With the advancement in the information technology (use of computers, telephone, internet, etc.) methods of distribution of goods from producers to consumers have witnessed new developments. Today, consumers can conveniently buy products of their choice without leaving their home or office, any time during the day or night.
Certain channels of distribution eliminate the long and expensive chain of middlemen. Manufacturers are directly approaching consumers, either through their websites using Internet or through their agent (direct selling).
1. Direct Marketing
Under this method of distribution the manufacturers bypass the chain of middlemen and approach the consumers directly and sell them the goods and services, without the help of wholesalers and retailers. The manufacturers inform the prospective customers about their products and its uses through advertisements (in newspapers, television, radio) or catalogues, letters and brochures.
If the customer wants to buy the product, he or she may place an order to the manufacturers over the telephone or through a letter sent by post or e-mail. The product gets delivered to the customer through courier, post or by salespersons.
The benefit of direct marketing to the producer as well as consumer is in the form of doing away with the profit margin of middlemen. The manufacturer is able to supply goods to the consumer at a lower price, even after keeping a larger share of profit margin as compared to the situation of distribution through middlemen.
Also, the time consuming process of the product changing hands from the producer to the wholesaler, then to the retailer and finally to the consumers, is avoided. Transactions are faster when the producer is face-to-face with the consumer. Also, the producer gets direct feedback from the customers for improvement in the products.
Direct marketing may be classified into different types, based on the mode of communication used by the manufacturers to approach the customers. The manufacturers may use:
- Printed catalogues to inform the customers about the products called Catalogue Retailing
- Television advertisements called Televised Shopping
- Brochures, letters etc. sent by mail called Direct Mail Retailing
Products that can be conveniently and safely sent to the customers by post or courier and whose utility and description can be easily communicated through a catalogue, letter or television advertisement, are generally sold using the method of direct marketing. This includes books, magazines, physical exercise equipments, certain types of furniture, etc.
2. Internet Marketing
With the widespread use of computers and internet, today it is possible to buy and sell products over the internet, through websites maintained by producers. Products can be ordered instantly from anywhere in the world, 24-hours of the day, from the convenience of one’s home or a nearby cyber-cafe.
On the website, you can see the picture of the product, read about it and then order it, just with the click on the mouse of the computer. The payment for the product may be made using a credit card or by bank draft, etc.
Internet marketing makes it convenient to do shopping anytime, anywhere and it is easy to compare prices of the same product charged by different producers. The only thing we have to do is to open different websites on the Internet. There is no need to physically go from one shop to the other, or one market to the other.
You can buy all types of products from flowers to foods, clothes to computers, from producer located even at a far-off place in some other country or continent. The producer is able to cater to a larger number of customers sitting anywhere in the world, efficiently and speedily, using Internet marketing.
But a drawback of this means of distribution is that the consumer can only see the image of the product. He or she cannot see the actual product nor touch it, try it nor witness a live demonstration of its use. Full information about the product may not be available on the website.
Some producers or manufacturers approach the consumers over the telephone, to tell them about the product and its uses and ultimately persuade them to buy the product. This method is often used to sell credit cards, subscription to certain books and journals and also membership of certain clubs, etc.
A marketing representative of the concerned producer calls up prospective customers over the telephone and tells them about the product and its uses. While interacting the caller can gauge the interest level of the customer towards the product and influence his decision to buy the product. If the customer is willing to buy the product, it is delivered to him by courier or post.
Now a days, if a large number of customer are to be approached through telemarketing, computerised calling system is used instead of a person calling up customers. The desired telephone numbers are dialed mechanically and the computer plays a pre-recorded voice message for the consumer. The consumer is given the option, after hearing the message, to record his own message that may be a query about the product or the order to purchase the product.