Flows and power in the distribution channels for fuel ethanol: a qualitative study in São Paulo state

Abstract

Although the expansion of sugarcane ethanol in the domestic market has been extensively discussed, little attention has been paid to understanding how this product is distributed. The objective of this paper is to analyze the functions, flows, and power of sugarcane ethanol distribution channels in terms of meeting the domestic demand for this fuel. After conducting a review of the literature on distribution channels and power bases applied to the study of distribution channels, field research of a qualitative nature was conducted, using the multi-case study method to collect and analyze data in 14 companies (ethanol production plants, marketing groups, distributors and service stations) in the state of São Paulo. The results indicate that the ethanol production plants are responsible for the production flow and storage of ethanol; the distributors bear greater responsibility for storage flows, orders and payment, financing, promotions and services; and the service stations look after the flow of services and promotion. One can conclude that the relations among these different channel members are based on the powers of legitimacy and reference. The existence of these two forms of power influences the establishment of marketing structures in the channel.