g MEANING . gencies and i A channel of distribution is an org a system of agen Institutions whic, ised! network oF iesand cers with users and k produ USE wi in combination, perform all the producers to accomplish the marketing ask Et 1 of distribution is the structure of ings jesale and retail, through whien | a [, According to American Marketing Associatio company organisation units and extra company agen | commodity, product or service is marketed.” | In the words of Professor Philip Kotler, “a ct | involved in the process of making a product or servi in, “a channel its and dealers, who! ribution is a set of independent orgarisatins hannel of dist Pr ice available for use or consumption” it stands for the path or route traced in the direct or indirect transfer of title to, m a producer to the ultimate consumer OF industrial users. ting the flow of goods and services from their functions and attainment of the product: as it moves fro tribution is a path-way direc Thus, a channel of dis es through producers to consumers composed of intermediari mutual objectives. m THE PRINCIPLES AND ROLE OF MARKETING CHANNELS Significance of the channels of distribution can be compared to the pipeline system or the routes that connect two points. They are the lifelines in the palm of marketing system. That is why, Professor Peter Drucker once said “channels are primary and products are secondary” and “deserve much more attention and study than they usually receive”. It is the trade channel system that creates “value added” to all the products and services. If value utility is created by manufacturing, it is the distribution system that creates time and place utilities. The following principles as given by W. Alderson elucidate significance of channels : 1. The principle of minimum total transactions : In the process of exchange, the need Mf channels and the intermediaries arises because, they improve the efficiency of exchange prow Precisely, it is less costlier and complicated to deal indirectly than directly with the final users-or ——e Wholesating) 2 ise demonstrates that more ng) MOre inte ps eee demonstrates, that eftcen and Mermediaries. will be available only at ishing Tere, these contacte canbe rede at He the intermediaries, mor will be the sie points Fig. 1 where we have ten contact, 2 ly severe ee ereasing fa e Aenea as ae wy C¥eN contacts in situation Fig, 2 and this ‘co SU storted in situation. Fig. 3 whor. the contacts are iNereawed ty f " ies lowing ate three situations o fallo’ ‘he SITUATION one MANUFACTURERS, retailers by 00 (10 ssa, et us say, they spend % 4.00 each betwe spalesaler spends % 1.50 for each retailer tot: xints. Thus, the total transportation _aving of € 4.50. SX 2.00 each and, hence, the tor Contacts for € 2.00 each). If we change to situation Tie erulacturer’s points and wholesales and the alling to €7.50 between wholesaler’s and retailer's "at 15.50 @ 4.00 + ¥ 4.00 + 750) tue resulting in SITUATION TWO SITUATION TW MANUFACTURERS: Tl MM ee WHOLESALERS RETAILERS isd SEVEN CONTACT LINES FIG.2 SITUATION THREE MANUFACTURERS : WHOLESALERS : RETAILERS : FOURTEEN CONTACT LINES FIG. 3Marketing Channels (Including Retailing and Wholesaling, = syokext ent on he assy sane y ie more than one avhotesaler is employed By 4 manutacturet, each retiler aay thy wervices oF ene af these avtaoenalers 4 There is no difference betwe the dveet andl the indirect communication costs and quai, ar carviee rendered by antermedtiaries i terms of effec tiveness and efficiency. y eof smoothening gaps in assortment and sorting : The intermediaries are known 2. The princip oats for emoath How of proxtucts ane services between the makers and the users by creating time, piace wad ownership utilities. These utilities inerease the value of the consumers’ assortments, Thy vitermediates sort out the goods and services in the light of consumer assortments thus bridging the gaps between assortments of goods offered and one demanded by the consumers. In other words, esortments are the outcome af sorting out work undertaken. 3, The principle of routine : The cost of any transaction can be minimised considerably, if attempts are made to regularise or routinise them in terms of say a product or a service valuation, vnode and time of payment. In absence of routinisation, the things are left to sheer bargaining resulting possible reduction in efficiency and, hence, Joss emerges. Routinisation has other advantages too. “Among these, most significant ones are : la) Itenc ourages standardisation of goods and services that facilitates performance evaluation and comparison. (b) Itencourages production of those items which are valued high. (c) Itencourages segmented flow of products and services. 4. The principle of searching : The marketing system represents exchange process where the buyers and sellers are researching for them the matching sellers and buyers. Search is common to both the parties which is uncertain. Thus, buyers want to search as to what is there for sale? Who is selling ? Where? When ? At what price ? And under what conditions ? On the other hand, sellers are eager to know about what buyers want ? Who are the buyers ? Where? When ? At what price ? And under what conditions ? The distribution channels greatly facilitate this mutual search and bring the parties together for their mutual benefits. 5. The principle of amassed reserves : In the process of distribution, to move the goods from producers to consumers, the stocks are to be held at all the points of the pipeline. This is, what this principle says. However, it appears strange but true that the total goods held in storage at a time would be much larger in absence of these intermediaries because, the final buying units or the byes outnumber these intermediaries. It is equally true because, the goods set in the pipeline are on the move than outside the pipeline. ns inl of proximity: The essence of his principe i that the intermediaries ae such ey a ae than the producers or the manufacturers. That is, they have deepe ad pra lh consumers that helps them to understand the consumer needs and possible change 'me to the producers or the manufacturers through orders and message. It does notyng Chaénes (including Retailing He fi Who i“ tuhey are not at all involved with hy “saling) 0 om the manutacturers fgg, jjyrn PMUeer, th oo ower (3 nal USES they ate mon seful to the ee interested, it and therefore, involved SSIFIC) Frade channels are classifi into conventional ANN rE with further ramifications, The following pont MOM-convention, i «following diagrame in fe dan Nad : ate figure 5 make this quit VERTICAL, Fig. 4 Conventional or individualistic channels are the fragmented net- works wherein the manufacturers and the consumers are loosely linked by intermediaries in the process of exchange These intermediaries perform the usual conventional marketing functions. The conventional channel alternatives can be: 1. Manufacturer to consumer. 2. Manufacturer to retailer to consumer. 3. Manufacturer to wholesaler to retailer to consumer. 4. Manufacturer to wholesaler to consumer and 5. Manufacturer to agents to wholesaler to retailer to consumer. Non-integrated or conventional channels take two shapes namely, direct and indirect, A ‘direct’ channel is one which is the shortest wherein the company choses fos dey © ia ‘sumer without engaging any intermediary. It is commonly seen in fa = bean by travelling salesmen and multiple shops. On the other re ‘in = “mploys the services of intermediaries in moving the goods to the consun mnge in the title of goods from manufacturers wo sulin direct channel, there is imme ae! as the intermediaries go on increasing, ® consumers while in case of indirect channels it gets delMarketing Channels (Including Retailing and Who, lesatin 19) 14.6 CONTRACTUAL DIRECT g a (CHANNELS | vemneaccnamnets 8 5 3 Zz 8 ae 3 ies 5 eoivauor| ||| Pause |" une ea INDIRECT HORIZONTAL CHANNELS ‘CHANNELS FIG. 5 “These direct and indirect channel options will be more clear with the practical illustrations a, given below. 1. Manufacturer to consumer : This channel choice is the shortest and simplest, as itis die where goods move directly from producers to consumers. That is, no intermediary ig involved. This is the channel choice opted by manufacturers industrial and consume, durable goods. The sales are affected through the company sales-force. Take the case of vacuum cleaner, water cooler, oil engines, generator sets. Same is the case with bakery products though they are consumer non-durables. 2. Manufacturer to retailer to consumer : Between the producers and the consumers, ths is channel has one intermediary namely, retailer. This the most common channel in case of consumer durables such as textiles, shoes, ready made garments and so on. In case of textiles, most of the mills have their own retail outlets all over the country. In case of shoes, Bata, Carona and Flex have their retail outlets throughout length and breadth of the country. 3, Manufacturer to wholesaler to retailer to consumers : This channel option has two intermediaries namely, wholesaler and retailer interposed between the producers and the consumers. This is the most popular form and is used by both small and big companies alike. The companies producing consumer non-durable items use this where the ‘wholesalers stock the production in different parts of the nation or a region and from there, the products are supplied in smaller quantities to the retailers and who in tur, sell to the consumers. 4, Manufacturer to wholesaler to consumer : This channel option by passes the last link namely, retailers. Therefore goods move from producers to wholesalers and back to consumers directly without having recourse to retailers. This is the most acceptable practice when the consumers are not individual buyers but are institutional buyers such 28 hospitals, schools, colleges, government agencies, public enterprises, business houses religious institutions, sports clubs and like. However, the scope of this channel is limited © the number of institutional buyers. Though it is used in cases of those companies ‘manufacturing consumer durable goods, it can be also used in case of consumer nO" durables.ting ue! Sting ana wh, Wo 5, Manufacturer 10 agent 19 hot, 3 14.7 ale channel option that a company hag tp.” TC to consume \ Hirect Shi mst 9 HMC Why ae Hamme Tas thy tama: 1 i the longest inutirec a owt vices af agents andl middiemen they al the wholesalers bw retailers and export merchants Who manage thy i ¥° REL ie wm ; ee concentrate Totally On production, tho ON PANE tthe mae fa aa : sie “oduct portiolio and prey tine, AY shane by companieg ei nate pet ral predic congue: oe sh by companies wth map {ind international market or dtrables on targe seal | lange scale enjaying, nationa ypis worth pointing Out at THs Tove that they above five ring 08 the individual requirement, channel of AT When COMPA USES Oy one chal fora ie spay mono-channel or single channel policy. When it weet ‘ ' se het segment itis calle as dual or multichanet 4 firm may isi Se i 'd options instead of only one t segments and 8 two oF more Policy all products, itis 9 channels for its products : oF pe mal site ‘ g. INTEGRATED CHANNEL SYSTEMS asopposed to the conventional or non inte stated channels of distribution, int ,jsripution are those net-works that work with full coordination and cohesion -Brated channels of ther than working ‘These integrated channels can be ‘vertical’ and ‘horizontal’ in nature. 1 Vertical channels : Vertical or vertically integrated channels of distribution are those which ae qrlessonally managed and centrally programmed net-works that are pre- engineered to achieve operating economies and maximum market impact. In other words, these are rationalised and capital stensive net-works designed to achieve, technical, managerial and promotional economies through integration, coordination and synchronisation of marketing flows from the points of production to ‘befinal points of ultimate use. These vertically integrated channels are of three types namely, ‘administered’, ‘contractual’ and ‘corporate’. ‘Administrative’ channel is one in which coordination of marketing activities is achieved through the use of programmes developed by one or a limited number of firms. Such an arrangement makes use of management facilities, modular merchandising, coordinated display and automatic replacement programmes and programmed merchandising agreements. Ths is generally followed by twowheeler or three- wheeler or four-wheeler manufacturers who direct its dealers guarantee coordinated display and merchandising to win the dealer support. A ‘contractual’ channel is one under which the independent channel components integrate their programme on contractual lines to attain the economies and enhance the market impact. That is, the outside units specialising would do the work for a price. Thus, the manufacturers hire the services of other units on contract ie This s the case with those companies which are confident of doing, well on distribution eu ee oe and expertise laxities. A ‘corporate’ channel is one in which the channel ne coe Operated by the same organisation. Though, it involves huge ivesent i ge Control. Thus, a manufacturing unit may float a selling or marketing unit o! . 2. Howzontal channels : Horizontal channe! is one in which two or more comatis Pit their # ves or by creating an tds to expt» marketing opportunity or opps ned Cement independent unit. The example of this kind are Sugar Syndica!N Marketing Channels (Including Retailing and Whojg,, Mi changing, markets, go cunay ine My ity, evel gle handed and so on The reasons: gin silt capacity bo take +f technology, eNees ancl ts Company competition, chan demand and the int m TYPES OF INTERMEDIARIES the middlemen and signity thes at profit or do not take and institutions in the tg indivi ttle to the goods but sai Intermestiaries: ane that either take title to the goods and sell ‘ing Association defined the term “middlemen” as “one who specia wi fentering services that are directly involved in the purchae ca vei from the producers to the users”, of Marketing intermediaries are the individuals and the organisations that Perform var. functions to sornect the producers with the end users. The individuals and institutions perform, ie functions of procurement, storage, packing, financing, transportation and counselling—in linking : se ends The significant thing to note is that these intermediaries perform these function so yg is possible neither for the producers nor forthe end users to endure alone and so economically that it : These middlemen are classified as ‘merchant’ and ‘agent’ middlemen. American Market performing operations of te goods in proves of their flow 3 |. Merchant Middlemen = | MERCHANT: AGENT tei 4 t f 4 £ ¥ + ¥ voy [mocesnceAs] [RETaLeRs] [anoxens]|COMNSSION]] SELLING |/ FORWARDING macro AGENTS Peeper al § [eu oor || [ruftion Jeonvervon] 2A, | eee eee [ UNIT STREET |[ MARKET STORES || TRADERS || TRADERS || JACKS || STORES DERRTMENTAT]T Goan || waonne® | supe COOPERATIVE STORES STORES HOUSES MARKERS: SOCIETIES Fig. 6 Structure of Intermediaries TE aei ca t middlemen are th Se Wh, or 4 sell DodS by taking poe MP iD the pipelin. ) ‘ wm In addition to these olor of es In other words, merchant middlemen sete aunty function function cea the risks and the price for their efforts fore middlemen are broadly clayey, “er Be namely, buying and selling, they do Services, ed as S Useful to the ‘ OS Wholesalers tl © the channel participants. ‘These 14.9 Boods and channelise the goods from the , 1, WHOLESALERS and retailers, wes HAZET IS ONE Who Set other: juantities. Accor, T middle; ‘a Ete andor india i Mingemay sn and individuals usually in ses int ea ee a vr sitational users in ar oo pe individuals” with marketing aac ‘old consumers, to individu op Poesiona or use orto the tions olesale traders perfor : ee important ae are. Snmber of functions in the proces of ‘marketing the goods. Of them, 1, Assembling and Buying 2, Warehousing 3, Transporting 4. Financing 5, Risk Bearing 6. Grading, Packing and Packaging 7. Dispersing and Selling 8. Providing Market Information 1. Assembling and Buying : Assembling implies the collection of small lot of scattered agricultural production for economic bulk buying; it also means bringing together stocks of different manufacturers producing same line of goods. ‘Buying’ comprises ofthe activites of selection of manufacturers and placing orders on them ‘and making special purchases in cases of seasonal products. oe of assembling, As 2. Warehousing : Warehousing or storing 1 closely related to the function ‘i consumption, the goods there is always a gap between te ime prods of pest Me bowie Hy are to be held and preserved. This involves caP! FP he problems of Storage. .d the retailers ‘wholesalers relieves both the producers and the erm 3. ; the processes of assembling and wacousig rs wie . Transporting : In the f goods from producers to eee tc oe tne pres ops retailers. What is imp’ red common carer: through their own fleet oF throus! hired co!14.10 4 * \\holesalers bear the risks of loss of change in pri icine... * Marketing Channels (Including Retailing and whote. 'saling) Wholesalers undertake marketing financing, They grant eredit on liberal ancial burden of the manufacturers by fms akin y fact that the wholesalers grant credit is as, 35 Bod Financing + to retailers on ane bane ks trom them, The v {and reduce the f early delivery of stoc 0 final users. he credit quota of manufacty are inherent in business which are to be borne and. hig " ite , of damage, deterioration in quality ity, as reducing Risk Bearing : Risks theft, tire and the like of the goods held in storage. They also bear risks of no by the retailers. Risk shouldering is the part of his game. ws another function of wholesalers where y pilrerage, under payment Grading, Packing and Packaging : Grading is thew sort-out the stocks in terms of differing sizes, qualities, moisture contents and so on i-breaking is done with a view to meet the small lot requirements of the retailers, in Bull orders of the retailers. tact. they repack for the consumers as per the Dispersing and Selling : The goods assembled and held in stock are meant for dispersing and selling, Itis the retailers who buy from the wholesalers. Similarly, wholesalers do have their own sales- army moving to retailers for collecting order. Providing Market Information : Wholesalers are the vital link between the retailers and the manufacturers. They provide relevant and up-to-date information to the retailers affecting their trade interests; so also they reciprocate the same to manufacturers as to whatever retailers feed them on changing market conditions useful for the wholesalers.NONE reAge Vand p : the Types of Wholesales ales and profit Takes sale Wholesalers are mainly of thre © types namely 1. Full function, Converter, and _ Drop shipper. 4 ‘full-function’ wholesaler is an intermediary who bu unt, assembles products trom different sources in bulk, ¢ al ~ ys and sells the products on his own ‘arries stocks, sells in smaller lots, grants cet and renders valuable counsel and advice, Because of wide range of functions, he perfor on vice he renders, he is called as full-line wholesaler. A ‘converter’ is that full-line wholesaler rms and, -s products and sells them to the subsequent channel members after Processing them. Thus, in a i convert wheat . + textiles, he may convert gray cloth into bleached and dyed, in corns, he may aii . = gi at flour or pallets. A ‘drop-shipper’ is that wholesaler who neither stores the products to whe:7 14.42 Marketing Channels (Including Retailing and wp, olesai, delivers them to the buyers trom his own stock but books: nd difects manutactune - retailers to that effect However, he has to take delivery af goods in case the retailer or th pe? th yer 5 to accept the same. hil, 7 2. RETAILERS Retailer is one whose business is t0 sell to consumers a wide variety of goods whi assembled at his premises as per the needs of final users, ‘The term ‘retail’ implies sale or for further processing. A retailer is the last link betyr, consumption rather than for te final user and the wholesaler or the manufacturers Acvonling to Profesor William Sato, “retailing includes all activities directly related to jy, of goods and services to the ultimate consumers for personal or non-business use”. Sale Thus retailer is that merchant intermediary who buys goods from preceding channel meme, ents of final users. in small assorted lots and sells them in the lot requ AAC this point it is worth noting the distinction between a ‘wholesaler’ and a “retailer, Fy, ‘wholesaler primarily sels tothe dealers or industrial users whereas the retailer tothe final consi, ‘mostly the house-holds, Secondly, goods sold by wholesalers are meant either fo resale or for fur, Processing while the goods sold by retailers are meant for final consumption. Thirdly, the gins ‘moving from wholesalers to the retailers are still in the pipe-line while goods sold by the retailers a, moved out of channel. Its so because, the wholesaler connects wholesalers retailers, and the retails wholesaler and the consumers. Fourthly, wholesaler sells in larger quantities than retailers and th, prices charged by the wholesalers are lower than those of retailers. Fifthly, wholesaler generaly specialises in one or a few product or products of same line while retailer in wide variety of products of many manufacturers. Sixthly, wholesaler works on reasonably low but quick returns while retailer works to higher margin over a relatively large period. 5 Functions of Retailers Retailer as the last link in the chain of distribution, performs good many functions of marketing Of all these following are the most significant ones. 1. Buying and assembling 2. Warehousing 3. Selling 4. Risk-shouldering 5. Grading and packing 6. Financing 7. Advertising 8. Supply of market information 1, Buying and Assembling : Retailer has to assemble products from different manufacture and wholesalers as he has to keep wide variety of stock of products to meet the Vat small requirements of large number of customers. This assembling is possible tho!- aS 0 Ng ang Whote ge oF OVINE: BUYING iy 'saling) : ontinuony, Aemicat and LepeNIABL soggy a PHS yy 1413 ns 7 Sof suppl WING setection y sig © REIT Ig sy ii Shes a he ment 2 pri Valve rey 2 yietes and price ranges According, i i rele patding HE STOCKS 1 MACH betwen in quantities ot iffeemn ing the st tween tn jeren PenlteTHFCF SUPPLY conditions Wego este Aleman and ates Possible a possible to Nd and the whale galing + The final aim is 40 se prduete called a8 the buving. agent of consumers. rye “onsumers (OF producers and whol te Is the lle nn Mispose the goods reigned BOO dal of aesmatip een ses 4, Risk-shouldering : Risk shouldering ohysical deteriorations and 8 in pri of a retailer Ceey of inventories Kee in Prices. These are unavadable 7 ina epkel A isk of 1055 is seen in the ne tit Yate bought il they are sla ee aad The risk is seen in the number of fo to the consumers, ms such as : 5 yclone, earthquake, 7 natural calamit cycone, earthquake, spoilage and deterioration duc to changes inthe one and 500n. weather and fashion esalers andl the basic responsibil, Grading and Packing : Retailers undertake packing activites left by the manufacturers and wholesalers. Classification of goods into different graders and lots is common. As he sells in loose packs and very odd lots, packing assumes a particular importance. Such packing can be highly standardise! or com the individual requirements. ighly standardised or can be as per secondary or second round grading and Financing : In the whole scheme of marketing, the contribution of retailers is really worth emphasizing in so far as consumer financing is concerned. His financing consists of credit granted on liberal terms to the consumers, investment made in large variety of stocks, the expenses of holding stock, salaries and wages of watch and ward staff and other trade expenses. . Advertising : Ratailers are the best agents to advertise the products, services and ideas. In collaboration with wholesalers and manufacturers retailers do undertake shop display, distribution of sales literature, introduction of new products in a convincing way as he recommends what is ‘right’ or ‘wrong’ to a particular customer. 8. Supply of Market Informatior + Retailers really enjoy enviable position in so i callesng information from the horse's mouth. As being in close and constant aan — a he clearly keenly observes, studies the consumer behaviour, eae a ee i This collected information is passed on ote aa tee perusal and necessary action for future adjustment and and the manufa success. 5 The Types of Retailers x, the most practical and popular way . Howeve The retailers can be classified in number of aye casiiations as under isthat ofsmall scale and lange retailers with furthers7 marketing channels (Including Retailing 37d Who, Min "0) 14.14 A Small Scale Retailers a : said atoroe run on prapHletary Lint stores ane the te ne) ' va, lathes, grocery terms, he . ce fiw stoves stele 06 TERPS » Py ; Fe Tine atures ane musty called preciaity 0p 2 they may pg Mk — slay their stock on : Traders Street adders rect retaiiers gol splay On footpath, 7 Tree sea epots of cities ane owwnss TE most promi rm pc are bu ot : ota so on. They deal in st el jaretons, squares and They ct po miwan tatcnts, [SATKS. At hese retailers ope hhops on fixed days oF dates in sperifng These rel a month, They do join fairs and jos. sk or a fortnight oF These retail outlets have fived Ye og Market Traders dre hime interval may be a wee see in. general or special Hine stores arrangements with builti’ flexibility, as been there in all the centres from the ie time class of retailers bs qekers and Pedlars : This class of retail 4 Hawkers and Pela nave any fixed place of business. They carry the g00d3 fom, ling the goods from door to door. They keep on — pusiness with the change in the season. Thus .- smmemorial. The id may change over to com flakes in rn, slace to another on hand cart sel trom locality: to locality and business t0 candy seller has a brisk business in summer an‘ and winter seasons. Cheap-jacks : Cheap jack is a retailer who has fixed place of business in a locality bt gy, Go changing his place to exploit the market opportunities. Change of locality is que oe amon’ in case of these retailers. These deal in cheap varieties of readymade gamens, plastics, shoes and the like. However, the speed of change of locality is not as fast as tha hawkers and pedlers. 6. Syndicate Stores: Itis an extension ofthe theory of mail-order business on a small sa Syndicate stores are known for widest varieties of goods in a product line but of knovn brands These retailers buy most of the unbranded varieties and try to sell under ts names. These apply to ready made garments, toys, machinery items and so on. B. Large Scale Retailers 1. Departmental Stores : It is a large retail store dealing in a wide variety of goods under® single roof. It is essentially an urban retail outlet designed for mass selling dealing in almwst Aspirin to zip, mostly catering to the needs of higher income groups. It is a central locaton and unified control. It is known for orderly arrangement of products in separ departments and it lays emphasis on consumers service. The best examples of this kind it India are: Ebony stores, Spencers, Super bazar. 2. Multiple Shops and Malls : A multiple shop or a chain store is a system of branch SP operated under a centralised management and dealing in similar lines of goods. Its of retail stores dealing in identical and generally restricted range of articles OP ns different localities under central ownership and control, It works on the pandtl © smulip centralised buying and administration and decentralised selling. The attributes of -g channels (Including p, ‘ailing an 'd Whotes, : cash a c sain, i are + cash and "Yin 9) Gecentralsed selling in igh ines of 14.15 co erent Loca Articles, shoes, Flex shoes ¢. Dealitig items are co ast hoes FRX shoes, Caron gy he examples f this 4 pumer durables— : Shoe of this kind are __ mail Onder Houses : As the Bata shoes, agadvertising, That is, the customers et contacts the inspection of goods before the pute the salen im oe through some form estly through V.PP. oF Ropisten. 1 transaetioy “8 nor there is personal wet As the goods are se POSt. That ig a Is settled through postal aca Feit, command den pet ah me Pre tata sting ki nd are du INE atticle must this kind are—patent medicines and reat in addition to high wane, Mell known, garments and 80 on. These units ane nema ls, jeweller re confis ‘Ye Limited of Mumbai deals in, ‘Ballavorker si cosmopolitan kit. commodities at just or fir prices. These are designed to meet the requirements of the weaker sections of the society for ration etc. 1 NON-STORE RETAILING Most part of the retail sales are made through retail stores. However, a part of it is also handled Synonstore retailing viz. House-to-House selling, telephone retailing related to personal and mail drdet house and automatic vending operators related to non-personal sales, Retailing activities that take place outside traditional store environments are referred toas ce Store retailing. Today, non-store retailing is growing much faster than in-store retailing, this growth is i ‘of working pected to continue in direct response to the shopping needs and time constraints of working ‘ouples, 5 1, HOUSE-TO-HOUSE SELLING i sh built around direct contact This is one of the oldest non-store personal retailing a ee renilng is generally f the customer. detergents soaps, een the seller and customer at the home of the custome, P97, tion Iie ished retail outlets ot sed by of mass consumpti in established r Sarge either due to their poor performanc lucts, housew: .a6 Marketing Channels (Including Retailing and whey, "lesaiin, 9) promoting products. This H 6. THis type OF eta lng vhen their proxiuet bs competing ih one BF tO 1 in proatucts, particularly fruits and vegetabl Hwa attyacts more and: more consumers due to off 08 Of en The main adevntage tochouse selling at fuy ing at he ‘ng ised server to the consumers. 1 How We to customers, Ieotters more)" also stuffers from some of the drawbacks : 4. This method entails very high cost, Because of high travelling cost, non-product ana the limited! number of contacts per day results in high operating expenses. VE calls, sntatives prove to be unscrupulous and fraudulent operators, However, this method 5. Some of the sales rep! J 2. TELEPHONE RETAILERS This is another personal non-store retailing technique which makes possible to direct conta ct ‘eeweon retailer and customer. They sell their goods through telephone only. The main advantages of this method are 1. Retailer may directly talk with the consumers and finalise the business without any intermediary. Operating and aiiministrative expenses may be reduced by using this method. However, this method also suffers from a certain limitation. 1. Without physically presence, sometime the retailer face difficulty to convince the consumers about the quality of the product. 2. Sometimes, customers get inferior quality of product. 3. MAIL ORDER SALE This is the non-personal non-storing method of retailing which sell goods by mail only. The ‘goods received by customers either through V-P-P. (Value payable post) or through registered post This method is very useful for the company at the time of introducing, a new product particularly when it has no established channels of distribution. In India, the selling through mails has not become much popular till date due to consumer's lack of confidence in them. The examples ofthis ind are-novelty goods, patent medicines and chemicals, books, readymade garments, Jewellery et. It is essential for the mail order articles that they must be free from damage in transit and given themselves a pictorial representation. Time to time, a list of all prospective customers is prepared and price list, catalogues, patterns and even samples are sent to these customers. This process enable them to secure more and regular orders from the customers. There are certain advantages of mail order sale : 1. Mail order business does not require any big shop or office in the main city or locality. gives opportunity can be handled from any place having the facility of postal service. It the customers for wide selection of articles from the catalogues and pumphlets. Ve eecna ING and wr, ables to save FUnning and estap in 1B eight chars ps DONE TOBE HIME dcr yy ‘ 00s ling) Mishinent charge and § fev save the * ail order business helps oretuee risk oy ene : sk of bn de arty Most of its busi . bs HS business on cash , Insis which simplify th hi 1 procedure of pit onder retailing method, however, isnot re a ee from certain fi acking in personal contact between retail een custot $ arts satisfy his customers because they ate dri ‘qlecting the goods before buying, and buye Wet, Sometimes, ret ved of from the Opportunity tailer unable to of examining and | gqme products requit _ ;someP quire a demonstration and can not be sold under th inder this method, au pone Many customers dislike this technique because of having no facility of of credit. qt increases the chances of frauds, 4 Possibilit : ‘ Gelays and misunderstandings, ility of losses : In transit, inconvenience due to The sale appeal somehow stereo i Paes type and not easily altered to suit the different ; AUTOMATIC VENDING MACHINES ‘Automatic vending machines is a pretty old idea that has around two hundred and fifty years of " There are certain items or products where there is no need for presence ofa sales person to ‘product or even services. Even today, when emarketing has made ‘good headway, automatic vifng machines are used. Take the case of products lke news-papers, milk pouches, t,cfie— saiy to drink, juices, even hot drinks. Further selling of rail-tickets, packets of eatables like pop- se chocholates. The series are that of telephone, weighing games of gambles or money spinners and s0.0n. ‘The business house own these machines and instal clubs, community halls, tives comes and te them at strategic market places, such as sports, bus-terminals, restaurants, railway stations and even strect comers x squares and so on. Each day, the company representa fakes the cash collected and nis back the goods or products that the machine can accept. Let us take two cases to illustrate. Say you want to buy beet of India from the Ep - he key-1 cates the paper. Check whether itis giving no signal. Rae areata peer coe comes back. However, you are to put exact nin in putting the money. Even if you put : y re ender tas ane coin ta two rupee coin. After putting does = ee en nea ic it. In case of S4Y 7 ets paper comes to the outlet and you are to pick i cen Sasa tone, or the the other party is eso th ‘ d then insert the amot at phone gives tone an me back ;f phone gives en*Be ther party speaks, then no coin will co otlifting, the coin comes back. The merits of the automatic vending machines 26° 1. No sales staff or supervisor #§ needed,=, Ming and Whotesati 9) Marketing Channels (Including Ret 14.18 + Antomatic elloction of mney resting, is eash sae No danger of bad debts J. Sates tthe full extent on caily basis oF weekly Da sis eperdig PO The Pat of Pry Interesting and cutions te ehilelren ‘The demerits are 1 Heavy investment on the part of the owner > Proper maintenance and security of the machines 3 Pasitulity of mishandling 4 Customers need basic oF minimum knowledge as to how to nandle the automatic vending machine 5. Limited capacity. In ¢ many pouches or papers of say selling milk pouches, news papers, one cannot say hy, will be Il, AGENT MIDDLEMEN are as important as merchant middlemen. Agent middle men are those channel components who help in the transfer of goods from the hands of producers to the hands of tltimate users without acquiring the ownership of these goods, therefore, they do not assume any isk involved in marketing of goods, they operate for a commission and act on behalf of their account but render a valuable service of bringing together the buyers and sellers or assume the role of striking Agent middlemen 2 transition for commission. J The Types of Agent Middlemen 1. Commission Agents : He buys and sells goods for his principals in return for a commission. He may or may not buy in his name but he does not assume any risk. He gets a fixed rate of commission for the business done. He has expert knowledge of all the commodities in which he is trading; he keeps close contacts with the producers and dealers on the one hand and the market trends on the other. He procures goods as per the instructions of his principals; he gets orders and is responsible for arranging for packing, transport and delivery of goods including granting of credit and collecting the payments and the dues. He has the right to charge his principal for the costs of the goods purchased and the expenses incurred and his share agreed as commission. If he guarantees payment on goods sold on credit, he is eligible for extra commission called ‘deal credert commission, over and above the normal commission. 2. Brokers : Broker is an agent who is employed to make bargains and contracts in matters f trade, commerce or navigation, between two parties for a compensation known # brokerage. He is an independent agent who negotiates bargains or agreements between t¥ of more parties for exchange. He brings the intending buye: and the seller together. H does not take title to the goods and hence, he does not take possession of goods. Broke specialise in a particular branch of commerce. Thus, we have produce brokers,on ee prokers, ship brokers, ing the parties of exchange, they make actual istly, they ore 0. Brokers, : atrangemenie f° bough render useful service to both organisations to keep in touch with the delivery. of aba with one another, Secondly, advice to both the parties on the iguyan Ptr and custonae, ity, maintain extensive : ISSUES OF market ‘omers. Fourthly, they give i 4, Factors: Factor i8 an agent ory Cling attecting thy eae y give valuable delivered to him by or his prineh © Bo0ds or merch goods assigned to him under sation Thus, his major aed OF fy ajor role is to sell the responsibility, a factor has the 2. te power cciee Is. Since, selling is his sole he ca i Valid receipts on behalf of hen Ss on credit he an se charges due to him and recov, Pals for a compen the instructions of 4. Auctioneers : There are some cla his & ss of prod - products lke jevellery tobaces ga, Prods where saleby auton takes pla. The commonly sold by auction. Auctioneer i ’ d buildings are more PI v teserve price’. The first one implies that the bidder start with that minimum price. Auction sale is always open to the public and therefore, auctioneer is to wide give publicity as to time and place of auction through newspapers, catalogues, posters, leaflets, and the like. The ad gives the details of auction. 5. Selling Agents : Selling agents are the intermediaries who are given the exclusive franchise only for a limited market segment. He performs the functions of an independent middlemen taking over all the selling activities of a producer. He negotiates sales of merchandise produced by his principal and has full authority and control over prices and the terms and conditions of the sale. Selling agents are to be differentiated from sole agents. The difference lies in terms of the restrictions imposed in regard to the territorial operations, products handled and the customers served. Sole agents are exclusive agents for substantially whole of the output without any territorial restrictions. Sole agents free the producers or manufacturers totally from the botheration of distribution. 6. Forwarding and Clearing Agents : Forwarding and clearing agents are the a employed to collect, deliver ‘and otherwise forward goods on behalf of others. Most a ‘ : manufgcturing houses, with gradual expansion and growth of their business : necessai are economical to employ the agent, middlemen to relieve them of the te 7 a fe tasks a collection, delivery and forwarding the goods to er ae ale in in foreign trade. Forwarding agents re ti mn indis} in foreign tra ne pial d arrange for the shipment of these goods to their _ ons ne aaeeaae broad on behalf of the importers at port of entry | ive goods from al _ f arrange for : which one bows down. pensable