Distribution Channel

A STUDY ON DISTRIBUTION CHANNEL IN MAHINDRA & MAHINDRA LIMITED AUTOMOTIVE AUTOMOTIVE SECTOR AT ZAHEERABAD, MEDAK DIST. Dissertation report submitted to the OSMANIA UNIVERSITY. Hyderabad in partial Fulfillment for the award of

MASTER OF BUSINESS ADMINISTRATION Submitted By

B.RACHAIAH H.T.No: - 91-05-105

DECLARATION

I declare that this dissertation report entitled “ DISTRIBUTION DISTRIBUTION CHANNEL” in Mahindra & Mahindra Limited (Automotive Sector), Zaheerabad submitted to MRKT Department, college of HOLY MOTHER P.G COLLEGE (Affliated to Osmania University)Hyderabad University)Hyderabad is Originally done by me. The findings of the report are based on the information collected by me during this study.

Date:

Place:

( B.RACHAIAH)

ACKNOWLEDGEMENT

The completion of this study makes me to recall with gratitude several persons who have extended their co-operation in one way or the other in this venture.

I am very much thankful to MR.SANJAY LAL, principal of HOLYMOTHER P.G College, Osmania University, Hyderabad.

I express my sincere thanks to our marketing lecturer MR.NAGA RAJU, under whose supervision and guidance this work was carried out.

I am indebted to Mr.K.P.N Rao, DGM – HR & IR. Mahindra & Mahindra

Limited, Zaheerabad, for allowing me to undertake my In-plant training (project work) in their esteemed organization. First and foremost I acknowledge my deep sense of gratitude to Mr.G.S. Naidu, Senior Manager – Sales Support for his valuable guidance and all other members of the organization for having given me their untiring timely support and helped me to successfully complete my project report.

.

.

(B.RACHAIAH)

DISTRIBUTION CHANNEL

CONTENTS CHAPTER – I 1.

I NTRODUCTION

Page No 1-2

1.1 . Objectives Objectives of of Study 1.2 . Scope Scope of Study Study

CHAPTER – II 2.

U NIT PROFILE

CHAPTER – III 3.

CHAPTER – IV

•

42 - 48

49 - 50

CONCLUSION & SUGGESTIONS

APPENDIX •

26 - 41

DATA A NALYSIS

CHAPTER – VII 7.

23 - 25

DISTRIBUTION THEORY

CHAPTER – VI 6.

22

ESEARCH METHODOLOGY R ESEARCH

CHAPTER – V 5.

6 - 21

COMPANY PROFILE

STRUCTURE OF MARKETING DEPARTMENT

4.

3-5

QUESTIONNAIRE BIBLIOGRAPHY

51 - 54

CHAPTER – I INTRODUCTION


1.1.OBJECTIVES

The survey is conducted in favor of MAHINDRA & MAHINDRA Ltd. It is the one of the top automotive sector.

The survey was done with the following objectives. •

To deliver the goods [vehicles] in time.

•

To study the most effective channel of distribution d istribution of vehicles.

•

To give suggestion to develop companies performance in the marketing field.

•

To find out the motivation factors which influence the buying behavior of the customer.

•

To get recognition in international level.

•

To establish and maintain laboratories for purpose of research and development.

M.B.A, Osmania University

1 DISTRIBUTION CHANNEL

1.2.SCOPE OF THE STUDY

The Study was conducted to find out the problems faced by the dealers and to know the attitude of dealers as well as suggestion from the dealers on the performance of MAHINDRA & MAHINDRA Ltd. The present study is conducted in the Twin Cities

(Hyd & Sec), Zaheerabad and Gulbarga. The sample size was selected to be 5 with a view that the time is a major constraint. The study is conducted in the following areas in the following cities.



VARIETY AUTOMOTIVES

Nagole-Uppal Ring Road, Hyderabad – 39.



BHAVANI MOTORS

Mumbai Highway (NH-9), Beside Indian Oil Pump, Miyapur, Hyderabad – 500 049.



AUTOMOTIVE MANUFACTURE LTD

8571, RP road, Secendarabad – 500003.



PAVITH AUTOMOBILE

Near R.T.O. Check Post. X Road. ZAHEERABAD – 502 220.



AVINISH & COMPANY

Nehru Gunj, Gulbarga.


2

CHAPTER -II

UNIT PROFILE


UNIT PROFILE

•

Unit Scenario:

The MAHINDRA & MAHINDRA Company is located at 108 Kilometers From the State capital of Hederabad in AP at Zaheerabad. It has an area of 350 hectors land including all facilities. In July 1983 Hyderabad Allwyn Allwyn Limited (HAL), (HAL), a State Public Sector Undertaking Undertaking of A.P. Government entered into a technical and financial assistance Agreement with Nissan Motor Company (NMC) Limited of Japan for manufacturingOf new generation of Light Commercial Vehicles (LCVs) in India. The scope of Transfer stocks of imported kits procured at favorable rates during the year year 1962 Vehicles were sold. sold. Although company achieved achieved a 60% localization in its products, yet the raising value of yen continued to adversely effect its financial performance.

At the same time the State Government was facing a severe financial crisis and both the Financial Corporation and Industrial Development Corporation were facing massive cuts in government findings. findings. Therefore, in order to cover the closing closing down of units, units, the State Government indifference to the State Industrial Policy decided to sell Allwyn Nissan Ltd. (A N L) to capable of business houses, in this case preferably and established automobile

company.

M.B.A, Osmania University.


After that an intensive negotiation MAHINDRA & MAHINDRA LTD., the Country’s leading manufacturing of of Jeeps and Tractors entered into a Memorandum of Understanding with HAL on 10 th June 1988 and agreed to acquire 26% of share capital in ANL and there after take control of the company’s company’s management with this transfer transfer of shares and management. The Joint venture between HAL & NISSAN Motor Company was terminated and a fresh joint venture Agreement was entered in to 7 th November 1988 by M & M with NMC. The name of the company was changed to MAHINDRA ALLWYN NISSAN LTD. M & M finally took entire control of the operation of the Plant on 1992.



Product Details:

Mahindra & Mahindra has modern m odern facility at Zaheerabad, Near Hyderabad where some of the important products are •

Mahindra FJ 470 DS4 High Roof Minibus.

•

Mahindra Cabking 576

•

Mahindra DI 3200

•

Mahindra FJ Minibus

•

Mahindra Tourister

•

Mahindra Cab king 576 DI



•

Mahindra Champion

•

Mahindra Load King DI

•

Mahindra Load King Super

•

Mahindra Marshall 2000 Delux

•

Mahindra Marshall DX Royale



Future Focus:

Mahindra & Mahindra Company was to gain number one position in automotive sector.


5

CHAPTER - III COMPANY PROFILE


COMPANY PROFILE



General Profile:

The Automobile Sector is one of the fastest growing manufacturing sectors in India. In the 1990’s the industry industry witnessed an average growth rate of above 20% . Indian Automobile Industry is characterizzzed by a very high h igh 21% (75%) of two wheeler production, ranking second second only to to Taiwan. India is also the largest Manufacturer of Tracotrs. The world leaders in the sector sector are evincing keen interest in establishing Manufacturing facilities for manufacturing and assembling components. A politically stable and vibrant state, Andhara Pradesh is centrally located with the support of Seaports, International Airports, assured and reliable reliable power supply, abundant water, broad base of auto component manufacturers, highly trained, skilled and disciplined manpower and is therefore, the preferred location for Automobile industries.

M/s. Ford, Mercedes, Benz, Daewoo, Fiat, Honda, Hyundai, Suzuki, Mitsubishi, Opal, Peugeot, Proton, Skoda, Toyota etc., have already set up their units in India. In the last two years, several joint ventures ventures and collaborations have been set up with investments investments to the tune of US $ 500 Million. About 10 percent of the production in value terms are exported all over the world.



Company Product Details: 

Mahindra Scorpio

Bolero Range:  

Mahindra Bolero Mahindra Bolero Caper

Pick-up Range:

Mahindra Utility  Mahindra pick-up  Mahindra NC 640 DP  Mahindra pick-up CBC 

Maxx Range:  

Mahindra Maxx Mahindra Maxx LX

CL Range:    

Mahindra MM 540/550 DP Mahindra MM 540/550 XDB Mahindra MM 540 DP Mahindra MM ISZ-Petrol Soft-Top.

Commander Range:  

Mahindra Commander 650 DI Mahindra Commader 750 ST

Hard Top Range:     

Mahindra Economy Mahindra Marshal Mahindra MM775 XDB Mahindra Three and Five Door Hard Top Mahindra Marshal 2000 Delux



Mahindra marshal DX Royale


7 DISTIBUTION CHANNEL

Alternative Fuel Range:   

Mahindra CNG – Three Door Mahindra Bijlee Mahindra FJ CNG Mini Bus

Army Range:  

Mahindra Rakshak (Bullet – Proof Vehicle) Mahindra MM550 XD

Three Wheeler Range:  

Mahindra Champion DX Mahindra Champion

Business:

The main business of Mahindra & Mahindra Limited is to manufacture the utility Vehicles and Light Commercial Vehicles and Tractor to m arket these Vehicles for customers. The Mahindra Group is divided into 6 sectors and these are the strategic core business units. ♦ ♦ ♦ ♦ ♦ ♦

Automotive Sector Farm Equipment Sector Automotive Component Sector Trade and Finance Sector Infrastructure Development Sector Telecom Software Exports Sector

Location: Automotive Sector:

It is nothing but the manufaturing and marketing m arketing of Light Commercial Vehicles and Utility Vehicles. The Plants are located at the following places.



♦ ♦ ♦ ♦



Kandivili Plant is located at Mumbai. Nasik Plat is located in the State of Maharashtra, Ligature Plant is located in the State of Maharastra. Zaheerabad Plant is located at Zaheerabad, Andhra Pra desh. Mission:

At M &M, will design, manufacture and market Internationally Competitive, Automotive Vehicles farm equipment and products. Our customer’s needs – especially the requirement of safety, reliability value for money and farm productivity will be our primary concern. In our Business operations operations are will –

ensure sustained profitability profitability and growth we will create a dynamic dynamic collaborative in which

our people will feel challenged and cared or and build an organization that is re-silient flexible and productive.

As an organization we will be recognized for high Ethical Standards and responsiveness to the social environment we will continue to be. •

Objectives:

The main objective of Mahindra is that they want to maintain none to second position. Best top company by maintaining talented people.

Customer Focussed:

People Culture: • • • •

By Encouraging team work By providing a healthy and good work environment By Sake practices By appraisal and Reward System.


9 DISTRIVBUTION CHANNEL

Community Culture: • • •

By setting high ethical standards. By responsible to environmental needs. By to community welfare.

Time Discipline: • • • •

By Meeting set targets By delivering on time By ensuring service on time By quick response to needs

Quality Discipline: • • •

By positive reputation for quality By following international quality assurance, systems and procedures. By delivering right time and every time.

Cost Discipline: • • •



By elimination of non-value added work. Through continues improvement. By productive use of assets.

History:

Mr. J.C. Mahindra and Mr. K.C. Mahindra established the company company in 1945 and named as “ Mahindra & Mahindra Limited ”.

Mr. Mohammed name was included in the name of the company as Recognition of his Enormours help for the establishment establishment of the company. After the divergence of India and and e Pakistan Mr. Mohammed has become the First Finance Minister of Pakistan and the company was incorporated in 1945.


10


The company renamed as “ Mahindra & Mahindra Limited “in 13 Jan, 1948. Upto Jan 14, 1955 it was continued as private company which covered under the Companies Act, 1923. It has become public public limited company company on 15th Jan 1955 and the shares were listed in BSE in 1956. It was initially formed formed to manufacture the utility vehicles vehicles to Indian People and it was initially assembling and importing “ Willy Over Land Corporation “. The Mahindra & Mahindra Limited has started manufacture of Utility Vehicles firstly the “ Willis Jeep “ in 1954 and later in 1965 it has concentrated on manufacturing the Diamler Chrysler Light Commercial Vehicles by producing “Successor”. New Part of Diamler corporation. In year 1963 the International Tractor Company.

In 1969 Export of Vehicles started and the company started to export the spare part to Yugoslavia. Yugoslavia. Exports also made to Ceylon, Singapore, Philippines and Indonesia. In 1987 M & M 540 D P Metal Metal Body Wagonette introduced. In 1993 Mahindra launched Armada and LCV Vehicles were shifted from Nasik to Zaheerabad. In 1995 Cab King D I 3150 were introduced and classic vehicles were launched. In 1997 Voyager was was launched at Zaheerabad Plant. In 1998 complete complete localization of Cab King Model at Zaheerabad Plant.



Unique Achievements: 1945:

On October 2, Mahindra & Mohammed formed. 1948:

The Company was renamed Mahindra & Mahindra Limited (M & M) Steel Trading business was started in association with Suppliers in U K Business connections in USA through Mahindra Wallace. 1950:

The first business with Mitsubishi Corporation (for 5000 Tons) for Wagon building plates for supply from Yawata Iron & Steel. 1954:

Technical & Financial Collaboration with Willys Overland Corporatin. 1956:

Shares listed on the Bombay Stock Exchage Dr. Beek & Co. Formed a JV with Dr. Beck & Co., Germany. 1958:

Machine Tools Division started. 1960:

Mahindra Sintered Products Ltd. Formed – a JV with the GKN’s Group, UK. 1963:

Iinternational Tractor Co. of India (ITCI) formed – a JV with International Harvester Co., USA 1965:

Vickers sperry of India Ltd., a JV with Sperry Rand Corporation, USA Roplas (India) a collaboration with Rubery Owen, UK Manufacture of Light Commercial Vehicles commenced.



1970:

Mahindra Engineering & Chemical Products Ltd. (MECP) commenced operation. 1971:

International Harvester Collaboration ended. 1977:

ITCI merges with M & M, to become its Tractor Division. 1979:

License from Automobile Peugeot, France for manufacture of XDP Engines. 1982:

License from KIA for manufacture of 4 Speed Transimissions “Mahindra” Brand of Tractors born Siro Plast formed. 1983:

M & M becomes market leader in Indian Tractor Market. 1984:

Mahindra Hellenic Auto Industries S.A. formed – J V in Greece to assemble and market utility vehicles in Europe.


13


1986:

Mahindra British Telecom (M B T) formed – a JV with British Telecommunications plc (BT), UK. 1987:

Acquired international instruments Ltd. 1989:

Automotive Pressing Unit acquired from GKW. 1992:

Triton over Water Transport Agency Ltd. Formed. 1993:

Mahindra Steel Service Centre limited formed in association with Mitsubishi Corporation and Nissho Iwai Corporation of Japan. Mahindra Acres Consulting Engineers Ltd. (MACE) formed. 1994:

Mahindra Realty & Infrastructure Developers Limited. (MRIDL) formed Mahindra USA Inc., formed, for distribution distribution of Tractors Tractors in the USA EAC Graphics (India) Ltd., formed in collaboration with The East Asiatc Company Ltd. Mahindra Sona Ltd., Mahindra Nissan Allwyn Limited merged with the Company.



1995:

Mahindra Holding & Finance Ltd. ( M H F 1 ) becomes a subsidiary of M & M to carry out business as an investment company technical collaboration with Mitsubishi / Samcor to manufacture L300.

1999:

Launch of ‘Bijlee’ a battery – operated, op erated, 3 – Wheeler environmenta friendly vehicle. The largest online used vehicle web site in India launched by Mahindra Network Services. The business of Inter Trade Division and Mahindra Exports Ltd.m Combined and renamed Mahindra Inter Trade Ltd. The Company acquired major stake in Gujarat Tracors. Mahindra & Mahindra Financial Services Ltd. Becomes a subsidiary of M & M. 2000:

The Company unveils new logo. Mahindra Auto Specialties Ltd., a new 100% subsidiary is formed. M & M sets up its first satellite tractor plant at Rudrapur. The Company launches New Age Tractor, the Mahindra Arjun 605 DI. The Company launches Bolero GLZ a utility Vehicle a response to needs of urban Consumer.



2001:

A 3 – Wheeler diesel vehicle “ Champion “ is launched. The Company Launches Mahindra MaXX a MUV positioned with the caption Maximum Space, Maximum Comfort. M & M ties up with Renault for petrol engines. M& M established a separate division to provide Defence Solutions. 2002:

M & M launch SCORPIO – A sprots utility vehicles.

2003:

Scorpio – Recipient of prestigious Awards – “car of he the year” award from Business Standard Motoring, “Best SUV of the year” and “Best car of the Year” Award from BBC on Wheels, “Car of the Year” Award from CNBC Auto Car. M & M launch the “Invader” – a sporty open top vehicle. M & M open a second tractor assembly plant USA. M & M launches MaXX Pik Up. M & M Tractors awarded the prestigious p restigious deming Prize for excellence in Quality. The first tractor company in the world to receive the award. M & M launches India’s first Turbo Tractor, Scorpio wins National Award for R & D. M & M venture into Industrial Engine business.





Functional Profile:

Organization Chart:

The Mahindra & Mahindra Limited is headed head ed by General Manager (Operations) Who is assisted by Deputy General Manager from Production Department, Quality Assurance, Finance Department, PHRD Department, Supply Module Department, and Ancillary Administration Department. The General Manager (operation) is also assisted by Senior Managers from Service Department, Administrative Department, and Vehicle Engineering Department and also assisted by manager from Product Control Department. The Senior Manager Production and Senior Manager Maintenance assist the Deputy General Manager Quality Assurance is assisted Senior Manager Quality assurance and Senior Manager Pre Delivery Inspection. The Deputy General Manager Finance Department is assisted by the senior Manager Accounts, Senior Manager Finance and Senior Manager of Excise Cell. The concerned Senior Manager assists the Deputy Manager of Ancillary Development Department.

Departmentalization:

In “Mahindra & Mahindra Limited” the departmentalization is divided into: 1. Dire Direct ct Depa Depart rtme ment nts. s. 2. Indi Indirec rectt Depa Depart rtme ment nts. s.





Direct Departments: The Department, which directly involves in the production process, comes under this

Category. The Core Departments are as follows: ♦ ♦ ♦

Production Planning and Control Department Vehicle Engineering Department (VED) Paint Shop.

Production Planning and Control Department:

The Core Function of this Department is target setting. This Department seeks information from Mumbai regarding the requirements of vehicles depending on the targets for which the company has to strive to achieve. To achieve the targets Mahindra & Mahindra at ZHB get engines from Igathpuri Plant and spare parts from other plants. The Chief Functions is: • • • •

Realize plans for model of the Vehicle, based on marketing. Control on the moving models. Total control and coordination with other departments. Coming up with contingency plans, in case of any problems.

Vehicles Engineering Department:

The Main objective of the Department is customer satisfaction Research and a design

activity of the organization depending on customer wants. Taking consideration as privations and with of customer this Department designs required vehicles with the help of Corporate R & D. • • • •

Looks after the new products units it goes into production. Responsible for bringing out manual for different vehicles. Testing the vehicles for ascertaining its functioning.] Incharge / handles the technical library.



Paint Shop:

Paint shop is used to give a high technology paint to the body of the vehicles. 

Indirect Departments: The Departments, which are not directly, involve in production process, and give more

assistance comes under this category. The Core Departments are as follows: • • • • • • •

Administrative Department. Finance Department. Personnel and HRD Department. Service Center Material Control Department of Ancillary Development Department. Industrial Engineering Department. Maintenance Stores Department.

Administrative Department:

Administrative Department is one of the important, which looks after various aspects like house keeping, provision of transport facilities, maintenance of security, safety aspects and maintenance exchanges. Finance Department:

The Department looks after allocation of funds, costing and accounting of the financial resources of the organization. A Part from these functions the Finance Department looks after the Provident Fund Trust as the Treasurer, Capital Purchase, Taxation and final Accounts. Personnel and HRD Department:

The Department looks after HRD activities they are • •

Training for apprentices Internal and external training and development


19 DISTRIBUTION CHANNLE

• • • • • • •

Induction programs House magazines and Mahindra news Suggestions schemes Sports and Games Quality circles Increment Policy Staff performance appraisal

The above HRD activities are conducted by Personnel Department. The quality circles program conducted with the assistance of Production Department and Industrial Engineer. This organization greatly concentrates on training aspects. Service Center:

This center comes under the MARKETING M ARKETING Department it provides services to customers to field officers and dealers. The various functions of this Department are as under: • • • • • •

Provides service training to dealers and field officers. Feed back to various departments about the products. Warranty processing. Makes service trails. Technical sale and collaboration with foreign companies. Sales of manuals and operators instructions.

Material Control Department of Ancillary Development Department:

The ADD and MCD Departments are linked to one another the control focus of these Department is too. Indigenous localizes the components of various parts used in the vehicles.



Industrial Engineering Department:

The IED is an important Department, which totally coordinates with all the other Departments it is responsible of the manpower planning of each section and also arranges, the tools needed for production of the vehicles in this Department they will self the production targets and inform to all the Departments. They also draw the process sheets, charges from time to time. The implement of TACT and MOST will be looked after through this Department. Maintenance Stores Department:

In M & M Maintenance M aintenance Department which take care of the maintenance of the various machinery equipment assets and instruments the Department does the following functions. • • • •

Up Keeping of the plant and machinery for high productivity. Spare part planning, stocking, inventory control of the maintenance stores. Break down maintenance. Periodical inspection of factory equipment’s and installations. installations.


21

STRUCTURE OF MARKET DEPARTMENT

STRUCTURE OF MARKETING Dept (SALES SUPPORT)

22

CHAPTER – IV RESEARCH METHODOLOGY


RESEARCH METHODOLOHGY METHODOLOHGY DATA COLLECTION METHODS: The information which has collected through the processes of • • •

Personal Interview Questionnaire Previous records (like Dealers data record of the company).

SOURCES OF DATA: The data which was collected for the study is of the following two types, those are a.

Primary Data:

The primary data is collected through survey method by administering a Structured questionnaire. b.

Secondary data:

The secondary data is collected from the printed material provided by the SPL and from journals and magazines.

SAMPLING METHOD: Sample is picked from the total dealers by adoption Random Sampling Method.



SAMPLE SIZE: The sample size is selected to 5. The total 5 Dealers were covered in some selected cities.

DURATION OF STUDY: The study was carried on for 45 days i.e., from April 25 to June 8, 2005

AREA OF STUDY: The study is conducted in 

VARIETY AUTOMOTIVES

Nagole-Uppal Ring Road, Hyderabad – 39.



BHAVANI MOTORS

Mumbai Highway (NH-9), Beside Indian Oil Pump, Miyapur, Hyderabad – 500 049.



AUTOMOTIVESECTOR

8571, R.P.Road, Secenderabad – 500 003.



PAVITH AUTOMOBILE

Near R.T.O. Check Post. X Road. ZAHEERABAD – 502 220.



AVINISH & COMPANY

Nehru Gunj, Gulbarga.


24 DISTIVBUTION CHANNEL

LIMITATIONS: It would be inappropriate to say that the survey conducted is perfect and accurate. Infact like other surveys, it also faced some limitation due to which the outcome may have certain deviations. These limitations were: 1.

Thee area Th area,, whic which h is the the res resea earc rche her, r, cove covere red d for for the the par parti ticu cula larr rese resear arch ch wil willl not not be suitable for entire marketing area of the product.

2.

Thee conc Th conclu lusi sions ons draw drawn n are are subj subjec ecte ted d to the the inf infor orma mati tion on pro provi vide ded d by the the vari various ous dealers contacted.

3.

Thee Deal Th Dealer erss are are very very bus busy y with with bus busin ines esss acti activi viti ties es.. Due Due to the the lim limit itat atio ion n Deal Dealer erss may not be able to provide correct information.

4.

Thee rese Th resear arch cher er can cannot not spec specif ify y the the dat dataa whi which ch has has coll collec ecte ted d is purel purely y rig right ht,, because some of the Dealers may not have given the actual information.

Inspire of all above limitations, a sincere attempt is made in this to assess the significance of distribution of the Mahindra & Mahindra vehicles.


25

`

CHAPTER – V DISTRIBUTION CHANNEL


A THEORATICAL APPROACH

DISTRIBUTION CHANNEL: (Def)

A set of interdependent organizations in the process of making a product or service available for use or consumption by the consumer or business users. The distribution channel transport & store goods & services from producers to consumers. Distribution channels can be described by the number of channel levels involved. CHANNEL LEVEL: A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer is Channel level. Because the producer and the final consumer both perform some work, they are part of every channel. We use the number of intermediary levels to indicate the length of a channel. There are two types of marketing channel. a).

Direct Marketing channel

b).

Indirect Marketing channe nnel



a). a).

A marke arkett chan channe nell that hat has has inter nterme medi diar ary y level evelss is call called ed “Dire Direct ct marke arketi ting ng

channel”. b). b).

A mar marke kett chan channe nell cont contai aini ning ng one one or or mor moree int inter erme medi diar ary y lev level el..

Below figure shows several consumer distribution channels of different lengths

CHANNEL 1. Channel Channel 1 Called Called a direct direct market marketing ing channel channel,, has no interm intermedia ediary ry levels levels.. It consists of a company selling directly to consumers. Ex: - AMVAY---etc; sell their product door to door or through home and office sales parties. The remaining channels in figure are indirect market channels.

CHANNEL 2. Channel Channel 2 contai contains ns one interm intermedi ediary ary level. level. In consum consumer er market market this this level level is typically a retailer. Ex: - The makers of televisions, cameras and many other products sell their goods directly to large retailers. Such “Wal-Mart” and “Sears” which then sell the goods to final consumers.



CHANNEL 3. Channel 3 contains two intermediary levels, a wholesaler and a retailer. Small manufacturer of food drugs, hard ware and other products often uses this channel.

CHANNEL 4. Channel 4 contains three intermediary levels. In the meat packing industry. For example, Jobbers buy form wholesalers and sell to smaller retailers who generally are not served by larger wholesalers. Figure 1:


28


A. CUSTOMER MARKETING CHANNEL

Figure 2: -

Consumer and business marketing channel

B. Business Marketing Channel

In the past many companies used a single channel to sell to a single market or market segment. To day with the proliferation of customer segments and channel possibilities, more and more companies have adopted “Multi channel” distribution system often called “Hybrid marketing channel”. Multi Channel: (Def)

A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments is called “Multi Channel” distribution system.



Functions and Distribution [Marketing] Channels perform: -

This channel performs many key functions. functions. Some help complete transactions transactions by gather gathering ing and distr distribu ibutin ting g inform informati ation on needed needed for planni planning ng and aiding aiding exchang exchangee by developing and spreading persuasive communication about an offer by performing contact work  finding and communicating with prospective buyers; by matching  shaping and fitting the offer to the buyer’s needs and by entering in to negotiation to reach and agreement on price and other terms of the offer so that ownership can be transferred. Other functions help to fulfill the completed transaction by offering “Physical Distribution” transporting and storing goods. Financing



acquiring and using funds to cover the costs of the channel work.

Risk taking  assuming the risks of carrying out the channel work.



DEALERS PERCEPTION: -

Dealer Selection:

Marketing take great care in the selection and appointment of dealers granting franchise to under serving dealers will be detrimental to the business interests or the firm.


30


The firm should take for a number of essential qualities and qualification in their prospective dealer. Some of these qualifications are irrespective of products lines and such alitiesare financial strength, credit worthiness, salesmanship, experience and reties, business capacity; etc. in practice, the firm may some times find it difficult to locate dealers dealers posses possessin sing g all the desire desired d qualifi qualificati cations ons and attrib attribute utes. s. Out of the availa available ble candidates dealers should be selected care fully. In the case of specialty. Products, selections of dealers require elaborate efforts. Qualities to be looked for while selecting dealers: •

Credit worthiness

•

Financial soundness & willingness to invest in line

•

Previous experience in the field

•

Business reputation

•

Business capacity & salesmanship

•

Willingness to provide credit

Capacity to offer:

•

Required assortments of product

•

Required service



Capacity to provide: -

Good relation with: •

Concerned government officials, sub – dealers if any, consumers,

Banks and other financial institutions. •

Storage facilitates, Show rooms, Shops, Service Workshops, Sales and

serviceman, consummate with expected business. •

Social status.

Positive attitude towards the company on the part of the dealer and his key personnel.

Dealer motivation: -

To be effective the dealers have to the constantly motivated. The firm should constantly strive the needs of the dealers. It is applied said that a wise firm gets a good band of dealers settle down with firm. Dealer’s motivational elements are as follows. 1.

Harmo Harmoni nious ous deale dealer’ r’ss mot motiv ivat atio ion n is is ver very y imp impor orta tant nt in in dea deale lerr mot motiv ivat atio ion. n.

2.

Ensu En suri ring ng good good stor storee imag imagee and deri derivi ving ng prom promot otio ion n advan advanta tage ge thou though gh the the stor storee image.

3.

An att attra ract ctiv ivee trade trade mar margi gins ns is is not not doubt doubt.. The The prim primes es fac facto torr in dea deale lerr moti motiva vati tion on..



4.

Ensu En suri ring ng deal dealer erss suppo support rt in in merch merchand andis isin ing g is anot another her imp impor orta tant nt asp aspec ectt of deal dealer er’s ’s management and dealer’s motivation.

5.

Prom Prompt pt deli delive very ry,, eeff ffic icie ient nt serv servic icee and and inc incen enti tive ves. s.

Managing the dealer network: The designing of the channel and the creation of the channel are not everyday tasks tasks in channel channel managem management. ent. It is the admini administr strati ation on of the dealer dealer’s ’s networ network k that that constitutes every day tasks channel management. In the broadest sense, managing the dealer dealer networ network k will will includ includee the dealer dealer servic servicing ing,, dealer dealer admini administr strati ating, ng, co – dealer dealer compensation, dealer motivation and dealer development.

Performance appraisal of individual dealers: Periodical evaluation of the performance of o f the dealers is yet another important Aspect of channel management. The performance appraisal must be done with a view to identifying the specific strengths and weakness of the dealers. If the performance is below the desire level, remedial action must be taken promptly Criteria for dealer appraisal: -



Market awareness





Sales point facilities



Public relation



Storage space provided



Inventory handling support



Market intelligence



Efficient of service provided to customers



Sales intensity



Enrollment of new accounts



Promotional support



Submission of reports



Timely payment of bills



Maintaining of business records

Thee appr Th apprai aisa sall of deal dealer er’s ’s perf perfor orma manc ncee shou should ld lead lead an impor importa tant nt in thei their r performance in addition to proper performance appraisal of individual dealers, periodic review of the dealer network as a whole and removal of weakness in the

network must also be take – up. Hence, we can say that dealer’s job is a continuous job.


34. DISTRIBUTION CHANNEL

Dealer – principal relation: The relations between a firm and a dealer revolve largely around the following factors. 1.

Serv Servic ices es or func functi tion onss to be perf perfor orme med d by by the the dea deale ler. r.

2.

Territory of operation.

3.

Serv Servic ices es or func functi tion onss to to be be per perfo form rmed ed by the the pri princ ncip ipal al..

4.

Remuneration to the dealer.

Thee firm Th firm norm normal ally ly expec expects ts a deal dealer er to esta establ blis ish h the the prod product uct in the the mark market et,, maintain fair trade practices, and provide serviced to consumers and help in promoting the products. The dealer in turn expects the firm to delivery a quality product, make adequate and reasonable profits for the Delaware in the price structure and render good sales promotion support.

Dealer induction: -

Proper induction of the dealer in to the organization is another important part of dealer management. Many firms view dealers as synonymous with dealer training. While induction does include a training component, it needs to be handled as a distinct function. It should lead to the smooth assimilation a ssimilation of the dealers in to the organization.

35



About area offices and their addresses, add resses, and Dealers address and distance from ZAHEERABAD. NORTH ZONE: AREA OF OFFICE

CHANDIGARH

NEW DE DELHI/

JAIPUR

LUCKNOW

KARNAL

ADDRESS

Sco33,sector

Mahindra Tower

408,4th floor,

Mahinra Towers,

26G,Madhya

2A, BIKAJI

GANAPATHI

gopal Tirath plaza,

Marg,chandigarh

CAMAPLACE,

PLAZA,MI Road

Auto Sector,Opp-

160 026

NewDelhi/

Jaipur – 302 006

HALL, Fizabad Road,Lucknow,22

sco-15,sector

6 016

8,Main market,karnal132 001 Distance from

Km

km

Km

Km

ZAHEERABAD By Own power

1950

By Carrier/Trucks

2100

1609/2000

1730

1494

2010/2060

1730

1627

24 Dealers attached to the CHANDIGARH area office in those 8 main dealers de alers (MD), 5 mahindra authorized dealer branch (MADB), 5 mahindra authorized service center (MASC), and 5 stockiest.

36



31 Dealers attached to the NEW DELHI/KARNAL area office in that 10 main dealers (MD), 1 mahindra authorized dealer branch (MADB), 7 mahindra authorized service center (MASC), 7 stockiest. 36 Dealers attached to the JAIPUR area office in those 10 main dealers (MD), 8 mahindra authorized dealer branch (MADB), 12 mahindra authorized service center (MASC), and 2 stockiest. 39 Dealers attached to the LUCKNOW area office in those 34 main dealers (MD), 0 mahindra authorized dealer branch (MADB), 0 mahindra authorized service center (MASC), and 2 stockiest. Totally 129 dealers attached to the north zone. EAST ZONE: -

AREA OFFICE ADDRESS

Distance from

ZAHEERABAD

CALCUTTA 7,KYD Street, 3rd

GUWAHATI 1 floor, consultancy

3rd floor,J-J complex,

floor, kolkatta-700

house, mani ram

East Boarding, conal

016.

deven road, bamuni

road, patna – 800

maidan.

001.

Km

st

Km

PATNA

Km

By own power

1765

2956

1632

By trucks/carrier

1767

3300

1632


37


16 Dealers attached to the CULCUTTA area office in those 5 main dealers (MD), 0 mahindra authorized dealer branch (MADB), 7 mahindra authorized service center (MASC), and 3 stockiest. 14 Dealers attached to the GUWAHATI area office in that 7 main dealers (MD), 1 mahindra authorized dealer branch (MADB), 3 mahindra authorized service center (MASC), 2 stockiest. 10 Dealers attached to the PATNA area office in those 10 main dealers (MD), 0 mahindra authorized dealer branch (MADB), 0 mahindra authorized service center (MASC), and 0 stockiest. 3 Dealers attached to the AGARTALA area office in those 2 main dealers (MD), 15 mahindra authorized dealer branch (MADB), 5 mahindra authorized service center (MASC), and 5 stockiest. 21 Dealers attached to the BHUBANESHWAR area office in those 5 main dealers (MD), 8 mahindra authorized dealer branch (MADB), 4 mahindra authorized service center (MASC), and 3 stockiest. Totally 64 dealers attached to the east zone.

38



WEST ZONE: -

AREA

MUMBAI/

OFFICE ADDRESS

GOA

PUNE

NAGPUR

BHOPAL

AHMEDAB AD

Mahindra

6, Jagatap

A1-

2nd floor,

APG

Towers,

marg,

indrasagar,

quality

bungalow

ground floor,

ambedkar

ravindranath

business

no.12,

tagore road,

center, plot

N.C.marg,sha

civil lines,

no: 7, zone II,

hibaug,

mumbai-

nagpur-440

M.P. nagar,

ahmedabad-

4000 018

001.

commer

380 004

worli road no. 13,

road,pune411 001

complex, Bhopal. Distance

Km

Km

Km

Km

Km

from Zaheerabad By own

Goa-730

1025

1150

Goa-730

1025

1150

power By trucks/carrier

16 Dealers attached to the MUMBAI/GOA area office in that 8 main dealers (MD), 1 mahindra authorized dealer branch (MADB), 1 mahindra authorized service center (MASC), 5 stockiest.


39


21 Dealers attached to the PUNE area office in those 12 main dealers (MD), 4 mahindra authorized dealer branch (MADB), 2 mahindra authorized service center (MASC), and 0 stockiest. 10 Dealers attached to the NAGPUR area office in those 7 main dealers (MD), 0 mahindra authorized dealer branch (MADB), and 0 mahindra authorized service center (MASC), 0 stockiest. 27 Dealers attached to the BHOPAL area office in those 3 main dealers (MD), 6 mahindra authorized dealer branch (MADB), 6 mahindra authorized service center (MASC), and 3 stockiest. 17 Dealers attached to the AHMADABAD area office in that 12 main dealers d ealers (MD), 1 mahindra authorized dealer branch (MADB), 2 mahindra authorized service center (MASC), 1 stockiest. 14 Dealers attached to the COHIN area office in that 1 main dealer (MD), 8 mahindra authorized dealer branch (MADB), 2 mahindra authorized service center (MASC), and 2 stockiest.Totally 105 dealers attached to the west zone.


40


SOUTH ZONE: -

Area office Address

BANGOLORE APH, Raheja

CHENNAI APG,Bharat

HYDERABAD Mahindra house,

chamber, 1st floor,

Insurance

TSR complex,1-7-

husum road,

Buld,129,annasalai,

1,Park

bangalore-560 001. Km

chennai-600 002 Km

lane,secenderabad-3 Km

By own power

750

825

120

By trucks/carrier

850

900

---

Distance from ZAHEERABAD

15 Dealers attached to the BANGALORE area office in those 8 main dealers (MD), 2 mahindra authorized dealer branch (MADB), 5 mahindra authorized service center (MASC), and 0 stockiest. 18 Dealers attached to the CHENNAI area office in that 15 main dealers (MD), 2 mahindra authorized dealer branch (MADB), 1 mahindra authorized service center (MASC), 0 stockiest. 19 Dealers attached to the HYDERABAD area office in those 7 main dealers (MD), 3 mahindra authorized dealer branch (MADB), 6 mahindra authorized service center (MASC), and 2 stockiest.

M.B.A,Osmania University.

41

CHAPTER - VI DATA ANALYSIS

1Q. Since how long you are taken dealer ship of M & M vehicles? RESPONSE a) Before 1 year b) Before 2 years c) Before 3 years

PERCENTAGE 10% 0% 20% 70%

LINE CHART PIE CHART

80% 60% 40% 20% 0%

a)PERCENTAG Before 1 year

E b) Before 2 years

a) b) c) d) Before Before Before More 1 year 2 years 3 years than 3 years

c) Before 3 years d) More More than 3 years

d) More than 3 years

Most of the Dealers taken their Dealer ship more than 3 years. 20 % Dealers taken their Dealer ship before 3 years. And 10 % Dealers taken their Dealer ship before 1 year.

42

2Q. What is the present position of M & M in the market? RESPONSE a) Excellent b) Good c) Average

PERCENTAGE 95% 5% 0%

0%

COLUMN CHA

100% 8 0% d) Poor 6 0% c) Average 4 0% b) Good 2 0% % a)0 Excellent

BAR CHART

PERCENTAG Series2 Series1

a) b) Good c) Average d) Poor Excellent 0 0.2 0.4 0.6 0.8 1

RESPONSE

Most of the Dealers said that present position of M & M company is Excellent. Remaining 5 % of the Dealers De alers said present position of M & M Company is good. good . 43

3Q. Will you get the vehicles from the “ R.S.O” intime? RESPONSE a) Yes

PERCENTAGE 90% 10%

PIE C HAR HAR

a) Yes b) No

b) No

Most of the Dealers said that they would get g et the vehicle from R.S.O intime. 10 % of the Dealers said no.

44

4Q. Will Company people assist you in advertisements? RESPONSE a) Yes

PERCENTAGE 90%

LINE CHART

1 0.8 0.6

Series1

0.4

Series2

0.2 0 RESPONSE

a) Yes

b) No

b) No

10%

RADAR CHART

RESPONSE 1 b) No

0

Series1

a) Yes

Series2

Most of the Dealers said that company people peop le assist them in advertisement. 10 % of the Dealers said that no. 45

5Q. What is your expectation of sales target?

LINE LINE C HAR

1 0.8 0. 8 0.6 0. 6

Series1

0.4 0. 4

Series2

0.2 0. 2 0 R E S P O NS E

a) Y e s

b ) No

RESPONSE a) Reach the goal b) Other factor

PERCENTAGE 100% 0%

LINE LINE CHART

120% 100% 80% 60% 40% 20% 0%

PERCENTAG E

a) Reach the b) Other factor goal

All of the Dealers said that their expectation sales target is Reach the goal.

46

6Q. Are you satisfied with the margins given by the company? RESPONSE

PERCENTAGE

PIE CHART

RESPONSE a) Reach the goal b) Other factor

a) Yes b) No

100% 0%

RADAR CHART

RESPONSE 1 b) No

0

Series1

a) Yes

Series2

All the Dealers said that they satisfied with the margins given by the company.

47

7Q. Are you conducting any survey regarding customer satisfaction?

COLUMN CHART

1.2 1 0.8 0.6 0.4 0.2 0

Series1 Series2

RESPONSE RESPONSE

a) Yes

PERCENTAGE

b) No

a) Yes b) No

90% 10%

COLUMN CHART

1 0.8 0.6

Series1

0.4

Series2

0.2 0 RE S P ONS E

a) Y es

b) No

Most of the Dealers said that they are conducting cond ucting survey regarding customer satisfaction. Remaining 10 % of the Dealers said that they have no time. 48

PIE CHAR

RESPONSE a) Yes b) No

CHAPTER – VII CONCLUSION & SUGGESTIONS

CONCLUSION

The Project has been taken – up to find out the what are the problems faced by the Dealers and what is the present company position in Twin Cities (Hyd, Sec), Zaheerabad and Gulbarga and what are the other suggestions to the company to increase the sales. I did the survey with the sample of 5 Dealer points in the given cities. •

Actually in the market Mahindra & Mahindra have hav e very good name.

•

In a survey I can conclude that the transportation (Dispatching) of the

vehicles of M & M Company is very good. •

Dealers are showing their good response.

•

Most of the Dealers opinion is that the company advertisement is not good

in Cities. They are telling that the management is not showing interest to increase the advertisement. •

Maxi Maximu mum m number number of deal dealer erss are are sati satisf sfie ied d with with the the serv servic ices es of the the

company.

49

SUGGESTIONS

After Through analysis of the findings researcher researcher offers offers following following suggestion suggestion to the Management of the Mahindra & Mahindra for their improvement. •

The most of the dealer’s suggestion is the management has to maintain to

their increase the company sales. •

Maximum numbers of Dealers are satisfied with the transportation. But

some are not satisfied. Because they are telling that the management is doing some delay in transportation. Dealer’s suggestion is to avoid the time delay. •

And most of the Dealer’s suggestion is to conduct the Dealers at least once

in a month. •

Some Some of the Dealers Dealers telli telling ng that that in the Region Regional al Sale Sale office office (R.S.O (R.S.O))

[AREA OFFICE] is no good response. So my suggestion is the management have to concentrate on the Area Office, which is in city. •

My best best sugg sugges esti tion on is that that the the mana manage geme ment nt has has to incr increa ease se the the

advertisement of their vehicles. They have to concentrate on advertisement very much.

50

APPENDIX

QUESTIONNAIRE ON DISTRIBUTION CHANNEL

Dealer perception in terms of “DISTRIBUTION CHANNEL”.

Dealer point:

1Q. Since how long you are taken dealer ship of M & M vehicles? a) Before one year

b) Before 2 years

c) Before 3 years

d) More than 3 years

2Q. What is the present position of M & M in the market? a) Excellent

b) Good

c) Average

d) Poor

3Q. What is the reason to sell exclusively for M & M vehicles only?

4Q. Will you get the vehicles from the “RSO” in time? •

Yes { }

•

No { }

5Q. How many types of vehicles maintaining in your dealer shop?

6Q. At present which one is the highest selling vehicle? What is the reason?

7Q. Who are your competitors?

51

8Q. What is the equal range of competitors of your vehicles? M & M vehicles

Competitor vehicles

9Q. Will Company people assist you in advertisements? • •

Yes { } No { }

10Q. Are you satisfied with the margins given by b y the company? • •

Yes { } No { }

11Q. Will you tie up with any banks ban ks for giving vehicle loans to the customers and why? Do you choose that particular bank? • •

Yes { } No { }

12Q. How do you provide the service to make the customer satisfaction?

13Q. Are you conduction any survey regarding customer satisfaction? •

Yes{ }

•

No { }

14Q. Have you observed any increasing sales on particular vehicle & why? What is the reason?

52

15Q. The company gives what is your actual target to selling the vehicles that?

16Q. What is your expectation of sales target? a) Reac Reach h the the goal goal b) b) Othe Otherr fact factor or

17Q. How do you promote the vehicles?

18Q. What is your sales Index & Sales growth?

19Q. What is the perception towards M & M vehicles?

20Q. On which factor emphasize for which vehicle?

53

BIBLIOGRAPHY 

BOOKS

TITLE

1)

Marketing Ma Management

AUTHOR



PHILIP KOTLER McGraw – HILL EDITION

2)

Principles of Management



KOONTZ McGraw – HILL EDITION



BASIC MATERIALS

1.

Prof rofile of Mahindra an and Mahindra Ltd.

2.

Pro Product duct Prof Profil ilee of of Mah Mahin indr draa an and Mah Mahin indr draa Ltd Ltd..

WEB SITE ADDREESS •

www.indiainfoline.com

•

www.automartindia.com

•

www.automotive.mahindraworld.com

54

Distribution Channel

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