Study of Sales & Distribution of

Detergent Market in India

3.2 Kg - Average Detergent Consumption
9 %- Strong and Consistent Growth
38 %- Market Share of leader (HUL)
HUL Facing tough Competition from P&G and Ghadi
Expected to reach INR 241 Billion by 2017
Premium products, such as Liquid Detergents have entered
High Penetration in Urban Areas

Porters 5 Forces Analysis: Detergent Industry

Barriers to
Entry
(MODEST)

Bargaining
Power of
Suppliers
(MODEST)

Industry
Competitiveness
(HIGH)

Threat of
Substitutes

(HIGH)

Bargaining
power of
customers
(LOW)

Product Portfolio of Detergent Industry

Premium
(15%)

Surf Excel
Henko
Ariel

Economy
(40%)

Tide
Rin
Sunlight

Popular
(45%)

Ghadi
Nirma
Wheel

Surf Excel Introduction

1959 the beginning

Highest selling
Premium Detergent

One of the oldest

Detergent brand in
India

Focuses on Emotional
Connect

First brand of
Detergent that had TVC

Introduced the concept

of Bucket Wash

Ariel is the main

competitor

Intense Competitive
Rivalry

Surf Excel: Distribution

C&F Agent

Urban
Distributors

Rural
Distributors

Wholeseller

Retailer

Consumer

Organized
Retail Outlets

Retailer

Consumer

Consumer

Distribution Framework for HUL

Area Sales Manager (ASM)
Each ASM manages 10-12 FSCs; For Rajasthan the ASM operates from Jaipur Depot

Field Sales and Customer Executive (FSC)

Each FSC manages 10-12 TSOs; For Rajasthan FSCs operates from Jaipur Depot

Territory Sales Officer (TSO)

Each TSO handles 4-5 distributors; For Rajasthan TSOs operate from Jaipur Depot

Distributor (Sales Manager)

3-4 Salesmen are employed; there are 2 distributors in Udaipur (rural & urban)

Salesmen
Distribute the stock to retailers

Rural Distribution Surf Excel

Sourcing of Stock
Distributors source stock from Jaipur Depot
Stock allotted according to Sales target assigned to each distributor
Stock replenished in every 2-3 days
Monthly operating cycle from 21st of this month to 20th of next month
Meeting with TSO on 21st of each month
Sales Target 50 lakh per month

Target Market
Type A (who purchase at least 1 lakh per month of stock) and Type B
retailers (who purchase between 50k and 1 lakh per month of stock)
Surf Excel not kept by Type C and Type D as it is considered premium
product
Product Variants include Surf Excel Quick Wash and Easy Wash in 1 kg,
500 gm and 50 gm sachets
Rural Distributor caters to 120 shops in 33 towns
Stock Sold to retailers on 15 days of credit

Evaluation of Distributors

Quarterly
Evaluation

Distributors are required to submit quarterly ROI report

ROI for Udaipur distributor is around 18% pa
The costs that need to be disclosed include loading, unloading of goods, labor,
transportation, maintenance, toll, pilferage, loss
Target sales of 50 lakh per month needs 70 lakh per month in operations

Yearly
Evaluation

Revisiting
Targets

Targets are revisited for the next year based on sales in the current year
The months in which sales are higher than the target the target is revised to
133% of the original
Entry barrier for new distributors to enter large scale business very high as
business is based mostly on goodwill

Rating on the scale of 5 based on achievement of target

Special consideration for distributors selling width and depth of product lines
If the rating is less than 2.2/5 then the distributor is discontinued
Distributor whose contract is terminated due to ratings cannot reapply
Distributors with outstanding target achievement awarded each year

Challenges in distribution
Challenges in Distribution

Supply Demand
Gap

Supply of goods regulated in Jaipur, Demand arises in nearby

markets
Payment grace period is 14 days while receivables is based on
goodwill and hence can extend more than 14 days

Leakages

Pilferages during transportation common

Transactions based on goodwill and any retailer can default
Losses due to theft

Target
Achievement

If the target underachieved, distributorship might go to

other distributors
If target overachieved by a certain margin, next years target
will be heavily increased

Other
Challenges

Distributor is pressurized from both sides of supply chain

Main Distribution center can stop supply to him, retailers
can stop their his payments
Other companies come and make inquiries about prices

Incentives to Salesmen
3 salesmen were appointed by the rural distributor
The basic salary paid was Rs. 10000 per month + transportation
and mobile
Rs. 1000 was an incentive given per month if the salesman
exceeds targets
Rs. 1000 incentive was preserved for special achievement like sales
of all product categories, sales of new product launched
In case of intentional misuse/misreporting of money a formal FIR is
lodged and the salesman is intimated just to avoid future instance

Project Shakti: Doing Well by Doing Good

A unique micro-entrepreneurship model with the aim of
integrating business interests with societal need
Sustainable investment opportunity for village community/rural
women
Increase in the household income of poor families of Shakti
Entrepreneurs (SEs)
Better standards of living through access to health and hygiene
products
Basic business management training for sustained livelihood
Company sells the products at additional discounts to the Shakti
Entrepreneurs (SEs)
Raises incomes of their families
The programme was extended to include Shaktimaans

Town Map

The transport route is optimized to cover

maximum villages per day
If there is an order on a day from a specific town,
the demand of all the towns en-route is acquired
and distribution is done
2 vehicles are engaged for distribution
Distribution is done in 33 villages
20 out of 33 villages are covered under Project
Shakti
Shakti ammas are chosen by distributor

Challenges with Project Shakti

Entire business is carried out by ShaktiAmmas brother
or husband

Shakti Amma sells the products to nearby retailers

There are over 50,000 Shaktimaans across India. Each

shaktimaan covers around 3 villages in his own villages
vicinity which is a larger area than a woman, Shakti
amma, can cover.

Huge investment for HUL to train Shakti Amma

Thanks Sir For

THANK
YOU