An Academic Overview of the Channels of Distribution of Marico Bangladesh

From Factory to Consumers, Excellence in the FMCG Industry

Submitted By
Shabbir Ahmed
2110233
Department of Marketing
School of Business and Entrepreneurship
Independent University, Bangladesh.

Submitted To
Mr. Suman Prasad Saha
Course Instructor
Distribution Management
MKT380
Section-01
Autumn 2023
Department of Marketing
School of Business and Entrepreneurship
Independent University, Bangladesh.
 Company Overview
Marico Bangladesh

Marico Bangladesh Limited is a public limited company which was established in September
1999 as a subsidiary of Marico Limited India which had a presence in more than 26 countries
across Asia and Africa. The Company is amongst the top 3 and fastest growing FMCG (Fast
Moving Consumer Goods) Multinational Companies (Unilever Bangladesh Limited, Nestle
Bangladesh Limited) in Bangladesh with a vibrant multi-product brand portfolio.

Marico Bangladesh is engaged in manufacturing and marketing of consumer goods in the

category of Branded Coconut Oil, Value Added Hair Oil, Hair Cleaning, Hair Color, Hair Serum,
Skin Care, Baby Care, Hygiene, Male Grooming, Edible Oil & Foods under the brand name of
Parachute, Parachute Advanced, Parachute Naturale, Parachute SkinPure, Parachute Just For
Baby, Nihar, Hair Code, Livon, Mediker Safelife, Studio X, Beardo and Saffola.

They started their commercial operation on 30th January 2000. Subsequently, it started its
commercial production at Filling unit, Crushing unit and Refinery unit in 2002, 2012 & 2017
respectively. Its manufacturing plants are located at Mouchak, Kaliakoir, Gazipur and
Shirirchala, Mahona, Bhabanipur, Gazipur. The company has invested to set up a new
manufacturing plant in Bangabandhu Shilpanagar, Mirsarai Economic Zone (MEZ), Chattogram
along with two contractual manufacturers. The Company sells its products through its own
distribution channels comprising four sales depots located in Dhaka, Chattogram, Bogura and
Jashore.

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 Answer to the Question No: 01
Distribution Strategy of Marico Bangladesh

Parachute is the undisputed market leader in the Branded Coconut Oil segment with 85% market
share in Bangladesh and the attainment of such a dominant position by Marico Bangladesh is
linked to their excellence in distribution, making it available to more than 7 lac retail outlets.

Marico Bangladesh has two broad distribution channels for reaching Parachute Coconut Oil to
their consumers: Modern Retail and Traditional Retail with the channel being segmented into
Urban Market and Rural Market.

1. Modern Retail: The flow of Parachute Coconut Oil is usually as follows: Factory – Depot –
Modern Trade Retails (Supermarkets, Convenience Chain) like Shawpno, Agora, Meena
Bazaar, Unimart, Daily Shopping, Almas Super Shop etc. – Customers.

2. Traditional Retail: This channel further segments into two categories.

● Urban Market: The flow of Parachute Coconut Oil in urban markets is as follows: Factory –
Depot – Distributor – Urban Retailers (Grocery Shops) – Customers. To cater to retailers
which are not catered by wholesalers.
● Rural Market: The flow of Parachute Coconut Oil in the rural market is as follows. Factory –
Depot – Super Stockists – Wholesalers – Rural Retailers – Customers. In areas where it is
feasible, there is the existence of sub-stockists to cater to the retailers.
Each of these channels has differences in the buying behavior of consumers, degree of control
and competitive strategies.

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Channel of Distribution-01: Modern Retail
The products are transported from the company's depots to the retailers in a direct manner
through this channel. A significant amount of products are acquired by modern trade retails like
Shawpno, Agora, Meena Bazaar, Unimart, Daily Shopping, Almas Super Shop, Wholesale Club
etc. Therefore, there are no distributors as a channel member who will work as intermediaries
between Marico and the modern trade retails. Instead, each of these retail outlets are considered
as a Key Account for the company, and Key Account Managers are responsible for managing
their relationships with them.

While considering both the traditional trade and modern trade for Marico, it has been found out
that both are equally important and cannot be compromised at cost of one another.

Channel of Distribution-02: Urban Market

This channel of distribution represents the traditional distribution chain for fast-moving
consumer goods (FMCG). The process gets underway with the transfer of products from the
company factories which are located in Gazipur or the two contractual manufacturers to the
depots located in Dhaka, Chattogram, Bogura and Jashore. The company's Area Sales Manager
is located in these depots. Subsequently, the products are sent to the distributors who serve the
various regions managed by each Area Sales Manager. Typically, the distributors are dispersed
among multiple districts. In big marketplaces or the metropolitan cities like Dhaka also marked
as Tier-1 cities, there are multiple distributors. Shared distributors are available for smaller
markets located in Tier 2 and Tier 3 cities. The distributor's sales force facilitates the movement
of products to the retailers. The customers purchase products from the retailers. The distributor’s
sales force typically services the prominent retail establishments located along the primary
thoroughfares of a given region. The small stores located in the narrow streets or lanes and
beyond the distributors' range purchase their products from the wholesalers.

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Channel of Distribution-03: Rural Market
The market is widely scattered throughout the rural areas of Bangladesh. Furthermore, the order
quantity for the shops is far lower than prior to the urban market. In such a scenario, Marico
found it economically non viable to employ a distributor as a channel member.
It employed a sub-stockist where following this, the products are distributed to wholesalers, who
subsequently sell them to shops in rural areas. The retailers are the ones who the customers
purchase from. In areas where it is more feasible, Marico employs sub-stockists who sell directly
to retailers.

Channel of Distribution-04: E-Commerce

After the recent acquisition of Beardo, the company has started to boost its online sales. The
product flow of Parachute for the e-commerce as follows:
Marico has partnered with major e-commerce platforms such as Daraz, Chaldal, Shajgoj,
Ohsogo, Othoba etc. As consumers' buying behavior has changed due to the advent of online
marketplaces partnering with those e-commerce platforms facilitates Marico with warehousing,
logistics and payment processing infrastructure which simplifies the delivery of the product to
consumers.

Channel Member Management

As given above. Marico has the following channel members in its 3 channels combined.
1. Modern Trade Accounts
2. Distributors (Urban Market)
3. Wholesalers
4. Retailers (Urban and Rural Market)
5. Sub-stockists
Marico's engagement varies for each member in terms of monetary/non-monetary rewards,
incentives, target setting approach, monitoring mechanism, training, and HR procedures.

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Modern Trade Accounts

● Monetary Rewards: The prices and margins differ significantly from those in the classical
distribution setting. These sales fall within the category of business-to-business (B2B) sales
for Marico and are managed by a Key Account Manager.
● Non-monetary Rewards: Non-monetary rewards encompass several forms such as club
dinners, loyalty programs, and other benefits.
● Target Setting: Targets are set based on both the quantity and value. The objectives for
modern retail are categorized by specific brands.
● Monitoring Mechanism: The Key Account Manager oversees the performance across several
zones. An extensive examination is conducted at the end of each month, wherein defective
goods or products which are experiencing a fall in demand are discovered.
● Training & HR Inputs: Marico engages in training the retail sales personnel to promote
in-store sales.

Distributors in Urban Market

● Monetary Rewards: Marico evaluates the return on investment (ROI) of the distributor in
order to determine the monetary incentives. Marico provides a 5% margin which is the
industry standard to their distributors operating in the urban market with a credit period
ranging from 30 to 45 days.
● Non-monetary Rewards: Marico provides their distributors with trade promotion strategies.
Marico also organizes contests and awards for its distributors, including the Retail Product
Push Winner Award.
● Target Setting: The Area Sales Manager (ASM) sets performance goals for the distributors
based on the management's expectations. The criteria taken into account include gross profit
margin, break-even threshold, sales methods such as customer retention, acquisition of new
customers, and upselling.
● Monitoring Mechanism: The Area Sales Manager (ASM) utilizes the quarterly statements
provided by the stockists to assess whether they are engaging in excessive or insufficient
trading activities who is proficient enough to analyze resource underutilization, operational
inefficiencies, low sales levels, lack of interest, and smuggling among other factors.

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● Training & HR Inputs: Marico organizes training programs and seminars for their
distributors. Typically, these meetings entail the area sales managers and top management
collaborating with the distributors. They discuss the objectives, evaluate the distributors'
return on investment (ROI), and ensure that the distributors' interests are in line with their
aims.

Wholesalers

● Monetary Rewards: Marico provides a 3% margin to distributors where they receive

discounts for purchasing quantities that exceed certain standards.
● Non-monetary Rewards: Marico provides their wholesalers with coupons and free products
when they make purchases above specific volumes.
● Target Setting: No targets are set as the wholesalers are not contracted or employed by the
company.
● Monitoring Mechanism: The Primary Sales Representatives (PSRs) stationed in the
wholesale markets monitor the sales made by the wholesalers. The performance of
wholesalers determines the implementation of primary and secondary trade promotion
schemes.
● Training & HR Inputs: They do not receive any training or human resources support.

Super-Stockists/Distributors and Sub-stockists in Rural Market

● Monetary Rewards: Marico provides all super stockists a 7% margin and a credit period
ranging from 30 to 45 days where the sub-stockists get 5% margin.
● Non-monetary Rewards: Marico offers comparable distributor programs and recognition for
both super-stockists and sub-stockists, mirroring those provided the same as the urban
distributors.
● Target Setting: The Area Sales Manager (ASM) determines the target goals for the
super-distributors based on the management's expectations.
● Monitoring Mechanism and Training & HR Inputs: Same as urban markets.

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Retailers in Urban and Rural Market

● Monetary Rewards: Marico offers a 5% margin to retailers in rural areas and a 10% margin to
shops in urban areas. Retailers typically receive credit with a short duration of about 7 days.
● Non-monetary Rewards: Marico's salesforce provides rewards to retailers through a trade
promotion strategy known as the secondary strategy. Retailers additionally provided loyalty
programs.
● Target Setting: Marico's salesforce endeavors to promote products to retailers through
strategic initiatives and persuasive efforts. The targets are often determined based on the
sales figures that can be achieved through retailers, as well as the amount of shelf space that
the retailer is willing to allocate for the company's product.
● Monitoring Mechanism: By employing salesforce automation, field people can promptly
update entries on internet-connected company applications, leading to timely modifications
to the Marico's information system as a result allows the secondary sales data to be
monitored actively.
● Training & HR Inputs: They do not receive any training or human resources support.

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 Answer to the Question No: 02
Channel Selection Criteria of Marico Bangladesh

Channel Selection Criteria incorporates the set of considerations and factors which a
manufacturing company takes into account when choosing the most appropriate channel of
distribution for its offering. The choice of distribution channels is a crucial strategic decision
which directly affects the way offerings are delivered to the final consumers. Therefore, Marico
takes this strategic approach into consideration very rigorously. The considerations behind their
selection of the distribution channels requires some key attributes to be possessed by the
distributors.

The criterias are segmented into two categories: Business and Operational Criteria and Sales and
Marketing Criteria. Where the attributes under the first category must have for all types of
channel of distribution. On the other hand, the attributes under the second category depend on
the size and business age of the channel of distribution.

Business and Operational Criteria

Financial Strength: The ability of the distributors to meet their financial obligations and
conduct the business operations effectively. It involves having a sufficient amount of capital,
liquidity, and profitability to effectively handle daily operations, allocate funds towards essential
resources, and endure economically adverse circumstances.
Marico considers these factors: Capital Structure, Profitability, Liquidity etc. of distributors as
very important.
● Distributors who have a strong capital structure, it serves them as a safeguard against
unforeseen financial challenges and enables them to allocate funds towards expanding
prospects.
● Distributors who consistently show profitability demonstrate the distributor's capacity to earn
sufficient revenue to meet expenses and reinvest in their operations.
● Distributor with sufficient liquidity indicates that the distributor possesses cash or easily
convertible assets to fulfill its immediate financial requirements.

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Marico normally adopts the strategy of analyzing the audited financial statements of the
distributor to assess their profitability. They also examine the credit reports of the distributor to
have an insight about their creditworthiness and finally they verify the credit facilities and
financial position of the distributor by cross checking with the bank of which the distributor is a
client which enhances the reliability of the evaluation.

Sales Revenue Performance: The distributors' ability for generating revenue through the sales
of manufacturers products. This criteria evaluates the extent to which distributors are effectively
contributing to the manufacturers targets for sales and profitability.
This criteria is important for Marico's channel of distribution as it allows them to assess how
well the distributors can sell their products in their respective regions. An assessment of sales
revenue performance assists Marico in identifying distributors with the potential of making a
substantial contribution to Marico's overall profitability. Furthermore, Marico frequently offers
training and support to their distributors. As a result the sales revenue performance strengthens in
the decision of distributing resources to distributors who contribute the most to sales and earn the
greatest profits.
Marico normally adopts the strategy of analyzing the annual sales reports of the distributor from
the previous year with the agenda of observing which product lines carried by them and how
profitable they are and if there is any downward curve for the overall sales performance.

Present Territorial Coverage: The current geographic locations which are served by the
distributor for other manufacturers' brands or products. This includes the distributor's extensive
coverage encompassing the quantity of retail outlets addressed and the frequency of visits made
combined with the ability to effectively channel the products over a broader geographic location.

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Parachute is a widely recognized brand of Marico which caters to the target audience belonging
to various age groups, and requires extensive distribution. Therefore present territorial coverage
becomes an important consideration for Marico because
● A distributor with existing coverage can efficiently introduce Parachute's products in their
respective geographic location, reducing the time required to enter the market and utilizing
the potential for generating revenue.
● In addition, distributors who have extensive coverage have developed strong connections
with retailers and wholesalers of their area of operation, which allows for quicker and more
broad market penetration of Marico's products. This is why we can find Parachute in front of
our eyes whenever we go to any retail shops.
One of the main considerations is that the present territorial coverage of the distributor crosses
the path of any of my assigned distributors as it will eventually end up creating a conflict
between their own channel of distribution.

Inventory Locations: The distributor's geographic coverage of warehouse or space for storage
under its ownership and operation. This refers to the distributor's capacity to store Marico's
products in strategically positioned sites across Bangladesh.
The selection of a distributor determined by their inventory locations is an essential
consideration for the Channel of Distribution of Marico due to various reasons:
● Availability of goods to consumers facilitates faster deliveries, satisfying the increasing need
for efficient and fast service. Marico's competitiveness is heavily reliant on this, particularly
in the fast-moving consumer goods (FMCG) industry.
● Balancing the distribution of goods around the country reduces the requirement for extensive
transportation, leading to cost reductions for both Marico and the distributor.
● Distributor with a wider network of inventory locations allows Marico to reach a larger
customer base, expanding its market reach which is a significant consideration for a
geographically diverse country like Bangladesh. As a result distributors with a wider network
of inventory locations get priority.

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Overall Condition of the Facilities: The physical state of preservation and the maintenance of
the distributor's facilities, includes buildings, warehouses, spaces for storage, and
loading/unloading docks.
This criteria is of utmost importance for Marico's distribution route as it has a direct impact on:
● Product Quality: Parachute is a brand which stands as the essence of purity in the eyes of
consumers. Facilities which are maintained poorly can subject items to dust, moisture, and
pests, resulting in contamination and deterioration of the coconut based oil product. This has
the potential to harm Marico's brand image and have a detrimental effect on customer
satisfaction.
● Storage and Handling: Sufficient storage capacity and appropriate handling machinery or
individuals are crucial to avoid product harm and enable effective distribution. IInfrastructure
which is upheld negligently can result in logistical challenges, shortages of inventory, and
increased expenses.
● Regulatory Compliance: Parachute as a brand gained large recognition as a brand. Therefore,
distributors are required to maintain multiple standards pertaining to cleanliness, sanitation,
and safety so that Parachute can maintain the recognition it achieved. Also, noncompliance
with these standards may lead to monetary sanctions and repercussions for both Marico and
the distributor.
Hence, it is crucial to assess the 'Overall Condition of the Facilities' when choosing dependable
distributors that can ensure product quality, effective distribution, and adherence to rules.
Followings are the aspects on which Marico particularly focuses:
● Temperature Control: As the melting point of coconut oil is around 24°C (75°F).
Consequently, it is essential to maintain temperature-controlled conditions in storage
facilities to avoid the oil undergoing repeated cycles of melting and solidifying, as this can
have a detrimental impact on its overall quality and texture.
● Humidity Regulation: Facilities with high levels of humidity can lead to a surge of bacteria
and mold in coconut oil. Therefore Marico wants the warehouses to have adequate
ventilation with drying systems in order to balance the level of humidity.
● Floors and Walls: The floors and walls of the facility should be maintained in a clean and
smooth condition.

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● Lighting: There should be a sufficient exposure of light across the facility to ensure that the
inspection and manipulation of products are accurate.
● Pest Control: Facilities have to go through routine pest control methods in order to avoid
contamination, as insects and rodents have the potential to damage the product or leave
marks on it.

Knowledge of Local Market Condition: The level of understanding and the degree of
awareness which a distributor showcases with regard to the distinct attributes, and the trends of
the market within a specific geographical location.
The selection of a new distributor is a critical factor for Marico in Bangladesh, as it guarantees
that the distributor has the expertise and assets required to effectively handle the distinct
problems and prospects in the local market. It showcases the distributor's effectiveness for
making well-informed choices, developing marketing tactics, and adjusting to the tastes and
preferences of the local consumers. A distributor with required knowledge of local market
conditions allows Marico to explore the followings:
● Bangladesh often encounters an unstable political system which ends up hampering the
business operation. For instance, recent political oppression such as the country wide
blockade is a big concern for the business entities. Therefore, having local knowledge allows
distributors of the efficient routes, warehouse locations, reducing costs, improving delivery
times and most importantly mitigating such adversity.
● Marico keeps innovating new products and it’s mostly witnessed for their Parachute brand
which requires catering to more untapped consumer segments and distributors who are
capable of identifying and selling to untapped consumer segments, thereby increasing
awareness of the brand and revenue.
● Can establish stronger connections with retailers, consumers, and additional stakeholders,
thereby ensuring continued success.
In order to distribute Parachute in Bangladesh efficiently, Marico wants a distributor to possess
the following local market expertise:

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● Conventional practices and habits of the consumers about hair care
● Effect of seasonal changes on the buying patterns of consumers
● Understanding the urban vs rural dynamics and retail infrastructures, the age groups and the
variation of the units sold based on the channel and age groups.
Marico conducts comprehensive interviews with prospective distributors to evaluate their
understanding of the local market conditions. These interviews mainly aim to examine their
knowledge of consumer behavior, rivalries, and regulatory factors. Along with that Marico
emphasizes that the large scale distributors provide a market research study or relative insights
tailored to their respective geographical location, showcasing their knowledge regarding the local
market dynamics.

Employee Quality: The characteristics, competencies, and qualities of the workforce employed
by the distributor. The workforce play an essential role in overseeing numerous aspects of the
distribution channel, such as sales, customer service, logistics, and relationship management.
Placing importance on employee quality is crucial for Marico's channel of distribution as
● A skilled and enthusiastic workforce ensures that the products are smoothly and timely
supplied to retailers resulting in zero errors and delays.
● Individuals that possess effective communication and interpersonal skills are able to deliver
exceptional customer service, resulting in increased satisfaction among retailers and
consumers of Marico's goods.
There are some common requirements for the distributor's workforce but followings are the one
on which Marico emphasizes most. Those are:
● Product Knowledge
● Logistics Expertise
● Service Orientation
● Reporting and Analysis
Marico in order to evaluate the quality of employees of the channel of distribution through a
pre-qualification questionnaire and comprehensive interview.

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Sales and Marketing Criteria
Sales Competency: The knowledge, skills, and actions that allow a salesman to identify
potential customers effectively and efficiently. analyze leads, establish relationships, provide
solutions, counter objections, and finalize transactions.
Sales Competency for Marico's channel of distribution is of the utmost importance since it
affects the company's performance in sales and position in the market. Marico benefits from
distributors that are highly competent in sales since they are better able to assess the
requirements of customers, implement successful sales methods, and increase the company's
bottom line.
Following are some of the competencies emphasized by Marico for selecting a distributor.
● Sales Process Management
● Lead Generation
● Relationship Building
● Negotiation
These are also evaluated the same as the Employee Quality. Sometimes Marico goes for a
Stimulated Sales Situation or Sales Presentation after interviewing the candidates.

Sales and Marketing Support: The internal infrastructure and particular specialization which a
distributor possesses to support the sales and marketing activities of the manufacturing company
it represents.
The effectiveness of sales and marketing support is vital for Marico's Channel of Distribution as
it strengthens the successful promotion, distribution, and sales of Marico's products in the
designated marketplace. It exhibits the distributor's capacity to contribute to Marico's wide
marketing strategy and sales objectives.

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Ordering and Payment Policies: The set of rules and guidelines established by the
manufacturing company for controlling the ordering and payment of the distributors.
Marico with these policies ensures how distributors should place orders for products and how
they should make payments for those orders. These policies are an integral part in order to
simplify the process of getting products from the manufacturing facility to the customer, these
regulations are a crucial aspect.
The ordering and payment policies often vary depending on the size of the business of the
distributors. These policies includes:
● Payment Terms
● Credit Limits
● Minimum Order Quantities
● Delivery Schedule
● Discounts

Consent to Sign a Contract: Marico always ensures that the distributors who are willing to
represent them or their brands are up for signing contracts where information about both the
parties are stated. This is prioritized because when distributors sign a contract they are obligated
to meet the objectives specified by Marico and if the distributor violates any of the terms stated
in the contract Marico can easily take legal actions to compensate for the efforts they have made.

Training Programs: The ability of distributors to train their own salespeople and retailers
in-house.
Training for Marico's products have to cover a wide range of topics, such as:
● Product Knowledge: A thorough understanding of Marico's product line, including all of its
features, benefits, and audience.
● Sales Technique: Being able to communicate effectively, coming up with convincing
arguments, handling customer objections, and finally, making a sale.
● Retailer/ Lower Counterpart Engagement: Strong relationships, mutual knowledge of
demands, and the provision of sales support and promotional plans.
● Customer Service: Efficient resolution of client complaints and questions, and the
encouragement of brand loyalty.

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Therefore, Marico ensures the in-house training capability of the distributors on these aspects,
especially the large one’s. Because-
● Sales and recognition of the Marico brand can skyrocket when sales associates and
distributors have the training they need to sell the company's products.
● Salespeople who have received proper training can increase revenue by using proven
methods to complete deals and meet or exceed sales goals.
● Implementing efficient processes, maintaining accurate records, and ensuring timely delivery
can improve overall efficiency and reduce operational expenses when the salesforce are
properly trained.

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 Answer to the Question No: 03
Incentives Offered by Marico Bangladesh for the Channel Candidates

This is one of the last steps involved in creating a new channel. Where criteria applied for
selecting a new channel of distribution allows the manufacturing company to become informed
about what the channel of distribution has to offer. On the other hand, the distributors are also in
search of some incentives from the manufacturing company to allocate their utmost level of
commitment in order to represent them and grow together hand in hand.

If the manufacturing company has adequate incentives to offer no distributors can not resist
themselves from representing the company. While some of the incentives are necessary to offer
to operate side-by-side, some incentives offered by the manufacturing company gives the
distributors a reason why they should employ their efforts more on the selling of the products of
this particular company.

Antes refers to the policies that are necessary to get the channel candidates into the distribution
operations.
Pluses refers to the policies that strengthen the position of the manufacturing company and make
an advantageous difference between the company and its rivals.

When a FMCG company like Marico is choosing a new distribution channel, it is essential to
offer incentives to the channel candidates such that their interests are in line with the company's.
As a result, the distribution partnership becomes more of a win-win for both sides. Marico, to
entice its channel candidates maintain their degree of incentives into Antes and Pluses.

We have categorized the antes and pluses offered by Marico which can be found on the following
page.

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Antes
Adequate Profit Margin: An acceptable profit margin is the percentage of revenue which will
stay as the profit for the distributor after deducting the expenses of selling the product.
For a number of reasons, it is essential for a company like Marico to provide adequate profit
margin to its distributors as part of the Antes in business relationships:
● Distributors are essential elements in the supply chain because they get products to retailers
and promote them. To ensure that distributors are fairly compensated for their marketing,
distribution, and sales expenditures, it is important to offer a reasonable profit margin. If
distributors are expecting an adequate return from selling Marico's product, they will be more
inclined to promote and sell them.
● The FMCG industry of Bangladesh is very much competitive with the presence of several
multinational companies along with local companies. Marico will be able to attract and
maintain top-tier distributors by providing them with attractive profit margins. Offering
distributors favorable conditions helps Marico differentiate and maintain a strong
distribution network, especially in a competitive industry where distributors may have
choices.

Quality Product: Products that are up to the same level with, or better than, what the
manufacturer had envisioned. The product's overall value and consumer happiness are influenced
by its qualities, features, and performance.
Providing a quality product as an Antes is of utmost importance to Marico for multiple reasons:
● The goal of distributors is to form lasting relationships with businesses. Distributors can
count on consistent and repeat business from satisfied customers who buy products of
superior quality. In the context of Parachute which is the most selling coconut based oil
product in Bangladesh. Marico has to adhere to their quality control to safeguard the position
they have achieved.
● Customers are less likely to have issues or send back high-quality products and distributors
also do not have to do that. As a result, distributors have less work to do, and company
operations run more smoothly.

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● Providing a better product can set Marico apart from other brands in the competitive FMCG
sector. Companies whose products are particularly noteworthy in quality distributors will be
more interested in partnering with them.
To ensure the quality of their product Marico goes through quality control processes, and checks
the products for any damage or abnormalities or mistakes before sending them to distributors.

Sales and Marketing Support: Companies often offer their distributors in the form of
promotional events, advertising materials, training, and product expertise. So does Marico, they
often collaborate with the retail chains operating in the large metropolitan areas of Bangladesh
and provide them with advertising materials like posters and calendars. Whereas for the small
scale distributors they organize workshops with the presence of industry experts who give them
insight on effective sales techniques and product expertise.
In order to ensure that distributors successfully market the products, it is essential for the
company to provide sales and marketing support as an Ante. Overall market performance and
profitability are boosted by this support, which increases brand awareness, generates sales, and
maintains consistent messaging.

Timely Delivery: When the products are transported in a timely manner from the manufacturer
to the final location, such as a retail location or the distributor's warehouse.
As a "Ante" or fundamental necessity, providing fast delivery is vital for Marico and similar
FMCG companies for several reasons:
● Customers in the fast-moving consumer goods market typically want things quickly and
easily. Increased customer satisfaction is a direct result of items being available to buyers
when and when they need them thanks to fast delivery.
● Stores and distributors may avoid stockouts thanks to quick delivery. Lost sales opportunities
and unhappy consumers can happen when products are out of stock. Products must be
restocked at regular intervals so that they remain accessible for purchase.

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● Businesses who are able to expedite product delivery tend to have an advantage in highly
competitive markets. In order to address urgent market needs or adapt to quick changes in
customer preferences, a firm might distinguish itself apart from competitors by offering rapid
delivery as a value-added service.

Price Protection: A policy where a manufacturer assures the distributors of the protection from
price reductions or fluctuations during a specified time period.
So, if a distributor buys products from Marico at a specific price and then Marico decides to cut
the pricing or change the quantity of the units, the distributor can get a credit or reimbursement
of the products of the same monetary amount for the difference. There are a number of contexts
in which providing price protection as an Ante can be useful for Marico:
● After making a purchase, distributors run the risk of losing money if the manufacturer lowers
the price of the goods. By protecting them against future price adjustments, Price protection
helps distributors reduce this risk.
● If distributors believe that product pricing will remain stable, they may be more inclined to
place greater purchases. By allowing for economies of scale and perhaps lowering total
distribution costs, this is advantageous for both the producer and the distributor.

Replacement of Faulty Products: The promise to replace any products which have been
delivered that are either damaged or otherwise unusable upon arrival.
Marico offers replacements of faulty products to ensure their commitment to product quality and
minimizations of disruptions in the business operation.

Payment Terms: The payment term of Marico states that the distributors have to pay their
money within a minimum time of 15 days after the product has left for delivery to their
warehouse or storage space. If any channel member completes their payment obligations within
15 days, they often get a credit on their next purchase. But this also varies with the size of the
order to encourage more bulk orders.

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Pluses
Product Warranty and Stock Rotation: The product warranty is the shelf life of their products
which is usually 15 months and if distributors can not sell in those 15 months marico takes the
products back and supplies them with new ones. In the context of Parachute it is often seen that
products do not usually come back. It usually allows the channel members to exchange their
expired stocks with no financial penalty which results in long-term relationships.

New Product Development Plans: The situation when the manufacturing company strategically
develops and releases new products to the consumers.
Marico, also known for their product innovation often informs their channel partners about their
strategic approach. This is done with the objective of informing them and being prepared if the
new product development leads to a new market trend. It becomes an essential aspect as
Distributors can better coordinate their plans with Marico's marketing and product launch
schedules when they have access to the company's new product development plans. This
coordination makes sure that items are ready to be introduced at the right time, so the launch may
have the most possible impact.
As a conclusion, Marico has made a strategic step by adding New Product Development Plans as
a "Plus" for distributors. As a result, distribution partners are better able to work together toward
a common goal, and distributors are given more agency over the success or failure of new
product launches.

Gift Hampers: Marico often provides their distributors with gift hampers which contain
household items, their own products, and monetary awards with the attainment of any specific
sales objectives compared to the size of their orders.

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 Answer to the Question No: 04
Communication Strategies Used by Marico Bangladesh

To keep its distributors informed of product pricing, promotional plans, and market changes,
Marico has an open line of communication with them. Both sides benefit greatly from this
ongoing conversation, which drives sales and maximizes profits.

Price Communication: Marico sends out an Excel document with all of the current product
prices to its distributors at the start of the month. This keeps things open and honest, which helps
distributors with inventory and pricing planning.

Scheme Communication: Distributors get promotional scheme information via email. In order
to encourage distributors to sell Marico products and reach sales goals, these schemes frequently
provide discounts, incentives, and other perks.

Interaction with the Territory Manager: The principal intermediary between Marico and its
distributors is the territory manager. Distributors are visited every day to:
● Keep In Touch: This entails providing updates on product details, price, plans, and industry
trends.
● Field Visits: Territory managers get the opportunity to witness distributor activities firsthand
during the five days that are dedicated to field visits.
● Reporting on Distributor Performance: Two days are devoted to data analysis and report
compilation.
● Relationship Development: On occasion, territory managers would treat distributors to lunch
or a meeting as a way to strengthen ties. Insights into distributor issues and problems are best
gained in this casual context.

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Market Communication: The majority of market visits are made by area managers, although
other teams also visit the market from time to time. Among them are:
● Marketing Team: The marketing group checks that distributors get consistent and clear
information and determines how successful various communication mediums are.
● Audit Team: Distributors must follow Marico's pricing standards and refrain from
manipulating prices; it is the responsibility of the audit team to make sure this happens.
● Quality Team: Distributor warehouses are their primary area of expertise when it comes to
goods handling and storage. In order to guarantee quality and avoid needless product returns,
they detect any signs of damage or misuse.

Area Manager Involvement: Area managers are just as important as territory managers,
although they don't make as many visits. In order to monitor distributor sales practices and
provide advice, they frequently accompany territory managers on joint sales calls.

Joint Sales Meetings: Distributors' sales strategies and client interactions are analyzed in these
morning sessions where a team coordinator visits the field with the representatives of
distributors, where those representatives are assessed. So that the invigilator can have a brief
knowledge about the sales competency of the representatives and come out with the result which
could improve their sales results with the help of their team's comments and encouragement from
the territory manager and others.

In conclusion, Marico's sales and communication approach with distributors is thorough,

involving many teams, regular contact, and an emphasis on openness. Marico and its distributors
benefit from this cooperative strategy since it strengthens connections, guarantees accurate
product handling and pricing, and increases in sales.

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 Answer to the Question No: 05
Suggestion for New Distribution Methods, Employed by Marico Bangladesh

Certain places, such as Bhola and Saint Martin, are difficult to get to for Marico. Although the
trucks of distributors can travel to these places, it is challenging to set up a thorough distribution
network there. Using its distribution model, Marico is able to reach about 300,000 retail outlets
in Bangladesh; however, for the remaining outlets, products are stocked and transported to these
remote places by wholesalers. Because of the decentralized method, there is less control over
these areas, which might result in problems like stock outs or protracted product unavailability.
Marico barely reaches 300,000 of the approximately 1 million outlets overall, therefore there is a
sizable disparity that needs to be filled. As listed below, there are several approaches that can be
used to address this problem and reach a larger market:

Data-Driven Decision-Making: Marico can use data analytics to learn more about the trends in
consumer demand in particular areas. Through an awareness of market dynamics, they are able
to minimize stockouts, optimize inventory levels, and customize distribution plans to each
location's particular needs.

Mobile Vendor Networks: They can establish a network of mobile vendors who can deliver
Marico products to customers directly in remote locations by navigating difficult terrain with the
use of carts or motorcycles. These mobile sellers might purchase goods from wholesalers,
guaranteeing a more flexible and economical distribution strategy.

Collaborative Partnerships: Forming alliances with nearby companies or business owners in

hard-to-reach areas could strengthen their standing in the market. Working together with
already-existing businesses can make it easier to create common distribution networks, which
will benefit distributors by saving them money and improving coverage.

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Community-Based Distribution Centers: Establish additional neighborhood-based distribution
hubs in key areas. To get around the difficulties of providing direct transportation to every
remote location, these hubs might be used to aggregate products and send them to stores in the
vicinity.

Alternative Transportation Modes: It is possible to investigate less common modes of

transportation to more efficiently reach island places like St. Martin, such as off-road vehicles or
small boats. Tailored transportation options tailored to the unique geographic characteristics of
each area can greatly improve distribution capacities.

References
1. Goupal, A. (2023, April 27). Untitled. Marico. Retrieved December 12, 2023, from
https://m.marico.com/investorspdf/Annual_Report_22_Marico_High.pdf
2. Interview:
Name- Confidential
Designation- Group Product Manager
Organization- Marico Bangladesh Limited

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