Distribution
Channel:
A channel is the pipeline through which a product flows on
its way to the consumer. The manufacturer puts his product into the pipeline or
marketing channel and various marketing people move it along to the consumer at
the other end of the channel.
According to American Marketing Association: " A
channel of distribution or marketing channel, is the structure of intra company
organisation units and extra company agents and dealers, wholesale and retail
through which a commodity product or service is marketed."
For a big organization like Britannia Industries Ltd, the
business hugely depends on the distribution channel and the consumer attitude
towards the product. In distribution channel retailers plays a very important
role. While making a product a SKU (stock keeping unit) of the shop retailers
think about the GMROI (gross margin return on investment) and they promote the
brand which provides them highest. They expect return in the form of profit
margin, company schemes, window display and reference of the shop. Among these,
company schemes make the difference and are the highest sources of motivation
after profit margin. Retailing demands a constant push from the company.
Marketer needs to use advertising and brand building
strategies to address the discerning buyers and retail push to in different
buyers. The manufacturer should understand consumer behaviour because retailers
can't help quality and price. It is only up to manufacturers to deliver what
consumer wants.
There is a greater need to understand the retailer
behaviour. Considering them as a team, working for the company may help them to
be attached to the company. There should be a feeling of belonging to the
company in inner of the retailers. This can be done by setting values club for
retailers so that they may exchange views with the company and help in
understanding consumer behaviour.
Functions of Channel Intermediaries
- Reconciling the needs of producers and consumers
- Improve efficiency by reducing the number of transactions and creating bulk for transportation
- Improve accessibility
- Providing specialist services
Channel Distribution for Consumer Goods
- Zero
Level Channel: Manufacturer---- consumer
(Direct marketing includes use of personal selling, direct mail, telephone selling and internet. Examples are Avon Cosmetics, Acquaguard, Amazon. Com) - One
Level Channel: Manufacturer---Retailer---Consumer
(It is economical for producers to supply directly to retailers than through wholesalers. Supermarket chains and Wal-Mart are examples) - Two
Level Channel: Manufacturer--- Wholesaler--- Retailer---Consumer
(Wholesalers buy in bulk from producers and sell smaller quantities to retailers) - Three
Level Channel:
(Producers delegate the task of selling their products to an agent who contacts wholesalers and receives commission on sales. Prevalent in foreign operations)
As per the study, we would like to conclude that bread not being the staple food in India, has definitely evolved as a substitute for chapattis, rotis, rice, etc. It is easily available due to its excellent distribution channels. Britannia bread has acquired almost50% stake in daily bread market. Today a variety of breads are available, such as brown bread, whole wheat bread, chutney bread, etc.
Marketing System
The marketing system in the bread industry is based on a
strong retail-wholesale distribution network and being a highly price sensitive
low margin food product with very short shelf life (about four days on an
average) and resultant return of more than 10 per cent of dispatches, the
industry is witnessing a very competitive environment with the result that
inter alia the consumer's choice and preferences plays an important role in the
sales pattern of different brands of bread in the market.
Handling/ Logistics
Logistics plays a key role in the bread industry, as the proper logistic support enables the producer to transport his products in the market at the right time. A producer has to see that all the packs are stacked in solid containers - steel or plastic crates - in order to avoid compression of bread (reduction of volume) during transportation. In case of bulk transport, producers can make use of trucks and tempos, and in case of smaller deliveries to the retail shops, the producer can use smaller tempos and bicycles. A producer also has to make sure that all vehicles are thermal proof, so that the bread is maintained at a lower temperature. All the products should be transported preferably in the night in order to avoid the heat and humidity and also the traffic delays.
Even after the product reaches the retail outlets, the producer has to educate the retailer to keep the bread away from direct sunlight. On keeping it in direct contact with the bright sunlight, bread starts sweating which may result in fungus formation, reduction in weight due to loss of moisture, change in texture of bread, etc.
Logistics plays a key role in the bread industry, as the proper logistic support enables the producer to transport his products in the market at the right time. A producer has to see that all the packs are stacked in solid containers - steel or plastic crates - in order to avoid compression of bread (reduction of volume) during transportation. In case of bulk transport, producers can make use of trucks and tempos, and in case of smaller deliveries to the retail shops, the producer can use smaller tempos and bicycles. A producer also has to make sure that all vehicles are thermal proof, so that the bread is maintained at a lower temperature. All the products should be transported preferably in the night in order to avoid the heat and humidity and also the traffic delays.
Even after the product reaches the retail outlets, the producer has to educate the retailer to keep the bread away from direct sunlight. On keeping it in direct contact with the bright sunlight, bread starts sweating which may result in fungus formation, reduction in weight due to loss of moisture, change in texture of bread, etc.
No comments:
Post a Comment