EContent_3_2023_11_29_09_52_27_Unit4PlaceDecisionpptx__2023_10_11_09_54_32.pptx

1. Designing and Managing
Marketing Channels

2. Explain what a
marketing channel is
and why intermediaries
are needed

3. ….Marketers realize that if they were to make the
brands available in the right size, at the right time
and at the right price, the Indian consumer can be
motivated to buy it and consume it…..

4. Marketing channel
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. TIME
PLACE
POSSESSION
The Nature of
Marketing Channels
Marketing Channels Create Utility

6. 6
Channel Intermediaries
Retailer
A channel intermediary that
sells mainly to customers.
Merchant
Wholesaler
An institution that buys goods
from manufacturers, takes title
to goods, stores them,
and resells
Agents and
Brokers
Wholesaling intermediaries who
facilitate the sale of a product by
representing channel members.
LO2

7. 7
Channel Intermediaries
Retailers
Merchant
Wholesalers
Agents
and
Brokers
Take Title to Goods
Take Title to Goods
Do NOT Take Title to Goods

8. Ownership Flow
Movement of
title of the
product
Information Flow
Information to
and from the
manufacturer
Promotion Flow
Flow of persuasive
communication
(advertising,
personal selling,
etc.)
Marketing Channel Flows

9. Describe the channel structures
for consumer and business
products and discuss alternative
channel arrangements

10. Figure 15.2 Marketing Channel Flows

11. Figure 15.3
Consumer Marketing Channels

12. 0 -Level
1. The Direct Channel for Consumer Goods and
Services.(0 Level)
• A good example of the direct channel is supplied by
the neighborhood bakery, which converts flour,
water, and other raw materials into baked goods
and then retails these products, providing any other functions
that might be necessary to complete the transaction.
• The direct channel is also familiar as the distribution
method used by many marketers of services.

13. 1 -Level
• The Manufacturer (Producer)-Retailer- Consumer Channel.
• Consumers channel is commonly employed when the
retailer involved is a sizable organization, such as a
discount chain like Wal-Mart.
• This type of retail marketing organization may prefer to
deal directly with manufacturers to be able to order
specially made merchandise or obtain discounts or other
benefits.
• Most of the private mobile phone service provides like Air
Tel, Vodafone, IDEA use service provider -Retailer -
Consumer channel to provide various pre-paid and post
paid service facilities to the consumers.

14. 2- Level
• The Manufacturer--Wholesaler-Retailer--Consumer
Channel.
• Consumer channel of distribution is the most commonly
used structure for consumer goods.
• This is because most consumer goods are so widely used.
• It would be virtually impossible for the ITC, for example, to
deal individually with every retailer stocking cigarettes, let
alone every consumer of cigarettes. Thus, a long channel,
with at least two intermediaries, is needed to distribute the
product.

15. 3- Level
• In marketing channels for consumer goods, agents may,
depending on the circumstances and the product they offer,
sell to retailers or wholesalers.
• The manufacturer-wholesaler-agent - retailer-consumer
channel is widely used in the marketing of consumer products,
especially convenience goods.
• It might seem that travel agents used by airlines function as
retailers.
• Technically, however, they are part of a channel involving an
agent. The service producer-agent channel is common in
marketing of consumer services like insurance, tours travel,
postal saving scheme etc.

16. 16
Levels of Distribution
Strategy
Intensive
Selective
Exclusive
LO4

17. 1. Intensive Distribution:
• This is a marketing strategy under which a company sells
through the widest possible channels and cover as many
outlets as possible so that the customers come across the
product wherever they .
• Intensive distribution is usually required where customers
have a range of acceptable brands to choose from. In other
words, if one brand is not available, a customer will simply
choose another.
• Mostly common for: This strategy is common for snacks,
soft drinks and juices, foods, basic supplies, magazines.

18. • Soft drinks and cigarettes are some of
the examples on which intensive
distribution is followed.
• Under the intensive distribution strategy, all
the possible outlets can be used by a company
to distribute the product. It creates brand
awareness of the product as well as boost
sales.

19. 2. Selective Distribution:
• This strategy is usually observed for more specialized products
which are carried through specialist distributors covering a
specific geographic location.
• The firm chooses some outlets for distributing its products.
This option helps focus the selling of manufacturers on
selected outlets rather than dispersing it over numerous
marginal ones.
 It Covers:
• Product distribution here basically considers high-end items
such as prestige or designer goods e.g. Puma, Fila, Nike,
Adidas.

20. • A good example for products for
which selective distribution is used is cars.
This need not be the case for high end luxury
cars, for which, more often than not,
exclusive distribution is used.
• For the low-end range and mid-level range
cars, selective distribution is used.

21. 3.Exclusive Distribution:
• Exclusive distribution is an intense form of selective
distribution in which only one distributor is appointed in each
territory.
• Taking exclusive distributorship opportunity is not tough but
need few steps to follow.
• When the manufacturing firm distributes its products through
just one or two major outlets in the market that are
exclusively dealing in it, it is said that the firm is using an
exclusive distribution strategy.
• Apple had an exclusive distribution deal with AT&T to
provide the iPhone to consumers.
• It caters to:
Exclusive distributors usually cover designer ware, major
domestic appliances, and the most luxurious items & brands
like Gucci, Prada.

22. • Such a distributor becomes the sole authorized
seller of the manufacturer's specific products.
• An example of exclusive distribution is Apple
solely authorizing AT&T to be the distributor of
the iPhone to end users.
• Lamborghini.
• BMW.
• Mercedes

23. Importance of Marketing Channel
1.Channel member provide Economies of Scale:
By breaking down the distribution activities into smaller
and simpler actions, allocating it into specialist
Wholesaler-Retailer, producer can create greater
efficacies. (capacity for producing a desired result or
effect; effectiveness: a remedy of great efficacy.)
2. Channel Member creates time, place and possession
utility.
3.Channel member facilitates exchange efficiencies.
4. Channel Member helps in reducing discrepancy.
Assortment discrepancy
Quantity discrepancy

24. 5. Channel Members helps in performing other
Function
I) Marketing information
II) Promotion
III) Physical Distribution