Channels of DistributionChannels of Distribution

And there role in marketing

Marketing channels and distribution Marketing channels and distribution

Marketing channels are set of interdependent organizations involved in the process of making the product or service available for use or consumption.

They are the set of pathways a product or service follow after production.

Importance of channelsImportance of channels

Decisions about the marketing channels are among the most critical management decisions.

They just not serve markets, they make market.

Channels chosen affects all other marketing decisions.

Firm’s sale depends upon training and motivation of dealers.

Classification of channels/channel Classification of channels/channel levelslevels

Channels of distribution

0-level 1-level 2-level 3-level

0-level 1-level 2-level 3-level

manufacture

consumer

Manufacturer manufacturer manufacturer

retailer

consumer

wholesaler

retailer

consumer

wholesaler

jobber

retailer

consumer

intermediariesintermediaries

Intermediaries are the middlemen and signify those individuals in the channels that either take title to take goods and sell at profit.

They are directly involved in process of flow of goods from manufacturer to consumer.

Types of intermediariesTypes of intermediaries

1. Merchant middlemeni. Wholesalers

ii. Retailers2. Agents

i. Brokersii. Commission agents

iii. Selling agentsiv. Factors

v. Clearing agentsvi. auctioneer

wholesalerswholesalers

Functions of wholesalers:1) Assembling and buying.

2) Warehousing.

3) Transporting.

4) Financing.

5) Risk bearing.

6) Grading, packing and packaging.

7) Dispersing and selling.

8) Providing market information.

Services of wholesalersServices of wholesalers

1.Service to manufacturers- Economies of scale. Saving in time and trouble. Better use of capital. Price stabilization.2. Services to retailers-i. Saving in cost and time.ii. Economy in transport an packing.iii. Better use of limited factors.iv. Expert knowledge.

Types of wholesalersTypes of wholesalers

Full functionConverterDrop shipper

retailersretailers

Retailing includes all activities directly related to the sale of goods and services to the ultimate consumer for personal or non-personal use.

functionsfunctions

1. Buying and assembling.

2. Warehousing.

3. Selling.

4. Grading and packing.

5. Financing.

6. Advertising.

Services of retailerServices of retailer

To manufacturer and wholesaler

1. Offer opportunity.2. A big relief.3. Provision of information.4. Reduce the risk of loss. To the consumers1. Largest choice.2. Relief from storage.3. Extra service.4. Supply of information.

AgentAgent middlemenmiddlemen

Agent middlemen are those channel components who help in the transfer of goods from the hands of ultimate users without acquiring the ownership of these goods.

They operate for a commission.

Types of middle agentsTypes of middle agents

1. Commission agents.

2. Brokers.

3. Factors.

4. Auctioneers.

5. Selling agents.

6. Clearing agents.

Factors governing the choice of Factors governing the choice of channel of distributionchannel of distribution

FACTORS

Products factors

Market factors

Institutionalfactors

Unit factors

Environmental factors

PRODUCT FACTORSPRODUCT FACTORS

1. Product nature.

2. Technical nature: simple or complex.

3. The length of product line.

4. The market position: market position of manufacturer.

The market forces-The market forces-

1. The existing market structure.

2. The nature of purchase deliberations.

3. Availability channel.

4. competitior's channels.

Institutional factorsInstitutional factors

1. The financial ability of channel members.

2. The promotional ability of channel members.

3. The post-sale service ability.

Unit factorsUnit factors

1. The company’s financial position.

2. The extent of market control desired.

3. The company reputation.

4. The company marketing policies.

Factors governing the choice of Factors governing the choice of intermediaryintermediary

1. Economic factors

2. The legal restrictions.

3. Fiscal policies.

4. The financial position.

5. The facilities available.

Thank youThank you

A presentation by-

Raveena kaushal

Bba 3rd sem

Soms bhaddal