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Distribution Structure Tata Tea: by Group 3

The document discusses TATA Tea's distribution structure in India. It follows a 3-level distribution system with 40 distributors per sales supervisor covering 10 wholesalers and 200 retailers each. Exports and domestic production of tea have increased 13% and 9% respectively from 2013-2018. The roles, margins, sales coverage, payment terms, and promotional support for distributors, wholesalers and retailers are described. Technology adoption in the distribution structure is still nascent.

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siddhant hingorani
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319 views22 pages

Distribution Structure Tata Tea: by Group 3

The document discusses TATA Tea's distribution structure in India. It follows a 3-level distribution system with 40 distributors per sales supervisor covering 10 wholesalers and 200 retailers each. Exports and domestic production of tea have increased 13% and 9% respectively from 2013-2018. The roles, margins, sales coverage, payment terms, and promotional support for distributors, wholesalers and retailers are described. Technology adoption in the distribution structure is still nascent.

Uploaded by

siddhant hingorani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Distribution

Structure
TATA Tea

By Group 3
About the Tea Market

Domestic Production
Increased from 2013 -
18 by 9%

Exports Increased from


2013 -18 by 13%
About the Tea Market
MultiChannel Distribution
Levels and Number of Intermediaries

3-Levels 1- SS 40
3-Level Type There are 40
marketing and Every Zone has its Distributors per SS.
distribution system own Super Stockist Every Distributor has 2
followed salesperson covering
10 wholesalers and 200
retailers each
Customer Penetration

1
1 2
2
Role of Each Intermediary
SuperStockist Distributor/Wholesaler Retailer

● Warehousing ● Delivery ● Sell products, educate


● Order Fulfillment ● Provide Local Credit customer on new products
● Risk bearing ● Provide Products ● Product promotion and
● Logistics Information advertisement
● Demand Management ● Anticipate Market ● Valuable source of information
● Packaging Demands and feedback
● Bulk Breaking (1 ● Retailer acts as the point of
carton 20 kgs) contact between the customer
● Mass Selling and the wholesaler/distributor
Territory Design in Delhi NCR
ROI & Margin for Primary Channel Partners

Margin (%) ROI (%) Discount Monthly Sales Margin ROI


(%)

Distributor 4 2 2 ₹ 45,00,000 ₹ ₹ 90,000


1,80,000

Wholesaler 2 2 0 ₹ 65,000 ₹ 1,300 ₹ 1,300

Retailer 10 10 0 ₹ 6,000 ₹ 600 ₹ 600


Coverage plan followed by distributors:
Infrastructure required by the distributors

Ø The salesperson is responsible for collecting the


orders, making sure timely delivery of goods and
collecting the payments as well
Ø The salesperson also acts as a channel for the flow
of information from customers to the company via
wholesalers, retailers and distributors.
Support Provided to Distributors

● Company provides support by sending


their Sales Officer (SO) to distributors

● Posters and banners are provided by


the company for promotional activities

● No Logistics Support
Payment terms given to distributors

Security Amount = Monthly


Sales / 3 ( Payment within 15
days)
Payment / credit terms given by distributors of TATA tea
Limited in the market

The credit provided in terms of


payment to wholesaler is
15days
Distributor
The credit provided in terms of
payment to Retailers is 15days
Promotional support given and expected

Recent Promotional offer- Buy TATA tea gold (250gms) and get Sipper free

FREE
Famous promotion in past to increase intention in sales funnel

BUY TATA TEA GOLD GET GOLD


OFFER
Conflict Envisaged

Sales target, Regarding


area coverage Price, quantity

Invoice related Regarding C&FA


issue revenues

Issue regarding
Product familiarity of
replacement Price across
territories
Conflict Management

To Resolve Invoice Limiting the order


related Issue, a dealer capacity of prominent Setting Subordinate
should be well dealers to reduce intra goals
informed about the trading across
delivery of products territories

Segmenting products
by seller type (direct
C&FA Commission by
or channel), or making
the company should Exchange of
certain geographical or
be well adjusted for Employees
vertical territories
inflation every year
exclusive to certain
sellers
Use of Technology in Distribution Structure
The distributors are earning well and are not accustomed to the new
technology trend to bring in adoption

No support from the company to enhance their distributors


technologically

Use of technology can certainly enhance the quality of record keeping,


inventory management and accounting, but reliance on old methods is
still strong

We are probably a generation away for all to adopt technology, even


though some have started but it's in the nascent stage
Logistics/Distribution Fulfillment

Strong Network Scope of Distribution ‘Last-Mile’ Distribution

All Zones and Town-classes 200-300 retailers and 10-25 Advance Payment, Consistent
as well as Rural; 2+ Million wholesalers per distributor in Wholesale Rates (38%
Outlets Delhi NCR Discount on MRP)

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