• Presented By

• A.S.Gera
 Marketing channel: system of marketing
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 distribution channel can be as short as
being direct from the vendor to the consumer or
may include several inter-connected
intermediaries such as wholesalers, distributors,
agents & retailers. Each intermediary receives
the item at one pricing point and moves it to the
next higher pricing point until it reaches the final
buyer Is also called channel of distribution or
marketing channel.
 Information
Information
Transfer
Transfer Communication
Communication

Payments
Payments Negotiation
Negotiation
Physical
Physical
Distribution
Distribution
Ordering
Ordering
Risk
Risk Taking
Taking Financing
Financing
 Intensive
Intensive Selective
Selective Exclusive
Exclusive
Distribution
Distribution Distribution
Distribution Distribution
Distribution

Evaluating the Major Alternatives

• Answering key questions helps to
determine customer needs:
– Do consumers want to buy from nearby
locations or are they willing to travel?
– Do consumers want many add-on services?
• Firm must balance needs against costs
and consumer price preferences.
 Setting Channel Objectives

• Channel objectives are influenced by:

– Cost
– Nature of the company
– The firm’s products
– Marketing intermediaries
– Competitors
– Environment
 Identifying Major Alternatives
• Types of Intermediaries
– Company sales force
– Manufacturer’s agency
– Industrial distributors
• Number of intermediaries
– Intensive distribution
– Exclusive distribution
– Selective distribution
• Responsibilities of intermediaries
 Evaluating the Major Alternatives

• Economic Criteria:
– A company compares the likely sales, costs, and
profitability of different channel alternatives.
• Control Issues:
– How and to whom should control be given?
• Adaptive Criteria:
– Consider long-term commitment vs. flexibility.
 Channel Management Decisions

• Selecting channel members

• Managing and motivating channel members
– Partner relationship management
• Evaluating channel members
 Intensity Of Distribution
• Market Intensity planning has four steps:
– Deciding on the company’s value proposition to its
customers
– Deciding on the best channel design and network strategy
for reaching the customer
– Developing operational excellence in sales forecasting,
warehouse management, transportation management and
materials management.
– Implementing the solution with the best information
systems, equipment, policies and procedures.
 Goals of the Intensity Of Distribution

• Goals of the Intensity System:

– Deliver a targeted level of customer service at the least
cost.

• Major Intensity Functions:

– Warehousing
– Inventory management
– Transportation
– Logistics information management
 Channel Design Decisions

• Designing International Distribution

Channels
– Global marketers usually adapt their channel
strategies to structures that exist within
foreign countries
– Key challenges:
• May be complex or hard to penetrate
• May be scattered, inefficient, or totally lacking
G-5
 Channel motivation.

• There are many devices for achieving

such motivation. Perhaps the most usual
is `incentive':

• The supplier offers a better margin, to tempt the owners in the

channel to push the product rather than its competitors; or a
competition is offered to the distributors' sales personnel, so that
they are tempted to push the product
• Different Forms of Incentive/Reward
1.Margin
2.Gifts
3.Tour Packages
4.Certificates