1.

An overview of “Channels of Distribution

The project report titled “Channels of Distribution Ultra tech Cement”. To

determine the dealer satisfaction of the product and future demands, needs, wants. The study
starts with an Introduction, over view of the Project Topic Distribution Channel, Company
profile, Objective of the study, Research methodology, data analysis and interpretation,
findings, conclusions, suggestions of the study follow.

The response given by the dealers and analyzed and interpret using different types of
statistical tool such as percentage analysis This is an attempts to find, what are the main
issues a manufacturer selling through a distribution channel has to worry about when
designing the product line. The problem of the product line design for a distribution channel
is modeled with the manufacturer, the retailer or several competing retailers, and the
consumers.

Distribution: Numerous Challenges• Cement has a useful shelf life of approximately 6

months. Customers also have a bias towards fresh cement (“Garam Cement “) forcing
manufacturers to predict accurate amount of inventory• In India construction activities slows
down during rainy season that is why cement demand is cyclic in nature. A fine balance
needs to be achieved between inventory cost and capacity utilization.• Since railway route is
the cheapest mode of transport, availability of railway wagon is a big constraint in present
scenario.• Since companies put multiple plants to save on transportation cost, which market
should be served from which plant is big challenge• Value added services such as Ready Mix
Concrete ( RMC) has now become a industry trend. It is putting pressure on lead-time and
vehicle TAT. Private & Confidential

Distribution channels are behind every product and service that consumers and business
buyers purchase everywhere. Usually, combination on institutions specializing in
manufacturing, wholesaling, retailing and many other areas join force in Distribution
channels.

A Distribution channels is a set of inter dependent organization involved in the process of

making a product or service available for use or consumption.
Distribution channels decisions play a role of Strategic importance in the overall presence
and success a company enjoys in the market palace.

When designing a product line, a manufacturer is often aware that it does not control the
ultimate targeting of the products in the line to the different consumer segments. While the
manufacturers can attempt to influence the target customers through communications in
appropriate media, product design, and the choice of channels of distribution, the ultimate
targeting is made by a retailer, which might only care about its own interests, and is fully in
control of interactions with customers, including how the product is sold and displayed. This
occurrence is widespread in numerous markets, for example, frequently purchased consumer
products, home appliances, personal computers, automobiles, etc.

The audience for this paper includes practitioners and academics who want to better
understand how a manufacturer selling through an intermediary can better induce this
intermediary to have a targeting strategy consistent with the manufacturer's intentions and be
willing to carry the full product line.

As distribution channel is a part of Marketing Mix. A brief description of Marketing is as

follow.
NEED OF THE STUDY
 The study is very significant to understand the distribution channels.
 The study is important to know the dealers satisfaction level for the dealership.
 The study is important to know the dealers satisfaction level in the price of the
cements.
 The study is important to know the dealers preference for the quality.
 The study is very important to know the sales volume.
 The study is also analyses the effective media for improving the sales.
 The study is important to know availability of the cement.
 The study is important to know margins in the cement industries.
 OBJECTIVES OF THE STUDY

1. To study the level of dealers satisfaction on Ultra Tech Cement under Hyderabad
2. To study the role of dealers in ULTRA TECH CEMENT Industries Limited.
3. To find dealers opinion on various issues of the present market situation and
furthering (strengthening) channel effectiveness.

As Consumer satisfaction is the most important objective for any manufacturing

concern to successfully market its products. ULTRA TECH CEMENT has from gradually
and would want to take a stock of the satisfaction level of consumers and define areas where
possible improvement may be made. The research work has been therefore selected in this
area.
The company which produces products doesn’t give life to sustain in competition
without sales of products. So sales are important function of the manufacturing company to
get profits. Through sales only wealth maximization if possible.
Distributions are also one of the important functions in marketing. Through
distribution only one company can sell its products. Here the distribution channels contain the
dealers. Who are very near to the customers and act as middlemen between the organizations.
So there is a need to study sales and distribute on strategies.
Distribution system includes distribution channels. Which are sets of independent
organizations involves in the process of making a product (or) a service available for the
consumption. Distribution network is necessary for smooth flow of goods.

SCOPE OF THE STUDY

 The scope of the study is confirmed to distribution channel with special reference to
the “Ultra tech Cement” in Hyderabad.
 The study can help to the management to know the factors why their sales volumes
are low.
 The study will help to improve the sales volumes of the “Ultra tech Cement”
 The recommendation and suggestion of the study can also be applied to the similar
project or similar situation
Research Methodology

In view of the objectives of the study, an exploratory design has been adopted.
Further the researcher also touched the descriptive researcher design and causal analysis to
relate between different variables. Exploratory research is one which largely interprets the
available information on the study and it lays emphasis on the analysis and interpretation of
the exiting and available information. This research is generally useful when we use the
information collected from three sources, viz., study of secondary sources, discussion with
individuals and analyzing the some specific case.
Research Approach
The research conducted was explanatory in nature and the goal was of gather preliminary
data to shed light to the real nature of the problems and to sugest possible solutions. For the
purpose of this project, we went for a questionnaire-based survey of the dealers. A pilot test
of this questionnaire was done for the proparation of final questionnaire. It involed, applying
the draft questionnaire to a sample of 5 dealers. This was done to ascertain which question
are ambiguous, wrangly worded or in any way objectionable.
Research Tool:
Personally administered questionnaire
Structured interview
Unstructured interview

Project Research Type -- Descriptive Research

Data Sources – Primary Data Secondary Data
Research Instrument – Questannaire
Sampling Procedure – Random Sampling
Sample Size – 100 Respondents
Geographical Coverage Hyderabad
Duration of Survey – 45 days

Sources of Data
To perform the Research study by Researcher, the sources of data obtained are:
Primary Data: This data is obtained by interacting and interviewing the dealers in
Hyderabad district.
Secondary Data: This data is obtained directly from the company in the form of broachers,
charts, diagrams, document and other forms.

Period of Study
The study aims to measure satisfaction level of the dealers. The area within which the study
to be conducted regarding the information the primary data is collected in the form of
questionnaire collected from the dealers in Hyderabad district. To sum up the project had
within the scope of the study in the area of “CHANNELS OF DISTRIBUTION” ULTRA
TECH CEMENT dealers in Hyderabad district for a particular time (duration in 45 Days)

Tools & Techniques

Data Collection Tool:

Questionnaire: This is one of the data collection tools. It is quite popular particularly in case
big enquires. It is being adopted by private individuals, research worker, private and public
organization and even government. In this method, a questionnaire is issued to the persons
concerned with a request to answer the questions and return the questionnaire. A
questionnaire consists of number of questions printed or typed in a definite order or a form or
set of forms.
The researcher used the structured questionnaire in which the questions were:
Open-ended questions
Close-ended questions
Dichotomous questions
Multiple choice questions

Sampling Design
The researcher has done his research study on the dealers of ULTRA TECH CEMENT to
know their present satisfaction and expectation from this brand. The researcher selected the
dealers of ULTRA TECH CEMENT at Hyderabad district for his research study.
Sampling Plan
Sample size: Sample size consists of 100 dealers.
Sampling unit: The Sampling unit includes all the dealers of ULTRA TECH CEMENT
products present in Hyderabad District.
Sampling method: For collecting information from dealers, non-probabilistic simple random
sampling method is used.

Tools of analysis:

The data collected trough survey has been carefully and meaningfully analyzed by
using well established statistical tool and techniques. Important statistical technique is
percentage method.

Hypothesis:
Hypothesis is a part of research that enables the researcher to predict about the
future based on the present trend. It is very much essential in any research activity to develop
the policies for a better working of the system. Based on the above concept, the hypothesis
for the study developed by the researcher at the various stages of analysis.
Analytical tools
The data, which was collected, was summarized and tabulated on MS-excel for further
analysis. The analysis performed was manly comparative analysis using statistical analytical
tools. The tools that have been used are as follows
Bar Chart Pie Chart Line Chart

Statistical Tools
Percentage: Refers to special kind of ratio percentage are used in marketing comparison
between two more series of data. Percentage is used to describe relationship. Since the
percentage reduce everything to a common base & these by allowing meaningful comparison
to be made
Weighted average If something is distributed it is more important that order, then their point
must be born in mind in order that average completed in representatives of the distribution. In
such as proper weight age is to be given to various items the weight attached to each item
being professional to the importance of the item to be the distribution
Formula
Average weight = Total weight / Total Number of Respondents x 100
 LETRETURE REVIEW

Boyle et. al. (1992) developed measures of the following six influence strategies in
marketing channels –
1. Promise: Source certifies to extend specified reward contingent on the target's compliance,
2. Threat: Source informs the target that failure to comply will result in negative sanctions.
3. Legalistic plea: Source contends that target compliance is required by formal agreement.
4. Request: Source asks target to act; no mention of subsequent sanctions.
5. Information exchange: Source supplies information with no specific action requested or
otherwise indicated.
6. Recommendation: Source stresses that specific target action is needed for the latter to
achieve desired outcomes. They examined association of the influence strategies on channel
relationship and alternative channel governance structures (market, administered, franchise,
and corporate). The results confirmed the predicted 50 negative association between
relationalism and the following influence strategies: threats, promises, legalistic pleas and
requests.
Bandyopadhyay and Robicheaux (1998) extended the study of the impact of six influence
strategies of suppliers on their dealers in USA and in India – information exchange,
recommendation, request, promise, threat and legal pleas and found that in India,
recommendation and legal pleas, which demand compliance of the terms of agreement
between them, had positive impact on dealer satisfaction. The researchers acknowledge that
with increasing competition, recruiting and retaining channel intermediaries is challenging
and conclude that by using proper influence strategies marketers will be able to attain the
desired channel performance levels while keeping channel partners satisfied. The study lacks
generaliz ability as it has been tested in only electric lighting industry, in only two countries.
Govindarajan and Fisher (1990) found that using behavioral measures comprising
subjective non- financial parameters were more influential to impact their performance.
Drawing from concepts of generic strategies of Porter (1980) and concepts of Balanced
Scorecard expounded by Kaplan and Norton (1992), an integrated model for measuring
marketing channel performance was developed by Valos and Vocino (2006), with measures
for various facets of channel performance covering aspects like internal communication and
coordination, internal conflict or ambiguity, which discriminates between efficiency and
effectiveness in performance measurement and provides a comprehensive framework for
overall performance improvement across channels and integrating market segmentation
strategy based on customer lifetime value and channel strategy in terms of channel cost and
channel response. The relevance of the preceding few publications is derived from the
emphasis on channel structures, communication, influence and alignment, followed by
performance and reward measures to foster successful marketing of new innovative products
by marketers through their channel intermediaries.
Abraham and Lodish (1990), who opine that television advertisements have led to increased
sales in only half the instances tested, in the case of trade promotions, only 16% instances
studied across 65 product categories have resulted in incremental sales, which lead them to
conclude that many companies could improve profitability by restrained expenses on
advertisements and promotions. The traditional notions of marketers of continually raising
expenditure on advertisement to promote their brand and increase sales are some of the myths
that they have argued against. They also advocate greater usage of empirical studies on
effectiveness of advertisements to justify continued expenditure.
Laurent and Kapferer (1985) created Consumer Involvement Profiles by studying various
facets like perceived importance of the product, risk, pleasure and sign value and suggested
segmentation of the market can be attempted based on involvement profile, since consumers
can be active or passive to advertising and marketing communications depending on their
level of involvement, so that even for low involvement category products, consumer profiles
can reveal consumers being high on certain facets, which can be identified and targeted.
Bauer et. al. (2006) proposed a product involvement category dependent model of consumer
decision making styles and encouraged future researchers to further investigate this
relationship that products and product involvement have on the decision-making styles
exhibited by consumers.
In Short Distribution Channel & Supply Chain can be defined as

A. Distribution Channel:

Companies invariably hire agents or transport cements to own or government warehoeses eith
via roadways or railways and is then transferred to the inporting contry. Domestically, from
agents or warehouses the cement is transported to the dealers/distributors and in turn to sub
dealers who finally sell it to the end users. Tere may or may not be physical ownership of
goods. In the secons case, dealers and sub dealers take order from buyers and place it to the
companies, co-ordinate and monitor the timely dispatch of said orders

There is use of 4 levels of channeling

Manufacturer/Producer to Agents/Jobber to Wholesaler to Retailers to End User

1. Producer  Wholesaler  Jobber  Retailer  Consumer

2. Producer  Wholesaler = = = = =  Retailerr  Consumer

3. Producer = = = = = = = = = = = = Retailer  Consumer

4. Producer = = = = = = = = = = = = = = = = = =  Consumer

B. Supply Chain

The team orders and maintains the inventory of stock keeping units so that unit does not run
out of critical supplies at any point. The team also ensures that all stock keeping units of
items used in the unit are received at stores from vendors and distributed to the different
outlets on time. Other functions include:

1. Distribution Function Configuration:

Number, location and network mission of suppliers, production facilities, distribution centers,
warehouses, cross-docks and customers.
 2. Distribution Strategy:

Includes functions of operating control (centralized, decentralized of shared) deliver scheme

(e.g. direct shipment, pool point shopping cross docking, DSD direst store delivery)

3. Information:

Integrating of and other processes through the supply chain to share valuable information,
inclusing demand singles, forescasts, inventory, transopration, and potential collaboration etc.

4. Inventory Management:

Quantity and Location of inventory including raw materials, work in process and finished
goods.

In Detail Distribution Channel & Supply is as follows

A. Distribution (Business)

Physical Distribution (or place) is one of the four elements of the marketing mix. An
organization or set of organizations (go-betweens) involved in the process of making a
product or service available for use or consumption by a consumer or business user.

The other three parts of the marketing mix are product, pricing, and promotion.

The Distribution Channel

Chain of intermediaries, each passing the product down the chain to the next organization,
before it finally reaches the consumer or end-user.... This process is known as the
'distribution chain' or the 'channel.' Each of the elements in these chains will have their own
specific needs, which the producer must take into account, along with those of the all-
important end-user.
Channels

A number of alternate 'channels' of distribution may be available:

 Distributor, who sells to retailers

 Retailer (also called dealer or reseller), who sells to end customers
 Advertisement typically used for consumption goods

Distribution channels may not be restricted to physical products alone. They may be just as
important for moving a service from producer to consumer in certain sectors, since both
direct and indirect channels may be used. Hotels, for example, may sell their services
(typically rooms) directly or through travel agents, tour operators, airlines, tourist boards,
centralized reservation systems, etc.

There have also been some innovations in the distribution of services. For example, there has
been an increase in franchising and in rental services - the latter offering anything from
televisions through tools. There has also been some evidence of service integration, with
services linking together, particularly in the travel and tourism sectors. For example, links
now exist between airlines, hotels and car rental services. In addition, there has been a
significant increase in retail outlets for the service sector. Outlets such as estate agencies and
building society offices are crowding out traditional grocers from major shopping areas.

Channel Decisions

 Channel strategy
o Gravity
o Push and Pull strategy
 Product (or service)<>Cost<>Consumer location

1. The Nature of Distribution Channels

Most businesses use third parties or intermediaries to bring their products to market. They
try to forge a "distribution channel" which can be defined as

"All the organizations through which a product must pass between its point of production
and consumption"

Why does a business give the job of selling its products to intermediaries? After all, using
intermediaries means giving up some control over how products are sold and who they are
sold to.

The answer lies in efficiency of distribution costs. Intermediaries are specialists in selling.
They have the contacts, experience and scale of operation which means that greater sales can
be achieved than if the producing business tried run a sales operation itself.

2. Indian Distribution System:

It is also important to assess how the distribution task is being performed in India. This
task can be undertaken by measuring the number of functionaries in each class, their
organizational structure and their capital structure. The margins charged by them would be a
function of the quantum if goods moved and the population served by them and services
rendered by them and would also assist in the task if measuring their performance. Dividing
the members involved in each type of trade we can briefly get an idea about the average
productive capital required in each class of trade. Having assessed the inputs, structure and
size their distribution all over India we are now in la position to assess how the task is being
performed in terms of output.

3. Distribution logistics:

Logistics was a military term referring to complete system of moving, supplying and
quartering troops. Businessmen broadened logistics to include any type of transportation and
storage. Marketers applied the term to mean the physical handing of products. They also
began employing the term ‘physical distribution’ in place of logistics. The area of physical
distribution has received considerable attention. The attention was quite justified for a
country such as ours because of its traditional short supply markets of for the gaps often
witnessed between the demand and available of products. Prices of essential commodities of
daily consumptions are particularly amenable to any dislocation in physical distribution. If
any evidence is required, we need the concerns and anxieties associated with news of strike in
Rail and road transport.

BIBLIOGRAPHY:

1. Books referred:

 Marketing management phillipkotler T.M.H 2003 new delhi(9thedition)

 Consumer behavior schiffman and kanuk,1997 PHI(6th edition)
 Quantitative techniques for MBA ,TATA MC Graw Hill 1985. Levin and kirpatric.
 Marketing management menothra new delhi (10thedition)

2. Websites referred:

 www.marketing.org
 www.estrategicmarketing.com
 www.marketingprofs.com
 www.ultratech.com
 www.marketingstudies.net

3.Journals referred:
 Economic Times
 Business Standard