Distribution Plan for Yummy Ltd.

8/12/2019 Distribution Plan for Yummy Ltd.

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5 DISTRIBUTION PLAN

5.1 Target Market Segment StrategyThese activities include the advertising, product promotion, retail management, etc. The

activities are performed to make sure that the products are transferred to the targeted

customer groups. We are targeting the customers of age group 18-30 who are young or

working couples, as they have time constrains & ready to accept new product for experiment.

We will be using a two-level distribution framework by selling direct to retailers and cutting out

only the wholesalers. A retailer could do the same thing by going directly to manufacturers.

The distributor person will be on commission base. A prior training will be given to the

distributors for effective & timely distribution of the product. He will be targeting the product

to be distributed initially only in supermarkets like Big Bazar, Easy day, reliance Fresh, More &

some small private owned outlets. The distributor will insist the retailer to keep our product in

grocery section beside where the unflavored rice packets are kept. The distributor will also

design a small window where our item will be kept, which is attractive & self explanatory for

the launch of new product. This will act as a self advertising of the product & will gain customer

attention towards our new product.


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5.2 TechnologyTo streamline the efficiency of our distribution methods, we will be using the latest in cutting edge

technology not only in the warehouse but also in the trade & manufacturing. We will be having

advanced equipments installed for processing & packaging, also equipped with software to manage

returns and collections; adjusting item price, profit or margin; applying promotional items to an account;

streamlining orders; tracking inventory; reducing out-of-stocks; and providing sales history reports. All

information recorded in the software is available in real time to be viewed by management in the office.

5.3 PackagingProper distribution of rice requires having rice packaged in various sizes. Since we are providing

precooked rice which can be prepared instantly following sizes will be available for consumer:-

1.250gm

2.500gm

3.1 Kg

4.5 Kg

50 kg packet (plastic sack) for warehouse storage before secondary processing is done.All the information related to nutrition, recipes as well as batch number, bar code, address,

MRP, etc. will be printed in each and every pack. The packaging meets all regulatory

requirements


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5.4 Distribution PatternDirect Distribution

Direct contact between producer and customer. Most common in B2B markets. Often found in the marketing of new products. Internet is helping companies distribute directly to consumer market.

In distribution channel e-choupals shall be implemented to obtain finest basmati rice for the

production of flavored basmati rice directly from farmers. The e-choupals initiative provides

computers and Internet access in rural areas across several agricultural regions of the country,

where the farmers can directly negotiate the sale of their produce .This backward integration

gives them two distinct advantages. The first being reduction in the cost of basmati rice by

around 2 percent as no middlemen is involved in the process. The second advantage is of

course quality.

The penchant for basmati rice among South Indians has kept the region among the top

consumer of the product among all other Indian states. Despite shooting rice prices for over a

year, there has been no major dip in demand from the southern part of the country that still

constitutes a lions share ofdomestic consumption of the rice. South India alone constitutes

about 30-35 per cent of the market in the branded basmati rice category.


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As the above chart show northern states are leading cultivating states of Basmati Rice

production in India. Among the northern states Haryana contribute 50% of production.

The organically farmed basmati rice will be produced & cultivated in Karnal in North, a place of

Haryana state & this spatial discrepancy can be overcome by setting up unit for riceprocessing(removal of husk and 50 kg packaging) in Kurukshetra which is 35-40 Km from Karnal

where basmati rice is collected via E-choupals directly from farmers. Hence the processed 50 Kg

packed bags will be transported to Salem in south,Tamil Nadu State via rail route.

Once the product reaches Salem and stored in a warehouse which is hygienic & equipped with

all the basic facilities like reptile protection, climate protection & security.

Here there will be industry for further rice processing (addition of flavor, pre cook and

packaging) for direct dispatch to retailers.

Logistics is the activities involved in controlling the flow of goods, services, and informationamong members of the supply chain.

Here physical product distribution method will be applied in which product are sold in a master

pack and require a cutting, or breaking down of the master pack to be sold in smaller

quantities. So 50-200 packs of (250gm,500gm,1 kg,5kg packet) will be packed will be manually

packed in a carton box containing different flavors. As there is good connectivity to Southern

Tier 1 and Tier 2 cities by road, it will be transported to the market of South and surrounding

areas through mini transport vehicles as well as to East using rented trucks. The warehouse &

industry in charge of Salem will be responsible for the distribution and transportation once the

product reaches their storage area i.e. warehouse. The basic focus will be on tire 1 & 2 cities of

South & East such as:

Bangalore, Chennai, Hyderabad, Mangalore, Vijayawada, Vishakhapatnam, Coimbatore, Cochin,

Trivendrapuram, Kazikot, Mysore

Bhubaneswar, Cuttack, Rourkela


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5.5 Storing

Certain portion of the product (i.e. rice with husk) should be preserved as a seed for next

plantation. Storing the seeds is one of the important factors that increase the production oforganic basmati rice. The major problem in the reducing production of organic basmati rice is

mutated seeds hence to eradicate such problem the seeds will be scrutinized to identify

mutated seeds and non mutated seeds (with the help of farmers and other stakeholders) after

segregating the mutated seeds from non mutated seeds only those seeds which are

not mutated will be selected and stored for next plantation, this will help in preserving the

genuine organic basmati rice as well as increase in production to certain extent. The storage

facilities thus built will have the basic feature to preserve those seeds.

The final product (i.e. organic basmati rice) will also be stored, in fact 5% of the total purchase

from farmers will be stored as a safety margin stock, whereas 95% of the total production will

be sold in the market. Minimum inventory levels must be maintained to ensure that there is noloss of sales due to problems such as late shipments and back orders.

5.6 Services, Terms & Conditions:

There will be term with the retailer for payment within 10 days from product delivery.

Discounts for early payment but no impose penalties for late payment in the early stages. In

spite of these a retailer & the distributor will be awarded to encourage their achievements of

targets. We will have customer care for handling queries & receiving feedback of the product

from customers & retailers.

Distribution Plan for Yummy Ltd.

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