SYNOPSIS

ON

COMPARATIVE ANALYSIS OF DISTRIBUTION CHANNEL

OF SAMSUNG INDIA AND MICROMAX MOBILES

SUBMITTED BY:

PRABHANSU DHAR DWIVEDI

Enrollment No. : 1305005368

SIKKIM MANIPAL UNIVERSITY

YEAR : 2014

RATIONAL OF THE STUDY

A channel of distribution comprises a set of institutions, which perform all of the

activities utilized to move a product and its title from production to consumption.

Place. Place is also known as channel, distribution, or intermediary. It is the mechanism

through which goods and/or services are moved from the manufacturer/ service provider

to the user or consumer.

A classical Distribution scenario:

A wholesaler procures an order, acquires goods and stores them in a warehouse, supplies

order-based stock for a calculated amount of profits. The wholesaler played a number of

roles traditionally - he was an intermediary who took care of logistics and moved stock

around, a consolidated sales agent for suppliers, a local customer service point and a

demand buffer for manufacturers.

Yes, multitasking existed even then, but with limited scope. These limitations were of the

physical kind - all these roles could be played out only within a certain geographical

terrain.

The Distribution Network today:

Today, the role of the distributor as an intermediary has morphed into that of a

'disintermediary'. A distributor plays a virtual role, an almost invisible part of a smooth

supply chain. Third-party logistics providers help ship goods from one part of the globe

to another in a day, while a more customer-centric distribution chain enables direct

ordering and tracking of orders over the Internet.

Remote means of customer service diminishes the importance of a local customer.

Today's supply chains have become extended value chains where distributor operations

have shifted from the buy, hold and sell paradigm to the sell, source and ship paradigm.

To make these necessary shifts the distributor needs to have more information about all

customers, learn to manage inventory from other distributors and have a workflow-based

information system.

Types of Channel Intermediaries

There are many types of intermediaries such as wholesalers, agents, retailers, the Internet,

overseas distributors, direct marketing (from manufacturer to user without an

intermediary), and many others. The main modes of distribution will be looked at in more

detail.

1. Channel Intermediaries - Wholesalers

o They break down 'bulk' into smaller packages for resale by a retailer.

o They buy from producers and resell to retailers. They take ownership or 'title'

togoods whereas agents do not.

o They provide storage facilities. For example, cheese manufacturers seldom wait

for their product to mature. They sell on to a wholesaler that will store it and

eventually resell to a retailer.

o Wholesalers offer reduce the physical contact cost between the producer and

consumer resulting in lower customer service costs, or sales force costs.

o A wholesaler will often take on some of the marketing responsibilities. Many

produce their own brochures and use their own telesales operations.

2. Channel Intermediaries - Agents

o Agents are mainly used in international markets.

o An agent will typically secure an order for a producer and will take a commission.

They do not tend to take title to the goods. This means that capital is not tied up in

goods. However, a 'stockiest agent' will hold consignment stock (i.e. will store the

stock, but the title will remain with the producer. This approach is used where

goods need to get into a market soon after the order is placed e.g. foodstuffs).

o Agents can be very expensive to train. They are difficult to keep control of due to

the physical distances involved. They are difficult to motivate.

3. Channel Intermediaries - Retailers

o Retailers will have a much stronger personal relationship with the consumer.

o The retailer will hold several other brands and products. A consumer will expect to

be exposed to many products.

o Retailers will often offer credit to the customer e.g. electrical wholesalers, or travel

agents.

o Products and services are promoted and merchandised by the retailer.

o The retailer will give the final selling price to the product.

o Retailers often have a strong 'brand' themselves e.g. Ross and Wall-Mart in the

USA, and Alisuper, Modelo, and Jumbo in Portugal.

4. Channel Intermediaries - Internet

o The Internet has a geographically disperse market.

o The main benefit of the Internet is that niche products reach a wider audience

o There are low barriers to entry as set up costs are low.

o Use e-commerce technology (for payment, shopping software, etc)

o There is a paradigm shift in commerce and consumption which benefits

distribution via the Internet.

COMPANY PROFILE OF MICROMAX

Micromax is an Indian consumer electronics company located in Gurgaon, Haryana,

India. It focuses on the manufacturing of mobile telephones, tablets, data cards and LED

televisions. It has 23 domestic offices across the country and international offices in

Hong Kong and Dubai. Presently, the company has about 1900 employees.

In 1991 Micromax focused on reselling and distribution of hardware equipments and as

an IT software company in the year 2000 working on embedded platforms. In 2008, it

entered mobile handset business and by 2010 it became one of the largest Indian

domestic mobile handsets company by offering unique affordable innovations. The

company has a 24% market share in the smartphone segment in India as per the CMR

report for April 2013.

History

A television advertising campaign, on satellite cricket channels, has helped the company

to gain customers. Micromax has seen a continued rise in market share since that time

and is now the largest Indian domestic mobile handset company, in terms of units

shipped during the quarter ending March 31, 2010 and the second largest mobile handset

seller in India as of March 31, 2013. On March 31, 2010, the company registered a

market share of 6.24% for that quarter, a growth from 0.59% in September 2008.On July

28, 2011, Micromax withdrew its 4.66 billion rupees (about $106 million) initial public

offering(IPO) due to volatile market conditions.The withdrawal was recommended by its

board in order to allow the company to focus on new product launches and product

development.Micromax Informatics Limited has announced its foray into Maldivian

telecom space through an exclusive partnership with Sense Wood Maldives (Pvt) Ltd.

COMPANY PROFILE OF SAMSUNG INDIA

Samsung Electronics commenced its operations in India in December 1995 and is today a

leading provider of Consumer Electronics , IT and Telecom products in the Indian

market. Samsung India is the Regional Headquarters for Samsung’s South West Asia

operations, which provides employment to over 8,000 employees with around 6,000

employees being involved in R&D. In 2010, Samsung India achieved a sales turnover of

US$3.5 billion.

Samsung began operations in India through its manufacturing complex located at Noida

(UP), which today houses facilities for Colour Televisions (including 3D, LED and LCD

Televisions), Mobile Phones, Refrigerators, Washing Machines and Split Air

Conditioners categories. Samsung commenced operations of its second state–of-the-art

manufacturing complex at Sriperumbudur, Tamil Nadu in November 2007. Today, the

Sriperumbudur facility manufactures Colour televisions, Fully Automatic Front Loading

Washing Machines, Refrigerators and Split Air Conditioners. Samsung India has two

R&D Centres in India – at Delhi and Bangalore .While the Delhi R&D Centre develops

software solutions for hi-end televisions such as Plasma TVs, LCD TVs and Digital

Media Products, the Bangalore R&D Centre works on major projects for Samsung

Electronics in the area of telecom, wireless terminals and infrastructure, Networking, SoC

(System on Chip) Digital Printing and other multimedia/digital media as well as

application software.

Samsung India is a market leader in product categories like LED TVs, LCD TVs, Slim

TVs and Side by Side Refrigerators. While it is the second largest mobile handset brand

in India, it leads in the smart phone segment in India.

Samsung India has won several awards and recognitions for both its corporate initiatives

as well as its product innovations in audio visual, home appliance, IT and telecom

product categories.

Apart from development of innovative technology, Samsung places great importance on

acting as a responsible corporate citizen in the communities where it operates. Its CSR

programs respond to the social and environmental needs and seek to give back to

communities that support the company. In 2009, Samsung launched the company’s

Corporate Social Responsibility initiative – ‘Samsung Hope Project’ with projects in the

areas of education, culture, sports, social welfare and community development. Each

program under the Hope Project uniquely addresses the needs of individual communities

while emphasizing on innovations for development of the community including

education, technology, engineering and IT technical training.

OBJECTIVES OF THE STUDY

To compare the distribution channel of Samsung India and Micromax Mobiles.

To analyze the distributor relations, margin, supply norms of Samsung India and

Micromax Mobiles

To analyze retailers view towards distribution channel of Samsung India and

Micromax Mobiles

To formulate a new strategy for distribution.

To build up a strong channel in comparison to both prospects.

REASON FOR CHOOSING THE PROJECT

Since I am interested to analyze the distribution channel of Samsung India and Micromax

Mobiles and since I am associated with this field. I thought it will be great if I will

analyze distribution channel of Samsung India and Micromax Mobiles. This will also

help the reader to analyze the benefits of good distribution channel.

RESEARCH METHODOLOGY

METHODOLOGY

The Research will be Exploratory Research. The data will be collected through 100

retailers of Samsung India Limited and 100 retailers of Micromax Mobiles.

SAMPLE SIZE

Sample will be around 100 retailers of Samsung India Limited and 100 retailers of

Micromax Mobiles.

TOOLS OF ANALYSIS

I will use Questionnaire Method. Some of the software’s used for making this project will

be Ms Word and Ms Excel. The Data collected will be shown through Graphs and Pie

Charts.

SAMPLING

Non Probability Convenient sampling method will be used to collect data.

DATA ANALYSIS AND INTERPRETATION:

The data will be analyzed after collection.

DATA COLLECTION

Source of Data for this project will be primary & secondary. The primary data will be

collected through questionnaire filled from the respondents. In reference to the theoretical

concept as well as for information are collected through secondary sources from paper

published material i.e. newspaper, journal, annual reports and magazine & from printed

electronic media i.e. internet websites.

EXPECTED CONTIBUTION FROM THE STUDY:

Distribution channel is most important for the organizational growth. An organization

cannot survive without good distribution channel. This project will help to understand

benefits of good Distribution channel. I will also try to analyze the factors influencing

distribution channel of leading Cement Manufacturing companies.

LIMITATIONS OF STUDY

Time will be the major constraint.

Respondents will be limited.

DIRECTION FOR THE FUTURE:

This project will help the companies to improve their distribution channel. This project

will also help the company to increase their sales. In future by following new ways

companies can improve their distribution channel.

CONCLUSION

After collecting and analyzing the data distribution channel of both the companies will be

compared.

SUGGESTIONS

Suggestions and recommendations will be given to the organization based on retailers

response and analysis

BIBLIOGRAPHY

Books:-

Kotler, Philip (2006): Marketing Management" Pearson Prentice Hall of India Pvt.

Ltd., New Delhi.

Saxena, Rajan (2007): Marketing Management Tata McGrow Hill Publishing

Company Ltd., New Delhi.

Malhotra Nares K.(2007): Marketing Research (an applied orientation) pearson

Prentice Hall of India Pvt. Ltd., New Delhi.

Shankar Ravi (2008): Services Marketing, (the Indian Perspective) Excel Book,

New Delhi.

Websites :

www.samsung.com

www.micromaxinfo.com