marketing mix rafael

8/2/2019 Marketing Mix Rafael

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DISTRIBUTION CHANNEL

A distribution channel is a medium by which goodsand services are made available to the consumersfor use or consumption. It is means by which goodsmove from producers or manufacturers to

consumers. Speed in product and service deliveryand physical location significantly affects efficiencyof the distribution channel. Consequently, gaps inthe delivery of these goods and services to the

consumers may make or break a company.


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. Two main categories of marketing

intermediaries are retailers and wholesalers.

Wholesalers / Wholesaling Intermediaries

Are person and firms that sells primarily to retailersand other wholesalers/ industrial users. They do notsell significant amount to ultimate consumers.

Retailers

They are person or firms who sell goods or servicesto individual for their own use rather than for resale.

They are marketing intermediaries that consumersare very familiar with.


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TYPES OF DISTRIBUTION CHANNELSHundreds of distribution channels are used to supply, deliver or servethe products and services of companies. No single channel is always

the perfect one for a given commodity or service.

Direct Marketing Channel

The first type of Distribution channel. This structure has no middlemenand intermediary level/s.

Retailer Marketing Channel

The second type of distribution channel. This structure hasmiddlemen and one intermediary level. The market intermediary isthe type of marketing channel is the retailer.

Wholesaler / Retailer Marketing Channel

The third type of distribution channel. This structure has middlemen

and two intermediary levels. The market intermediaries is the type ofmarketing channel are the wholesaler and the retailer.

Wholesaler/ Jobber/ Retailer Marketing Channel

The fourth type of distribution channel. This structure has middlemenand three marketing channel . The market intermediaries


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TYPES OF DITRIBUTION SYSTEM

Before, Distribution was simply groupings of weakand independently- owned and managedcompanies. Little attention was given to the overallperformance of these distribution channels. Thevertical marketing system was designed tochallenge the conventional distribution channelorganization. It improves performance and

efficiency, provides opportunities for strongerleadership and maximum customer relationship.


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CONVENTIONAL DISTRIBUTION SYSTEM

Its often referred to as the traditional/ customary channel for consumer

goods, is the most popular and widely used channel organization. In this

structure, various channel members make little or no effort to cooperate

with each other.

VERTICAL MARKETING SYSTEM (VMS)

This type of distribution channel organization system is the vertical

marketing system. There are Three(3) types of the vertical marketing

system:

Corporate Channel-A firm at one channel level owns the firm at the nextlevel owns the entire channel.

Administrative VMS-The channel members informally agree to cooperate

with each other.

Contractual VMS -The channel members agree by contract to cooperate

with each other.


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DESIGNING MARKETING CHANNEL

Designing marketing channel involves a series ofstages it includes analyzing consumer needs,setting channels objectives and constraints.Identifying major alternatives , evaluating these

alternatives and selecting the appropriatedistribution channel.


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ANALYZING CONSUMER SERVICES NEEDS

Consumer needs are very critical to designing a marketingchannel structure. An analysis should help the firm to come upwith design decision that will bring benefits to the company.

SET CHANNEL OBJECTIVES AND CONSTRAINTS

The company should consider their target consumer and theirdesired service level. In most terms, the company is able toidentify these segments and what different levels of channel

services are expected, if not demanded.


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ar a es o cons er n se ng c anneobjectives

Company channel objectives will vary depending on the nature of its products,company policies, middlemen competitor and the environment. These are

enumerated as follows:

Product CharacteristicsThe channel design chosen will be greatly affective by thecharacteristic of the product of the company. An example ofthis food that spoils easily.

Company characteristicsThe size of the company pays a big role in choosing the size ofits target market and its ability to get dealer. The companysfinancial resources will also affect the marketing function interms of choosing the people who will handle marketing

activities or hiring middlemen and marketing intermediaries.


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Middlemen CharacteristicsChannel design is affecting by middlemen characteristics. Theability of the middlemen and what they can do and willing toshould be included in criteria for choosing middlemen.

Competitors

Most of the times, companies situate their outlets near theoutlets of their competitors. Other companies, however, find itdifficult to do this because of scarcity in the location forintended retail outlet and instead set up door to door selling.

Environmental FactorsFactors such as the economy and legal constraints affectchannel designing decision. If the economy is depressedproducers would want to distributes their goods in the mosteconomic way, use shorter channels, and drop unneededservices to reduce total cost.


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IDENTIFY MAJOR ALTERNATIVES

After Analyzing the needs of the consumers, welearned how to set channel objectives. We likewisestudied the constraints existing in the company.Before making a choice let us first find out what aredifferent categories of middlemen and how manymiddlemen should the company.


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Types of Middlemen:

Company Sales force

Consist of individuals whose main job is to sell the product ofthe company. They are salesperson assigned to a particularfor the purpose of marketing the company products.

Manufacturer Agencies

Are autonomous firms whose business is to sell othercompanies.

Industrial Distributors

They are given exclusive distribution rights to purchase andcarry the product line. They are like franchises/ branches ofthe company.


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Number of Middlemen

Intensive distribution- refers to stocking the products in asmany outlets as possible. It allows the producers to distributetheir producers to distribute their products to as many outletsas possible or as the producers can handle their products tothe consumer anytime and anywhere.

Exclusive distribution- means authorizing limited number ofdealers to exclusively distribute a companys products in theirterritories.

Selective distribution- refers to use of more than one but not

all middlemen who are willing to carry the companysproduct .


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EVALUATE MAJOR CHANNEL ALTERNATIVES

When company has identified its major channel alternatives,then it continue this process by evaluating each one of thesealternatives. It scrutinizing these alternatives, these are criteriato consider. They are ECONOMIC, CONTROL and ADAPTIVEcriteria. This criterion will help the company in choosing thebest alternative, this arriving at a channel managementdecision.

SELECT THE APPROPRIATE DISTRIBUTION CHANNEL

The choice of distribution is the penultimate stage in designingmarketing channels. The selection of a distribution channeldepends on several factors:


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Market factor- most important consideration in choosing dist.Channel is the market segment that the producers is attempting toreach. Changes in consumer buying behavior may influence achannel decision.

Product factor- products that are complicated, expensive, custommade and perishable move through shorter distribution.

Producer factor- producers who offer broad product line withadequate financial and marketing resources to distribute andpromote their products are likely to use shorter channel od

distribution.

Competitive factor- producers must consider how well theintermediary performs the marketing functions.


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marketing mix rafael

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