What is a market development strategy?

A market development strategy is a business growth strategy that focuses on introducing existing
products to new markets. Companies often use market development strategies to identify and
develop new opportunities to sell their products in previously unexplored markets. For example,
a company that produces cell phones and sells them to customers in the United States may decide
to start advertising and selling the same cell phones in Canada to reach new customers.

Companies can also use a market development strategy to create a new product line to sell to
new customers or up sell to existing customers. For example, the same company that produces
cell phones might decide to start manufacturing smart watches. This is a new product they can
sell to their current customers and advertise to new customers.

Value Delivery Process:

When the firm or an organization makes something, manufacture something and then sells it then
it is known as marketing kind of a thing. It tells about making the product and then selling it. The
value delivery process consists of two things that are as follows:

1. Making the product

2. Selling the product

It consists of pricing, selling, product, promotion, price, distribution and also the services after
sales which are given by the company and its people to the customers. It helps in better services
as well as sales in terms of the respect to the customer.

The companies create values to customer and this becomes the first step then they deliver the
same. They deliver the value by terms of product or service which is based on the total
management system how they process each work, by the help of better product or service or by
the help of customer means to say they achieve the growth and development by providing the
best to its customer.

There are three things which come in the process of value delivery and that are choosing the
value, providing the value and then communicating the value which includes activities like
customer segmentation in choosing the value it is a concept for process the image. It represents
the image which is meaningful and easy. It is related with targeting and positioning. If a sales
person or a marketer needs to position its product or services he needs to first identify the target
market, then position its product as per the marketing research and finally he do the last part of
segmentation. It matches the correct position which suits the product.

In providing the value, it includes manufacturing, sourcing, distribution, pricing Market

penetration will occur because it is a new business for me and my team. The price will define the
product development market development and the diversification etc. Price also defines our next
plan, our employee’s salary, infrastructure cost; the cost which will take place in marketing is
quite difficult for top managers to decide because for a new product it’s quite difficult to define
that it will succeed or not so the best steps get taken by following these steps. The public wants
value for everything that it purchases. In the interior business price matter a lot because here
customers pay for products and services for long term and in communication of the value it
includes promotion and advertisement which is a very exciting thing for public residing there.
They will get a new interest and if it makes them feel something new and different they will
surely visit the company so the company promotion will be very much important for the business
because promotion will help in creating a good business so firstly I will design my service and
past activities list and give it to press for release it so that more number of people can be aware
of the interior design company which will be really unique and attracting so that the customers
can have their eyes on it. I’ll arrange a program of public relations so that not much investment
will take place from my side. If I will get a successful public and media relations program I will
have an increased exposure and prestigious value without spending a fortune. It should be
exclusive and should be an extension of brand identity.

For example: Nike creates value to its customers in terms of all the above terms like pricing,
promotion, comfort level, from the part of making to the part of selling it helps the customer in
so many ways to warranty period and the comfort zone.

In terms of Honda city car, it is a brand of automobile sector and the length of this car is good
enough because the space of Honda city is more as compare to Verna and other cars and the car
of Honda city is preferred by most of the people as compare to Verna and other like swift or any
other. The overall mileage in Honda city is also greater than Verna. People also prefer Honda
city because it gives better mileage than Verna. The style and performance as well the quality all
is most preferred by the users of Honda city. The company also provides with good sales service
and the level of production as well the level of comfortability.

The production level of this car is also done on a better way as compare to other and from the
point of sale it is bit different and good in terms of other segments and cars like Zen, Maruti and
others. It is known by the most people and also it helps in knowing the personality which gives
value to the customers and the people also who works with this company.

BRANDING:
Branding is a type of marketing practice where a company creates a name or a symbol or even a
design that can be easily identifiable, about the belonging of the company. The brand acts as a
true representation of the individuality of the business, and the way the business wants to
flourish, this can be perceived from the brand of that particular company.

A brand concept consists of the core ideas behind a company's branding that pull together its
purpose and goals. A brand concept is all about how a brand makes you feel, which becomes the
base to build an entire brand and marketing strategy.

Branding

“A brand is a name, term, design, symbol, or any other feature that identifies one seller’s good or
service as distinct from those of other sellers” - American Marketing Association.

A brand can be conceived as an idea or an image that people will have in their minds when they
think about specific products and services or even the activities that are associated with the
company.

Features of Branding
The features of Branding are as follows
Competitiveness

For a brand to truly be successful the needs are required to be focused as being competitive in
today’s world is very important. A company has an entire team who is working behind a brand,
to make that a hit. A successful brand goes beyond consumer expectations to give a competitive
edge cutting to the industry.

Distinctiveness

To create an identity of the brand, the creation needs to be highly distinctive from the other. The
world’s most popular brands, like Apple, Starbucks, or the BMW cars have successfully created
this impact in the minds of the customers. Take for instance the Apple product which is
renowned for its technical approach to design and technology gets appreciation for the
innovation in its products. Starbucks promises services across the globe. Hence, we see that
brands have a distinctive approach always.

Consistency

Being consistent is always the catch. It is highly important for the company to remain consistent
with the devotion it does to create the brand. They should maintain the flow of efforts.
Consistency will help the customers be familiar with the brand.
Leadership

The greatest brands in the world are always supported by the leaders who have the power to
inspire and continually aspire for their greatness. This works the same for a sports team, and
hence also for a large corporation or a small business, the most successful business ought to have
an influential leader backing them.

The Importance of Branding

1. Creates Consumer Preference for The Product Or Service Behind The Brand
A wide variety of products leads to confusion. One way purchasers manage these issues is by
leaning towards brands they know and trust. Genuine and widely known brands are viewed as
less risky to buy from. Hence, customers believe that the products from brands that are
intensively marketed would always perform better. And it is true as the results reflect that. The
more you give importance to Branding, it helps in the longer run.

2. Generates Increased Revenues And Market Share

When a firm does extensive marketing or branding, its revenues and market share increase. This
means that the firm can become stronger than it was before. It can use its power to enter new
geographical markets, do co-branding and gain new distribution opportunities. Branded firms are
well looked up to. Branding gives you wings to experiment with different sectors of the market.

3. Helps The Company Survive Temporary Crises

Toyota, a brand with the best quality, has had some genuine product quality issues in 2009,
which created a PR nightmare. However, the company has spent numerous years conveying its
“quality” image, which has helped the organization oversee the crisis and re-establish trust in its
products. Brand recall is a big part of marketing investments. people realizing that the brand
stands for a particular thing is very important.

4. Expands The Organization’s Estimated Worth

An organization’s physical resources and the number of workers do not contribute much to its
market value. What matters is the brand’s equity. John Stewart, the previous CEO of Quaker
says “If the business splits up and I give you the land, bricks, and cement, and take the goodwill
and trademarks, I’d still stand better than you.” The company’s worth shows the importance of
branding.

5. Keeps New Competition Away

A market segment that is targeted by popular brands is a huge hurdle for most new competitors.
If you are the first one to create and target a segment, you will gain tremendous benefits. Gaining
a first movers advantage is a big deal. This helps in making a place in the consumer’s minds and
staying that way.

6. Increases Employee Productivity

When your brand is well-known, people will want to work for you. This opens your company up
to the top talent and provides you with the most qualified and skilful employees for your
company. Once you have the best people for the job, your company’s productivity level will
increase as well.

7. Increases Profitability By Commanding A Higher Price

This is one of the most important reasons for the significance of marketing. Clients tend to be
more willing to pay a premium for a well-established brand’s product compared to a similar item
from a brand that isn’t as well-known.

Packaging refers to the preparation of a product for appropriate transportation and storage.
Depending on the type of commodity, the packaging process may entail wrapping, bottling,
strapping, sealing, marking, cushioning, bracing, weatherproofing, or blocking.
Fundamentally, packaging protects products from damage during storage or transportation.
Additionally, different packages differentiate brand products from competitors, ensuring they are
recognizable and marketable. In other words, packaging helps identify, describe and promote the
product.
The three types of packaging are:

1. Primary packaging — This is the first level of packaging that protects individual
products from damage.
2. Secondary packaging — is used to transport commodities in primary packages. An
excellent example is a pack of soda.
3. Tertiary packaging — is used by warehouses when shipping products in secondary
packaging. An example is the pallets that hold bulk shipments.

It is crucial to note that different types of products require different types of packaging. For
example, liquid products are stored in bottles and barrels while solid commodities are wrapped.
Companies that deal with fragile products, such as glassware, have special containers for packing
them. Practically, packaging covers the product to identify and safeguard it against
contamination, damage, dust, or leakage. For instance, milk is packaged in sachets while a
chocolate bar is wrapped in thin, attractive sheets.
Home » Blog » The Importance of Product Packaging
The Importance of Product Packaging

 Protects the product

 Displays and promotes the product
 Attracts buyers
 Differentiates the product from competitors

What’s Rural Marketing?

“Rural Marketing is the process of developing, pricing, promoting, distributing rural specific goods and
services leading to exchanges between urban and rural markets which satisfies consumer demand and
also achieves organizational objectives.”

Rural marketing is the process of producing, marketing, and turning rural people's spending into an
effective demand for specific products and services in order to achieve the organization's goals and
objectives.

Four A’s of Rural Marketing

When a company decides to enter the rural market, its marketing methods must be restructured to meet
the demands and requirements of rural customers.

Therefore, businesses must adjust their marketing strategy according to the four pillars of rural
marketing. It will ultimately help to meet the unique needs of rural customers.

The four A’s components of the rural marketing mix are:

1. Affordability

People in rural areas have a low standard of living. This is why many find it difficult to spend money on
overpriced things. Furthermore, they are primarily concerned with obtaining the required products.

Therefore, rural marketing initiatives must target rural consumers by identifying and meeting their
unique demands.

Additionally, marketers must prepare for modest packaging of the product at an affordable price. It will
aid to grab the attention of process-sensitive consumers.

In simple words, the items or services that are advertised should be affordable to rural consumers.
2. Availability

This is another important part of rural marketing — ensuring constant product availability— in remote
rural locations. It is known that most rural people are daily wage workers that spend money on their
needs regularly.

In case, they cannot obtain products in the rural markets, then they opt for different options. Therefore,
it's critical to reach out to a rural marketing environment with your products and services on time.

3. Acceptability

Consumers in rural locations should be able to use your product or service. As a result, it must be
developed in a way that meets the requirements of consumers. Furthermore, rural consumers'
willingness to spend more money on a product reflects their brand acceptance.

4. Awareness

A rural consumer's access to media, such as smartphones or television, is limited. Furthermore, they
have a very different perspective than a metropolitan customer.

As a result, marketers must concentrate on the communication and entertainment mediums that are
widely available in rural areas. This will assist them in raising brand recognition and attracting potential
rural customers to their products.

Additionally, your marketing strategy should also guarantee that your product or service adds value to
their lives. And, also convince them that you can solve their specific needs.
What is a Product Mix Strategy?

A successful product mix strategy enables a company to focus efforts and resources on the
products and product lines within its offerings that have the greatest potential for growth, market
share, and revenue.

Key Product Mix Strategies

There are four key product mix strategies:

1. Expansion: A company increases the number of product lines or depth (i.e., product
variations) within lines.
2. Contraction: A company narrows its product mix to eliminate lower-performing
products or lines or to simplify remaining products or lines.
3. Change an Existing Product: A company improves a current product rather than
creating a completely new product.
4. Product Differentiation: Without modifying the product in any way, a
company positions it as a superior choice to a competitive product.

Additional product mix strategies include:

 Deepening Depth: A company keeps existing lines but expands them.

 Developing New Uses for Existing Products: A company finds and communicates new
uses for current products without disturbing lines or products.
 Trading Up: A company adds a higher-cost product to an existing line to improve brand
image and increase demand for its lower-cost products.
  Trading Down: A company adds a lower-cost product to an existing line of higher-cost
products.

NEW PRODUCT DEVELOPMENT:

New Product Development (NPD) is the a set of design, engineering, and research processes
which combine to create and launch a new product to market. Unlike regular product
development, NPD is specifically about developing a brand new idea and seeing it through the
entire product development process.
In today's competitive market, the ability to offer products that meet customers' needs and
expectations has never been more important.
New Product Development refers to the complete process of bringing a new product to market.
This can apply to developing an entirely new product, improving an existing one to keep it
attractive and competitive, or introducing an old product to a new market.

1. Idea generation
Idea generation involves brainstorming for new product ideas or ways to improve an existing
product. During product discovery, companies examine market trends, conduct research, and dig
deep into users' wants and needs to identify a problem and propose innovative solutions.
A SWOT Analysis is a framework for evaluating your Strengths, Weaknesses, Opportunities,
and Threats. It can be a very effective way to identify the problematic areas of your product and
understand where the greatest opportunities lie.
There are two primary sources of generating new ideas. Internal ideas come from different areas
within the company—such as marketing, customer support, the sales team, or the technical
department. External ideas come from outside sources, such as studying your competitors and,
most importantly, feedback from your target audience.
Some methods you can use are:

 Conducting market analysis

 Working with product marketing and sales to check if your product's value is being positioned
correctly
 Collecting user feedback with interviews, focus groups, surveys, and data analytics
 Running user tests to see how people are using your product and identify gaps and room for
improvement
 Ultimately, the goal of the idea generation stage is to come up with as many ideas as possible
while focusing on delivering value to your customers.

2. Idea screening
This second step of new product development revolves around screening all your generated ideas
and picking only the ones with the highest chance of success. Deciding which ideas to pursue
and discard depends on many factors, including the expected benefits to your consumers, product
improvements most needed, technical feasibility, or marketing potential.
The idea screening stage is best carried out within the company. Experts from different teams
can help you check aspects such as the technical requirements, resources needed, and
marketability of your idea.
3. Concept development and testing
All ideas passing the screening stage are developed into concepts. A product concept is a detailed
description or blueprint of your idea. It should indicate the target market for your product, the
features and benefits of your solution that may appeal to your customers, and the proposed price
for the product. A concept should also contain the estimated cost of designing, developing, and
launching the product.
Developing alternative product concepts will help you determine how attractive each concept is
to customers and select the one that would provide them the highest value.
Once you’ve developed your concepts, test each of them with a select group of
consumers. Concept testing is a great way to validate product ideas with users before investing
time and resources into building them.
Concepts are also often used for market validation. Before committing to developing a new
product, share your concept with your prospective buyers to collect insights and gauge how
viable the product idea would be in the target market.

4. Marketing strategy and business analysis

Now that you’ve selected the concept, it’s time to put together an initial marketing strategy to
introduce the product to the market and analyze the value of your solution from a business
perspective.
 The marketing strategy serves to guide the positioning, pricing, and promotion of your new
product. Once the marketing strategy is planned, product management can evaluate the business
attractiveness of the product idea.
 The business analysis comprises a review of the sales forecasts, expected costs, and profit
projections. If they satisfy the company’s objectives, the product can move to the product
development stage.

5. Product development
The product development stage consists of developing the product concept into a finished,
marketable product. Your product development process and the stages you’ll go through will
depend on your company’s preference for development, whether it’s agile product development,
waterfall, or another viable alternative.
This stage usually involves creating the prototype and testing it with users to see how they
interact with it and collect feedback. Prototype testing allows product teams to validate design
decisions and uncover any flaws or usability issues before handing the designs to the
development team.
6. Test marketing
Test marketing involves releasing the finished product to a sample market to evaluate its
performance under the predetermined marketing strategy.

The goal of the test marketing stage is to validate the entire concept behind the new product and
get ready to launch the product.
7. Product launch
At this point, you’re ready to introduce your new product to the market. Ensure your product,
marketing, sales, and customer support teams are in place to guarantee a successful launch and
monitor its performance.

You will need to constantly track and measure the success of your product launch and make
adjustments if it doesn't achieve the desired goals.

Main factors or reasons for developing a new product have been described as follows:

1. Changes in Market:

Today’s market is much dynamic as compared to the past. Due to increased education, borderless

marketing, severe competition, and availability of a number of substitutes have posed

tremendous challenges for today’s marketers. Market fashion, preference, and habits are

constantly changing and marketer finds no option except to respect such market changes, by

positive response in terms of innovation. Thus, consumer behaviour is one of the dominant

reasons for innovation.

2. Changes in Technology:

Due to continuous technological development, new production methods are invented. Old

technology and production methods are replaced by newer ones. A company spends a large

amount of money for technological research. To match the technological changes, new products

are developed.

3. Increasing Competition:
Increasing competition is one of significant reasons leading to go for innovation. Every company

struggles to attract and maintain consumers by offering superior products. To offer more

competitive advantages and to satisfy consumer more effectively and efficiently, the product

innovation seems to be necessary.

4. Diversification of Risk:

In many cases, a company develops new products just to diversify risk. Existing products may

not be capable to match with market needs and wants. By offering more varieties, a company can

minimize the degree of obsolescence. Thus, the need for continuous innovation arises because

older products are thrown out of market.

5. Reputation and Goodwill:

To create image and reputation as an innovative and dynamic firm, the innovation is adopted.

Company wishes to convince the market that it tries seriously to meet consumer’s expectations.

Obviously, a company developing new products periodically has more reputation, and can attract

consumers easily.

6. Utilization of Excess Capacity:

Excess capacity may be in form of production capacity or human skills. To utilize maximum

plant and material capacity, a company may go for developing a new product. Sometimes, excess

managerial or human capacity may also tempt the company to opt for innovation.

7. Seasonal Fluctuations:

Sometimes, new products are developed just to minimize seasonal fluctuations in demand. By

producing new product, a company can meet seasonal requirements of market. Market is
satisfied due to matching products in each of the seasons, and company can get attractive

business.

8. Growth and Development:

Innovation is an effective way to win more market share or sales. Marketer can exploit emerging

opportunities by innovative products. When it is not possible to accelerate growth rate by the

existing products, a company prefers to develop new products to expand its market, maximize

sales, and earn more profits.

Constraints in Developing New Products:

Why Does A New Product Fail?

To develop a new product successfully is not an easy game. One has to make a lot of exercise to

minimize the rate of failure. There are a large number of factors leading to failure of innovation.

As per the rough estimate, in developing countries, more than half of newly developed products

fail. Same is the case in developed countries. The fundamental question is: Why does a new

product fail? Which are the reasons leading to a higher rate of failure?

We may find following causes for failure of new products:

1. Shortage of new ideas is the main constraint. Because of shortage of new ideas, it is difficult

to offer a distinct product to market.

2. High cost of developing new products is another obvious reason. Development costs and

production costs are so high to offer new product at a competitive rate

/price.
3. Long time period requires for developing a new product. When the product is introduced after

considerable time tag, it fails to match the needs and wants of market.

4. Fragmented or small market is another problem leading to failure of new products. Due to

small market or limited market, heavy expenses cannot be recovered.

5. Social and government constraints play a vital role in producing and marketing of new

products.

6. Due to dynamic nature of market, a new product has a shorter life span. A product introduced

may not serve the market effectively for a long period of time. Before it reasonable establishes, it

is replaced by the newer products. Competition has dominant role in this regard.

7. Heavy capital investment is one of the major problems in developing new products.

Development, production, and marketing of new products need a heavy investment. Many firms

are afraid of new products due to inability to invest the huge fund.

Product Life Cycle

Product life cycle is a representation of the cycle through which each product goes through from
introduction to decline and eventual demise of the product. The Product Life Cycle helps us
recognize which stage the products are in. Accordingly, the company can adjust their marketing
strategy to make most of the conditions.

There are four distinct stages in a product’s lifecycle. Right from the introduction of the product in
the market to its end. Every stage has its own distinct features. And the company should change its
marketing strategy every time the product makes its move from one stage to another. Let us take a
look at the four stages.
1] Introduction

As the name suggests this is the stage of introduction of the product to the market. At this stage, the
demand for the product is only a proved demand and not effective demand. This stage is categorized
by the following features

 The product’s sale is at its lowest and is increasing but very slowly

 During the introduction, the promotion expense is very high. Extensive promotions have to
be undertaken to create awareness and demand for the product.

 The products are put in limited outlets. The distribution is also kept limited to a few
channels. The point is to try out the product before expanding distribution.
2] Growth Stage

This is the second stage of the product lifecycle. Now the sales begin to take off and the product
becomes well known. Some other characteristics are

 The promotion expenses still remain high. Now the focus will be on brand recognition and
brand image. This helps the product maintain and extend its selective demand.

 With a rise in sales, the profits also rise sharply

 This is the stage where new competitors may enter the market with better research and better
products. To keep up with their products, the company may make improvement and
modifications to their products
3] Maturity Stage

 This is the stage where the market saturates and sales growth of the firm slow down and
finally stabilizes at a stage.

 Competition in the market will intensify in this stage. All competitors will want to maintain
a production level to enjoy economies of scale

 This stage may also see a price war in order to keep their market share. Reducing prices may
affect the profit margin of the company.
4] Decline Stage

This the terminal stage of the products, they are no longer relevant in the market. So the end of this
stage is the eventual demise of the product in the market.
CHANNELS OF DISTRIBUTION

MEANING

The term distribution collectively refers to all the acts or services rendered by various
agencies. It consists of operation or series of operation which physically brings the
goods from the producer into the hands of the final user. The Word Channel is derived
form the French Word “Cannal”. The channel of distribution refers to the pathway taken
by the goods as they flow from the point of production to the point of consumption.

DEFINITION

According to the American Marketing Association,” A channel of distribution or

marketing channel is the structure of intra – company organization units and extra
company agents and dealers, wholesalers and retailers through which a commodity,
product or service is marketed.”

IMPORTANCE OF CHANNEL OF DISTRIBUTION

A channel of distribution for a product is the route taken by the title to goods as they
move from the producer to the ultimate consumer or industrial user. It brings maximum
profit to all. The channel of distribution is very important to the producer and the
consumer. There is a big gap between the producer and the consumer and the gap is
shrunked by the channel of distribution.

The middlemen in the channel of distribution collects the outputs of various products,
subdivides the products according to the needs of the consumers and gathers this in the
assortment wanted and disperses this assortment to consumers or industrial buyers.
The middlemen are specialists in concentration, equalization and dispersions. They
create time, place, form and possession utilities.

TYPES OF CHANNELS OF DISTRIBUTION

1. MANUFACTURER – CONSUMER

This is the direct channel. Products are transferred directly to consumers. It is the
shortest and simplest channel. This channel is adopted by the producers of perishable
goods, producers of fashion goods who wants to sell the products before the fashion
disappears, when the plan t is located near the customers, when the new products are
introduced into the market for aggressive sales etc. The main draw back of this direct
channel are:

1. It is uneconomical to have a direct contact with the customers, who are countless and
scattered all over.
2. It is not possible for a direct contact with the multi millions of potential customers for
the products.

For direct selling the methods adopted by the producers are opening sales counter at
manufacturer plant, door to door sales, sales by mail order method, sales by opening
own shops, sales through mechanical devices.

2. MANUFACTURER – RETAILER --- CONSUMER

In the channel there is an intermediary retailer. A manufacturer sells goods to

consumers through these retailers. There is a gap between the manufacturers and the
consumer. This method is adopted when the buyers are large, for perishable goods that
need speed in distribution. In this channel wholesalers are ignored and the
manufacturers renders the functions of a wholesaler.

Generally, automobile appliances, clothings, shoes are sold directly to retailers. Bata
India limited uses this channel.

3. MANUFACTURER – WHOLESALER --- RETAILER --- CONSUMER

Wholesaler and retailers are the two types of intermediary in this channel. A
manufacturer channels his products to consumers through these intermediaries. The
gap between the manufacturers and the consumers is widened due to these
intermediaries.

4. MANUFACTURER --- AGENT MIDDLEMEN --- WHOLESALER ---

RETAILER – CONSUMER

Agent middlemen, wholesalers, retailers are the three types of intermediaries in this
channel. The gap between the manufacturer and the consumer is very great. In this
channel the manufacturer uses the services of the agent middlemen for the dispersal of
goods. The agent distributes the goods to the wholesalers who sells the goods to
retailer and who in turn sells the goods to the consumers.

FACTORS INFLUENCING THE SELECTION OF A CHANNEL

1. MARKET CONSIDERATION

(a) Nature of the market: This is one of the important factors in market consideration.
Consideration takes place about the product which is meant for customer or the
industrial buyer. Long channel will have to be employed if the product is meant for
consumer market and industrial market.
(b) The number of potential customers: There is the need for a number of middlemen
service if the number of potential customers is large. If the number of potential
customers is small direct selling is suggestible.

(c) Geographic Concentration of the Market: Direct selling is effective if the

customers are concentrated in a few places. If they are situated over the whole country,
then a large number of middlemen will have to be employed.

(d) Order Size: If the sales volume is large, direct selling is suitable. Industrial
distributors sell industrial operating supplies.

(e) Customer Buying habit: This affects the channel policies very much. When the
buyer’s habit and purchase pattern of consumers are frequent and small in size, then
indirect selling is suitable.

2. PRODUCT CONSIERATION

a. Unit sale value of the product: When the unit value of a product is high, direct
channel is effective. On the other hand, when the unit value is low, the direct channel is
ineffective. If the product is of low value, larger and cheaper channels will be better.
Short and costly channels may be used of the products is of high value.

b. Bulk and Weight: To minimize the freight, heavy or bulky goods may be sent by
train or truck.

c. Perishable Nature: Perishable products such as milk, dairy products, bread, meat
etc are sent by shorter channel or direct channel, while long channel is used for non
perishable products.

d. Technicality: The technical nature of the product requires services. Hence, sales
and servicemen are needed to explain the use of the product to the customers. For
products like computers, business machines etc., direct channel is more advantageous.

e. Seasonal: Sales of the product are subject to seasonal variation, for example,
woolen clothes etc. Hence to sell these seasonal products intermediaries are needed.
Direct selling is ineffective.

3. COMPANY CONSIDERATION

a. Financial Strength: Financially sound companies are in a better position to select

and design their distribution channel. As such, direct channel is adopted. On the other
hand, financially weak companies have to select indirect channel, as they depend on
the intermediaries.
b. Reputation: It has been said that reputation travels faster than man. There are many
companies, which have good reputation because of the product preference by the
customers. Many intermediaries are eager to have connection with such companies.

c. Market Control: When a firm wants to exercise control over the price, the way in
which customers are served etc., direct channel is suggested.

4. MIDDLEMEN CONSIDERATION

The middlemen, who is able to offer a good facility of storage may be considered. The
channel which facilitates maximum sales must be preferred. The cost of each attractive
channel may be estimated on the basis of unit sale. The best type of channel which
gives a low unit cost of marketing may be considered.

5. CONSUMER CONSIDERATION

The characteristics of buyers as to their number, location, frequency of the purchase,

quantities bought by them etc influence the channel selection. If the customers are
scattered geographically, a long channel can be adopted. Consumers may wish to have
the product at a convenient place; for example daily consumption items like milk, paper,
breadetc, consumers may like to have them at the door. The channel adopted must
facilitate the commodities produced to be available to the consumers in time.

WHOLESALER

MEANING A wholesaler is a businessman who specializes in performing wholesale activities. The word
wholesaler means to market goods in relatively large quantities.

DEFINITION According to American Marketing Association,” Wholesalers buy and resell merchandise to
retailers and other merchants and to industrial institutions, and commercial users, but do not sell in
significant amounts to ultimate consumers.

FUNCTIONS OF THE WHOLESALERS

1. Buying and Assembling: The wholesalers procures varieties of goods from various producers regularly
and preserves them in his shop for resale.

2. Warehousing: The wholesaler stores goods in large quantities in his own or hired warehouses. This
ensures uninterrupted supply of goods to the retailers.

3. Transporting: Transportation involves the bringing of goods from the plant door to his godown and
also from his godown to the retailer’s shop.

4. Financing: He offers financial assistance to the retailers through extension of credit facilities. On the
other hands, he buys from the manufacturers for cash or for relatively shorter period of credit.
5. Risk bearing: Since he acquires the title over the goods in which he deals, he assumes the risk arising
out of changes in demand, spoilage and deterioration in quality of the goods kept in his godown

RETAILERS
MEANING The word retailer is derived from a French word retailen which mean “to cut again.”

DEFINITION According to Cundiff and Still, “ a retailer is a merchant or occasionally an agent whose main
business is selling directly to the ultimate consumer.” IMPORTANCE OF RETAILERS It is one of the
important functions of marketing process. The retailer is an intermediary in the marketing channel of
distribution. He is both a marketer and consumer. He is a specialist is selling the goods to the ultimate
consumer. Retailers create place, time and possession utilities. He supplies the needed goods from the
place of production to the place where it is demanded. He sells the goods at a reasonable price at the
time when the customers want the goods.

FUNCTIONS OF RETAILERS

1. Provide personal services to all.

2. Provide two way information.

3. Facilitate standardization and grading.

4. Undertake physical movement and storage of goods.

5. Assemble goods from various sources. Etc