ppt on channels of distribution

1. Distribution Management and Sales Promotion:
Sales Techniques for Consumer and Industrial Users, Channel
functions and Flows, Channel Levels, Channel Management
Decision- Communication mix- Sales force management-
Promotinal Mix- Communication Strategies.
 It includes all activites concerned with the efficient
movement of goods from the place of prodction to the place of
consumption. It includes wide range of inter-related activies
which includes order process, inventory management , storage
and transportation etc.
Main objectives are
1.Consumer satisfaction 2. Profit orientation

2. Distribution Channels
Definitions
Components
Funtions
Nature and importance of channels
 Channel behavior & organization
 Channel design decisions
 Channel Management decisions

3. Distribution Channels
Definitions:
“ A channel of distribution or marketing channel is the structure of
intra company organisation units and extra company agents &
dealers, wholesale and retail through which a commodity, product or
service is marketed” ----American Marketing Association
“Distribution Channel is a set of interdependent organisation involved
in the process of making a product or service available for use or
comsumtion by consumer or business use”. ----Phillip Kotler
Producers produce fewer products in large quantities and customers
want more product in smaller quantities and broader assortments
wanted by the customers and break them into smaller and broader
assortments wanted by the customers

5. Information(Customers, Competitors and others)
Promotion
Contact(Finding and communicating with
prospective buyers)
Matching
Tranfering
Order (Backward Communication)
Financing
Risk Taking(Take the risks of carying the work)
Physical Flow(Producer to Competitors)
Title

6. Nature and Importance of Channels
Most businesses use third parties or intermediaries to bring their
products to market.
They try to forge a "distribution channel" which can be defined as
“All the organizations through which a product must pass between
its point of production and consumption“
Why does a business give the job of selling its products to
intermediaries?
The answer lies in efficiency of distribution costs. Intermediaries
are specialists in selling. They have the contacts, experience and
scale of operation which means that greater sales can be achieved
than if the producing business tried to run a sales operation itself.

8. Consumer is interested in different services from the
company and the channel must deliver value to the
consumer. We need to identify his needs and satisfy it.
Consumer convenience, the mode of delivery, credit,
service, installation, place of purchase, type of product
assorment. All these factors required here.
Nature of the company, product characteristics, type
of channel memebers, competitors and the prevailing
business envornment should be considered by the
company.
Legal conditions and macro ecnomic situation of the
country should also be considered. It is based on PLC

9. After setting the channel objectives the company should
identify channel alternatives in terms of types of
intermediaries, number of intermediaries, and the
responsibilites of each member.
Types of Intermediaries:
1. Company Sales Force
2. Manufacturing Agency
3. Industrial Distributor(region wise ex:
Supermarket, mail orders, exclusive show rooms)
Number of Marketing Intermediaries:
1. Intensive Distribution (Tooth paste inMany outlets)
2. Exclusion Distribution
3. Selective Distribution

10. Number of Marketing Intermediaries:
1. Intensive Distribution (Tooth paste inMany outlets)
2. Exclusion Distribution

11. Number of Marketing Intermediaries:
1. Selective

12. The company should select the best channel which will
suit its long term objectives.
It should consider the factors like probability, share of
control and adaptive nature of each of the channel
Cost of transaction is low for direct marketing channels
like internet and telemarketing but value addtion also
very low.
With direct sales channel like company sales force the
cost per transtion is high and the value addition is high
Indirect channels like retailers, distributors the cost per
transaction is moderate and the value addition is also
moderate.

13. 1. Horizontal Channel Conflicts
2. Vertical Channel Conflicts
3. Multi Channel Conflicts