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Factors affecting choice of channels of distribution:

(a) Product related factors: Industrial goods which are technical or complex (made as per order) and are of higher value generally have direct channels. Goods which are standardised, non-complex, non-perishable or low priced are normally sold through indirect channels of distribution.

(b) Company related factors: If the financial strength of the company is good and wants to hold on its channel members, it will opt for direct selling. For example, selling through its own retail outlets, mail order selling, etc.

(c) Market related factors: The size of the market, geographical concentration of potential buyers and quantity purchased affect the decision of the choice of channel. If the customers are geographically concentrated in a small place or if the order size is large enough, a direct channel of distribution can be used, otherwise indirect channel is opted by the manufacturer.

(d) Competitive factors: Choice of channel may be decided by a company either to go wit/to be different from its competitors.

(e) Environmental factors: Economic conditions and legal constraints also affect the choice of channel of distribution. In case of a depressed economy, a company may choose indirect channel to distribute goods in an economical manner.

Label on a product provides detailed information about the product, its contents, methods of use etc. 

The various functions performed by a label are as follows:

1. Describe the Product and Specify its Contents: One of the most important functions of labels is that it describes the product, its usage, cautions in use etc and specify its contents.

2. Identification of the Product or Brand: A label helps in identifying the product or brand e.g., we can easily pick our favorite soap from a number of packages, only because of its label.

3. Grading of Products Labels helps to grade the products into different categories. Sometimes, marketers assign different grades to indicate features or quality of the product e.g., a different type of tea is sold by some brands under Yellow, Red, and Green label categories.

4. Help in Promotion of Products An important function of label is to aid in promotion of the products. A carefully designed label can attract the customer to purchase. So, many labels provide promotional messages, some show discounts or other schemes, etc.

5. Providing Information Required by Law Another important function of labeling is to provide information required by law. e.g., the statutory warning on the package of cigarette or pan masala – ‘Smoking is injurious to health’ or ‘Chewing tobacco causes cancer.’

Physical Distribution: The physical handling and movement of goods from the place of production to the place of distribution is referred to as physical distribution.

Components of physical distribution are:

(i) Order processing: Products flow from the producers to the customers, while orders for products flow in reverse direction i.e., from the customers to the producers.

It is necessary that the products ordered by customers must reach them in time, in right quantity and as per specifications which is ensured by effective physical distribution.

(ii) Transportation: Products reaches to the consumers scattered all around through transportation.

It makes goods available in the market, without which goods cannot be sold.

(iii) Warehousing: There is a time lag between production and sales of goods. Warehousing helps in stabilizing prices by checking fluctuations. It also facilitates regular and even supply of products throughout the country and throughout the year.

(iv) Inventory control: High level of inventory leads to high cost because more capital, and stock, is tied up in the business. Hence, an optimum level of inventory needs to be maintained through a good inventory control system.

Advertising : 

Advertising may be defined as “any paid form of non-personal presentation and promotion of ideas, goods or service of an identified sponsor”.

Merits of Advertising

1. Advantages to Manufacturers and Traders

(1) Advertising helps in introducing new products.

(2) It stimulates the consumers to purchase the new products. 

(3) Advertisement helps to increase the sales of new and existing products.

(4) It helps to increase the goodwill of the rm.

(5) It helps to face the competition in the market.

(6) It increases profit of the rm through large sales.

2. Advantages to Consumers 

(1) It helps the consumers to know about the various products and their prices. 

(2) Consumers can purchase the better products easily. 

(3) It helps in maintaining high standard of living. 

(4) It educates the consumers about the various uses of products.

3. Advantages to the Society 

(1) Advertisement helps to create more employment opportunities. 

(2) It provides an important source of income to the press, radio, T.V., etc. 

(3) It is a source of encouragement to artists.

(4) It plays an important role in economic development of the country. 

(5) It reduces number of middlemen and consumers get quality products at lower cost.

Brand Name: It refers to a special word, symbol, letter or the mixture of all these.

A good brand name should contain the following characteristics:

(i) Simple and Short: A brand name should be simple and short so that there is no complication related to its name.

(ii) Easily Pronounceable: A brand name should be easily pronounceable e.g., : TAIA, GLUCOSE, etc.

(iii) Suggestive: Brand name should be self-explanatory thereby, suggesting the inherent quality of the product. For example: HAJMOLA indicates the curing of indigestive system.

(iv) Distinctive: Brand should be so distinctive that it highlights itself in the group of other brand names. Such as Tide, Rin, Surf excel, etc.

(v) Stability: The brand should have a stable life, its life should not be affected by the changes in fashion or style. Phillips, Bournvita, Saridon, Surf, and HMT are some of the examples in this regard.

(vi) Registration: The brand name should be capable of being registered. This will protect the brand-holder from imitation by the rivals.

The term channels of distribution refer the facilities to the movement of goods and services and their title between the point of production and point of consumption, by performing a variety of marketing activities. 

Following are the functions performed by the channels of distribution:

1. Accumulation: It aims at holding the stock to match between consumer demand and supply condition. Warehousing helps in maintaining a continuous flow of goods and services.

2. Promotion: The marketing channels also help in promoting the demand for the product by displaying, demonstrating and participating in various promotional activities organized by the producers.

3. Negotiating: The marketing channels are the intermediaries between the producers and the consumers. They attempt to reach final agreement on price and other terms of the offer, so that transfer of ownership is properly effected.

4. Risk-taking: Risk-taking is the basic responsibility of the intermediaries. It may arise out of physical deteriorations, changes in price levels, natural calamities, change in fashion, etc. These are unavoidable as they hold sufficiently large and variety of inventories till the sale of stock.

5. Grading/Sorting: Grading is the process whereby they sort the products on the basis of different sizes, qualities, moisture contents and so on. It helps in realizing the time value on shelf life for the product and at the same time, the ultimate consumer feels satisfied with the uniform quality of the product.

6. Packaging: The products are packed in the small tradable lots for the convenience of the consumer.

7. Assembling Assortment: Marketing channels aim at satisfying the needs of the customers. The products desired by the consumer may not be available in the market. They procure such goods from different sources, assemble or assort them as per the requirements of the consumers.

Factors affecting choice of channels of distribution:

(a) Product related factors: Industrial goods which are technical or complex (made as per order) and are of higher value generally have direct channels. Goods which are standardised, non-complex, non-perishable or low priced are normally sold through indirect channels of distribution.

(b) Company related factors: If the financial strength of the company is good and wants to hold on its channel members, it will opt for direct selling. For example, selling through its own retail outlets, mail order selling, etc.

(c) Market related factors: The size of the market, geographical concentration of potential buyers and quantity purchased affect the decision of the choice of channel. If the customers are geographically concentrated in a small place or if the order size is large enough, a direct channel of distribution can be used, otherwise indirect channel is opted by the manufacturer.

(d) Competitive factors: Choice of channel may be decided by a company either to go wit/to be different from its competitors.

(e) Environmental factors: Economic conditions and legal constraints also affect the choice of channel of distribution. In case of a depressed economy, a company may choose indirect channel to distribute goods in an economical manner.

The main components of physical distribution are as follows:

1. Order Processing If a firm takes more time to process the order, then the consumer remains dissatisfied. Therefore, order processing has to made faster by using information technology.

2. Inventory Control Inventories ensure the availability of the product as and when consumer demand arises. There are various factors that influence a firm decision regarding the level of inventory e.g., degree of accuracy of sales forecast, cost of blocking of the working capital, etc.

3. Warehousing It refers to the storage of goods from the time of production to the time of consumption, Warehousing is important as it creates time utility. 

4. Transportation It creates place utility, It refers to the carrying of raw materials or finished goods from one place to another, The most important thing to be kept in mind is that the value-added by transportation should be greater than the cost of transportation.

Factors affecting choice of channels of distribution:

(a) Product related factors: Industrial goods which are technical or complex (made as per order) and are of higher value generally have direct channels. Goods which are standardised, non-complex, non-perishable or low priced are normally sold through indirect channels of distribution.

(b) Company related factors: If the financial strength of the company is good and wants to hold on its channel members, it will opt for direct selling. For example, selling through its own retail outlets, mail order selling, etc.

(c) Market related factors: The size of the market, geographical concentration of potential buyers and quantity purchased affect the decision of the choice of channel. If the customers are geographically concentrated in a small place or if the order size is large enough, a direct channel of distribution can be used, otherwise indirect channel is opted by the manufacturer.

(d) Competitive factors: Choice of channel may be decided by a company either to go wit/to be different from its competitors.

(e) Environmental factors: Economic conditions and legal constraints also affect the choice of channel of distribution. In case of a depressed economy, a company may choose indirect channel to distribute goods in an economical manner.

The choice of channels depends on various factors, which are discussed as follows:

1. Product-Related Factors The important product-related considerations is deciding the channels. It includes whether the’ product is an industrial product or a consumer product. Industrial products require shorter channels and consumer products require longer channels.

2. Company Characteristics The important company characteristics affecting the choice of channels of distribution include the financial strength of the company and the degree of control it wants to hold on other channel members. Direct selling involves lot of foods to be invested in fixed assets say starting own retail outlets or engaging large numbers at salesforce. Similarly, if the management wants to have greater control over the channel number, short channels are used but if the management does not want more control over the middlemen, it can go in for longer channels or large number of intermediaries.

3. Competitive Factors The choice of channel is also affected by what the competitor has selected as its channel. Sometimes, firm may decide to go for the same channel and sometimes absolutely opposite.

4. Market Factors Important market factors affecting the choice of channel of distribution include size of market, geographical concentration of potential buyers and quantity purchased.

5. Environmental Factors Sometimes environmental factors also helps in deciding the channel of distribution, e.g., in a depressed economy, marketers use shorter channels to distribute their goods In an economical way.

Factors affecting choice of channels of distribution:

(a) Product related factors: Industrial goods which are technical or complex (made as per order) and are of higher value generally have direct channels. Goods which are standardised, non-complex, non-perishable or low priced are normally sold through indirect channels of distribution.

(b) Company related factors: If the financial strength of the company is good and wants to hold on its channel members, it will opt for direct selling. For example, selling through its own retail outlets, mail order selling, etc.

(c) Market related factors: The size of the market, geographical concentration of potential buyers and quantity purchased affect the decision of the choice of channel. If the customers are geographically concentrated in a small place or if the order size is large enough, a direct channel of distribution can be used, otherwise indirect channel is opted by the manufacturer.

(d) Competitive factors: Choice of channel may be decided by a company either to go wit/to be different from its competitors.

(e) Environmental factors: Economic conditions and legal constraints also affect the choice of channel of distribution. In case of a depressed economy, a company may choose indirect channel to distribute goods in an economical manner.

Factors affecting choice of channels of distribution:

(a) Product related factors: Industrial goods which are technical or complex (made as per order) and are of higher value generally have direct channels. Goods which are standardised, non-complex, non-perishable or low priced are normally sold through indirect channels of distribution.

(b) Company related factors: If the financial strength of the company is good and wants to hold on its channel members, it will opt for direct selling. For example, selling through its own retail outlets, mail order selling, etc.

(c) Market related factors: The size of the market, geographical concentration of potential buyers and quantity purchased affect the decision of the choice of channel. If the customers are geographically concentrated in a small place or if the order size is large enough, a direct channel of distribution can be used, otherwise indirect channel is opted by the manufacturer.

(d) Competitive factors: Choice of channel may be decided by a company either to go wit/to be different from its competitors.

(e) Environmental factors: Economic conditions and legal constraints also affect the choice of channel of distribution. In case of a depressed economy, a company may choose indirect channel to distribute goods in an economical manner.

A manufacturer should keep into consideration the following factors while selecting a channel of distribution.

i. Considerations Related to Product: When a manufacturer selects some channel of distribution he/she should take care of such factors which are related to the quality and nature of the product. They are as follows:

a. Unit value of the product: When the product is very costly it is best to use small distribution channel. For example, Industrial Machinery or Gold Ornaments are very costly products that’s why for their distribution small distribution channel is used. On the other hand, for less costly products long distribution channel is used.

b. Perishability: A manufacturer should choose minimum/no middlemen as channel of distribution for such an item or product which is of highly perishable nature. On the contrary, a long distribution channel can be selected for durable goods.

ii. Considerations Related to Market: Market considerations are given below:

a. Number of buyers: If the number of buyers is large then it is better to take the services of middlemen for the distribution of the goods. On the contrary, the distribution should be done by the manufacturer directly if the number of buyers are less.

b. Types of buyers: Buyers can be of two types: General Buyers and Industrial Buyers. If the more buyers of the product belong to general category then there can be more middlemen. But in case of industrial buyers there can be less middlemen.

iii. Considerations Related to Manufacturer/Company: Considerations related to manufacturer are given below:

a. Desire to control the channel of distribution: Manufacturer ambition to control the channel of distribution affects its selection. Consumers should be approached directly by such type of manufacturer. For example, electronic goods sector with a motive to control the service levels provided to the customers at the point of sale are resorting to company owned retail counters.

b. Financial strength: A company which has strong financial base can evolve its own channels. On the other hand, financial weak companies would have to depend upon middlemen.

1. Gathering and analysing market information: Gathering and analyzing market information is an important function of marketing. Under it, an effort is made to understand the consumer thoroughly in the following ways:

• What do the consumers want?

• In what quantity?

• At what price?

• When do they want (it)?

• What kind of advertisement do they like?

• Where do they want (it)?

• What kind of distribution system do they like? All the relevant information about the consumer is collected and analysed. On the basis of this analysis an effort is made to find out as to which product has the best opportunities in the market.

2. Marketing planning: In order to achieve the objectives of an organisation with regard to its marketing, the marketer chalks out his marketing plan. For example, a company has a 25% market share of a particular product. The company wants to raise it to 40%. In order to achieve this objective the marketer have to prepare a plan in respect of the level of production and promotion efforts. It will also be decided as to who will do what, when and how. To do this is known as marketing planning.

3. Customer support service: It refers to a group of services which aim at providing maximum satisfaction to the customers. A marketeer offers primarily the following services to the customers:

a. After-sales-services

b. Handling customers’ complaints

c. Technical services

d. Credit facilities

e. Maintenance services

f. Product related information Helping the customer in this way offers him satisfaction and in today’s competitive age customer’s satisfaction happens to be the top-most priority. This encourages a customer’s attachment to a particular product and he starts buying that product time and again.

Functions of Marketing:

(a) Marketing research/Gathering and analysing market information: Marketing research is the systematic investigation of the facts relevant to the various aspects in marketing. Marketing research helps managers to arive at an appropriate decision. Market information should be gathered and analysed, appropriately.

(b) Market Planning: This is concerned with the development of appropriate marketing plans to achieve the marketing objectives of an organisation. This includes making a comprehensive action programme covering all the important aspects of the plan.

(c) Customer support services: Services such as after sales services, maintenance services, technical services, handling customer complaints are included in this function.

Correct option is a) Both are correct and (R) is the correct explanation of (A)

Brand provides a specific name to a product for identification

Functions of Marketing:

(i) Market Planning: This is concerned with the development of appropriate marketing plans to achieve the marketing objectives of an organisation. This includes making a comprehensive action programme covering all the important aspects of the plan.

(ii) Product Designing and Development: Another important marketing activity is related to the product designing and developing in such a way so as to attract the targeted customers. The product design should be such, which improves the performance of a product or gives it a competitive edge over its competitors.

(iii) Pricing: Pricing is the process of fixing the price of a product or service. Prices are generally fixed by manufacturers carefully after looking into three factors, i.e., the cost of production, the demand for the product and the nature of competition.

Personal Selling

Features of personal selling are:

(i) Personal form: It involves direct face-to-face dialogue between the salesman and the potential buyer.

(ii) Development of relationship: It allows sales persons to develop personal relationships with the prospective customers.

The correct answer is Product Mix.

Functions of Marketing:

(i) Product Designing and Development: Another important marketing activity is related to the product designing and developing in such a way so as to attract the targeted customers. The product design should be such, which improves the performance of a product or gives it a competitive edge over its competitors.

(ii) Standardisation and Grading: Standardisation refer to determining the basic measure/standard of the product with regard to shape, size, colour quality, quantity, etc. Grading is the process of classification of the product into different groups, on the basis of some parameters like quality, quantity, size, etc.

(iii) Customer support services: Services such as after sales services, maintenance services, technical services, handling customer complaints are included in this function.

(iv) Pricing: Pricing is the process of fixing the price of a product or service. Prices are generally fixed by manufacturers carefully after looking into three factors, i.e., the cost of production, the demand for the product and the nature of competition.

Features of a good brand name:

(i) Simple and Short: A brand name should be simple and short so that there is no complication related to its name.

(ii) Easily Pronounceable: A brand name should be easily pronounceable e.g., : TAIA, GLUCOSE, etc.

(iii) Suggestive: Brand name should be self-explanatory thereby, suggesting the inherent quality of the product. For example: HAJMOLA indicates the curing of indigestive system.

(iv) Distinctive: Brand should be so distinctive that it highlights itself in the group of other brand names. Such as Tide, Rin, Surf excel, etc.

(v) Stability: The brand should have a stable life, its life should not be affected by the changes in fashion or style. Phillips, Bournvita, Saridon, Surf, and HMT are some of the examples in this regard.

(vi) Registration: The brand name should be capable of being registered. This will protect the brand-holder from imitation by the rivals.

Promotion/Promotion Mix

Societal Marketing Concept

Correct option is (c) Customer value

Correct option is (b) Marketing planning

Promotion mix is a group of tools to create awareness about the product and services among consumers so that they can be attracted and motivated to purchase.

According to Kotler, “Sales promotions are short-term incentives that encourage the customer to buy the product or service.”

Personal selling not only creates awareness about the product but also creates a preference for the product and faith in the seller and the company. As a result, chances of sale increases.

The activity of presenting the product – before the potential customers, solving their doubts and converting them into actual buyers by a salesmen is called personal selling.

Characteristics of Good Salesman:

• Sales-man should be smart, interactive and physically fit
• Should be good in communication, intelligent and efficient
• Ability to present the product before a customer and ability to convince the customer
• He should have all the technical and other relevant information about the product
• Honesty and good character
• His politeness and
• An ideal salesman should be enthusiastic, disciplined and ambitious.

Salesman is the person who represents the business unit to the tentative consumer and his job is to highlight the nature of the product, demonstrate the product and explain its usefulness to the tentative consumer and clear doubts and convert him to real consumers.

Objections against Advertisement:

• Unnecessary expenditure, Social evil,
• Inferiority complex for the poor,
• Expensive ‘activity
• Portrait competitors as inferior,
• Sub-standard quality goods being sold,
• Unimpressive advertisement for unnecessary products
• Harmful effects due to addiction in long run
• Encouragement to unwanted competition and
• Cheating caused by exaggeration.

The objectives of advertising are: 

• To influence the behavior of prospective buyers favorably towards the product or service of the firm. 
• To inform the people about the introduction of the new product/service in the market.
• To create the demand for the new product and to maintain the demand for an existing product. 
• To support a personal selling program. 
• To enter a new market or attract a new group of customers. 
• To bring an awareness among consumers about the existence of duplicate products. 
• To create brand preference and loyalty. 
• To fight against competition in the market and thereby increase sales. 
• To improve the market share for the firm’s product.