Distribution Analysis

Table of Contents

Page

Objective 8

Details about United Biscuits 9-11

Product range of United Biscuits 12-14

United Biscuits in India 15

Details about United Biscuits distribution channel in Delhi and NCR 16-19

Research Methodology 20

Data Analysis and Interpretation 21-34

Findings and Conclusions 35

Limitations 36

Recommendation 37

Bibliography 38

Questionnaire 39-40

Objectives

Primary Objective –

- Identify the factors which are important in restructuring the distribution network.

- Enhancement of effective and efficient distribution network.

Different product range of United Biscuits

McVitie's - McVitie’s biscuits have been enjoyed by generations for around 160 years. The first ever digestive biscuit was created by a new young employee, Alexander Grant. The name Digestive was derived from its high content of baking soda as an aid to food digestion. Over one hundred years later the McVitie’s Digestive remains a firm favourite and is the highest selling brand in the everyday biscuit segment.

Jacob's - W & R Jacob’s Ltd was founded by brothers William and Robert in 1851. The first Cream Cracker was produced in 1885 in a Dublin factory. Between 1914 and 1958 Jacob's grew, expanding in England with the building of the Aintree factory near Liverpool. In 1982, Nabisco bought Associated Biscuits (formed in 1969 with the merger of Jacob's and Associated Biscuit Manufacturers Limited). In 1989, the company was renamed as The Jacob's Bakery Limited and acquired by B.S.N. (Danone). In 2004 Jacob's was acquired by UB.

Twiglets - Twiglets are one of Britain’s classic snack brands. Originally developed by Peak Frean and and first launched in time for Christmas in 1929, Twiglets are now manufactured in the Jacob's factory in Aintree. Twiglets are a unique wholewheat product within the bagged snacks and sharing market. There is a huge amount of brand loyalty with people enjoying Twiglets for their multi- dimensional taste and texture. The extra crunchy bite and knobbly shape combined with the unique flavour make Twiglets irresistible for many.

Phileas Fogg - Phileas Fogg is perhaps the UK's most characterful snacking brand. Opened by four entrepreneurs in March 1982 as Derwent Valley Foods, in the unlikely location of a portacabin in Consett, the company aimed to provide the first adult premium snacks in the UK, with a brand distinguished by its authenticity and quality. Built around the phrase 'Finest Food from around the World' the team developed an array of appetisingly tasty snacks and this, together with quirky

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advertising, made Phileas Fogg an icon of the late 1980s and early 1990s. In March 1993, Phileas Fogg was acquired by United Biscuits and is now incorporated in our snacks range.

Hula Hoops - 2006 was an exciting year for Hula Hoops, as the whole range was made healthier. They are made with 100% sunflower oil and contain no artificial colours or flavours or MSG. Hula Hoops contain 80% less saturated fat than in 2005, are lower in sodium and still have the same great taste. Hula Hoops are available in the following permanent flavours: Original, Salt & Vinegar, Cheese & Onion, BBQ Beef & Roast Chicken.

BN - Created in 1897, BN is seen as a traditional brand and it enjoys a good reputation in France. Over the years, BN has established itself as an indispensable brand in the children’s biscuit market, focusing in particular on the snack sandwich cookie segment. Listed among the ten most popular brands among children in France, BN relies on the strength of its image as a unique brand, that of a biscuit with an appetising smile.

go ahead! - go ahead! was launched in 1996 into the biscuits category and quickly became the UK’s No.1 lower fat biscuits range. Since 2000 the healthier snacks market has grown significantly

as consumers have become more health conscious. The choice and variety within the healthier biscuits category is phenomenal and sees the sector now worth over £373m. This is now the biggest sector in the biggest market and is the fastest growing.

Sultana - Founded in 1886 in Zaandam in the Netherlands, starting off mainly with the production of bread and rusks, Verkade has brought a wide range of delicious biscuits and chocolate to Dutch consumers ever since. The Verkade brand is known by nearly all Dutch consumers, who have appreciated Verkade classics since childhood. The Sultana biscuit was launched as a tea biscuit with raisins and currants more than fifty years ago by Verkade. Nowadays, Sultana offers a complete range of products to consumers and has become a star brand under the Verkade name.

Skips - Skips is the favourite distinctive Prawn Cocktail flavoured snack with a unique, well recognised petal shape. It was first launched in 1974. Skips are created using Japanese technology, under license from Meji, to create the unique tongue-tastic mouth experience on the tongue. Skips are identifiable by their star shaped red veins running through the petal. Skips are available in Prawn Cocktail flavour. Sizzling Bacon flavour and Utterly Cheesy flavour were launched in 2005 in multipacks, offering fun and variety to the consumers.

Penguin - Penguin was first produced in 1932 by William McDonald, a biscuit manufacturer in Glasgow, and became a McVitie’s brand when McDonald joined with McVitie’s and Price, MacFarlane Lang & Co and Crawford to form United Biscuits in 1948. Penguin is enjoyed by families with young children.

Mini Cheddars - Mini Cheddars have been around for over 20 years and are still the UK’s no.1 savoury baked snack, delivering a substantial savoury hit and satisfaction. Since 2001 the brand has enjoyed strong growth through the introduction of a 50g pack. Mini Cheddars is one of the UK's most established snack brands and is loved by a wide range of different consumers. Despite its deceptive size, Mini Cheddars delivers a surprisingly satisfying cheesy hit any time the munchies

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strike. Aimed at a broad target, mainly families, Mini Cheddars are ideal for when you have the tummy rumbles and you want something genuinely cheesy to keep you going until meal time.

McCoy's - McCoy’s was launched in 1985 as the “big chip from the big country”, the definitive ridged cut potato chips with real flavours. Standard McCoy's were launched in 1987. The McCoy’s brand is now the 3rd biggest brand in the bagged snacks market. The Real McCoy's ridge cut crisps were designed and built with men in mind to give a substantial and involving eat that could satisfy the male appetite using real potatoes with real food flavours.

KP - KP originally began life as a manufacturer of sugar confectionery, jams and pickle in 1853. KP Nuts is brand leader in the UK Nuts category dominating the total convenience and impulse market. Its nuts have been the snack of choice eaten at parties and pubs all over Britain for more than 50 years. To consumers KP Nuts is the brand synonymous with quality peanuts. It is distinctly positioned as an adult snack brand for everyday in-home socialising, at the pub or eating on the go. KP Nuts has a strong affinity with drinking and socialising with 40% of ‘eating occasions’ being with alcohol, especially over the peak social seasons – Summer and Christmas.

Carr's - Carr's Table Water biscuits in their original form first appeared in the late 19th Century as a refinement of the ship's biscuit. Carr's is the leading premium cracker brand and the range consists of the following products: Carr's Table Water, Carr's Melts range, Carr's Selections and now Carr's Nibbles.

McVitie's Jaffa Cakes - McVitie’s Jaffa Cakes were introduced over 60 years ago and the brand is now the 4th biggest in the biscuit market. Over 3 million McVitie’s Jaffa Cakes are made every day, each taking 18 minutes to make. The original recipe is a closely guarded secret, but the delicious combination of light sponge, plain chocolate and the smashing orangey bit in the middle has made McVitie’s Jaffa Cakes infinitely loved by the British nation.

Delacre - Established in the 1870s, Delacre was first known for its Belgian chocolate. Acquired by UB in 1998, the Delacre brand has quickly gained a reputation as a specialist in adult biscuits though impactful communication on its core biscuits and recent innovative launches (for example, Fou de Chocolat in October 2002). Delacre is well known for its wide range of indulgent biscuits in both France and Belgium. The core of the Delacre product portfolio consists of various high quality biscuit assortments, in which luxury chocolate biscuits dominate.

Verkade - Over the 50-plus years of its existence, Sultana has become a star brand under the Verkade name and other classics include San Francisco, Maria, Knappertjes, Café Noir, Nizza and Sprits. In recent years the Verkade biscuits portfolio has been successfully extended from the ‘classical’ range with biscuits from United Biscuits overseas, such as Digestives from England, BN from France and most recently Délichoc from Belgium. The Verkade brand is also present in France, with the Fruit & Form range and Verkade Bio range.

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United Biscuits in India

In India United Biscuits started its operation in 2009. United Biscuits purchased the plant of Bonn brad (S.S. foods) with the investment of 15-20 crores located at Kala Amb industrial area in Himachal. However in totality UB has already made an investment of 40 crores for this plant and also planning to invest more. UB identified as a market with great potential than it made foray into the Indian market by deciding the production in Himachal Pardesh. UB India today directly and indirectly employees over 1000 people and also plans to continue expanding its presence in the year 2010.

Product range of United Biscuits in India

McVitie's Digestive – United Biscuits have launched McVities Digestive in 82gm pack priced Rs. 10/- and 230gm pack priced Rs 30/- and would be competing with Britannia Marie Gold and NutriChoice and Sunfeast Marie Lite.

McVitie's Cream – Mcvities Cream chocolate flavour in 75 gm priced Rs 12/- and would be competing with Britannia Cream Biscuits.

McVitie's Cashew Cookies – United Biscuits have launched Mcvities Cookies in 68gm pack priced Rs 10/- and would be competing with Britannia Good Day and Sunfeast Special.

McVitie's Butter Cookies – United Biscuits have launched McVities’s Butter Cookies in 68gm pack priced Rs 10/- and would be competing with Britannia Butter Cookies.

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Competitors of United Biscuits in India

The existing market leaders in the Indian biscuit market are –

1 - Parle

2 - Britannia

3 - ITC

Some other strong regional brands such as Priya Gold in the north, Cremica in the west and Dukes in the south.

Distribution Channel

A channel of distribution is a group of individuals and organization that directs the flow of products from producer to customers. The main function of this element is to find out appropriate ways through which goods are made available to the markets.

Types of Distribution Channel –

1 -

2-

3 -

4 -

Consumer

Manufacturer Consumer

Consumer

Jobber Consumer

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Distribution Channel of United Biscuits Pvt. Ltd. in Delhi and NCR -

United Biscuits has its manufacturing plant in industrial area of Kala Amb, Nahan Dist, Himachal Pradesh. In India United Biscuits has only one manufacturing plant and making plan to open another manufacturing plant also. For product Supply Company use Land Transport. Its land transport is based on Roadways. Company use trucks for their product supply from plant to sales depot in Delhi.

United Biscuits has its Sales Depot in Industrial Area of Patpar Ganj, New Delhi. This sales depot is company own warehouse. From this sales depot biscuits supplied in Delhi and NCR regions. United Biscuits has many stockiest points in Delhi and NCR. From the sales depot biscuits are supplied to different stockiest points.

There are 22 sales officers in Delhi and NCR who are appointed at different stockiest point to regulate the distribution network. Under the guidance of each sales officer 2-4 sales men work at a particular stockiest point.

Each sales officer has many beat plans for a particular area and as per beat plan sales men visit retailers to take orders from them. Most of the orders are supplied by next day. At this level biscuits are supply by stocker’s vehicle. For supply they use van. These retailers sell biscuits to consumers.

Manufacturer

Sales Depot

Wholesalers

(stockiest points)

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Retailers

Consumers

Distribution Channel of United Biscuits in Delhi and NCR

Selection of Wholesalers (stockiest point)

United Biscuits followed following strategies for the selection of wholesalers.

1 – Dealership - Wholesaler has other FMCG companies’ dealership such as Mother Dairy, Amul, Haldiram and many more.

2 – Location – Centrally located in a particular potential market.

3 – Warehouse – Wholesaler has warehouse so that inventory can managed.

4 – Identity – Wholesaler has good image in the market so that company can make good relation with the retailers.

Beat Planning –

United Biscuits followed following strategies for the selection of Beat Planning.

1 – Company divided a particular are in many Beat such as East Delhi has divided into 50 Beat approx.

2 – Each Beat has 40 retailers approx.

3 – Company focused those retailers who are good in FMCG business.

4 – As per sales volume Beats are divided into category A, B and C.

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5 – As per sales volume retailers are also divided into category A, B and C.

6 – Company mainly focuses ‘A’ category retailers so that company can increase sales growth and revenue.

7 – Company gives special sales promotion offer to ‘A’ category retailers.

Selection of Sales Displays –

Sales displays have become very common these days. Good displays attract the customers and raise the sales of the products. It requires creativity and good arrangement of displays. United Biscuits sales displays play a very important role in pushing the product to the customer and to popularize it. They act as silent salesmen and induce the customer to come into the shop. United Biscuits sales displays are used to maximize product exposure, stimulate product interest, facilitate sales transactions, ensure product security, and keep reminding customers of his purchase.

For Sales Displays United Biscuits selected those retail stores which are located in potential market and people of that particular area know the retail store. These retail stores have heavy amount of product sales of biscuits.

Company pays Rs. 300/- to Rs. 500/- as sales display amount on monthly basis.

Advertising and Sales Promotion -

Advertisement is any paid form of nonpersonal and promotion of ideas, goods, or services by an identified sponsor. United Biscuits promoting its McVitie’s Biscuits by Television Ads.

Whereas advertising offers a reason to buy, sales promotion offers an incentive to buy.

For consumers United Biscuits has following sales promotion objective –

1 - Encourage purchase of larger size units 2 - Build trial among non users and 3 - Attracting switchers away from competitors’ brands.

For retailers United Biscuits has following sales promotion objective –

1 - Persuading retailers to carry new items and higher levels of inventory2 - Encourage off season buying3 - Building brand loyalty and 4 - Gaining entry into new retail outlets

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Tools used United Biscuits for consumers’ promotion –

1 - Sample2 - Coupon

Tools used United Biscuits for retailers’ promotion –

1 – Price off

Research Methodology

- Marketing Research: Quantitative Research

- Data:

Primary Data: Collected by field work

Secondary Data: Collected by books and internet

- Research Approach: Survey method

- Research Instrument: Questionnaire

- Type of Questionnaire: Structured

- Type of Questions: Close-ended and open-ended questions

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- Target Population: Retailers

- Sample Size: 100

- Sampling Technique: Convenience Sampling

- Sample Areas:

Noida – Sec. 11, 12, 14, 15, 17, 19, 20, 21, 22, 23, 27, 33, 34, 50, 53, 55, 56 and 71.

Data Analysis and Interpretations

1) - Which brand of biscuits do you have?

McVitie’s 100

Parle 99

Britannia 99

ITC 99

Others 99

All 99

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Interpretation – Survey shows that McVitie’s Biscuits are sold at all the 100 shops and other biscuits are sold at 99 shops. As per data we can say that Noida is a potential market for McVitie’s Biscuits.

2) – Which brand is more in demand?

McVitie’s 1

Parle 38

Britannia 52

ITC 25

Others 0

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Interpretation – In 100 sample shops one shop sales only McVitie’s that’s there are no competition. Most Demanded biscuits are Britannia 52% followed by Parle 38% and ITC 25%. In some shops demand of two biscuits are same such as Parle and Britannia.

3 A) - Rate the Packaging.

1 - Bad, 2 – Average, 3 – Good, 4 – Very Good, 5 - Excellent

Packaging Bad Average Good Very Good ExcellentMcVitie's 0 10 70 20 0Britannia 0 0 35 65 0Parle 0 0 60 40 0ITC 0 5 55 40 0

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Interpretation - For McVitie’s packaging 10% retailers said that its average, 70% said good, 20 said very good. For Britannia 35% said good and 65% said very good. For Parle 40% said good and 60% said very good. For ITC 5% said average, 55% said good and 40% said very good.

3 B) - Rate the Price.

1 - Bad, 2 – Average, 3 – Good, 4 – Very Good, 5 – Excellent

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Interpretation - For McVitie’s price 15% retailers said that its average and 85% said good. For Britannia 35% said good and 65% said very good. For Parle 40% said good and 60% said very good. For ITC 55% said good and 45% said very good.

Price Bad Average Good Very Good

Excellent

McVitie's 0 15 85 0 0

Britannia 0 0 35 65 0

Parle 0 0 40 60 0

ITC 0 0 55 45 0

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3 C) - Rate the Quality.

1 - Bad, 2 – Average, 3 – Good, 4 – Very Good, 5 – Excellent

Interpretation - For McVitie’s quality 10% retailers said that its average, 55% said good and 35% said very good. For Britannia 30% said good and 70% said very good. For Parle 50% said good and 50% said very good. For ITC 60% said good and 40% said very good.

3 D) - Rate the Quantity.

Quality Bad Average Good Very Good

Excellent

McVitie's 0 10 55 35 0Britannia 0 0 30 70 0Parle 0 0 50 50 0ITC 0 0 60 40 0

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1 - Bad, 2 – Average, 3 – Good, 4 – Very Good, 5 – Excellent

Quantity Bad Average Good Very Good

Excellent

McVitie's 0 15 85 0 0

Britannia 0 0 35 65 0

Parle 0 0 35 65 0

ITC 0 0 45 55 0

Interpretation - For McVitie’s quality 15% retailers said that its average and 85% said very good. For Britannia 35% said good and 65% said very good. For Parle 35% said good and 65% said very good. For ITC 45% said good and 55% said very good.

3 E) - Rate the Availability.

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1 - Bad, 2 – Average, 3 – Good, 4 – Very Good, 5 – Excellent

Interpretation - For McVitie’s quality 20% retailers said that its average and 80% said very good. For Britannia 55% said good and 45% said very good. For Parle 45% said good and 55% said very good. For ITC 70% said good and 30% said very good.

4) - How did you get to know about McVitie’s biscuits?

Availability Bad Average Good Very Good

Excellent

McVitie's 0 20 80 0 0Britannia 0 0 55 45 0Parle 0 0 45 55 0ITC 0 70 30 0

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Newspaper 0

TV Commercials 10

Magazines 0

Outdoor Media (Banners, Hoardings, etc) 0

Any other 100

Interpretation – All retailers know about McVitie’s biscuits by regular visit of sales men, and wholesaler. Among all this 100 retailers’ only 10% retailers are aware about McVitie’s TV Ads.

5) - Which flavor of McVitie’s biscuit is demanded the most by the customers?

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Interpretation – Digestive demand is 70%, Cashew Cookies demand is 23%, Cream demand is 23% and Butter Cookies demand is 3%. Butter Cookies demand is less because it is recently launched in market.

6) - How frequently the salesmen of McVitie’s visit your shop?

McVitie's Digestive 70

McVitie's Cream 13

McVitie's Cashew Cookies 23

McVitie's Butter Cookies 3

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Within 7 days 70

Within 15 days 25

Within 30 days 5

After 30 days 0

Interpretation – Sales Men of United Biscuits visit retailers as per his beat plan. Sales Men visit 70% retailers within 7 days, 25% retailers within 15 days and 5% retailers within 30 days.

7) - How is the service of McVitie’s biscuits in terms of supply at your shop?

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Interpretation – 7% retailers said that McVitie’s biscuits supply is bad, 45% said average and 48% said good.

Bad 7

Average 45

Good 48

Very Good 0

Excellent 0

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8) - Are you satisfied with the distributer of McVitie’s?

Interpretation – 66% retailers said that they are satisfied by distributer and 34% said that they are not satisfied with distributer.

9) - Are you aware of McVitie’s promotional offers?

Yes 66

No 34

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Yes 80

No 20

Interpretation - 80% retailers said that they are aware about promotional offer and 20% said that they are not aware about promotional offer.

10) – What are your suggestions for the company?

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1 – Package size is small as compare to other biscuits such as Parle and Britannia.

2 – Different variety of biscuit should be more.

3 – Package weight is lesser than other biscuits such as Parle and Britannia.

4 – Supply Chain should be effective.

5 – Advertisements should be more.

6 – Biscuits test should be more effective.

7 – Rs. 12/- McVitie’s Cream price should be 10/-. There is problem of change. 8 – Sales Men and officer visit should be on time.

9 – Before launching any new flavor of biscuit, sample should be distributed.

10 – Replacement and Sales Displays be on time.

Findings

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1 – Noida is potential market for McVitie’s biscuits.

2 – In Noida Britannia is most demanded biscuits.

3 - Only 10% retailers are aware about McVitie’s TV ads.

4 – Digestive is most selling biscuits. In 70% retail stores digestive sale is more than McVitie’s other biscuits.

5 – Sales Men cover 70% retail stores within 7 days.

6 – MCVitie’s biscuits supply is good only at 48% retail store.

7 - 66% retailers are satisfied with the distributer.

8 – 20% retailers are not aware about McVitie’s promotional offers.

9 – McVitie’s price is higher than other competitors.

10 – Retailers need different size of package and varieties of biscuits also.

Limitations26

1 – Time – For accomplishment of project I have only 42 days, but for the research I required more time.

2 – Area – Survey is based on Noida City’s retailers.

3 – Sample Size – I had only 100 sample size for the survey which is less for Noida City.

4 – Retailers do not have enough time to response the questionnaire.

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Recommendations

1 – Proper supply chain should be so that biscuits can be supply on time and reduce stock out problem.

2 – No need to cover those areas which is not potential for McVitie’s biscuits supply.

3 – More focus ‘A’ and ‘B’ category of retailers rather than wasting time and money on ‘C’ category retailers.

4 - Focus more on advertising and sales promotion.

5 – Give proper training to sales men about the selling techniques.

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Bibliography

1 – www.unitedbiscuits.com

2- http://business.mapsofindia.com/india-industry/biscuits.html

3 - http://nvonews.com/2010/02/03/united-biscuits-all-set-to-launch-in-himachal

4 – Sales and Distribution Management by Dr Martin Khan, Page No 162- 168 and Page No 253 – 268.

5 – Marketing Management (A South Asian Perspective) by Philip Kotler, Kevin Lane Keller, Abraham Koshy and Mithileshwar Jha, Page No 486- 503.

6 – Marketing Research by Harper W. Boyd, Jr. Ralph Westfall and Stanley F. Stasch, Page No

407.

7 – Marketing Research by Naresh K. Malhotra, Page No 183.

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Questionnaire on McVitie’s Biscuits

Please tick the answer you like the most. ( )

1) Which brand of biscuits do you have? a. McVitie’sb. Parlec. Britanniad. ITCe. Othersf. All

2) Which brand is more in demand?

a. McVitie’sb. Parlec. Britanniad. ITCe. Others

3) Rate the following.

1 – Bad, 2 - Average, 3 – Good, 4 – Very Good, 5 – Excellent

Packaging Price Quality Quantity Availability a. McVitie’sb. Britanniac. Parled. ITCe. Others

4) How did you get to know about McVitie’s biscuits? a. Newspaperb. TV Commercialsc. Magazinesd. Outdoor Media (Banners, Hoardings, etc) e. Any other………………………………..

5) Which flavor of McVitie’s biscuit is demanded the most by the customers?

a. McVitie’s Digestive b. McVitie’s Cream

c. McVities Cashew Cookiesd. McVities Butter Cookies

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6) How frequently the salesmen of McVitie’s visit your shop?a. Within 7 daysb. Within 15 daysc. Within 30 daysd. After 30 days

7) How is the service of McVitie’s biscuits in terms of supply at your shop?a. Bad b. Averagec. Goodd. Very Goode. Excellent

8) Are you satisfied with the distributer of McVitie’s?

a. Yes b. No

9) Are you aware of McVitie’s promotional offers?

a. Yes b. No

10) What are your suggestions for the company?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Name: - ………………………………………………………………………………………………………

Age: - ……………………………………………………………………………………………..

Address: - …………………………………………………………………………………………………………

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