Sales and Distribution Management Assignment

By- Naman Seth

Topic- Selection and evaluation of channel intermediaries is a crucial decision.

Imagine if you ran out of toothpaste one morning and you need a new one to get your day
started, hence the next thing you do is that you run to your nearest grocery store and grab another
one and the day is saved , its that easy isn’t it? Do you ever think about how thousands of
everyday items are so easy to obtain in today’s day and age, it is only because of channel of
intermediaries that supply different kinds of products from their respective wholesaler or
warehouse directly to your nearest store. This process of getting consumer products to your
nearest outlets or grocery stores is called Channel of Intermediaries, For example- Maruti Suzuki
cars are generally manufactured in Gurgaon but are available all over the country , it is because
of those intermediaries. The goods are produced in one place but the consumers are scattered
over a wide geographical area. Therefore, it is hard to get the product to every customer that is in
need , hence, they take help of these intermediaries. Channel of Distribution are those people,
institutions ,organizations or group of people that help in the distribution of good and services.
Philip Kottler defines distributions channels as “ a set of independent organizations involved in
the process of making the products and services available to the customers.”
Therefore it is a quite clear fact as of why these channels of distribution are so important for any
business involved in the production of any kind of products and services and without these
channels it would be almost impractical for a customer to travel to different destinations inorder
to obtain simple daily use items necessary for sustaining life directly from their respective
producers factories or warehouses. Moreover these channels of distribution become an integral
part of any business’s functioning as they recognize the need for these activities and how
difficult it would be without them.
Channels of distribution bring economy of efforts and provides a manufacturer a scope for
expansion , in a sense that business owners can cover a vast geographical area which gives them
reach and ultimately increase their sales throughout an area. The processes involved in the actual
task undertaken would include warehousing, transportation and other functions. There are
various different types of distribution channel that a business might opt for according to the type
of products that they are producing. For example – A basic good like bread would require a
longer channel than a car manufacturer would choose. These different types of channel of
intermediaries will be discussed further in detail.
As described above , it becomes quite clear that there is high importance of a selection of a
channel of intermediaries , let us now discuss the functions that channels of intermediaries offer
to a business operation-
• Sorting- Sorting of goods are when middlemen receive different types of products
and they sort them into different groups on the basis of their product type and
quality. There can be other parameters for distinguishing and sorting products ,
this function is performed at the warehouse level.
 • Accumulation- As the name suggests, middlemen have to accumulate or obtain
large quantities of stock to keep the flow of goods in the market continuous.
• Allocation- This refers to sorting the products into different levels of quantities.
So basically, allocation is sorting on the basis of quantities. For example – You
can get rice from the market in different sizes of packaging like 500 grams and
one kg packets ad so on.
• Assorting- Assorting is obtaining the same products from different manufacturers
and sorting them out on the basis of different manufacturers as the customers
would suggest buying them. An example of this could be in the case of almonds
where Indian produced almonds and American produce almonds are sold
separately.
• Product Promotion- Promotional activities which are generally taken care of by
the sellers and producers may sometimes be undertaken by the middlemen as well
in the form of selling discounts, bulk discounts etc.
• Negotiation- A middleman negotiates the product price, quality, quantity with the
producer as well as with the customers. They try to get as much benefit as they
can from a deal.
• Risk trading- Middlemen involved in the supply chain are very big risk takers on
the matter of the quality of goods , spoilage , price fluctuation etc.

Mentioned above were the various functions involved with the process of Intermediaries
channels, there exists a wide array of functions which almost forms a kind of an industry or field
of supply chain as a whole and is considered to be highly competitive and rewarding. Besides the
various functions that are performed in the latter, there are a wide array of choices or Types of
Channel of intermediaries to choose from. The choice of the channel of intermediaries are
measured with the number the people of stages involved in between them and the ultimate choice
depends upon the type of products that a business is manufacturing. As mentioned earlier a bread
manufacturer would chose longer channels as compared to a shoe brand. Let us recall the types
of channels available to a business owner-
1. Direct Channels or Zero Level Channels- These are channels that are straight from the
producer to the customer with no involvement of middlemen. One of the most popular
example of this type of distribution channels is telemarketing, specialized car
showrooms, door to door sellers like Amway.
2. Indirect Channel- These include multiple sub categories of channels like one level
channel , two level channels and three level channels with the involvement Retailer ,
Wholesaler , and Agents and the choice depends on the type of product to be distributed.
A wide number of factors determine the choice of channels implemented by the company factors
like – Type of Product, Company Characteristics, Market factors and competitive factors.
All these factors carefully evaluated will bring the management to undertake the decisions
regarding the choice of channels of distribution of goods as clearly any bad choice will cost them
their whole business operation. An inaccurate decision in the choice of channel is what a
business is dependant on ultimately. Therefore, if all factors are duly considered and carefully
analysed will result in a successful business operation. With that being the case, the choice of
channel of distribution and marketing will oversee the fate of any business operation and
businesses just cannot afford to go wrong on this decision. The selected channels must have the
lowest cost associated to the business and must provide them with the maximum outputs being
sold in the market. Any business operation just cannot afford to take this decision lightly and
maybe that is the reason why this decision has given so much emphasis in the field of Sales and
Distribution Management. All these considerations if taken correctly will justify the end result
for any business operation whether large or small scale. Therefore it can be concluded that all
these factors together will justify that the choice associated with the decision of opting an
appropriate channel of distribution is a crucial decision, Indeed.