and to understand the concept of distribution how from the
manufacturers goods are delivered to the ultimate consumers with no time.
This whole duration of the project has been a wonderful experience working in the
corporate field and getting to know new trends and developments in the market.
There has been a lot of knowledge enhancement and there exists a basket full of new
concepts and theories learnt and practical observation during this time , visiting the
vendors helped to gain more knowledge about the market as they provided with the first
hand information. Retailers are the one which are in contact with the customers hence
knows what exactly a customer demand for.
These days companies have started using tablets while taking orders from vendors,
during my first few days I was involved in learning the use of tablets.
Another Learning during my SIP was how to operate the software which was installed in
every computer being used by the distributor which helps in checking the stock left in the
store house, orders placement, and billing process.
Page 61
REFERENCES
http://www.business-standard.com/india/news/dabur-uses-astra-to-boost-ruralsales/327802/
http://www.dabur.com/default.aspx
http://delhigovt.nic.in/WorkingReport2007/Rural%2520Delhi.pdf&pli=1
http://info.shine.com/ListofCompany/FMCG/780.aspx
http://www.business-standard.com/india/news/a-mixed-baggoodies-for-fmcgplayers/468019/
http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/fmcgcompanies-like-hul-dabur-godrej-marico-continue-to-achieve-consumption-drivengrowth/articleshow/13368922.cms
Page 62
ANNEXURES
QUESTIONNAIRE 1
I am conducting a survey on distribution of Dabur Products and would like to know your views
and opinions. Kindly spare a few minutes helping us by completing this questionnaire. The data
Retail outlet name __________
Area ____________
Q1. Does a Dabur salesman visit your place?
Yes ______ no______
Q2. If yes how often does he visit?
Once a week _____ twice a week ______
Q3. If no from where have you purchased the existing Dabur products kept in your outlet?
________
Q4. Are you satisfied with the existing services provided to you by Dabur Company?
Yes _____ no_____
Q5. If no. what are you not satisfied with?
________________
Q6. Any suggestions or recommendation for the company?
__________________
Page 63
QUESTIONNAIRE 2
I am conducting a survey distribution of Dabur Products and would like to know your views and
opinions. Kindly spare a few minutes helping us by completing this questionnaire. The data
Name of the village: _______________
Sub district: ____________________
Population: ____________
Q.1 Do you keep Dabur products?
Yes ___ No ____
Q.2 From which nearby market do you buy the goods?
______________
Q.3 How often do you buy from the nearby mandi ?
Once a week ___ twice a week ____ More than twice a week ___
Q.4 Approx of how much do you purchase per visit?
( ) 1 to 5000
( ) 5001 to 10,000 ( ) 10,001 to 20,000 ( ) 20,001 to 40,000 ( ) 40,000 to 80,000
( ) Above 80,001
Q.5 Salesmen of which other FMCG companies are visiting you?
____________________
Q.6 How many times in a week does the salesmen visit?
____________________
Q.7 what are your approx. monthly sales?
( ) 1 to 5000 ( ) 5001 to 10,000 ( ) 10,001 to 20,000 ( ) 20,001 to 40,000 ( ) 40,000 to 80,000(
) Above 80,001
Page 64

Final Project Report Dabur

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Final Project Report Dabur

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A REPORT

EXPANDING THE DISTRIBUTION

DABUR INDIA LIMITED

Summer Internship Report

Summer Internship Report

Summer Internship Report

Mr. Raja Shekhar Reddy

Summer Internship Report

Summer Internship Report

On Site Project ......................................................................................................................................................................... 36

Summer Internship Report

Summer Internship Report

Purchase as and when required

Summer Internship Report

Chart 1: Hair oil

Figure 4-Table: SWOT Analysis of FMCG Industry

Figure 21- Process Chart: International business division

Summer Internship Report

PURPOSE AND SCOPE OF THE REPORT:

Summer Internship Report

Summer Internship Report

INDUSTRY ANALYSIS OF FMCG SECTOR

FMCG INDUSTRY ECONOMY

STRUCTURAL ANALYSIS OF FMCG INDUSTRY

Summer Internship Report

DISTINGUISHING FEATURES OF INDIAN FMCG BUSINESS:

Summer Internship Report

MARKET POTENTIALITY OF FMCG INDUSTRY

Growing Modern Trade

Technology as a Game Changer

Summer Internship Report

MAJOR SEGMENTS OF FMCG INDUSTRY

Food and Beverages

Summer Internship Report

Food and Beverages:

THE TOP 10 COMPANIES IN FMCG SECTOR:

Hindustan Unilever Ltd.

Summer Internship Report

COMPARISON OF FEW CONSUMER GOODS ACROSS DIFFERENT

Summer Internship Report

Summer Internship Report

Low operational cost.

Lower scope of investing in

Presence of established distribution

Less scope of achieving economies

Low exports levels.

Presence of well known brands in

Favorable government policies.

Foreign direct investment.

Untapped rural market changing

Rising income level.

Removal of import restriction

Tax and regulatory structure.

Rural demand is cyclic in nature.

High consumer goods spending.

Rise in awareness among

India is under penetrated in many

Summer Internship Report

GROWTH DRIVERS FOR FMCG SECTOR

FMCG GROWTH STORY

Summer Internship Report

FOLLOWING IS THE TABLE SUMMARIZES PRE AND POST

MAJOR BRANDS 1970s-1980s