Tapal Distributors: Case Study

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D I S T R I B U T O R S.

Tapal deals only with distributors on contract basis with no other intermediaries involved. They do not extend credits to their primary customers and all their sales are cash based. The contract comprises of a specification of a complete volume of the market, Tapal’s share in the market, the profit margin of the distributor, the sales that will be made by the distributor, as well as the complete route plan of the distribution network. After this the operational and managerial responsibilities are up to the distributor himself.

Tapal chooses their distributors after analyzing their complete financial background and Public Relations. They provide the distributors with a detailed description of the distribution network; all the costs and expenses involved and when the distributor agrees the contract is signed. This contract involves the condition that the distributor has to be brand loyal, pro-active and cannot deal with other tea companies otherwise the contract will be terminated. The contract includes a clause that describes its termination process. Either of the two parties: Tapal and the distributor, can terminate the contract on one month basis.

Generally the company has divided its market into territories in the following way:

Tapal has divided Pakistan into 2 regions i-e north and south. The regional sales manager for south is MR. SYED HASSANAIN HAIDER ZAIDI and for north is MR.WAHID SARWAR. Both these managers report to the national sales manager, MR. JAFFER BALOCH, and national sales manager to managing director MR. AFTAB.F.TAPAL. At the top of this hierarchy is MR.FAIZULLAH TAPAL the chief executive of the organization. Regions are further subdivided into zones. The regional office in Karachi was only able to provide us with the Information regarding the southern zone and some information regarding the northern region is not available to us.

South is divided into 4 zones. These zones include KARACHI A, KARACHI B, HYDERABAD and SUKHUR. Zonal manager for KARACH A and B is MR. HASHIM, for HYDERABAD is MR.TARIQ ANSARI and for SUKHUR is MR. SADAQAT ALI.

North region is divided into 5 zones and these are: PINDI, MULTAN, LAHORE, and FAISLABAD. Information about the 5th zone as well as the information about the zonal managers for north region was not available. These zones are subdivided into territories. South region is divided into 19 territories and north region is divided into 23 territories, which cover 95% of the market and are managed by the territory executives

R E T A I L E R S.

Tapal believes in intensive distribution to make sure that their product is available conveniently to all its consumers and all its target markets are served effectively. Accordingly a large distribution force has been engaged in the process. National distributors: 405

Distributors in Karachi: 10

The names of the distributors in Karachi are:

Sales Promoters
Target Marketers
Asjad Distributors
SR Traders
Babar Sons
D Salers
Zoom Marketers

Apart from these distributors Tapal also operates from their main shop in Pan Mandi, which was previously located in Jodia bazaar.

Tapal has such a huge market all over Pakistan that the exact number of retailers and wholesalers all over Pakistan cannot be found. However an approximate figure for the retailers and wholesalers in retailers in Karachi is 16,000 and Tapal serves 95 % of these.

T R A D E M A R G I N.

On our visit to the company when we asked them the trade margins involved in their channel of distribution, Tapal labelled this information as “confidential”. However, we managed to get some information regarding the trade margins from the wholesalers and retailers.

According to the wholesalers they get a trade margin of Re 0.75 to Re.1.00 per kg from the distributors. This margin is very...
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