Channels of distribution

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Channels of distribution

  1. 1. Vijayakumar A B
  2. 2.  INTRODUCTION MEANING DEFINITION CHARACTERISTICS NEED AND IMPORTANCE TYPES Consumer Marketing Channels Industrial Marketing Channels Marketing Flow in Marketing Channels INTERMEDIARIES CHANNEL DESIGN DECISION CONCLUSION
  3. 3. The channel of distribution is the pathway taken by goods and services as they flow from the point of productionto the point of consumption and includes a sequence of marketing agencies.
  4. 4. The word ‘channel’ has its origin tothe French word used for ‘canal. thus channel is a route through which thegoods passes from one end to another.
  5. 5. According to William.j.Stanton,’Achannel of distribution for a product isthe route taken by the title to the goods as they move from the producer to theultimate consumers or industrial users.’
  6. 6.  ROUTE OR PATHWAY FLOW COMPOSITION FUNCTION REMUNERATION
  7. 7.  Bridge between the producers and the final consumers or industrial users. Helps to move the goods from one place to another. Bring the goods to the final consumers or users. Help in the transfer of title to goods. Goods available to the consumers in convenient unit or size,package,etc.
  8. 8.  DIRECT SELLING INDIRECT SELLING
  9. 9.  PRODUCER-TO ULTIMATE CONSUMER PRODUCER-RETAILER-ULTIMATE CONSUMER PRODUCER-WHOLESALER-RETAILER- ULTIMATE CONSUMER.
  10. 10.  PRODUCER-ULTIMATE CONSUMER PRODUCER-RETAILER-ULTIMATE CONSUMER PRODUCER-WHOLESALER-RETAILER- ULTIMATE CONSUMER PRODUCER-WHOLESALER-JOBBER- RETAILER-ULTIMATE CONSUMER
  11. 11.  PRODUCER-ULTIMATE CONSUMER PRODUCER-RETAILERS-ULTIMATE CONSUMERS PRODUCER-WHOLESALER-RETAILER- ULTIMATE CONSUMER PRODUCER-AGENT-RETAILER-ULTIMATE CONSUMER PRODUCER-AGENT-WHOLESALER- RETAILER-ULTIMATE CONSUMER
  12. 12. Wholesale shops
  13. 13. Retail shops
  14. 14. Manufacturer Manufacturer ManufacturerManufacturer Wholesaler Wholesaler Retailer Jobber Retailer consumer Retailer consumer consumer consumer
  15. 15. Manufacturer Manufacturer ManufacturerManufacturer Manufacturer Manufactures Representative sales branch Industrial Distributor Industrial Industrial Distributors Distributors Industrial Customer Industrial Industrial Industrial Customer Customer Customers
  16. 16. Physical FlowSuppliers Transporters, Transporters, Manufacturer Dealers Transporters Customer wholesalers wholesalersTitle Flow Supplier Manufacturer Dealer Customer
  17. 17. Payment Flow Suppliers banks Manufacturer Banks Dealers Banks Customer Promotion Flow Advertising AdvertisingSuppliers Manufacturer Dealers Customer Agency Agency
  18. 18. The channels of distribution includes manufacturers or producers, middlemen and the final consumersor users. but it refers primarily to the intermediaries or middlemen between the manufacturers orproducers and the consumers or users.
  19. 19. Middlemen or intermediaries are the connecting links between themanufacturers or producers and the final consumers or users.
  20. 20.  AGENT MIDDLEMEN OF MERCANTILE AGENTS MERCHANT MIDDLEMEN
  21. 21.  TO PROVIDE THE CONNECTING LINK BETWEEN THE MANUFACTURERS AND THE FINAL CONSUMER. THEY ADD PLACE,TIME,AND POSSESSION UTILITIES TO GOODS. THEY REDUCES THE MARKETING ACTIVITIES TO AN OPTIMUM NUMBERS. THEY UNDERTAKE THE FUNCTIONS OF STORAGE AND TRANSPORTATION OF GOODS ON BEHALF OF THE PRODUCER-SELLERS AND THE BUYERS. THEY ASSUME MARKETING RISKS ALSO.
  22. 22.  THE TYPE AND EXTENT OF MARKET SERVED BY THE INTERMEDIARY. THE PRODUCT LINE IN WHICH THE INTERMEDIARY SPECIALISES. THE FINANCIAL POSITION OF THE INTERMEDIARY. THE MARKET REPUTATION ENJOYED BY THE INTERMEDIARY. THE SELLING POLICIES OF THE INTERMEDIARY COMPATIABLE WITH THOSE OF THE PRODUCER. THE CONTINUED RELATIONSHIP FOR A LONG TIME BETWEEN THE PRODUCER AND THE INTERMEDIARY. THE SALES ORGANISATION,i.e,THE UTILITY AND EFFICIENCY OF THE SALES FORCE OF THE INTERMEDIARY. OTHER FACILITIES,SUCH AS STORAGE FACILITIES,DELEVARY VANS,Etc.POSSESSED BY THE INTERMEDIARY.
  23. 23. IT REFERS TO DECISION-MAKING IN REGARD TO TYPES OF DISTRIBUTION CHANNELS OR TRADE CHANNELS TO BE ADOPTED BY A CONCERN FOR THE MARKETING OF ITS PRODUCTS.
  24. 24.  CHANNEL DECISIONS HAVE A GREAT IMPACT ON DECISION-MAKING IN ALL AREAS OF MARKETING. TO DETERMINE THE SIZE OF THE SALES FORCE,THE TYPE OF SALES FORCE,THE SIZE AND THE COMPLEXITY OF THE MARKETING DEPARTMENT AND THE COST OF MARKETING. IT INFLUENCE PRICING DECISION,ADVERTISING DECISION. A FIRM’S CHANNEL DECISIONS INVOLVE LONG-TERM COMMITMENT TO OTHER FIRMS.
  25. 25.  PRODUCT FACTORS OR CHARACTERISTICS. CUSTOMER CHARACTERISTICS. MIDDLEMEN CHARACTERISTICS. SUPPLY CHARASTERISTICS. DISTRIBUTION POLICIES OF THE PRODUCER OR MANUFACTURER. CHANNELS OF RIVALS. COMPANY CHARACTERISTICS. ECONOMIC CONDITIONS AND LAWS OF THE COUNTRY. COSTS OF THE MARKETING CHANNELS.
  26. 26. Channels of distribution for a product begins with the producer and ends with the ultimate consumer.The importance of channels of distribution is clear from the role they play and the function they perform in the marketing of goods. And finally middlemen plays a important role in channels of distribution.

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