Report On Pepsodent

Forecasting and target setting
Channel Conflicts
- Distributor
- Sales Officer
Distribution in the Marketing strategy of Pepsodent

With a parent company being Unilever distribution is the last thing any
of its brands can get effected from, over the years it has expanded
across the geographies and distribution channels, also the brand has
simultaneously invested in developing an efficient supply chain to look
after its business needs.
With capabilities of the brand for worldwide procurement

complementing with an extensive established network of sourcing,
partners enable it to deliver efficiently to its customer’s needs with the
help of its vendors across nations.
HUL’s distribution has evolved over the years from the first phase when
it had wholesalers placing bulk orders directly to the company to the
second phase where company focused on providing desired products
and quality service to the company’s customers to achieve one
wholesaler in one market to now the third phase where the concept has
shifted to “Redistribution Stockist” which were replaced by “Registered
Wholesaler”. The company later developed “Company Depots” system
which was again replaced by Carrying and Forwarding Agents (C&FAs)
which act as buffer stock-points to ensure stock outs di not take place
for any of its products.
Place in the Marketing mix of Pepsodent

In order to create a market for its products Pepsodent has decided to
create and maintain a professional approach. The company has made
its distribution channelvery organized so that products can be easily
available to the customers. The product is producedat the
manufacturing plants of the company and from there they are
dispatched to the wholesaler. The next step is to send the products to
the retailers who in turn supply the items to the various showrooms and
outlets. The consumers can easily buy these products because of their
easy accessibility in every nook and corner. As its distribution network
is immense, the products are available in both rural market and semi
urban market.
Related: Marketing Mix Of Microsoft Office - Microsoft Office Marketing Mix
Pepsodent is committed to gain better understanding of the market and

hence they are always in the lookout for improving any hiccups in the
distribution channels. They have the backing of their parent
company Unilever and hence it is possible to send the products easily
in every part of the country. They have large warehouses for storing
and safekeeping of their goods. Products from these warehouses are
sent to the retail outlets as per demand. The items are available in
nearly 80% of the retail outlets across India because of the timely
delivery.
https://www.marketing91.com/types-of-demand-2/
Q. Could you first describe about your company--products it manufactures

and total sales volume?
A. Colgate Palmolive is a consumer product company, with a total sales
volume of roughly $6 billion. We manufacture various consumer products
including detergent, soap, shampoo and dental cream. We are the world-
wide leader in products such as shampoos and toothpaste. I am involved in
forecasting the domestic sales of oral care products.
Q. What is the organization structure of your company? Where does the
forecasting functions fit in the structure?
A. We have been shifting around quite a bit. Right now our forecasting
department reports to finance. We had been reporting directly to
marketing. Prior to that, going back about eight years ago, we reported to
sales. About seven years ago, we had a marketing concept of breaking up
the total operation into separate business units, each unit operating almost
as an independent company. Each unit had a general manager, as well as
marketing, sales and financial heads.
Q. How many people work in the forecasting department?
A. There are five sales regions, each one has a forecaster of their own.
Each of them is responsible for all the products sold in their region. They
report to each of the national forecast managers which are four in total.
Our whole line of products are divided into four segments--fabric care,
household surface/home care, oral care and body care. Each line of
products has a national forecast manager. They are all located in New
York City.
Q. How much time do you spend on forecasting function?
A. Right now almost all my time is spent on forecasting related activities.
In the past, though, I was also involved in the planning process, that is,
preparing production schedules for outside manufacturers. I do get
involved in the disposal of excess inventory. This, I believe, falls in my
area, since I know what is moving and which channels to put in.
Q. What exactly do you forecast, demand or shipment?
A. Our official forecast is based on shipment. Sales quotas are based on
shipment forecasts . The daily orders which we receive are followed
closely and are used as a basis for shipment projections.
Q. What level of detail do you have in your data base?
A. Our data base, as it exists today, is fairly sophisticated. It captures
practically everything that is on the order form. Our database maintains the
lowest possible detail. We have information of items ordered and shipped
by account, region and national levels. Also, we have information about
salespersons responsible for each order.
Q. How far back does your data go?
A. We can go as far back as 36 months.
Q. How much data do you normally use in preparing forecasts?
A. We use 24 month data. Our business changes dramatically. To me, it is
questionable to go back even beyond one year. But much of our statistical
modeling requires 24 months of activity in order to capture seasonality in
the data.
Q. How quickly does data become available?
A. Our sales are updated daily. We've recently upgraded our system.
Previously, if we wanted to go back two years, we had to download
monthly data. We could not breakdown the data regionally. There were
many things we wanted to do but we couldn't without a great deal of
effort. Basically, we could only get data of different stock numbers
nationwide. Now we are more sophisticated. We can now retrieve sales
activity of any stock number by week on the PC.
Q. Can you give some ideas about the methods you use in preparing
forecasts?
A. Things are shifting rather rapidly in this area. Prior to the STSC system
we put in, we really did not have any statistical model at all. I reviewed the
past data trends and then judgmentally estimated how they would do next
period. Then we reviewed the numbers with marketing and sales
representatives, and made necessary adjustments. …
Forecasting and target setting

Target setting is a result of negotiation between the distributor and the company.
Mid month targets for the next month are given by the company at around 5th -10th of a month.
These are set for the Sales officers, ASMs and Branch Managers in the hierarchy and driven
down by them.
At the month end the distributor can negotiate these targets in the range of +/- 10%.
The branch manager is responsible for coordinating targets of the factories and the targets of
the individual product managers.
Confirmed sales set as weekly targets.
For a sales officer, the focus is the redistribution targets, also called as secondary invoicing
(from cash distributor to the redistributors)
For an ASM, primary invoicing ( From C&S to cash distributor) is more relevant.
For the company as a whole, primary as well as secondary invoicing as adjusted against “back”
is important.
The company is now moving on to a statistical tool called “Winters model” for demand
forecasting” .This is done by the SCM and the inventory managers at the corporate levels along
with interactions with the sales and senior sales officers.
Under the winters model, the baseline demand curve is worked out, that is remove the effects
of other factors like sales promotions, unexpected variations like wars etc. on sales. This is
done by the sales officer by preparing a monthly log and writing against each month the reason
for any exceptional variation in sales, if any.
After negating from the past sales, the effect of these exogenous variances , trends are
calculated and sales of the next year are calculated. On these figures, the effects of any planned
promotions, any foreseeable variations etc, are imposed to get the approximate forecasts. For
example normally the effect of a TPP (Temporary Price Promotion) on sales is that of a 150%
sales. That is sales of 6 weeks are achieved in 4 weeks.
Inventory holding ( on an average 3 ½ weeks of inventory is held)
Channel Conflicts
Earlier large areas used to be assigned to the distributors and there used to be some scope for
confusion or conflict due to overlapping. However, now the number of distributors have
increased and there is clear earmarking of the areas as well as markets for each distributor by
the company and there is hardly any scope for conflicts based on areas.
There are a few sources of channels conflicts like-
1. Channel Conflicts
Division of the territory is done into routes (1 route=6 beats) and categorization of
brands as P1, P2, P3. The outlets are served once in a week and currently a single
distributor cannot hold more than 2 portfolios of brands (out of P1, P2, P3) as per
company’s norm. There is clear earmarking of the brands as well as markets for each
distributor by the company.
However, there are a few sources of conflicts within the channels like-
 Supply late by distributor- Distributors collect the orders from the retailers
but do not serve them well within time due to lack of stock maintenance,
manpower shortage etc.
 Undercutting- Wholesalers passes some portion of his extra margin, which he
receives, from the distributor, to the retailers. This brings the willingness in
the retailers to buy from the wholesalers thus undercutting the volume of the
distributor
 Secondary schemes not passed to retailers- The distributor does not pass on
few schemes, which are designed by the company for the retailers and the
consumers. Say the company gives a bottle free with a jar of Mentos but the
distributor keeps the bottle and does not let the scheme penetrate to the
retailer and the customer
 Botree bill not provided- The distributor does not use company’s software
instead uses their own software for billing purpose hence any discount
schemes for the retailers is not passed totally to them by the distributors.
Moreover, retailers do not even get to know about those schemes. Thus,
wrong data/ information flows to the company

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Forecasting and target setting

Distribution in the Marketing strategy of Pepsodent

With capabilities of the brand for worldwide procurement

Place in the Marketing mix of Pepsodent

Related: Marketing Mix Of Microsoft Office - Microsoft Office Marketing Mix

Pepsodent is committed to gain better understanding of the market and

Q. Could you first describe about your company--products it manufactures

Forecasting and target setting

Inventory holding ( on an average 3 ½ weeks of inventory is held)

There are a few sources of channels conflicts like-

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