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    Marketing Channels.1ppt

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    Sunil Chauhan
    1. Marketing channels refer to the network of organizations and individuals involved in moving a product or service from production to consumption. They help facilitate the exchange between producers and consumers. 2. Marketing channels perform important functions like bringing buyers and sellers together, providing information to customers, promoting products, negotiating deals, and providing pre- and post-sale services. 3. There are different types of marketing channels including direct channels that connect producers directly to consumers, and indirect channels that involve intermediaries like wholesalers and retailers to help distribute products. Choosing the right channel design depends on factors like the target market and product.

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    Marketing Channels.1ppt

    Uploaded by

    Sunil Chauhan
    101 views28 pages
    1. Marketing channels refer to the network of organizations and individuals involved in moving a product or service from production to consumption. They help facilitate the exchange between producers and consumers. 2. Marketing channels perform important functions like bringing buyers and sellers together, providing information to customers, promoting products, negotiating deals, and providing pre- and post-sale services. 3. There are different types of marketing channels including direct channels that connect producers directly to consumers, and indirect channels that involve intermediaries like wholesalers and retailers to help distribute products. Choosing the right channel design depends on factors like the target market and product.

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    1. Marketing channels refer to the network of organizations and individuals involved in moving a product or service from production to consumption. They help facilitate the exchange between producers and consumers. 2. Marketing channels perform important functions like bringing buyers and sellers together, providing information to customers, promoting products, negotiating deals, and providing pre- and post-sale services. 3. There are different types of marketing channels including direct channels that connect producers directly to consumers, and indirect channels that involve intermediaries like wholesalers and retailers to help distribute products. Choosing the right channel design depends on factors like the target market and product.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    101 views28 pages

    Marketing Channels.1ppt

    Uploaded by

    Sunil Chauhan
    1. Marketing channels refer to the network of organizations and individuals involved in moving a product or service from production to consumption. They help facilitate the exchange between producers and consumers. 2. Marketing channels perform important functions like bringing buyers and sellers together, providing information to customers, promoting products, negotiating deals, and providing pre- and post-sale services. 3. There are different types of marketing channels including direct channels that connect producers directly to consumers, and indirect channels that involve intermediaries like wholesalers and retailers to help distribute products. Choosing the right channel design depends on factors like the target market and product.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 28

    Marketing Channels

    Marketing Channel

    Submitted to - : Prof. JASMEET

    Submitted by -: Sunil Kumar


    Definition of Channels
    Any organization or individuals who participate in the
    flow of goods and services as they move from producer
    to an ultimate user ( consumer or industrial );
    Marketing channels refer to an organized network of
    interconnected organizations and agencies involved in
    the process of making a product or service available to
    consumers.
    Cont….

    Producers Intermediaries Customer


    Channels of Distribution
    …create time, place, possession and
    information utilities.

    PLACE
    TIME

    POSSESSION

    t y Information
    U t ili
    37 2157 1
    Box 9 24
    Creating utilities for customers.
    Functions of Channels
    •Facilitation : bringing buyer and seller to close the deal ( transfer of title and
    ownership )

    •Information : information about product / services to customers;

    •Promotion : products / services ( changeover from earlier product and brand


    building of new one );

    •Negotiation : with customer on behalf of producers regarding price, delivery


    terms etc.;

    •Providing pre-sale and post-sale services : as producers can not reach to the
    customers;

    •Warehousing and transportation : stocking, sorting, break bulk, pkg. & dispatch
    to members down the channel;

    •Market feedback and intelligence : product performance, trend, change in


    habits / fashion / behavior of customer i.e. Demography.
    Channel Functions: Promotion
    Producer Collaborators Customer
    (Facilitate exchange)

    Promotion:
    - Cooperative advertising
    - In Store Sales promotion

    Advertising
    Sales
    Agencies
    Promotion
    Personal Selling:
    Merchant sales reps
    sell only, no title transfer
    Channel Functions: Pricing
    Producer Intermediaries Customer

    Pricing: How much?

    Pricing support:
    - terms of sale (credit, cash, etc.)
    - convenience of payment
    - financial risk
    Financial Institutions:
    Transfer of Ownership
    Provide Credit Services
    What Levi’s is Doing
    • Levi’s jeans were the same model and price for many years
    although they were bought many different types of people.
    •Diversifying their target markets by selling jeans in high
    end stores such as Central , to middle class stores such as
    Westside , to large discount stores such as Mega-Mart.
    Types of Marketing Channel
    Wholesaler: They buy goods from
    manufacturer and resell the same the retailer

    Retailer: Retailer buys goods from wholesaler


    and sale the same to the customer

    Commission Houses: They have physical


    control of the goods they handle . these houses are
    in a position to enjoy broader control on price,
    method, sales etc than broker
    Cont…
    Factors to Consider When
    Selecting Specific Intermediaries
    The producer will want to use
    intermediaries who:

    Reach their target market


    Have a good reputation
    Handle distribution functions efficiently
    Order large quantities
    Pay invoices quickly
    Display and promote merchandise well
    Have a good location and professional
    salespeople
    Marketing Strategy

    Intensive Channel> product / service sale of


    FMCG / Consumer goods – wider mkt. coverage.

    Selective Channel> product / service sale of


    different brands / products but in limited places /
    locations – branded garments / apparels

    Exclusive Channel> product / service sale of only


    one manufacturer / producer – showroom / outlet /
    franchisees
    Channel Design:
    #1 Target Market Coverage

    Intensive Selective Exclusive


    distribution distribution distribution
    Reasons for Choice of strategy
    Every manufacturer / producer may adopt different channels of
    distribution according to his convenience and may change them
    over a period and in different situations. It is an long-term
    decision and various factors need to be considered while
    determining the channel
     
    product nature;
    customer class / segment;
    middleman – channel cost, suitability, availability, legal
    compliance, cost of maintenance;
    market considerations – nature, size, spread, size and frequency
    of orders;
    competitor’s channel.
    Decisions in channel Management

    Mktg. channel -independent business orgn.,


    -middleman
    -ensure smooth flow
    -act as an interface between mfg.
    & customer

    Product/Goods Service
    Flow Flow

    Buyers(institutional/individual)
    Need Of Channel Management

    Every manufacturer needs to reach to customers in the


    market by either ways. Options to reach the Customer
    are as under :-

    Mfg. / Producer Wholesaler

    Retailer

    Customer

    [ Indirect Marketing Concept ]


    Types of channel
    Two channels
    • Direct to customer
    • Through a Marketing channel
    Direct Vs. Indirect Channels
    Direct channel- a marketing channel
    that does not use intermediaries to
    distribute the product.
    Why sell directly?

    Indirect channel – a marketing


    channel where intermediaries are
    used to help distribute the product.
    Why sell indirectly?
    Examples of direct and indirect
    channels
    Distribution Channel Designs
    Organizations through which a product passes to
    reach the end user.

    Zero-level: Intermediaries:
    (Direct) (Traditional)
    Manufacturer Producer Manufacturer
    Manufacturer
    Manufacturer

    Wholesaler
    Wholesaler
    Intermediaries

    Consumer Retailer
    Retailer
    Consumer Retailer
    Consumer Consumer
    Consumer
    Direct to customer

    Channel Structure

    Zero level Channel


    Direct contact with customer: Luxurious
    : Exclusive products

    Small Producers: Weak Financial Capability


    : Perishable Goods(Food, Farm)
    Direct Marketing Channels

    Producer Buyer
    Personal Selling
    Telemarketing
    Toll free phone #
    Catalog order
    Fax order
    Mail order
    E Commerce
    Direct Marketing can eliminate the
    middleman but not the functions

    Infomediaries & Vertical Exchange


    Through Marketing channel

    Channel Structure
    one level Channel
    M>D>C- automobiles, electronic goods

    M>Large Retailer>C- supermarkets ,malls

    M>Franchisee>C-food products, garments

    Services Provider>Agent>C-Insurance, Mobile

    M>Agent>C- Computers
    Channel Structure
    Two level Channel

    M>W>R>C-all FMCG

    M>Brokers/Commission Agents>R>C-Farm product


    Food grain
    Advantages of Marketing Channel
     It bridge the gap between the producer and
    consumer
     It helps in large scale distribution of products.
     It creates time , possession and place utilities.
     It performs marketing functions like storage of
    goods, risk bearing, sales promotion etc.
     effective coverage of the target market.
     helping the firm to carry on manufacturing
    uninterrupted, confident that the channels will
    take care of sales.
    Disadvantage
    Sources of Channel Conflict
    – Disagreements on responsibilities
    – Communication difficulties reduce coordination
    – Increased use of multiple distribution channels by
    manufacturers creating conflicts with distributors
    and retailers
    – Intermediaries diversifying into and offering
    competing products
    – Producers try to circumvent intermediaries and
    deal directly with retailers

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