Page 200 - DMGT509_RURAL MARKETING

Unit 10: Distribution Strategies for Rural Market

Self Assessment Notes

Fill in the blanks:
1. The manufacturers give legal rights to an ...................... business entity to run franchiser’s
business.

2. ...................... sales are a variant of mail order, as here the firms dealing with a number of
products get colourful attractive catalogues made describing the products.
3. The spread of computers and Internet has opened the doors for ...................... or selling on
the Internet.
4. .......................... are independent businessmen who help manufacturers in selling their
products.
5. Manufacturers sometimes appoint ............................. who are businessmen with storage
space.
6. ............................... orientation of the first half of twentieth century was mainly on
manufacture.

10.3 Multiple Product Manufacturers

When one manufacturer can supply a variety to products needed by one type of customers for
e.g., Hindustan Lever then they need to have distributors who can invest in inventories and
prime location for their retail sales outlets.
We will discuss the value of wholesalers in the distribution system. Manufacturers need retailers
most, as they are the link between the manufacturer and the consumer. However, manufacturers
find it difficult to sell to retailers directly, as they need small quantity of products only. Selling
to numerous retailers would involve huge amount of billing action, and several dispatches to a
variety of locations needing enormous manpower. Wholesalers buy in bulk and hence selling
to wholesalers reduces these activities. Bulk packing can be used for large consignments.
Wholesalers are also called distributors and perform the following functions for the manufacturer:
1. Buy in bulk.
2. Making “small customer size” packages.

3. Buying variety of products and making matched sets as required by the customers, like
soap and soap dish, tooth paste and tooth brush.
4. Stocking products in large quantities and ensuring that the dealer is never out of stock
without having to invest in large inventory himself.
5. Low cost transport to retailers can be provided as for small quantities they need not hire
trucks. They can use tempos, three wheelers and hand trolleys.
6. Provide information regarding competitive activities, new products in the market, change
in prices; they can be virtual market surveyors for the firm.

7. Provide credit, loans and leasing facility (either themselves or through a leasing agency)
to the customers.
8. Share in advertising and promotion arranged by the firm.

As many firms are resorting to direct selling to the retail trade and sometimes to the customers,
wholesalers may become obsolete in the future.

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