Channel selection


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Channel selection

  1. 1. Selection of ChannelsA Sales & Distribution Presentation
  2. 2. Presented ByArti
  3. 3. Channel ManagementChannel Management is a process by which a producer or supplier directsmarketing activity by involving and motivating the entities comprising itschannel of distributionVarious Channels are: Wholesalers, Retailers, Distributors & Agents
  4. 4. Market Intermediaries MiddlemenMarketing Intermediaries Agent or Broker Wholesaler Retailer Distributor Value-added Resellers Merchants Facilitating Agents
  5. 5. Need for Distribution Channels
  6. 6. Types of Channels Direct Marketing Channel Indirect Marketing Channel
  7. 7. Direct Marketing ChannelDirect Marketing Channel (or Zero Level)This type of channel has no intermediaries. In this distribution system, the goodsgo from the producer directly to the consumer, e.g., Amway, Eureka Forbes.
  8. 8. Indirect Marketing Channel Level- 4 Level- 3 Consumers Level- 2 Consumers Retailer Level- 1 Consumers Retailer WholesalersConsumers Retailer Wholesalers Distributor Retailer Wholesalers Distributor Agent Producers
  9. 9. Channel Strategy Decisions Market Factors Channel Selection Criteria  Customer Preference  Organizational Customers  Geography Competitors Nature & Availability of Intermediaries Product Factors  Life Cycle  Selling Price/Unit  Perishability  Size & Weight  Consumer Perceptions
  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. WholesalersWholesale trade is defined as “all establishments or places of business primarilyengaged in selling merchandise to retailers; to industrial, commercial,institutional or professional users or to other wholesalers; or acting as agent inbuying merchandise for or selling merchandise to such persons or companies”. 1. Merchant Wholesalers 2. Agent Wholesalers 3. Manufacturers’ Sales branches and offices
  13. 13. Merchant Wholesalers Merchant Wholesalers Wholesalers  Full Function or Service Wholesalers  Limited Function Wholesalers  Cash & Carry Wholesalers  Drop Shippers  Truck Wholesalers  Mail Order Wholesalers  Prod. & Retail Cooperative
  14. 14. Agent Wholesalers Agent Wholesalers  Manufacturers’ AgentWholesalers  Brokers  Commission Merchant  Selling Agents  Commercial Auction Companies Manufacturer’s Sales Branches and Sales Offices
  15. 15. Selecting WholesalersA wholesaler is generally selected on the basis of his performanceevaluation. Before selecting wholesalers, manufacturers’ analyze awholesaler 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?
  16. 16. Strategic Management of Wholesalers Wholesalers Strategic Management of Wholesalers  Effectiveness  Profitability  Niche Marketing  Proprietary Brand  New Technology
  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 Retailers Mark prices and pay for goods Conclude Transaction with final consumer
  19. 19. Relation Between Retailers & Suppliers Selling goods or services Selling goods or services for use of retailer for reselling by retailer
  20. 20. Wheel of Retailing Innovation Vulnerability Trading Up
  21. 21. Thank You