Role of Distribution in launching new Brands

As mentioned in the last few posts, distribution is the key in FMCG sector. So lets start with some stats.

• ITC cover 2 million outlets directly and 4 m indirectly
• HLL cover 3 to 3.5 million outlets indirectly
• India has 6 million outlets

Does this presence of ITC and HLL will help them to launch new Brands? Lets look at some points:

1. Brand ITC/ HLL
2. Established relationship of with the outlets
3. Outlets dependent on the companies for other brands in Demand in Market
4. Attractive Trade Promotions
5. Retail Outlets also need a variety, be it biscuits or soap, to satisfy different needs of the consumers

A combo of Branding Expertise and Distribution Capabilities is required.

Lets take few examples:

1. STAR Cigarette: With ITC's deep penetration and right relationship with the outlet owners, they were able to launch a new brand in Bingo category. Just think of the numerous rules & regulations in tobacco industry which make any cigarette company almost impossible to lauch a new name. But nothing is impossible with ITC
2. Sweet N Salt: With ITC's umbrella biscuit brand - Sunfeast and deep touch in the market, ITC was successful in launching a new brand few weeks ago - Sunfeast Sweet N Salt

So all FMCG companies out there build Distribution Expertise !!