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Channel Market Vs Buyer’s Market in Indian Context

Channel Market Vs Buyer’s Market in Indian Context
Channel Market Vs Buyer’s Market in Indian Context

I was in Sofia, Europe for six months. It was an international scholarship. Truly speaking we had enough free time to spend as compare to our studies in India. Just to utilize the time me and Varun (my friend) decided to do a research study on ‘Retail Layouts and its effect on consumer behavior’. I am not going to write much about the research part here, but during the project we understood the difference of channel market and buyer market.
So, Now I am going to write my thoughts on what is better in Indian context, Channel market or Buyer market. When I am talking about channel market here; it means all the intermediaries between manufacturer and buyer.
Before saying much about it let me point out some facts of India, which I think will help in deciding which market is better for Indian context.
1. Internet penetration – Internet penetration in India is relatively less if we compare it with European countries.
2. Advertising influence: Still Indian advertising industry is not aggressive in terms of innovation and marketing promotional activities while comparing with Europe.
3. Brands availability: I guess Indian market offers more competition in terms of brands as lot many domestic players are present in Indian market. Indian domestic market is still highly fragmented.
4. Monopolistic market – Indian market is still not driven by monopoly of any particular big player. I am not talking about any particular product category here.
5. Indian Customers buying behavior – Indian customers are more price-sensitive.
I think Channel markets are better than Buyer market if we talk about Indian context. Reasons are as follows:
For buyer market to be powerful the products must have a strong command in market. Now let’s take few examples of the companies who still follow Buyer’s market. Amway, Pure-it (HUL), Eureka Forbes and Ion-Exchange are the few companies who are following the direct sales channel. Though Amway is using multi level marketing approach but it helps is reducing middleman. Eureka-Forbes still follows the direct sales by door-to-door marketing approach and they have a good market in this category. But the question comes, if the above given examples uses the Channel market, will they not be able to survive??
Before answering the above question let’s have a look at Channel Market in India. The distribution channel in India is largely influence the sales decisions. The channels like dealers, distributors, stockiest, and retailers makes the sales happen by using ‘Push’ and ‘Distribute’ strategy.
As we did some research in European retail, so let me talk about retail channel for a while. Retail outlets these days have better offerings than company’s offering. The ‘Variety and Assortment’ law makes retail more promising. Fantastico and Billa were the two major grocery retails in eastern European markets. The value and offerings by these retails makes customer more associated to departmental store rather than brand. The promotional campaign at stores makes customer aware of the different offerings by companies as well. All brands under one store gives customers choice to choose between the available brands.
I mean to say that retail channel increases the ease of buying and decision making. This implies that channel is a mean to reach the end customer. Since retails strategies influence the buying behavior tremendously; the retail stores bargaining power is increasing over consumers.
Previously Buyer’s market was supposed to be the best because margin of middleman reduces, but since the large retails brag a better deal by Bulk Buying so as the offerings to customer also becomes better.
In European markets the internet penetration is good and customers use it at the fullest for e-commerce. E-commerce makes the Buyer’s channel more effective, as customers can buy from the online store of the brand for example buying i-pod from apple website or buying customized shoes from Nike website. But when it comes to India lack of internet penetration makes this Buyer’s channel less effective. Even Indian customers holds the mentality of experiential buying i.e. having touch n feel (checking) the product before paying for it.
All of the above reasons make Channel market more effective in India rather than Buyer’s market. Your views in support of buyer’s market are most welcome.

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