channels of distribution

1. Presented by:-
VASUNDHRA
CM9232

2. Contents :-
 Meaning of Channel Distribution.
 Channel Functions
 Channels of distribution for consumer products and industrial
products.
 Channel designing process.
 Factors influencing the channel selection.
 Intensity of market coverage.
 Channel Management.

3. Meaning:-
“Marketing channels are the combination of agencies through
which the seller, who is often, though not necessarily the
manufacturer, markets his product to the ultimate User.”
John A. Howard

4. Channel Functions
 These functions should be assigned to the channel members who
can add most value for the cost
Contact Financing
Information
Risk Taking
Promotion
Matching
Negotiation
Physical
Distribution

6. Manufacturer Custom
er
ONE -
LEVEL
CHANN
EL
Manufacturer Retailer Custome
r

7. Manufacturer
Retailer
Custome
r
Wholesale
r
T
W
O
L
E
V
E
L
C
H
A
N
N
E
L
Manufacturer
Retailer
Custome
r
Wholesale
r
Agent
T
H
R
E
E
L
E
V
E
L
C
H
A
N
N
E
L

8. Channels of distribution for consumer and
industrial products

9. Channel Behavior
Identify target consumer
Determining consumer buying habits for the type of goods
Locate potential customer geographically
Pinpoint channel alternatives
E valuate channel alternatives
Select channel members

10. Factors influencing the channel selection
 Product or Market characteristics factors
 Company characteristic factors
 Middleman consideration.
 Environmental characteristics
Number of customers
Cost of the product
Type of the product
Degree of channel control
desired
Financial
Resources
Ability of Management
Services provided by the middleman
Availability of desired
middleman
Attitude of middleman towards
manufacturer’s Policy

11. Intensity of Market coverage
Intensive Selective
Exclusive
Distribution
through every
reasonable
outlet in a
market
Distribution
through multiple,
but not all,
reasonable outlet
in the market
Distribution
through
single
wholesaling
middlemen in
a market

12.  The Relationship between types of product, level of shopping effort, and
intensity of distribution
Typeof
product
Specialty
Goods
Shoppin
g Goods
Convenienc
e
Goods
Level of shopping
effort
Little or no
Effort
Som
e
Effort
Much
Effort

13. Vertical Marketing System
 "A marketing channels in which manufacturing and the successive
stages of distribution are operated as a unified system.”
Types of systems Control maintained by Examples
Administered Economic Power Contract Amul Dairy Products,
P&G Products.
Contractual
1. Wholesaler sponsored
2. Retailer sponsored
3. Manufacturer
sponsored
4. Service company
sponsored
1. Stock owned by
wholesaler.
2. Stock owned by
retailers.
3. Franchise system.
4. Marketers of services.
Retail chain like Naaz in
Delhi,
Soft drink bottles
Corporate Ownership Singer (Sewing Machines)
Good Year (Tyers)
Oil Companies

14. Horizontal Marketing System
 Horizontal Conflict occurs among firms at the same level of the channel
(e.g., retailer to retailer).

15. Channel Management
Recruiting Trainin
g
Motivatin
g
ServicingCompensating
Evaluating and
Replacing Channel
Members
•Decision areas for channel Management