Selection of

Channels

A Sales & Distribution Presentation

Arti

Presented By

Channel Management is a process by which a producer or supplier directs marketing activity by involving and motivating the entities comprising its channel of distribution Various Channels are: Wholesalers, Retailers, Distributors & Agents

Channel Management

Market Intermediaries

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Inte

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s Middlemen

Agent or Broker

Wholesaler

Retailer

Distributor

Value-added Resellers

Merchants

Facilitating Agents

Need for

Distribution Channels

Direct Marketing Channel Indirect Marketing Channel

Types of Channels

Direct Marketing Channel (or Zero Level) This type of channel has no intermediaries. In this distribution system, the goods go from the producer directly to the consumer, e.g., Amway, Eureka Forbes.

Direct Marketing Channel

Indirect Marketing Channel

Producers

Consumers

Retailer

Wholesalers

Consumers

Retailer

Consumers

Retailer

Wholesalers

Distributor

Consumers

Retailer

Wholesalers

Distributor

Agent

Level- 1

Level- 2

Level- 3

Level- 4

Channel Strategy Decisions

Market Factors Customer Preference Organizational Customers Geography

Competitors Nature & Availability of Intermediaries Product Factors

Life Cycle Selling Price/Unit Perishability Size & Weight Consumer Perceptions

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Key Issues in Determining Channel Requirement

While a manufacturer faces an agenda of issues related to finance, marketing and industrial

relations, attention is focused on selected topics that directly impact marketing channel

arrangements. The key issues related to this are:

Product proliferation and dynamics; and

Total-quality initiatives.

These two issues are significant drives for a typical firm in determining how channel

requirements will be delineated.

Manufacturing Strategy

Wholesalers

Wholesale trade is defined as “all establishments or places of business primarily engaged in selling merchandise to retailers; to industrial, commercial, institutional or professional users or to other wholesalers; or acting as agent in buying merchandise for or selling merchandise to such persons or companies”.

1. Merchant Wholesalers 2. Agent Wholesalers 3. Manufacturers’ Sales branches and offices

Merchant Wholesalers

Merchant Wholesalers Full Function or Service Wholesalers Limited Function Wholesalers

Cash & Carry Wholesalers Drop Shippers Truck Wholesalers Mail Order Wholesalers Prod. & Retail Cooperative

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Agent Wholesalers

Agent Wholesalers Manufacturers’ Agent Brokers Commission Merchant Selling Agents Commercial Auction Companies

Manufacturer’s Sales Branches and Sales Offices

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A wholesaler is generally selected on the basis of his performance

evaluation. Before selecting wholesalers, manufacturers’ analyze a

wholesaler on the basis of the following questions:

How can a wholesaler serve a supplier?

How can a wholesaler serve a retailer?

How can a wholesaler serve business users?

Selecting Wholesalers

Strategic Management of Wholesalers

Strategic Management of Wholesalers Effectiveness Profitability Niche Marketing Proprietary Brand New Technology

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Introduction to Retailing

Retailing It include all activities incidental to selling to ultimate consumer. According to ‘William.J.Stanton’, “A retailer or a retail store is a business enterprise which sells primarily to ultimate consumers for non business use.”

Function of Retailing

Collect product assortment and offer them for sale

Product Information

Mark prices and pay for goods

Conclude Transaction with final consumer

Retailers

Relation Between Retailers & Suppliers

Selling goods or services for use of retailer

Selling goods or services for reselling by retailer

Wheel of Retailing

Innovation

Trading Up Vulnerability

Thank You