Hindustan Lever Limited is putting in place a new distribution model to push its sugar confectionery brands — currently in the pilot stage in Chennai — in the Indian market.
The multinational plans to target the ubiquitous paan shops and wayside tea stalls through a direct coverage. Paan shops, for one, are covered indirectly by companies through the wholesale route. HLL is drawing up plans to bring the paan shop coverage under its own dealer network.
HLL is test-marketing sugar confectionery under Max, Choco Max and Max Magic, priced at the 50 paise and 25 paise levels. The company believes that products in the impulse market will be successful if these can be availed at an arm’s length. This is where distribution will play a key role, and thus the move to take the direct coverage to paan shops.
Chennai is estimated to house about 15,000 such outlets which attract an indirect coverage. The number of such outlets is enormous when it comes to the entire country. The company targets to accomplish the task of direct coverage of paan shops and tea stalls in two phases. In the first phase, 8,000-9,000 outlets will be covered directly, and the balance will be covered in a year’s time.