1. INDIAN INSTITUTE OF TECHNOLOGY ROORKEE
PRESENTATION TOPIC-
Presented By-
ANANT SIROHI (15810003)
Distribution Channels in FMCG Industry
2. 2
What is FMCG?
• Fast Moving Consumer Goods.
• Also Known as CPG- Consumer Packaged Goods.
• Short Shelf life.
• Low Margin and High Volume.
• Examples- Cold Drinks, Soap, Processed Food, etc.
• Major Companies- Nestle, ITC, HUL, GSK, P&G, etc.
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FMCG MARKET IN INDIA
• Market is Excepted to reach US$ 12.5
Billion in 2015 and US$ 20.6 Billion by
2020.
• Urban Markets account for 65% of
Total Revenues.
• In Terms of Products:-
Food Products - 43% of Overall Market
Personal Care - 22% of Overall Market
Fabric Care - 12% of Overall Market
• Government Policies and Regulatory
Frameworks are major growth drivers.
6. 6
DISTRIBUTION CHANNEL
• Path or Pipeline through which Goods and Services flow.
• It can be Short or Long.
• In Long Channels, Price increases till the Product reaches
the Consumers.
7. 7
WHY STRONG DISTRIBUTION CHANNEL?
• Large Market to Cover.
• Products are Confined to Day to Day Basic.
• Perishable Items have Low Shelf life.
• High Profitability can be achieved through High Sales
Volume.
• Minimize Inventory Cost.
8. 8
TYPES OF DISTRIBUTION CHANNELS
1. Manufacturer to Customer
2. Manufacturer to Retailer to Customer
3. Manufacturer to Wholesaler to Retailer to Customer
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MANUFACTURER TO CUSTOMER
• Direct selling.
• No Middleman is Involved.
• Example- Bata.
• Simplest and Shortest Channel.
• Fast and Economical.
• Adopted by Both Small producers and Big Firms.
Manufacturer Customer
10. 10
MANUFACTURER TO RETAILER TO CUSTOMER
• One Stage Distribution Channel.
• One Middleman i.e. Retailer.
• Producers Sell to Big Retailers, Departmental Stores or
Chain stores.
• Retailers sell the Products to Ultimate Consumers.
• Retailers purchase in Large Quantity.
• Example- Refrigerators, TV Sets, Washing Machines, etc.
RetailerManufacturer Consumer
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MANUFACTURER TO WHOLESALER TO
RETAILER TO CONSUMER
• Traditional Channel of Distribution.
• Two Middleman i.e. Wholesaler and Retailer.
• Suitable for products with Widely Scattered Market.
• Example- Groceries, Drugs, Cosmetics, etc.
• Suitable for Small Producers with Narrow Product Line.
• Service and Promotional Support given by Wholesaler.
Manufacturer ConsumerRetailerWholesaler
