Channels And Distribution 2003

CONCEPT CONTRIBUTION &

DEVELOPMENT APPLICATION IN GENERAL

SPECIFIC APPLICATION

Types of channels of distribution

(1)Consumer Channels(2) Business to Business

Channels (3) Multiple Marketing

Channels

Consumer Channels Vertical dimension is determined by the numbers in the channels. Channels for consumer products are as follows:

(1) Channel A : Producer Consumer It is the door-to-door purchases of

unsought products like encyclopedias.

Ex. TV home shopping, catalogs, LL Bean etc.

(2) Channel B : Producer Retailer Consumer In this channels, there is no

discrepancy in quantity supplied and demanded. This type of channel is popular for shopping products, clothing, and automobiles, but cost of transportation and inventory is high.

Ex. Kmart, JC Penney.

(3) Channel C : Producer Wholesaler

Consumer Retailer

In this kind of channel , there are smaller retailers, widely distributed products, and convenience products

(4) Channel D : Producer Agent Wholesaler Consumer Retailer This kind of channel involves mass

distribution of product such as processed food. This may be most efficient distribution channel for consumer products, which is very convenient.

In this sense, Chevrolet is much wider distribution than Rolls Royce.

Business to Business Channels (1)Channel E: Producer Buyer

This channel is especially for high cost items that need after sale support. In this channel, fewer customers are clustered geographically.

(2) Channel F : Producer Agent Buyer

In this kind of channel, the agent performs the tasks of marketing department or sales force for the company.

(3) Channel G : Producer Agent Buyer Distributor

This works same as the channel G, but in this case there are many customers, as in exporting.

Multiple Marketing Channels

(1) Dual Distribution: The dual distribution uses

several types of channels simultaneously . Generally, two or more marketing channels are set to attract the same target market or different target markets. Using two or more channels to attract the same target market can lead to channel conflict.

(2) Wholesale Intermediaries : They buy products and resell

them.

Agent and Brokers :

They negotiate purchase, and expedite the sales but do not take the title. They work as functional middlemen that bring buyers and sellers together. For this, they are compensated with commission.

Vertical Marketing System (VSM):

VSM is a marketing channel that a single channel member co-ordinates. The channel member manages channel activities to achieve efficient, low cost distribution aimed at satisfying the target market customers.

Selection of Distribution Channels: The selection of distribution channels

should determine what the final buyer wants and determine the best way to reach them. This is determine by:

• Organizational goals, objectives(same day delivery), resources & capabilities.

• market characteristics, geography, greater distance use more intermediaries, market density, market size, buyer behavior, where?/how?/L’Eggs.

• Product Attributes, i.e. need to provide a service.• Environmental forces, IE Competition, technology.

BY these Channels of distribution, we can select correct system for logistics and consumer goods.

By these, we can help to achieve organization goal, i.e. profit and customer satisfaction.