Distribution channel• The management of all activities which facilities

movement and co-ordination of supply and demand in the creation of time and place utility in goods.

• Broad range of activities concerned with the efficient movement of finished products from the end of the production line to the consumer and in some cases it also includes the movement of raw materials from the source of supply to the beginning of the production line.

Need for Distribution Channels

• Makes the product easily available

• Service to the customers

• Services to the manufacturers

Types of channels

• Direct distribution channel

• Indirect distribution channel

MANUFACTURER

WHOLESALER

RETAILER

END-CONSUMER

Factors in selecting channel

• Organizations strategy

• Nature of product

• Target audience

• Geographical area

WHOLESALING

What is Wholesaling? All the activities involved in selling goods

and services to those buying for resale or business use.

Wholesaler - those firms engaged primarily in wholesaling activity.

Wholesalers buy mostly from producers and sell mostly to: Retailers, Industrial consumers, and Other wholesalers.

Why are Wholesalers Used?

Wholesalers are Often Better at Performing One or More of the Following Channel

Functions:

WholesalerFunctions

Selling andPromoting

Selling andPromoting

Buying andAssortment Building

Buying andAssortment Building

Bulk BreakingBulk Breaking

WarehousingWarehousing

TransportationTransportation

FinancingFinancing

Risk BearingRisk Bearing

MarketInformation

MarketInformation

ManagementServices & Advice

ManagementServices & Advice

Types of Wholesalers

Manufacturers’ Sales Branches and OfficesWholesaling by Sellers or

Buyers Themselves Rather Than Through

Independent Wholesalers.

Brokers/ AgentsThey Don’t Take Title

to the Goods, and TheyPerform Only a Few

Functions.

Merchant WholesalerIndependently Owned

Business that Takes Title to the

Merchandise it Handles.

Trends in Wholesaling

Consolidation within the Industry is dipping the number of Wholesalers

Consolidation within the Industry is dipping the number of Wholesalers

Distinction Between Large Retailers and Wholesalers BlursDistinction Between Large Retailers and Wholesalers Blurs

Wholesalers Will Continue to Increase the Services ProvidedWholesalers Will Continue to Increase the Services Provided

Wholesalers Are Beginning to Go GlobalWholesalers Are Beginning to Go Global

Retail

• Retailing involves a direct interface with the customer and the coordination of business activities.

INTRODUCTION TO RETAIL

Retailing is a distribution channel function where one organization buys products from supplying firms or manufactures the product themselves, and then sells these directly to consumers. A retailer is a reseller (i.e., obtains product from one party in order to sell to another) from which a consumer purchases products.

RETAILING Business activities involve Selling Goods and Services to Consumers for their Personal, Family or Household use.

“Every sale of Goods and Services is to final consumer” – Food products, apparel, movie tickets; services from hair cutting to e-ticketing.

Retailing is the Last stage in Distribution Process- Wholesale is an intermediate where Goods and services are sold to Business customers.

MANUFACTURER

DISTRIBUTOR

WHOLESALER

RETAILER

END-CONSUMER

Who is a Retailer?

Retailer links Producers to Customers

Retailer is a person, agent, agency, company or organization who delivers the Goods or Services to ultimate consumer

Organized Retailing

Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses.

ORGANISED RETAILING

• Retail chains like Wal Mart, McDonalds brought Rapid Growth and consolidation of Organized Retail

• Rapid rise of Income levels and accompanying changes in lifestyles greatly contributed to growth of Organized Retail

Unorganized Retailing

• Unorganised retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc

Functions Of Retailer

1) Breaking bulk

2) Providing assortment

3) Holding inventory

4) Providing services

Retail Formats

Retail Formats

Store-Based Non store-Based

Form of ownership

Independent RetailChain RetailFranchise

Leased dept.

Merchandise Offered

Convenience store

SupermarketHypermarket

Specialty storeDept. store

Factory outlets

Direct sellingInternet

Automated vending

Classification on the basis of Ownership

1) Independent Retailer2) Chain Stores3) Franchise4) Leased Department

Independent Retailer

An independent retailer is one who builds his/her business from the ground up. From the business planning stage to opening day, the independent retail owner does it all. He/she may hire consultants, staff and others to assist in the business endeavor. The opportunities are endless.

Chain Stores

Chain stores are retail outlets that share a brand and central management, and usually have standardized business methods and practices In 2004, the world's largest retail chain, Wal-Mart, became the world's largest corporation in terms of gross sales.

Franchise

A contract between the franchiser and the franchisee whereby the franchisee is allowed to conduct his business operations under an established brand name.

Leased Department

• They are also termed as shop in shops. When a section in a retail store is leased or rented to the outside party, it is termed as a leased department.

Classification on the basis of Merchandise offered

1) Convenience stores2) Supermarkets3) Hypermarkets4) Specialty stores5) Departmental Stores6) Factory outlets

Convenience Stores

1) Relatively smaller in size2) Long working hours3) Offers convenience products like eggs,

breads, milk etc.4) Size ranges from 3000 to 8000 sq ft. Eg. In & Out

Supermarkets

1) Large, low cost, low margin, high volumes.2) Self service operations.3) Meet the needs of food, groceries, non food

items.4) Size ranges from 8000 to 20000 sq ft.

Supermarkets

Spencers • Supermarket chain in India; part of RPG

Enterprises; has 125 stores spread across 25 cities; product profile covers groceries & staples, home care & personal care products etc

Supermarket

Subhiksha • India's supermarket, pharmacy and telecom

chain founded by R. Subramaniam in Chennai; has 800 outlets spread across more than 60 cities in India, selling household provisions, packaged foods, fruits and vegetables etc

Hypermarkets

1) Combination of supermarket and departmental store

2) Offers a wide range of products like jewellery, clothes, hardware, cd’s, DVD's, computer equipments etc.

3) Eg. Big Bazaar , Reliance Mart

Specialty Store

1) It specializes in a particular product or merchandise.

2) High service and product information.3) Products like home furniture, electrical appliances,

consumer electronics are popular.4) Eg. Reliance Footprint, Reliance Trendz

Department store

1) Specializes in selling a wide range of products under one roof

2) Eg. Shopper’s stop, Westside, Lifestyle ,Marks and Spencer,

Factory Outlets

An outlet store or factory outlet is a retail store in which manufacturers sell their stock directly to the public through their own branded stores.

NON STORE RETAILING

A form of retailing in which the retailer directly reaches to the end consumer is known as the Non Store Retailing. It can be classified into :

Direct selling

As the name suggests , this form of retailing

involves making personal contact with the end consumer wither by reaching at their homes or at their work places.

AUTOMATED VENDING

1) Impersonal form of selling2) Products like soft drinks, candy etc. are

mainly involved.

E- tailing

The rise of internet has led to phenomenal changes in the world of retailing. In retailing, it has opened a new way for the retailers to reach out to the customers and the suppliers where they don’t have any physical presence

TV home shopping

• Asian sky shop was among the first to introduce the TV shopping in India. In this form, the product is advertised on television and its features are explained. The buyer can make a call and order their products.