channels of distribution

Channel design and channel Conflict

Presented by:-Manju verma

M.B.A. (2nd semester)vermamanju84@yahoo.com

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