Chapter I Introduction and Company Profile

1.1 INTRODUCTION TO TOPIC

Channels of distribution have a vital role to play, especially in the distribution of consumer
goods. The most innovative product offered at an attractive price would be of no use unless there
is an efficient distribution system. The consumer will not search for the product; it has to be
made available at a convenient place from where he can obtain it easily. The distribution channel
provides three types of utilities –time, place and ownership. Time utility means the products
should be made available when consumers want them. Place utility is provided by making the
product available at a location where a consumer wants it. Ownership utility is created when the
physical possession and title to the product are transferred to the consumer. Market channels play
a far more important role than the mere transporting of goods from producers to consumers. The
economic function of the various institutions that make up a channel are cost reduction,
financing, co-operation in setting prices, communication link between the buyer and the user,
promotional assistance, and reduction in the number of transactions.

1.2 COMPANY PROFILE

Hangyo Ice Creams Pvt. Ltd., is a flagship company of Srikrishna Group, which is an Rs.100
crore entity with interests spanning various sectors like milk and milk products, ice creams and
fresh foods, restaurants, and hospitality. Srikrishna Group has the distinction of being the first
organized private sector venture in the milk industry in Karnataka state. Continuing in the same
pioneering tradition, Hangyo Ice Cream Pvt. Ltd., is also Karnataka's first private ice cream
manufacturer in the organized sector. Incorporated in 2002, Hangyo, is today a leading ice cream
brand loved by consumers across all segments of society in its rapidly growing market spanning
the states of Karnataka, Kerala and Goa.
ISO Certification:

Hangyo Ice Cream Pvt. Ltd., is an ISO 22000:2005 certified company for both its divisions -
Dairy and Ice Cream. Hangyo is probably the first ISO certified company in the private sector in
ice cream manufacture in the state.

Market Reach:

Hangyo ice creams are offered in a variety of presentations like cups, cones, and candies. At
present 138 varieties of ice creams are available in these novelties and also in larger take-home
family packs. Hangyo Ice Creams are presently marketed throughout Coastal Karnataka from
Mangalore to Karwar and in major cities of the state like Bangalore, Mysore, Hubli, Dharwad,
Belgaum, Haveri, Gulbarga, Bagalkot, Bijapur. The small towns like Athani, Navalgund,
Naragund, Ranebennur, Gadag are also covered. Hangyo Ice Creams have already opened in
Solapur and Kolhapur, in southern Maharashtra.

Retailing Models:

Strong retailing network is the key to win any retail market. Hangyo Ice Creams has introduced a
unique retail format which has enabled the brand to remain consistently successful. This format
relies on a chain of franchisees called "HangyoParlours" and "Hangyo Shoppes" for the vending
of ice creams and milk products.

Hangyo Ice Creams Pvt. Ltd., presently has a network of over 6000 retailers in its operational
area. In larger cities, Hangyo Ice Creams also has valuable associations with bigger Retailing
giants like Big Bazaar, Metro, More and Reliance Fresh for display and sales of its varieties of
ice creams
Infrastructure:

Maiden Unit: The company's maiden full-fledged manufacturing plants are situated in Heroor
Village of Udupi District. This plant was established in 2003 with all indigenous content.

The plant has a production capacity of 10,000 liters of ice cream per day. All the ice cream
products of the company are manufactured in this plant in various presentation like Cones,
Candies, Sundaes and Ice Cream Cups.

The dairy unit of the plant has a capacity of 50,000 liters/day of processing and distribution of
milk and milk products.

New Plant: Given the overwhelming response from the channel partners and also the consumers,
Hangyo Ice Creams has embarked on a major expansion drive which will result in increased
capacity and bigger market share.

As a first step in this direction, a New Plant has been established by the company at Hosalli
Village, Kirwatti on National Highway 63 near Yellapur, Uttar Kannada District. The plant is
just 45 km from HubliThe new imported automatic plant has a production capacity of 16,000
liters/day of ice creams and can produce ice cream mix too. The company had also installed the
continuous freezers to match the processing and manufacturing process; compatible packing
capacity is also available to support the production process.

VISION:

A vision statement describes a desirable state that a company wishes to attain at some time in the
future. Vision statement of Hangyo Ice Creams Pvt. Ltd. is to be the major player in the state of
Karnataka with the product folio.

MISSION:

 To improve the quality and quantity of products.

 Services by promoting healthy practices with economical.
 Operation and to service the ultimate consumers.
 To their utmost satisfaction at affordable prices with an optimization of group's wealth.

OBJECTIVES:

 The objectives of the company are as under

 Maintain on-time delivery of products.
 Improve awareness of Food Safety Management System among all the employees.
 Empower the employees through training to delegate the work to meet the customer needs.
 Improve the quality and quantity of sales of Products.
 Creation of employment.
 Better utilization of skilled local manpower.
 Increase the demand for the product.

To ensure as well as enhance customer satisfaction

Quality Policy:

The quality policy of the Company is as under.

 Quality and Safety requirements in all stages of Procurement, Processing, Packing, storage
and supplying of Milk, Milk Products and Ice Cream for Customer Satisfaction.
 Evolving and Practicing Integrated and Interactive Total Quality Management.
 Quality Improvement as a continual process and improve the Quality Management System
continually to ensure and enhance customer satisfaction.

1.3 PRODUCT PROFILE:

 Dairy Division has a wide range of milk and milk products. Following are the details of the
products.
 Srikrishna Toned Milk: This milk is having 3% fat and 8.5% SNF content and packed in 500
ml and 1000 ml food-grade polythene pouches.
 Natural Rich Milk: This milk is having 4% fat and 8.5% SNF content and this is also packed
in 500 ml and 1000 ml food-grade polythene pouches.
 Srikrishna Curds: Curds are prepared from toned milk. These are packed in 200 ml and 500
ml food-grade polythene pouches.
 Srikrishna Pot Curd: This is prepared from Natural rich milk and packed in 250 ml earthen
pots to preserve the natural taste, texture, and flavor.
 Srikrishna Buttermilk: This is available in sachets of 200 ml and bulk, in two varieties,
Masala Buttermilk and Jeera Masala Buttermilk.
 Srikrishna Lassi: This is available in 200 ml sachets, in two varieties viz., plain and mango.

Types of machinery being used for milk operations are Storage Tanks, Cream Separator,
Pasteurizer, Homogenizer, Packing Machine, Boiler, etc. Other infrastructure facilities include
Refrigerated Cold Storage, Diesel Generators, etc.

The daily distribution of milk and milk products is about 25,000 liters. Hangyo Ice Creams Pvt.
Ltd., has two divisions, viz., Dairy Division and Ice Cream Division.
1.4 The various departments are as follows:

1. Purchase Department

2. Production Department

3. Stores Department

4. Quality Control

5. Maintenance Department

6. Marketing Department

7. Personnel Department

8. Dispatch

9. Accounts Department

Purchasing :

Suppliers are analyzed based on quality, capability to deliver, experience and reputation. Most of
the purchases are made locally. Other purchases are made from places like Mumbai as per the
needs and quality.

The various raw materials include:

Sugar Black Current Fruit

Glucose Angeer

Milk Powder Supota

Butter Banana

Milk Cream Strawberry Fruit

Mango Pulp Litchis Fruit

Stabilizer Food Color

Other seasonal Fruits

The purchases are generally made from wholesalers based on the demand. Seasonal fruits are
purchased when available, processed and stored. The local sources are preferred mainly to
minimize inventory control. The food color used is also organic and that is the reason why the
slogan of the organization goes this way "SPREADING HAPPINESS NATURALLY".

Purchasing Activity:

Terms and Conditions of Purchase:

1. The period of supply of raw materials need to be specified.

2. Load of raw materials to be supplied has to be specified.

3. Whether the transport facility will be provided by the factory or the supplier has to make
arrangements.

All the user departments will send the list of regular items required by them to stores. If the stock
availability is found to be insufficient stores department in consultation with production manager
shall place purchase orders.

Production

The different steps followed before the process of production starts

1. Receiving the Milk Cream:-The manufacturing process of Hangyo starts when milk cream is
received from Srikrishna Dairy Private Limited. The quality of milk measured using the
following factors.

a) Taste has to be pleasant

b) Flavor has to be good

c) Fat content should be 9.5%

d) Presence of SNF content

Sample Testing: -

The first and foremost test is milk testing. Milk used for milk cream will be tested in the
laboratory situated in the plant.

The various tests are:

a) Fat Test

b) Protein Test

c) Total Solids Test

d) Activity Testing

e) Color Testing

f) Flavor Testing

g) Nuts and Fruits Testing

h) Weight Testing

i) Melting resistance Test

j) Taste Testing

k) Bacteria Test

The Process:

Ice cream production is mainly dependent on the quality of Ice creams. As Hangyo is situated
near Srikrishna dairy there is no problem in the availability of milk cream which is a very
important component in Ice cream production. The milk cream used in Hangyo Ice Cream is
pure and fresh. Hangyo contains permitted colors, added flavors of milk and milk fat. At each
step, the production manager will test the product.

Selecting and mixing of ingredients: 20

Ingredients like milk cream, other milk products, and non-dairy products like sugar, glucose,
stabilizer, and emulsifiers are mixed in a tank at a certain temperature.

Batch Pasteurizer:-

Heating:-

In the Batch Pasteurizer first milk will be heated that is indirect heating by water through jacked
tank without direct heating.

Addition of other raw materials:

At 500 c other raw materials like skimmed milk powder etc. are added.

Pasteurization and holding for 30 minutes:-

It is a process whereby the mixture is heated up to 720 c temperature and held for half an hour
till the machine cools off. By doing so the milk cream can be preserved for a longer time and
prevents the growth of bacteria like mesophilic and Thermo uric bacteria in milk cream.

Homogenization:-

It is the process of applying pressure on the product. In the first stage, 2500 PSI pressure and the
second stage 5000 PSI pressure is applied. This pressure mixes the SNF and fat content.

Cooling:-

Cooling is done at 450 c

Chilling:

The chilling process is similar to the homogenization. After this, it passes through a chilling
machine. If the mixture is chilled properly then it can be preserved for a longer time. It is chilled
to 400 c.
Arrange – addition of colors, flavors, fruits, and nuts:

There is a fixed composition according to which colors, flavors, fruits, and nuts are added. The
color should be attractive. If it is more than the composition then it will taste odd. So color
testing is important, only after the test the color needs to be added.

There are different flavors like vanilla, chocolate, butterscotch, mango, coffee, honey due melon,
apple, black current, rose, gulkand, strawberry, pineapple, apricot, guava, orange and
watermelon.

Depending on the order the production manager will decide which flavor is to be produced.
Flavor testing is also done. Fruits and nuts are also tested before using. Each and everything used
in the production process will be tested.

Freezing and Packing:

Freezing is a process where cream turns into ice. There is a freezing point that is the temperature
at which the liquid freezes. To preserve the food products in the frozen state the process of
freezing is of utmost importance.

After freezing it is packed. Packing is done according to SWAM Act i.e. Standard Weights and
Measures Act. Packing material is bought from faraway places. The Hangyo packages are
attractive. The price and weight of the product, packing date etc is mentioned on the pack.

Hardening:-

Hardening is done to make the product hard or unyielding. If hardening is not done in a proper
way it will melt before it reaches the customers.

Storage:-

After hardening the products go to the storage room. The product is stored in a cold room at a
temperature of -300 c. The products are stored for future use. In the rainy season, there will be no
production of ice cream if there is any order the items from the store will be sent.
Quality Control Department:-

Chemicals and macro biological test is done and if the product is not up to the mark it is either
reprocessed or destroyed.

They have their parameters to determine the quality. This separate department has got chemists
and technicians. The Fat content, protein, and acidity are tested.

Maintenance :

Production largely depends on the maintenance of the plant. The plant is generally kept under the
control of the works manager.

Maintenance of the machine means efforts directed towards upkeep and repair of the machines.
The maintenance department is responsible for the smooth and efficient working of the industry
and helps in improving the productivity. There are 2 types of maintenance.

1) Preventive Maintenance

2) Breakdown Maintenance

At Hangyo they follow all these types of maintenance. The maintenance of major equipment
such as plant types of machinery, cold storage, deep freezers, diesel generators are carried out
through an annual maintenance contract.

1) Preventive Maintenance

The preventive maintenance schedules are drawn by the general manager and are implemented
by the supervisor for production equipment and utilities as per preventive schedule. Preventive
maintenance shall be carried out as and when the equipment is free. Any defect is brought to the
notice of the general manager, who takes necessary corrective actions.
2) Breakdown Maintenance

Whenever there is a breakdown the concerned supervisor will raise the maintenance report which
would have the name of the machine, nature of breakdown, breakdown time, etc. then the
maintenance report is handed over to the general manager.

General Manager Calls the operator and then the job is allotted to him. While attending to
breakdown, reference to troubleshooting procedure given in the concerned machine equipment
manual is made.

Whenever a breakdown of the machine occurs alternative arrangements are made by the plant
manager in consultation with the general manager to see that the production process is not
affected by the breakdown.

This department has a total of 10 members

Their main functions are to check the condition of machines and cleaning the dust. Every week
they check the oil belt tension and once in three months the oil is changed.

Important among the above-mentioned activities are:

Pricing of products:

Prices of the products are fixed as below.

Maximum retail price

Dealer margin 25%

Distributors margin 12%

GST 18 %
Selling and Distribution Expenses

Transportation cost

Salary (marketing)

Distribution Traveling Allowance and Dearness allowance.

Newspaper Ads

Sales promotion and point of purchase

Product complaints and damages

Marketing Traveling Allowance and Dearness allowance

Launching Expenses.

1.5 AWARDS
Chapter II: Work Profile

2.1 INTRODUCTION TO WORK PROFILE

I chose to took my project in distribution channels because channels of distribution have a vital
role to play, especially in the distribution of consumer goods. The most innovative product
offered at an attractive price would be of no use unless there is an efficient distribution system.
The consumer will not search for the product; It has to be made available at a convenient place
from where he can get it easily. The distribution channel provides three types of utilities–time,
place and ownership. Time utility means it should make the products available when consumers
want them. Place utility is provided by making the product available at a location where a
consumer wants it. It creates ownership of utility when the physical possession and title of the
product are transferred to the consumer. Market channels play a far more important role than the
mere transporting of goods from producers to consumers. The economic function of the various
institutions is cost reduction, financing, co-operation in setting prices, the communication link
between the buyer and the user, promotional help, and the reduction in the number of
transactions.

2.2 WORK PROFILE

• Understanding the overall Bangalore ice cream market and competition in the ice cream
industry in Bangalore, understanding the key competitor with their share of the market through
analyzing secondary data.

• Visiting super stockist to understand how much business they are doing, what is the storage
capacity and their level of satisfaction towards Hangyo brand and its operations. Also,
understanding the problem they are facing at the distribution level.

• Interviewing the distributors to understand why have they joined Hangyo brand, what kind of
initiative they are taking to increase the Hangyo market share,

• understanding the support extended by the company to the distributors and also what kind of
problem faced by them from the company side and from the retailer side.
• Understanding the Hangyo promotions and other support for the distributor for increasing the
sales, market share and comparing it with the competition.

• Understanding the storage capacity of each distributor.

• Understanding the retailer segments like Modern Trade, Food Stores, General stores etc and
their rules of engagement with Hangyo.

• Visiting retailers point to understand their perception towards Hangyo brand and what
difficulties they are facing while selling Hangyo products to the consumer.

• Identify the problem faced by retailers from company and distributor points.

• Understanding what is the credit policy of intermediaries (distributors and retailers) is there any
problem with a payment system.

• identify the promotion initiative taken from company to create brand awareness and attract
customer toward hangyo ice cream

2.3 LEARNING AND TAKEAWAY

• What is the share of each ice cream in Bangalore and what is the positioning of each company
and how every company makes a difference with a competitor. How the message delivered to
target customers through various communication channels

• Through analyzing the sales data, I understand which products are highest selling and which
are the lowest selling products and also understand how sales figures will fluctuate throughout
the year.

• What kind of problem are distributors facing from company side and from the retailer side.And
what is the solution for that.
• what is the company replacement policy, on what basis company decide the product
replacement to the distribution

• How the company is doing the promotion of a brand at low cost

• what is the share of freezer taken by Hangyo ice cream in each retailer point and what
perception retailer having about Hangyo ice cream compare to other ice cream brands

• What kind of problem arise at the distribution process and what is the best solution for
resolving that issue.
Chapter III Review of Literature

Dr. A.K Singh

Rural markets offer a great scope for FMCG Companies to market their products because of the
recent increase in rural incomes. The tough competition in the FMCG sector makes it important
to constantly revise the schemes as per the market conditions. Understanding the taste and
preference of the consumers provide useful insight into the market conditions and helps
companies devise their schemes accordingly. Proper distribution coverage is a powerful tool to
stimulate the demand which not only helps in retaining the present customers but can also attract
additional customers by offering better services. The right distribution objective is to get the
right goods to the right places at the right time for the least cost. The paper opted for an
exploratory study using the interview technique to solicit information from the distributors,
wholesalers, and retailers. The data were complemented by other information from Consumer
Behavior and Rural Marketing literature also. The distribution mechanisms and channel behavior
dimension of the rural market of Bhopal and Hoshangabad is analyzed. The channel behavior has
a critical influence on channel decisions and identifying how the distribution channel performs
would help us to understand how successfulness the company is. The paper includes implications
for understanding distribution management and channel behavior which are critical to Study the
Problems faced by the FMCG Distribution Channels in Rural Area of Bhopal &Hoshangabad
Districts of M.P.

DR. HAMID SAREMI

One of the main issues that marketing managers are faced with it is decisions about the
distribution of goods. Decisions about the structure of the distribution channel are important in at
least two dimensions. First, the decision has a direct effect on other marketing strategic planning
decisions (including pricing policy, advertising, packaging, etc). Second, decisions regarding
distribution channels require long-term commitment. It takes several years to be deployed to a
desired distribution system and can't be changed easily. Distribution means delivering the
product to the consumer at the right time and place. In marketing Association of America's
definition distribution channel is the structure of the organizational units within the company and
outside the company, brokers, wholesalers, and retailers that market goods or services.
Distribution channels always include the manufacturer and the final consumer, the main duty of
the distribution system is that place goods to potential customers in the right time and place.
Today managers becoming more important due to the distribution issue, according to the
distribution, physical distribution, and management of it and the cost and interaction between
analysis, planning, and control of service levels are physical tasks of distribution management.
Companies achieve competitive advantages using distributed systems.

DOMINIC ZIMON

The main aim of this publication is to analyze the influence of standardized quality management
systems for the betterment of distribution channels in the FMCG market. The research covered
20 deliberately chosen distribution channels of a large manufacturing company carrying out the
activity in the food industry in the FMCG market in SouthEastern Poland. For the research
process, channels are divided into two groups. In the first group were classified channels in
which all (or almost all) cells have implemented quality management systems (ISO 9001, ISO
9004 or ISO 22000). In the second group were classified channels in which intermediaries had
no standardized quality management systems. The research conducted process helped to answer
the research questions and the following conclusions: distribution channels with implemented
quality management systems in most cases have received better grades than other distribution
channels. In particular, their advantage is evident in aspects such as customer service, timeliness,
and accuracy.

Dr. P Selvaraj

The Fast Moving Consumer Goods (FMCG) sector is a cornerstone of the Indian economy. This
sector touches every aspect of human life. The FMCG producers now realize that there is a lot of
opportunity for them to enter the rural market. The sector is excited about the rural population
whose incomes are rising and the lifestyles are changing. There are as many middle-income
households in the rural areas as there are in the urban. Thus the rural marketing has been growing
steadily over the years and is now bigger than the urban market for FMCGs. Globally, the
FMCG sector has been successful in selling products to the lower and middle-income groups and
the same is true in India. Over 70% of sales are made to middle-class households today and over
50% of the middle class is in rural India. The sector is excited about a burgeoning rural
population whose incomes are rising and which is willing to spend on goods designed to improve
lifestyle. Also with a near saturation and cut-throat competition in urban India, many producers
of FMCGs are driven to chalk out bold new strategies for targeting the rural consumers in a big
way. But the rural penetration rates are low. This presents a tremendous opportunity for makers
of branded products who can convert consumers to buy branded products. Many companies
including MNCs and regional players started developing marketing strategies to lure the
untapped market. While developing the strategies, the marketers need to treat the rural consumer
differently from their counterparts in urban because they are economically, socially and psycho-
graphically different from each other. This paper covers the attractions for the FMCG marketers
to go to rural, the challenges, the difference between the rural and the urban market and the
suitable marketing strategy with the suitable example of companies and their experience in going
rural.

Githa S Hegde

The paper aims to identify channel design for effective bi-directional relations between the
company executives who are the representative of the manufacturers and the channel partners in
the FMCG sector, with special reference to the Indian scenario. The study focuses on the major
criteria that the channel managers and the distributors consider important for selecting and
designing the number and type of channel structures.

Zeng Xian-dong

The problem of marketing channels would seriously affect the production and operation of
enterprises, and the feature of FMCG industries makes this industry channel more complicated.
How to establish a good terminal channel management mechanism for effective distribution is a
significant problem that affects the survival of the enterprise. American Wrigley Candy
Company has very good sales performance and excellent goods condition in some cities of
Jiangsu. Its success comes from the deep comprehension of terminal channel management, and
good job of terminal market segmentation and intensive cultivation, that is,if enterprises want to
succeed now, they must pay attention to market overall layout and improve in details.

Avinash Milley

An effective distribution channel can be a source of strategic advantage for companies. However,
little research exists about the distribution channel structure in India, which is largely traditional
and unique. The first part of this round table article provides an overview of distribution
channels, particularly their constituents and structure, with a special focus on distribution
channels in India. The second part of the article reports on a panel discussion with eminent
academics and industry experts on the challenges that companies in India face in designing,
constructing, and managing distribution channels on the ground.

Midhat Saleem

The study is attempted to examine the competence of distribution in the progress of the FMCG
industry. Through this study, trying to realize the level of progress increment by distribution
channels. The outcomes attracted the study is absolutely in light of a study directed among the
retailers. With a direct-distribution framework, the marketer achieves the proposed last client of
their item by circulating the item straightforwardly to the distribution channels are characterized
and arranged. Their improvement is clarified and new potential outcomes of their advancement
in contemporary conditions are demonstrated. In this sense, a variety of distribution channels
exists, and also the contemporary understanding of overseeing supply chains and value creation
systems. The information was gathered from 35 retailers, who practice consistently. The
information required for the study has been gathered from the retailers through the questionnaire.
Analysis and interpretation has been done by using statistical tools. The outcomes from the study
demonstrate that the dominant part of the respondents are satisfied with the facilities offered by
the distributors. The intense rivalry in the FMCG part makes it imperative to always modify the
plans according to the economic situations.
Ioana Barin

Distribution includes all activities undertaken by the producer, alone or in cooperation, since the
end of the final finished products or services until they have consumers. The distribution consists
of the following major components: distribution channels or marketing channels, which together
form a distribution network; logistics or physical distribution. To effective achieve, distribution
of goods requires several activities and operational processes related to transit of goods from
producer to consumer, the best conditions, using existing distribution channels and logistics
system. One of the essential functions of a distribution is performing acts of sale, through which,
with the actual movement of goods, their change of ownership takes place, that the successful
transfer of ownership from producer to consumer. This is an itinerary in the economic cycle of
goods, called the distribution channel.

Mano Raj.

The Fast Moving Consumer Goods (FMCG) sector is a cornerstone of the Indian economy. This
sector touches every aspect of human life. The FMCG producers now realize that there is a lot of
opportunity for them to enter the rural market. The sector is excited about the rural population
whose incomes are rising and the lifestyles are changing. There are as many middle-income
households in the rural areas as there are in the urban. Thus the rural marketing has been growing
steadily over the years and is now bigger than the urban market for FMCGs. Globally, the
FMCG sector has been successful in selling products to the lower and middle-income groups and
the same is true in India. Over 70% of sales are made to middle-class households today and over
50% of the middle class is in rural India. The sector is excited about a burgeoning rural
population whose incomes are rising and which is willing to spend on goods designed to improve
lifestyle. Also with a near saturation and cutthroat...

Trevor Stanley

ABI has a sophisticated and effective distribution fleet which delivers canned and bottled non-
alcoholic beverages to 12000 wholesale and retail outlets in the Durban Metropole and 46000
outlets nationally. Delivery is normally executed once per week, 48 hours after a separate order
is taken by an account manager. In the more rural or "emerging market" areas traditional retail
outlets such as supermarkets and superettes are scarce and reliance is made on spaza and house
shops. Cash flow and storage space is limited. The sales and distribution calls are expensive,
relative to the size order that the spaza would place. Spaza shop owners rely on distributors or
collect from wholesalers. These outlets often run out of stock. Sales revenue is thus not
maximized. Outlet development is marginal. The writer embarked on a research project to
develop a sustainable and cost-effective Sales and Distribution model to address these constraints
in the Emerging Market territories of ABI Durban. Traditional theory turns to channel
distribution as a means to effectively reaching an entire retail market. Levels are thus added to
the distribution channel. The research, however, showed that service levels are sometimes
compromised. The model that was developed returns ABI to DSD (direct service delivery) via
specially designed vehicles and combines the function of "reseller" and "delivery merchandiser"
on a dedicated route. Although a marginal increase in cost per case has been experienced,
deliveries are direct to store, at least twice per week. Sales growth in these routes has been more
than 85% while the total Umlazi area grows at 13%. Customer service levels, as surveyed, are
exceptional. Although the model was specifically designed by ABI Durban for use in Durban,
the concept has been adopted as a best practice and is being "rolled out" across the business. By
the end of 2005, 10% of ABC's fleet nationally will function as MOTD (Merchandiser Order
Taker Driver) routes. Additional vehicles have been ordered for delivery during the period July
2005 to September 2005 for this to be achieved. This model has assisted ABI in achieving its
goal of maximizing DSD and lifting service levels to its customers (retailers). Revenue has
increased significantly along with volume in these areas. Invariably MOTD acts as a significant
barrier to competitor entry in those geographic areas where it is utilized. The Merchandiser
Order Taker Driver (MOTD) model is successful and has the potential for wider use, even in
more developed markets.

Rashid, Paola

The purpose of this thesis is to add empirical findings of IMC strategies utilizing digital- and
traditional marketing communication channels to build and maintain brand equity in the FMCG
industry. More specifically awareness, associations/image, and sales that are said to be critically
affected by communication are the focus of the study.
Joe Nyaga

The general objective was to investigate factors affecting the distribution of fast-moving
consumer goods (FMCG) in Kenya, with particular emphasis on Eveready East Africa Limited.
The study specifically aimed to; determine the effect of competition; establish the effect of price;
analyze the effect of promotion and investigate the effectiveness of demand forecasting on the
distribution of Eveready East Africa Ltd products. The study adopted a descriptive research
design and the study population comprised 120 distributors and staff assigned in market
territories in Kenya. The study applied a stratified sampling technique to select a total of 120
respondents. Questionnaires were used as the main data collection instruments and a pilot study
was conducted to pretest questionnaires for validity and reliability. Descriptive statistics data
analysis method was applied. The study findings indicated that the major factors affecting
distribution of the company's fast-moving consumer goods are; high competition from cheap
imports, high prices of the company FMCG in comparison to the competitors FMCGs,
application of ineffective promotion campaigns and lack of effective demand forecasting
systems. The study recommendations were; introduction of less expensive and high quality
FMCGs in the market that is dominated by cheap and poor quality imports; application of
effective pricing strategies like competitor based pricing; offering of effective promotion
methods such as sales promotion and continuous advertising and application of effective demand
and forecasting systems such as distribution requirement system and material requirement
system.

Githa S Hegde

This study focuses on the distribution strategy for enhanced channel partner performance in
Insurance, Mobile telecom and Fast-moving consumer goods (FMCG) Sectors. The dimensions
considered in the study were Motivating channel members, positive attitude towards the channel,
providing the channel members with market knowledge, conducive credit facility, constant and
effective communication and being aggressive. Results indicated a lesser correlation between the
distributors and channel managers of the insurance sector, whereas the Mobile telecom's
distributors correlated with that of the channel manager's attitude. The attitude of High
performing distributors and channel managers of FMCG sector were similar, while it did not
correlate with that of the low performing distributors.

Mirza Hasan Hosseini

Due to the industry globalizing and getting more competitive, today, more than any time else, we
feel the necessity of an integrated and coordinated distribution system for all industries
especially fast-moving consumer goods manufactures. In other words, distribution is the main
element in presenting products by marketers that indicates buyers the significance of availability
and trustworthiness of presenter as shopping objectives. The current study is carried out to
investigate the role of effective factors in selecting distribution channels and their significance
improving the competitive advantage of fast-moving consumer goods producers. This research
from its practical goals, the descriptive research method and data collecting is a scrolling type.
The research statistical society includes exporters, senior managers and certified marketers in
Ranchers Dairy Industry Company; therefore we disregard sampling due to the limitation of the
statistical society in line with the increase in research validity. The findings suggest a positive
and meaningful effect of substructure features, marketing ability and communication and
transition ability in choosing distribution channel. Due to the results, the choice of distribution
channel impacts the competitive advantage of the company as well.

Deepa Ingavale

The rural markets have been increasing steadily since the 1980s and are now bigger than the
urban market for both FMCGs (53%) and durables (59%). The rural consumer market, which
grow 25% in 2008 when demand in urban areas slowed due to global recession, is expected to
reach $425 billion in 2010-11 with 720 – 790 million customers which will be double the 2004-
05 market size of $220 billion. All smart marketers, Indian as well as MNCs, are trying to enter
into rural markets. Companies such as Hindustan Lever, Godrej, Colgate Palmolive, Parle Foods,
Philips, Dabur India have made inroads into the countryside. Rural reach is on the rise and it is
fast becoming the most important route to growth. Accessing rural markets presents challenges
to the marketers as these markets are geographically spread out with a large number of retail
outlets. A study on the buying behavior of rural consumers indicates that the rural retailers
influence 35% of purchase decision. India offers a huge, sustainable and growing rural market
that can be tapped effectively through innovative distribution channels with retailing being the
most critical element of this strategy as it is the final touchpoint. The paper focuses on the rural
distribution strategy and emerging distribution channels for rural market with due emphasis on
rural retailing.

Kaushik Manda

India has been witnessing a sea change in terms of competition since the decade of the nineties.
Indian players, especially players of FMCG, Cement & Durable, are compelled to change their
functional operations under this high degree of competition. Therefore, functional operation like
distribution management is considered important in terms of effectiveness & efficiency. For
effective & efficient distribution, marketers have to take not only the care of logistics but also
they have to take care of the behavioral management of channel partners. Globally accepted
literature have already proposed strategies of power & influence in this regard. But some of the
empirical researches have raised questions on the applicability of those strategies about
developing nations. Considering this question valid and relevant we have identified our research
plan vis-à-vis Indian distribution. For this study we have selected three objectives: i)
Development of scale for identification of channel control strategies of marketer, ii)
Identification of strategies for controlling channel partner, and iii) Identify the importance of
each specified strategies. For the empirical purpose of the present research, we have executed a
survey in the southern part of West Bengal, a state of India, with randomly selected 166
respondents who are distribution channel partners in the profession. We have selected the
southern part of the state of West Bengal because this region is having a representative character
of India. For attainment of first objective stated above, we have developed a valid and reliable
construct by combining items from the globally recognized scales of power & influence
strategies. We have reached second & third objectives by using appropriate statistical tools used
for Exploratory & Confirmatory factor analysis. Finally, we can identify four important strategic-
facets namely i) Intelligence ii) Big Bossing iii) Contract Orientation iv) Expert for Indian
distributions. Result indicates deviation from the global research outcome. Thus, the present
research is very much contributory to academic & management world, especially about
developing nations.
Odupitan, Aminat

The Fast Moving Consumable Goods (FMCG) sector in Nigeria is one of the largest sectors in
the country and its contribution to the economy cannot be overlooked. This sector is highly
important in the food industries which makes this study to focus on its distribution channels. This
study also focuses on its challenges that are related to the distribution channels.

This study aimed to help foreign investors that are investing in the food sector as well as
students, and sales representatives of the companies to understand the distribution channel that is
used in the sector by FMCG Companies in Nigeria. Some theories of marketing distribution
channels are used and which are collected from different sources such as books, articles, and
journals.

Both qualitative and quantitative research approach was used to elicit the information required
for this study. A random sampling method was used to select the participants of this study. The
study population in this study were FMCG companies in Lagos industrial area and managers and
distribution staff of FMCG companies. Questionnaires and phone interviews were used to obtain
information from respondents. Reliability and validity tests were conducted to ascertain the
precision of the data tools used in this study.

The findings in this study revealed the types of distribution channels that are used by fast-
moving consumable goods companies and some of the problems encountered the problems
which include; defaults in payment, stolen goods, poor infrastructure, presence of counterfeit
goods in the market place, quality issues,

discriminatory trade offers, inadequate training of sales personnel, etc.

The analysis of findings in this study suggests that these distribution channels may affect the
profitability, sales turnover, market share, productivity and revenue generated by FMCG
companies. Furthermore, FMCG companies must be willing to monitor their territory
management, business status, financial capability, and infrastructure compliance to ensure the
efficacy of distribution strategies.
James A. Adeniran

It has been suggested that a firm should adopt only a few variety of routes to market to minimize
channel conflicts. But today's consumers which have developed varied and complex choices and
preferences for where and how they want to purchase products are continuously forcing FMCGs
firms to tailor their channel design and configuration towards the multiplicity of channels.
Therefore, this study examines the effect of distribution intensity on consumer perception of
marketing utility about channel multiplicity. A cross-sectional survey research design was
adopted for data collection with the aid of a structured and closed-ended questionnaire. The
questionnaire was administered to 384 consumers across all the local government areas in Lagos.
Data was analyzed using descriptive and inferential (simple and multiple linear regression
analysis) statistics. Findings reveal that distribution intensity has a significant positive effect on
marketing utility perception of consumers of FMCGs products in Lagos State, Nigeria. Also, a
significant positive relationship was established between distribution intensity and channel
multiplicity. Further results show that channel multiplicity has a significant positive effect on
marketing utility perception. In a final analysis, the study reveals that distribution intensity and
channel multiplicity have a combined effect on marketing utility perception. In concluding, the
study gave useful recommendations.

Rajesh K. Aithal

This chapter explores the distribution challenges in Indian rural market and evaluates the various
strategies to approach rural markets. Reaching out to rural markets has been acknowledged as the
biggest challenge. This chapter discusses various strategies used by firms to reach out to rural
India. A set of six strategies of distribution in rural India has been identified. Major fast-moving
consumer goods (FMCG) firms which have serious interests in rural markets have been using
these strategies. The pros and cons of each distribution strategy have been elaborated. The
critical discussion of these six distribution strategies and future recommendations is expected to
enhance the understanding of marketers so that they can plan better for reaching to rural India.
Chapter IV Research Methodology
4.1 WORKING TITLE:

A Study of Effectiveness and Development of Distribution channel of Hangyo ice cream In

Bangalore Market.

4.2 PURPOSE OF THE RESEARCH:

Purpose of the research is to understand the current distribution structure of Hangyo, compare it
with the other players of the industry, identify issues and opportunities in the distribution system
of Hangyo . Distribution is one the important element of marketing mix and is important to
create accessibility for the consumer.

4.3 OBJECTIVES:

 To study the effectiveness and efficiency of the distribution channels.

 To find out the satisfaction of intermediaries of distribution channels.
 To study the market for Hangyo ice cream, PVT Ltd .

4.4 SCOPE OF THE STUDY:

The scope of the study was limited to Bangalore city and a sample size of 50 no of retailers and
20 no of distributors . The study also probes the preferences of the consumers and their
awareness towards Hangyo dairy product via retailers recommendation. Though the data may
look insufficient to present the findings and recommendations, it is clearly an indicative message
to the Brand to take up further research and steps for improvement

4.5 RESEARCH METHODLOGY:

The present study is aimed at discovering the effectiveness of the distribution channel and
potential market for Hangyo ice cream, the retailer's incentive for promoting Hangyo brand and
their level of satisfaction and factors affecting the effective distribution of Hangyo ice cream.

Therefore, research design adopted for the present study is exploratory in nature. The data
collection includes both primary and secondary.
4.6 SOURCE OF DATA

The study makes use of both primary and secondary sources. The primary sources consist
of personally questionnaires administered to the distributors and retailers. The secondary sources
of information about the ice cream market and the company information has been collected from
the office records and Internet.

4.7 DATA COLLECTION – SURVEY METHOD

Two separate structured questionnaires were to take responses from retailers and distributors .
The two questionnaires were pre tested and necessary changes were made accordingly.

4.8 SAMPLING

 For this study the main sampling units were the distributors and retailers who deal
directly in Hangyo products. The sample size is 50 retail outlets and 20 distributers from
Bangalore city and surrounding area.

4.9 LIMITATIONS OF THE STUDY

 The study was limited to the areas that were covered by the 20 distributors in
the Bangalore city. So the results cannot be represented to all the of the company
 Study was restricted only to 50 retailer outlets of Bangalore city.
 The study was restricted to understand the channel effectiveness of only those that
represent the sample collected.
Chapter V Data Analysis

5.1 DATA ANALYSIS OF DISTRIBUTORS

Table no -5.1
Table no -5.2
 DISTRIBUTORS ANNUAL TURNOVER

750000 TO 4000000

6100000 TO ABOVE

Total
TURNOVER

4100000 TO 6000000

1 3 5 7 9 11 13
4100000 TO 6000000 6100000 TO ABOVE 750000 TO 4000000

Total 12 5 3

NO OF DISTRIBUTORS

Graph-5.5

The annual turnover of Hangyo distributors at the lowest point is Rs 750000, on the other hand,
the highest sale is Rs 47425159. here we can say the turnover of distributors will differ with the
area of service and no of retailer he is serving. On Average, we can see the sale of distributors
ranging from Rs 4100000 to Rs 6000000 (12 distributors ) and above that range, only five
distributors are coming.
 margin you get from the product Hangyo ice cream (in %)
Kollar Sri Chowdeshwari Enterprises 9%
9%
M S Enterprises 9%
9%
Krishna Enterprises 9%
6%
Maruti Enterprises 9%
9%
V S S Enterprises 9%
9%
Ananya Enterprises 9%
name of the distributor

9%
Core Marketing Agency 9%
9%
Nandi Enterprises 9%
9%
Vishwas Traders 6%
6%
SLV Enterprises 6%
6%
Kruthi Enterprises 6%
6%
Sri Vinayaka 9%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
margin % offered by company

Graph-5.6

Above graph is showing the margins offered to distributors by the hangyo company.
6 % margin is offered to 7 no of distributors and to 9 % margin is offered to 16 no of distributors
which is at par throughout the industry. the margin of the distributors depends on business
turnover and other things.
 What is the credit period that you avail ?
110%
1

90%

70%
% of distributors

50%

30%

10%

10 to 15 Days 15 to 30 Days 30 to 45 Days

Count of NAME OF DISTRIBUTOR 1 NaN NaN

no of days credit period

Graph-5.7

The credit period is an important factor in the distribution process. This is additional benefits for
distributors on the other hand credit period will help to keep free product flow in the market. this
is the major reason for the distributor to get attracted towards the brand. Hangyo company will
give credit period of 15 days which is better than other players.
 Why did you choose the brand for distribution ?
65% 60%
55%
45%
35%
25%
15% 15%
% of retailers

15% 10%
5%
Good demand Attractive margins Incentive plan Good quality of prod-
uct
Count of NAME OF 15% 60% 15% 10%
DISTRIBUTOR

Reasons

Graph-5.8

There are many reasons to choose hangyo brand from distributors.attractive margin of product is
the main reason to attract distributors towards hangyo because the margin offer by Hangyo is
good compare to competitors margin.
 5) What is the number of outlets do you
service?
12
11

10
8
8
NO OF DISTRIBUTORS

6
4
4

0
 1 0 1 –1 5 0  5 0 o r b el o w  51 – 100

NO OF OUTLET SERVED BY DISTRIBUTORS

Graph-5.9

The above data shows that 11 no of distributors are handling 50 or less than 50 retailers and 8 no
of distributors serving 51 to 100 retailer points whereas only 4 no of distributors are handling
100 to 150 retailers. Here we can say on average hangyo distributors are serving 50 retailer
points.
 Graph-5.10

The distributors are fully satisfied with salesman cooperation and overall support which is good
for the company but on the other side around 45 % of distributors dissatisfied with timely supply.
Also, more dissatisfaction is coming from replacement policy which is around 60 % of
distributors and after-sales service dissatisfaction level is at 20 % .company must need to take
corrective action on timely supply and replacement policy.
 7) What are the most frequently faced problems in Hangyo ice
creams ?
95% 95%
95%
85%
75%
65%
55%
45%
% of distributors

35%
25%
15%
5%
5%
 Availability of stock  Packaging  Quality

Count of NAME OF DISTRIBU- 95% 95% 5%

TOR

Problems faced by distributors

Graph-5.11

The recent problem faced by distributors are related to stock availability in season and
packaging-related issues. both kinds of problem is faced by almost 95 % of distributors.these
problem company needs to take in consideration to increase the market share of Bangalore.
 9) Do you have any problems with Hangyo distribution
network?
7.5 7 7
6.5
5.5 5
4.5 4
NO OF DISTRIBUTORS

3.5 Total
2.5
1.5
0.5
No Product availability Replacement Policy Timely Supply of
products
Total 4 7 7 5

PROBLEM FACED BY DISTRIBUTORS

Graph-5.13

19 no of the distributors are having problems with the distribution system because of various
reasons like product return policy,Product availability, timely supply of product. Remaining 4 no
of distributors are satisfied with the distribution system.in this situation company should take
corrective measures to increase the efficiency of distribution channels.
 7)Are you facing any problem with the salesperson ?
85%
85%
75%
65%
55%
% of distributors

45%
35%
25%
15% 15%
15%
5%
No Yes communication gap
Count of NAME OF DISTRIBUTOR 85% 15% 15%

problems

Graph-5.14

Out of total distributors, 85 % of distributors don't have a problem with company salesperson.
That shows that the relationship between distributor and salesperson which will help the
company for future sales growth. Only 15 % of distributors are having problems with
salesperson related to communication gap.
 11) Please suggest a few measures aimed at improving the
share of Hangyo ice creams in general:
9.5 9
8.5
7.5 7
6.5 6
5.5
4.5
no of distributors

3.5
2.5
1.5 1
0.5
Brand promotion Don't change price of Improvement in product Quality of product
products again and delivery
again
Total 9 6 7 1

measures

Graph-5.15

From the above pie chart we can see that the suggestion given by distributors to improve the
share of hangyo in the market, the majority of suggestions is relating to the promotional activities
which is 50 % .the 27.3 % of suggestion are for improvement in the delivery of the product. and
another suggestion is relating to product range and product quality.
 what kind of promotional support you are getting from the
company please specify
12 10
10
8 7
6
6
4
2
0
NO OF DISTRIBUTORS

g
din

rs
ran

ct
ffe

du
B

Pro
rs

nt
ze

ou

of
ree

is c

ng
t, F

,D

pli
uc

am
din
rod

,S
ran
fP

g
din
B
so

rs

ran
l et

ze
ph

ree

B
rs
m

t, F

ze
Pa

ree
uc

PROMOTIONAL SUPPORT
s&

rod

t, F
ing

fP

uc
ard

so

rod
Ho

l et

fP
ph

so
m

l et
Pa

Graph-5.16
ph
s&

m
Pa
ing

s&
ard

ing
Ho

ard

From the above graph we can see that the company is giving hoardings, pamphlets and freezers branding
Ho

support to every distributor and 17 no of distributors are getting additional promotional support like
discount offers and sampling of products.
 13) What is the credit period that you give it to the retailer ?

11
10

7
7
6
NO OF DISTRIBUTORS

5 TO 7 DAYS 7 TO 10 DAYS 7 TO 15 DAYS

Total 10 7 6

NO OF DAYS CREDIT

Graph-5.17

Here we can see that the credit period differs with distributor .10 no of distributors(43.5 %) give
a 5 to 7 day credit period to retailer.7 no of (30.4 %) gives 7 to 10 days credit period and 6 no
(26 %) of distributors give credit period up to 15 days.
 Salesman faces any problem while selling product to the re-
tailers ?
95%
86%
85%
75%
65%
55%
% of distributors

45%
35%
25%
14% 14%
15%
5%
No Yes margin related issues
Count of NAME OF DISTRIBUTOR 86% 14% 14%

issues

Graph-5.18

86 % of distributors are saying they don't face problems while selling products to the retailers
only about 14 % of distributors faced problems from retailers regarding additional margins on
product.
 16) what is company policy for slow -moving or non- moving
product please specify
15 14
13
11
9
9
NO OF DISTRIBUTORS

7
5
3
1
Discount Offers, Sampling of Product, stock Re- Discount Offers, stock Return
turn
Total 9 14

PROMOTIONAL SUPPORT

Graph-5.19

Company is givign various option for slow moving product like discount offers,sampling of
product and stock return.but here I will suggest instead of giving stock return focus more on
discount offers and sampling of the product.
5.2 DATA ANALYSIS OF RETAILERS

Table no -5.3
Table no -5.4
Table no -5.5

Table no -5.6
 Count of Name of the Retailer: by Turnover of Ice cream:
(Monthly Sale in Thousand)
47.5
43
42.5
37.5
32.5
NO OF RETAILERS

27.5
22.5
17.5
12.5
7.5 4 4
2.5
31000-60000 4000-30000 60000 AND ABOVE
Total 4 43 4

SALES TURNOVER

.
Graph-5.20

Hangyo company retailer sales ranging from 4000 to 94000 Rs depending on the retailer type.
around 43 no retailers are doing 4000 to 30000 Rs which are 43 no retailer and above 60000 are
only 4 no of retailers so company should push more retailer into above 60000 category for
increasing the market share.
 If customer ask you which brand do you promote?
27.50%
27.50%
23.50%
22.50%
19.60%
17.50% 15.70%
13.70%
12.50%
% of Retailers

7.50%

2.50%

Hangyo Amul Cream bell Joy Kwality walls

Count of NAME OF DISTRIBU- 19.60% 15.70% 27.50% 23.50% 13.70%
TOR

preferred brand

Graph-5.22

Cream bell and Joy is most preferred brand by retailers for promoting because of various reasons
like product quality,product variants,retail margin etc. whereas only 19.6 % retailers prefer
Hangyo brand for promoting.Amul and kwality walls is preferred by 15.7 % and 13.7 %
respectively.Hangyo brand should take some corrective action for attracting retailers towards
Hangyo brand.
 Please indicate the ownership of ice cream freezer in your out-
let
95.00% 90.20%
85.00%
75.00%
65.00%
55.00%
45.00%
35.00%
% of retailer

25.00%
13.70%
15.00% 9.80%
5.00% 2.00%
Company owned My own ice cream My own refrigerator company own refrig-
freezer freezer erator
Count of 90.20% 13.70% 9.80% 2.00%
NAME OF
DISTRIBUTOR

ownership of freezer

Graph-5.23

From the above graph we can see that almost 90 % of retailers using company-owned freezer
whereas only 13 % retailers using their freezer .here I will say the Hangyo brand is having an
added advantage from other brand because by offering free company freezer they trying to
motivate retailer for more sales. also, the company freezer will give allocated space and proper
display to the Hangyo product (increase the visibility ) that will help the company to keep
competitors away.
 Please indicate the storage capacity of the freezer in your out-
let
42.50% 39.20%
37.50%
33.30%
32.50%
27.50%
27.50%
22.50%
No of retailers

17.50%
12.50%
7.50%
2.50%
100-250 ltr 250-400 ltr 400 and more ltr
No of Retailers 33.30% 27.50% 39.20%

storage capacity

Graph-5.24

From the above image we can conclude that 33 % of Hangyo retailers are having freezer with a
storage capacity of 100-250 ltr .and 39 % retailers are having storage capacity more than 400 ltr
which is more suitable for store enough quantity of ice cream and the frequency of distribution
can be regulated thereby saving on the cost .400 ltr capacity freezers used by institution,
supermarkets and hotels (Retailer type)which are having more sale.
Segment wise sales

Sale of cups by retailers

10

1000 to 5000
10001 to 20000
4 20001 and above
5001 to10000
3

37

Graph-5.25

Sale of Bricks by retailers

2
2 1000 to 5000
10001 to 20000
20001 and above
5001 to10000

42

Graph-5.26
 Sale of cones by retailers

13

1000 to 5000
10001 to 20000
20001 and above
5001 to10000
29
5

Graph-5.27
The above three graph is showing the Hangyo sale segment-wise sale.here we can see among all
product cones category is more preferred by the consumer compare to other category as per
information the cone category will contribute almost 50 % sale to retailer monthly sale .secondly
the cups category preferred by consumers and lastly bricks contributes to the sale so here I will
suggest company need to take some action to improve the sale of bricks that will help the
company to increase overall sale.
sss

Product Range of Hangyo

95.00%
86.00%
85.00%
75.00%
65.00%
55.00%
No of Retailers

45.00%
35.00%
25.00%
14.00%
15.00%
5.00%
Dissatisfied Okay
Count of name of Retailers 86.00% 14.00%

Satisfaction Level

Graph-5.29

From the above graph we can predict that almost 86 % retailers are unhappy with the product
range of hangyo ice cream that will be demotivational factor to retailer to suggest the hangyo
brand to customers.almost 14 % of retailers partially happy with the product range which is
offered by hangyo brand so company need to focus on product range to survive in competitive
market
 Satisfaction Level of Replacement Policy

95.00% 92.20%
85.00%
75.00%
65.00%
55.00%
No of Retailers

45.00%
35.00%
25.00%
15.00% 7.80%
5.00%
Dissatisfied Okay
Count of name of Retailers 92.20% 7.80%

Satisfaction level

Graph-5.30

From the above graph, we can see that almost 92 % of retailers are dissatisfied with the
companies’ replacement policy. here I would like to suggest that the company really needs to
take corrective action on the replacement policy of the product. Corrective action will boost the
motivation level of retailers that will help the company to improve brand loyalty among the
retailers. And only 8 % retailers are partially happy with replacement policy.
 Satisfaction level on Salesman Interaction
95.00% 88.20%
85.00%
75.00%
65.00%
55.00%
No of retailers %

45.00%
35.00%
25.00%
15.00%
5.90% 5.90%
5.00%
Dissatisfied Okay Satisfied
Count of name of Retailers 5.90% 5.90% 88.20%

Satisfaction Level

Graph-5.31

From the above graph we can see that almost 88% of retailers happy with the salesman
interaction ( sales executive from Hangyo ) like regular visits to distributor point, taking sales
orders ,follow up for the purchase order with distributors ,taking promotional activities for
hangyo brand at distributor point etc. this factor for hangyo brand is beneficial because it will
help to increase the effectiveness of distribution channels.
 New Product offerings
75.00%
68.60%
65.00%

55.00%

45.00%
No of retailers

35.00%

25.00% 21.60%

15.00% 9.80%
5.00%
Dissatisfied Satisfied Okay
Count of name of Retailers 68.60% 21.60% 9.80%

Axis Title

Graph-5.32

The graph depicts that almost 69 % of retailers are unhappy with the new product offering with
hangyo brand that will dimotivate retailers to attract towards Hangyo brand and the ultimate
result will be decreased sales of Hangyo.only 21 % is satisfied retailers whereas 10 % retailers
okay with new offering.
 Table no -5.7

Here we can see some suggestions from retailers to increase the hangyo market share .the
suggestions are on brand promotion because hangyo only work on below the line promotional
strategy so some retailers are suggesting for above the line and online promotional strategies to
increase brand awareness.
Also, some retailers suggesting offers and more margins on products that will keep motivating
retailers to push Hangyo brand in the market.
5.3 COMPETITIVE ANALYSIS

Table no -5.8

Graph-5.33
RETAILERS MARGINS AND MARKET SIZE (IN FIGURE)

BRAND MARGINS MARKET SIZE

HANGYO 25% 15 Cr (PA)

DAIRY DAY 25% 30 Cr (PA)

KWALITY WALLS 20% 40 Cr (PA)

JOY 27% 20 Cr (PA)

AMUL 18 to 21% 40 Cr (PA)

ARUN 20 % 20 Cr (PA)

HAVMOR 21 to 23% 03 Cr (PA)

DAIRY RICH 25 to 28% 08 Cr (PA)

LOCAL BRANDS 25 to30% 15 Cr (PA)

Table no -5.9
4 P’s OF Hangyo Ice Cream

Hangyo is one of the main ice cream producers from Karnataka. The company ‘Hangyo ice
cream private limited’ was established in the year 2002. Most of the products of the brand
Hangyo are milked based.

The ice cream market has become quite competitive because of the entry of many wonderful
brands. Stiff competition from brands like Amul, Mother Dairy, Havmor, Dairy day and Vadilal
has been a wake-up call for the producers of Hangyo ice cream. They have now incorporated
many new flavors and variety of products to counter-attack their competitors and to maintain a
long-lasting relationship with their consumer base.

Product

To entice the customers who were inclined towards traditional sweets the company launched a
determined campaign to convert them into buyers. Hangyo has introduced some blockbuster ice
creams with new assortment of flavors and ethnic tastes especially for them.

its product category ‘Bars and Candies’ was launched that dealt with ice creams and targeted
the Children. Later delicious products like Calypso, Twisto, Raspberry Dolly, Caramello and
Rave also featured in the Range.

Hangyo started the mouth-watering ‘Cones’, range, targeting the younger generation. This
product was romanticized with an apt Tag line, "Share a Smile " it added Strawberry Cones,
Butterscotch and Chocolate to its portfolio. Two combinations hangyo-pannacotta and hangyo -
blackcurrant were included in the range of premium cones.

Another product to join this winner club is ‘Hangyo -Nutty Bar’. This flavor signifies the Love
Season and is a delicious combination of Cashew and Pistachio flavors. It has stuffing of
Caramel Sauce and has toppings of Almond pieces and Cashew.
Some products of Hangyo Brand

PRODUCT SIZE (in ml) PRICE(in Rs)

Aam musti cone 80 ml 20 Rs

Fun treat black currant 125 ml 30 Rs

Panacotta cone 120 ml 40 Rs

Matka kulfi 100 ml 30 Rs

Calypso orange & vanilla 60 ml 25 Rs

Cookies & cream 1000 ml 250 Rs

Spanish delite 1000 ml 250 Rs

Belgian chocolate 1000 ml 270 Rs

Vegan coconut 125 ml 50 Rs

Table no-5.10

Place

The Hangyo ice creams are available at various category of outlet like retail outlet,hotel
restaurant and café, bakery shops, juice centre, institutional outlet etc.in bangalore market
Hangyo products are available with more than 1000 retail outlet. for placing premium product in
the market Hangyo choose modern trade and company owned outlet.

Hangyo ice creams are sold in many Indian cities like Bangalore, Mangalore, Pune, Mumbai,
Hyderabad and Chennai.
Price

To grasp the maximum consumer value the strategy is value-based pricing. To sustain in the
market competition, it has introduced a variety of products ranging from minimum cost to
reasonable prices to even premium price.

Price range of Hangyo products

PRODUCT CATEGORY SIZE (in ml) PRICE (in Rs)

Orange bar bar 35 ml 10 Rs

Mango bar bar 60 ml 25 Rs

Nutty bar bar 60 ml 30 Rs

Belgian chocolate (rave) bar 60 ml 60 Rs

Kesar pista kulfi kulfi 60 ml 30 Rs

Mango kulfi Kulfi 60 ml 25 Rs

Pineapple & grape candy candies 50 ml 5 Rs

Juicy mango candies 50 ml 10 Rs

Black currant cone cone 120 ml 30 Rs

Panacotta cone cone 120 ml 40 Rs

Chocolate cone cone 50 ml 15 Rs

Aam masti cone 80 ml 20 Rs

Kaju draksh tub 1000 ml 220 Rs

Roasted almond tub 1000 ml 270 Rs

Vegan coconut tub 500 ml 200 Rs

 Mysore pak Tub 125 ml 35 Rs

Pink guava tub 125 ml 35 Rs

Table no-5.11

Promotions

Hangyo has taken several initiatives to capture the ice cream market and these steps have been
executed in phases. Hangyo brand believe in below the line promotion strategy where they
provide hoarding of brand, boards for outlet, standees, coloring of outlet, pamphlets, freezer
branding this kind of facilities given to retailer and distributor to brand promotion.

Capitalizing the social and visible media Hangyo has launched some interesting and creative ads.
brand ambassadors is the famous actress, Rashmi Desai have made the Cone ad immortal. Eating
an ice cream have never brought upon an exotic feeling before.

SWOT ANALYSIS

Hangyo Ice Cream SWOT Analysis

 Strengths:- Weaknesses:-

1. Strengths are attributes of the organization 1. The weaknesses of the company are as
that are helpful to the below:
2. achievement of the objective. The strengths 2. Scarcity of water in the Company.
of the company are: 3. No local procurement of milk.
3. Good Image in market. 4. No aggressive marketing.
4. Each department in the organization is very 5. Lack of delegation of power.
coordinative with each other
5. Wide product profile of the company.
6. It is located in the place where good
infrastructure is available.
7. Experienced management.
8. Ideally located.

Opportunities:- Threats:-

1. Increasing demand for the products. 1. Stiff competition by brands like Ideal,
2. Scope for extension of market. Amul etc.
3. Market for skimmed ice cream powder and 2. Price regulated by government.
other products are strengthening. 3. Strong supply chain management by the
4. Expanding production capacity. competitors.
4. Threat of new entrant to ice cream industry.

Table no-5.12

Amul Ice Cream SWOT Analysis

 Strengths:- Weaknesses:-

1. Good product range include various flavors, 1. Growing competition from international and
party packs, sticks, cones etc other brands means limited market share
2. Good quality and packaging, and good 2. Limited international presence as compared
advertising to leading global brands
3. Amul is one of the most respected top-of-
the-mind brands
4. Also launched probiotic and sugar free ice-
creams
5. Offers over 200 products across India

Opportunities:- Threats:-

1. High End ice-cream to tap the higher 1. Kulfi in rural markets

income group also 2. Local ice creams and sweet dishes
2. Tie-up with food chains, restaurants 3. Health conscious people refraining from
3. Mobile vans for better visibility sweets

Table no-5.13

Kwality Walls SWOT Analysis

 Strengths:- Weaknesses:-

1. Strong brand name 1. Food products have a limited shelf life

2.Excellent advertising and visibility
3.Good product distribution and availability
4.Lots of flavors and varieties available

Opportunities:- Threats:-

1.Better and newer flavors 1.Threat from existing ice-cream brands

2.Local Kulfis

Table no-5.14

Arun Ice cream SWOT Analysis

 Strengths:- Weaknesses:-

1. Unparalleled service to customers through 1.Stronger competition stifling its growth

exclusive franchise parlors 2. Brand visibility lower than other major
2. More than 70 mouth-watering ice cream players
flavors and combinations
3. The first Indian ice cream brand to be
certified ISO 9000
4. Attracting more children by offering toys
along with ice creams
5. High quality products with good attractive
packaging and distribution

Opportunities:- Threats:-

1. Explore the premium segment and come up 1. Other competitors also offering products at
with varieties, which cater to the adult similar quality and price
population 2. Most people are not really brand conscious,
2. Increase the distribution network to other so loyalty might be an issue
parts of the country

Chapter VI FINDINGS
  Distributors face a major problem of timely delivery of the products, especially during the peak
seasons
 Distributors also have a problem of sales returns and delays in the replacement policy for Hangyo
ice cream brand
 Most of the distributors of Hangyo are quite satisfied with its services and they have a good
relationship with retailers
 The retailers of Hangyo have a problem with the replacement policy and availability of stock with
the distributor.
 Good demand and good quality are the major reasons for the distributors and retailers for
promoting and opting for the brand Hangyo
 Good quality, good taste, and best consumer offers are the major reasons for customer preference
of the brand Hangyo
 The distributors and retailers feel that the consumer offers should continue in Hangyo ice cream
brand
 The company mostly focus on the below the line promotional activities so brand awareness is low
compared to other competitors.
 Maximum no of Hangyo distributors are having problems with retailers related to credit policy
and margin problems.
 The salesman relationship with Hangyo distributors is very good which will help the company for
future sales growth.
 Most of the distributors are revealing that the company needs to focus on more promotional
activities.
 For non-moving products, the company gives additional discounts and sampling of products to
liquidate the product stock.
 Hangyo ice cream brand is having approximately 15 crore annual business in Bangalore market
and having a 7.85 % market share of Bangalore.

Chapter VII Conclusions & Recommendations

Conclusions

The survey conducted provides a clear picture of the Hangyo brand. The distribution network of
the Hangyo brand is weak compared to other players in the ice cream market. Hangyo brand has
more dissatisfaction levels among intermediaries because of various reasons like product
availability, retailer margins, product replacement policy, credit period, etc.

Hangyo brand awareness is very low compared to other competitor because the company only
focusing on below the line promotional strategies.

In the product variety, some product is not produced by Hangyo which will be beneficial for the
competitors like 10 Rs cone variant not available with Hangyo.

Most of the retailers are not getting attracted towards Hangyo brand because of various reasons
like no attractive margins, new product offering is not effective compared to competitor products
so the market share of Hangyo is not increasing in Bangalore market.

Recommendations

 Hangyo brands should take corrective measures to improve the distribution channel
network.
 Hangyo brands should focus on promotional activities to increase brand awareness
among the customers.
 The Hangyo brand could satisfy the consumer by giving good offers compared to
competitors but at the same time, Hangyo can improve support to distributors and
retailers through new product offerings, trade promotion for both and POP displays in-
retail outlet.
 The transportation cost and effort of the distribution channels can be reduced by
increasing freezer storage capacities to optimum level based on demand for ice cream in
their retail outlet.
 Customer prefers ice cream based on quality, price, taste, flavor and offers given by the
company. Hangyo ice cream was provided with, taste and best quality. But flavors in
Hangyo ice cream were less compared to other competitors so Hangyo can be improved
with different varieties of flavors.
 The company should try to understand the customer preferences of their unearthed
desires and place them into different product categories. The customer has to be provided
with better services to show loyalty towards the brand. Similarly, distributors and
retailers have to be maintained by providing them better service and offers for promoting
their sales, in turn, increase the company sales and turnover.