This document discusses distribution channels and logistics management. It covers the nature of distribution channels, including definitions and functions. It also discusses channel design decisions, including identifying alternatives like the number and types of intermediaries. Channel management decisions are covered, such as selecting, motivating, and evaluating channel members. Finally, it addresses physical distribution and logistics management, including major logistics functions and integrated logistics approaches.

1. Distribution channels and logistics
management

2. The learning objectives
 The nature of distribution channels
 Channel behavior and organization
 Channel design decisions
 Channel management decision
 Physical distribution and logistics management

3. 1.The nature of distribution
channels
 What is distribution?
 Why are marketing intermediaries used?
 The function of distribution channel
 Channel level

4. What is distribution channel?
 A set of interdependent organizations involved
in the process of making a product or service
available for use or consumption by the
consumer or business user.

5. How a Distributor Reduces the
Number of Channel Transactions
= Customer
= Manufacturer
A. Number of contacts
without a distributor
M x C = 3 X 3 = 9
1
3
2
4
5
6
7
8
9

6. How a Distributor Reduces the
Number of Channel Transactions
= Distributor
= Customer
= Manufacturer
B. Number of contacts
with a distributor
M x C = 3 + 3 = 6
Store
1
2
3
4
5
6

7. Ordering
Payments
Communication
Transfer
Negotiation
Financing
Risk Taking
Physical
Distribution
Information
DISTRIBUTION CHANNEL FUNCTIONS

8. Wholesaler Jobber Retailer Consumer
   
Consumer
Retailer Consumer

Manufacturer
0-level channel
Wholesaler Retailer Consumer
 
Mfg
2-level channel
Mfg
3-level channel
1-level channel
Manufacturer
CHANNEL LEVELS

9. Industrial
distributors
Manufacturer
Consumer
Manufacturer’s
representative
Manufacturer’s
sales branch
Industrial Marketing Channels

10. Customers’ Desired Service Levels
 Lot size
 Waiting time
 Spatial convenience
 Product variety
 Service backup

11. Why are marketing intermediaries used?

12. Distribution channel function
 Information
 Promotion
 Contact
 Matching
 negotiation

13. Channel level

14. Channel behavior and organization
 Channel conflict
 Vertical marketing system
 Horizontal marketing system
 Hybrid marketing systems

15. Corporate
Common Ownership at Different
Levels of the Channel
Contractual
Contractual Agreement Among
Channel Members
Administered
Leadership is Assumed by One or
a Few Dominant Members
TYPES OF VERTICAL CHANNELS

16. Conventional Distribution Channel vs. Vertical
Marketing Systems
Vertical
marketing
channel
Manufacturer
Retailer
Conventional
marketing
channel
Consumer
Manufacturer
Consumer
Retailer
Wholesaler
Wholesaler

17. Channel conflict
 Horizontal conflict
 Vertical conflict

18. Vertical marketing systems
 Conventional distribution
 VMS
 Corporate VMS
 Contractual VMS
 Administered VMS
 Franchise organization

19. Horizontal marketing system
 Horizontal marketing is a channel
arrangement in which two or more companies
at one level join together to follow a new
marketing opportunity
 McDonalds places Express Restaurants in
Wal-Mart stores.
 Economies of scale are achieved
 Reduction of cost by combined utilsation of
resources

20. Hybrid marketing channel
 Increase in market coverage
 Lower channel cost
 More customised selling
Disadvantages
 Increase in channel conflict
 Problems in contrlling various channels

21. 2.channel design decision
 Analyzing consumer service needs
 Setting channel objectives and constraints
 Identifying major alternatives
 Evaluating the major alternatives

22. Identifying major alternative
 Types of intermediaries
 Number of marketing intermediaries
 Responsibilities of channel members

23. Number of marketing intermediaries
 Intensive distribution
 Exclusive distribution
 Selective distribution

24. 3.Channel management Decision
 Selecting channel members
 Motivating channel members
 Evaluating channel members

25. Channel Management Decisions
Selecting
FEEDBACK
Motivating
Training
Evaluating

26. 4.physical distribution and logistics
management
 Physical distribution(marketing logistics)
 major logistics function
 Integrated logistics management
 Third-party logistics

27. Major logistics function
 Order processing
 Warehousing
 Inventory
 transportation

28. Integrated logistics management
 Cross-functional teamwork inside the company
 Building channel partnerships

29. Third-party logistics
 An independent logistics provider that performs
any or all of the functions required to get their
clients’ product to market.