2 Marketing ChannelA marketing channel is the structure linking a group of individuals or organisations through which products are made available to the consumer or industrial user.The structure of channels may vary depending on the type of market, needs of the end consumer and type of product.
3 IntermediariesPlay an important role in increasing efficiency and reducing costs.There are several different types that come together to characterise distribution channels between manufacturer and consumer.Each intermediary adds a margin to the price of the products handled.Not all intermediaries take legal title or physical possession of the products.Different functions are performed by the different intermediaries.
4 Types of IntermediaryWholesalers are intermediaries that buy products in bulk, usually from manufacturers, and resell them to trade customers, usually small retailers.
5 Types of IntermediaryRetailers sell direct to the consumer and may either purchase direct from the manufacturer or deal with a wholesaler, depending on purchasing power and volume. They come in many different formats, sizes and locations.
6 Channel StructureChannel structure concerns the route selected to move a product through different intermediaries.
8 The channel selection decision Manager must conduct a through market analysis to identify the target markets that will be served by a prospective marketing channel. Managers need to ask:Who are the potential customers?Where do they buy?When do they buy?How do they buy?
9 The design of marketing channels Direct Versus Indirect Distribution:Use intermediaries to reach target markets orContact ultimate buyers directly using its own sales force or distribution outlet or the Internet.
10 The design of marketing channels Direct Distribution:Target market is composed of easily identifiable buyersWhen personal selling is the major component of the organization’s communication processWhen the organization have a wide variety of offerings for the target marketWhen sufficient resources are available to satisfy target market requirementsWhen intermediaries are not available for reaching target marketsWhen intermediaries do not poses the capacity to service the requirements of target markets
11 Channel selection at retail level Which channel and intermediaries will provide the best coverage of the target market?Which channel and intermediaries will best satisfy the buying requirements of the target market?Which channel and intermediaries will be most profitable?
13 Intensive Distribution Characteristics Maximum number of outletsMaximum availabilityConvenience productsHigh number of potential purchasersHigh purchase frequencyLow level of planning for purchasesLow price
14 Selective Distribution Characteristics Number of outlets variesSpecialist retailer knowledgeShopping productsMedium number of potential purchasersOccasional purchase frequencyMedium level of planning for purchasesMedium price
15 Exclusive Distribution Characteristics Few outletsClose retailer/consumer relationshipSpecialty productsLow number of potential purchasersLow purchase frequencyHigh level of planning for purchasesHigh price
16 Satisfying buyer requirements/Intermediary benefits Information: In store displays, Demonstration, Personal Selling,Convenience: Delivery, Proximity or driving time, Sorting, Storage, Web page: easy to locate & navigateVariety: Both breadth & depth of products.Attendant Services: Installation, Credit, Technical assistance, Post sale service
17 Dual Distribution & Multi channel Marketing Dual distribution occurs when an organization distributes its offering through two or more different marketing channels that may or may not compete for similar buyers. E.g. Using both direct distribution and indirect distributionMultichannel marketing involves the blending of an electronic marketing channel & a traditional channel.
18 Channel RelationActively managing your agents and distributors is a vital part of getting the best results from these sales channels.Keeping them up to date with product information and selling the benefits to them of any new initiatives you want them to be involved with.Regular communicationRegular visitsProduct trainingJoint promotions
19 Channel commission and loyalty Pricing decisionCompetitive advantageCreating channel loyalty