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  • Distribution Channels: Unit III

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    Chhavi Tevatia
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    This document discusses distribution channels and marketing systems. It defines distribution channels as the network of organizations that move goods from producers to consumers. There are two main types of marketing systems: vertical and horizontal. Distribution channels can have multiple levels including direct channels from producer to customer, or indirect channels passing through various intermediaries like wholesalers or retailers. Producers must consider factors like costs, time, commitment and production fluctuations when selecting and managing distribution strategies.

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    Distribution Channels

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    This document discusses distribution channels and marketing systems. It defines distribution channels as the network of organizations that move goods from producers to consumers. There are two main types of marketing systems: vertical and horizontal. Distribution channels can have multiple levels including direct channels from producer to customer, or indirect channels passing through various intermediaries like wholesalers or retailers. Producers must consider factors like costs, time, commitment and production fluctuations when selecting and managing distribution strategies.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppt, pdf, or txt
    17 views19 pages

    Distribution Channels: Unit III

    Uploaded by

    Chhavi Tevatia
    This document discusses distribution channels and marketing systems. It defines distribution channels as the network of organizations that move goods from producers to consumers. There are two main types of marketing systems: vertical and horizontal. Distribution channels can have multiple levels including direct channels from producer to customer, or indirect channels passing through various intermediaries like wholesalers or retailers. Producers must consider factors like costs, time, commitment and production fluctuations when selecting and managing distribution strategies.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppt, pdf, or txt
    of 19

    Distribution channels

    Unit III

    Anjali Singh

    Distribution Channel
    A channel of distribution comprises of a set of institutions which perform all the activities utilized to move the goods and title from the producer to the owner The network of organizations necessary to distribute the goods from the producer to the consumer All the organizations through which a good must pass between its point of production and consumption

    Types of Distribution Channels


    Vertical Marketing System ( VMS ) Horizontal Marketing System ( HMS )

    General Terms
    Middlemen Agent / Broker Wholesaler Retailer Distributor Dealer Value added re-seller Merchants Facilitating agents

    Types of Marketing Channel


    Direct marketing Channel 0 level
    Producer

    Customer

    Types of Marketing Channel


    Indirect marketing Channel 1 level
    Producer

    Intermediary

    Customer

    Types of Marketing Channel


    Indirect marketing Channel 2 level
    Producer

    wholesaler

    Retailer

    Customer

    Types of Marketing Channel


    Indirect marketing Channel 3 levels
    Producer

    wholesaler

    Distributor

    Retailer

    Customer

    Functions Performed
    Buying Inventory Selling Transportation Financing Promoting Negotiating Market Research Servicing

    Need for Distribution channels


    Spatial Gaps Temporal Gaps Transactional Gaps Information Gaps

    Critical decisions
    Costs Time and place Commitment Fluctuation in production

    Distribution strategy decisions


    2 Main sets of decisions
    Selection of Channels Extent and intensity of distribution

    Other considerations
    Training Motivating Evaluation & Modifying channel arrangements

    Distribution strategy decisions


    Selection of channels
    Channel length Channel number Channel member types

    Distribution strategy decisions


    Channel width
    Intensive Selective Exclusive

    Channel Selection Criteria


    Market factors Product factors Producer factors

    Channel Selection Criteria


    Market factors
    Customer preferences Customer type organizational v/s individual Geography Competitors Nature / availability of intermediaries

    Channel Selection Criteria


    Product factors
    Life cycle stage Complexity Value Product nature size/weight/fragile Customers perceptions

    Channel Selection Criteria


    Producer factors
    Companys objectives Resources Desire for control

    Channel Strategies - Motivation


    Coercive power Reward power Legitimate power Expert power Referent power

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