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Distribution channel The management of all activities which facilities movement and co-ordination of supply and demand in the creation of time and place.

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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:

1 Distribution channel The 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.

2 Need for Distribution Channels
Makes the product easily available Service to the customers Services to the manufacturers

3 Types of channels Direct distribution channel
Indirect distribution channel


5 Factors in selecting channel
Organizations strategy Nature of product Target audience Geographical area


7 What 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, and Other wholesalers.

8 Why are Wholesalers Used?
Management Services & Advice Selling and Promoting Wholesalers are Often Better at Performing One or More of the Following Channel Functions: Market Information Buying and Assortment Building Wholesaler Functions Risk Bearing Bulk Breaking Financing Warehousing Transportation

9 Manufacturers’ Sales Branches and Offices
Types of Wholesalers Merchant Wholesaler Independently Owned Business that Takes Title to the Merchandise it Handles. Manufacturers’ Sales Branches and Offices Wholesaling by Sellers or Buyers Themselves Rather Than Through Independent Wholesalers. Brokers/ Agents They Don’t Take Title to the Goods, and They Perform Only a Few Functions.

10 Trends in Wholesaling Consolidation within the Industry is dipping the
number of Wholesalers Distinction Between Large Retailers and Wholesalers Blurs Wholesalers Will Continue to Increase the Services Provided Wholesalers Are Beginning to Go Global

11 Retail Retailing involves a direct interface with the customer and the coordination of business activities.

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. 

13 RETAILING 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.


15 Who 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

16 Organized Retailing Organised 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.

17 ORGANISED RETAILING Retail chains like Wal Mart, McDonalds brought Rapid Growth and consolidation of Organized Retail Rapid rise of Income levels and accompanying changes in lifestyles greatly contributed to growth of Organized Retail

18 Unorganized 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

19 Functions Of Retailer 1) Breaking bulk 2) Providing assortment
3) Holding inventory 4) Providing services

20 Retail Formats Retail Formats Store-Based Non store-Based Merchandise
Form of ownership Independent Retail Chain Retail Franchise Leased dept. Merchandise Offered Convenience store Supermarket Hypermarket Specialty store Dept. store Factory outlets Direct selling Internet Automated vending

21 Classification on the basis of Ownership
Independent Retailer Chain Stores Franchise Leased Department

22 Independent Retailer An 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.

23 Chain Stores Chain stores are retail outlets that share a brand and central management, and usually have standardized business methods and practices In 2004, the world's largest retail chain, Wal-Mart, became the world's largest corporation in terms of gross sales.

24 Franchise A contract between the franchiser and the franchisee whereby the franchisee is allowed to conduct his business operations under an established brand name.

25 Leased Department They 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.

26 Classification on the basis of Merchandise offered
Convenience stores Supermarkets Hypermarkets Specialty stores Departmental Stores Factory outlets

27 Convenience 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

28 Supermarkets 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.

29 Supermarkets 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

30 Supermarket 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

31 Hypermarkets 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


33 Specialty 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

34 Department store Specializes in selling a wide range of products under one roof Eg. Shopper’s stop, Westside, Lifestyle ,Marks and Spencer,

35 Factory Outlets An outlet store or factory outlet is a retail store in which manufacturers sell their stock directly to the public through their own branded stores.

36 NON STORE RETAILING A 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 :

37 Direct selling As 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.

38 AUTOMATED VENDING Impersonal form of selling
Products like soft drinks, candy etc. are mainly involved.

39 E- tailing The 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

40 TV home shopping Asian 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.

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