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Chapter 7

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  • Note to Instructor Channels perform the following functions: Information: Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange. Promotion: Developing and spreading persuasive communications about an offer. Contact: Finding and communicating with prospective buyers. Matching: Shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging. Negotiation: Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred. Physical distribution: Transporting and storing goods. F inancing: Acquiring and using funds to cover the costs of the channel work. Risk taking: Assuming the risks of carrying out the channel work
  • Note to Instructor In any channel producers and intermediaries need to agree on price policies, conditions of sale, territorial rights, and services provided by each party.
  • Transcript

    • 1. Fundamental Of MarketingMKT243 Chapter 7 Marketing ChannelsDHD2010 MKT243 Fundamental Of Marketing 1
    • 2. Slide Outline Marketing channels Channel intermediaries and their function Channel Structure Channel strategy decisionDHD2010 MKT243 Fundamental Of Marketing 2
    • 3. Marketing Channel/ Distributionchannel A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumerDHD2010 MKT243 Fundamental Of Marketing 3
    • 4. Types of Channel Intermediaries 1. RETAILER 2. MERCHANT 3. AGENT & BROKER WHOLESALER Buy products from Do not take anySell products mainly Manufacturers, and title on product. for final users or Resells to business users Facilitate selling Consumer market (government, wholesaler, Activities for Or retailers) Producers Takes title to product Or storesDHD2010 MKT243 Fundamental Of Marketing 4
    • 5. Why Channel member are used?1) Provide specialization and division of labor2) Overcoming Discrepancies Discrepancy of quantity Temporal discrepancy Spatial discrepancy Discrepancy of assortment3) Providing contact efficiencyDHD2010 MKT243 Fundamental Of Marketing 5
    • 6. The Nature and Importance ofMarketing Channels How Channel Members Add ValueDHD2010 MKT243 Fundamental Of Marketing 6
    • 7. Channel Structure(Consumer Product) Producer Producer Producer Producer Agent/ brokers Wholesalers Wholesalers Retailers Retailers Retailers Consumers Consumers Consumers ConsumersDirect channel Retailer channel Wholesaler Agent/broker channel channelDHD2010 MKT243 Fundamental Of Marketing 7
    • 8. Channel Structure (Business and Industrial Product) Producer Producer Producer Producer Producer Agents/ Agents/ broker broker Industrial distributor Industrial distributor GovernmentIndustrial User Buyer Industrial User Industrial user Industrial userDirect Channel Direct channel Industrial Agent/broker Agent/ broker- distributor channel industrial distributor DHD2010 MKT243 Fundamental Of Marketing 8
    • 9. DHD2010 MKT243 Fundamental Of Marketing 9
    • 10. Channel Design DecisionsDHD2010 MKT243 Fundamental Of Marketing 10
    • 11. Factors Suggesting Type of Wholesaling Intermediary to Use Product characteristics Product characteristics Buyer considerations Buyer considerations Market characteristics Market characteristicsDHD2010 MKT243 Fundamental Of Marketing 11
    • 12. Factor Affecting Channel Choices1. Market factors -Target customer consideration -Must consider the geographical/ location, market size and level of competition2. Product factors -Nature of the products characteristics -PLC -Delicacy of the product e.g: Perishable, fragileDHD2010 MKT243 Fundamental Of Marketing 12
    • 13. Factor Affecting Channel Choices3. Producer factors -Producers’ capabilities and performance -Managerial and financial -Marketing resourcesDHD2010 MKT243 Fundamental Of Marketing 13

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