Question

Flipkart, a Bengaluru based company, which started in the year 2007 as an online book store is now India’s largest e-retailer. It is popular in the books and electronics segment but it now sells products across categories including fashion, consumer durables, home decor and furniture. Flipkart is doing very good business and it acquired 100% of Myntra, but Myntra will operate as an independent entity. Mobile Brand ‘Motorola’ is selling their new launches in India through Flipkart. The company aims at becoming leader in every segment. India’s e-commerce market has seen growth in the past few years as more people log on to file Internet to shop online. Goods can be bought on ‘cash on delivery’. Various banks like HDFC, Axis and ICICI tied up with the reputed e-sellers, so as to convert online purchases into convenient equated monthly installments. Amazon, the world’s largest e-retailer entered India and in few . months the company has aggressively gained market share by expanding its product range and introducing the one day delivery system. Soon after Flipkart also introduced one day delivery and the same day delivery in selected towns and cities. With reference to the above : 

(a) What is online shopping ? 

Name any three companies do online trading in India. 

(b) What are the reasons for the increase in online shopping in India ? 

(c) Identify the distribution channel adopted by Motorola in selling its new launches. 

Briefly explain few other distribution channels adopted by marketers.

Answer 1

(a) Online shopping is very convenient and hasslefree and customers can order goods or products 24 hours a day. They can access information on the internet about competing brands. The sellers or producers sells products across all over the world and sells across various categories including fashion, consumer durables, home decor, furniture etc. It is the place where seller can quickly add products and change prices and descriptions also. The companies who do online trading in India are Flipkart, Amazon, Myntra etc. 

(b) The various reasons for the increase in online shopping in India are : 

1. Consumers can easily compare prices and review online before making a purchase. 

2. Customers increasingly prefer the flexibility of online shopping as it offers the convenience to shop when they want and from wherever they happen to be. 

3. Online shopping offers a much easier way for customers to search for exactly what they want at the click of button. 

4. An online store allows customers the option to shop from further a field as they are not restricted by geographical location. 

5. Customers can buy things at cheaper prices. 

(c) Direct channels of distribution adopted by Motorola in selling its new launches. 

There are various distribution channels adopted by marketers : 

1. Telemarketing : The products are heavily advertised on T.V. The consumers who watch advertisements and feel interested can place their orders. 

2. One Level Channel : This channel involves the use of one middleman who in turn sells them to the ultimate customers. This channel is often used for the distribution of consumer durables and products of high value. 

3. Two Level Channel : This channel is suitable where producer has limited finance and narrow product line or where the wholesalers are specialised. Under this, wholesaler and retailer act as a link between the manufacturer and the customers. 

4. Three Level Channel : This is the longest channel of distribution. The producers hands over his entire output to the selling agent who distributes it among a few wholesalers. This level is usually used when a manufacturer deals in limited products and wants to cover a wide market.