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Channel Strategy

for building aBrandGuided by: Submitted by:

Prof. Anant Gwal Trupti Joshi

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PGDM "!1#1$

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Channel Strategy

The manner by which a product is sold or distributed can

have a profoud impact on the resulting equity & ultimatesales success of a brand.

It includes the design & management of intermediaries.

%holesellers Distributors &ro'ers (etailers

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Channels Design

A producer has to find out the most economical & effective form ofdistribution. These are categorised on the basis of number of

intermediaries between producer & the manufacturer.

1. Dire)t sellin* by manufa)turer &

Company owned stores

Personal selling

Mail order selling

Telephone selling

". +ndire)t sellin* throu*h middlemen.

Push & Pull

  Channel upport

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Direct Channel

 

In !irect Channel of distribution there can be computer sales or

mail order or face"to"face sales but there can#t be any sort of

distributor e$cept the original producer .

It is most common in the manufacturing & agriculture based

 products li%e heavy equipment industrial components etc.

A small farmer selling his production of vegetables in the mar%et is

also an e$ample of !irect Channel.

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 Advantages

!ue to the absence of any intermediaries to share the profits the direct

distribution channels generally have higher profit than the indirect

distribution channels.

A number of customers also appreciate the opportunity to provide profits to

 producers and artists directly.

A web"based selling has very low overhead and provides your product

 publicity at a global level. An '"Commerce portal is very convenient and is

available round the cloc% for its customers. !ue to these reasons we are

witnessing a huge surge in the '"Commerce space.

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Disadvantages

Inability to compete with the high geographical reach and huge business

volume of an indirect distribution channel which involves ma(orwholesellers and retailers.

Although players li%e Ama)on '"bay Alibaba and *lip%art are

increasingly e$panding and serving new mar%ets everyday +ast Mile

!elivery for remote areas still remain a big challenge for them to

encounter.The companies do provide *ree hipping for a lot of products and for

orders over minimum limit but still not all products are e$empted from

delivery charge which tends to fend away the customers.

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Direct Channels

elling through personal contacts to prospective customers by,

,#mailPhone )alls

,le)troni) means+n#person -isits

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Company Owned Stores

To gain control over the

selling process & buildstronger relationship with

customers

Manufacturers introduce

their own retail outlets or

through other means to

reach their customers.

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Indirect Channel

-ere comes selling through third party intermediaries as they have the required

contacts e$perience and scale of operations. -e might be a Consultant

riginal 'quipment Manufacturer/'Ms0 etc.

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Channel Design

Push Strate*y: Mar%eters can devote theirselling efforts to the channel members themselves

 providing direct incentives for them to stoc% & sell

 products to the end consumer.

Pull Strate*y: 1y devoting mar%eting efforts to

the end consumer a manufacturer is said to employ a

Pull trategy

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Push & Pull Strategy

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Channel Support

1. Physi)al

Distribution

. Mar'etin*

(esear)h

". Mat)hin*

demand with

supply

. Sharin* of

responsibility

/. Finan)in* $. (is' Sharin*

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 Advantages

'stablished sales force2ood segmentation'stablished mar%ets & programs for productsProven service e$periencehared mar%eting e$pensesPotentially e$pense sharing

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Disadvantages

 3o real loyaltyPotential conflicts amongst sales force 3o product loyaltyPotential e$pensive support for services

Margin issues between manufacturer & intermediaries

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Promotional Allowancesin Indirect Channel

Slottin* Fees

0ooperati-e ad-ertisin*

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Slotting ees

*ees charged by a 4etailer to stoc% a manufacturer#s

 products on its shelves.

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Cooperative Advertising

A manufacturer pays for

a portion of the

advertising that a

retailer runs to promote

the manufacturer#s

 product & itsavailability in the

retailer#s place of

 business.

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!eferences

http,55www.%ellogg.northwestern.edu5

mar'etin*"made"simple.com5

http,55firealarmmar%eting.com5

http,55www.)eepedia.com5

www.in-estopedia.com5

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