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Route 2 Market Distribution Strategy: We Save The Pennies For The Pounds To Follow

The document summarizes Cadbury Dairy Milk's Route 2 Market (R2M) distribution strategy in India. [1] The R2M model is designed based on population size, with different channel members and margins for populations above and below 25,000. [2] For populations over 25,000, factories supply mother godowns which supply large distributors; for populations under 25,000, smaller distributors are supplied. [3] The summary compares Cadbury's model to competitors and recommends increasing distributor margins to 4% and developing an East India packaging unit.

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Sharath Ghosh
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69 views11 pages

Route 2 Market Distribution Strategy: We Save The Pennies For The Pounds To Follow

The document summarizes Cadbury Dairy Milk's Route 2 Market (R2M) distribution strategy in India. [1] The R2M model is designed based on population size, with different channel members and margins for populations above and below 25,000. [2] For populations over 25,000, factories supply mother godowns which supply large distributors; for populations under 25,000, smaller distributors are supplied. [3] The summary compares Cadbury's model to competitors and recommends increasing distributor margins to 4% and developing an East India packaging unit.

Uploaded by

Sharath Ghosh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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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
About Cadbury Dairy
Milk

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 1948
o 30% Standalone Market Share in India
o Market Leader
o The end-to-end supply chain have been the key performance
indicator
o Loyalty of 60 million total consumers increasing at 15 million
per year
o 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’ award


o 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
R2M Distribution Model

• About the Model


• Role of Channel Members
About The Model

– Managed using SAP


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

•5 Factories
•4 •Mother
ThaneGodown`
Factory
•East Zone : Radient
• Pune
•State Dipo
Enterprise
• Himachal
•In East Pradesh
India for Bihar &
•All• expenses
Gwalior borne by the
Jharkhand
company
• Bangalore
•Nepal Market Served
•Charged on per cartoon
Through Bihar
basis
•No Commission System
•Remuneration according to
the no. of cartoons sold
•Key Accounts
•Spencer BigBazar, Spencers
Mother Godown
Direct State C&F
•Margin : (Zonal)
• Fixed 4.5%
• Variable 1%
(Performance Debate)
•30 days Credit Period
•HMC, Radha Madhav
Agency
10000-25000 Population

Factory

•Margin : 3% (2%+1% Freight)


•Pandit Enterprise (South 24
Parganas)

•Outsourced Mother Godown


•Accountibility of Super (Zonal)
Stockist (Managed in SAP)
•Margin 5%
•Kakdip, Bakkhali
Competitor’s Distribution
Channel

• Beat Plan
• Distribution Relation
• Wider and Deeper Network
Traditional Trade • Availibility Mordern Trade
Nestle • Variable Margins Ferrorocher (KinderJoy)
Mars
Amul (Commissions)
Foreign Assortments
Recommendations

• Level Distributor Margins


– Competitors – 4%
– Cadbury - 3%
• Develop a Packaging Unit
in East India
Thank You

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