distribution channel decision
TRANSCRIPT
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Slides Developed by:
Micaela L. SaguidMBA-1
Distribution Channel
Decision
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Channel Design Decision
It concerned with developing a channel
structure that links the firms marketing
strategy with the needs of its target market.
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Channel Management
It involves the development of policies
and procedures to gain and maintain the
cooperation of and often to form
mutually beneficial long-termrelationship with the various
institutions within the channel.
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Objectives of Distribution Channels
Increase the availability of the good or
service to potential customers.
Satisfy customer requirements by
providing high levels of service. Ensure promotional effort.
Obtain timely and detailed market
information.
Increase cost- effectiveness.
Maintain flexibility.
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Institutions Found in Marketing
Channels Merchant Wholesalers
Agent Middleman
Retailers
Nonstore Retailing
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Merchant Wholesalers
It is independently owned establishments
which take title to the merchandise they
carry.
It may be classified into the following:
General line merchant
Specialty line merchant
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Agent Middleman
Agent middlemen do not take title to, or
physical possession of, the goods they
deal in.
Manufacturers agents or manufacturersreps
Sales agents
Brokers
E-Hubs
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Retailers
Sell goods and services directly
to final consumers for their
personal, nonbusiness use.
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Nonstore Retailing
Refers to those who sell outside of a store
They consist of the following:
1. At-home retailers
2. Telephone retailers
3. Vending machine retailers
4. Mail-order retailers
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Marketing Channels for
Consumer Goods and Services
Figure 1-1
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Marketing Channels for
Industrial Goods and Services
Figure 1-2
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Channel Design for Global Markets
Market entry strategies
Exporting is simple because it involves
the least commitment and risk.
Contractual entry modes are nonequityarrangements that involve the transfer of
technology and/or skills to an entity in a
foreign country.
Overseas direct investment can beimplemented in two waysthrough joint
ventures or sole ownership.
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Channel Design for Global Markets
Contractual entry modes:
Licensing
Franchising
Include contract manufacturing
Turnkey construction contract
Coproduction
Countertrade
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Channel Design for Global Markets
Channel alternatives
The use of domestic middlemen who
provide marketing services from a
domestic base.The use of foreign middlemen.
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Channel Management Decision
Vertical Marketing Systems
Corporate VMSs
Contractual VMSs
Administered VMSs
Relational VMSs
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Channel Management Decision
Sources of channel power
Economic power
Coercive power
Expert power Referent power
Legitimate power
The power of any firm within a
distribution channel is inverselyproportional to how dependent the otherchannel members are on that firm.
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Channel Management Decision
Channel control strategies
Pull Strategy
Push Strategy
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Channel Management Decision
Trade promotions
Manufacturers typically use a
combination of incentives to gain reseller
support and push their products throughthe channel.
Most of these incentives constitute sales
promotion activities.
Categories of sales promotion activities: Consumer promotions
Trade promotions
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Channel Management Decision
Trade promotions
Incentives to increase reseller purchases
and inventories
Incentives to increase personal sellingeffort
Incentives to increase local promotional
effort
Incentives to improve customer service
The changing role of incentives in
relational distribution systems
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End Of SlidesThank You
Distribution Channel
Decision