1. D ISTRIBUTION C HANNELS - 2 MKT 405: Distribution Management M Wahidul Islam Summer 2014

2. Elements of Distribution Management Planning, Forecasting & Budgeting Sales Force Management Product Pricing and Promotion Product Visibility Distribution Channels Channel Information Systems Warehousing and Logistics

3. D ISTRIBUTION C HANNEL M EMBERS Owned or Contracted Company Owned Distribution Center Carrying and Forwarding Agents Consignment Selling Agents or General Selling Agents Direct Marketing Sales force Franchises Exclusive / Shared Distributors/ Dealers / Stockiest Value Added Resellers WholesalersRetailers

4. C HANNEL F ORMATS Who plays the major / dominant role in the distribution channel is also a big deciding factor Producer Driven Company Owned Retail Outlets Licensed Outlets Consignment Selling Agents FranchisersDistributors Seller Driven Existing RetailersWholesalersModern Store FormatsSpecialty StoresFactory / Discount StoresAgents / DealersD2D Sales People Service Driven CouriersCredit Card CompaniesFinancial Institutions 3P Logistic service providers Others Multilevel marketingKiosks TV home shopping networks Catalogue shoppingInternet based sellers

5. H OW TO DECIDE WHICH DISTRIBUTION CHANNELS TO USE ? Product type Industrial / Textile / Chemicals and Fertilizers Automotive FMCG Pharmaceutical Telecommunication IT hardware Services Consultancy Requirement of after-sales service?? Who is driving the channel? Ability to influence consumer’s buying decision

6. Producer Direct Marketing Team Central Distributor Regional / Market Specific Distributor WholesalersRetailers Customers Authorized Reseller CSAs / GSAs Own Branded Store

7. I NDUSTRIAL P RODUCTS General natures Technical Mostly B2B Need of more personal interaction with the customer Relationship management very important Examples: Production Raw Materials, Steel Mills Producer Agent Industrial Distributor Customers Critical Question: How do you manage the relationship with the Customer? Critical Question: How do you manage the relationship with the Customer?

8. P HARMACEUTICAL P RODUCTS Highly technical Doctors one of the key stakeholders End Users / Customers virtually have no communication with the manufacturer Examples: Medicine Companies Producer Distributor Retailer / Chemist Customers Doctors Wholesaler Critical Question: Can the producer influence Customers buying decision? Critical Question: Can the producer influence Customers buying decision?

9. C ONSUMER P RODUCTS Target is to reach as many customers as possible Every possible route is selected Most evolved distribution flow / channels format Examples: Lux, Clear, Low Cost Ball Pen, Mineral Water etc. FMCG Products Producer Distributor Different forms of Retail Customers / Consumers Wholesaler Critical Question: Which distribution flow is right for my product? Is my Consumer buying my product? Critical Question: Which distribution flow is right for my product? Is my Consumer buying my product?

10. C ONSUMER D URABLES Similar to Consumer Products But needs to be maintained / serviced Targeted Customer / End Users based Usually high-end Examples: Samsung, NOKIA, Sony, Mercedes Benz, QUBEE Producer Market Specific Distributor Different forms of Retail Customers / End Users Product Service Team Critical Question: Which is more important? Distribution Flow or Service? After Sales Service?? Critical Question: Which is more important? Distribution Flow or Service? After Sales Service??

11. S ERVICES Customer Experience is the most important factor, leading to high coordination of Sales and After Sales Customer Service The customer interaction is directly with Company Representative, usually Usually customer goes through a process of service experience Purchase > Experience > Post Evaluation Franchises / Agents are carefully chosen, and are closely controlled Examples: DHL, Hospitals, Airlines’ Telecommunication?? GP?? Service Provider Customers Different Forms of Service Outlets Critical Question: Does a distribution flow exist as there is no physical movement of services? Critical Question: Does a distribution flow exist as there is no physical movement of services?

12. N EW F ORM OF D ISTRIBUTION F LOWS Mixture of Service and Physical Distribution Online Marketing Tele-shopping Catalogue Marketing (New or Old) Kiosks Others????

13. O NLINE MARKETING

14. T ELE -S HOPPING

15. C ATALOGUE MARKETING

17. K IOSK / V ENDING M ACHINE

18. The Facebook Vending MachineThe Google Vending Machine

19. R EFERENCES Chapter 8 – Distribution Management and the Marketing Mix Havaldar K. and Cavale V. M. (2011) Sales and Distribution Management – Text and Cases (2 nd Edition) Delhi: Tata McGraw-Hill Education Private Limited Chapter 9 – Marketing Channels Havaldar K. and Cavale V. M. (2011) Sales and Distribution Management – Text and Cases (2 nd Edition) Delhi: Tata McGraw-Hill Education Private Limited

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