Page 198 - DMGT509_RURAL MARKETING

Unit 10: Distribution Strategies for Rural Market

Catalogue Sales Notes

These are a variant of mail order, as here the firms dealing with a number of products get
colourful attractive catalogues made describing the products. These catalogues are then sold or
distributed to a large number of prospective customers, who select products from the catalogue
and place order on the firm. The firms have to ensure that the quality of the product sold is the
same as mentioned in the catalogue; otherwise, the negative publicity with bad product sold
will spoil the firm’s business.

Web Marketing

The spread of computers and Internet has opened the doors for marketing or selling on the
Internet. Pick up any channel on the net and you will find a number of advertisements. The
customers can place orders on the net itself and give their credit card number. The sellers will
surely dispatch the product against the order. Since there are no expenses on shops, effective
reduction in prices can be made. The only danger of these types of sales is that the customer does
not get to see the product before they get the same.
Agency Operation

Agents are independent businessmen who help manufacturers in selling their products. The
agents obtain orders from the customers, which they forward to the manufacturers. On the
conclusion of the transaction, the agent gets an agency commission for his efforts in getting the
orders. Agents can be both for buying and selling products. They have long-term agreements
with the manufacturers and they operate within the terms and conditions of the contract. Their
task includes negotiating the sales contract with the buyers on behalf of the manufacturers for
which they have the authority. They build long-term relationships with the buyers who benefit
as they get consistently good products at uniform prices.

Stockists

Manufacturers some times appoint stockists who are businessmen with storage space. The
stockist’s job is to keep stocks on behalf of the manufacturer and dispatch the same to distributors
and retailers on receiving instructions from the manufacturer. For the use of their storage space
and their efforts in making dispatches they get a commission from the manufacturers. Normally
they are not involved in actual selling effort of the firm.

Consignment Agents

These businessmen are required to keep stocks of manufacturers’ merchandise on their behalf
and as and when they are able to sell the products they send the money received to the
manufacturer. For their efforts they are paid a commission on sales. These types of agents are
especially needed when a product is introduced in the market and the channel members are not
sure of its saleability.
Unlike in the first half of the twentieth century, when the manufacturer as per his convenience
decided the channel, now the channel selection depends mainly on market survey report, which
tells the manufacturer, how the customer wants to buy the product.

Main criteria can be summed up as follows:
1. Customer reach for the channel
2. Customer convenience of buying

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