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How Does Distribution Channel Add Value? Can You Think of an Example for Time Value?

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Submitted by        -Rohan Sam Kuruvilla

Roll No.         -18H120    

Section         -PGDM-HR

Professor         -Prof. Surya Mahadevan

Q1. How does Distribution Channel add value? Can you think of an example for Time value?

Time value in case of distribution channel means serving the unpredicted demands of the market and many a times when there is a sudden increase in  demand they come to be of great help. An example would be ‘neelabringadi oil’ when it was advertised by Kavya Madhava in Kerala witnessed a huge rush in its demand. The conpan would

Distribution channels add value by:

1.Reduced Costs: The entire overhead costs are reduced as now it gets shared with a third party. Also, the company doesn’t incur additional stocking and delivery expenses.

2.Wider customer reach, with greater ease you can distribute your products in a wider geographic area.

3. More efficient marketing, you can collaborate with other manufacturers and together do a joint marketing or promotional campaign and increase the foot traffic to the retail outlets that sell your products. Hence you don’t have to bear the entire advertising costs.

4. Logistic support, distributors would be efficiently managing stocks and they are generally good at it.

5. Ease of collecting feedback, Retail chains can easily know the products that sell well in their areas of coverage

6. Without a distribution channel a sudden increase in demand is difficult to cater.

Q 2. Why is branded retail more common in the product categories listed above

Single branded retail stores are common in the categories listed as they are goods which the customers are generally choosy (as in accessories) about and often brand conscious. When a business sells goods to individual customers (not other businesses) and when goods are all sold under the same brand in a shop is becomes single branded retail. The advantages of doing this are many. It invokes a sense of personal interaction between the brand and the customer and thereby building a stronger bond with clients. These can give an edge over competitors. Also Retail marketing gives a real time control as in you get more control on how you wish to sell you brand. Instantly you can change promotions, get the customer needs and monitor sales as well on a real time basis. Often loyalty programs are tagged better or executed easier with branded retail. Store credits, coupons  etc create incentives to buy and also enhances the touch points to maintain your brand in the minds for longer. Another reason why apparels and accessories stores prefer branded retail outlets are often only customers who are serious about purchasing take time out and visit the stores, giving them a higher conversion rate.

Q 3. Many companies have an additional intermediary---- Super distributor---- particularly in smaller market. What is the intended role?

In smaller markets there is not point in having many distributors as the potential and quantum of sales is very small. Hence in many cases there exists only one distributor who stocks the goods and sells to retailers. Now when the market expands or in a place where there is a lot of sales happening he in turn becomes the super stockists and be further having  re-distributors under him in smaller towns or village for distribution to retailer. Also companies who cannot afford to have their own warehouse and own units can adopt the super stockist concept where by even catering to small orders of goods. Also they perform all the activities of sales and marketing, stock analysis, inventory
management & control, packaging and distribution reducing the work for the companies.

Q4. How do the brands control customer experience and detailing in multi-brand outlets ?

MULTI BRAND outlets are targeted at customers who want more options to fulfil their needs and desires. All the big brands in the world can be brought under a single roof with this method of marketing. This can help different chains in knowing the consumer buying patterns and their brand likeliness much better compared to doing it on a single brand.

 Consumers often visit a multi brand outlets with two-three brands already in their evaluated set, and often is able to satisfy their expectations ad get one that best delivers their idea ad utility of the product.

The brands control the customer experience and detailing in such outlets as follows:

  1. People who truly love fashion are curious generally are open to choices and willing to try and experiment. Their curiousness is best handled by the the company direct sales person who are best with the technical know-how of that particular product would be high and would be able to provide thes best personal attention and render the experience similar to that in branded retail store.
  2. The multi brand stores are enticers to new entrants in the market. Such new brands provide more choices to the customers and often find better VFM and also a higher level of satisfaction and utilty.
  3. These multi brand stores also run multiple promotions and offers to attract maximum customers

Q5. How does the SE Productivity impact the business model?

Sales executives are the key point of contact between an organisation and its customer answering queries, offering advice and introducing new products. They also cold call approaching potential customers with the aim of winning new business. Sales executives strive to maintain good relationships with existing clients, gaining repeat business wherever possible. They listen to customer needs and requirements and present appropriately to make a sale and generate revenue for the organisation. They are the ones responsible for negotiating the terms of an agreement and the close of sales. Often it is the sales executives who make accurate, rapid cost calculations and providing customers with quotations.

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