This document defines marketing channels and describes various types of intermediaries that can be involved in marketing channels, such as retailers, wholesalers, brokers, sales agents, banks, and transporters. It also discusses push and pull strategies for managing intermediaries and outlines key decisions involved in designing marketing channels, such as analyzing customer service needs, setting channel objectives, identifying alternatives, and evaluating alternatives based on economic, control, and adaptive criteria.

1. What is a marketing channel ?
• POOJA CHOUDHARY(43-MBA-16)
• PRIYANKA SHASHU(44-MBA-16)
• RADHIKA GANDOTRA(45-MBA-16)
• RAJAT GUPTA(46-MBA-16)
• RISHAV GUPTA(47-MBA-16)
• SAHIL SHARMA (49-MBA-16)
• SAKSHI THAPAR (50-MBA-16)
Section- B
Semester -2nd

2. Marketing Channel
 Also known as Trade Channel or
Distribution channel
 Set of interdependent organizations
involved in the process of making a
product or service available for use or
consumption.
 Comprises of Intermediaries

3. Different types of intermediaries
Retail
ers
Wholesa
lers
Broker
s
Sales
Agents
Banks Transpor
t
Advertising
Agencies
MERCHANTS AGENTS FACILITATORS

4. Potential
buyer
Profitable
customer
Marketing Channels not just serve the market ; they make the market
Affect marketing decisions like pricing , sales force and advertising
decisions, etc.

5. To Manage Intermediaries…
The firm must decide how much effort to devote to
push and to pull marketing.
PUSH STRATEGY
PULL STRATEGY

6. Used in case of
LOW BRAND LOYALTY
Choice is made before
coming to store
Choice is made in store
Uses
sales
force and
sales
promotio
ns
Used in case of
HIGH BRAND LOYALTY
Uses
Advertisem
ents
and
promotions
PUSH PULL

7. Follow PUSH strategy as well as PULL strategy

8. Channel Levels

9. CHANNEL- DESIGN DECISIONS
Analyzing the service output levels desired by
customers
Establishing channel objectives
Identifying major channel alternatives
Evaluating major channel alternatives

10. ANALYZING THE SERVICE OUTPUT LEVELS
DESIRED BY CUSTOMERS
In designing the marketing channels, Channel produces
five
service outputs:
Desired Lot Size (No. of units channel permits a customer to purchase on one occasion)
Waiting Time (The average time customers wait for the receipt of goods)
Spatial Convenience (Degree which makes easy for customers to purchase the product)
Product Variety (Assortment provided by marketing channel)
Service Backup (Add-on services provided by the channel)

11. ESTABLISHING CHANNEL OBJECTIVES
Channel objectives should be stated in terms of
targeted service output levels.
Besides the target market, the company’s channel
objectives are influenced by;
• the nature of its product
• company characteristics
• Characteristics of
intermediaries
• competitors’ channel
• Environmental conditions

12. IDENTIFYING MAJOR CHANNEL
ALTERNATIVES
After the channel objective have been determined, the
company should identify its major channel alternatives in
terms of
 Types of intermediaries
Agents , Wholesalers , Distributors , Retailers
 Number of intermediaries needed
Exclusive - In this , producer hopes to obtain dedicated & knowledgeable selling
.This requires greater partnership between seller and reseller.
Selective - In this, company don’t have to make efforts to sell their products
Intensive - In this, goods & services are placed in as many outlets as possible
 Terms & responsibilities of each channel member
Price policies, Conditions of sale, Territorial rights and
Specific service to be performed by each party.

13. EVALUATING MAJOR CHANNEL ALTERNATIVES
Economic criteria:
Company need to estimate the costs of selling different volumes
through each channel and the next step is comparing sales and
costs.
Control criteria :
The company must also consider control issues. Using
intermediaries means giving them some control over the
marketing of the product.
Adaptive Criteria:
Channels involve long term commitments, for this company wants
to keep the channel flexible to adapt to environmental changes.

14.  Selecting channel members :
characteristics of intermediaries  channel member’s length of
business, growth and profit record, cooperativeness and reputation.
 Motivating individual channel members :
Positive motivators  higher margins, special deals, premium,
cooperative advertising allowances, display allowances and sales
contests.
Negative motivators  threatening to reduce margins, to slow down
delivery, or to end the relationship altogether.
 Evaluating their performance over time :
Evaluating standards  sales quotas, average inventory levels,
customer delivery time, treatment of damaged and lost goods,
cooperation in training programs and customer service.
CHANNEL MANAGEMENT DECISIONS

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