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MBA Fall Semester Year 2 (July - December 2020) : Sales and Distribution Management
MBA Fall Semester Year 2 (July - December 2020) : Sales and Distribution Management
12/23/2020
Channel Design
2
Are Channels Necessary?
• BATA
• EUREKA FORBES
3
Sell Directly or Indirectly?
• MOST COMPANIES USE A COMBINATION OF EACH
MODE.
CHOICE DEPENDS ON:
• NATURE OF COMPANY AND ITS PRODUCTS
• NATURE AND DISPERSAL OF CUSTOMERS
• BUSINESS GOALS OF THE COMPANY
4
Sell Directly or Indirectly? Other factors….
• MARKET EXPECTATION OF CREDIT
• NATURE OF COMPETITION
Control Cost
efficiency
6
Factors affecting Channel Design
LIST OF MARKETS TO BE COVERED
TRACKING COMPETITION
7
Designing International Distribution Channels
Evaluating the Major Alternatives
Responsibilities of Number of Types of
Intermediaries Intermediaries Intermediaries
Identifying Major Alternatives
Setting Channel Objectives & Constraints
Analyzing Consumer Service Needs
Channel Design Decisions
FRAMEWORK FOR CHANNEL DESIGN AND IMPLEMENTATION
SEGMENTATION:
Recognize and respond to target customers’ CHANNEL POWER: CHANNEL CONFLICT:
service output demands Identify sources for all Identify actual and potential
channel members sources
Decisions About
Efficient Channel Response:
MANAGE/DEFUSE
CHANNEL STRUCTURE: CONFLICT:
What kinds of intermediaries are in my Use power sources strategically,
channel? subject to legal constraints
Who are they?
How many of them?
SPLITTING THE WORKLOAD:
With what responsibilities? GOAL:
DEGREE OF COMMITMENT: Channel Coordination
Distribution alliance?
Vertical integration/ownership?
GAP ANALYSIS:
What do I have to change?
Intensive
Intensive Selective
Selective
Distribution
Distribution Distribution
Distribution
Exclusive
Exclusive
Distribution
Distribution
Patterns of Distribution
• INTENSIVE..NUMEROUS OUTLETS
• SELECTIVE..A FEW SELECT OUTLETS
• EXCLUSIVE..ONE OR TWO OUTLETS…NOT CARRY
COMPETING LINES
11
Example of Distribution Models of telecom
companies like Spice Telecom / Reliance/
Connect
Multi Channel
• DMAs for field sales
• Retailers for walk-in sales, some branding
• Franchisees (examples Web World, Planet
Connect) for walk-in sales, branding /image-
building/ customer feedback
• How many depending on market potential
Examples of Distribution Models of Godrej
Pacific Technology Ltd. / Samtel India Ltd. in IT
Distribution
14
Trend toward Disintermediation
16
SUGGESTIONS FOR TELECOM SERVICE PROVIDERS
Thank You
• Service providers need to make greater efforts to retain
those customers who have been on the network for a longer
time and who have been contributing more to the top line
or bottom line.