1. WELCOME
‘A’ Division ‘B’ Division
Haribhau Kale
Nandkishor Kale
Kunal Kamble
Dipak Khade
Abhishek Khanande
2. PART 6 DELIVERING VALUE
Chapter 15
MARKETING CHANNELS & VALUE
NETWORK
3. What is a Marketing Channel?
A marketing channel system is the particular set
of interdependent organizations involved in the
process of making a product or service available
for use or consumption.
4. Marketing Channels
• Importance of Channels
a. push strategy
b. pull strategy
• Channel Development
• Hybrid Channels
• Understanding Customer Needs
a. Habitual Shoppers
b. High-value deal seekers
c. Variety-loving Shoppers
d. High-involvement shoppers
5. The Role of Marketing Channels
• Channel function flow
• Channel Level
a. producer and the final customer are part of
every channel.
b. zero level channel
c. one level channel
d. two level channel
e. three level channel
• Service Sector Channels
6. Channel-Design Decision
• Analyze customer desired service output level
a. lot size
b. waiting and deliver time
c. spatial convenience
d. product variety
e. service backup
• Establishing objectives and constrains
• Identifying and Evaluating Major Channel Alternatives
7. A. Types of intermediaries
B. Number of intermediaries
C. Terms & responsibilities of channel
members
8. Numbers of Intermediaries
I. Exclusive distribution
II. Selective distribution
III. Intensive distribution
9. Channel-Management Decisions
• Selecting channel members
• Training channel members
• Motivating channel members
• Evaluating channel members
• Modifying channel members
10. Channel Integration and Systems
A. Vertical marketing systems
a. Corporate VMS
b. Administered VMS
c. Contractual VMS
B. Horizontal marketing systems
C. Multichannel systems
11. What is Channel Conflict?
• Channel conflict occurs when one member’s actions
prevent another channel from achieving its goal.
• Types of channel conflicts:-
– Vertical
– Horizontal
– Multichannel
12. What is a Marketing Channel?
A marketing channel system is the particular
set of interdependent organizations involved
in the process of making a product or service
available for use or consumption.
13. PART 6 :- Delivering Value
CHAPTER 16:- MANAGING,
RETAILING, WHOLESALING AND
LOGISTICS
14. Retailing
• Retailing includes all the activities in selling goods or
services directly to final consumers for personal,
non-business use
• Any organization selling to final consumers is doing
retailing
• It doesn't matter how or where the goods or services
are sold
• A retailer or retail store is any business enterprise
whose sales volume comes primarily from retailing
15. Types Of Retailing
• Specialty store
• Departmental store
• Supermarket
• Convenience store
• Discount store
• Off-price retailer
• Superstore
• Catalog showroom
16. Levels of Service
Retailers position themselves as offering one of four levels of service
• Self service
• Customers carry out their own locate-compare-select process to
save money
• Self selection
• Customers find their own goods, although they can ask for
assistance
• Limited service
• Customers need more information and assistance
• Full service
• Customers who like to be waited on prefer this type of store
18. The New Retail Environment
• New Retail Forms and Combinations
• Growth of Intertype Competition
• Competition between Store-based and Non-
Store –Based Retailing
• Growth of Giant Retailers
• Decline of Middle-Market Retailers
• Growing Investment in Technology
• Global Profile of Major Retailers
19. Marketing Decisions
• Target Market
• Product Assortment
• Product Procurement
• Prices
• Services
• Store Atmosphere
• Store Activities And Experiences
• Communication
• Location
20. PRIVATE LABELS
• A private-label brand Role Of Private Labels:-
(also called a reseller, • It lowers the cost of
store, house, or Research and
distributor brand) is a development,
brand that retailers and Advertisements, Sales
wholesalers develop. promotion and physical
distribution, etc.
21. The Private-Label Threat
• In the deal between manufacturers' and private labels,
retailers gets many advantages and increasing market power.
• Many supermarkets now charge a high fee for accepting a
new brand, to cover the cost of listing and stocking it.
• Manufacturers and retailers copy and duplicate the qualities
of the best brands.
• The continuous barrage of coupons and price
specials(discounts) has trained people to buy on price.
• This has led to a confusing amount of product.
22. WHOLESALING
• Wholesaling includes all the activities in selling goods
or services to those who buy for resale or business
use.
• wholesalers pay less attention to promotion,
atmosphere, and location.
• wholesale transactions are usually larger than retail
transactions, and wholesalers usually cover a larger
trade area than retailers.
• the government deals with wholesalers and retailers
differently ill terms of legal regulations and taxes.
23. Functions of Wholesalers
• Selling and promoting
• Buying and assortment building
• Bulk breaking
• Warehousing.
• Transportation. Financing.
• Risk bearing.
• Market information
• Management services and counseling.
24. Trends in Wholesaling
• Wholesaler-distributors have faced pressures due to
competition, demanding customers, new technologies, and
more direct-buying programs by large industrial, institutional,
and retail buyers.
1.They sought a clear agreement with their manufacturers
about their expected functions in the marketing channel.
2. They gained insight into the manufacturers' requirements by
visiting their plants and attending manufacturer association
conventions and trade shows.
3. They fulfilled their commitments to the manufacturer by
meeting the volume targets, paying bills promptly, and feeding
back customer information to their manufacturers.
4. They identified and offered value-added services to help their
suppliers.G7
25. MARKET LOGISTICS
Market logistics includes planning the infrastructure
to meet demand, then implementing and controlling
the physical flows of materials and final goods from
points of origin to points of use, to meet customer
requirements at a profit.
26. Market logistics planning has four steps
Deciding on the company's value proposition to its customers. (What
on-time delivery standard should we offer? What levels should we
attain in ordering and billing accuracy?)
Deciding on the best channel design and network strategy for reaching
the customers. (Should the company serve customers directly or
through intermediaries? What products should we source from which
manufacturing facilities? How many warehouses should we maintain
and where should we locate them?)
Developing operational excellence in sales forecasting, warehouse
management, transportation management, and materials
management
Implementing the solution with the best information systems,
equipment, policies, and procedures
28. Market-Logistics Objectives
Means"getting the right goods to the right places at the right
time for the least cost.“
Market-logistics costs interact and are often negatively
related. For example:
• The traffic manager favors rail shipment over air shipment
because rail costs less. However, because the railroads are
slower, rail shipment ties up working capital longer, delays
customer payment, and might cause customers to buy from
competitors who offer faster service.
• The shipping department uses cheap containers to minimize
shipping costs. Cheaper containers lead to a higher rate of
damaged goods and customer will.
29. Given the market-logistics objectives, the company must
design a system that will minimize the cost of achieving these
objectives.
Each possible market-logistics system will lead to the
following cost:
M= T+ FW+ VW+ 5
where,
M = total market-logistics cost of proposed system
T = total freight cost of proposed system
FW = total fixed warehouse cost of proposed system
VW= total variable warehouse costs
(including inventoly) of proposed system
5 = total cost of lost sales due to average
delivery delay under proposed system
30. Market-Logistics Decisions
The firm must make four major decisions about its
market logistics:
How should we handle orders (order processing)?
Where should we locate our stock (warehousing)?
How much stock should we hold (inventory)?
How should we ship goods (transportation)?
