Distribution

Management
Module: 3
Dr. Saurabh Mishra
PIBA
Parul University
Topic Covers
Introduction, Need and scope of distribution management

Marketing channels strategy, Levels of channels, Functions of

channel partners, Evolution & possible channel formats.

Channel Institutions: Retailing & wholesaling. Designing channel

systems: Channel Intensity, Channel Design Process, Selecting
Channel Partners
Channel Management: Channel Policies, Power Bases in
managing channel partners, Conflict management
Distribution System
• A distribution system refers to the network
of individuals, organizations, and activities
involved in the process of transferring goods
or services from producers to consumers.
• The distribution system plays a crucial role
in ensuring that products and services are
delivered to the right customers, at the right
time, and in the right condition.
Understanding and effectively managing the
distribution system is essential for
businesses to achieve customer satisfaction
and maintain a competitive advantage in
the market.
Basic Concepts of a Distribution
System

Channel of Intermediaries: Channel Levels: Channel Channel

Distribution: This These are The number of Functions: The Integration: This
is the path or route individuals or intermediaries distribution system refers to the
through which organizations that involved in the performs several coordination and
products and facilitate the distribution functions, such as collaboration
services flow from movement of channel transportation, among channel
the manufacturer goods and services determines the warehousing, members to
or producer to the from producers to channel level. financing, risk- achieve efficient
end consumer or consumers. taking, promotion, and effective
user. and market distribution.
information Integration can be
gathering. vertical (involving
different levels of
the same channel)
or horizontal
(involving
 Conti……

Channel Channel Design: Physical Distribution Distribution

Conflicts: Companies Distribution: This Logistics: This Strategies:
Disagreements carefully plan aspect of the refers to the Companies can
between channel distribution distribution system planning, choose from
members due to channels based on involves the implementation, various distribution
differing product, market, physical movement and control of the strategies, such as
goals/practices. geographic factors, of goods from the efficient and intensive, selective
Effective and desired control point of production effective flow of and exclusive.
management over the process. to the point of goods and services,
resolves conflicts consumption. as well as related
for smooth information, from
operations. the point of origin
to the point of
consumption.
Need for Distribution Management

Efficient Product Delivery: To bridge the gap between production and consumption, ensuring
smooth flow of goods.
FMCG companies like Procter & Gamble use distribution channels to deliver products to rural and
urban markets.
Customer Satisfaction: To meet customer demands promptly, enhancing satisfaction and loyalty.
Amazon’s advanced logistics ensures same-day or next-day delivery in many locations.
Cost Optimization: To reduce logistics and inventory costs through efficient planning and
management.
Companies use just-in-time (JIT) inventory systems to minimize storage costs.
Market Expansion: To penetrate new markets and serve diverse geographical regions.
Coca-Cola uses an extensive network of distributors to ensure availability in remote areas.
Competitive Advantage: To stay ahead by ensuring product availability and visibility where
competitors may not.
Apple ensures its products are distributed across exclusive and multi-brand retail outlets worldwide.
Scope of Distribution Management
Channel Selection Identifying the best distribution channels (direct, indirect, or hybrid).
and Management
Nike uses both its online platform and physical stores as part of its multi-channel
strategy.
Inventory Balancing stock levels to avoid overstocking or stockouts.
Management
Walmart uses data-driven systems to track inventory and ensure shelves are always
stocked.
Transportation Ensuring cost-effective and timely delivery of products.
and Logistics
FedEx specializes in logistics solutions, offering same-day delivery for critical
shipments.
Warehousing and Efficient management of warehouses to store goods safely.
Storage
Amazon operates fulfillment centers globally to ensure quick order processing and
delivery.
Order Processing Streamlining the process of receiving, processing, and delivering customer orders.
and Fulfillment
Zomato partners with restaurants and delivery personnel for seamless order
fulfillment.
Reverse Logistics Managing returns and recycling or disposing of products efficiently.
E-commerce platforms like Flipkart handle reverse logistics for returned goods.
Monitoring and Regularly assessing the efficiency of distribution channels and making
Performance improvements.
Evaluation Fast-food chains like McDonald’s monitor delivery times and optimize processes for
better service.
Marketing Channels Strategy

• A marketing channels strategy refers to

the methods and pathways businesses
use to deliver their products or services to
Marketing
Channels

the end consumers. It focuses on

Strategy

selecting, managing, and optimizing

distribution channels to maximize
efficiency, customer satisfaction, and
profitability.
Key Components of Marketing
Channels Strategy
Channel Design
Determining the structure and number of channels needed to reach the target audience.
• A direct channel (e.g., company website) or indirect channels (e.g., wholesalers, retailers).

Channel Levels
• Direct Channel: Selling directly to customers without intermediaries
• Dell selling laptops via its website.
• Indirect Channel: Involving intermediaries like distributors or retailers.
• Unilever products sold through retail stores worldwide.
• Hybrid Channel: Combining direct and indirect channels.
• Nike sells through its stores and online, as well as through retailers like Foot Locker.

Channel Integration
• Vertical Integration: Controlling multiple levels of the distribution chain.
• Zara designs, manufactures, and sells its products.
• Horizontal Integration: Partnering or acquiring competitors at the same channel level.
• Facebook acquiring Instagram to expand reach.
• Channel Partner Selection
Conti….
Channel Intensity
• Intensive Distribution: Maximizing availability by placing products in as many outlets as possible.
• Coca-Cola is available in grocery stores, vending machines, and restaurants.
• Selective Distribution: Partnering with a few intermediaries to maintain brand image.
• Samsung electronics in selected stores.
• Exclusive Distribution: Using a single intermediary to ensure exclusivity.
• Luxury brands like Rolex limit distribution to exclusive outlets.

Channel Partner Selection

• Choosing intermediaries based on their market reach, expertise, and reliability.
• Selecting local distributors for international markets.

Customer-Centric Approach
• Ensuring the channel strategy aligns with customer needs, preferences, and purchasing behavior.
• Amazon prioritizes customer convenience with a user-friendly platform and fast delivery.
Channel
Structure/ Levels
Channel levels refer to the number of
intermediaries or steps involved in the
distribution of products or services
from the producer to the end
consumer. The levels are categorized
based on how many "middlemen" are
present in the supply chain.
• Zero-Level Channel (Direct
Channel)
• Dell and Apple
• One-Level Channel
• Automobiles Company
• Two-Level Channel
• FMCG/ Pharma
• Three-Level Channel
• Export/ Agricultural Products
Functions of Channel Partners
Role: Manage the movement of goods from manufacturers to consumers.
• Activities:
• Storing, transporting, and delivering products to wholesalers, retailers, or end-
Physical Distribution
users.
• Maintaining an inventory of goods for quick fulfillment.
• Example: Logistics companies like DHL or FedEx ensure timely product delivery.
• Role: Assist in executing transactions between producers and consumers.
• Activities:
• Generating purchase orders.
Transaction Facilitation • Processing payments.
• Ensuring smooth exchange of goods for money or other agreed terms.
• Example: Retailers like Walmart facilitate transactions by selling products directly to
consumers.
Role: Extend the reach of products to untapped or geographically dispersed markets.
• Activities:
Market Coverage and • Expanding distribution to new territories.
Expansion • Penetrating niche or local markets.
• Example: Coca-Cola relies on distributors to make its beverages available
worldwide.
Role: Support marketing efforts by promoting products and creating awareness.
• Activities:
Promotion and • Organizing in-store promotions, advertising, and point-of-sale displays.
Communication • Educating consumers about product benefits and features.
• Example: Electronic retailers like Best Buy promote Samsung TVs via in-store
demos.
 Role: Influence customer buying decisions to boost sales.
• Activities:
Demand Generation • Recommending products to end-users.
• Highlighting the value or competitive advantages of specific products.
• Pharmaceutical distributors encouraging pharmacies to stock specific medications.

Role: Absorb some of the risks associated with inventory and product ownership.
• Activities:
Risk Sharing • Taking responsibility for unsold inventory.
• Managing returns, damages, and defective products.
• Wholesalers buying goods in bulk take on the risk of selling them to retailers.

Role: Provide after-sales service to ensure customer satisfaction.

• Activities:
Customer Support • Handling complaints, product replacements, and warranties.
• Offering technical support and installation services.
• Dealers offering free installation for air conditioners.

Role: Serve as a feedback loop between customers and manufacturers.

• Activities:
Information Gathering • Collecting data on customer preferences, market trends, and competitor activities.
• Reporting sales performance and inventory levels to producers.
• Retailers sharing customer insights with brands to improve product design.

Role: Maintain consistent pricing across the distribution network.

• Activities:
Price Stability • Avoiding abrupt price fluctuations by balancing supply and demand.
• Enforcing manufacturer-recommended retail prices (MRP).
• Apple ensures uniform pricing across its retail outlets and e-commerce platforms.

Role: Customize products or repackage them to meet specific customer requirements.

• Activities:
Product Customization and • Bundling products for promotions.
Packaging
• Offering specific variants or packaging styles for regional markets.
• Food distributors customizing packaging for smaller or bulk sizes based on market demand.
 Evolution of Distribution Channels
E-Commerce
Emergence of Omnichannel
Traditional Modern and Digital
Intermediaries and Hybrid
Channels (Pre- Retailing (Mid- Channels (Late
(Industrial Models (21st
Industrial Era) 20th Century) 20th to Early
Revolution) Century)
21st Century)
• Characteristics: • Characteristics: • Characteristics: • Characteristics: • Characteristics:
• Direct selling from • Introduction of • Growth of large- • Online platforms • Seamless
producers to wholesalers and scale retailers, disrupted traditional integration of online
consumers. retailers to handle supermarkets, and distribution and offline channels
• Limited reach due to mass production. department stores. channels. (omnichannel
transportation and • Improved • Standardization of • Direct-to-consumer approach).
communication transportation (e.g., products and (D2C) models • Hybrid formats
challenges. railways) expanded pricing. gained popularity. combining direct
• Predominantly market reach. • Increased focus on • Integration of and indirect
local trade and • Specialization in customer digital tools for channels.
barter systems. functions such as experience and tracking, • Emphasis on
• Example: Artisans storage, merchandising. marketing, and customer
selling handmade packaging, and • Example: Walmart delivery. convenience and
goods in local delivery. and Sears emerging • Example: Amazon, personalized
markets. • Example: General as major retail eBay, and other experiences.
stores distributing players. online • Example: Nike
goods manufactured marketplaces. operates physical
in industrial stores, an e-
factories. commerce website,
and sells through
third-party retailers
like Foot Locker.
Possible Channel Formats
Direct Channels Producer sells directly to the consumer without intermediaries.
Example: Apple sells directly through its website and stores.

Indirect Channels Intermediaries like wholesalers, distributors, and retailers are involved.
Example: Procter & Gamble products sold via supermarkets and grocery stores.
Dual Distribution A combination of direct and indirect channels.
Channels Example: Dell sells laptops directly online and through retail partners like Best Buy.

E-Commerce Channels Digital platforms where customers purchase products online.

Example: Amazon, Flipkart, and Shopify.
Integration of multiple channels (physical stores, websites, mobile apps) to create a unified shopping
Omnichannel experience.
Example: Zara’s "buy online, pick up in-store" model.

Franchising Independent businesses operate under the brand name of the franchisor.
Example: McDonald’s and Subway franchise models.

Distributorships Producers partner with exclusive distributors for specific regions.

Example: Automotive manufacturers like Toyota working with local distributors.

Network Marketing Individuals act as independent distributors and sell products within their network.
Example: Amway or Tupperware.
Mobile Commerce (M- Sales through mobile apps and smartphones.
Commerce) Example: Food delivery apps like Uber Eats or Zomato.

Hyperlocal Channels Focus on delivering goods to customers in a specific locality or region.

Example: Grocery delivery apps like Instacart or BigBasket.
Channel Institutions
• In the distribution channel, channel institutions refer to
intermediaries that help move goods from manufacturers to end
consumers. The two main types are retailers and wholesalers,
each playing a distinct role in the supply chain.
Retailing
• Retailing involves the sale of goods and
services directly to end consumers for
personal use. Retailers act as intermediaries
between wholesalers or manufacturers and
consumers.

Wholesaling
• Wholesaling refers to the sale of goods in
bulk to businesses, retailers, or institutions,
rather than directly to consumers.
Wholesalers act as intermediaries between
manufacturers and retailers.
Types of Retailing
Non-Store Retailing
• Any retail operation that sells to consumers
without using a fixed, physical store location. It
allows direct interaction between sellers and
buyers without traditional brick-and-mortar
establishment.
Store Retailing
• Store retailing is a traditional form of retail
business where products or services are sold
directly to consumers through physical retail
establishments.
Store-Based Retailing
•Department Stores – Large stores offering multiple product categories under one roof.
🏬 Example: Shoppers Stop, Lifestyle, Pantaloons
•Supermarkets – Self-service stores specializing in food and grocery items.
🛒 Example: Big Bazaar, Reliance Fresh, DMart
•Hypermarkets – Large retail stores combining supermarkets and department stores.
Example: Reliance SMART, Spencer’s Hyper
•Specialty Stores – Focus on a specific product category.
👞 Example: Titan (watches), Bata (footwear), Lenskart (eyewear)
•Convenience Stores – Small stores offering essential goods with easy accessibility.
⛽ Example: 7-Eleven India, In & Out (at petrol pumps)
•Discount Stores – Offer products at lower prices by reducing overhead costs.
🔖 Example: DMart, Vishal Mega Mart
•Warehouse Clubs – Sell bulk goods at discounted prices, usually requiring a
membership.
🏢 Example: Metro Cash & Carry, Reliance Market
•Franchise Stores – Retail outlets operated by franchisees under a brand’s name.
☕ Example: McDonald's, Domino’s, Subway
Non-Store Retailing

•E-Commerce – Online platforms for shopping.

Example: Amazon India, Flipkart, Tata Cliq
•Direct Selling – Selling directly to consumers through representatives.
👥 Example: Amway, Tupperware, Avon
•Telemarketing – Selling via phone calls.
📞 Example: Naaptol, Telebrands
•Vending Machines – Automated retail selling snacks, beverages, or
other goods.
🏪 Example: Mother Dairy milk vending machines
 Types of Wholesalers

• Full-Service Wholesalers • Brokers – Arrange sales • Cash-and-Carry

Specialized Wholesalers
Merchant Wholesalers
(Own & Stock Goods)

Agents & Brokers (Do Not

Own Goods)
– Provide a full range of between buyers and sellers Wholesalers – Sell to small
services like storage, credit, for a commission. retailers who pay cash and
and delivery. • Example: Commodity carry their goods.
• Example: Metro Cash & brokers in APMC markets • Example: Metro Cash &
Carry, Reliance Market (e.g., mandis for wheat, Carry, Walmart India
• Limited-Service rice, vegetables) (before Flipkart
Wholesalers – Offer fewer • Sales Agents – Represent acquisition)
services, focusing on bulk manufacturers and sell • Drop Shippers – Take
sales. goods on their behalf. orders but do not physically
• Example: Big Bazaar • Example: Pharmaceutical handle goods.
Wholesale sales agents for Sun • Example: E-commerce
Pharma, Cipla wholesalers supplying
directly from
manufacturers
• Truck Wholesalers –
Deliver perishable goods
like dairy and bakery
products.
• Example: Mother Dairy,
Amul’s distribution
network
Channel Design Process
• The channel design process refers to the structured
approach businesses use to develop an efficient
distribution channel to deliver products and services
to customers. A well-designed channel ensures
product availability, enhances customer satisfaction,
and maximizes profitability.
Channel Design Process
Analyze Customer Define Channel Identify Channel
Needs Objectives Alternatives

Understand what Align the channel with Select between direct

customers expect in business goals like channels (own retail, e-
terms of convenience, market penetration, cost commerce) and indirect
speed, and service. efficiency, or customer channels (wholesalers,
• Identify preferred service. retailers, distributors).
buying habits (e.g., • Consider factors like • Evaluate various
online vs. offline, bulk product type, intermediaries like
vs. small purchases). competitor channels, distributors,
• Example: In India, and legal constraints. wholesalers,
urban customers • Example: FMCG franchisees, or online
prefer Amazon, companies (HUL, ITC) platforms.
Flipkart, while rural need extensive • Example: Reliance
consumers rely on distribution, while Retail sells directly via
kirana stores. luxury brands (Rolex, its own stores,
Louis Vuitton) use whereas Coca-Cola
selective channels. relies on a vast
 Conti….
Evaluate Channel Select the Best Implement the Monitor and Modify
Alternatives Channel Structure Channel Strategy the Channel

• Compare channel Choose intensive Negotiate terms with Continuously assess

options based on: distribution (e.g., FMCG channel partners. performance based on
• Cost – What are the products), selective Train distributors and sales data, customer
expenses involved? distribution (e.g., retailers on product feedback, and market
• Control – How much electronics), or exclusive knowledge and sales trends.
influence does the distribution (e.g., luxury techniques. • Adjust channel
company want over • Set up inventory strategies by adding
cars).
branding and pricing? • Optimize the number of management and new partners or
• Coverage – How logistics processes. switching to direct
intermediaries to
widely should the balance cost and • Example: OYO channels.
product be available? market coverage. partners with hotels, • Nike India shifted from
• Customer • HUL uses intensive trains them, and selling via third-party
Experience – How distribution, ensuring implements retailers to launching
does the channel Lifebuoy soap is technology-driven its own e-commerce
impact service available in every retail booking systems. platform.
quality? outlet. • Swiggy & Zomato
• Apple India sells • BMW India follows evolved their business
through its official exclusive distribution, model by adding
stores (high control) with only a few grocery delivery and
and via Amazon authorized cloud kitchens.
(wider reach). dealerships.
• Amul distributes via
a vast wholesaler-
retailer network for
Channel Policies Selection Policy
(Choosing
Channel
Partners)
Pricing &
• Channel policies are Margins Policy
guidelines that businesses
Credit & Payment
establish to manage Policy
relationships with Territory &
intermediaries (wholesalers, Market Coverage
Policy
retailers, distributors) and Promotion &
ensure smooth distribution Advertising
Policy
of products. These policies Logistics &
help in maintaining Inventory
Management
consistency, controlling Policy
conflicts, and optimizing Conflict
Resolution Policy
channel performance.
Channel Policies
Selection Policy (Choosing Channel Partners)
• Defines criteria for selecting intermediaries based on:
• Financial stability
• Market reputation
• Geographical reach
• Sales expertise
• Infrastructure & logistics capability
• Apple India selects only premium retailers and exclusive distributors to maintain brand image.
• FMCG companies (HUL, ITC) choose distributors with strong rural and urban reach.
Pricing & Margins Policy
• Establishes how pricing, discounts, and margins are structured across different intermediaries.
• Defines wholesale price, retail price (MRP), and trade discounts.
• Ensures fair profit margins to motivate partners.
• Prevents price undercutting and unfair competition.
• Pharmaceutical companies (Cipla, Sun Pharma) set fixed MRP, but wholesalers and pharmacies get predefined margins.
• E-commerce platforms (Amazon, Flipkart) enforce pricing policies to avoid unfair discounts by sellers.

Credit & Payment Policy

Regulates financial transactions between manufacturers and intermediaries.
Defines credit limits and payment terms (e.g., 30-day or 60-day credit).
• Sets penalties for late payments and incentives for early payments.
• Automobile companies (Maruti Suzuki, Hyundai) offer credit to dealers but ensure timely payments through bank
guarantees.
• Retail giants (Reliance Retail, DMart) negotiate bulk purchase discounts and extended credit terms with suppliers.
Territory & Market Coverage Policy
Defines the geographical area or customer segment assigned to each channel partner to prevent conflicts and ensure
market penetration.
Exclusive Territories – A distributor gets exclusive rights in a region.
• Shared Territories – Multiple partners operate in the same area.
• Coca-Cola India assigns exclusive distributors for each city to avoid competition between partners.
• Samsung India allows multiple retailers in metro areas but gives exclusivity in smaller towns.
Promotion & Advertising Policy
Outlines how marketing and promotional expenses are shared between the company and channel partners.
Defines co-branding rules and advertisement reimbursement.
• Ensures brand consistency in marketing campaigns.
• Oppo & Vivo India offer financial support to retailers for in-store branding and advertising.
• McDonald's India provides franchisees with standardized marketing materials for promotions.

Logistics & Inventory Management Policy

Regulates how goods are stored, transported, and replenished.
Defines minimum stock levels and order processing timelines.
• Establishes return and damage policies.
• Amazon India follows a Just-in-Time (JIT) inventory model for sellers using Fulfillment by Amazon (FBA).
• Amul ensures strict cold chain logistics for dairy products to prevent spoilage.

Conflict Resolution Policy

Defines procedures for handling disputes between channel members.
Prevents price wars, territory conflicts, and unfair competition.
• Includes arbitration or mediation mechanisms.
• Nestlé India sets clear pricing policies to avoid disputes between traditional retail and modern trade channels
(supermarkets).
• Hero MotoCorp mediates conflicts between dealers regarding service areas and promotional activities.
Power Bases in Managing Channel
Partners

Power in channel management refers to a company’s ability to influence the

behavior and decisions of its channel partners (wholesalers, retailers, distributors).
Effective use of power ensures smooth collaboration, minimizes conflicts, and
strengthens relationships within the distribution network.
French & Raven (1959) identified five primary power bases, which businesses use to
manage their channel partners. Later, information power was added as the sixth
power base.
 Coercive Power Reward Power Legitimate Power
(Power of (Power of Incentives) (Power of Authority)
Punishment) The ability to offer benefits or Power derived from a formal
The ability to penalize or punish incentives like higher margins, agreement or contract between
channel partners for non- better credit terms, exclusive the company and its channel
compliance. This can include deals, or bonuses for meeting partners. This includes
reducing discounts, terminating sales targets. franchise agreements,
contracts, or restricting product Samsung & Oppo India offer distribution contracts, or
supply. extra commission or dealership licenses.
Apple India penalizes retailers promotional funds to retailers Maruti Suzuki controls
who violate pricing guidelines who achieve high sales. dealerships through formal
by restricting future stock. • Reliance Retail provides contracts defining terms of
better trade discounts to operation.
• FMCG brands (HUL, Nestlé)
may cut supplies if distributors suppliers offering bulk • McDonald's India enforces
fail to meet sales targets. quantities. strict rules on franchisees to
maintain brand standards.
Expert Power (Power Referent Power Information Power
of Knowledge & (Power of Brand & (Power of Market
Skills) Reputation) Data & Insights)
Power that comes from having Power based on the strong Power derived from having
superior knowledge, reputation and brand value of valuable market intelligence,
technology, or market expertise the company, making partners consumer insights, or sales
that channel partners rely on. want to associate with it. trends that channel partners
Pharmaceutical companies Luxury brands (Rolex, Louis depend on.
(Pfizer, Sun Pharma) guide Vuitton) attract exclusive retail Amazon India shares
distributors on new drug partners due to their brand customer purchasing data with
launches and regulatory prestige. sellers to optimize inventory.
updates. • Tata Motors & Mahindra • Coca-Cola provides
• Nike India provides exclusive have strong dealer networks distributors with sales
training to retail partners on because of their trusted brand analytics to improve demand
customer engagement and name. forecasting.
product features.
Conflict Management
Channel conflict occurs when
there is a disagreement
between different members of
the distribution channel
(manufacturers, wholesalers,
retailers, or distributors). If not
managed properly, conflicts
can disrupt business
operations, reduce sales, and
damage relationships.
Types of Channel Conflict
Vertical Conflict Horizontal Conflict Multi-Channel Conflict
(Different Levels in the (Same Level in the (Between Online &
Same Channel) Channel) Offline Channels)
Occurs between Occurs between retailers, Occurs when companies
manufacturers and distributors, or wholesalers sell through multiple
wholesalers, or wholesalers selling the same product in channels (physical stores,
and retailers. different regions. online platforms, direct-to-
Nike India vs. Retailers Samsung Mobile consumer) and create price
– Nike launched its own e- Dealers – One retailer wars or customer
commerce site, reducing selling at a lower price preference shifts.
retailer sales. than others due to special Adidas India – Retailers
• Amazon vs. FMCG discounts. protested when Adidas
Brands – FMCG • Maruti Suzuki Dealers started offering lower
companies like HUL and – Dealers in different prices on its own website.
Nestlé have clashed with cities offering extra • Reliance Digital vs.
Amazon over deep benefits to lure JioMart – JioMart’s lower
discounts affecting customers from other pricing affected sales at
traditional retail margins. regions. Reliance Digital physical
stores.
Strategies for Managing Channel
Conflict
Hold regular meetings and discussions with channel partners.
Communication & Use feedback systems to address partner concerns.
Collaboration • Example: Nestlé India conducts training and discussions with distributors to ensure
alignment.
Define pricing, territory, and promotional rules to avoid conflicts.
Clear Channel Policies Ensure fair trade margins for all partners.
• Example: Apple India controls its pricing strategy to maintain uniformity across
retailers.
Assign specific regions or customer segments to different channel partners to avoid
Exclusive Distribution direct competition.
Agreements • Example: Mercedes-Benz India assigns exclusive dealership zones to prevent intra-
brand competition.
Standardize pricing across different channels to maintain fairness.
Price & Discount Control Restrict deep discounting on online platforms to protect offline retailers.
• Example: Samsung & LG India enforce Minimum Advertised Price (MAP) policies to
control price undercutting.
Offer equal benefits to both online and offline channels to avoid multi-channel
Dual Compensation conflicts.
Programs • Example: Nike India gives exclusive in-store collections while also selling online at
regular prices.
Establish a grievance redressal system to resolve disputes quickly.
Conflict Resolution Use third-party mediation for major disputes.
Mechanisms • Example: FMCG companies like ITC & HUL have dedicated teams to handle
distributor disputes.
End of
Module 3
Dr. Saurabh Mishra
saurabh.mishra26384@paruluniversit
y.ac.in
+91 98930 12681, 79999 46124