Presented by:-

Manju verma

M.B.A. (2nd semester)

vermamanju84@yahoo.com

Contents :- Meaning of Channel Distribution.

Channel Functions

Channels of distribution for consumer products and industrial

products.

Channel designing process.

Factors influencing the channel selection.

Intensity of market coverage.

Channel Management.

Meaning:-“Marketing channels are the combination of agencies throughwhich the seller, who is often, though not necessarily the

manufacturer, markets his product to the ultimate User.”

John A. Howard

Channel Functions These functions should be assigned to the channel members who

can add most value for the cost

Contact Financing

Information

Risk Taking

Promotion

Matching

Negotiation

Physical

Distribution

Manufacturer Customer

ONE -

LEVELCHANNEL

Manufacturer Retailer Customer

Manufacturer

Retailer

Customer

Wholesaler

T

W

O

L

E

V

E

L

C

H

A

N

N

E

L

Manufacturer

Retailer

Customer

Wholesaler

Agent

T

H

R

E

E

L

E

V

E

L

C

H

A

N

N

E

L

Channels of distribution for consumer and industrial

products

Channel Behavior

Identify target consumer

Determining consumer buying habits for the type of goods

Locate potential customer geographically

Pinpoint channel alternatives

E valuate channel alternatives

Select channel members

Factors influencing the channel selection

Product or Market characteristics factors

Company characteristic factors

Middleman consideration.

Environmental characteristics factors.

Number of customers

Cost of the product

Type of the product

Degree of channel control desired

Financial Resources

Ability of Management

Services provided by the middleman

Availability of desired middleman

Attitude of middleman towards

manufacturer’s Policy

Intensity of Market coverage

Intensive Selective Exclusive

Distribution

through every

reasonable

outlet in a

market

Distribution

through multiple,

but not all,

reasonable outlet

in the market

Distribution

through single

wholesaling

middlemen in

a market

The Relationship between types of product, level of shopping effort, and intensity of distribution

Typ

e o

f p

rod

uct

Specialty

Goods

Shopping

Goods

Convenience

Goods

Level of shopping effort

Little or no

Effort

Some

Effort

Much

Effort

Vertical Marketing System

"A marketing channels in which manufacturing and the successive

stages of distribution are operated as a unified system.”

Types of systems Control maintained by Examples

Administered Economic Power Contract Amul Dairy Products,

P&G Products.

Contractual

1. Wholesaler sponsored

2. Retailer sponsored

3. Manufacturer

sponsored

4. Service company

sponsored

1. Stock owned by

wholesaler.

2. Stock owned by

retailers.

3. Franchise system.

4. Marketers of services.

Retail chain like Naaz in

Delhi,

Soft drink bottles

Corporate Ownership Singer (Sewing Machines)

Good Year (Tyers)

Oil Companies

Horizontal Marketing System

Horizontal Conflict occurs among firms at the same level of the channel

(e.g., retailer to retailer).

Channel Management

Recruiting Training Motivating

ServicingCompensatingEvaluating and

Replacing Channel

Members

•Decision areas for channel Management