Various types of marketing channel in marketing

1. DISTRIBUTION CHANNEL
OR
MARKETING CHANNEL
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2. • Product Distribution (or Place) is one of the four
elements of the marketing mix.
• Distribution is the process of making a product or
service available for use or consumption by a
consumer or business user, using direct means, or
using indirect means with iŶterŵediaries͟.
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3. • Distribution of products takes place by means of
channels.
• A Channel of Distribution comprises a set of
institutions (intermediaries) which perform all of the
activities utilised to move a product and its title from
production to consumption͟.
Producers Middlemen
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Final Consumer Or
Business Users

4. • Intermediaries make distribution and selling
processes more efficient.
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5. Types/Levels of
Distribution Channel
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6. 1. Business-to-Customer (B2C) distribution occurs between
the producer and the final user.
2. ͞Business-to-Business (B2B) distribution occurs between a
producer and industrial users of raw materials needed for
the manufacturer of finished products.
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7. • Both types types/levels of distribution channels may
be-
1. Direct
2. Indirect
3. Hybrid
ABH MISHRA (Ph.D) 107

8. • Direct Channel: A distribution system is said to be direct when the
product or service leaves the producer and goes directly to the
customer, with no middlemen involved.
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• For example,
– Company owned outlets
– Car wash
– Barber utilize direct distribution because the customer receives the
service directly from the producer.
– The jewelry manufacturer who sells its products directly to consumer.

9. • Indirect
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Distribution Channel: An indirect
to perform
distribution
most or allchannel relies on intermediaries
distribution
distribution.
functions, otherwise known as wholesale
• Hybrid Distribution Channel: Many times companies use
combination/hybrid of Direct and Indirect channels to
distribute its product in the market.
– Ex: A company (suppose Samsung mobiles) may sell the product
through its exclusive company owned outlet and website, as well as
through independent retailers.

10. Distribution Channel for Consumer Products
1
0

11. 14
1
1

12. • Zero Level channel/Direct Marketing Channel: It consists of a
manufacturer directly selling to the end consumer.
• Ex.
– Door to Door sales,
– Direct mails or
– Telemarketing.
• One Level Channel: It has an intermediary in between the producer
and the consumer. Ex.
– An insurance policy in which there is an insurance agent
between the insurance company and the customer.
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13. • Two level Channel: It consists of two intermediaries between
manufacturer and consumers, usually a wholesaler and a
retailer.
• It is a widely used marketing channel in the FMCG and the
consumer durables industry.
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14. • Three level channel: It can combine the roles of a
distributor on top of a dealer and a retailer. The
distributor stocks the most and spreads it to dealers
who in turn give it to retailers.
• It as usually observed in both the FMCG and the
consumer durables industry.
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15. Distribution Channel for Business Products
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16. 19
AMITABH MISHRA (Ph.D) 1
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17. Factors affecting
Distribution Channel Choice
17

18. • Factors related to Market/Consumers.
– Number of buyers
– Expansion/spread of the Consumers.
– Size of the Order/Sale.
– Objective of Purchase.
– Need of the Credit Facilities.
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19. • Factors related to Product.
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– Price of the product
– Standardised or customised product
– Perishability of the product
– Technical nature of the product
– Goods made to order.
– After-sales service.

20. • Factors related to the Intermediary/Middlemen
– Services offered by middlemen.
– Scope or possibilities of quantity of sales.
– Attitude of agents towards the producers' policies.
– Cost of channel of distribution.
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21. • Factors related to the Producer /Company
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– Level of production.
– Financial resources of the company.
– Managerial competence and experience.
• Other Factors
– Distribution channel of competitors.
– Social viewpoint.
– Freedom of changing the middleman.

22. AN OVERVIEW OF RETAILING
Introduction The word 'Retail' is derived from a French word with
the prefix re and the verb tailer meaning "to cut again". Evidently,
retail trade is one that cuts off smaller portions from large lumps
of goods. It is a process through which goods are transported to
final consumers. In other words, retailing consists of the activities
involved in selling directly to the ultimate consumer for personal,
non-business use. It embraces the direct-to-customer sales
activities of the producer, whether through his own stores by
house-to-house canvassing or by mail-order business.
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2

23. Indian Economy – GDP Projections Through 2022 (2007
Prices)
2007
13,245
2,897
2,374
2,630
2,232
979
916
1,068
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
Brazil
Russia
India
F rance
UK
China
Germa
US A
2012
15,354
4,197
2,648
3,198
1,304
1,409
2,470
1,369
- 5,000 10,000 15,000 20,000
Brazil
R ussia
India
F rance
UK
Germany
C hina
US A
2017
17,031
6,341
2,953
3,513
2,761
1,688
2,119
1,789
- 5,000 10,000 15,000 20,000
Brazil
Rus sia
India
France
UK
Germany
C hina
US A
2022
19,751
9,229
3,766
2,103
2,282
- 5,000 10,000 15,000 20,000 25,000
Germany
C hina
US A
Brazil
Russ ia
US$
Billion
US$
Billion
US$
Billion
US$
Billion
*GDP figures are in real terms with base year as 2007
India is expected to be comparable with UK & France in GDP by 2022
India 3,128
France 3,085
UK 3,251

24. Rapid Transformation
Anticipated
Current Size & Future Projections for Indian Retail Market
336 376 421 471 527
590
1011
12 17 29 51 74 97
282
200
0
1200
1000
800
600
2007 2008 2009 2010 2011 2012 2017
US$Billion
Total Retail Organized Retail
28% share
Reach a share of 28% by 2017

25. 9.0%
6.8%6.0%
6.0%
5.6%
5.2%
6.4%
6.6%
5.4%
9.4%
2%
1%
0%
7%
6%
5%
4%
3%
10%
9%
8%
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Projections of 8% sustainable real GDP growth rate till 2020 promise
high growth potential for Indian Retail
HIGH GDP GROWTH