Indirect distribution channel has divided into 3 types according to the usage of intermediaries or channel methods. When the producer or the manufacturer directly sells the goods to the customers without involving any middlemen, it is known as direct channel or zero level channel. Distribution strategies used by businesses 5 types of. Vaswani introduction close to seventy percent of indias billion strong population lives in villages and the rural economy contributes nearly half of the countrys gdp. The latest business management research and ideas from hbs faculty. A channel of distribution sometime a trade channel for a product is the route taken by the title to the goods as they move from the producer to the ultimate consumer or industrial user.
Broadly, channel of distribution is of two types viz. Direct distribution requires a commitment of a lot of resources and time. Till now rural distribution was based on physical distribution and channels of distribution. Definitions some important definitions are as follows.
The role of distribution channel research and other details. Marketing mix and relationship marketing part i cases 1. Choosing direct marketing channels for agricultural products. And after the mixed designed channels, the next step is determine a proper distribution channel, evaluation, selection and contract signing with the best channel partners. Place is considered in case of products as well as services distribution strategy is mainly decided by keeping the top management in loop because it affects overall operations. Geographical distribution of bank branches and cooperatives in brazil, retail bank branches and cooperatives are the most important distribution channels for rural credit. Rural distribution channelsfive layers of distribution channels for the movement of products from the company depot to the interior village markets.
Such large traders supply to markets or food processors, since processors and factories located elsewhere are prohibited under apmc act from buying from the farmers directly. Project report on sales and distribution management pdf. Marketing channel concepts 1 6 distribution through intermediaries economic considerations are very important in determining what form intermediaries will have in their appearance in marketing channels. While researching my new book, rise of rural consumers in developing countries, i conducted interviews with executives at both multinational and local. Jan 28, 2015 a great example of local direct channel distribution would be farmers markets. Feb 06, 2014 definitions some important definitions are as follows. A distribution marketing channel has been defined in the book marketing channels by authors anne t. Distribution challenges and workable solutions sciencedirect. Through jobbers is perhaps the oldest and widely used channel of distribution. Channel strategy is concerned with the entire process of setting up and operating the contactual organizations that are responsible for meeting the firms distribution. A case study on rural marketing initiative management case prof. Product strategies for rural market indian perspective.
Large traders or factories appoint brokers who buy from farmers, adding to another level in the marketing channel. Hof and heather green, how amazon cleared that hurdle, business week february 4, 2002. In marketing, a distribution channel is a vehicle used by the company to sell its products and services to it customer base. Mostly this channel is used by expensive watches and fmcg products. Rural distribution strategy deepa ingavale departmen. To successfully market products in rural areas, distribution is a critical barrier which needs to be overcome.
Rural distribution channel in india, with the total potential of 3,800 towns and 6,27,000 villages. Distribution of rural products india rural marketing. Higher the level of literacy, the easier it becomes for companies to penetrate into rural areas. Ernst, independent writer center for profitable agriculture december 2010 the development of this publication was funded in part by the tennessee department of agriculture and usda rural development. An effective distribution channel can be a source of strategic advantage for companies. Distribution channels definition types of distribution. Distribution, particularly of processed organic foods, is dominated by united natural foods and tree of life. As the rural market opportunity becomes more attractive. Marketing channels 7e 1 5 channel strategy versus logistics management channel strategy and logistics management comprise the distribution variable of the marketing mix. This is also the reason why place which majorly consists of distribution is one of the major 4ps of the marketing mix.
Project report on the distribution channels for marketing. Types of distribution channels in marketing bizfluent. The route can be as short as a direct interaction between the company and the customer or can include several interconnected intermediaries like wholesalers, distributors, retailers, etc. P a g e 1 distribution in rural markets introduction.
A great example of local direct channel distribution would be farmers markets. A distribution channel in marketing refers to the path or route through which goods and services travel to get from the place of production or manufacture to the final users. But the main problem arises in channel of distribution like multiple tiers. Read articles about distribution channels hbs working knowledge. Distribution strategies for rural market marketing lessons. The theory of distribution channels states that each company in the channel must charge enough to pay expenses and leave a profit. Demandside misalignments in the channel structure that will occur if d. Distribution channel management designing channel strategies for specific market segments understand how your customersend users buy and which channel benefits they value most not just what, but how they want to buy target the highest potential channel segments in your market tailor channel experiences to deliver the priority. Choosing direct marketing channels for agricultural products megan l. While these financial institutions are highly concentrated in some areas, its five million rural credit recipients are. Accessing rural markets, coverage status in rural markets, channels of distribution, evolution of. Marketing has economic value because it gives form, time, place, utility to products and services. They are one level, two level and three level channel. In early 2007, the leading mobile operator in kenya, safaricom part of the vodafone group launched one of the most successful implementations of a mobile money transfer service, mpesa.
Channels of distribution are of various types such as through jobbers, direct to consumer, direct to retailers, through brokers or agents etc. A distribution channel also called a marketing channel is the path or route decided by the company to deliver its good or service to the customers. This set of marketing intermediaries is called the marketing channel, also trade channel or channel of distribution. Also at times, the retailers stores will do the marketing and promotion activities for you to increase their own traffic and customer base.
Marketing of agricultural produce among rural farm. It involves the bridging of place utility gaps between manufacturer and customers. Unlocking the wealth in rural markets ideas and advice. Frazier, organizing and managing channels of distribution, journal of the academy of marketing science. Thus, there is a lot of importance given to making proper distribution strategies for a company. Much as it sounds, level one channel distribution occurs when a manufacturer uses a middle man to sell their product to a consumer.
Accessing rural markets, coverage status in rural markets, channels of distribution, evolution of rural distribution systems wholesaling, rural retail system, vans, rural mobile traders the last mile distribution, haatsshandies, public distribution system cooperative societies behavior of. They try to develop a distribution channel marketing channel to do this. Rajesh panda deputy director, associate professor, sibm, pune email. In one level channel manufacturer sells the goods directly to a retailer. Beginning of a research project but forms an integral part of the verification. Rural marketing influencing factors tutorialspoint.
Coming to the frame work of rural marketing, rural marketing broadly. In general, distribution channels are either direct, meaning the company interacts with customers directly, or indirect, meaning intermediaries perform activities on behalf of the company to reach customers. Using a distribution channel will help you widen your customer reach. However, at most of the time its the distribution which acts as a limiting factor in growth of the business in. Knowing where you are in the channel helps you understand your costs and your markup needs. However, little research exists about the distribution channel structure in india, which is largely traditional and quite unique. An understanding of the structure of distribution in rural areas would help in the development of an efficient distribution system. Rural marketing definition and the importance of distribution rural marketing rural marketing means different things to different people and confusion exists. Distribution decides the manner in which product and services are made available to the target customers. Distribution channels can be also defined as marketing channels or market channels. How unilever reaches rural consumers in emerging markets. Distribution channels definition types of distribution channels. The distribution channels through which the industrial goods travel from the place of the production to the final consumers is known as industrial distribution channels.
In the distribution of industrial goods, there are fewer middlemen and shorter channel of distribution, which should be in your mind. Ernst, independent writer center for profitable agriculture december 2010 the development of this publication was funded in part by the tennessee department of agriculture and. It still employs more than 58% of population and accounts for 15 % of the gdp. Attaining competitive advantage through channel design 4.
Marketing channel strategies in rural emerging markets. Rural marketing i about the tutorial rural marketing involves a bunch of processes that includes developing, pricing, promoting, distributing rural specific product and service which satisfies the consumer demand and also achieves organizational objectives as expected from the target market. While these financial institutions are highly concentrated in some areas, its five million rural credit recipients are spread across the country. It then discusses the different forms of channel, their advantages and disadvantages. Dec 14, 2016 while researching my new book, rise of rural consumers in developing countries, i conducted interviews with executives at both multinational and local firms, and talked with and observed rural. Rural marketing strategies, distribution strategies slideshare. Dilemma was how to extend its network to the remaining villages in inaccessible rural areas. Jul 03, 2012 topics to be covered distribution strategy. This is a great option for simple transactions for international distribution. The literacy level of rural people has a considerable impact on the marketing strategies to be adopted by the marketing team especially in communication with the rural people. Rural marketing strategies, distribution strategies. Rural distribution, distribution channels, fmcg products, rural marketing. Distribution or marketing channels are systems of mutually dependent organisations included in the process of making goods or services available for use or consumption.
Nov 19, 2015 distribution strategies for rural market indian perspective in our last post we talked about product strategies one can adopt while managing business in the rural markets. Acropdf a quality pdf writer and pdf converter to create pdf files. Rural marketing has become the latest mantra of most corporate. A distribution channel is a group of dependend on each other organisation units, which are taking part in process of flow of producst or services form producers to buyers. The aim of this paper is to understand the influence of the external environment and rural retailer purchase preference on the length of channels in rural areas in india. The types of international distribution channels perpetual. Apr 28, 2016 the distribution channels through which the industrial goods travel from the place of the production to the final consumers is known as industrial distribution channels. The typical value chain is seed merchants, farmers, country buyerscooperatives, ginner, buyer, merchant, selling agent and end user. Distributor acquisitions and mergers in 1982 there were 28 consumer cooperative distributors. The population is widely dispersed, transportation infrastructure is. Particular attention is paid to the channel forms of relevance to global agricultural food marketing including brokers, contractors, and.
Multiplicity of distribution channels exhibit 2 on the following page illustrates an important point about marketing channels and channel members. A marketing channel is a set of interdependent organizations involved in the process of making a product or service available for use or consumption. The first part of this round table article provides an overview of distribution channels, particularly their constituents and. Companies like hindustan lever, colgate palmolive, britannia and even multinational companies mncs like pepsi, coca cola, l. If you are near the end of the channel, you will pay the most for a product, because it has been marked up on its way to you. Marketing is defined as a process of satisfying human needs by bringing products to people in the proper form and at a proper time and place.
Pdf rural markets in india has acquired a major role in the growth of our. Thus, a channel of distribution is the route or path along which goods move from producers to ultimate consumers. Distribution strategies for rural market indian perspective in our last post we talked about product strategies one can adopt while managing business in the rural markets. Most producers use intermediaries to bring their products to market. Pdf appraising the fmcg product distribution in rural areas. Huls distribution network comprises about 2,500 redistribution stockists, covering 6. The route taken by goods as they move from producer to consumer is known as channel of distribution. Stanton defines the channel of distribution as the route taken by the title to the goods as they move from the producer to the ultimate consumer or industrial users. These constraints can have legal, environmental, andor managerial foundations. The chapter starts by showing the importance of the institutional and physical channel of distribution in global marketing. A distribution channel is a set of interdependent organizations that help make a product available for use or consumption by the consumer or business user. The marketing of agricultural products begins at the farm when the farmer harvests his products. The paper focuses on the rural distribution strategy and emerging distribution channels for rural market with due emphasis on rural retailing.
986 604 85 763 171 266 262 434 1095 89 427 935 605 744 270 1388 479 1477 264 204 193 614 380 672 1434 1477 873 1240 519 476 861