Page 204 - DMGT509_RURAL MARKETING

Unit 10: Distribution Strategies for Rural Market

Notes
Distribution Coverage Concentration Control Cost
A Wide High Low High
B Medium Medium Low Medium
C Medium Low Low Medium
D Medium Medium Medium Medium
E Wide Low Medium Medium
F Wide Medium Low Low
G Medium Low Low Low
H Low High Low Low
I Medium Medium Low Low
J Low High Top class Medium

These values keep on changing and marketers have to understand the market dynamics before
finalizing their distribution method.
In several product groups and markets, with the help of direct selling catalogue and Internet
sales the middlemen as these intermediaries are called have been eliminated. They are supposed
to be, by a section of society and business community considered to be only money-making
bodies that do not perform any worthwhile task. The distribution chain adds to the costs of sale,
which, ultimately the customer has to bear. As most middlemen do not perform any value
addition function these could be reduced if not totally eliminated.

However, it must be understood that to remain in competitive market, the middlemen have
learnt to provide value added services to the customers, like leasing, hire-purchase options,
product servicing. Thus, they give the manufacturer chance of concentrating on production,
product development and innovation, advertising and sales promotion.
It is therefore important for each manufacturer to weigh each of his concerns and then opt for a
particular method of reaching his product to the people for whom they are meant and are
produced in the first place, the customers.

Manufacturers like Eureka Forbes have eliminated the middlemen altogether, while others
with the similar product ranges are still using the time-tested methods. Personal selling like
what is done by Eureka Forbes helps in building relationships, but it calls for huge investments
in manpower, their training and area coverages.

Notes Today in the beginning of the twenty-first century, manufacturers are facing severe
competition in practically all the products and the manufacturer who can place his product
within easy reach of the buyer definitely gains advantage over other competitors.

Self Assessment

State whether the following statements are true or false:
7. Low cost transport to retailers can be provided as for small quantities they need not hire
trucks.
8. Shopkeepers have been performing important role in the business of the manufacturers,
most important being that of making bulk purchases.

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