412 33 Powerpoint Slides 15 Distribution Channel Management an Introduction Chap 15

Copyright © 2011 Oxford University Press Chapter 15: Distribution Channel Management

Sales and Distribution Management, 2e

Dr Tapan K. Panda, Great Lakes Institute of Management, Chennai

Dr Sunil Sahadev, University of Sheffield, UK


Chapter 15

Distribution Channel Management- An Introduction


Role of distribution channels

• To adjust the discrepancy of assortment through the process of

sorting, accumulation, allocation, and assorting

• To minimize the distribution costs through routinising and

standardizing transactions to make exchange more efficient and

effective

• To facilitate the searching process of both buyers and sellers by

structuring the information essential to both the parties

• To provide a place for both parties to meet each other and

reducing uncertainty


How do distribution channels contribute

• Intermediaries can improve the efficiency of the exchange process

• Channel intermediaries adjust the discrepancy of assortment through the performance of the sorting process

• Marketing intermediaries hang together in channel arrangements to provide for the routinisation of transactions

• Channels facilitate the searching process


Discrepancies in the process of exchange

• Spatial discrepancy

• Temporal discrepancy

• Need to break the bulk

• Need to provide assortment


The cost and control aspects of intermediation

Direct Distribution Indirect distribution

Control Cost efficiency


Distribution channel strategy

• Setting distribution objectives in terms of the customer

requirements

• Finalizing the set of activities that are required to be

performed to achieve the channel objectives

• Organizing the activities so that the responsibility of

performing the activities is shared among the entities who

are meant to perform these activities

• Developing policy guidelines for the smooth functioning of

the channel on a day to day basis


Distribution channel management (contd.)

• Distribution channel management encompasses all activities dealing with the distribution function of the firm

• The distribution strategy provides guidelines for decision making

• The distribution management function can be viewed as happening in two phases: the ex ante phase and the ex poste phase


Distribution Channel Management (contd.)

• The ex ante phase involves all the activities that are associated

with the design and establishment of the distribution channel.

These activities actually take place before the distribution

channel actually starts functioning.

• The exposte phase involves managing the day to day activities

of the channel wherein the behavior of the individual channel

members are coordinated


Channel Management tasks

Distribution Channel StrategyChannel Objective

Activity FinalizationOrganizing the activitiesDeveloping Policy Guidelines

Design of the channel structure

Establishing the channel

Motivating Channel Members

Resolving Conflicts among channel members

Ex ante Phase

Ex Poste Phase

Documents

412 33 Powerpoint Slides 15 Distribution Channel Management an Introduction Chap 15