ICFAI University Dehradun

Class of 2011 Semester III

Name: Ujjawal Ranjan

IUD No: 0901202606

Course Code: SLMM606

Course Name: Sales & Distribution Management

Faculty Name: Prof.Shailendra Dasari

Date of submission: 31/08/2010

Topic of the Assignment:

Development of Distribution Strategy

Student’s Signature Faculty’s Signature

 Declaration

I Ujjawal Ranjan hereby declare that the assignment entitled ― “Development of

Distribution Strategy” submitted to ICFAI Business School, Bangalore in
partial fulfillment of the requirements of the MBA Program is an original and
bonafide work done by me.

And also I hereby declare that this work is not my SIP work.

Ujjawal Ranjan

0901202606
QUESTION 3. Develop appropriate distribution strategy for the following products being
launched in India by a foreign multinational company

a. Solar heaters

b. Designer watches

Your response should cover

i. Channel alternatives

ii. Coverage

iii. Control

iv. Cost

v. Brand building and

vi. After Sales Service

ANSWER 3

Solar heaters

Solar hot water is a water heater heated by the use of solar energy. Solar heating systems are
generally composed of solar thermal collectors, a water storage tank or another point of usage,
interconnecting pipes and a fluid system to move the heat from the collector to the tank

Distribution strategy used to market Solar Water heater.

1 Channel alternatives

A channel of distribution or trade channel is the path or route along which goods move from
producers to ultimate consumers or industrial users. In other words, it is the distribution network
through which a producer puts his product in the hands of actual users. The channel of
distribution includes the original producer, the final buyer and any middlemen-either wholesaler
or retailer. So here in this case of distributing Solar Water Heater, the channel of distribution will
be PRODUCERWHOLESELLERRETAILERCUSTOMER
For institutional and organization sales company should follow this distribution pattern
PRODUCERWHOLESELLERINSTITUTIONAL & ORGANIZATION

The great scope of this Solar Water heater lies with the metro cities of INDIA. Company can
have tie ups with many real estate companies for supplying Solar Heater in their new building
project. This can help in increasing the revenue of the company.

2 Coverage

With the implementation of National Solar Mission by Government of INDIA and subsidy
provided by them, solar energy is now affordable by common public. The company should try to
have good distribution network in rural area and small towns of India. This can help them to
capture the market. The sell of solar heater always maximize in season of winter. The proper
research of radiation obtain in particular area should be done. This research can help company to
understand that in which area they have to concentrate more on distribution and selling. Solar
energy can help in a big way in contributing to the economic development of urban and rural
India. The Indian government has made some initial efforts to attract investment in this area.

3 Control

A distribution channel consists of several relationships that assist channel members in carrying
out various channel functions. Suppliers tie up with various intermediaries in the distribution
channel as the latter help suppliers or manufactures achieve the objectives of making product
available to end customer cost effectively. So it becomes very much important to have control
and evaluate the channel member. Control helps company in decreasing channel conflict. So
company will have direct interaction with retailers and wholesalers. The data and
recommendation obtain from them can help in proper inventory control and better operational
control.

4 Cost

The hunt for better, cheaper Solar cells is due in India. Despite the fact that the price of Solar
Photovoltaic technology has been coming down over the years it still remains economically
unviable for power generation purposes. The average cost of Solar PV modules was around Rs. 2
lakhs per kW. So with the subsidy provided by the government, pricing should be done in such a
way that common public can also buy.

5 Brand building

Brand is the name attached to a product or service. However, upon close inspection, a brand
represents many more intangible aspects of a product or service: a collection of feelings and
perceptions about quality, image, lifestyle and status. It creates in the mind of customers and
prospects the perception that there is no product or service on the market that is quite like yours.
In short, a brand offers the customer a guarantee and then delivers on it. Branding of solar water
heater should be done on the basis of-

1. Quality positioning - Perception of quality is probably one of the most important

elements for a brand to have.
2. Value positioning -  Although at one time, items that were considered to be a good
"value" meant that they were inexpensive, that stigma has fallen by the wayside. Today,
brands that are considered a value are rising in popularity amongst consumers
3. Feature-driven prompts - More marketers rely on product features to differentiate their
brands than any other method. The advantage is that the message is clear, and the
positioning will be credible if you stick to the facts about the product. Unfortunately,
feature-orientated stances are often rendered useless if the competition comes out with a
faster or more advanced model.

6 After Sales Service

After-sales service of solar water heaters is very important because solar water heaters are
durable consumer goods, and usually installed in the roof, once a fault, the user is difficult to find
the fault, so after-sales service must be their to protect customer interest. The home service at
lower expenses and manufacturers more confidence to set a longer warranty period, 1 year, 2
years from that point of view, to some extent products can also be speculated that the merits of
solar water heater purchase.
Designer watches

Everyone knows designer watches aren't absolutely essential but rather an indulgence. However,
if you possess the funds, why not buy one! A high end watch can be a sign of a rich man, a
prosperous man. Men's high-class designer watches are costly for a reason, since they are hand
crafted with some of the very priciest materials obtainable. As years pass, timepieces continue to
develop. In this day and age, wrist watches are not only useful for keeping time, but also to make
a fashion statement as well as to say something concerning who the wearer is.

Distribution strategy used to market Designer watches.

1 Channel alternatives

Company should focus on opening Company showroom, which will help in creating awareness
of the new product. Company should also follow the traditional distribution network to ensure
the reach of product to mass. For that the channel of distribution will be
PRODUCERWHOLESELLERRETAILERCUSTOMER

2 Coverage

For high end Watches Company should do aggressive promotion in metros and A & B grade
cities. More company exclusive showroom should be opened to market high end designer
watches. Watches for mass should be covering all places in India. For this traditional distribution
should be followed.

3 Control

Channel control should be such that the profitability leads to the good ROI (return on
investment). The margin of distributor should be such that they should give preference to our
product. This could help in maximum sale of watches hence higher revenue will be earned by the
company. The channel control should be such that it leads to minimum conflict in channel of
distribution. The proper information system will be necessary to send data backward to the
company. Thus proper inventory management and analysis of data can be done.
4 Cost

The pricing should be done in such a way that it can be targeted to all segment of society. This
can ensure to capture the market.

Pricing Objectives

1. Survival – low range watches

2. Market share – watches for youth, medium level pricing

3. Market skimming – high end user (no price constant to them)

4. Product quality

Pricing method

1. Product line pricing

2. Promotional pricing

5 Brand building

The brand building will be done by good commercials with a Indian Celebrity. This will ensure
the existence of brand in India. Apart from that we have to position ours elf with following
position strategies-

1. Attribute Positioning: To bring new technology for watches to the Indian market. This
helped to penetrate the market and gain a market share.
2. Benefit Positioning: The Digital range offers the customer a functional watch that is
attractive and has superior style.
3. Competitor Positioning: With the entry of Omega, Tissot etc into the market who are
catering to the upper end of the market we have to position our self increasing the price
range.
4. Quality or Price Positioning:
6 After Sales Service

There is great requirement of after sales service in watches. Watches are used on day to day basis
so after sometime service of watch is essential. Apart from that some more points to be cover to
ensure good service. That are-

1. Changing the battery

2. Changing the leather and rubber strap.
3. Water resistance
4. Polishing service
5. Guarantee and warranty of watch