Route 2 Market Distribution Strategy

We save the pennies for the pounds to follow

Agenda

• About the product• The R2M Distribution Model– About the Model– Role of Channel Members

• Study of Competitor Distribution Channel• Recommendations

o The story of Cadbury Dairy Milk started way back in 1905 at Bournville, U.K.

o The journey with chocolate lovers in India began in 1948o 30% Standalone Market Share in Indiao Market Leadero The end-to-end supply chain have been the key performance

indicatoro Loyalty of 60 million total consumers increasing at 15 million

per yearo Chocolate value share of the total impulse category is 6.1 %.

Out of which Cadbury enjoys the share of 4.4%

About Cadbury Dairy Milk

o Cadbury won the ‘Supply Chain Excellence’ awardo Kraft Foods Horizontal Expansion (Feb 2010)o DHL was conferred the ‘Best CFA of 2009; North Region’ by

Cadbury India Ltd in recognition of its consistent high quality supply chain services

o By using JIT product line, the inventory cost of Cadbury reduced from $670,000 to $200,000

About Cadbury Dairy Milk

• About the Model• Role of Channel Members

R2M Distribution Model

– Managed using SAP– Impulse Buy – Time, Place and Quality Utility– Vertical Channel Model– Designed on basis of Population >25000 & <25000 (10-25K)

About The Model

Factory

Direct State C&F

Distributor

Retail

Mother Godown(Zonal)

State Godown

Direct Store

DistributorM

odern Trade

wholesalerRetail

•5 Factories• Thane• Pune• Himachal Pradesh• Gwalior• Bangalore

•4 Mother Godown`•East Zone : Radient Enterprise•All expenses borne by the company •Charged on per cartoon basis

•Key Accounts•Spencer BigBazar, Spencers

>25000 Population

•Margin :• Fixed 4.5%• Variable 1%

(Performance Debate)•30 days Credit Period•HMC, Radha Madhav Agency

•State Dipo•In East India for Bihar & Jharkhand•Nepal Market Served Through Bihar•No Commission System•Remuneration according to the no. of cartoons sold

Factory

Mother Godown(Zonal)

State Godown

Super Stockist

Sub Stockist

Retail

10000-25000 Population

•Margin : 3% (2%+1% Freight)•Pandit Enterprise (South 24 Parganas)

•Outsourced•Accountibility of Super Stockist (Managed in SAP)•Margin 5%•Kakdip, Bakkhali

Competitor’s Distribution Channel

Traditional Trade• Nestle• Amul

Mordern Trade• Ferrorocher (KinderJoy)• Mars• Foreign Assortments

• Beat Plan• Distribution Relation

• Wider and Deeper Network• Availibility

• Variable Margins (Commissions)

• Level Distributor Margins– Competitors – 4%– Cadbury - 3%

• Develop a Packaging Unit in East India

Recommendations

Thank You