Page 197 - DMGT509_RURAL MARKETING

Rural Marketing

Notes 2. Mostly large sums of money are involved and the customer wants the best price without
middleman’s commission.
3. Installation and commissioning of the equipment is involved, best done by the
manufacturer’s engineers.
4. After-sales service is complicated.

Consumer Goods

These are usually sold through the distribution channels as follows:

Manufacturer Customer

Manufacturer Sole Distributor Sole Distributor’s own
channel

Dealer/Retailer
Manufacturer Area Distributor

Very small firms, who have limited market, like bakeries may resort to direct selling to their

customers. Very large firms have sole distributors with their own network of dealers and

retailers. We will discuss the merits and demerits of each of the methods of distribution and
some other methods as well.
Other distribution methods include the following:

Own Shop

Many manufacturers like Bata; Usha and Singer have their own i.e. company owned sales outlets
(shops). These shops ensure that the products are available to the customer in good quantity, of
right quality, and at the right price. Besides, as the shops sell products of the firm only, the
control on sale can be more effective as compared to the sales being made through dealers and
retailers who handle competitive products as well. The above mentioned firms realized the
great assets they had in their own shops and as the firms had only a limited range of products,
the shops, mostly in prime locations were not being fully utilized. These firms, therefore added
complementary products and made their shops as sales outlets for a complete range of products
in their particular fields.

Franchise Outlets

The manufacturers give legal rights to an independent business entity to run franchiser’s business
(under some controls by franchiser, like quality control). The franchisees help the manufacturers
to add to their business, have bigger geographic coverage and increase their market share.
McDonald’s, and Pizza Hut are two examples of manufacturers who have used franchise system
effectively.

Mail Order

Some products like Readers Digest magazine are sold through Mail Order. Customers are
requested to send their orders directly to the publishers, who send the product directly to the
customers.

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