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Distribution Channels - 2. MKT 405: Distribution Management M Wahidul Islam Summer 2014. Distribution Channel Members. Channel Formats. Who plays the major / dominant role in the distribution channel is also a big deciding factor. How to decide which distribution channels to use?. - PowerPoint PPT Presentation
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DISTRIBUTION CHANNELS - 2MKT 405: Distribution ManagementM Wahidul IslamSummer 2014
Elements of Distribution Managemen
t
Planning, Forecasting
& Budgeting
Sales Force Managemen
t
Product Pricing and Promotion
Product Visibility
Distribution Channels
Channel Information
Systems
Warehousing and
Logistics
DISTRIBUTION CHANNEL MEMBERS
Owned or Contracted
Company Owned Distribution
Center
Carrying and Forwarding
Agents
Consignment Selling Agents or General Selling
Agents
Direct Marketing Sales force
Franchises
Exclusive / Shared
Distributors/ Dealers / Stockiest
Value Added Resellers
Wholesalers
Retailers
CHANNEL FORMATS Who plays the major / dominant role in the
distribution channel is also a big deciding factorProducer
DrivenCompany Owned
Retail Outlets
Licensed Outlets
Consignment Selling Agents
Franchisers
Distributors
Seller Driven
Existing Retailers
Wholesalers
Modern Store Formats
Specialty Stores
Factory / Discount Stores
Agents / Dealers
D2D Sales People
Service Driven
Couriers
Credit Card Companies
Financial Institutions
3P Logistic service providers
OthersMultilevel marketing
Kiosks
TV home shopping networks
Catalogue shopping
Internet based sellers
HOW TO DECIDE WHICH DISTRIBUTION CHANNELS TO USE? Product type
Industrial / Textile / Chemicals and Fertilizers Automotive
FMCG Pharmaceutical Telecommunication IT hardware Services Consultancy
Requirement of after-sales service?? Who is driving the channel? Ability to influence consumer’s buying
decision
Producer
Direct Marketing
TeamCentral
Distributor
Regional / Market Specific
Distributor
Wholesalers
Retailers
Customers
Authorized ResellerCSAs / GSAs
Own Branded
Store
INDUSTRIAL PRODUCTS General natures
Technical Mostly B2B
Need of more personal interaction with the customer
Relationship management very important
Examples: Production Raw Materials, Steel Mills
Producer
Agent
Industrial Distributor
Customers
Critical Question:How do you manage the relationship with the Customer?
PHARMACEUTICAL PRODUCTS Highly technical Doctors one of the key
stakeholders End Users / Customers
virtually have no communication with the manufacturer
Examples: Medicine Companies
Producer
Distributor
Retailer / Chemist
Customers
DoctorsWholesaler
Critical Question:Can the producer influence Customers buying decision?
CONSUMER PRODUCTS Target is to reach as many
customers as possible Every possible route is
selected Most evolved distribution
flow / channels format
Examples: Lux, Clear, Low Cost Ball Pen, Mineral Water etc.
FMCG Products
Producer
Distributor
Different forms of Retail
Customers / Consumers
Wholesaler
Critical Question:Which distribution flow is right for my product?
Is my Consumer buying my product?
CONSUMER DURABLES Similar to Consumer
Products But needs to be
maintained / serviced Targeted Customer / End
Users based Usually high-end
Examples: Samsung, NOKIA, Sony, Mercedes Benz, QUBEE
Producer
Market Specific
Distributor
Different forms of
Retail
Customers / End Users
Product Service Team
Critical Question:Which is more important? Distribution Flow or Service? After
Sales Service??
SERVICES Customer Experience is the most
important factor, leading to high coordination of Sales and After Sales Customer Service
The customer interaction is directly with Company Representative, usually
Usually customer goes through a process of service experience Purchase > Experience > Post
Evaluation Franchises / Agents are carefully
chosen, and are closely controlled
Examples: DHL, Hospitals, Airlines’ Telecommunication?? GP??
Service Provider
Customers
Different Forms of Service Outlets
Critical Question:Does a distribution flow exist as there is no physical
movement of services?
NEW FORM OF DISTRIBUTION FLOWS Mixture of Service and Physical
DistributionOnline MarketingTele-shoppingCatalogue Marketing (New or Old)KiosksOthers????
ONLINE MARKETING
TELE-SHOPPING
CATALOGUE MARKETING
CATALOGUE MARKETING
KIOSK / VENDING MACHINE
KIOSK / VENDING MACHINE
The Facebook Vending MachineThe Google Vending Machine
REFERENCES Chapter 8 – Distribution Management and the
Marketing Mix Havaldar K. and Cavale V. M. (2011) Sales and
Distribution Management – Text and Cases (2nd Edition) Delhi: Tata McGraw-Hill Education Private Limited
Chapter 9 – Marketing Channels Havaldar K. and Cavale V. M. (2011) Sales and
Distribution Management – Text and Cases (2nd Edition) Delhi: Tata McGraw-Hill Education Private Limited
END