Distribution Overview and Consumer Insights on General Trade

 

                                     Distribution
 

Distribution channels are pathways along which products travel from producers and manufacturers to ultimate consumers. They are routes along which products, information, and finance flow. While some manufacturers deal directly with their customers, most manufacturers use a distribution channel to take products to consumers. Considerable thought, effort, and investment are required to create and maintain a distribution channel. Channel margins and the expense of sales efforts in managing channels can form substantial proportion of total marketing costs. An effective channel can be a source of strategic advantage for companies.

Channel design and channel management are therefore important elements in a company’s competitiveness. Channels are also important from a public policy perspective since they employ a large number of people and are critical to the unhindered availability of food items and other products to customers across the socio-economic spectrum. Although channels are very important, little research exists about Indian distribution channels. This note and the accompanying round table presentations therefore attempt to focus on distribution channels in India, especially on the challenges that companies in Indiaface in designing, constructing, and managing distribution channels. The aim is to identify important challenges, examine the relevance of research findings, and develop an agenda for future channel related research in India.

 

              Distribution channel structure in India

 The distribution channel structure in India is largely traditional and quite unique. The major channel components are the retail network, wholesale network, and the logistics infrastructure. The retail network in India consists of over nine million outlets. These include traditional outlets like paan shops; grocers or kirana stores; general stores; specialized shops for footwear, clothing, jewellery,

watches, mobile phones, and consumer durables; newer formats like supermarkets, hypermarkets, and online stores; and service outlets like fast food outlets, beauty parlors, fitness centers, coaching centers, and so on.

 Many of the whole sellers and local manufacturers are failed in the market because of proper penetration and management like price place promotion , schemes deviations , reach and competitive analysis , they may not have long term goal but that spoiled the others brands for short terms and reduce the consistency of set companies profitability and their rapport in the market.

 Many Organized and new  Companies are entering into market and trying their bit for distribution reach but there are the many on ground selections challenges  during the channel partners  , if channel partners are not into organized distribution sales that the product presence would get impacted pricing would also become challenge for company and channel , which will reduce the trust and NPS ( Net Promoter Score for the Retailers ( dealers ). To overcome this situation initially company should not think about the quantity neither the distribution would get impacted by wholesalers without proper channel for the short term growth can be seen but long term availability and brand loyalty shall be impacted.

Important notes for Successful distribution

 

• Study about market behavior of wholesalers, Dealers and Distributors as well as local manufacturing and traders
• Reach by organized distributor the same or parallel product line channel partners
• Increase depth with concept selling ideas to untapped market and area
• Penetrate all the products through analysis of market neither channel partner will be impacted by Primary billing and his rolling money would become obstacles for existing running SKUs
• Pricing and scheme promotion should be competitive and different , should relate and increase the sales instead of making confusion and less attractive which impact and lower the sales.
• Relationship Balance, the current scenario’ we still have concept of traditional trade , its  true now a days trade partners want to attached with seniors for all the such things related to business , then the Mounting staffs should be connected with their frontlines they should insure the better connectivity ,relationship and communication among frontlines , dealers and distributors.

Since we know the ATL plays good role into any product success but BTL is very important tools for distribution this should be utilized without any hesitation , there are the different- different type customers whose buying behaviors are depend upon cost , referral , brands and advertisement but still distribution trade are influenced by referral so Many retailers push the brands through same manner to increase profitability , here proper distribution plays major role for good sales and brand value. Distribution is all about depend upon B to B and B to C but its important to see both the scenarios to increase sales and long term profitability with increasing g market share but its important to evaluate and implement the  ''right time, right place, right product''.

           ''Every ideas and edge should be implemented on cost effective manner''


Aazad Singh-Mumbai