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Mod-1n 2
Mod-1n 2
Marketing channel
The network made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system.
Set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user
institutions that promotes the physical flow of goods and services, along with ownership title, from producers to consumer or business user; also called a distribution channel
A strong distribution system can be a competitive advantage Channel decisions involve long-term commitments to other firms
Information gathering Consumer motivation Negotiating with suppliers Placing orders Financing Inventory management Risk bearing After sales support
Physical reach Customer contact Building relationships Market feedback Understand market trends and keep principals informed Handle price risks Finances market credit and inventory holdings Provide after sales service
Producers lose more control and face greater channel complexity as additional channel levels are added.
moves goods directly from a producer to ultimate user Direct selling: strategy designed to establish direct sales contract between producer and final user
channel system designed to improve distribution efficiency and cost effectiveness by integrating various functions throughout the distribution chain
Examples: Bata, Bombay Dyeing, Raymond Sears, Goodyear Suppliers of food items could be also their own supplying firms - like Nilgiris
Corporation owns production and distribution Coordination and conflict through regular organizational channels
Leadership through the size and power of dominant channel members Leadership could be manufacturer or retailer Gains market power by dominating a channel Usually true of dominant brands like GE, Kodak, Pepsi, Gillette, Coke and HLL in certain locations
Command high level of co-operation in shelf space, co-operation from resellers, displays, pricing policies and promotion strategies
Benefits include lower cost, better market coverage and customized selling
Same product but different market segments Unrelated products in same market detergents and ice creams (HLL) Size of buyers varies Geographic concentration of potential consumers varies Reach is difficult