SALES AND

DISTRIBUTION
MANAGEMENT
BY
SANJANA KAITHWAL
DISTRIBUTION CHANNELS
 Distribution channels, also known as marketing channels, refer to the pathways
through which goods and services move from producers to consumers. They
play a crucial role in connecting producers with consumers and ensuring that
products are available when and where customers need them. Here's an
overview of distribution channels, including their concept, levels, and functions:
 Concept of Distribution Channels: Distribution channels encompass the entire
network of intermediaries, entities, and activities involved in the distribution
and delivery of products or services to end-users. These channels facilitate the
flow of goods and services from manufacturers or producers to wholesalers,
retailers, and ultimately to consumers. Distribution channels can be both direct,
where products move directly from producers to consumers, and indirect,
involving intermediaries such as wholesalers, retailers, agents, and brokers.
LEVELS OF DISTRIBUTION CHANNELS
 1. Direct Channel (Zero Level: As the name suggests, a direct channel or zero level is a
distribution level through which an organisation directly sells its products to the customers with
the involvement of any intermediary. For example, jewellers use direct channels, Apple sells
its products directly to the customers through its stores, Amazon sells directly to the
consumers, etc.)
 2. Indirect Channels: When a middleman or intermediary is involved in the distribution
process, it means the organisation is using Indirect Channels of Distribution. The indirect
channels of distribution can be classified into three categories; viz., One Level Channel, Two
Level Channel, and Three Level Channel.
 i) One-Level Channel: One level channel means that there is only one intermediary involved
between the manufacturer and the customer to sell the goods. This intermediary is known as
a retailer. In simple terms, under one level channel, the organisations supply their products to
the retailers who sell them to the customers directly. For example, goods like clothes, shoes,
accessories, etc., are sold by companies with the help of a retailer.
 ii) Two-Level Channel: A most commonly used channel of distribution that
involves two intermediaries for the sale of products is known as Two Level
Channel. The intermediaries involved are wholesalers and retailers. The
producer sells their products to wholesalers in bulk quantity, who sells them to
small retailers, who ultimately supply the products to the customers. This
channel is generally used to sell convenient goods like soaps, milk, milk
products, soft drinks, etc. For example, Hindustan Unilever Limited sells its
goods like detergent, tea leaves, etc., through wholesalers and retailers.
 iii) Three-Level Channel:Three level channel means that there are three
intermediaries involved between the manufacturer and the customer for the sale
of products. The three intermediaries involved are Agent Distribution,
Wholesalers, and Retailers. It is usually used when the goods are distributed
across the country and for that different distributors are appointed for different
areas. For example, wholesalers purchase goods from different distributors,
like North India Distributors and then pass the goods to the retailers, who
ultimately sell the goods to customers.
FUNCTIONS OF DISTRIBUTION
CHANNEL
1. Market Coverage: Distribution channels enable manufacturers to access diverse
geographic regions, customer segments, and sales channels, thereby expanding
market coverage and enhancing market penetration.
2. Promotion and Marketing: Channels contribute to product promotion and
marketing efforts by executing advertising campaigns, implementing sales
promotions, and deploying point-of-sale materials to attract and engage
consumers.
3. Inventory Management: Channels play a crucial role in managing inventory
levels to ensure optimal stock availability and minimize the risk of stockouts or
excess inventory. They help synchronize supply with demand to meet customer
requirements efficiently.
4. Order Processing and Fulfillment: Distribution channels manage order
processing, fulfillment, and delivery logistics to ensure timely and accurate
delivery of products to customers. They handle tasks such as order entry, shipment
coordination, and delivery scheduling.
5. Customer Service: Channels provide customer support and assistance throughout the purchase process and
after-sales service, including installation, repairs, returns, and warranty services. They serve as a primary point
of contact for addressing customer inquiries and resolving issues.
6. Market Feedback: Channels gather valuable market feedback, customer insights, and sales data to help
manufacturers understand market trends, consumer preferences, and competitive dynamics. This information
guides product development, marketing strategies, and business decision-making.
7. Risk Management: Distribution channels assist manufacturers in mitigating various risks associated with
product distribution, such as transportation delays, inventory obsolescence, and market volatility. They
implement risk management strategies to safeguard against potential disruptions and losses.
8. Relationship Management: Channels foster collaborative relationships between manufacturers and
intermediaries through effective communication, negotiation, and cooperation. They establish mutually
beneficial agreements and partnerships to ensure the smooth flow of products and revenue sharing.
FACTORS AFFECTION DISTRIBUTION CHANNELS
1. Product Characteristics: The nature of the product, including its size, weight, perishability, and technical
complexity, influences the choice of distribution channels. For example, bulky or perishable products may
require direct distribution channels to minimize handling and ensure freshness.
2. Market Segmentation: The characteristics and preferences of the target market segments influence
channel selection decisions. Different customer segments may have distinct preferences for purchasing
channels, necessitating the use of multiple distribution channels to reach diverse audiences effectively.
3. Competitive Environment: The competitive landscape, including the presence of competitors and their
distribution strategies, impacts channel selection. Manufacturers may choose distribution channels that
offer a competitive advantage, such as exclusive partnerships or innovative delivery options.
4. Distribution Costs: The costs associated with different distribution channels, including transportation,
warehousing, and intermediary fees, affect channel selection. Manufacturers evaluate the cost-
effectiveness of each channel option and choose those that maximize profitability while meeting customer
needs.
5. Channel Accessibility: The availability and accessibility of distribution channels influence selection
decisions. Manufacturers assess the reach and coverage of potential channels to ensure widespread
availability of products to target customers.
6. Channel Control: The level of control desired by manufacturers over the distribution process affects
channel selection. Direct distribution channels offer greater control over branding, pricing, and customer
relationships, while indirect channels provide broader market reach but less control.
SELECTING AND MOTIVATING CHANNEL MEMBERS

 Selection Criteria: Define transparent criteria for channel member selection based on factors like
reputation, market reach, distribution capabilities, and alignment with the company's ethos and objectives.
 Market Research:Undertake thorough market research to pinpoint potential channel partners with access
to the desired market, a deep understanding of consumer preferences, and the ability to effectively promote
and distribute the company's offerings.
 Partner Profiling: Develop profiles of ideal channel collaborators, detailing their strengths, limitations,
market penetration, and available resources. Leverage these profiles to identify candidates that meet the
company's criteria.
 Recruitment Process: Establish a methodical recruitment process to assess potential channel members
through interviews, evaluations, and reference checks. Choose partners who exhibit dedication,
competence, and synergy with the company's mission.
 Training and Assistance: Provide comprehensive training and continual support to channel partners to
equip them with the knowledge, skills, and tools needed to represent the company's products proficiently.
Offer training on products, sales techniques, marketing collateral, and technical assistance as required.
 Clear Expectations::Clearly communicate roles, expectations, and responsibilities to
channel members, including sales targets, performance indicators, and contractual
obligations. Establish shared objectives to align incentives and foster collaborative
efforts.
 Incentive Structures: Create incentive programs to incentivize and recognize channel
members' achievements. Offer competitive incentives such as commissions, bonuses,
discounts, tied to sales performance, market share, and customer satisfaction.
 Building Relationships: Cultivate strong relationships with channel partners grounded
in trust, effective communication, and mutual respect. Dedicate time to nurturing
connections, addressing concerns, and resolving conflicts to bolster partnerships and
loyalty.
 Feedback Mechanisms: Establish mechanisms for soliciting feedback from channel
members to gain insights into market dynamics, consumer needs, and competitive
landscapes. Utilize this feedback to refine strategies, enhance product offerings, and
strengthen collaboration.
 Ongoing Evaluation: Regularly assess channel member performance against
predetermined criteria and benchmarks. Provide constructive feedback, acknowledge
accomplishments, and identify areas for growth to drive continuous improvement and
development
EVALUATING CHANNEL MEMBER PERFORMANCE
 Performance Metrics: Establishing transparent performance metrics and key performance indicators (KPIs) that
align with the company's goals and the responsibilities of channel members. These metrics could encompass
aspects such as sales volume, market share, customer contentment, order completion, and adherence to
contractual agreements.
 Data Collection: Collecting pertinent data and performance indicators from channel partners using sales records,
order documentation, client feedback, and other pertinent sources. It's crucial to ensure the accuracy and
consistency of data to enable meaningful evaluations.
 Performance Reviews: Conducting routine performance assessments with channel partners to review their
performance against predetermined metrics, recognize achievements, pinpoint areas for enhancement, and outline
action plans. Providing constructive feedback is integral to fostering improvement.
 Quality of Service: Evaluating the quality of service rendered by channel members, including their
responsiveness to customer inquiries, precision in order handling, timeliness of deliveries, and effectiveness in
resolving customer issues. Maintaining service standards aligned with company expectations and customer needs
is paramount.
 Sales Effectiveness: Assessing the effectiveness of channel partners in driving sales and attaining revenue targets
by analyzing sales trends, market share, and conversion rates. Identifying opportunities for growth is essential
for sustained success.
 Market Penetration: Gauging the success of channel members in penetrating target markets and reaching
critical customer segments by evaluating market coverage, distribution reach, and market share. The effectiveness
of channel strategies can be determined through these assessments.
 Relationship Management: Evaluating the strength of the relationship between the company and its channel
partners by assessing communication, collaboration, and goal alignment. Productive partnerships are crucial for
mutual success.
E-ENABLED SELLING AND
DISTRIBUTION
 E-enabled selling and distribution refers to the use of digital technologies and online platforms to facilitate
sales processes, streamline distribution channels, and enhance customer engagement. It involves
leveraging various digital tools, e-commerce platforms, and online channels to reach customers, manage
sales transactions, and deliver products or services efficiently.
 Here's an overview:
 E-commerce Platforms
 Online Marketplaces
 Mobile Commerce (M-commerce)
 Omnichannel Retailing: Integrating various vending channels, including online, offline, mobile, and
social media, to furnish customers with a cohesive shopping journey across diverse touchpoints.
Omnichannel approaches cater to customer preferences and enhance convenience.
 Inventory Management Systems: Employing digital inventory management platforms to monitor and
regulate product stock across multiple distribution channels in real-time. These systems optimize stock
levels, avert inventory shortages, and refine order fulfillment proficiency.
 Order Fulfillment Solutions: Collaborating with external logistics providers or utilizing internal
fulfillment capacities to manage order processing, packaging, and delivery efficiently. E-enabled order
fulfillment solutions guarantee punctual delivery and client contentment.
 Customer Relationship Management (CRM) Software: Employing CRM software to oversee client
interactions, trace sales prospects, and tailor marketing endeavors. CRM systems empower businesses to
foster and nurture customer connections throughout the sales journey.
 Data Analytics and Insights: Utilizing data analytics software and technologies to glean actionable
insights into client conduct, sales trends, and market dynamics. Data-guided decision-making aids in
optimizing sales strategies, spotting opportunities, and mitigating risks.
 Security and Compliance: Implementing rigorous cybersecurity protocols and adherence measures to
safeguard client data, secure online transactions, and ensure regulatory conformity. Establishing trust and
credibility with clients is paramount for prosperous e-enabled vending and distribution
E-COMMERCE AND E-RETAILING
 E-commerce and e-retailing serve as digital channels of distribution, enabling businesses to market, sell,
and deliver products or services to customers electronicallye-commerce and e-retailing channels provide
businesses with opportunities to expand their reach, increase sales, and enhance customer engagement in
the digital age. By leveraging these channels effectively, businesses can stay competitive in an increasingly
online marketplace.
 Here's how these channels function:
1. Online Storefronts: Businesses can establish their digital storefronts or websites, where customers can
browse products, make purchases, and complete transactions online. These online platforms offer
convenience and accessibility, allowing customers to shop from anywhere with an internet connection.
2. Third-Party Marketplaces: E-commerce platforms like Amazon, eBay, and Alibaba provide online
marketplaces where businesses can list and sell their products alongside other sellers. These platforms
offer a vast customer base, built-in traffic, and tools for product promotion, making them attractive
distribution channels for businesses of all sizes.
1. Mobile Commerce (M-commerce): With the rise of smartphones and mobile apps, businesses can
leverage mobile commerce channels to reach customers on their mobile devices. Mobile-optimized
websites, shopping apps, and mobile payment solutions enable seamless shopping experiences on
smartphones and tablets.
2. Social Media Commerce: Social media platforms such as Facebook, Instagram, and Pinterest offer
opportunities for businesses to sell products directly to users through social commerce features. Businesses
can create shoppable posts, run targeted ads, and leverage influencer partnerships to drive sales through
social media channels.
3. Omnichannel Retailing: E-commerce and e-retailing channels can be integrated with traditional brick-
and-mortar stores to create omnichannel retailing experiences. Customers can shop online, in-store, or via
mobile devices, with options for home delivery, in-store pickup, or curbside pickup, depending on their
preferences.
4. Digital Marketing: E-commerce channels are complemented by digital marketing strategies such as
search engine optimization (SEO), pay-per-click (PPC) advertising, email marketing, and content
marketing. These tactics help businesses attract, engage, and convert customers online, driving traffic and
sales to e-commerce platforms.
ELECTRONIC INTERMEDIARIES
 Electronic intermediaries, also referred to as e-intermediaries, are digital platforms or entities that facilitate
transactions between buyers and sellers within electronic commerce (e-commerce) environments. These
intermediaries are pivotal in enabling smooth and efficient exchanges of goods, services, or information in
online marketplaces. Electronic intermediaries play a critical role in facilitating transactions, providing
additional value-added services, and enhancing the efficiency and effectiveness of e-commerce
ecosystems. They serve as crucial connectors between buyers and sellers, streamline processes, and drive
growth in online commerce.
 Here are several common types of electronic intermediaries:
1. Online Marketplaces: These platforms serve as hubs connecting multiple sellers with potential buyers,
allowing them to showcase, sell, and purchase products or services. Examples include Amazon, eBay,
Alibaba, and Etsy, offering a centralized venue for sellers to expand their reach and buyers to access a
diverse range of offerings.
2. Aggregators: Aggregators gather and organize information or offerings from various sources, presenting
them to users in a consolidated manner. In e-commerce, they might compile product listings, reviews, or
price comparisons from different sellers or platforms, aiding consumers in making well-informed
purchasing decisions. Notable examples include travel aggregators like Expedia and Booking.com,
alongside comparison shopping websites like PriceGrabber and Google Shopping.
3. Payment Gateways: These intermediaries facilitate secure online payments between buyers and sellers by
processing payment transactions. They encrypt sensitive financial data, verify payment details, and facilitate
the transfer of funds. Well-known examples encompass PayPal, Stripe, Square, and Authorize.Net, ensuring
the reliability and security of online transactions.
4. Logistics and Fulfillment Services: Providers in this category support e-commerce businesses in
managing inventory, warehousing, order fulfillment, and shipping operations. They handle storage, packaging,
and delivery, streamlining logistics processes and enhancing efficiency. Notable examples include fulfillment
centers like Amazon Fulfillment and third-party logistics (3PL) providers such as UPS, FedEx, and DHL.
5. Affiliate Networks: These networks connect merchants (sellers) with affiliates (publishers or marketers)
who promote their products or services in exchange for commissions. They offer services like tracking,
reporting, and payment processing to facilitate affiliate marketing programs. Prominent examples include CJ
Affiliate (formerly Commission Junction), ShareASale, and Rakuten Advertising (formerly LinkShare).
6. Digital Advertising Platforms: Platforms in this category enable advertisers to target audiences through
various online advertising channels, including search engines, social media, display networks, and video
platforms. They provide tools and services for creating, managing, and optimizing advertising campaigns.
Examples include Google Ads (formerly Google AdWords), Facebook Ads, and Microsoft Advertising
(formerly Bing Ads).
 E-ENABLED LOGISTICS MANAGEMENT AND
TRACKING SYSTEMS

 E-enabled logistics management and tracking systems leverage digital technologies to

streamline and enhance the efficiency of logistics operations, enabling businesses to
manage, track, and optimize the movement of goods throughout the supply chain. These
systems incorporate various e-enabled tools and platforms to improve visibility,
coordination, and decision-making in logistics processes.
 e-enabled logistics management and tracking systems offer significant benefits in terms
of efficiency, visibility, and cost savings in supply chain operations. By leveraging
digital technologies and automation, businesses can optimize logistics processes,
improve customer service, and gain a competitive advantage in the marketplace.
 Here are some key components and functionalities of e-enabled logistics management
and tracking systems:
 Transportation Management Systems (TMS): TMS software streamlines
transportation activities by automating planning, execution, and monitoring. This
includes route planning, carrier selection, load optimization, and freight management.
TMS enhances visibility into shipments, boosts delivery accuracy, and lowers
transportation costs.
 Warehouse Management Systems (WMS): WMS software enhances warehouse and
distribution center efficiency by overseeing inventory, orders, and storage locations. It
automates tasks like receiving, picking, packing, and shipping. WMS also enables
inventory tracking, cycle counting, and demand forecasting.
 Inventory Management Systems: These systems monitor inventory movement and
storage across the supply chain. They offer real-time visibility into inventory levels,
locations, and stock movements, helping businesses optimize inventory levels, reduce
stockouts, and enhance order fulfillment efficiency.
 RFID and Barcode Technologies: RFID and barcode technologies automate tracking
and identification of goods in the supply chain. They attach RFID tags and barcode
labels to products, pallets, or containers for accurate and efficient inventory tracking in
real-time.
 GPS and Telematics Solutions: GPS and telematics solutions enable real-time
tracking and monitoring of vehicles, assets, and shipments during transportation. They
provide location data, route optimization, and driver behavior monitoring, improving
fleet management and delivery efficiency.
 Electronic Data Interchange (EDI): EDI facilitates electronic exchange of business
documents like purchase orders and invoices between trading partners. It streamlines
communication and data exchange in logistics, reducing manual errors, paperwork, and
processing times.
 Cloud-based Platforms: These platforms offer a centralized infrastructure for
managing and coordinating logistics activities. They enable collaboration, data sharing,
and integration across stakeholders, enhancing visibility and coordination in the supply
chain.
 Analytics and Reporting Tools: These tools use data analytics and business
intelligence to analyze logistics performance, identify trends, and generate insights.
They provide dashboards, reports, and KPIs for monitoring key metrics, optimizing
operations, and making data-driven decisions in logistics management