channels of distribution

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Channel design and channel Conflict Presented by:- Manju verma M.B.A. (2 nd semester) [email protected] Presentation on

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Page 1: Channels of distribution

Channel design and channel Conflict

Presented by:-Manju verma

M.B.A. (2nd semester)[email protected]

Presentation on

Page 2: Channels of distribution

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.

Page 3: Channels of distribution

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

Page 4: Channels of distribution

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

Page 5: Channels of distribution

CHANNELS OF

DISTRIBUTION

Page 6: Channels of distribution

ZERO LEVEL CHANNEL

Manufacturer

Customer

ONE - LEVEL

CHANNEL

Manufacturer

Retailer Customer

Page 7: Channels of distribution

Manufacturer

Retailer

Customer

Wholesaler

TWO

LEVEL

CHANNEL

Manufacturer

Retailer

Customer

Wholesaler

Agent

THREE

LEVEL

CHANNEL

Page 8: Channels of distribution

Channels of distribution for consumer and industrial

products

Page 9: Channels of distribution

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

Page 10: Channels of distribution

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

Page 11: Channels of distribution

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

Page 12: Channels of distribution

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

Page 13: Channels of distribution

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

Page 14: Channels of distribution

Horizontal Marketing SystemHorizontal Conflict occurs among firms at the

same level of the channel (e.g., retailer to retailer).

Page 15: Channels of distribution

Channel ManagementRecruiting

Training

Motivating

Servicing

Compensating

Evaluating and Replacing Channel Members

•Decision areas for channel Management

Page 16: Channels of distribution

Thank you