Whitener Company Case Analysis

By: Group 11

To explore the untapped business potential of upcoming rural markets and to have the first mover advantage as well as the faith of villagers; this is of much importance as far as rural market is concerned. To explore the potential of setting up of company stockists and to develop proper supply chain network to design a highly efficient yet responsive supply chain. To decide upon potential logistic network/media to minimize the transportation cost, without compromising the lead, also to explore the possibility of Continuous Replenishment policies by the company stockists to the retail village shop.

PROBLEM

It is assumed that average population in villages linked by road is 10000, with the average family size of 5 members. Vans will not cover each and every village of the state which are connected by road but they will go to a common point/market which is easily accessible by retailers/kirana shop owners of 6/7 villages, will be based Third party milk run logistics method to minimize the transportation costs as the density of users is low in villages. Assuming the product type mentioned in enclosure 3(A) are the product types manufactured by the Whitener Company.

ASSUMPTION

Analysis
Village No. of kirana Population No. of Total connected shops in As % of in villages household in Eastern Region Number of with all villages total linked village linked Village weather linked with village withroad with riad roads road Assam 22005 14219 10000 2000 50 65% West Bengal 38074 15780 10000 2000 50 41% Sikkim 440 269 10000 2000 50 61% Bihar 67566 23558 10000 2000 50 35% orissa 54606 8247 10000 2000 50 15% Tripura 4723 2810 10000 2000 50 59% Meghalaya 4583 2234 10000 2000 50 49% Manipur 1949 944 10000 2000 50 48% Magaland 987 346 10000 2000 50 35% Mizoram 724 135 10000 2000 50 19% Arunachal 2973 330 10000 2000 50 11%
Similar calculations were done for other regions of the country as well.

Average expenditure in respective region Average expenditure in Eastern region Average expenditure in western region Average expenditure in Northern region Average expenditure in Southern region

In Rs. 4,04,360.00 1,37,200.00 3,13,600.00 3,23,360.00

Cont.

One of the key issues to note is the fragmented and low connectivity in eastern region of the country, but still with low penetration (15%) of branded products in east, Total expenditure on the branded oral product is highest in the country, owing to high rural population of east. The company should establish a well structured transportation network for eastern India and should also focus in promotional campaign for branded oral products may be through road shows, free dental check-up camps etc to have the first mover advantage.

Analysis

The company should adopt a much focussed distribution network a variant of Distribution with Milk Run model, which will help the company to use the vans with TL and will reduce the transportation cost. From the common market either the retailer or the company backed agent will take the products to individual village and thus the transportation cost will be minimized also a direct relation will be developed between company and villagers through the company agent which will also instrumental in getting the feedback about the product.

Recommendation

The penetration of branded oral products is very low, figures

of eastern part as low as 15%

The Whitener Company needs to improve the market penetration of the oral products in order to increase its market share as a whole

The company should adopt regional branding strategy and

should focus on road shows and awareness campaigns to increase the awareness of oral product as whole in rural

Cont..

market.

A promotional campaign of trial packs must be initiated to

make the product in the consideration set of villagers.

Company should launch region wise community dental health programs and informative commercials on oral health to raise awareness on dental hygiene.

The company should also rope in influential people like

doctors and respected people of village for this campaign.

Cont..