PROCTER & GAMBLE
DISTRIBUTION CHANNEL
SYSTEM
By: Sarvesh Singh 2K16GA016
Kaif Ullah Khan 2K16GA017
Anushree Mukherjee 2K16GA018
Abhishek Sidhu 2K16GA020
FLOW OF CONTENTS
Introduction
Channel Explanation
Intensive and Extensive Distribution
Vertical Marketing System
Transportation
Diagrammatic Presentation of Channel
Conclusion
Introduction
The company was established in 1837, by William Procter and James
Gamble
Company headquartered in Cincinnati, Ohio
Established in India in 1964
Product includes Vicks, Ariel, Tide, Olay, Gillette, Ambipur, Pampers,
Pantene, Oral-B, Head & Shoulders, Wella and Duracell
Operates under 3 entities Procter & Gamble Hygiene and Health Care
Limited and Gillette India Limited
Channel Explanation
In India: General office in Mumbai and manufacturing facilities in
five areas (Baddi, Bhiwadi, Goa, Hyderabad, Bhopal).
Globally they manufacture their own goods from many different
countries such as the US, Canada, China, Mexico, Australia and
more.
Typical Distribution of P&G Products
Manufacturer
Marketing Agents- State Wise
Retailer/Wholesaler/Distributors
Chemist Shop/ Retail Outlets/
Big Markets
Agents
P&G products are distributed through a network of redistribution stockists RS)
(covering both urban and rural population).
There are 35 C&FAs (Carrying and Forwarding Agents) in the country who feed
these redistribution stockists regularly.
The general trade comprises grocery stores, chemists, wholesale, kiosks and
general stores.
The C&FAs act as buffer stock‐points (at company depot) to ensure that
stock‐outs did not take place.
The C&FA system has also resulted in cost savings in terms of direct
transportation and reduced time lag in delivery.
Intensive Distribution
P&G follows this strategy in India. As the company manufactures
FMCG convenience/necessity goods, hence there is lesser/no brand
loyalty from customer side.
These products are typically purchased impulsively and frequently
and required to be widely available to customers.
The distribution network of the company needs to be very strong and
proactive.
As the products are relatively small and easily transported, they are
easy to box up a great number of units to many different channel
intermediaries
Extensive Distribution
Sold in retail stores such as Walmart, Target, and other convenient
stores all over the world
Company requires extensive distribution to obtain big sales volume
The Procter and Gamble owns a series of distribution centers in
Texas, Ohio, and more
Vertical Marketing System
Corporate Vertical Marketing System: Wella Professionals have joined
with P&G and are exclusive distributors of their hair and skincare products.
They are only sold within their own stores.
Transportation
Shipping: Their first mode of transportation is through shipping
Advantages: Provided large amounts of carrying capacity with low cost
Disadvantages: They are often effected by weather and seasonal delay which
may delay the shipping time.
Truck wholesaling: Then the products move to truck fleets where P&G have a
contract with "Ryder logistics & Solution“.
Advantages: Trucks are relatively fast form of transportation
Disadvantages: Expensive way to transport so often they use double trucks
Diagrammatic Presentation of Channel
PRODUCER RETAILERS CUSTOMERS
PRODUCER WHOLESELLER RETAILERS CUSTOMERS
Conclusion
The company uses its absolute control power to design more effective
distribution channels.
It streamlines the number of distributors so that making the distributors is
more stable and competitive.
P&G Company is investing in a more agile and faster distribution network
to optimize inventory and reduce out-of-stocks.
It reasonably allocates resources across channel options.
It is also investing in its sales force to establish more profitable
distribution system (Annual Report of P&G, 2016)
THANK YOU
