Distribution Channel In FMCG
- 1. INDIAN INSTITUTE OF TECHNOLOGY ROORKEE PRESENTATION TOPIC- Presented By- ANANT SIROHI (15810003) Distribution Channels in FMCG Industry
- 2. 2 What is FMCG? • Fast Moving Consumer Goods. • Also Known as CPG- Consumer Packaged Goods. • Short Shelf life. • Low Margin and High Volume. • Examples- Cold Drinks, Soap, Processed Food, etc. • Major Companies- Nestle, ITC, HUL, GSK, P&G, etc.
- 5. 5 FMCG MARKET IN INDIA • Market is Excepted to reach US$ 12.5 Billion in 2015 and US$ 20.6 Billion by 2020. • Urban Markets account for 65% of Total Revenues. • In Terms of Products:- Food Products - 43% of Overall Market Personal Care - 22% of Overall Market Fabric Care - 12% of Overall Market • Government Policies and Regulatory Frameworks are major growth drivers.
- 6. 6 DISTRIBUTION CHANNEL • Path or Pipeline through which Goods and Services flow. • It can be Short or Long. • In Long Channels, Price increases till the Product reaches the Consumers.
- 7. 7 WHY STRONG DISTRIBUTION CHANNEL? • Large Market to Cover. • Products are Confined to Day to Day Basic. • Perishable Items have Low Shelf life. • High Profitability can be achieved through High Sales Volume. • Minimize Inventory Cost.
- 8. 8 TYPES OF DISTRIBUTION CHANNELS 1. Manufacturer to Customer 2. Manufacturer to Retailer to Customer 3. Manufacturer to Wholesaler to Retailer to Customer
- 9. 9 MANUFACTURER TO CUSTOMER • Direct selling. • No Middleman is Involved. • Example- Bata. • Simplest and Shortest Channel. • Fast and Economical. • Adopted by Both Small producers and Big Firms. Manufacturer Customer
- 10. 10 MANUFACTURER TO RETAILER TO CUSTOMER • One Stage Distribution Channel. • One Middleman i.e. Retailer. • Producers Sell to Big Retailers, Departmental Stores or Chain stores. • Retailers sell the Products to Ultimate Consumers. • Retailers purchase in Large Quantity. • Example- Refrigerators, TV Sets, Washing Machines, etc. RetailerManufacturer Consumer
- 11. 11 MANUFACTURER TO WHOLESALER TO RETAILER TO CONSUMER • Traditional Channel of Distribution. • Two Middleman i.e. Wholesaler and Retailer. • Suitable for products with Widely Scattered Market. • Example- Groceries, Drugs, Cosmetics, etc. • Suitable for Small Producers with Narrow Product Line. • Service and Promotional Support given by Wholesaler. Manufacturer ConsumerRetailerWholesaler
- 12. 12 THANK YOU