THE ROLE OF DISTRIBUTORS IN MARKET

ABSTRACT
This project explains about the role of distributors which act as intermediaries between
manufacturers and end users , providing a critical link that allows products to reach their
intended market. They can facilitate communication between manufacturers and end users,
helping to ensure that products meet the needs of the market. The role of distributors is
crucial in project research as they play a significant part in supply chain. This study enables
how distributors play a key role by providing critical support that can make success of the
product.

INTRODUCTION

Distribution is a process of making goods and services available to end users or customers
who require them. Its primary objective is to efficiently store and handle the products and
supply them in the best possible condition to consumers in different locations.

Distribution refers to the flow of goods and services from the producer or manufacturer to the
buyer or consumer. It is an element of place, a crucial marketing mix component. Businesses
can improve customer retention by ensuring that the products reach the end users efficiently
and easily.

The distribution channel is the chain of intermediaries or businesses through which the goods
and services flow. This channel can be long or short, depending on the number of
intermediaries necessary to make the goods and services available to consumers in different
regions. That said, manufacturers earn lower profits if the channel is longer, as they must pay

every intermediary involved in the distribution network.

Types of distributors:
As it is above, distributors are those professionals involved in buying products, storing them,
and selling them through a specific route. That is, they assist the producer in storage facilities
after buying from him to avoid over-stock of products in the factory. They as well take
charge of conveying goods from the producer to the final consumer. 

The following are the types of distributors;

 Exclusive distributors
 Intensive distributors
 Direct distributors
 Selective distributors

Exclusive distributors

Exclusive distributors are the authorized distributors a company signs an agreement or a

contract with to work with the company’s product within a geographical location. Here, it is
restrictive in nature, that is only one distributor has the authorization to distribute a company
in a single geographical area. Usually, they possess a high level of trust in terms of
representing the producer well. Working with one distributor gives the producer more control
over how they represent the product and the people they are selling to. Exclusive distributors
help the producer to have more protection.

Intensive distributors

Intensive distributors are those distributors that are specialists in maximizing the number of
outlets where a firm’s product is available. Such a distributor possesses high skills in
intensive distribution and usually works best within the industries where consumers switch
in-between brands usually when their first choice is unavailable.

For example, a consumer prefers consuming Pepsi but when Pepsi is not available, he goes
for Coca-Cola instead. So in this instance, we can draw a conclusion that Pepsi lost out on a
sale because its distributor did not succeed in stocking the product and this forced the
consumer to switch to a close substitute, otherwise its competitor.
Oftentimes, brands gauge the success of an intensive distributor on the basis of the number of
retailers he is able to secure so far.

Direct distributors

A direct distributor skips the middleman by selling the manufacturer’s products directly to
the store rather than taking them to the retailer’s distribution center. Usually, this distributor
has a faster rate of turnover. With this, it is easier and faster for him to restock goods that are
selling faster than the store expected. Direct distributors are very fast in providing service and
meeting demand. Because of this, retailers love to work with them.

Selective Distributors

Selective distribution is the type of distribution method that operates between the intensive
and exclusive distributions. Here, it involves the use of more than one but less than the entire
intermediaries and distributors involved in carrying the products of the company based on the
specific rules the company sets up. 

Companies with intensive distributors want their products in many possible places but this is
not the case with selective distributors. Producers select/choose the retailers they would
prefer to carry their products, they then appoint a distributor to deliver products to consumers
as well as providing high-quality customer service to them.

A selective distributor usually works within specialized industries with a limited retail outlet.
Here, the producer works with a selective distributor who can sell the goods to niche retailers
that sell their products.
 Objectives of the study

 To maintain the longterm relationship and integrity towards the market.

 To imbibe the knowledge of customers of partners.
 Making the effective distribution for easy availability of services.
 To create distribution effectiveness and expectations in various verticals.
 To understand the present distribution market conditions.
 Literature Review

Supply chain management: One of the primary roles of distributors is to manage the flow
of goods from manufacturers to retailers or end customers. Distributors act as
intermediaries in the supply chain, coordinating the movement of products, handling
logistics and inventory management, and ensuring timely delivery. Research has shown
that effective distributor management can improve supply chain efficiency and reduce
costs for manufacturers (Hult, Ketchen, & Arrfelt, 2017).

Market reach: Distributors can help manufacturers expand their reach into new markets
and customer segments. By leveraging their existing networks and relationships with
retailers or other partners, distributors can facilitate entry into new geographies, help
identify market opportunities, and provide valuable market intelligence. Research has also
shown that distributors can help manufacturers build brand awareness and reputation
(Cox & Brittain, 2015).

Sales and marketing: Distributors often play a critical role in the sales and marketing
process, acting as a salesforce for manufacturers and promoting their products to retailers
or end customers. Research has shown that distributors can be effective in driving sales
growth, particularly for niche or specialized products (Jahangirian, Eldabi, Naseer,
Stergioulas, & Young, 2010). Distributors can also provide valuable feedback to
manufacturers on product performance, pricing, and other market trends.

Risk management: Distributors can help manufacturers mitigate risk by providing a

buffer against fluctuations in demand or supply. By holding inventory and managing
logistics, distributors can absorb some of the uncertainty and variability in the supply
chain. Research has shown that effective risk management through distributor
partnerships can lead to improved supply chain resilience and flexibility (Fawcett,
Magnan, & McCarter, 2008).

One of the primary roles of distributors in the e-commerce sector is to manage the flow of
goods from manufacturers to customers. Distributors act as intermediaries in the supply
chain, coordinating the movement of products, handling logistics, and ensuring timely
delivery. Research has shown that effective distributor management can improve supply
chain efficiency and reduce costs for manufacturers, as well as enhance customer
satisfaction by providing faster and more reliable delivery options (Chang, Tseng, &
Wu, 2019).

Distributors in the e-commerce sector can help manufacturers manage their inventory
levels and avoid stockouts. By holding inventory on behalf of manufacturers and
managing logistics, distributors can provide a buffer against fluctuations in demand or
supply, as well as help reduce lead times and improve order fulfillment rates. Research
has shown that effective inventory management through distributor partnerships can lead
to improved supply chain responsiveness and customer service levels (Liu, Wu, & Lai,
2019).

Distributors in the e-commerce sector can help manufacturers expand their reach into new
markets and customer segments. By leveraging their existing networks and relationships
with online marketplaces or other partners, distributors can facilitate entry into new
geographies, help identify market opportunities, and provide valuable market intelligence.
Research has also shown that distributors can help manufacturers build brand awareness
and reputation in the highly competitive e-commerce marketplace (Chen & Xie, 2021).

Distributors in the e-commerce sector can help manufacturers mitigate risk by providing a
buffer against fluctuations in demand or supply, as well as by managing logistics and
fulfillment. By partnering with distributors, manufacturers can reduce their exposure to
supply chain disruptions, as well as enhance their ability to respond to changes in market
demand. Research has shown that effective risk management through distributor
partnerships can lead to improved supply chain resilience and flexibility in the e-
commerce sector (Xiao & Xu, 2017).

RESEARCH DESIGN
STATEMENT OF PROBLEM:
"How can the role of distributors be optimized to improve the efficiency and effectiveness of
the supply chain in [industry/sector]? A study on the current methodologies of distributors
and their impact on the supply chain.

SIGNIFICANCE OF RESEARCH:

research on the role of distributors can provide valuable insights for businesses looking to
optimize their supply chain operations, improve customer satisfaction, and gain a
competitive advantage. It can also inform decisions on resource allocation and sales and
marketing strategies.