Rural Marketing Strategies 5(Distribution & Logistics)

Advertising is easy but Managing Distribution network in Rural Market is Donkey’s work

- Mr Harish Bijoor a marketing Consultant

Distribution Chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.'

Logistics is the management of the flow of goods, information and other resources, between the point of origin and the point of consumption in order to meet the requirements of consumers

What is Distribution? What is Logistics?

WholesalerConventional RetailerWeekly Haats, Bazaar and ShandiesVans

Distribution channels in Rural Marketing

Conventional

New players

Unofficial Channel – eg 500 dealers of Hero Honda Co-operative Societies – State, Regional & District Level

Petrol Bunks – LPG, Ferilizer, Pesticides etc.

NGO – Some NGO work for the social sustainable development

Son of Soil Channel – Self help

Ensure ReachReach by whatever mode

Strategies of Distribution & Logistics in Rural Marketing

Strategies of Distribution & Logistics in Rural Marketing

Ensure VisibilityNo Stock outs – Over stocking is bad but Stock outs are worst

Reach Haats / Mela / Pilgrim SiteA typical Mela or Fair – a case study

Strategies of Distribution & Logistics in Rural Marketing

In 2007 HLL spend Rs 30 cr in Kumbha melaAverage spending in Mela/Haats/Fairs/Shandies is around Rs 50 to 60 Cr

Delivery Vans cum Promotional Vans cumMobile Retail OutletConvert Delivery van into Promotional van or Mobile retail outlets in remote areas

Strategies of Distribution & Logistics in Rural Marketing

Understand the Peak SeasonDemand based strategy

Convert Unorganized Sector Manufacturers into DistributorsLocal Manufacturers knows the pulse of local retailers & distributors

Strategies of Distribution & Logistics in Rural Marketing

Collaborate with DistributionP&G collaborated with most of the distributors

Encourage JobbersSon of Soil – a mobile traders that go from house to house

Sales Women NetworkProject Shakti – Shakti Amma, TTK group – Prestige Pressure cooker – Emphasis on Add

Strategies of Distribution & Logistics in Rural Marketing

Manufacturer

C&F Agent of a State/City

Sole Distributor of a District

Stockist of a Feeder Town

Distributor of a village

Retailer

Customer

Through Which Transports A Rural Customer Gets His Product

The key components of Transportation decisions are:

1. Route and network selection – Direct shipment, Milk run, Central DC, Tailored Transportation

2. In-house or Outsource – Purchase versus Leased versus Vendor’s vehicle

3. Trade off - Responsiveness versus Efficiency – Cost versus Speed

Key Components of Transportation

Suppliers Retail Stores

Direct Shipping Network

Transportation Network

Suppliers Retail Stores

Direct Shipping with Milk Runs of Retail Stores

Transportation Network

Suppliers Retail Stores

Direct Shipping with Milk Runs of Suppliers

Transportation Network

Suppliers Retail Stores

Direct Shipping via Central DC

DC

Transportation Network

Suppliers

Milk Runs from DC

DC

Retail Stores

Transportation Network

Factors to be considered while deciding stores route

Octroi naka passing (In Cities)Octroi Held up timeStore opening/closing timeTraffic regulationsLean hours of retailerStaff availability to unloadMerchandise mixLoad sizeDelivery Route – length in km

Route selection in Transportation

DC

1

Retail Stores2

3

8

9

7

6

5

10

4

Route selection in Transportation

DC

1

Retail Stores2

3

8

9

7

6

5

10

4

Route selection in Transportation

Route selection methods

Saving Matrix method

General assignment method

Distribution Centre

Go down

DC/ Godown Inventory Flow

Put away method

Flow through method

Cross Docking

DC/ Godown Layout

DC Planning and Parameter

Infrastructure

Layout

Staffing

Equipments

IT

Misc.

Location & Infrastructure of DC/ Gown

Communication – landlines/Mobile/VSAT

Nearness to City /Cities / Town /District/ Feeder town

Octroi

Weighing Bridges / Petrol pumps

Power / Electricity – Gen set

Water for (Wet DC)

Layout

Out bound / In bound staging areas

Pallets v/s Bins

Grid Layout

Flooring / Height / lights / Ventilation / Docks

Other planning – Office/Security/Staff Welfare/Genset

Food v/s Non- Food

Area for flow through / cross docking

Other areas – Scarp/Damage/Expiry/Batch mgt

Layout Grid Layout

Staffing

3PL v/s Own Staff

KAM/DC Mgr/OB/IB/Inventory/Transportation

3PL – KAM/ Supervisor/DEO/Checkers/Pickers/Helpers

Shifts / Breaks / Over time

Security

Equipments & IT in (DC)

Bar-coding – IB & OB

Pickup Trolleys

Fork-Lifts & Reach Trucks

Battery charging section

RFID – Chips/RF Gun / Wi-Fi for RFID