Channels of distribution
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Transcript of Channels of distribution
Channel design and channel Conflict
Presented by:-Manju verma
M.B.A. (2nd semester)[email protected]
Presentation on
Contents :-Meaning of Channel Distribution.Channel FunctionsChannels of distribution for consumer
products and industrial products.Channel designing process.Factors influencing the channel selection.Intensity of market coverage.Channel Management.
Meaning:- “Marketing channels are the combination of
agencies through which the seller, who is often, though not necessarily the manufacturer, markets his product to the ultimate User.”
John A. Howard
Channel FunctionsThese functions should be assigned to the
channel members who can add most value for the cost
Contact Financing
Information
Risk Taking
Promotion
Matching
Negotiation
PhysicalDistribution
CHANNELS OF
DISTRIBUTION
ZERO LEVEL CHANNEL
Manufacturer
Customer
ONE - LEVEL
CHANNEL
Manufacturer
Retailer Customer
Manufacturer
Retailer
Customer
Wholesaler
TWO
LEVEL
CHANNEL
Manufacturer
Retailer
Customer
Wholesaler
Agent
THREE
LEVEL
CHANNEL
Channels of distribution for consumer and industrial
products
Channel BehaviorIdentify target consumer
Determining consumer buying habits for the type of goods
Locate potential customer geographically
Pinpoint channel alternatives
E valuate channel alternatives
Select channel members
Factors influencing the channel selection
Product or Market characteristics factors
Company characteristic factors
Middleman consideration.
Environmental characteristics factors.
Number of customers
Cost of the product
Type of the product
Degree of channel control desired
Financial ResourcesAbility of Management
Services provided by the middleman
Availability of desired middlemanAttitude of middleman towards manufacturer’s Policy
Intensity of Market coverage
Intensive Selective Exclusive
Distribution through every
reasonable outlet in a
market
Distribution through
multiple, but not all,
reasonable outlet in the
market
Distribution through single
wholesaling middlemen in a market
The Relationship between types of product, level of shopping effort, and intensity of distribution
Intensity of
Distribution
Intensiv
e
Distributio
n
Selective
Distributio
n
Exclusiv
e
Distributi
o
n
Type
of
prod
uct
Specialty
Goods
Shopping Goods
Convenience
Goods
Level of shopping effort
Little or no Effort
Some Effort
MuchEffort
Vertical Marketing System"A marketing channels in which
manufacturing and the successive stages of distribution are operated as a unified system.”
Types of systems Control maintained by
Examples
Administered Economic Power Contract
Amul Dairy Products,P&G Products.
Contractual1. Wholesaler
sponsored2. Retailer sponsored3. Manufacturer
sponsored4. Service company
sponsored
1. Stock owned by wholesaler.
2. Stock owned by retailers.
3. Franchise system.4. Marketers of
services.
Retail chain like Naaz in Delhi,Soft drink bottles
Corporate Ownership Singer (Sewing Machines)Good Year (Tyers)Oil Companies
Horizontal Marketing SystemHorizontal Conflict occurs among firms at the
same level of the channel (e.g., retailer to retailer).
Channel ManagementRecruiting
Training
Motivating
Servicing
Compensating
Evaluating and Replacing Channel Members
•Decision areas for channel Management
Thank you