Channels of Distribution

Channel design and channel Conflict:

Channel design and channel Conflict Presented by:- Manju verma M.B.A. (2 nd semester) vermamanju84@yahoo.com Presentation on

Contents :-:

Contents :- Meaning of Channel Distribution. Channel Functions Channels of distribution for consumer products and industrial products. Channel designing process. Factors influencing the channel selection. Intensity of market coverage. Channel Management.

Meaning:-:

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 Functions:

Channel Functions These functions should be assigned to the channel members who can add most value for the cost Contact Financing Information Risk Taking Promotion Matching Negotiation Physical Distribution

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Channels of distribution

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Zero level channel Manufacturer Customer ONE - LEVEL CHANNEL Manufacturer Retailer Customer

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Manufacturer Retailer Customer Wholesaler T W O L E V E L C H A N N E L Manufacturer Retailer Customer Wholesaler Agent T H R E E L E V E L C H A N N E L

Channels of distribution for consumer and industrial products:

Channels of distribution for consumer and industrial products

Channel Behavior:

Channel Behavior

Factors influencing the channel selection:

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 Resources Ability of Management Services provided by the middleman Availability of desired middleman Attitude of middleman towards manufacturer’s Policy

Intensity of Market coverage:

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

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The Relationship between types of product, level of shopping effort, and intensity of distribution Intensity of Distribution Intensive Distribution Selective Distribution Exclusive Distribution Type of product Specialty Goods Shopping Goods Convenience Goods Level of shopping effort Little or no Effort Some Effort Much Effort

Vertical Marketing System:

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. Contractual Wholesaler sponsored Retailer sponsored Manufacturer sponsored Service company sponsored Stock owned by wholesaler. Stock owned by retailers. Franchise system. Marketers of services. Retail chain like Naaz in Delhi, Soft drink bottles Corporate Ownership Singer (Sewing Machines) Good Year (Tyers) Oil Companies

Horizontal Marketing System:

Horizontal Marketing System Horizontal Conflict occurs among firms at the same level of the channel (e.g., retailer to retailer).

Channel Management:

Channel Management Recruiting Training Motivating Servicing Compensating Evaluating and Replacing Channel Members Decision areas for channel Management

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Thank you