Distribution decisions

Most producers do not sell their goods directly to the final users; between them stands a set of intermediaries performing a variety of functions. These intermediaries constitute a marketing channel. They are basically a set of pathways that a product or a service follows after production, culminating in purchase and consumption by the final user. Channels of all types play an important role in the success of a company and affect all other marketing decisions. Therefore , while building a marketing channel system , it is required of the marketer to judge them in the context of the entire process by which their products are made , distributed, serviced and sold. Cadbury is present in more than 200 countries. The distribution network of Cadbury is absolutely fantastic and, needless to say,  widespread, so much so that it  comprises of 2100 distributors and some abut 4,50,000 retailers! Channel Design: Distribution structure- No. of levels & Selection criterion for channel partner.


Criterion for selection of channel members: Business capacity and salesmanship           Experience and previous expertise Credit Worthiness Financial and social status. 
Market Segments Changes during PLC Training and Support Required Channel Member Management: I. Rewards: Monetary:-General trade distributor margin is around 4.75% and 1% is activity based ( completion of Monthly sales target)Modern Trade distributor margin is around 4.5% and 0.5%. Super stockiest margin is around 2% and 1% or market value.Retail margins: For instance, Bournvita has 9%, Oreo 13%, Chocolates worth Rs 5- 20, 10% and so on and so forth. Non – monetary:-Foreign trips to super stockiest based on performance.-Visi-coolers can be given only in food stores and chemist shops where sales is more than 3000 per week.

II. Target setting and Monitoring:-Monthly targets are set separately for general and modern trade distributor. Incentives, are therefore, given only after surpassing targets. -Monitoring is done by “Analyzing Invoices” generated by the distributor and through company sales force. III. Training and Capacity building: -Training program is organized, once in a year, arranged and paid by Cadbury itself, to train the new sales force and the under-performing lot in the existing sales force, both from the company and the distributors. IV. Cash Flow:-Distributor makes payment to the company on a weekly basis. The cash cycle varies from 1- 7 days. In Modern trade cash cycle, however, it varies from 16 days to one month.