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distribution catts, cafit vI

atad custontet

3t5

sAlke

INIRODUCflON
marketing cost'S:t}T:::t"::::
Selling and distribution coss, no doubt, broadly represent
a.-""a, secure orders and retain customeb'. Distribution costs cov-er
packed product is made available,l":^1y:"*
il"' *c""li:".

;;ilil;;i"i.

H;;;;;;il;Jd"

ffi il;t;h* ;;.i"',;;.-;;;;;Jt't'""a "'uir'"a emptv package


":illil]:ll i::::,
h are incurred in gettlng. ffnished products ftom{actory
il*:i..,io'' ;;;;il;;;;ht
arise from arswering
to customer

;il;;;;:'

following:

l.
2.

those involved with lilling orders. The oider-fillir,g-conts

e""it ",. r",rtu"pi"p?t

into the
orqce' These could be su6-divided

depreciation ot
Transportation such as fteight and insurance' operating expenses'
delivery vehicles, etc.
of warehouses' loss in
Warehousing and storage rent' insuranc and depreciation
warehouse, stock record - keeping costs, etc'

S.Administrativecostssuchascostofcartyingandbuyingofsupplies'administration
overheads apportioned to distribution costs'

Cosrs
costs arises due to the
The necessity for a proper classification and enalysis of distribution
following teasons
profitability
> To determine cost ofsales of diffelent jobs and productr' and the extent of
of each of them.

>
)
>

To help in fixation of optimum sales level'


activities' to determine the
To control costs of efforts in diferent areas of distrlbutktn
Jifftt""t conditioru in different markes and
profftability of vario* *le; ;;i;';J'
by different methods.
in the long-term'
To help in guiding marketing policy both in the ebort and

AEocATIoN oF DtsrRIBUTroN lqq!trg


is no easily measurable
Disnibudon costs are usually common to several functions an{ thgre
dtfff:+i t".ltt-1Xd:rt|;t"i:"i"1
and assignable outp.'t. Al"o,
'"1,:\
the

standa'rl"';i;;;;t"

"t" ;hi'h
be i&ntined with
:1ffi:ffiT:."iffi;:J*#':*;ffi;t* '*c
'o.'td
product, division, unit, etc.

costs to products and


Some important bases of allocation of selllng and distribution
customers are given in Table 22.1.

sales

s86

and distribution maiagenten

Allocati0n 0t56lling and Distribulion C08t8to Producls


Bases ol Allocation

Functional Cost Group


1.

Inventory investment charge such as


insurance and iaxes

Average inventory value

Storaoe of tinished goods handling

Floor space occupied

Inventory record-keeping

Number of invoices mad/requisitions/orders handled

Finished goods handling

Number of siandard units handled

5. Packing and shipping


6. Transportation
7. Sales prornotioa programmes
8. Sales solicitation
9. Order eotry - processing ol ordets and

Number of standard shipping units, time studies


Weight, number of standard shipping units
Dirct where possible, analysis of promotion
Time studies; analysis ol sales elforts
Numbers of invoices; number of otders

preparing invoices

O. Billing - time speni in processing orders and


prepaflng oroers

Number ol invoices; number ot orders

11. Credit extension

Not allocated to products

12. Accounts receivable record-keeping.

Not allocaled to prcducts.

- costs related to numbers


of handled customers, orders processed,
posting, invoices

Allocali0n ol SslllnC and Di$ldbullon C0sl8lo Guslomots

Ba3 ol Allocatlon

Functlonal Cosl Group

1.
2.
3.
4.

Inventory invgstment charges

Generally nol allocated to customets

Storage ol finished goods

Generally not allocated to customers

Inventoryrecord-keeping

Gene.ally not allocatd to customrs

Finished goods handling

Number of invoices: number of oders: standaro units


handled

5.
6.
7,
8.

Packing and shipping

Number of standard shipping units

Transpoftation

Pretarably direct weight handled

Sales promotion

Analysis ol promotion programmes

Sales solicitation

Time siudies; number ol sales calls; analysis ol sales

eflorts

9.

Ordr entry

Number of invoices; number ol orders

10.

Billing

Numbr ol invoices; number ol orders

11.

Credit extension

Average arnount outstanding; numbr ol orders

Aocounts receivable rcord-keeping.

Number ot posting; number ol invoice.

2.

Sou/ra. Crowningshied Gerald R and Gorman, Kenneti A. Cost Accounting: Principlss and Managarial
Applications (Boston: Houghton Mitllin Company, 1974), R i186.

distibution

cosrs, cortt

gl and custo?ner servlce

s87

AI,IALysTs oF DISTRIBI.JTION COSTS


Selling and distribution costs can be analysed in a variety of ways, depending upon the needs
and desires of management. If profit is to be maximised, sales efforts should be directed
towards the most profitable of products and customers through the most economic channels
of distribution. The analysis of distribution costs can be discussed on the following lines:

)
>
>
>
>
)
>

Product or products lines

lndividual customers or groups of customers


Channels of distribution
Salesmen

Ccographical arca or rerritories


Tcgms of sales

Order

sizes.

ELEnmNTs oF TorAL

Cosr

nq PHYsICAL DISTRBLITIoN SYSTEM

Tiansportation costs
Railway Cost
Railway costs can be classified into fixcd cost and operating cost. Fixed costs are large, sunk'

irreversible, risky, technology dependent, scale influencing, environment influencing and so


on. Operating costs include maintenance oftrack, upkeep ofrolling stock, repairs ofbuildings,
renovation of facilities, fueL and lubricant cost, salary and wages, administrative cost' ctc.
Fixed costs remain constanr upto a certain rangq of activity. lnitially, marginal cost might
decline resulting in the average cost per unit service declining. Costing in railways needs to
be computed with respect to passenger kilometer, tonne kilometer run and wagon load
kilometer. For better control, route-wise and round-trip wise costing would do well'

Freight Rate Structure in Road Transport


Freight rate refers to charges levied on the user for carrying and handling his cargo by the
carrier. Freight rate in road rransport is generally fixed on the basis of cost of service rules.
Freight rate should be based on the cost of service. There are two tlpes of transport costs
(i) Standing Cost (ii) Operating Cost.

>
i

Standing Costs includes the following costs:

o
o

C,ost of vehicles

Expcnditure on miscellaneous.

Capital cost for premises and buildings needed for garage, office, repair shops'
e tc.

I
:
I

sates and distrlbutiort nLro'agefie"c

lsss

>

following costs:
OPerating C,osts includes the
o RePairs and maintenance cost

o
o
o
o

Dcpreciation and renewal expenses


Taxes
Insurance

Licence fec, administrarive expenses'

service and tTryt::4r"ti:til.::":$.,:.:::.T:


The cost of service, the value.of
nature ot cornmoo
ooi;. fieight rate' Besides these' the
conditions in
i""ti" tt""tocltt industry' the competitiverate'
demand and ,"potv t""aiti"i-"
The'cost
fteight
the transport nat*w'
""tt "g;il;"';;"
operators'
plus' method is adopted by private

also influence the

Cost of AirwaYs
cost includes huge cost
cost and operating cost. capital
capital
includes
airways
of
cost
t"i.,att" tadar equip"'et'tt' meteorological
which is involved in airport t"*;;;;t'i"ii
of air traffic control tower' etc'
devices cost, the runway cost' cost
Ground expenses include
ground erq2enses and fl1ing expense-s'

Operating cost includes


fot offitt space' depreciation and maintenance
interest on investme"t l" grotttto fl-tiliri"t' '""t
insurance tax' etc'
traffi<: a"d advertising expenses'
of buildings, wages of ground o"t-nt'"t'

costing of

seaways

are two maior


Fixed cost and operating costs,
*"e.r,
cost includes motive power, *r"r, ""a

tcl*

costs' operating

n seaways
-'p"*i::advertisine
l
and promotion
costs,

costs'

vessels and port buildings'


-offi."
;i:t;''t;' ;;lt*"0
repairs and maintenance tttt"
-t:tt]T]'i1es
port land' etc'
equrpments' lighihouses' cost of

loadine and unloading

Inventory Costs
costs:
There are three types of inventory

1.(}de'tlgCosbltincludescostofstationery,Postage,telegram,etc.'inplacingan
order.

2.

Cost of Matoiak:
and taxes if anY'

It

and insurance during ransit


is the purchase price plus transport

taxes' theft and pilferage'


space cost' storage cost' insurance'
includes
It
Cost;
Corrying
3.
wastage and loss, etc'
these
ordering cost and carrying cost' As
both
Inventory control aims at reducing
-the
the inventory
of both these'costs is the crux of
move in opposite ditttti"*' "t;;;;;;i;total
is based
manasement
;;h"t"ue of inventory
gto^o^ii nTJ:
manasement

exertl"'

on this minimisation etlect'

;;;;;

dLstributiort catts, conttol and customet senice

38e

Warehouse Costs
the
The costs ol maintaining a warehouse building are largely fixed and independent of
land,
include
amount of stock it holds or rhe amount of handling required. These fixed costs
are very
building cost, administrative cost, material handling' insurance and taxes' There
fcw variable costs at warehouses

Material Costs
of material
The cost of material handling includes the cost of protective packaging' the costs
is that of
cost
important
most
The
handling'
in
handling equipment and of loods damaged
inventory'
the
labour associated with packing, loading and unloading

Packaging Costs
On
Packaging cost is in{luenced by mode of transport and material handling equipments'
characteristics
the
determines
th" otl".L.d, the selecrion of a particular rnode of transport
of packaging.

Customer Se,rvice Costs


producer or a supplier cannot always ensure the availability of goods whenever they are
cases' this
demanded by th..,litomer. It may increase the inventory carrying costs; in some
upto
cost may eue., be p.ohibitive. The producer or the marketer -has to set certain limits
inventory
the
against
.\n
sales
of
lost
cost
off
the
trade
hich he witl satisfo customer dernand and
carryrng costs.

Cor.rrNOr- SYSTNU FOR EFFICIEI{CY


A
lrgistics system should function efficiently' Efliciency is the ratio of output to input'
logistics system requires the following efficiencies:

)
)
)
)
)
)

Operating efticiencY
Financial efiiciencY
Sewice level efficiencY

Marketing efficiencY
Personnel effi.ciencY

OrganisationalefficiencY.

rate
For example, operating efiiciency can be measured in terms of fuel consumption
is
known
efficiency
per tonne kilometer, maintenance cost per tonne kilometer, etc' Financial
ilo*gh op"r",ing profft to gross eamings, operating profit to capital employed etc' Service
l"*l iffi.i..r.y i, -"as.,red th.o.tgh n.,-b"' oidoot-to-door services rendercd to total number
etc' Marketing
of services made, number of onltime setvices to total number of services'

sso

talss aad dktribu6ot m4n4gern4nt

efffciency depends on market share, rate of growth in gross earnings, etc. Organisational
efticiency is seen in the adherence to schedule, wider communiry coverage, flexibility, etc.
L.ogistics system should have a snategic orientation, i.e,, linkages with inner and outer
environments. A strategic logistics system must ffrst of all be planned, organised, executed
and connolled. The managerial functions need to be conducted with regard to raw materials,
work in-process inventory as well as {inal goo&. For all this, we require, human resources
committed to the system,

Consumer

In

Utility

Place Utility

Enoenl
Movernent
Competiliv

Inwntory, Ordr

EdSe

processing, \ty'are,
housing,
Transporting,
Packaging,
Communication,

I tnooucrrvrrr Asrncrs AND Locrsrrcs

Consumr
Sd6faclion

MANAGauEr.rr

The following ratios are suggested by the Asian Productivity Organisation (APO) for physical
and financial productivity measures
1

Risht Detiverv

ooo

Route Potential Ratio =

Accidents Ratio

No' of deliveries on time/year


Tota.l no. of deli veries/vear

Tonne kilometre run/route


Tonne kilometre capacity/rcute

No' of accidents/year

= No. of tripc operated/year


No. of consifF[nents booked./year
No. of consignmmts plarned,/year

verude

Vehicle kilometre actuallv run/dav


UnlsauonKano=
'
'

brea(aqes KanO =

'

Vehicle kilometre planned/day

No. of consipgrments damated in transit

Total no. of consignments

distibutiotu

7.

costs,

3911

control arui customer sert)ice

Business Efficiency

(Jperatf nq h\Press

Tonne kilometre achieved/year

Ratio: 'Ionne
kilometre planned/day

,.
f(dtfo

Totdl oPerating e\Penses


fotal eamings

---Net Profit Rdtio

9.

10.

I'rompl

'

Net orofit
Total eamings

-,,I
No. of prompt
neSS l(atlo --=-=---

deliveries/Year

Total no. of deliveries/year

DIsrRBr,nIoN AND Cusronmn SlrrsracrroN


ExceLlcnt quality of service will iead to customer satis{action, which creates customer loyalry.
Satisfied customers help in retaining market share. The markcter needs to undcrstand what
the customer needs from a service. Whether the buyer is satisfied aftcr purchase depends on

the offer's performance in relation to the buyer's expectation. In general, satisfaction is a


function of pcrceived performance and cxpectations. Nowadays companies are aiming for
hish satisfaction because customers who are just satisfied still find it easy to switch whcn a
better offer comes along.

ln custoncr services, therc are threc elements, which are important for the marketcr,
in decision makius.

PRE-TRANSACTIONAL
ELEMENTS

Statementof policy

Organisation

TRANSACTIONAL
ELEMENTS
Working Relations
StatlTraining in handling

POST-

TRANSACTIONAL
ELEMENTS
lnstallation, wananty
Repairs,

customers

System Development

Technical services

Spare parts, customer


claims and complaints

Onc important dimension of customer service is service after salcs. [t is nn obligation


on the part of a manufacturcr to rendcr scrvicc assistance to his customers by attending to
breakdowns or failures in the case of consumer durable itcms, or replacing the items free of
charges cluring the warranty period, and repairs on charge once the product is out of warranty.

Hopkins and Bailey have very precisely described thc functions involvcd in service aftcr
sales. These functions are:

>
>

Information service to customcr

Warrantyadministratjon

see l

selectior. of cb@tflals

lcruNNnr-

Marketing, Intermediaries

rhepeopreandorganisations^tilt*rul".*-;ilff;li::ffi'i3*"'S;:';
as market
.rlr,o*"4

are known

i1".Tffi,-r

between
as an intermediary
just about anybody acting
to
refers
Middlemen

#i!i::i$;;1;ilx';#ili#ft :$f;:l
'$i:-T,!;#,il'-'1ff
g",,.onv
'#ll{Il':#1tr,Ji;#,#""*:l,T#
-:I\
t;::,nit:l'H-i"'i tlI.:fl:dff
liil"'"' iTt"nt or broker r,'
business'

Xglni.-

.frl""ii'"-t"ff"t'

more comfir(
This situation is becoming

in real estate

'wFb*e,y\***;:'filt"i;Hi"'1'!;lTtn*:ti*illl*..'iTl'..i
and organisational cust
,ft" ."t?tftt or other intermediaries'
;#?'Hf;n*T :ri; ::::'i:::::*::'i'-TJil:
:ff:*,lilT iT:.[*"

'

'
>

>

producer'

,-

^-^li-;

r..,

These
variew of intermediaries.

i*ffix ff ??l':'#'il::*:iT""J"ffl' :;g:,.::"' :;:il*,tt*m*


l:**:n'x]*'*i'f;l'nT$i::,Ti''n$T'"#,il:::il:

ffi

Distributors are more


o.cu'io""llY act as dishibutors'
term that can applv
ilJ
Dearq;Another general
u,d,'ot to
same
the
Basicauy,
-'-those rntcrrrrturo"-"
distinguish dealers as
other intermediarie
d - --^ :6ra,*F liaries that buy the basic Product'fi'omit
ir'" p,od,'.,' modi$'
v ah*-ddd.1
oroducers and ado v
'.nd then resell it to ffnal customers'

t:-':'rl*;t

ffifffl'".]J:i:',5:

KJ,'L:.il:#1":il:::"i, :;ilTili;;:;oi*..

T:.H:_flsl; t"l.ll,lli,iili,t il'""".";";i

lss6

sales and

distribution mandgernent

Merchants: They are intermediaries that assume ownership of the goods that they sell
to customers or othcr intermediaries. Merchants usually take physical possession of the
goods that thcy sell.

Fa.ilitating (C&F Agents) Agents: They are people and organisations that assist the
flow of products and information to marketing channels and include banking and
insurance functions. The following are thc serviccs where assistance is required:

.
r
o

Transportation and Storage (C&F Agent)


Covering the risk (lnsurance)
Financial services,

Because of the wide varicty of channel arrangements that exist, it is diflicult to generalise
the structure of channels across all industries. However, distribution channels are usuallv of
rwo rypes

)
>

Direct Marketing Channel (or Zero Level)


Indirect Marketing Channel.

Direct Marketing Channel (or 7*ro

l*vel)

This type ofchannel has no intermediaries. ln this distribution system, the goods go fiom the
producer directly to the consumer, e.g., EurellFot::l
0 Level

Producer

Consumer

Indirect Marketing Channel


This rnay further be classilied into the following categories

l.

one-leuel chanrch In this type of channel there is only one intermediarv between
producer and consumer. This intermediary may be a retailer or a distributor.

Level

producer ------------->
R"tlit"r--------------+ con"u,nur-

If the intermediary is a distributor, this type of channel is used for speciality products like
washing machines, refrigerators or industrial products.
Producer

2.

-__+,

jstribUtor _--_____> Consumer

Tuo-leuel chooneb rhis type of channel has two intermediaries, namely, wholesaler/
distributor and retailer.

selection of

cbannels
2 Levet

Producer

--'------+

-----'-+
Wholesaler/Distributor

Retailer

Consumer

-rl':e-re:,ercy:l*:'ili**::\n::'rTi:'.'fr"$il[';l1]*i,1""'0"''
and retarter'
wholesaler

3 Level
Producer '--'--'--------'

4'

Distriburor----->

Wholesaler

-------+

Retailer

----)

Consumer

yff i:l* ;:';':l'ffi :1 *nfi::'ffi u ir: t:: ;:T;i';": Till:


t;:':3;:t;*ll":i,iL'r^iil;;;'d"'ubr"productsarso'

u
F our'te

etc

4 Level
Producer

---+ Agent'--'

ln addition

Oistributor

Wholesaler

--)

t'.r the above mentioned

channels'':-:

--+

Retailer

products, viz'

(ii) Consumer dr

(i) Consumer

*t t'i*:'J":',::::::ffi
dirrerent

"tvpes

1'::

Consumer

tt"Jil::::il::'::T:l':iilI;

**,oi.Ti"'."":.:i:.111'"1il1!ii,+iT{::iill..lr",'.ffi
uPon the ottt"'";;r;'es
also depends

---)

1fi fi

j:l;:ml

.*.'T:,::,:iu::ffilruHml

services.Therefore,wecanSaythatfordifferentproducts'thet

Crmnqm SrnlrncY OEcrsrcN


is pran nnarisa'lion'
;".',t"il'lm:*:'"
il'-n"ar step
H^;i::mr:"J"""?fi JI.Ti "::rli",; :ilTfililT::i

lll* f;n:n::':fii:rt::'::"";iffii""
Channel Selection Criteria

el:,i{';

r:T:[1T:Tail::iT]::::"1;;;:r5:t',*:ffi
i,,,-.J.aru,i".,it"","',""1;1;{ffi

:*i;':X*'fi

Jl[::

:1"'e.lj'};"'"1?iltt

:r::ti'S'^ji:il:1::":::

:ilX::'L:l;Iff .T'::""'11""'
Market Factors

l.

r --:^ 'L'A'ct sien in selecting marketing channels'

+[ru:*:xi:::Tii:?:i:'i:i;jff'fj;:|f.llil""fi
comPeutors:
to the tYPes of

'];il;"c'"gr'om"""*""

l4oo

sales

otd dtstrtbuttot rna,4gcrt ent

Customer prderctrcer The channel which is most prefened by customers.

Orgcnisotional customers: Organisational customers fiequently have buying habits that


are different from those of other consumers.
Geograplryt Customer location is another important factor determining the type of
channel to be used.

Competitors
Often a good channel choice is one that has been overlooked or avoided by competitors. In
some cases, the marketer may try to duplicate his competitors' channel in order to have his
products replace that of a competitors'.

Nature and Availability of Interrnediaries


A question that arises very often in the channel decision

is "Are there enough of the right


kinds of intermediaries to build the desired channell" We need to frnd intermediaries that
can handle the products capably and provide adequate service to ffnal customers. For new
entrants, it is better to ffnd the best available intermediaries in the market.

Product Factors
Even products that end up at the same retail location may need different intermediaries
earlier in the channel.

Lite Cycle: A product category's stage in the life cycle can be an irnportant factor in
selecting a channel and channels may have to be adjusted over time. Customers require
less support once the product has established itself.

>

Complexity; Some products are so complicated and require so much support that
producers need to stay closely involved. This indicates either a direct sales force or a
limited number of highly qualiffed intermediaries. Scientiffc equipments, let aircrafts,
nuclear reactors, pharmaceuticals and computers are products whose complexity affects
the way in which they are marketed.

>

Valwr The value of the product also affects its distribution channel choices. Items
with low cost and high volume are usually distributed through large, well-established
distribution networks such as grocery wholesalers.

Size anil Weigltt A product with significant size and weight can face restricted
distribution channel options, particularly if it is also of low value.

>

Conslmer Perceptions: The perceptions customers have of products and producers


also play a role in channel decision making.

>

Othcr ftoduct Fdctors, Depending on the product in question, other factors may enter
into the decision as well. Some ofthese include whether a product is fiagile or perishable
and whether or not it requires signiffcant customer satishction.

sales

and dislribut ion manaSemelt

l+ro
Rcadily
RcgularlY

Equitably, and

ln

a fresh form.

25.1

Possession

Ti

Marketing
Flows in a

' Possessron -'


)
- Title
- Promotion )
Negotiation )
- Finandng

)
1

)
)
Finanong 't
Risk Bearing )
. Ordering ')
Payment
Information ,
Promotion

Channel
System

Negotiation

ll
le
l

Risk Bearins -)
Ordering
Payment

lnformation

Possesslon -7

Tifle
Promotion

)
)

Negotiation
Financlng

e Risk Eearing )
e Ordering
Payment
lnformalon -,

in lhe Ameican Economy


TS Grether and R Cox' "Ma"(eling
Source: Adapted from RS Valie'
(NY-The Ronald Press)

lPrrrnnNs on DrsrnrsurtoN
selectcd th".tvp" of 'hut".'"1,:T::::::.:n:,*T::::ili:il'.n*:t:;
After a produccr has serectcd
*hich specifies the numbcr of
"irlt'i.l
the next stcP is to dctermine tht
products'
;';i;;i;;;;'-"diaries that will carrv the
lcvels of intcnsity may
objectives and custo:ncrs' the
Depending on a firm's- product'.
as a product
intcnsity is.frcquentlv modified
distribution
Also'
case
to
casc
from
iliffer
bu,i. l"u.i, of intensitv to choosc
Drosresses through its rir" .y.r.]iiiir.l',""*
i-,i, ln,"nriu", Selective and Exclusivc'
products availablc in as
stratcgy that secks to makc
> Interuiue Distribution: A channer
possible'
many appropriatc places as
of products to a few
strategy that Iimits availability
)- Selectiue Disrribution: A channel
,"l".t"d otttl"tt in a given markct arca'

lilli,"iil;;;,;;r'
;;;;';i;";

;;"li;

role and furtction of cbannels of

distibution

@ANDCoMPANY's

COMPARISON

DISTRIBUTION SYSTEM
DI

STRI B U T ION

DIRECT DISTRIBUTION

TH ROIJ G H SE LLI N G

D/SIRiBUTORS
CompanY aPPoints wholesalers

SD appoint wholesellers
(SD
Good WS doesn't want to work with SD
alwavs sees his Interest while passing
Incentives schemes' etc somelime
"oarn'aa'on",
appoints his relative for his sake )

-o

atways appoints tris regular/traditional WS

Sales force aPpointed bY SD


does not
SM quality is not up to the mark (Good SM
wani'to wort< witn SO Oanner/low remuneration)

atter
SM reports to SD (information to Co- comes
filtration and fabrication)
5D does not provide SM, in proper quantity and
SD

i" |.""pon"iblu

fo|.

and collection from WS

WS i"

Co

"l*ay"

*point,

intu,""ted in working with direct Co

p|.op",

right WS as per the product

"nd

Sales force appointed bY

co

uetter and can be improved by


proper trarning anO guidanc kom time lo time

it ut""yt
st,t-ou"tity

o co. (""curate and proper information)


51,16-ort"
Co.

"oooint"

SM in t"rms of quality and quantity

co o ,"r-pon.iut" to, .ales and collection from wS

"ales

SD does not take proper interest in all Co's


promotional activities
MIS is imProper and time consuming
(in a
SD regorts to Co maximum on weekly basis
Loyalty of SM is always with SD
Co controls only a single person to SD
value
SD works on a fixed percentage on sales
Co reaches upto SD level

co cannot command the trade very smoothly

Co does this through its SM dkectly


N4lS is Proper and very

fast

Reporting from SM is on day-to-day basis


Loyalty of SM is always with Co

co controls a no. of SM and WS

ti-tty *s

nign to

Io reaches

upto ground level (retailer) directly

Co

""n

"o.."nd

co

until the volumes are there

th" trade in its own way directly

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