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CHANNEL: A Path or a way through which a product, service or an information flows to reach its ultimate final consumers.


MARKETING CHANNEL: Set of interdependent organizations involved in the process of making a product or a service available for use or consumption.

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IMPORTANCE: Represent opportunity cost. Convert potential buyers into profitable orders. Not just to serve markets but to make markets. To decide for push or pull strategies.

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CHANNEL DEVELOPMENT. Branching of various channels into a single market or use different channels in different market.

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HYBRID CHANNELS: Various channels for various products or various channels for a specific product.

Categories of buyers:

Categories of buyers Habitual buyers. High value deal seekers. Variety loving shoppers. High involvement shoppers.

Value Networks::

Value Networks: A system of partnerships and alliances that a firm creates to source, augment and deliver its offerings. It includes firm suppliers and its supplier’s supplier and its immediate customers and their end customers.

Role of Marketing Channels::

Role of Marketing Channels: Intermediaries bring in pooled financial resources. Create assortment for the customers. Cost effect due to specialization.

Physical flow.:

Physical flow. Suppliers transporters manufacturers Transporters dealers transporters customers

Title Flow ::

Title Flow : Suppliers Manufacturers Dealers Customers

Payment Flow ::

Payment Flow : Suppliers Banks Manufacturer Banks Dealers Banks Customers

Information Flow ::

Information Flow : Suppliers Transporters(T/W/B) Manufacturers T/W/B Dealers T/B Customers.

Promotion Flow ::

Promotion Flow : Suppliers Adv agency Manufacturer Adv agency Dealers Customers

Channel Functions and Flows::

Channel Functions and Flows: Gather info about the potential and current customers, competitors and other forces on marketing environment. Place orders with manufacturer. Provide for successful storage and physical movement of goods.

Consumer Marktg Channels::

Consumer Marktg Channels : 0 level 1 level M’ftrer M’ftrer Retailer Consumer Consumer

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2 level 3 level M’ftrer M’ftrer Wholesaler Wholesaler Jobber Retailer Retailer Consumer Consumer

Industrial Marktg Channels::

Industrial Marktg Channels : 0 level 1 level M’ftrer M’ftrer Industrial Distrbtrs Indstrl Consumer Indstrl Consumer

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2 level 3 level M’ftrer M’ftrer M’ftrer’s Rep M’ftrer’s Sales Branch Indstrl distrbtrs Indstrl distrbtrs Indstrl Consumer Indstrl Consumer


CHANNEL DESIGN DECISIONS. Lot size. Waiting & delivery time. Spatial convenience. Product variety. Service backup.

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Strategies available for channels of distribution Exclusive distribution. Selective distribution Intensive distribution

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Terms & responsibilities of channel members Price policies Condition of sale Territorial rights Specific services

Major alternatives:

Major alternatives Basis for alternative Economic criteria Control & adaptive criteria

Channel management Decisions::

Channel management Decisions: Selecting Channel members. Training channel members. Motivating channel members. Coercive power Reward power Legitimate power Expert power Referent power

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Evaluating channel members. Modifying channel arrangements.

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