Unit 6 part_2_distribution_channel_management
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Distribution channels involve intermediaries that help transfer products from manufacturers to consumers. A typical distribution channel involves manufacturers selling to distributors or wholesalers, who then sell to retailers, who finally sell to consumers. Effective distribution channels are important for companies to get products to consumers through various intermediaries at the right place, time, quantity and price. Common distribution channel members include manufacturers, distributors, wholesalers, retailers, and transporters.
![Distribution Channel – Members
• Manufacturer [starting point]
• Distributors
• Wholesalers
• Retailers
• Warehouse owners
• Transporters
• Insurance agents](https://image.slidesharecdn.com/unit6part2distributionchannelmanagement-210416150305/85/Unit-6-part_2_distribution_channel_management-7-320.jpg)
![Factors Affecting Distribution
channels
• Nature of product: standardized or customized
• Size of the market [scattered market]
• Product Perishability [e.g. Bread]
• Financial Standing of the manufacturer
• Desire to control distribution channel [flipkart]
• Multichannel marketing approach](https://image.slidesharecdn.com/unit6part2distributionchannelmanagement-210416150305/85/Unit-6-part_2_distribution_channel_management-10-320.jpg)
![Current trends in wholesaling &
Retailing
• Online retailing – Today, Retailing is
happening over the internet. Using E-
Commerce portals, it has become possible to
sell products over few clicks.
• Green Marketing – Green marketing is a recent
trend that focuses on producing goods [organic
products] and services which are environment
friendly. Activities like using paper packaging
etc is also included in green marketing.](https://image.slidesharecdn.com/unit6part2distributionchannelmanagement-210416150305/85/Unit-6-part_2_distribution_channel_management-17-320.jpg)
![Current trends in wholesaling &
Retailing
• AI [Artificial Intelligence]: Personalization in
Digital retailing is an example of using AI. In
personalization, the focus is on displaying ads
of products in which the consumer is
interested. Consumer’s interest is discovered
on the basis of his online search behaviour.
• E.g. social media platforms, Amazon etc start
showing ads related to laptop bags when
someone searches about it on Google.](https://image.slidesharecdn.com/unit6part2distributionchannelmanagement-210416150305/85/Unit-6-part_2_distribution_channel_management-18-320.jpg)
Unit 6 part_2_distribution_channel_management
- 2. What is ‘Distribution’? • Distribution is the function of marketing through which the products & services are made available to the consumers • ‘Place’ in the marketing sense refers to how the product will be made available to the consumer? • The objective is to make the product available – at the right place, at the right time, in the right quantity, at the right price
- 3. Distribution creates convenience for the consumer
- 4. Distribution Channel – Introduction • Getting a product to the market largely requires an effective marketing channel for companies that manufacture goods and services • A distribution channel typically features various entities / intermediaries between the manufacturer and the consumer, such as distributors, wholesalers and retailers.
- 5. A typical Distribution Channel Manufacturer Distributor Wholesaler Retailer Consumer
- 6. Distribution Channel – Definition • A channel is a flow that realizes the distribution function for a product/service • A distribution channel is the combination people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products and services get to the end-user, the consumer; and is also known as a marketing channel. • Channel entities are also called ‘intermediaries’
- 7. Distribution Channel – Members • Manufacturer [starting point] • Distributors • Wholesalers • Retailers • Warehouse owners • Transporters • Insurance agents
- 8. Why are Channels required? Objectives / Functions / Importance • Take the products to the consumers through ‘transfer of ownership’ • Break the bulk • Provide market information to the manufacturer • Matching demand and supply • Perform the logistics function
- 9. Distribution Channels - Types Level Zero Channel Level One Channel Level Two Channel Level Three Channel Distributor
- 10. Factors Affecting Distribution channels • Nature of product: standardized or customized • Size of the market [scattered market] • Product Perishability [e.g. Bread] • Financial Standing of the manufacturer • Desire to control distribution channel [flipkart] • Multichannel marketing approach
- 11. Distribution Channel Design Strategy • Intensive Distribution • Selective Distribution • Excusive Distribution
- 12. Intensive Distribution • In intensive distribution, products are sold in as many outlets as possible. • E.g. all household products
- 13. Selective Distribution • In selective distribution, products are sold in few selected outlets at specific locations. • E.g.
- 14. Exclusive Distribution • In exclusive distribution, products are sold in very few outlets at specific locations. • E.g.
- 15. Logistics Management – Meaning • Logistics management is a function of marketing which is concerned with distribution • Logistics management covers activities like: Packing Loading Warehousing and inventory management Transportation Unloading
- 16. Logistics Management – Types • Inbound logistics – Procurement of raw materials from suppliers • Outbound Logistics – Taking finished products to the market • Reverse Logistics – Taking used / damaged products from the customers back to the manufacturer • Efficient logistics helps the company in reducing their distribution costs
- 17. Current trends in wholesaling & Retailing • Online retailing – Today, Retailing is happening over the internet. Using E- Commerce portals, it has become possible to sell products over few clicks. • Green Marketing – Green marketing is a recent trend that focuses on producing goods [organic products] and services which are environment friendly. Activities like using paper packaging etc is also included in green marketing.
- 18. Current trends in wholesaling & Retailing • AI [Artificial Intelligence]: Personalization in Digital retailing is an example of using AI. In personalization, the focus is on displaying ads of products in which the consumer is interested. Consumer’s interest is discovered on the basis of his online search behaviour. • E.g. social media platforms, Amazon etc start showing ads related to laptop bags when someone searches about it on Google.
- 19. B2B • B2B stands for ‘Business to Business’ • It is a type of market scenario in which on organization sells products / services to another organization for further processing in order to prepare goods and services for final consumption • E.g. tire companies sell tires to car manufacturers • Bottle manufacturers sell bottles to coca – cola
- 20. B2C • B2C stands for ‘Business to Consumer’ • It is a type of market scenario in which on organization sells products / services to final consumers who consume the product • E.g. toothpaste, bread, soap