Bombay Pickles 2i356f

Bombay Pickles Ltd.

Submitted By Group 3 Suyash Nigotia Ashir Madaan Kaushik Nihalani Mayank Rathore Nikhil Jain

13P116 13P131 13P148 13P150 13P152

About Bombay Pickles Ltd 

Started in 1995 as there was opportunity for non-homemade pickles

In 16 years, changed ownership from family partnership to a public limited company  Sales to all over the state of Maharashtra  Factory and central warehouse at Aurangabad to take advantage of central location in Maharashtra  Sales Turnover recorded at 25 crores  Gross Profit Margin of about 15% but showing decline in the recent quarters 

Sales and Distribution System(1/2) 

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Each of 34 districts on an average covered by 3 distributors with 108 distributors in total Products available at about 50000 Retailers Distributors chosen were from FMCG trade which already had established infrastructure and facilities Not a single exclusive distributor

Company Manufacturing Plant

Central Warehouse

Distributors

Wholesalers Retailers

Sales and Distribution System(2/2)   

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Company initially planned to give only 4% margin to distributors but later agreed on 5% Distributors are given credit of 15 days Margin of 12% for Retailers on the MRP Distributor employed 1-2 salesmen Retailers covered by salesmen every week or every 2 weeks depending upon its sales potential Some Retailers also covered directly by distributors

Demands by Distributors Present

Company’s View

Replacement 4% of the sales Policy value

Upper limit of 50000/- per annum per distributor for damaged goods

50000/- was fixed to check the amount of spoilage and damage by distributors

Spread Available

Either increase margin to 7% or increase the prices so that they can charge more from retailer

5% of the sales

FMCG companies are also giving 5% margin to distributor. Increasing MRP just not possible without taking hit on market share

Credit

Advance cheques policy should be stopped. Sales officer should collect cheque on

Cheques are taken in advance and deposited on 15th day of

Distributor’s original businesses are in lean phase which have reduced their earnings

Issue

Demand

Present Situation 

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TDDA(Thane District Consumer Products Distribution Association) has gone on strike on their charter of demands After 10 days, RDDA(Raigad District Consumer Products Distribution Association) threatened that they would also them if demands are not met Weak sales from last few months due to market slowdown Festival season was about to begin where company can achieve its annual sales target No further supplies would lead to stockout of their products in the respective markets Impact could be on other 95 distributors

Managing Channel Conflict 

Detecting Channel Conflict ◦ “After the fact approach” to the detection of channel conflict is unsatisfactory ◦ Survey by independent agencies need to be done to know the perception of other around 95 distributors to uncover potential conflict areas between channel before situation reach in dangerous stage

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Appraising the Effect of Conflict Resolving Conflict ◦ Channel – wide committee for periodic evaluations of emerging problems ◦ t goal setting to mitigate the effects of conflict ◦ Distribution executive post need to be created Reference :Marketing Channels – A Management View by Bert Rosenbloom

Recommendations 

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Distributors’ Advisory Council or channel ’ Committees for early detection of channel conflict should be formed Termination of the distributors cannot be done as it can backfire : All distributors of Maharashtra region can go on strike in As it is not possible for company to agree on demands, bringing them on negotiation table is important now. Demand of Replacement Policy can be fulfilled If distributors don’t agree for any negotiation, going for new distributors must be looked upon Temporarily for these 2 areas company should approach the distribution system