Mc 106 marketing management

1. Presented by : Sangeeta Saini
M . Com (p)
641

2.  Meaning of distribution channels.
 Example of distribution channels.
 Types of distribution channels.
1. Conventional distribution channels.
2. Non Conventional distribution
channels.
 Conclusion.

3. Channels of
distribution

4.  Distribution channel is
a route or pathway
through which goods
and services flow from
the producer to the
ultimate consumers.
 The channels of
distribution are also
known as ‘ Trade
Channels’ .
Producer
Intermediaries
Consumers

5.  A farmer in Srinagar has an apple orchard. Once the apples
are ripened he sells the apples to an agent of Delhi.
 The agent collects the apples from Srinagar, packs them,
and sells them to a wholesaler at New Delhi sabzimandi.
 The wholesaler then distributes them to various retail
fruit vendors throughout Delhi by selling smaller
quantities.
 Finally, consumer purchase apples from those vendors as
per there requirement.
 Thus, we find that while coming from the producer at
Srinagar, the product reaches the consumers by passing
through several hands like an agent, a wholesaler and a
retailer. All these three are called middlemen.

6. Types of
distribution
channels
Conventional
Direct Indirect
One -Level Two -Level Multi -Level
Non -
Conventional
Vertical
Administered Contractual corporate
Horizontal

7.  In conventional distribution channels , it is
assumed that each enterprise working in channel is
separately owed and operated concern.
Conventional channels are of two types:
1 . Direct distribution channel.
2. Indirect distribution channel.

8.  Direct distribution channel is the oldest and simplest
type of distribution . It is also known as ‘zero level
distribution channel’.

9.  When goods are produced in small quantity.
 When there are few potential buyers.
 When the product is highly perishable.
 When the channel costs are higher than direct selling.
 When the manufacturer decides not to use the
middlemen.

10. Bata India ltd. , liberty shoe
ltd. , clothing retailer Zara
has their own retail shops to
sell their products directly to
consumers.

11.  Indirect distribution channels is one which the
manufacturer sells his products with the help of
intermediaries.
Indirect distribution channels
One
level
channels
Two level
channels
Multi
level
channels

12. manufacturer consumersretailers
consumerswholesalersmanufacturer
Suitability :
When the product is perishable.
When the speedy distribution is required.
When the demand for product is constant.
Examples:
bread , biscuits, patties etc.

13. Manufacturer Wholesaler Retailer Consumers
Suitability :
When the retail outlets are more and widely spreaded .
When the financial resources of the manufacturer are
limited.
When the product are durable .
Example :
Food grains , spices, utensils

14.  This channel is used where the wholesalers
are scattered throughout the country and
selling agent under take marketing on
behalf of manufacturer.
manufacturer ConsumersRetailerswholesalers
Selling
agent

15.  Non conventional distribution
channels are those networks that work
with full co-ordination and cohesion .
Types of non conventional channels
Vertical distribution channel system.
Horizontal distribution channel system.

16.  The vertical channels are professionally managed
networks , designed to achieve technological ,
managerial, and promotional economies through
integration ,co- ordination and synchronisation of
marketing flows from the point of production to point of
ultimate use.
 There are three types of vertical channels :
Corporate system : In this, a single firm owns both production
and distribution facilities.
Example : Bata, Tata , Godrej with their own production units and
retail outlets

17. Administrated vertical system : Administrated vertical
channels are a co –ordination of all functions of production
and distribution achieved through the use of programme
developed by one or the number of limited firms throughout
the whole marketing system.
Contractual marketing system : A contractual
channel is one under which the independent
channel components integrate their programme on
contractual lines to attain the economies and
enhance the market impact.

18.  It is a new trend in distribution in which two or more
companies join hands to exploit a marketing
opportunity or opportunities, either by themselves or
by creating an independent unit.
Example– Associated cement company, sugar
syndicate of India, Maruti Udyog and HDFC bank .
Maruti Udyog manufacturer cars . Car financing is not
their business .but, Maruti has joined hands with HDFC
bank who has specialised knowledge about financing .
Both have 45% stake each with 10% being held by Maruti
Udyog.

19. In short ,we can say that a
manufacturer can use the different
type of distribution channels to
transfer the goods and services
from producer to consumers.

20. Thank
you

21. Any
Query ?