Role of community dominance of trade channels in India: exploratory study

Abstract

The process of liberalisation of the Indian economy and efforts to integrate it with the global economic set up has led to a lot of changes in the way business is being organised and conducted. One of the sectors of the economy which has seen important, if not actually dramatic change in the past decade has been the trading segment. Lot of companies including multinationals are trying to introduce novel practices in their distribution and retail systems in order to penetrate the Indian market. But so far their efforts in this direction have not been supported by an ability to understand the community dimension with respect to the channel members for whom their community affiliation is not just a question of identity, but also one that provide strong business support. Though channel members themselves are well aware of the existence of community dominance, this issue has mostly been neglected in academic research and has in no small way contributed to lack of understanding of the Indian market situation particularly among managers with a multinational background. In this study we present results of an exploratory field study carried out over nine industry segments. Apart from probing the issue of the existence of dominant community groups in the trade channels, we also explore the implications of the existence of these groups for the relationships that exist between the trade channels and other components of the value chain with whom they interact.