Selection of Distribution Channels

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This presentation explain how channels are essential in distribution management

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Selection of Distribution Channels

  1. 1. Selection of Channels A Sales & Distribution Presentation
  2. 2. Arti Presented By
  3. 3. Channel Management is a process by which a producer or supplier directs marketing activity by involving and motivating the entities comprising its channel of distribution Various Channels are: Wholesalers, Retailers, Distributors & Agents Channel Management
  4. 4. Market Intermediaries MarketingIntermediaries Middlemen Agent or Broker Wholesaler Retailer Distributor Value-added Resellers Merchants Facilitating Agents
  5. 5. Need for Distribution Channels
  6. 6.  Direct Marketing Channel  Indirect Marketing Channel Types of Channels
  7. 7. Direct Marketing Channel (or Zero Level) This type of channel has no intermediaries. In this distribution system, the goods go from the producer directly to the consumer, e.g., Amway, Eureka Forbes. Direct Marketing Channel
  8. 8. Indirect Marketing Channel Producers Consumers Retailer Wholesalers Consumers Retailer Consumers Retailer Wholesalers Distributor Consumers Retailer Wholesalers Distributor Agent Level- 1 Level- 2 Level- 3 Level- 4
  9. 9. Channel Strategy Decisions Market Factors  Customer Preference  Organizational Customers  Geography Competitors Nature & Availability of Intermediaries Product Factors  Life Cycle  Selling Price/Unit  Perishability  Size & Weight  Consumer Perceptions ChannelSelectionCriteria
  10. 10. Key Issues in Determining Channel Requirement While a manufacturer faces an agenda of issues related to finance, marketing and industrial relations, attention is focused on selected topics that directly impact marketing channel arrangements. The key issues related to this are:  Product proliferation and dynamics; and  Total-quality initiatives. These two issues are significant drives for a typical firm in determining how channel requirements will be delineated.
  11. 11. Manufacturing Strategy
  12. 12. Wholesalers Wholesale trade is defined as “all establishments or places of business primarily engaged in selling merchandise to retailers; to industrial, commercial, institutional or professional users or to other wholesalers; or acting as agent in buying merchandise for or selling merchandise to such persons or companies”. 1. Merchant Wholesalers 2. AgentWholesalers 3. Manufacturers’ Sales branches and offices
  13. 13. Merchant Wholesalers Merchant Wholesalers  Full Function or Service Wholesalers  Limited Function Wholesalers  Cash & Carry Wholesalers  Drop Shippers  Truck Wholesalers  Mail Order Wholesalers  Prod. & Retail Cooperative Wholesalers
  14. 14. Agent Wholesalers Agent Wholesalers  Manufacturers’ Agent  Brokers  Commission Merchant  Selling Agents  Commercial Auction Companies Manufacturer’s Sales Branches and Sales Offices Wholesalers
  15. 15. A wholesaler is generally selected on the basis of his performance evaluation. Before selecting wholesalers, manufacturers’ analyze a wholesaler on the basis of the following questions:  How can a wholesaler serve a supplier?  How can a wholesaler serve a retailer?  How can a wholesaler serve business users? Selecting Wholesalers
  16. 16. Strategic Management of Wholesalers Strategic Management of Wholesalers  Effectiveness  Profitability  Niche Marketing  Proprietary Brand  New Technology Wholesalers
  17. 17. Introduction to Retailing Retailing It include all activities incidental to selling to ultimate consumer. According to ‘William.J.Stanton’, “A retailer or a retail store is a business enterprise which sells primarily to ultimate consumers for non business use.”
  18. 18. Function of Retailing Collect product assortment and offer them for sale Product Information Mark prices and pay for goods Conclude Transaction with final consumer Retailers
  19. 19. Relation Between Retailers & Suppliers Selling goods or services for use of retailer Selling goods or services for reselling by retailer
  20. 20. Wheel of Retailing Innovation Trading UpVulnerability
  21. 21. Thank You

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