Haldiram: Marketing Mix Part-3by Udit Jain on June 14, 2007
Haldiram’s developed a strong distribution network to ensure the widest possible reach for its products in India as well as overseas. From the manufacturing unit, the company’s finished goods were passed on to carrying and forwarding (C&F) agents. C&F agents passed on the products to distributors, who shipped them to retail outlets. While the Delhi unit of Haldiram’s had 25 C&F agents and 700 distributors in India, the Nagpur unit had 25 C&F agents and 375 distributors.
Haldiram’s also had 35 sole distributors in the international market. The Delhi and Nagpur units together catered to 0.6 million retail outlets in India. C&F agents received a commission of around 5%, while distributors earned margins ranging from 8% to 10%. The retail outlets earned margins ranging from 14% to 30%. At the retail outlet level, margins varied according to the weight of packs sold.
Retailers earned more margins ranging from 25% to 30% by selling 30 gms pouches (priced at Rs.5) compared to the packs of higher weights. Apart from the exclusive showrooms owned by Haldiram’s, the company offered its products through retail outlets such as supermarkets, sweet shops, provision stores, bakeries and ice cream parlors. The products were also available in public places such as railway stations and bus stations that accounted for a sizeable amount of its sales.
Haldiram’s products enjoyed phenomenal goodwill and stockists competed with each other to stock its products. Moreover, sweet shops and bakeries stocked Haldiram’s products despite the fact that the company’s products were competing with their own products.
Haldiram’s also offered its products through the Internet. The company tied up with indiatimes.com, a website owned by the Times of India group to sell its products over the Internet. Haldiram’s products could be ordered through a host of other websites in India and abroad. Giftstoindia.com, giftssmashhits.com, tohfatoindia.com and channelindia.com enabled people residing abroad to send Haldiram’s gift packs to specified locations in India.
Region-specific websites enabled people to send gifts to specified regions. These include indiamart.com (Delhi and surrounding areas), mumbaiflowersgifts.com (Mumbai), and chennaiflowersgifts.com (Chennai and other parts of Tamilnadu). These websites competed on issues such as delivery time, which varied between 48 hrs to one week, delivery charges (some websites offered free delivery of products) and value added services (like sending personal messages along with the gift packs).