Dlm Mod 1


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  • Amity Business School
  • Dlm Mod 1

    1. 1. Amity Business School MBA Class of 2010, Semester II Distribution & Logistics Management Ms.Vandana Gupta
    2. 2. Distribution channel management - an introduction
    3. 3. <ul><li>‘Marketing channels can be viewed as set of interdependent organizations involved in the process of making a product or service available for consumption or use’ </li></ul>
    5. 5. How do distribution channels contribute <ul><li>Intermediaries can improve the efficiency of the exchange process </li></ul><ul><li>Channel intermediaries adjust the discrepancy of assortment through the performance of the sorting process </li></ul><ul><li>Marketing intermediaries hang together in channel arrangements to provide for the routinisation of transactions </li></ul><ul><li>Channels facilitate the searching process </li></ul>
    6. 6. <ul><li>Sorting out </li></ul><ul><li>involves breaking down a heterogeneous supply into separate stocks that are relatively homogeneous. </li></ul><ul><li>Accumulation </li></ul><ul><li>bringing similar stocks from a number of sources together into a larger homogeneous supply </li></ul>
    7. 7. <ul><li>Allocation </li></ul><ul><li>breaking a homogeneous supply down into smaller and smaller lots </li></ul><ul><li>Allocating at the wholesale level is referred to as breaking bulk </li></ul><ul><li>Assorting </li></ul><ul><li>building up an assortment of products for resale in association with each other </li></ul>
    8. 8. Role of distribution channels <ul><li>To adjust the discrepancy of assortment through the process of sorting, accumulation, allocation, and assorting </li></ul><ul><li>To minimize the distribution costs through routinising and standardizing transactions to make exchange more efficient and effective </li></ul><ul><li>To facilitate the searching process of both buyers and sellers by structuring the information essential to both the parties </li></ul><ul><li>To provide a place for both parties to meet each other and reducing uncertainty </li></ul>
    9. 9. Discrepancies in the process of exchange <ul><li>Spatial discrepancy </li></ul><ul><li>Temporal discrepancy </li></ul><ul><li>Need to break the bulk </li></ul><ul><li>Need to provide assortment </li></ul>
    10. 10. The cost and control aspects of intermediation Direct Distribution Indirect distribution Control Cost efficiency
    11. 11. Distribution channel strategy <ul><li>Setting distribution objectives in terms of the customer requirements </li></ul><ul><li>Finalizing the set of activities that are required to be performed to achieve the channel objectives </li></ul><ul><li>Organizing the activities so that the responsibility of performing the activities is shared among the entities who are meant to perform these activities </li></ul><ul><li>Developing policy guidelines for the smooth functioning of the channel on a day to day basis </li></ul>
    12. 12. Distribution channel management (contd .) <ul><li>Distribution channel management encompasses all activities dealing with the distribution function of the firm </li></ul><ul><li>The distribution strategy provides guidelines for decision making </li></ul><ul><li>The distribution management function can be viewed as happening in two phases: the ex ante phase and the ex poste phase </li></ul>
    13. 13. Distribution channel management (contd.) <ul><li>The ex ante phase involves all the activities that are associated with the design and establishment of the distribution channel. These activities actually take place before the distribution channel actually starts functioning. </li></ul><ul><li>The ex poste phase involves managing the day to day activities of the channel wherein the behavior of the individual channel members are coordinated </li></ul>
    14. 14. Channel Management tasks <ul><li>Distribution Channel Strategy </li></ul><ul><ul><li>Channel Objective </li></ul></ul><ul><li>Activity Finalization </li></ul><ul><li>Organizing the activities </li></ul><ul><li>Developing Policy Guidelines </li></ul>Design of the channel structure Establishing the channel Motivating Channel Members Resolving Conflicts among channel members Ex ante Phase Ex Poste Phase
    15. 15. Functions in marketing channels <ul><li>Different functions to be performed by all intermediaries are </li></ul><ul><li>charting the process of distribution </li></ul><ul><li>arranging transportation and storage facilities </li></ul><ul><li>site analysis for warehouses </li></ul><ul><li>stocking and reordering procedures </li></ul><ul><li>ordering and payment procedures </li></ul>
    16. 16. <ul><li>Credit Financing </li></ul><ul><li>Repair and warranty Services </li></ul><ul><li>Technical Support </li></ul><ul><li>Financing customer purchases </li></ul><ul><li>Providing management services </li></ul><ul><li>Taking Risks </li></ul>Facilitating functions <ul><li>Buying Based on interpretation of customer needs </li></ul><ul><li>Dissemination of information </li></ul><ul><li>Promotion </li></ul><ul><li>Gathering customer information </li></ul>Communication Function <ul><li>Sorting products into desired quantity </li></ul><ul><li>Assorting items into desired variety </li></ul><ul><li>Delivery </li></ul><ul><li>Storage </li></ul><ul><li>Breaking Bulk </li></ul><ul><li>Accumulating Bulk </li></ul><ul><li>Creating Assortments </li></ul><ul><li>Transportation </li></ul><ul><li>Storage </li></ul>Logistical functions Facilitate Customers Facilitate Suppliers Functions of Intermediaries
    17. 17. Flows in Marketing channels <ul><li>A flow is a set of functions performed in sequence by channel members. </li></ul><ul><li>There are basically eight universal flows- </li></ul><ul><li>Physical </li></ul><ul><li>Possession Ownership </li></ul><ul><li>promotion </li></ul><ul><li>Negotiation </li></ul><ul><li>Financing </li></ul><ul><li>Risking </li></ul><ul><li>Ordering </li></ul><ul><li>Payment </li></ul>
    18. 18. Marketing Flows in channels Producers Wholesal- -ers Retailers Consumers Industrial And Household Physical Physical Physical Possession Ownership Possession Ownership Possession Ownership Promotion Promotion Promotion Negotiation Negotiation Negotiation Financing Financing Financing Risking Risking Risking Ordering Ordering Ordering Payment Payment Payment