This document discusses distribution channels and the key participants and functions involved. A distribution channel involves manufacturers, intermediaries like wholesalers and retailers, and consumers. Intermediaries perform important marketing functions and facilitate transactions between parties in the channel. The structure of a distribution channel determines how customers access products and can impact a brand's image. Channels can be direct, involving no intermediaries, or indirect, involving suppliers, manufacturers, wholesalers, retailers, and consumers.
Influencing factors on Service Delivery
Impacts of Service Characteristics
The Role of Intermediaries
The Impact of Technology
Strength & Weaknesses of Delivery Models
Role of Distribution Channel in Marketing of FoodMansiGupta413277
For manufacturers, it is very important to create a mix of distribution channels that allow for ease of availability for the consumer, i.e., a good marketing mix. Based on the diversity and scope of a manufacturing business or any other business that can be found in the distribution process, the respective business needs to settle on a channel or channels that allow for good sales generation and ease of access for consumers.
Distribution Channel/Marketing Channels by Amitabh MishraAmitabh Mishra
This presentation talks about Place decision of marketing strategy. It presents fundamentals of Distribution Channels or Marketing Channels, functions of intermediaries, types and levels of channels, and channel management.
Distribution Strategy, Function of Channel Distribution, Marketing Intermediaries, Relationship Marketing in Channels, Types of Marketing Systems, and Non store retailing.
Distribution Channels and Marketing Intermediary in E marketing Nischal16
This Presentation is about a brief introduction of Distribution Channels and Marketing Intermediary in E marketing. Also Focuses on Logistics and Supply chain management and Distribution Strategy used by Amazon India and all other valuables information. Hope you all like the content, presentation. Thank You!☺️☺️☺️
Influencing factors on Service Delivery
Impacts of Service Characteristics
The Role of Intermediaries
The Impact of Technology
Strength & Weaknesses of Delivery Models
Role of Distribution Channel in Marketing of FoodMansiGupta413277
For manufacturers, it is very important to create a mix of distribution channels that allow for ease of availability for the consumer, i.e., a good marketing mix. Based on the diversity and scope of a manufacturing business or any other business that can be found in the distribution process, the respective business needs to settle on a channel or channels that allow for good sales generation and ease of access for consumers.
Distribution Channel/Marketing Channels by Amitabh MishraAmitabh Mishra
This presentation talks about Place decision of marketing strategy. It presents fundamentals of Distribution Channels or Marketing Channels, functions of intermediaries, types and levels of channels, and channel management.
Distribution Strategy, Function of Channel Distribution, Marketing Intermediaries, Relationship Marketing in Channels, Types of Marketing Systems, and Non store retailing.
Distribution Channels and Marketing Intermediary in E marketing Nischal16
This Presentation is about a brief introduction of Distribution Channels and Marketing Intermediary in E marketing. Also Focuses on Logistics and Supply chain management and Distribution Strategy used by Amazon India and all other valuables information. Hope you all like the content, presentation. Thank You!☺️☺️☺️
What Is a Marketing Channel of DistributionYou see the results .docxphilipnelson29183
What Is a Marketing Channel of Distribution?
You see the results of distribution every day. You may have purchased Lay’s potato chips at a 7-Eleven convenience store, a book online through Amazon.com, and Levi’s jeans at a Kohl’s department store. Each of these items was brought to you by a marketing channel of distribution, or simply a marketing channel, which consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
Marketing channels can be compared to a pipeline through which water flows from a source to a terminus. Marketing channels make possible the flow of products and services from a producer, through intermediaries, to a buyer. Intermediaries go by various names (see Figure 15–1) and perform various functions. Some intermediaries purchase items from the seller, store them, and resell them to buyers. For example, Celestial Seasonings produces specialty teas and sells them to food wholesalers. The wholesalers then sell these teas to supermarkets and grocery stores, which, in turn, sell them to consumers. Other intermediaries such as brokers and agents represent sellers but do not actually take title to products—their role is to bring a seller and buyer together. Century 21 real estate agents are examples of this type of intermediary.
Direct Channel
Channel A in Figure 15–4, represented by IBM’s large, mainframe computer business, is a direct channel. Firms using this channel maintain their own salesforce and perform all channel functions. This channel is employed when buyers are large and well defined, the sales effort requires extensive negotiations, and the products are of high unit value and require hands-on expertise in terms of installation or use. Not surprisingly, IBM’s Watson supercomputer, priced at $3 million, is sold and delivered directly to buyers.
Indirect Channel
Channels B, C, and D in Figure 15–4 are indirect channels with one or more intermediaries between the producer and the industrial user. In Channel B, an industrial distributor performs a variety of marketing channel functions, including selling, stocking, delivering a full product assortment, and financing. In many Page 412ways, industrial distributors are like wholesalers in consumer channels. Caterpillar uses industrial distributors to sell its construction and mining equipment in over 180 countries. In addition to selling, Caterpillar distributors stock 40,000 to 50,000 parts and service equipment using highly trained technicians.
Channel C introduces a second intermediary, an agent, who serves primarily as the independent selling arm of producers and represents a producer to industrial users. For example, Stake Fastener Company, a producer of industrial fasteners, has an agent call on industrial users rather than employing its own salesforce.
Channel D is the longest channel and includes both agents and industrial distributors. For instance, Harkman Electric.
Marketing Channels
Channel Functions
Role of Intermediaries
Direct Distribution
InDirect Distribution
Marketing Channel Systems
Vertical Marketing System
Horizontal MS
Multi-channel Distribution
Distribution Channels
Spatial Discrepancy
Temporal Discrepancy
Breaking Bulk
Need for Assortment
Financial Support
Channel Flows
Three Flows Recognized
Degree of Involvement
Channel Levels
Key Learnings
Corporate VMS
Administered VMS
Contractual VMS
Vertical System
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1. Distribution Channel Overview
Marketers are concerned about distribution because it determines how the customer
actually receives a product or service .A customer access in gaining access to the
product often flags the brand image. DELL, for example maintains complete control of
its distribution, so its customers buy directly from the manufacturer.
A distribution channel is a group of interdependent firms that work together to transfer
product and information from the supplier to the customer. Infact it is composed of the
following participants –
Each channel member perform some of the marketing functions needed to get the
product from the point of origin to the point of consumption .In addition to matching
buyers and sellers , intermediaries exist in the channel to perform some of these
functions perhaps more effectively & efficiently than other channel participants .Some
benefits of intermediaries include –
Mediating transactions between parties
Providing cost savings in the form of lowered search, monetary, transaction, and
energy costs.
The structure of the distribution channel can either make or impede possible
opportunities for marketing on the internet. In fact there are four major elements those
are combined to form a company’s channel structure –
Producers ,manufacturers or originators of the product or
service
Intermediaries -the firms that match buyers and sellers &
mediate the transactions among them
Consumers , customers or buyers who consume or use the
product or service
2. Types of Intermediaries
Channel intermediaries include wholesalers, retailers, brokers, and agents.
Wholesalers buy product from the manufacturer 7 resell them to retailers
Both brick –and-mortar and online retailers (sometimes called e – tailers) buy
products from wholesalers and sell them to consumers.
Brokers facilitate transactions between buyers and sellers without representing
either party. They are market makers and typically do not take title to the goods.
Agents usually represent either the buyer or seller, depending upon who hires
and pays them. They facilitate transactions between buyers and sellers and do
not take title to the goods .Manufacturers agents represent the seller whereas
purchasing agents represent the buyer.
For some digital products such as software , the entire distribution channel may be
internet based .In most cases however only some of the firms in the channel are wholly
or partially web enabled .For example non digital products such as flowers and wine
may be purchased online but must be delivered via truck.
Distribution channel length and functions
The length of the distribution channel refers to the number of intermediaries
between the supplier and the consumer .The shortest distribution channel has
no intermediaries –the manufacturer deals directly with the consumer in this
case (the way DELL computer sells directly to its consumers ). This is known as
the direct distribution channel.
4 Major
elements
of channel
structure
Types of
intermediaries
Length of the
channel
Functions of a
distribution
channel
Physical or
informational
(distribution )
system
3. Most distribution channel incorporates one or more intermediaries in an indirect
channel .A typical indirect channel include s suppliers, a manufacturer,
wholesalers, retailers and end consumers. Intermediaries help to perform
important functions.
Disintermediation describes the process of eliminating traditional
intermediaries .Eliminating intermediaries can potentially reduce costs since
each intermediary must add to the price of the product in order of product
.Disintermediation allows the supplier to transfer goods and services directly to
the consumer in a direct channel .Besides complete disintermediation tends to
be the exception because intermediaries can often handle channel function more
efficiently than producers can handle them .An intermediary that specializes in
one functions ,such as product promotion tends to become more proficient in
that function than a non specialist .