The document discusses channels of distribution and the roles of various participants in distribution networks. It defines a channel of distribution as the path goods move from producers to consumers. Middlemen like agents, wholesalers and retailers facilitate the flow of goods and provide various marketing functions. Factors like product characteristics, market size, company objectives, and middlemen considerations determine the optimal distribution channel for a business.
The document discusses channels of distribution, which refers to the route or path that goods move from producers to ultimate consumers. There are two main types of channels - direct and indirect. The direct channel involves producers selling directly to consumers without middlemen. The indirect channel involves middlemen like wholesalers and retailers who help facilitate the flow of goods. Wholesalers buy large quantities from producers and sell smaller quantities to retailers, while retailers buy from wholesalers or producers and sell directly to consumers.
Sales and distribution management full notesSandip Konwar
This document provides an overview of sales and distribution management. It discusses distribution management, which has two parts: distribution channels and physical distribution/marketing logistics. Distribution channels involve a set of organizations that make a product available for consumption. Physical distribution focuses on delivering finished products to intermediaries and end users. The document outlines the key functions of marketing channels and flows within channels.
The document discusses channels of distribution, defining it as the pathway taken by goods and services as they flow from production to consumption. It notes the importance of channels of distribution in bridging producers and consumers and helping transfer goods. The types of channels are described, including direct and indirect selling. Middlemen are discussed as important connecting links between manufacturers and consumers. [END SUMMARY]
Marketing channels, retailers and wholesalersMayanka Singh
1. The document discusses marketing channels and different types of intermediaries involved in making products available to consumers such as retailers, wholesalers, distributors.
2. It describes different channel structures from zero-level channels involving direct sales to consumers to multi-level channels involving multiple intermediaries.
3. The roles and functions of different channel members as well as important considerations in designing, managing, and integrating marketing channels are summarized.
This document discusses distribution channels and sales and distribution management. It defines distribution channels as sets of interdependent organizations that make products available for consumption. Effective distribution channels help address spatial, temporal, breaking bulk, assortment, and financial discrepancies between production and consumption. The key types of distribution channel members discussed are C&FAs, distributors, dealers, stockists, agents, wholesalers and retailers. The document also outlines different distribution strategies like intensive, selective and exclusive distribution.
This document provides an overview of distribution management. It defines distribution management as the efficient transfer of goods from the place of manufacture to the point of sale or consumption. It then lists the names, organizations, and positions of 7 team members presenting on distribution management systems. The presentation goes on to discuss key distribution concepts like product, place, price, and promotion. It also describes different distribution channels including direct selling, indirect selling through wholesalers and retailers, and different distribution intensities. The document concludes with an overview of channel formats like producer-driven, seller-driven, and service-driven distribution.
Physical Distribution - Marketing(783) CBSE Class 12Lovell Menezes
The document discusses physical distribution and distribution channels. It defines distribution as making products available to consumers through direct or indirect channels. There are three main types of distribution channels: intensive/mass distribution which uses many outlets to reach a wide market, selective distribution which uses some intermediaries for specialized goods, and exclusive distribution where a manufacturer uses only one intermediary. Distribution involves warehouses and intermediaries like wholesalers and retailers to store and transport goods and facilitate transactions between producers and consumers.
Middlemen ,retailers and their functions newNikhil Sharma
This document discusses different types of middlemen and their functions, as well as wholesalers and retailers. It defines middlemen as traders who buy from producers and sell to retailers or merchants. The main types of middlemen are brokers, factors, commission agents, underwriters, traveling agents, and auctioneers. Wholesalers buy large quantities from producers and warehouse and resell to retailers, providing services like financing, risk bearing, and market information. Retailers purchase from wholesalers and sell directly to consumers, performing functions such as assembling products, warehousing, grading, packing, financing, market research, and advertising.
The document discusses channels of distribution, which refers to the route or path that goods move from producers to ultimate consumers. There are two main types of channels - direct and indirect. The direct channel involves producers selling directly to consumers without middlemen. The indirect channel involves middlemen like wholesalers and retailers who help facilitate the flow of goods. Wholesalers buy large quantities from producers and sell smaller quantities to retailers, while retailers buy from wholesalers or producers and sell directly to consumers.
Sales and distribution management full notesSandip Konwar
This document provides an overview of sales and distribution management. It discusses distribution management, which has two parts: distribution channels and physical distribution/marketing logistics. Distribution channels involve a set of organizations that make a product available for consumption. Physical distribution focuses on delivering finished products to intermediaries and end users. The document outlines the key functions of marketing channels and flows within channels.
The document discusses channels of distribution, defining it as the pathway taken by goods and services as they flow from production to consumption. It notes the importance of channels of distribution in bridging producers and consumers and helping transfer goods. The types of channels are described, including direct and indirect selling. Middlemen are discussed as important connecting links between manufacturers and consumers. [END SUMMARY]
Marketing channels, retailers and wholesalersMayanka Singh
1. The document discusses marketing channels and different types of intermediaries involved in making products available to consumers such as retailers, wholesalers, distributors.
2. It describes different channel structures from zero-level channels involving direct sales to consumers to multi-level channels involving multiple intermediaries.
3. The roles and functions of different channel members as well as important considerations in designing, managing, and integrating marketing channels are summarized.
This document discusses distribution channels and sales and distribution management. It defines distribution channels as sets of interdependent organizations that make products available for consumption. Effective distribution channels help address spatial, temporal, breaking bulk, assortment, and financial discrepancies between production and consumption. The key types of distribution channel members discussed are C&FAs, distributors, dealers, stockists, agents, wholesalers and retailers. The document also outlines different distribution strategies like intensive, selective and exclusive distribution.
This document provides an overview of distribution management. It defines distribution management as the efficient transfer of goods from the place of manufacture to the point of sale or consumption. It then lists the names, organizations, and positions of 7 team members presenting on distribution management systems. The presentation goes on to discuss key distribution concepts like product, place, price, and promotion. It also describes different distribution channels including direct selling, indirect selling through wholesalers and retailers, and different distribution intensities. The document concludes with an overview of channel formats like producer-driven, seller-driven, and service-driven distribution.
Physical Distribution - Marketing(783) CBSE Class 12Lovell Menezes
The document discusses physical distribution and distribution channels. It defines distribution as making products available to consumers through direct or indirect channels. There are three main types of distribution channels: intensive/mass distribution which uses many outlets to reach a wide market, selective distribution which uses some intermediaries for specialized goods, and exclusive distribution where a manufacturer uses only one intermediary. Distribution involves warehouses and intermediaries like wholesalers and retailers to store and transport goods and facilitate transactions between producers and consumers.
Middlemen ,retailers and their functions newNikhil Sharma
This document discusses different types of middlemen and their functions, as well as wholesalers and retailers. It defines middlemen as traders who buy from producers and sell to retailers or merchants. The main types of middlemen are brokers, factors, commission agents, underwriters, traveling agents, and auctioneers. Wholesalers buy large quantities from producers and warehouse and resell to retailers, providing services like financing, risk bearing, and market information. Retailers purchase from wholesalers and sell directly to consumers, performing functions such as assembling products, warehousing, grading, packing, financing, market research, and advertising.
This document discusses distribution channels and the roles of wholesalers and retailers. It explains that wholesalers perform important functions like market coverage, inventory holding, sales support and credit/financing for manufacturers and retailers. Wholesalers help products reach consumers efficiently and include merchant wholesalers, agents, brokers and manufacturer's branches. Retailers then sell directly to consumers and provide services and utilities to make products available for personal or household use.
This document discusses marketing channels and channel management. It begins by defining marketing channels as the set of interdependent organizations involved in making a product available for use or consumption. It then discusses the importance of channels in converting potential buyers to profitable consumers and creating markets. The document provides examples of pull and push strategies and hybrid/multichannel marketing. It also discusses value networks, benefits of demand chain planning, roles of marketing channels, channel functions and flows. The rest of the document focuses on channel design, evaluation, selection, training, motivation, and modification. It discusses vertical marketing systems, horizontal marketing systems, and multichannel marketing systems. It also addresses causes of channel conflict and the need for coordination.
The document discusses the importance of distribution strategy for businesses. It notes that distribution affects sales, profits, and customer satisfaction. It then defines distribution and distribution channels. The rest of the document discusses factors to consider when selecting distribution channels, such as the type of channel, number of intermediaries, and whether to use a single or multiple channels. It also covers vertical and horizontal marketing systems.
1. The document discusses various aspects of marketing channels including marketing channel design, market testing, and segmentation for marketing channel design.
2. It provides definitions of marketing channels and discusses important concepts like marketing flows in channels, who belongs to a marketing channel, and the work of marketing channels.
3. The document also discusses channel analysis framework including channel design process, channel implementation process, and concepts like channel power and channel conflict.
Chapter 18 marketing channels and physical distribution marketing managementmerryncevalcorza
The document discusses marketing channels and physical distribution. It defines a marketing channel as a system of relationships between businesses involved in buying and selling products. It describes different types of channels for consumer and industrial products. It also discusses factors that affect channel selection, objectives, intensity of market coverage, terms and conditions, evaluation of alternatives, selection and training of intermediaries, performance evaluation, and modification of channels. Finally, it covers physical distribution functions like order processing, inventory management, warehousing, and transportation of goods.
The document discusses channel management and selection of distribution channels. It describes different types of channels including direct marketing channels with no intermediaries and indirect marketing channels with various levels of intermediaries like retailers and wholesalers. It also discusses different intermediaries like agents, wholesalers, retailers and their roles. Key factors for selecting appropriate channels are discussed like market factors, customer preferences, product characteristics and competition.
This document provides an overview of channels of distribution from a presentation on sales and advertising management. It defines channels of distribution as the ways that goods and services are distributed from manufacturers to consumers. The document outlines various definitions of channels of distribution from different authors. It discusses the characteristics and elements of channels of distribution, including that they are routes that goods and services flow through composed of intermediaries like wholesalers and retailers. The document also covers the functions of channels of distribution, factors that determine choice of channels, and factors relating to products, companies, markets, middlemen, and the environment that influence channel selection.
The document discusses channels of distribution, which refers to the routes by which products flow from producers to consumers. It describes direct selling from manufacturers to consumers as well as indirect selling which involves middlemen like wholesalers and retailers. The different types of middlemen are explained, specifically focusing on wholesalers who buy goods in bulk from manufacturers and resell them to retailers.
The document discusses various distribution channels and intermediaries involved in moving products from manufacturers to consumers. It describes different types of intermediaries like wholesalers, retailers, brokers, and their roles. Wholesalers purchase large quantities from manufacturers and sell to retailers. Retailers sell directly to consumers. Distribution channels can be direct from manufacturer to consumer or indirect using intermediaries. The advantages and disadvantages of different channels are also outlined.
This document discusses distribution channels and their types. It defines distribution channels as the route by which products flow from production to consumption. Distribution channels can be conventional or non-conventional. Conventional channels involve independent intermediaries while non-conventional channels involve vertically or horizontally integrated systems. Common conventional channels include direct channels from manufacturer to consumer, and indirect one-level, two-level, or multi-level channels involving intermediaries like wholesalers or retailers. Non-conventional channels include vertical systems where manufacturers own distributors, and horizontal systems with strategic partnerships. The document also discusses industrial distribution channels.
The document discusses marketing channels and distribution strategies. It covers:
- The functions of marketing channels in moving goods from producers to consumers. Common intermediaries like wholesalers and retailers are discussed.
- Factors influencing channel design like customer needs, objectives, alternatives. Types of channels like exclusive and intensive distribution are explained.
- Evaluating channel alternatives based on economic, control and adaptive criteria to determine the most effective option. An example comparing direct sales reps vs an industrial distributor is provided.
This document discusses marketing channels and distribution strategies. It covers types of marketing channels including one-level, two-level, and three-level channels. It also discusses intensive, selective, and exclusive distribution strategies. Additionally, it covers types of wholesalers and retailers as well as their roles in marketing channels. Specifically, it outlines full-service and limited function wholesalers and categories of retailers based on factors like sales volume, product mix, and ownership form.
Channel Power & Conflict and Channel DynamicsNavin Raj Saroj
This document discusses channel power, conflict, and dynamics. It defines channel power as a member's ability to influence other members' behavior. The five bases of power are reward, coercion, expertise, reference, and legitimacy. Channel conflict can occur vertically between different levels, horizontally between members at the same level, between different types of members, and with multiple channels. Conflicts arise from incompatible goals, unclear roles, and dependence. Managing conflict involves communication, councils, co-optation, arbitration, and mediation. Channel dynamics include gaining member acceptance, physical distribution, legal issues like exclusivity and tying arrangements, and factors like output, lot size, waiting time, convenience, variety, and service.
The document discusses distribution channels and issues related to designing distribution strategies. It covers the roles and functions of channel partners, types of channel levels (zero-level, one-level, two-level, three-level), considerations for channel design such as customer service requirements and alternatives for channel structure. Channel structure alternatives include the types of intermediaries used, number of intermediaries, and terms of responsibilities between the producer and channel members.
Distribution channels are an important element of marketing mix and are the routes through which products reach target customers. Indirect channels utilize middlemen like merchants and agents to distribute products from producers to consumers. Direct channels do not involve middlemen and producers sell directly to consumers. Companies may also use mixed channels that employ both direct and indirect methods simultaneously in different markets.
A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. It can include wholesalers, retailers, distributors and even the internet itself.
Distribution importance and functions by divanshu pahwaDivanshu Pahwa
This document discusses the importance and functions of distribution. It defines distribution as spreading products throughout the marketplace so that many people can buy them. This requires an effective transportation system, tracking system, packaging, and placement of products. Distribution is critical because it determines if a company can sell its products more widely than competitors. The document also outlines different distribution methods like direct sales, wholesalers, and retailers. It explains key functions of distribution channels including optimizing sales volume, managing costs of sales, impacting profits, and influencing brand perception. Overall, the document emphasizes that distribution is an important part of the marketing mix that adds value by delivering satisfaction, employment opportunities, communication between producers and consumers, financing support, and production efficiency.
This document provides an introduction to marketing channels and distribution. It defines what a marketing channel is and explains why manufacturers use intermediaries. The key members of marketing channels are producers, wholesalers, retailers, and end users. Channels add value through activities like sorting, accumulating, allocating, and assorting products. Channels also allow for the routinization of transactions and reduction in the number of customer contacts. The document outlines important channel concepts like physical possession, promotion, negotiation, financing, and risk taking that flow between members.
There are four main types of distribution channels:
1. Producer to Customer - the shortest channel without middlemen.
2. Producer to Retailer to Customer - involves one middleman, the retailer.
3. Producer to Wholesaler to Retailer to Customer - the most common channel with two middlemen.
4. Producer to Agent to Wholesaler to Retailer to Customer - the longest channel with three middlemen.
The appropriate channel depends on factors like the product, market size and geography, and distribution costs.
The document discusses physical distribution and distribution channels. It defines physical distribution as moving tangible products through distribution channels. Physical distribution management involves activities like order processing, inventory control, inventory location and warehousing, materials handling, and transportation. When designing marketing channels, marketers consider factors like setting distribution objectives, specifying distribution tasks, developing alternative channel structures, evaluating relevant variables, and selecting channel members. Channel structure dimensions include the number of levels, intensity at various levels, and types of intermediaries. Variables affecting channel structure are market variables, product variables, company variables, intermediary variables, and environmental/behavioral variables. The key is developing a channel structure that aligns with objectives and considers all relevant factors.
Distribution channels marketing management pptGanesh Asokan
The document discusses key aspects of channels including their nature, design, management and conflicts. It describes how channels help distribute products efficiently by utilizing specialized intermediaries. The document outlines factors to consider in channel design like customer needs, objectives and alternative structures. It also discusses evaluating alternatives based on economic and control criteria. Finally, the summary highlights how channel members are selected, motivated and evaluated over time to ensure good performance.
This document discusses distribution channels and the roles of wholesalers and retailers. It explains that wholesalers perform important functions like market coverage, inventory holding, sales support and credit/financing for manufacturers and retailers. Wholesalers help products reach consumers efficiently and include merchant wholesalers, agents, brokers and manufacturer's branches. Retailers then sell directly to consumers and provide services and utilities to make products available for personal or household use.
This document discusses marketing channels and channel management. It begins by defining marketing channels as the set of interdependent organizations involved in making a product available for use or consumption. It then discusses the importance of channels in converting potential buyers to profitable consumers and creating markets. The document provides examples of pull and push strategies and hybrid/multichannel marketing. It also discusses value networks, benefits of demand chain planning, roles of marketing channels, channel functions and flows. The rest of the document focuses on channel design, evaluation, selection, training, motivation, and modification. It discusses vertical marketing systems, horizontal marketing systems, and multichannel marketing systems. It also addresses causes of channel conflict and the need for coordination.
The document discusses the importance of distribution strategy for businesses. It notes that distribution affects sales, profits, and customer satisfaction. It then defines distribution and distribution channels. The rest of the document discusses factors to consider when selecting distribution channels, such as the type of channel, number of intermediaries, and whether to use a single or multiple channels. It also covers vertical and horizontal marketing systems.
1. The document discusses various aspects of marketing channels including marketing channel design, market testing, and segmentation for marketing channel design.
2. It provides definitions of marketing channels and discusses important concepts like marketing flows in channels, who belongs to a marketing channel, and the work of marketing channels.
3. The document also discusses channel analysis framework including channel design process, channel implementation process, and concepts like channel power and channel conflict.
Chapter 18 marketing channels and physical distribution marketing managementmerryncevalcorza
The document discusses marketing channels and physical distribution. It defines a marketing channel as a system of relationships between businesses involved in buying and selling products. It describes different types of channels for consumer and industrial products. It also discusses factors that affect channel selection, objectives, intensity of market coverage, terms and conditions, evaluation of alternatives, selection and training of intermediaries, performance evaluation, and modification of channels. Finally, it covers physical distribution functions like order processing, inventory management, warehousing, and transportation of goods.
The document discusses channel management and selection of distribution channels. It describes different types of channels including direct marketing channels with no intermediaries and indirect marketing channels with various levels of intermediaries like retailers and wholesalers. It also discusses different intermediaries like agents, wholesalers, retailers and their roles. Key factors for selecting appropriate channels are discussed like market factors, customer preferences, product characteristics and competition.
This document provides an overview of channels of distribution from a presentation on sales and advertising management. It defines channels of distribution as the ways that goods and services are distributed from manufacturers to consumers. The document outlines various definitions of channels of distribution from different authors. It discusses the characteristics and elements of channels of distribution, including that they are routes that goods and services flow through composed of intermediaries like wholesalers and retailers. The document also covers the functions of channels of distribution, factors that determine choice of channels, and factors relating to products, companies, markets, middlemen, and the environment that influence channel selection.
The document discusses channels of distribution, which refers to the routes by which products flow from producers to consumers. It describes direct selling from manufacturers to consumers as well as indirect selling which involves middlemen like wholesalers and retailers. The different types of middlemen are explained, specifically focusing on wholesalers who buy goods in bulk from manufacturers and resell them to retailers.
The document discusses various distribution channels and intermediaries involved in moving products from manufacturers to consumers. It describes different types of intermediaries like wholesalers, retailers, brokers, and their roles. Wholesalers purchase large quantities from manufacturers and sell to retailers. Retailers sell directly to consumers. Distribution channels can be direct from manufacturer to consumer or indirect using intermediaries. The advantages and disadvantages of different channels are also outlined.
This document discusses distribution channels and their types. It defines distribution channels as the route by which products flow from production to consumption. Distribution channels can be conventional or non-conventional. Conventional channels involve independent intermediaries while non-conventional channels involve vertically or horizontally integrated systems. Common conventional channels include direct channels from manufacturer to consumer, and indirect one-level, two-level, or multi-level channels involving intermediaries like wholesalers or retailers. Non-conventional channels include vertical systems where manufacturers own distributors, and horizontal systems with strategic partnerships. The document also discusses industrial distribution channels.
The document discusses marketing channels and distribution strategies. It covers:
- The functions of marketing channels in moving goods from producers to consumers. Common intermediaries like wholesalers and retailers are discussed.
- Factors influencing channel design like customer needs, objectives, alternatives. Types of channels like exclusive and intensive distribution are explained.
- Evaluating channel alternatives based on economic, control and adaptive criteria to determine the most effective option. An example comparing direct sales reps vs an industrial distributor is provided.
This document discusses marketing channels and distribution strategies. It covers types of marketing channels including one-level, two-level, and three-level channels. It also discusses intensive, selective, and exclusive distribution strategies. Additionally, it covers types of wholesalers and retailers as well as their roles in marketing channels. Specifically, it outlines full-service and limited function wholesalers and categories of retailers based on factors like sales volume, product mix, and ownership form.
Channel Power & Conflict and Channel DynamicsNavin Raj Saroj
This document discusses channel power, conflict, and dynamics. It defines channel power as a member's ability to influence other members' behavior. The five bases of power are reward, coercion, expertise, reference, and legitimacy. Channel conflict can occur vertically between different levels, horizontally between members at the same level, between different types of members, and with multiple channels. Conflicts arise from incompatible goals, unclear roles, and dependence. Managing conflict involves communication, councils, co-optation, arbitration, and mediation. Channel dynamics include gaining member acceptance, physical distribution, legal issues like exclusivity and tying arrangements, and factors like output, lot size, waiting time, convenience, variety, and service.
The document discusses distribution channels and issues related to designing distribution strategies. It covers the roles and functions of channel partners, types of channel levels (zero-level, one-level, two-level, three-level), considerations for channel design such as customer service requirements and alternatives for channel structure. Channel structure alternatives include the types of intermediaries used, number of intermediaries, and terms of responsibilities between the producer and channel members.
Distribution channels are an important element of marketing mix and are the routes through which products reach target customers. Indirect channels utilize middlemen like merchants and agents to distribute products from producers to consumers. Direct channels do not involve middlemen and producers sell directly to consumers. Companies may also use mixed channels that employ both direct and indirect methods simultaneously in different markets.
A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. It can include wholesalers, retailers, distributors and even the internet itself.
Distribution importance and functions by divanshu pahwaDivanshu Pahwa
This document discusses the importance and functions of distribution. It defines distribution as spreading products throughout the marketplace so that many people can buy them. This requires an effective transportation system, tracking system, packaging, and placement of products. Distribution is critical because it determines if a company can sell its products more widely than competitors. The document also outlines different distribution methods like direct sales, wholesalers, and retailers. It explains key functions of distribution channels including optimizing sales volume, managing costs of sales, impacting profits, and influencing brand perception. Overall, the document emphasizes that distribution is an important part of the marketing mix that adds value by delivering satisfaction, employment opportunities, communication between producers and consumers, financing support, and production efficiency.
This document provides an introduction to marketing channels and distribution. It defines what a marketing channel is and explains why manufacturers use intermediaries. The key members of marketing channels are producers, wholesalers, retailers, and end users. Channels add value through activities like sorting, accumulating, allocating, and assorting products. Channels also allow for the routinization of transactions and reduction in the number of customer contacts. The document outlines important channel concepts like physical possession, promotion, negotiation, financing, and risk taking that flow between members.
There are four main types of distribution channels:
1. Producer to Customer - the shortest channel without middlemen.
2. Producer to Retailer to Customer - involves one middleman, the retailer.
3. Producer to Wholesaler to Retailer to Customer - the most common channel with two middlemen.
4. Producer to Agent to Wholesaler to Retailer to Customer - the longest channel with three middlemen.
The appropriate channel depends on factors like the product, market size and geography, and distribution costs.
The document discusses physical distribution and distribution channels. It defines physical distribution as moving tangible products through distribution channels. Physical distribution management involves activities like order processing, inventory control, inventory location and warehousing, materials handling, and transportation. When designing marketing channels, marketers consider factors like setting distribution objectives, specifying distribution tasks, developing alternative channel structures, evaluating relevant variables, and selecting channel members. Channel structure dimensions include the number of levels, intensity at various levels, and types of intermediaries. Variables affecting channel structure are market variables, product variables, company variables, intermediary variables, and environmental/behavioral variables. The key is developing a channel structure that aligns with objectives and considers all relevant factors.
Distribution channels marketing management pptGanesh Asokan
The document discusses key aspects of channels including their nature, design, management and conflicts. It describes how channels help distribute products efficiently by utilizing specialized intermediaries. The document outlines factors to consider in channel design like customer needs, objectives and alternative structures. It also discusses evaluating alternatives based on economic and control criteria. Finally, the summary highlights how channel members are selected, motivated and evaluated over time to ensure good performance.
This document discusses marketing channels and distribution. It defines marketing channels as the interconnected organizations involved in making a product available for consumption. Channels of distribution include multiple levels from manufacturers to consumers, such as wholesalers and retailers. Intermediaries are middlemen that take ownership of goods and sell them for profit. Key intermediaries discussed are wholesalers, retailers, and agent middlemen like brokers. Important factors in choosing distribution channels include product characteristics, market forces, institutional capabilities, and environmental considerations.
This document discusses distribution channels and sales promotion techniques. It defines distribution channels as the interconnected organizations involved in making a product available to consumers. The objectives of distribution include consumer satisfaction and profitability. It also discusses channel design decisions, functions like order processing and inventory management, and channel management considerations like identifying consumer needs and selecting the optimal channel structure.
This document provides an overview of marketing channel structure and functions. It discusses how channel members add value through specialization and the division of labor principle. The document also examines different types of marketing channels for consumers and businesses. It explores considerations for selecting and managing multi-channel distribution systems, as well as carefully selecting and developing international channel members. Finally, it summarizes that future distribution channels will be more interactive and challenged by the internet, while international channels will remain important with an adaptive focus on customer preferences.
Webinar: Improve Campaign Results with Multi-Channel Funnels and Acquisio Att...Acquisio
While tracking page hits has become a mandatory practice, determining the path someone takes to land on a specific page can be challenging at best. However, if you can uncover this information, you can determine which marketing channels are most effective and fully leverage them.
To facilitate this, Google has developed an Attribution Modeling tool. Part of Google Analytics Premium, the tool provides valuable insight and analytics by breaking down and comparing the effectiveness of your key marketing channels, such as paid and organic search, email, affiliate marketing, display ads, mobile placements, and more.
To show you how it works, we will be hosting a webinar on August 30. Presented by James Thompson, President of Clix Marketing, and Marc Poirier, CMO & Co-Founder of Acquisio, this webinar will cover the following:
- Google’s Attribution Modeling concept
- The benefits of using Attribution Modeling
- Case studies on clients using this product
- Best practices
The webinar will also explain the value of combining Google’s Attribution Modeling tool with a platform like Acquisio, to receive additional insight towards your media channels, as well as the true value of display and Facebook advertising.
If you are looking to enhance your digital marketing efforts, enable better budget allocation across channels and increase your marketing ROI, this webinar is not to be missed.
The document discusses various pricing strategies and considerations for setting prices. It covers topics like customer value-based pricing, cost-based pricing, competition-based pricing, and other strategies. Various factors are examined that affect pricing decisions, such as costs, customer perceptions of value, competitors' prices, and market conditions. The document provides an overview of key concepts in pricing as well as examples and factors to consider for different pricing models.
Kellogg's Company has a large distribution network in India to reach customers. It has 200 distributors, 18 storage hubs, and over 35 million square feet of manufacturing, distribution, and warehouse facilities. Kellogg's products reach over 50,000 stores in India. The distribution channel flow involves manufacturing at Kellogg's plant in Taloja, Mumbai and then distributing to distributors who send products to retailers, with distributors receiving a 5% margin and retailers a 12% margin. Kellogg's has a 37% market share of the breakfast cereals market in India and the widest product range and strong distribution network have helped it become the leading brand.
The document provides a history of sales and marketing from ancient times of bartering to modern times of intelligent sales automation and empowered customers. It discusses the evolution of sales approaches from exaggerated claims to relationship building to solution selling. It also summarizes different types of distribution channels including consumer, industrial, and service channels. Consumer channels can involve direct sales or multiple intermediaries like wholesalers or retailers. Industrial channels tend to be shorter with direct sales to business customers. The roles of channels are to enhance efficiency, facilitate the flow of goods, reduce transaction costs, and bring products closer to consumers. Primary sales involve selling to channel partners while secondary sales reach end users.
This document discusses spatial channel modeling based on wave-field representation for wireless communications. It provides an overview of existing spatial channel models and proposes a new approach using electromagnetic theory. Key points include representing transmitted and received signals as time-varying fields, modeling propagation using Maxwell's equations, and illustrating the method on linear stochastic and geometrical channel models that combine aspects of wave propagation and random scattering.
This document discusses international distribution and logistics. It defines distribution channels and international channel systems, including direct and indirect exporting. It also lists factors that influence channel selection and the various components of an international logistics system, such as fixed facilities location, transportation, inventory management, order processing, and materials handling/warehousing.
This document analyzes the market share of Pepsi in Jamshedpur, India. It finds that Pepsi has a 62% volume share compared to Coca Cola's 38% share. Pepsi exclusively stocked outlets have a 54% empty stock share while mixed outlets show 45% Pepsi share. Slice and Thums Up are the top-selling Pepsi and Coke products respectively. The document recommends that Pepsi improve production, services, and promotions to increase market penetration and better compete with Coca Cola.
Business Development For Startups - Part 1 - Choosing and Managing Sales Chan...Stephen Davis
The document discusses choosing and managing sales channels for startups. It provides an overview of 9 steps to sales success, including getting into the mind of buyers, developing buyer profiles, and being where prospects are. It also covers developing channel strategies, types of sales channels, common mistakes, and considerations for choosing channels like costs, control, and margins.
Merchant middlemen buy goods from producers and sell them to retailers or consumers. They act as intermediaries in the distribution process. There are several types of intermediaries that perform important functions like breaking bulk, warehousing, financing, transportation, and risk bearing. The document discusses merchant middlemen, wholesalers, distributors, dealers and agents in detail - outlining their roles and functions in facilitating the flow of goods from producers to consumers. It also covers the different strategies for establishing intermediaries like exclusive, selective and intensive distribution.
Conventional retailing refers to traditional small retail formats like local kirana shops. These shops are family-run with low investment and lack standardization. They make up 98% of India's retail sector. They remain popular due to proximity, credit options, and efficient management systems. However, organized retail is growing at 35% annually and poses a threat with modern practices and formats. E-commerce is also transforming retail by offering convenience and new ways for customers and retailers to interact.
The document discusses distribution channels and the factors to consider when selecting a distribution channel. It defines distribution and distribution channels. There are typically four main types of distribution channels: 1) Producer to Customer, 2) Producer to Retailer to Customer, 3) Producer to Wholesaler to Retailer to Customer, and 4) Producer to Agent to Wholesaler to Retailer to Customer. When selecting a channel, an entrepreneur should consider product characteristics, market characteristics, and other factors like costs, sales volume, and the firm's marketing policies. Product considerations include value, perishability, and need for service. Market considerations include customer type, location, and order size. Other factors include the firm's size, resources,
The document discusses the roles of middlemen and different types of middlemen in the distribution channel between producers and consumers. It defines a middleman as a trader who buys from producers and sells to retailers or consumers, acting as an intermediary. Middlemen include wholesalers and retailers. Wholesalers buy large quantities from manufacturers and sell smaller quantities to retailers. Retailers then sell directly to consumers, providing a variety of products, small quantities, and convenient locations. Both wholesalers and retailers perform important functions in the distribution process such as breaking bulk, storage, packaging, financing, risk taking, and marketing.
Retailing involves selling goods directly to consumers for personal use. Retailers occupy the middle position between producers/wholesalers and customers, receiving products and passing them on. Key characteristics of retailers include marketing directly to customers, using multiple channels like stores and e-commerce, and innovating to meet changing customer needs. Retailers aim to provide maximum customer satisfaction in a limited area by maintaining personal contact, offering product selection and convenient shopping experiences.
The document discusses channels of distribution and the different intermediaries involved in moving products from manufacturers to consumers. It describes wholesalers as intermediaries that buy large quantities from manufacturers and resell to retailers. Retailers sell directly to consumers for personal use, either through physical stores or non-store methods like catalogues, TV, and online. Agents bring buyers and sellers together but do not take ownership of goods. Products typically move through multiple channels from manufacturer to wholesaler to retailer to consumer, though some steps may be skipped.
The document discusses distribution in rural markets, including channel structures and partners. It provides details on:
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2) Key rural channel members include CFAs, redistribution stockists, wholesalers, and retailers like mobile traders.
3) Companies are utilizing various approaches to reach rural customers, such as partnering with cooperative societies, public distribution systems, oil company centers, feeder markets, and festivals/fairs.
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Distribution channels refer to the routes that products take from manufacturers to consumers. There are direct channels where manufacturers sell directly to consumers, and indirect channels involving intermediaries like wholesalers and retailers. Common types of indirect channels include one-level channels with retailers or wholesalers, and two-level channels with both. Channels serve to transfer ownership and possession of goods while performing functions like breaking bulk, financing inventory, risk taking, and providing information to facilitate sales.
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This document discusses different types of middlemen in distribution channels. It defines middlemen as institutions or businesses between producers and final buyers that facilitate the flow of goods. The main types of middlemen discussed are agent middlemen (e.g. brokers, commission agents) and merchant middlemen (e.g. wholesalers, retailers). Wholesalers purchase goods in bulk from manufacturers and sell them in smaller quantities to retailers. Retailers then sell directly to end consumers. The document outlines various functions and classifications of these middlemen.
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1. 23
Channels of Distribution
23.1 Introduction
As you know, the primary objective of all business enterprises is to
earn profit by selling goods and services to ultimate consumers or
users. In order to bring goods from the place of manufacture to the
place of consumers, the goods have to follow a path or route which is
known as channel of distribution or trade channel. A trade or marketing
channel consists of producer, middlemen, and consumers or users. The
channel serves as a link between the producer and consumers. In the
present lesson we shall discuss the various aspects of channels of
distribution.
23.2 Objectives
After studying this lesson you will be able to :
recall the meaning of channels of distribution;
identify the various channels of distribution with the help of a
chart;
describe the role of middlemen in the distribution of goods;
state the desirability of eliminating the middlemen;
enumerate the role of wholesaler and retailer in distribution of
goods;
2. 40:: Business Studies
explain the role of specialised retail outlets e.g., departmental
stores, multiple shops, mail order business, etc.;
prepare a list of factors to be considered before choosing a
suitable channel of distribution.
23.3 Channel of distribution - Meaning
A channel of distribution or trade channel is the path or route along
which goods move from producers to ultimate consumers or industrial
users. In otherwords, it is the distribution network through which a
producer puts his product in the hands of actual users. The channel of
distribution includes the original producer, the final buyer and any
middlemen-either wholesaler or retailer. The term middleman refers to
any institution or individual in the channel which either acquires title
to the goods or negotiates or sells in the capacity of an agent or
broker. But facilitating agencies who perform or assist in marketing
function are not included as middlemen in the channel of distribution.
This is because they neither acquire title to the goods nor negotiate
purchase or sale. Such facilitating agencies include banks, railways,
roadways, warehouses, insurance companies, advertising agencies, etc.
The following diagram (chart) is illustrative of the channel of distribution
which may exist in a market.
P Direct Sale C
R Retailer O
O Wholesaler Retailer N
D Agent Retailer S
U U
C Agent Wholesaler Retailer M
E Agent/dealer Retailer E
R R
Agent/dearler Wholesaler Retailer
S S
The above chart indicates that the number of middlemen may vary. If
there is direct sale by the produce to the consumers then there is no
3. Channels of Distribution :: 41
middleman. But that is very rare. As the chart shows the producer may
sell goods to retailer who may then sell the same to consumers. The
producer may sell goods to wholesalers who may inturn sell to retailers
and the retailer may sell to consumers. The fourth alternative channel
of distribution is when any agent/dealer intervenes between the producer
and retailers and acts as a middlemen. The agent is appointed by the
producer for the sale of goods to the retailers. Another alternative
channel is there when producer’s agent sells goods to wholesalers who
sell to retailers. Agent/dealer is an independent person/firm buying
goods and selling them to retailers. Agent/dealer may also sell to
wholesalers who may then sell to retailers and goods are thus made
available to consumers. In the channel of distribution there may be
more than one agent/dealer and wholesaler.
23.4 Role of middlemen in the distribution of goods
The middlemen perform the following marketing functions which are
listed in sequence.
I. Searching out buyers and sellers (contacting & Mechandising),
matching goods to the requirements of market.
II Offering goods in the form of assortments or packages.
III Persuading and influencing the prospective buyers to favour a
certain product and its maker (personal selling/sales promotion).
IV Implementing pricing policies in such a manner that would be
acceptable to buyers and ensure effective distribution.
V. Providing feed back information, marketing intelligence and sales
forecasting services for the regions to their suppliers.
VI Looking after the process of distribution where necessary.
VII Participating actively in the creation and establishment of a market
for a new product.
VIII Offering pre and after sale services to consumers.
IX Communicating the use of technique of the product to the users.
4. 42:: Business Studies
X Offering credit to retailers and consumers.
XI Risk bearing with reference to stock hoarding/transport.
23.5 Desirability of eliminating the middlemen
You have already learnt the role of middlemen above, which indicates
the significance of middlemen in the channel of distribution. Indeed
without the existence of middlemen goods produced on a mass scale
could not have reached the consumers at right time and place. However
the existence of middlemen may lead to several short comings. The
elimination of middlemen is based on the following grounds.
I. Excessive number : Often there are too many middlemen between
the manufacturers and consumers. As every middleman charges
some commission or profit, the ultimate consumer has to pay a
very high price for goods. They are social parasites thriving at
the cost of the consumer and their ultimate elimination will reduce
prices and burden on consumers.
II. Superfluous : Most middlemen do not render any useful service
in lieu of profit or commission. They act as only transfer agents
and unnecessarly cause delay in the flow of goods. Their
elimination will result in quick and smooth flow of goods.
III. Limited risk taking : Middlemen do not bear the producers' risk
such as loss due to strikes, lockouts, depression and change in
fashions and habits, etc.
IV. Anti-social activities : They take undue advantage of adverse
conditions in business. Some businessmen (middlemen) indulge
in anti-social activities like hoarding and adulteration to earn
huge amount to profits.
V. Limiting consumers' choice : The middlemen often promote
products which are inferior in quality and get high margin of
profit. Thus they exploit consumers and limit their choice.
5. Channels of Distribution :: 43
Intext Question 23.1
Fill in the blank
(i) A channel of distribution is the ________ along which
goods move from producers to consumers.
(ii) Banks are __________ included in the channel of
distribution.
(iii) Retailer acts as a __________ between the wholesaler and
consumers.
(iv) Role of the middlemen is to __________ out buyers and
sellers and match goods to the requirements of market.
(v) Some businessmen (middlemen) indulge in _______ social
activities.
23.6 Role of wholesaler and retailer in distribution of
goods
Role of Wholesaler :
Wholesaler acts as a middlemen in the channel of distribution as he
buys goods in large quantity from the manufacturer and sells these to
retailers in small quantities. His role in distribution of goods is discussed
below:
I. Buying and assembling : A wholesaler forecasts the demand for
goods and assembles different varieties of goods from several
manufacturers. Some wholesalers also import goods from foreign
countries.
II. Selling and dispersing : A wholesaler breaks the bulk so that
retailers and users can buy them in small lots. His representatives
egularly call on retailers and industrial users/buyers to distribute
the goods among widely scattered people.
III. Transportation : A wholesaler arranges transportation of goods
from producers to his godowns and from there to retailers.
6. 44:: Business Studies
Sometimes he has his own transport arrangement for this purpose.
IV Storage : He holds large stocks and serves as a reservoir and
supplies to retailers. He helps in stablising prices by adjusting
supply of goods to their demand.
V. Packing and grading : A wholesaler packs and repacks goods
in convenient lots. He sorts out goods in different grades. He
also gives brand names to the products packed and graded by
him.
VI. Advertising and sales promotion : A wholesaler performs
advertising and sales promotion activities to increase the sale of
products. He also takes the services of experts for this purpose.
VII. Financing : Sometimes the wholesaler buys goods on cash basis
from manufacturers and sells them on credit to retailers. In this
way he provides financial help both to the producers and retailers.
If necessary, the wholesaler also provide financial help by way
of advance payment to producers.
VIII Risk-taking : A wholesaler bears risks of changes in demand
and prices, bad debts and damage to goods in the course of
transportation and storage. By undertaking various risks he
simplifies the process of distribution.
Role of Retailers :
Retailers buys goods from wholesaler and sells them directly to
consumers. Thus he acts as a direct link between the wholesaler and
consumers. His role in distribution of goods is enumerated below:
I. Wide choice to consumers : The retailer anticipates needs of
consumers. He assembles goods from different sources and stocks
different varieties of products. Thus, he offers a wide choice to
consumers. They can buy according to their purchasing power
and requirements.
II. Availability of goods in small quantities and at convenient
locations: A retailer provides ready supply of goods so that
consumers can buy conveniently and quickly in small lots without
7. Channels of Distribution :: 45
any inconvenience of placing advance orders and waiting for
supplies. By ensuring uninterrupted and fresh supply of goods,
he saves consumers from the botheration of buying goods in
bulk and storing them.
III. Home delivery : A retailer transports goods from wholesalers to
ultimate consumers. Some retailers provide free home delivery
service to their consumers. Thus they create place utility.
IV. Assurance of regular supply : He maintains adequate supply of
goods so that consumers are sure of getting regular supply at the
time of their need.
V. Credit facility : Although retailers mostly sell goods for cash,
they also supply goods on credit to their regular customers.
VI. Close interaction with customers : A retailer brings new products
to the notice of customers and educates them in their uses. A
retailer thus, acts as a friend and guide to his customers. Indeed
his interaction with customers is of intimate personal nature and
thus he is able to provide feed back to wholesalers and
manufacturers about consumers' preferences.
Intext Question 23.2
Fill in the blanks
i. A wholesaler forecasts the ___________ for the goods.
ii. A wholesaler gives _________ name to the products packed
and graded by him.
iii. A wholesaler provides financial help to manufacturers by
purchasing goods for ___________.
iv. Some retailers provide ___________ home delivery service
to their consumers/customers.
v. Retailer provides feed back to wholesalers and __________
about consumers' preferences.
8. 46:: Business Studies
23.7 Role of specialised retail outlets e.g., departmental
stores, multiple shops and mail order business
house
A retailer is the final link in the distribution channel between a
manufacturer and the consumers. He is directly and continuously in
touch with people of varied tastes and preferences. Retailers may be
divided into two categories, namely institutional and non-institutional.
The institutional retailers (retail outlets) include departmental stores,
multiple shops and mail order houses. Non-institutional retailers include
the floating population of street sellers, pedlars, and hawkers.
(a) Departmental Stores : A departmental Store is a big retail store
with many departments under one roof. It offers a wide range of
products so as to suit different consumer tastes and preferences.
All the departments are centrally controlled but each department
forms a complete sales unit in itself. The examples of such
stores in metropolitan cities are Akbarally’s and Sahakari Bhandar
in Bombay and Spencers in Madras.
(b) Multiple shops or chain stores : Manufacturers often use their
own retail shops for direct sale of their products to consumers.
These retail shops are established as multiple shops operating in
the same city or different parts of the country. These shops have
identical product display. Bata India Ltd and DCM provide typical
examples of multiple shops system. In this type of retail selling
manufacturers have control over distribution channel and have
first hand information regarding customers' preferences.
(c) Mail-order business : These are retail outlets which sell goods
by mail only. The mail order house centrally procures products,
advertises them and expect perspective buyers to send offers/
orders. The products are sent through value-payable post. Mail
Order Sales Ltd, Bombay, the seller of ‘Bull worker’ health aid,
is a typical example of such mail order business in India.
It is through these retail outlets that manufacturers often by pass the
wholesalers in trade route or path. You have already learnt in detail
about departmental stores, multiple shops and mail-order business in
lesson No.8 on ‘Internal Trade’.
9. Channels of Distribution :: 47
23.8 Choice of a channel of distribution
The factors to be considered before choosing a suitable channel of
distribution are listed below:
1. Product considerations : The nature and type of product have
an important bearing on the choice of distribution channels. For
examples, perishable goods need speedy movements and hence
shorter channel or route of distribution; For durable goods, longer
and diversified channels may be used; Similarly, for technical
products requiring specialised selling and serving talents, the
shortest channel should be used.
2. Market considerations : The nature and type of customers and
size of market are important considerations in the choice of a
channel of distribution. For example, if the market size is large,
there may be long channels, whereas in a small market direct
selling may be profitable. The nature and type of consumers
include factors such as desire for credit, preference for the stop
shopping, demand for personal services, amount of time and
effort the customer is willing to spend. It also includes factors
like age, income group, sex, and religion of customers.
3. Company considerations : The nature, size and objectives of
the business firm also play an important role in the selection of
distribution channel. It includes financial resources, market
standing, volume of production, desire for control of channel,
services provided by manufacturers', etc. For example a company
with substantial financial resources need not rely too much on
the middlemen and can afford to reduce the levels of distribution.
Similarly a company desiring to exercise greater control over
channel will prefer a shorter channel.
4. Middlemen considerations : The cost and efficiency of
distribution depend largely on the nature and type of middlemen.
It includes characteristics of middlemen such as availability,
attitudes, services, sales potential, costs etc. For example, if the
terms and conditions of engaging wholesalers are unfavourable,
a manufacturer may like to channelise his products through semi-
10. 48:: Business Studies
wholesalers or retailers, thereby, bypassing wholesalers. However,
the determining factor would be the differential advantage
involved in the choice.
To conclude, the channel generating the largest sales volume at
lower unit cost will be given top priority. This will minimise
distribution cost.
Intext Question 23.3
State which of the following statements are ‘True’ and which are ‘False’.
(i) Mail order business house is known as institutional retailer.
(ii) Pedlars are known as institutional retailers.
(iii) Perishable goods require short channel of distribution
(iv) If the market size is large business firm must have many
channels of distribution.
(v) A business house desiring to exercise greater control over
channel will not prefer a shorter channel of distribution.
23.9 What you have learnt
Meaning of Channel of distribution : It is the path or route along
which goods move from producers to ultimate consumers or users.
There are various middlemen in the channel of distribution such as
Agent, Wholesalers and Retailers.
Role of middlemen : Middlemen performs various marketing functions
which are stated as below:
i) Searching out buyers and sellers ii) Implementing pricing
policies iii) Providing feed back information iv) Creating and
establishing a market for new product v) Providing pre-and after-
sale services to consumers vi) Communicating the use of technique
of the product vii) Providing credit facility to retailers and
consumers.
11. Channels of Distribution :: 49
Desirability of eliminating the middlemen: The elimination of
middlemen the based on the following grounds.
I) Excessive number II) Superfluous III) Limited risk taking IV) Anti
social activities V) Limiting consumers' choice
Role of wholesaler in distribution of goods : Role of wholesaler in
distribution of goods is given as below :
I) Buying and assembling II) Selling and dispersing III) Transportation
IV) Storage V) Packing and grading VI) Advertising and Promoting
sale VII) Financing VIII) Risk.
Role of Retailer in distribution of goods : Role of retailers in
distribution of goods is enumerated as below:
I) Wide choice to consumer II) Availability of goods in small quantities
and at convenient places III) Home delivery IV) Assurance of regular
supply V) Credit facility to customers VI) Close interaction with
customers.
Role of specialised retail outlets e.g. departmental stores, multiple
shops and, mail order business house. These retail outlets also act as
a retailer between the manufacturer and consumers. It is through these
retail outlets that manufacturers often byepass the wholesalers in trade
route or path.
Choice of a channel of distribution : The choice of a channel of
distribution depends on the various factors which are listed below :
I) Product considerations II) Market consideration
III) Company considerations IV) Middlemen considerations.
23.10 Terminal Exercise
1. Explain the role of middlemen in the distribution of goods.
2. Define wholesaler. Explain the role of wholesaler in distribution
of goods.
3. Define retailer. Explain the role of retailers in distribution of
goods.
12. 50:: Business Studies
4. Explain the factors governing the selection of a suitable channel
of distribution.
5. Explain the desirability of eliminating the middlemen.
Short Questions
1. Define channels of distribution.
2. Name any three institutional retail outlets.
3. Briefly explain the role of multiple shops as a specialised retail
outlet.
4. Name any three middlemen between the manufacturer and
consumers.
5. Name any two anti-social activities of businessmen (middlemen)
in distribution of goods.
23.11 Answers to Short Questions
23.1 (i) path/route (ii) Not (iii) Middlemen/link
(iv) search/find (v) Anti
23.2 (i) Demand (ii) Brand (iii) Cash
(iv) Free (v) Manufacturers
23.3 (i) True (ii) False (iii) True
(iv) True (v) False