Summer Internship Report

Company Name:

FieldFresh Foods Pvt. Ltd. (Del Monte), Bengaluru

Project Title:

Analysis & optimization of sales and distribution network, Brand promotion and
Merchandising

By

Sai Krishna M
PGDM-IB
Roll No.23

Under the guidance of

Mr. Y V Vijay Kumar Prof. Ramki

Area Sales Manager Faculty
FieldFresh Foods Pvt. Ltd. KJ Somaiya Institute of Management
Bengaluru Studies and Research,
Mumbai

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 K J Somaiya Institute of Management Studies & Research

Certificate from Summer Project Guides

We approve this Summer Project Report titled “Analysis & optimization of sales and
distribution network, Brand promotion and Merchandising” as a certified study in
management carried out and presented in a manner satisfactory to warrant its acceptance as a
prerequisite for the award of Post Graduate Program in International Business for which it has
been submitted. It is understood that by this approval we do not necessarily endorse or
approve any statement made, opinion expressed or conclusion drawn therein but approve the
Summer Project Report only for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

Name Signature

1. Faculty Examiner

2. PG Summer Project Co-coordinator

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 Acknowledgement

On this opportunity I would like to extend my sincere thanks to my college, K.J

Somaiya Institute of Management Studies and Research, Mumbai and to Field
Fresh Foods Pvt. Ltd., for offering me a unique platform to earn exposure and
garner knowledge in the field of sales and distribution of premium FMCG
products. This project was a great learning experience and provided me an up
close insight of how the sales & distribution, merchandizing and promotional
activities are carried out. I am especially thankful to my guide Mr. Vijay Kumar for
the kind support and guidance that he extended to me throughout the project.
I also want to convey my sincere thanks to my college faculty Prof Ramki, SIMSR
who has been guiding me throughout the project. He was there to help me out at
all possible situations.
Last but not the least I would like to express my profound gratitude and thanks to
each and every employee of Field Fresh Foods Pvt. Ltd. who knowingly or
unknowingly have contributed in their own ways to the successful completion of
this project.

Sai Krishna M
PGDM(IB)-023
SIMSR, Mumbai

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 ABSTRACT

The project was aimed at understanding and then analyzing the sales and
distribution channel of Field Fresh Foods and the methods in which the company
is currently carrying out promotional activities for their Del Monte range of
products. Del Monte, an international conglomerate in food industry has recently
entered the Indian market. While the market potential is huge, the competition is
also fierce. Typical of the FMCG market almost all the major FMCG players wage a
price war. Del Monte products are positioned as premium products. To reach the
target segment and convince them of assured high quality which is the Del Monte
promise is a challenging job. The sales and distribution network is the backbone
of any FMCG company. In my project, I started off with the feasibility study of
usage of perforated sheets as a promotional material in private vehicles.
Following which I studied the sales and distribution model of Del Monte products
in Bangalore city focusing on Modern Trade outlets which included stand alone
super market outlets. I gave the feedback about how the present Distribution
model is working and also gave suggestions for optimization of sales and
distribution network. The issues with retailers and distributors regarding the
products were reported to company. I was also looking after point-of-sale
promotions of Del Monte products at the supermarkets that I was allotted.

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Content

Acknowledgement…………………………………………….……………………………………………………………3

Abstract…………………………………………………………………………………………………………………………….4

Chapter 1 - Introduction
Topic………………………………………………………………………………………………………………………………….6

Objectives of Study……………………………………………………………………………………………………………6

Research Methodology……………………………………………………………………………………………………..7

Conclusion………………………………………………………………………………………………………..……7

Chapter 2 - About the Company and Industry

About the FMCG Market in India ..............................................................................…...8

About the Company .……………………………….……………………………………………….………………………14

About the products………………………………….………………………………………………………………………19

Chapter 3 -Theoretical Framework

Milk Run Model………………………………………………………………………………………………………………..22

Methods of Distribution……………………………………………………………………….………………………….23

Chapter 4- The Project

Feasibility Study…………………………………………………………………………………………….…………………25

Sales and distribution……………………………………………………………………………………………………….26

Modern Trade……………………………………………………………………………………………………………………27

General Trade…………………………………………………………………………………………………………………..30

General Issues with Product/Packaging and Other Issues……………………………………………….32

Recommendations…………………………………………………………………………………………………………….33

Visibility contract……………………………………………………………….………………………………………………35

Brand promotion………………………………………………………….……………………………………………………35

Chapter 5 - Summary………………………………………………………………………………………………………36

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Topic
The objective of my project was aimed at understanding the sales and distribution channel of
Field Fresh Foods and how the company is carrying out promotional activities for Del Monte
range of products the city of Bangalore. Del Monte is a recent player in the processed foods
industry in India. While the market potential is huge, the competition is also fierce. Thje
competition stems from the fierce price war amongst the players. Del Monte products are of
premium category with emphasis on quality. To reach the target segment and convince them of
assured high quality is a challenge the company has embarked upon. The sales and distribution
network is the backbone of any FMCG company. In this project, I have studied the sales and
distribution model of Del Monte products in Bangalore city. After the analysis of the
distribution channel, I was asked to give feedback on how the present Distribution model is
working and also provide suggestions for optimization of sales and distribution network. The
issues with retailers and distributors regarding the products were reported to company. We
also did market research for one of the promotional material, perforated sheet. We found out
the reasons why it was not successful in Bangalore. While we promoted Del Monte products at
all possible outlets, from small bakeries to big hypermarkets, my area of focus was on
standalone Family malls which come under the purview of Modern Trade.

Objectives of Study
 Understanding the sales and distribution network of Del Monte
 Give suggestions for optimization of sales and distribution network
 Carrying out promotional activities
 Merchandizing

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Research Methodology:

Primary research: All the data pertaining to the sales and distribution channels were
collected as a part of daily field visits which were extensive and laborious. My daily field visits
included visiting the distributor’s office and accompany the distributor’s salesman in studying
the market.

Secondary research: Other data about the company like Sales figures, Advertisements and
such have been collected through internet. Also the facts and figures about the FMCG Company
have been collected through secondary research.

Conclusion
In my project, I was entrusted to study the sales and distribution channels of Del Monte
products in Bangalore city especially focusing on the Modern Trade channel. I gave the
company feedback on how the present Distribution model is working and also gave suggestions
for optimization of sales and distribution network. The issues with retailers and distributors
regarding the products were reported to company. We also did market research for one of the
promotional material, perforated sheet. We found out the reasons why it was not successful in
Bangalore.

Having learnt of the good response from the retailers whose customers praised the high quality
of the products and it’s good taste, company is expecting to capture a huge market share.
Presently the chunk of company’s profit is coming from Modern trade divisions which include
big departmental stores and stand alone supermarkets. However the company is also banking
upon the general trade channels to provide for a substantial share in the overall sales pie.

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About the FMCG Market in India

The Indian FMCG sector is the fourth largest sector in the economy and creates employment for
three million people in downstream activities. Within the FMCG sector, the Indian food
processing industry represented 6.3per cent of GDP and accounted for 13 percent of the
country's exports in 2003-04. A distinct feature of the FMCG industry is the presence of most
global players through their subsidiaries (HUL, P&G, Nestle), which ensures new product
launches in the Indian market from the parent's portfolio. Demand for FMCG products is set to
boom by almost 60 percent by 2007 and more than 100 per cent by 2015. This will be driven by
the rise in share of middle class from 67 per cent in2003 to 88 per cent in 2015.

The key characteristics features are a strong MNC presence, a well-established distribution
network, intense competition between the organized and unorganized segments and low
operational cost. Availability of key raw materials, cheaper labor costs and presence across the
entire value chain gives India a competitive advantage.

The FMCG market is set to treble from $11.6billion in 2003 to $33.4 billion in 2015. Penetration
level as well as per capita consumption in most product categories like jams, toothpaste, skin
care, hair wash, etc. in India is low indicating the untapped market potential. Burgeoning Indian
population, particularly the middle class and the rural segments, presents an opportunity to
makers of branded products to convert consumers to branded products. Growth is also likely to
come from consumer 'upgrading' in the matured product categories.

With 200 million people expected to shift to processed and packaged food by 2010, India needs
around $28 billion of investment in the food-processing industry.

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Government Policy

The Government has enacted policies aimed at attaining international competitiveness through
lifting of the quantitative restrictions, reduced excise duties, automatic foreign investment and
food laws resulting in an environment that fosters growth.

Completely export oriented units can be set up by government approval and use of foreign
brand names is now freely permitted.

Automatic investment approval (including foreign technology agreements within specified

norms), up to100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate
Bodies(OCBs) investment, is allowed for most of the food processing sector except malted food,
alcoholic beverages and those reserved for small scale industries (SSI). 24per cent foreign
equity is permitted in the small-scale sector. Temporary approvals for imports for test
marketing can also be obtained from the Director General of Foreign Trade. The evolution of a
more liberal FDI policy environment in India is clearly supported by the successful operation of
some of the global majors like PepsiCo in India.

The Indian government has abolished licensing for almost all food and agro-processing
industries except for some items like alcohol, cane sugar, hydrogenated animal fats and oils
etc., and items reserved for the exclusive manufacture in the SSI sector.

Quantitative restrictions were removed in2001 and Union Budget 2004-05 further identified 85
items that would be taken out of the reserved list. This has resulted in a boom in the FMCG
market through market expansion and greater product opportunities.

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Central and State Initiatives

Various states governments like Himachal Pradesh, Uttaranchal and Jammu & Kashmir have
encouraged companies to set up manufacturing facilities in their regions through a package of
fiscal incentives.

Jammu and Kashmir offers incentives such as allotment of land at concessional rates, 100 per
cent subsidy on project reports and 30 per cent capital investment subsidy on fixed capital
investment upto $63,000. The Himachal Pradesh government offers sales tax and power
concessions, capital subsidies and other incentives for setting up a plant in its tax free zones.

Trends

The boom in various consumer categories, further, indicates a latent demand for various
product segments. For example, the upper end of very rich and a part of the consuming class
indicate small but rapidly growing segment for branded products. The middle segment, on the
other hand, indicates a large market for the mass end products. The BRICs report indicates that
India’s per capita disposable income, currently at $556 per annum, will rise to $1150 by 2015 -
another FMCG demand driver. The spurting the industrial and services sector growth is also
likely to boost the urban consumption demand.

An estimated double-digit growth over the next few years shows that the good times are likely
to continue.

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Growth Prospects

With the presence of 12.2% of the world population in the villages of India, the Indian rural
FMCG market is something no one can overlook. Increased focus on farm sector will boost rural
incomes, hence providing better growth prospects to the FMCG companies. Better
infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit
from growing demand in the market. Because of the low per capita consumption for almost all
the products in the country, FMCG companies have immense possibilities for growth.

If the companies are able to change the mindset of the consumers, i.e. if they are able to take
the consumers to branded products and offer new generation products, they would be able to
generate higher growth in the near future. It is expected that the rural income will rise in 2007,
boosting purchasing power in the countryside. However, the demand in urban areas would be
the key growth driver over the long term.

The increase in the urban population, along with increase in income levels and the availability
of new categories, would help the urban areas maintain their position in terms of consumption.

At present, urban India accounts for 66% of total FMCG consumption. However, rural India
accounts for more than 40% consumption in major FMCG categories such as personal care,
fabric care, and hot beverages. In urban areas, home and personal care category, including skin
care, household care and feminine hygiene, will keep growing at relatively attractive rates.
Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term
growth categories in both rural and urban areas.

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 Industry Analysis

A. Key Success Factors:

a) Distribution-related KSFs:

 A strong network of distributors

 Efficient and responsive supply chain
 Ability to secure favourable display space on retailer shelves
 Robust relationship with retailers

b) Marketing-related KSFs:

 Strong brand recall

 Motivated Sales team well equipped with the product knowledge
 Point of Sale advertising
 Special offers and bulk buy deals for retailers
 Attractive product packaging

c) Other types of KSFs:

 High product quality standards

 Product innovation capabilities with respect to new product launch and time to market

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d) Industry’s Dominant Features:

 Industry growth rate: The industry is growing at the CAGR of 9%.

 Number of rivals: In certain product categories, such as, ketchup and sauces, the
industry is dominated by a few large companies but overall it is fragmented into many
small and regional companies.
 Number of buyers: Market demand is fragmented among several buyers across the
country and hence buyers do not enjoy much of bargaining power
 Degree of product differentiation: Product of other companies is less differentiated
leading to heightened price competition.
 Product Innovation: Development of new and differentiated products is important

B. Industry Driving Forces:

 Booming modern retail

 Increasing globalisation of industry leading to several foreign companies foraying into
India
 Changes in consumer behaviour marked by increased health consciousness and
adoption of urban and outgoing lifestyle
 Burgeoning middle class with increased purchasing power

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About the Company
FieldFresh Foods Pvt Ltd.:

An Indian business giant and a Philippine conglomerate have come together to create
FieldFresh Foods Pvt. Ltd.

FieldFresh Foods Pvt. Ltd., is a venture between Bharti Enterprises and Del Monte Pacific
Limited, to offer fresh and processed fruits and vegetables in the domestic as well as
international markets, including Europe and the Middle East.

Brand Del Monte has 118 years of rich international heritage during which it has been
synonymous with quality and taste. The brand originated in the US and is now available all
across the globe. The Del Monte range of branded processed food products includes Fruit
drinks, Ketchup & Sauces, Packaged Fruits and the Italian Range consisting of Pasta, Olive Oil
and Olives/Jalapenos and a Culinary range which is aimed at HORECA, Foodservices and QSR
industries.

Del Monte was brought to India in 2007 by a joint venture between Bharti Enterprises and Del
Monte Pacific Ltd. The JV is called FieldFresh Foods Pvt Ltd.

Bharti Enterprises is one of India's leading business groups with interests in telecom, agri
business, financial services, retail and manufacturing. Del Monte Pacific Ltd, headquartered in
Manila, Philippines, is engaged in the production, marketing, and distribution of Del Monte
products in the select Asian markets.

Del Monte Pacific also holds exclusive rights to produce and distribute food and beverage
products in the Indian subcontinent.

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The company will produce, market and distribute farm fresh products that address the needs of
today’s consumer. With a range of delicious and superior tasting products, FieldFresh Foods
Pvt. Ltd., looks forward to becoming one of the most trusted providers of premium quality fresh
farm products, processed foods and beverages.

With the synergy between Bharti’s dynamism and Del Monte’s heritage of over 100 years, the
company aims at becoming a leading player in the foods & beverages segment in India.

FieldFresh Foods Pvt Ltd besides offering Del Monte range of Food & Beverage products, also
sources and markets fresh produce for domestic as well as export markets. The company's
vision is to be the most trusted and innovative provider of branded fresh fruits, vegetables and
processed food products in India.

Bharti Enterprises:

India’s leading business group, Bharti Enterprises has interests in telecom, agri-business,
insurance & retail. With over 100 million customers, Bharti’s flagship unit, Airtel Ltd., is the
country’s leading private sector provider of telecommunication services.

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Del Monte Pacific Limited:

Based in Philippines, the company is engaged in the production, marketing, and distribution of
premium branded processed foods and beverages. Del Monte Pacific also holds exclusive rights
to produce and distribute food and beverage products in the Indian subcontinent.

Quality Excellence at FieldFresh

FieldFresh ensures best-in-class facilities, business practices and quality standards through
technological innovations, international quality management systems and food safety
initiatives. Our Quality Management System (QMS) operates on:

• Right First Time

• Zero Tolerance

These are achieved through critical interventions in processes wherever applicable, so that only
top-class quality products reach the end consumers.
To pave the way in farming practices, the company has complied with Global GAP guidelines
not only in company managed farms but across all partner farms. The growing partners are
spread across the following states:
• Punjab - Baby Corn, French Peas
• Maharashtra - Sweet Corn & Baby Corn
• Gujarat and Andhra Pradesh – Mangoes

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The state-of-the-art laboratory facilitates physical, chemical and microbiological analysis of the
raw materials and packaging materials through the entire manufacturing cycle. Continuous
focus on packaging development and innovative solutions has enabled FieldFresh to meet the
superior packaging requirement of customers.

At FieldFresh, food safety and consumer health is the top most priority. This is clearly reflected
in the manufacturing facility and packhouse being certified under:
• Food Safety Management Systems (FSMS) (ISO:22000:2005)
• BRC – British Retail Consortium

Environment Health & Safety (EHS) is an integral part of FieldFresh business practices. Focus on
EHS is driven through:
• Process Mapping
• Regulatory and Food Safety Audits
• Reviews of Certifications

The Technical team is also focused on critical processes and development for new initiatives on
new products.

Certifications
The Good Agricultural Practices and QMS have enabled us to achieve highest levels of standards
and certifications.

Exports
FieldFresh Foods has focused on building a robust Fresh Exports business model in vegetables-
primarily Baby Corn and Sweet Corn. Some of the other greens exported are French Beans and
Green Chillies. All farms, where both Baby Corn & Sweet Corn is grown are Global GAP certified
farms.

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Agri Centre Of Excellence (ACE)

FieldFreshAgri Centre OF Excellence (ACE) at Ladhowal, Ludhiana, Punjab was inaugurated by

Dr. Manmohan Singh, Honourable Prime Minister of India on 27 th September, 2006.  ACE
comprises of 300 acres of farming, developed for open and protected cultivation.

The activities that have gone into making ACE a centre of excellence are:

• Partner Farming
• Farmer Training
• Open Cultivation
• Crop Development
• 132 acres of Micro Irrigation
• 42 acres of Spanish designed protected cultivation
• Bell Peppers and Cherry Tomatoes grown in Glass Houses
• Chilly Nursery in Green Houses
• Cauliflowers in Net Houses
• 24 x 7 technical support to the partner farmers

A state-of-the-art processing facility and pack-house has been set up with vegetable processing
capacity of over 250 tons and a cold-storage capacity of 500 metric tons built over 7500 sq.
metres. The facility takes pride in the following certifications:

• GLOBALGAP Certified Operations

• ISO 22000 Certified Packhouse
• BRC (British Retail Consortium) Certification for the Packhouse

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About the Products

The Del Monte product range includes:

 Fruit drinks: Pineapple fruit drink with pulp, Pineapple Orange fruit drink, and Four
seasons fruit drink (Pineapple, Mango, Orange and Guava), Green Apple and Orange

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 Packaged fruits: Pineapple Slices, Pineapple Tidbits, Prunes,  Mango Pulp(Sweetened),
Fiesta Fruit Cocktail and Peach Halves

 Corn: Regular and Sweet Corn

 Ketchup &  Sauces: Tomato Ketchup, Zingo & Twango Sauces

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 Italian Range: Range of dry Pasta, table Olives and Olive Oil

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Theoretical Framework

Milk Run Model

Del Monte Distributors use “Milk Run” model for the distribution of their products. A milk run is
typically a route in which a delivery van either delivers product from a single to multiple
retailers or goes from multiple suppliers to a single retailer. In other words, a supplier delivers
directly to multiple retail stores on a truck or a truck picks up deliveries for many suppliers of
the same retail store.

The diagram below shows how a milk runs model of single supplier and many retailers work.

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The company has divided their distribution channel into two parts General trade and modern
trade. General trade consist of bakeries, small kirana stores, retail stores and medium size
deartmental stores.It is a huge business and the fact that the mass of India still purchases their
grocery items from local kirana stores. It becomes very important for the company to have a
robust sales and distribution network in genearl trade. Whole of the city is divided into areas
depending on the geographical location of dealers. The dealer has the responsibility of catering
to demand whole area surrounding it.Their were 7 dealers and each dealer had 700 outlets in
his area. Modern trade constitutes stand alone supermarkets, Hypermarkets and supermarkets
which are a part of retail chain spread across the country. There are three distributors for
modern trade. Milk run is helpful since in our case very frequent and small deliveries are
needed on a regular basis and either a set of suppliers or a set of retailers is in geographic
proximity. The dealer has around 700 outlets in his area and the delivery is divided on the basis
of routes. Since all the stores are in geographical proximity and the deliveries are small this
model is very successful.

Some of the salient features of Milk runs model are

• Milk runs help to reduce the transportation costs by consolidating shipments to multiple
stores on a single truck.
• Milk runs allow deliveries to multiple stores to be consolidated on a single truck,
resulting in a better utilization of the truck and somewhat lower costs.
• The use of milk run is helpful if very frequent, small deliveries are needed on a regular
basis and either a set of suppliers or a set of retailers is in geographic proximity.

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 • Helps to reduce the amount of inventory to be kept as a safety stock in the warehouses.

High degree of coordination and synchronization required among the members of supply
chain

Methods of Distribution

Method 1
Ready stock unit: In ready stock unit, the company appointed salesman, 1 driver and a helper
from dealer go in a delivery van. They go to each store and according to the order that retailer
places, it is immediately delivered. Delivery vans usually contain all the products in substantial
quantity but if it is not avalaible at that moment the order is noted and delivered later. A
receipt is made for the same and whole of the order is given on credit. Sometimes only driver
and sales guy are there depending upon the distributor.

Method 2
In the second method the salesman appointed from Del Monte takes order from stores which
he visits on his motorcyle. He covers all the stores on a prticular route in a day. He gives the
order list to dealer at the end of the day. The order list consists of products to be delivered,
quantity and address of retailer. The next day the delivery van goes on the same the route and
delivers the at the given address. The sales man on the other hand is on another route for the
next day and this cycle continues.

The Project

Feasibility of perforated sheet promotional material in Bangalore

Background:-

The Company Del Monte had launched perforated sheet with Del Monte brand printed on it as
a promotional material which was a great success in Delhi. These perforated sheets basically
acts like sun shield and to be put in the car rear windshield. The design of these sheets is such
that while it blocks the incoming sun light, the visibility is not hampered. Such perforated
sheets are already in use in buses where the large glass area provides for ample space to put

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these materials. The Company wanted to replicate the success of this promotional material in
Bangalore too but it proved to be a failure, reasons for which we shall discuss below.

Task:-

The Company had asked us to analyse the reasons of failure and at the same time try to diffuse
the promotional material in the market.

Action & Outcome:-

In this regard I interacted with car owners or drivers on whether they would be willing to use
that sheet for their cars. The locations selected for such interaction were Parking lots in malls,
and other commercial areas where there were plenty of cars. Invariably, all the people I spoke
to, refused to this idea citing one of the following reasons:-

 They already have a sun film on their car’s windows and windshield
 They are not comfortable in carrying a Company’s advertisement.
 They were asking for some incentive for sporting the promotional material.
 Car drivers refused to this saying they need to take prior permission from car owners.
 It doesn’t get as hot and sunny in Bangalore as it is in Delhi, which made the sun screen
seem less attractive even in summer.
 They were sceptical that visibility would be hampered.

It was also observed during the above interaction that most of the people I interacted with
were not aware of the Del Monte brand but I made use of the opportunity to make them aware
of the brand and its product offerings even if they were averse to idea of using perforated
promotional material. This exercise instead turned out to be a face-to-face promotion and
perforated sheets were just a platform to start-off the interaction. I also observed that such
face-to-face promotion was very effective as people were not only made aware of the Brand
but could also be educated on the Brand, its history and of course its product offerings but the
downside was the very limited reach we had.

Sales and distribution:

India's economy is projected to grow at a fast rate over the next few years. With increasing
purchasing power and a rising middle class, the fast moving consumer goods (FMCG) industry is
posed to grow dramatically. To leverage opportunities, FMCG manufacturers and retailers are
developing and implementing deliberate strategies for gaining market access. FMCG giants like
Unilever, Marico, P&G, Nestle etc are constantly improving and modernizing their sales and
distribution network removing their bottle necks.

25
Del Monte has developed a strong distribution channel in a short span of time. I would like to
throw some light on sales and distribution network of Del Monte. Bangalore is the head office
of South India Del Monte operations.

The company has divided the distribution channel into two parts
1. General Trade
2. Modern trade

Modern trade constitutes stand alone supermarkets and supermarkets which are a part of
retail chain spread across the country. General trade deals with bakery, retail stores and small
kirana stores.

Sales
90
80
70
60
Sales
50
40
30
20
10
0
General Trade Modern Trade

MODERN TRADE (STAND-ALONE)

OVERVIEW

The Co. has three distributors that serve the standalone departments stores across Bangalore.
Most of these outlets are individually owned operate like mom-pop stores but in an organized
fashion. Each distributor covers 6 different routes each day from Monday through Saturday. I

26
was working under Ghouri and Co, a distributor who handled around 65 stores in Bangalore
South and Central.

Unlike General Trade where the outlets are located in a cluster, the outlets are sparsely located.
A Sales Man typically serves 7-10 stores in a day, whereby the orders are taken and the delivery
is made the following day.

Normally, the activities performed are as follows:-

 Take a count of the existing stock and note down in the order book
 Estimate the potential order.
 Consult the purchase officer/ store manager/ category manager for final order
placement.
 Delivery made by the distributor the following day.
 Payment collected either by the distributor themselves or by the Co.’s Salesman.
 Credit period usually ranges from 15-30 days.
 Put up point of sale promotional material.

Most of the stores that fall under the Modern Trade- Stand Alone category have decentralized
purchasing system even if the no. of outlets of that particular Co. is in several. Since the stores
are serviced weekly, the quantity ordered aren’t huge and typically the stores doesn’t keep off
the shelve stock, what all they have is there on the shelves.

At present modern Trade (including Retail chains) account for 85% of the sales. This is mainly
because the products that Del Monte has under its portfolio in India are premium and suit the
lifestyle of modern audiences who buy their groceries from modern retail outlets. The higher
purchasing power and brand awareness also helps in the sale of almost all the products. The
following products sell well at modern retail outlets:-

 California prunes
 Canned fruits
 Italian range including olive, pastas etc.
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  Juices

Again this is an overall movement of goods because movement each product depends primarily
on the location of the store and its customer base.

DAY ROUTE OUTLETS COVERED

Monday Indira Nagar, Domlur 15
Tuesday Marathahalli, Whitefield 11
Wednesday Wilson Town, Frazer Town, 14
Hennur Main Road
Thursday Kamanahalli, Banasawadi 14
Friday Ulsoor, Indira Nagar 12
Saturday Kasthuri Nagar, K R Puram 04

Issues in Modern Trade – Stand Alone Super Markets

1. The single most important issue was the start time of the daily route. Ideally the
distributor should open office by 9 AM which enables the sales representative to start
his route by 9:30 but mostly there are delays either on distributor’s side or the
salesman’s side. This results in a late start by the sales man. Most stores do not give
orders beyond lunch hour, due to which there is an unnecessary rush on the salesman’s
part to get to the stores and get their orders before lunch.

2. The products in demand in modern trade are different from that in general trade. In G.T
(general trade) mostly ketchup and juices are sold while in Modern trade (M.T) Pastas,
Prunes, Fruit cocktail and Sweet corn are also sold in good numbers. Salesmen in
modern trade are not able to explain the ingredients or the taste of the products. This

28
 lack of precise knowledge creates confusion in minds of retailers and brings about a
certain degree of hesitation while giving orders.

3. Salesman does not emphasize the placement of products in the store shelf. Even if they
do it is impossible to keep a check on the activities of the other salesman who push their
product up front.

4. Salesmen sometimes do not understand the importance of putting point of sale

promotional material or do not understand the right application of such material.

5. Route planning is an important issue and sometimes one needs to travel 30 kms to
service 4 stores. Such issues are unavoidable since the products are new and no market
can be risked by ignoring.

GENERAL TRADE
General trade consist of bakeries, small ‘kirana’ stores retail stores and medium size
departmental stores. It is a huge business and the fact is that the majority of consumers in India
still purchases their grocerry items from local kirana stores. It becomes very important for the
company to hace a robust sales and distribution network in genearl trade.Whole of the city is
divided into areas depending on the geographical location of dealers. The dealer has the
responsibility of catering to demand whole area surrounding it.The dealer with whom I worked
had 700 outlets in his area.Certain features assosciated with genearl trade are

 Large no. of outlets under each dealer

 Outlets are located in clusters
 Sales man has to be vigilant about any new store opened

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  Has to frequently visit even those stores who have not given orders earlier and inforn
them about new products

The sales guy has to insure two important parts

1.Order booking
2.Delivery

Now the company follows two types of distribution methods

1.Ready Stock Unit
2.Order booking and delivery next day

1)Ready stock unit :In ready stock unit,the company appointed salesman,1 driver and a helper
from dealer go in a ready unit.They go to each store and whatever the order that retailer places
is immidiately delivered.Delivery van usually contains all the variety of products in substantial
quantity but if it is not avalaible at that moment the order is noted and delivered later.A receipt
is made and whole of the order is given on credit.Sometimes only driver and sales guy are there
depending upon the wishes of dealer

2)In the second method the salesguy appointed from Del Monte takes order on his bike.He
covers all the stores on a prticular route in a day.He gives the order list to dealer at the end of
the day.The list consists of products to be delivered,quantity and address of retalier.The next
day the delivery van goes to the route and gives delivery to the given address.the sales man on
the other hand is on another route.This cycle continues.

The delivery van also carries promotional posters,danglers banners etc.The dealer is given
promotional products in adequate number and the sales person is told to put posters on all the
outlets in that articular route.

Responsibility of sales man include

 He is the link between the company and dealer
 He persuades the retailer to try company products
 He informs the retailer about new schemes
 If it is not a ready stock unit he collects money back from retailer and give it to dealer
 He acts as a link between C&F(carry and forward) agent and dealer
 He puts posters,danglers and other promotional stuffs at appropriate place around retail
shop
 Adds new retail stores under the retail

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GENERAL ISSUES WITH PRODUCT/ PACKAGING & OTHERS:-

 Originally the fruit juices had a paper wrapping which often got spoiled due to
condensation of water when refrigerated. This also sometimes resulted in rust on really
old packs. However, the present stock of cans come printed directly which leads to
better external appearance and makes it less prone to rust.

 As the Del Monte is a new brand in India they don’t enjoy much of bargaining power
while negotiating with retailers. Hence, distributors generally sells the products on
consignment basis i.e. the retailers only make payment to the distributor only once the
entire stock gets sold and at times retailers used to return the stock complaining that
they are very slow moving items and make no payments. All this leads to delayed
payments or at times no collection making the distributor sceptical of the Del Monte
especially when compared to other well established brands.

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RECOMMENDATIONS

Having worked primarily with Modern Trade, The recommendations I gave to the company
were primarily aimed at optimization of the modern trade distribution channel. However,
certain ideas can be successfully implemented in general trade as well.

1. The Co. should stress upon the dealers to start their day as early as possible, ideally 9
AM. This would ensure that the sales men have ample time to obtain their orders.
2. A well planned route map would considerably enhance the efficiency of the salesmen,
and ensure that orders are evenly placed throughout the week.
3. The reimbursement for the sales man should be performance based. Break up the salary
into fixed pay and variable pay. Give the petrol allowance also variable. The benefit of
this would be greater motivation for the salesmen to perform and deliver results.
4. Special training to be imparted to salemen to enable them to perform better-
 In convincing the new as well existing retailers to buy more and more of Del Monte
products across range.
 Exhaustive knowledge of the Del Monte brand and its products should be given to
them. They should be shown a ppt. on that in their regional language. This
knowledge will in-turn enables them to explain to retailers on the product’s USP.
 Sales men should be given thorough knowledge of competitors’ product as most of
the questions they faced revolved around this only.
 The Company should give tasting samples of the items to the sales men, so they
themselves understand the product and can more confidently pitch the products to
the retailers.
5. The Sales Officer should at random go on rounds with the sales men to monitor the field
activities and also talk to retailers about the issues they are facing, if any and should
update them on the company plans and new launches. This will improves the Co.’s
image in the mind of retailers and also the SO will know the prevailing issues and the
proficiency of the sales men.

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6. Sales men should also be asked and encourage to visit new stores and there should be a
target with respect to appointment of new retailers as buyers. Though this is not very
viable in modern trade as there are limited stores, this holds good for general trade.
7. Build strong relation with retailers and build confidence in him through various methods
like promotional tours, extensive sampling etc. This is crucial since the company is new
and the products are just increasing their presence. The company should also inform
him about ongoing promotions and running TVCs and give them an update about the
latest developments like soon to be operational Hosur factory which would help in
fostering retailers’ confidence in the company.

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Brand Promotion Activity

Visibility Contract:
In modern trade as well as General trade, the company had brand promotional activity known
as visibility contract. As per the contract, retailers were supposed have certain kind of display
shelf provided by the company in their store. Depending on the store type this shelf contained
different products. In a Supermarket, it ideally had the entire product range while ion smaller
‘kirana’ stores, the display shelf had only ketchups and juices. This method has proven to be
quite beneficial for the company. However, after the initial period, the company has removed
these shelves from stores where there is no perceptible change in sales even after the display.

Brand promotion
For any new entrant in the market, this is the most important aspect. The brand promotion is
done with topmost priority by all the companies. Del Monte is no different from those. They
rolled out their T.V advertisements in the month of April and they were aired on all T.V
channels. (H.B.O, Star Plus, U.T.V, Sony etc.)
Apart from TV, Internet and newspaper commercials, proper promotion at the point of
purchase is very important.

For this the sales representative plays a very important part. Company gives each sales man a
lot of merchandising to put it on its daily route. The company has Posters, Banners, Danglers
hangers etc for this. The package containing all the merchandised material is kept with dealer.
This material is kept in ready stock unit and as they go along the route Sales man and the helper
from dealer put it at different bakeries, Retail outlets etc.

For the effective promotion there are some things to be kept in mind.

1. Proper training has to be given to Sales representative for placing promotional material
at right place for maximum visibility.
2. According to the research done by company, the life of a poster is average 2 hours. So
placing it in such a way 2 enhance its life to maximum should be the aim.
3. Retailer should be told about new promotional activities such as visibility contract.
4. Sales man should ensure that the products are properly displayed at stores. In
hypermarkets sales man has to ensure that products are put at top of shelves.

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 Summary

This project was aimed at understanding the sales and distribution channel of Field Fresh Foods
and how the company is carrying out promotional activities for Del Monte range of products.
Currently the majority of sales come from Modern Trade. However with the increase in
awareness and the company’s investment in promotional activities, the company is expecting
greater returns from general trade in terms of greater sales share. The company is also facing
issues in retaining dealers but with the increasing sales, they believe this problem will be solved
soon. Company is also involved in a lot of promotional activities and a trend statistic is being
maintained now as to how strong have been the effect of promotional activities like
merchandizing. wet sampling activity etc. Customers had given a feedback that they wanted to
first try small quantity of these products before actually buying big volume. Thus Company has
launched sachets and small bottles of all its variant of ketchups and they are planning to launch
small tetra packs of juices. This will be feasible once the production of these juices start in the
company manufacturing unit coming up in Hosur, TN. Most importantly, the company having
understood the importance of the salespeople in the overall growth of the company is taking
efforts to properly train salesman and also retain them.

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THANK YOU

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