Professional Documents
Culture Documents
Channels of Distribution: Place Amongst The 4 Ps
Channels of Distribution: Place Amongst The 4 Ps
Channels of Distribution: Place Amongst The 4 Ps
users
There are intermediaries in between Trade Channel or Distributor Channel Wholesalers & Retailers buy from producers & then sell at
producer but dont take title of the goods they are called AGENTS
Fact : Marketing Channels earn between 10-50% of the ultimate selling Price
CONTRAST THIS TO ADVERTISING COSTS WHICH IS ABOUT 2 to 5%
2 absolute winners
These cars..
Heres the kicker- both those cars have Fiat Diesel engines
The deal
Fiat will give engines to Tata Motors for their cars
Tata Motors will sell the Fiat cars from their large network WIN WIN deal on paper
Advantage?
Advantages
Shares your costs, gets you
Disadvantages
Longer the channel, less
much needed sales Helps you focus on core competencies Takes care of storage/stock quantities etc. Knows about the local market & hence saves on research
communication between the two Less control over what is being delivered You are reliant on their enthusiasm & reading of the market
Hybrid channels
Own sales Force
To focus on large customers
Retail
To focus on smaller units
location RETURN an online ordered product to a nearby store RECEIVE discounts & promotional offers based out of my total online & offline purchases
Price/Value Customers
Concerned about spending their money wisely
Affinity Customers
Concerned about which groups they belong to and where
In India
ICICI Bank
4 different Market segments in rural markets
Rich - Branches SMEs - Franchisees Middle Class - Kiosks Low income group Microfinance & SHGs
Choosing a Channel
HOW SHOULD WE PLAN?
Do we push or pull?
PUSH STRATEGY Uses OWN salesforce/ trade promotion/ induce intermediaries to carry, promote, sell products Appropriate for new products/categories / low brand loyalty/ impulse purchase
PULL STRATEGY Uses Advertising, promotion, and other forms of communication to increase demand from customers & get the intermediaries interested Appropriate for high brand loyalty / perceived difference between brands etc.
solutions customers are looking for , not what products we are trying to sell them.
VALUE NETWORK its a network of suppliers & suppliers
VALUE NETWORK?
VALUE NETWORK?
Looking at Channels
Delivery Channel
Service Channel
What do you think are these cos doing for the 3 channels?
Channel Levels
Marketing Channels
Depth of Channels
0 Level
Direct marketing
1 level
One intermediary
2 level
Wholesaler
3 level
Jobbers/ agents between wholesalers & retailers
Online/mail order
Retailer
Retailer
On a tap?
Credit/Delivery/Installation/repairs?
Different channels for different segments Constraints like Perishable goods, bulky products, requires
minimizing shipping distance, requires refrigeration etc. unit value products require special handling.
Online
Direct mail
3 decision points
Types of Available Intermediaries
Number of Intermediaries
Exclusive Distributors
Severely limiting the number of intermediaries
Producer wants to maintain control over service & outputs Wants very close partnership & dedication
Internet
Channel Management
SELECTING THE CHANNEL MEMBERS
TRACK RECORD
SERVICE REPUTATION
PROCESSES
EVALUATE
PARTNERSHIP
SALES
SERVICE
Channel Conflicts
Causes
Goal Incompatibility Eg. Rapid Market Expansion with
a low season
Dependence on Manufacturer Exclusive dealers suffers
PROJECTS
Groups of 2
Discuss the Concept to be used
Discuss the product type/category & competitors Your answer Anything Out of the Box?
Rest of you
To go through these concepts AGAIN
Think OUT OF BOX solutions
1 last word