1. Marketing Channel Strategy & Management
MKT 460. Taufique Hossain

2. Marketing Channel
A 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. Intermediaries
Play 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 Intermediary
Wholesalers are intermediaries that buy products in bulk, usually from manufacturers, and resell them to trade customers, usually small retailers.

5. Types of Intermediary
Retailers 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 Structure
Channel structure concerns the route selected to move a product through different intermediaries.

7. Rationale for Using 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 or
Contact 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 buyers
When personal selling is the major component of the organization’s communication process
When the organization have a wide variety of offerings for the target market
When sufficient resources are available to satisfy target market requirements
When intermediaries are not available for reaching target markets
When 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?

12. Target Market Coverage
Intensive
distribution
Selective
distribution
Exclusive
distribution

13. Intensive Distribution Characteristics
Maximum number of outlets
Maximum availability
Convenience products
High number of potential purchasers
High purchase frequency
Low level of planning for purchases
Low price

14. Selective Distribution Characteristics
Number of outlets varies
Specialist retailer knowledge
Shopping products
Medium number of potential purchasers
Occasional purchase frequency
Medium level of planning for purchases
Medium price

15. Exclusive Distribution Characteristics
Few outlets
Close retailer/consumer relationship
Specialty products
Low number of potential purchasers
Low purchase frequency
High level of planning for purchases
High 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 & navigate
Variety: 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 distribution
Multichannel marketing involves the blending of an electronic marketing channel & a traditional channel.

18. Channel Relation
Actively 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 communication
Regular visits
Product training
Joint promotions

19. Channel commission and loyalty
Pricing decision
Competitive advantage
Creating channel loyalty