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CHANNELS OF DISTRIBUTION RENUKA MEHRA LECTURER INB.B.B.A.III GCCBA-42.

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Presentation on theme: "CHANNELS OF DISTRIBUTION RENUKA MEHRA LECTURER INB.B.B.A.III GCCBA-42."— Presentation transcript:

1 CHANNELS OF DISTRIBUTION RENUKA MEHRA LECTURER INB.B.B.A.III GCCBA-42

2 INTORDUCTION  According to American Marketing Association, “Distribution channel is a structure of intra-company organization units and extra-company agents and dealers, wholesale and retain, through which a commodity, product or service is marked.”  According to EW Cundiff and RS Still, “ Channel of distribution is the route taken by title to the goods as they move from the producer to ultimate consumers or industrial users.”

3 Marketing system comprising channels of distribution Manufacturers and processors Marketing Intermediaries -retailers -agents -brokers -wholesalers -dealers End users Perform functions like -Financial -advertising -transportation -warehousing -others

4 Characteristics of Channel of Distribution  It is a pathway composed of intermediaries through which products and services flow from manufacturers to customers.  Flow of goods is sequential and usually undirectional  constitutes a contractual organization  Function performed by intermediaries include buying, sorting out, accumulation, allocation, selling and transferring title of products to consumers.

5 Need Channel of Distribution  Helps in making product visible to customer  Provides valuable feedback to the producer regarding consumer’s preference, taste, habits, fashion and consumer’s response to a product.  Further provides consumer services like credits, home delivery, warranties and guarantees

6 Functions of Distribution Members  Research  Contact  Promotion  Matching  Sorting  Accumulation  Allocation

7 Contd.  Negotiation  Physical distribution  Financing  Risk taking

8 Importance of Channel of Distribution  Cost saving in specialization  Minimum total transactions  Principle of searching  Facilitates distributive system  Reduce exchange time  Creates time, place and ownership utility  Stabilize  Provides information

9 Types of Channel of Distribution Direct Selling Indirect Selling Channels

10 Direct Selling  Personal Selling  Direct Mailing  Telemarketing

11 Indirect Selling  Manufacturer- Retailer- Consumer Channel  Manufacturer- Wholesaler-Retailer-Consumer Channel  Manufacturer- Agent -Wholesaler-Retailer-Consumer Channel

12 Figure showing relationship Marketing Channels for Consumer Products Manufacturer Agents Wholesalers Retailers Consumers AB C D

13 Types of Marketing Intermediaries 1) Merchant Intermediaries- they are further of following types Wholesalers Retailers 2) Agent Intermediary

14 Wholesalers are of following types  Full functions wholesaler  Limited function wholesalers  Convertor Wholesaler  Rack jobbers  Drop shippers  Limited line wholesalers  Specialty time

15 Retailers  Small Scale Retailers  Large scale retailers- for eg.  Departmental store  Multiple shops  Supermarkets  Mail order houses  Franchising  Consumer cooperatives

16 2) Agent Intermediary  Commission agents  Brokers  Factors  Auctioneers  Facilitators

17 Factors affecting Selection of channels  Market Consideration  The nature of the market  Number of potential customers  Size of order  Geographic location of consumers

18 Product Consideration  Cost of the product  Nature of product  Technical nature of the product  Range of product  Level of services required  Weight of products

19 Company Consideration  Financial soundness  Volume of production  Post-sale service ability  Company reputation  Company marketing policies

20 Middlemen Consideration  Functions performed by middlemen  Financial ability  Terms and conditions

21 Environment consideration  Economic  Legal  Fiscal Policies

22 Channel selection process Identity target consumers Determining consumer behavior Ascertain channel alternatives Evaluation of channel alternatives Locate potential customer Select channel members

23 THANK YOU


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