Presentation on theme: "Distribution channel The management of all activities which facilities movement and co-ordination of supply and demand in the creation of time and place."— Presentation transcript:
1Distribution channelThe management of all activities which facilities movement and co-ordination of supply and demand in the creation of time and place utility in goods.Broad range of activities concerned with the efficient movement of finished products from the end of the production line to the consumer and in some cases it also includes the movement of raw materials from the source of supply to the beginning of the production line.
2Need for Distribution Channels Makes the product easily availableService to the customersServices to the manufacturers
3Types of channels Direct distribution channel Indirect distribution channel
7What is Wholesaling?All the activities involved in selling goods and services to those buying for resale or business use.Wholesaler - those firms engaged primarily in wholesaling activity.Wholesalers buy mostly from producers and sell mostly to:Retailers,Industrial consumers, andOther wholesalers.
8Why are Wholesalers Used? ManagementServices & AdviceSelling andPromotingWholesalers are Often Better at Performing One or More of the Following Channel Functions:MarketInformationBuying andAssortment BuildingWholesalerFunctionsRisk BearingBulk BreakingFinancingWarehousingTransportation
9Manufacturers’ Sales Branches and Offices Types of WholesalersMerchant WholesalerIndependently OwnedBusiness that Takes Title to theMerchandise it Handles.Manufacturers’ Sales Branches and OfficesWholesaling by Sellers or Buyers ThemselvesRather Than ThroughIndependentWholesalers.Brokers/ AgentsThey Don’t Take Title tothe Goods, and TheyPerform Only a FewFunctions.
10Trends in Wholesaling Consolidation within the Industry is dipping the number of WholesalersDistinction Between Large Retailers and Wholesalers BlursWholesalers Will Continue to Increase the Services ProvidedWholesalers Are Beginning to Go Global
11RetailRetailing involves a direct interface with the customer and the coordination of business activities.
12INTRODUCTION TO RETAIL Retailing is a distribution channel function where one organization buys products from supplying firms or manufactures the product themselves, and then sells these directly to consumers. A retailer is a reseller (i.e., obtains product from one party in order to sell to another) from which a consumer purchases products.
13RETAILING Business activities involve Selling Goods and Services to Consumers for their Personal, Family or Household use.“Every sale of Goods and Services is to final consumer” – Food products, apparel, movie tickets; services from hair cutting to e-ticketing.Retailing is the Last stage in Distribution Process- Wholesale is an intermediate where Goods and services are sold to Business customers.
15Who is a Retailer? Retailer links Producers to Customers Retailer is a person, agent, agency, company or organization who delivers the Goods or Services to ultimate consumer
16Organized RetailingOrganised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses.
17ORGANISED RETAILINGRetail chains like Wal Mart, McDonalds brought Rapid Growth and consolidation of Organized RetailRapid rise of Income levels and accompanying changes in lifestyles greatly contributed to growth of Organized Retail
18Unorganized Retailing Unorganised retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc
20Retail Formats Retail Formats Store-Based Non store-Based Merchandise Form of ownershipIndependent RetailChain RetailFranchiseLeased dept.MerchandiseOfferedConveniencestoreSupermarketHypermarketSpecialty storeDept. storeFactory outletsDirect sellingInternetAutomated vending
21Classification on the basis of Ownership Independent RetailerChain StoresFranchiseLeased Department
22Independent RetailerAn independent retailer is one who builds his/her business from the ground up. From the business planning stage to opening day, the independent retail owner does it all. He/she may hire consultants, staff and others to assist in the business endeavor. The opportunities are endless.
23Chain StoresChain stores are retail outlets that share a brand and central management, and usually have standardized business methods and practicesIn 2004, the world's largest retail chain, Wal-Mart, became the world's largest corporation in terms of gross sales.
24FranchiseA contract between the franchiser and the franchisee whereby the franchisee is allowed to conduct his business operations under an established brand name.
25Leased DepartmentThey are also termed as shop in shops. When a section in a retail store is leased or rented to the outside party, it is termed as a leased department.
26Classification on the basis of Merchandise offered Convenience storesSupermarketsHypermarketsSpecialty storesDepartmental StoresFactory outlets
27Convenience Stores Relatively smaller in size Long working hours Offers convenience products like eggs, breads, milk etc.Size ranges from 3000 to 8000 sq ft.Eg. In & Out
28Supermarkets Large, low cost, low margin, high volumes. Self service operations.Meet the needs of food, groceries, non food items.Size ranges from 8000 to sq ft.
29Supermarkets Spencers Supermarket chain in India; part of RPG Enterprises; has 125 stores spread across 25 cities; product profile covers groceries & staples, home care & personal care products etc
30Supermarket Subhiksha India's supermarket, pharmacy and telecom chain founded by R. Subramaniam in Chennai; has 800 outlets spread across more than 60 cities in India, selling household provisions, packaged foods, fruits and vegetables etc
31Hypermarkets Combination of supermarket and departmental store Offers a wide range of products like jewellery, clothes, hardware, cd’s, DVD's, computer equipments etc.Eg. Big Bazaar , Reliance Mart
33Specialty Store It specializes in a particular product or merchandise. High service and product information.Products like home furniture, electrical appliances, consumer electronics are popular.Eg. Reliance Footprint, Reliance Trendz
34Department storeSpecializes in selling a wide range of products under one roofEg. Shopper’s stop, Westside, Lifestyle ,Marks and Spencer,
35Factory OutletsAn outlet store or factory outlet is a retail store in which manufacturers sell their stock directly to the public through their own branded stores.
36NON STORE RETAILINGA form of retailing in which the retailer directly reaches to the end consumer is known as the Non Store Retailing. It can be classified into :
37Direct sellingAs the name suggests , this form of retailing involves making personal contact with the end consumer wither by reaching at their homes or at their work places.
38AUTOMATED VENDING Impersonal form of selling Products like soft drinks, candy etc. are mainly involved.
39E- tailingThe rise of internet has led to phenomenal changes in the world of retailing. In retailing, it has opened a new way for the retailers to reach out to the customers and the suppliers where they don’t have any physical presence
40TV home shoppingAsian sky shop was among the first to introduce the TV shopping in India. In this form, the product is advertised on television and its features are explained. The buyer can make a call and order their products.