Relationship Marketing

&
Distribution Channels

Submitted by:-
Vishal Chhikara(46)
 What is relationship marketing?

• Marketing designed to create, maintain, and

enhance strong relationships with customers

and other stakeholders.

 Why is it important?
• It costs five times as much to attract a new
customer as it does to keep a current one satisfied.
• It is claimed that a 5% improvement in customer
retention can cause an increase in profitability of
between 25 and 85 percent depending on the
industry.
• Likewise, it is easier to deliver additional products
and services to an existing customer than to a first-
time “buyer.”
 Stages in the development
of a Customer Relationship

1. The Pre-relationship Stage

• The event that triggers a buyer to
• seek a new business partner.
2.The Early Stage
• Experience is accumulated between
• the buyer and seller although a great
• degree of uncertainty and distance exists
3. The Development Stage
• Increased levels of transactions lead to a
higher degree of commitment and
• the distance is reduced to a social exchange.

4. The Long-term Stage

• Characterised by the companies’ mutual
importance to each other.
5. The Final Stage
• The interaction between the companies
becomes institutionalized
 Managing Customer Relationships

• Developing the relationship

• Select an appropriate offering;

• Customise the relationship;

• Link the solutions with the customer’s needs

• Discuss customer concerns;

• Summarize the solution to confirm benefits;

and

• Secure commitment.
Distribution Channels
 What is a distribution channel? 

• A channel to distribute is the method of

getting your product into the customer’s hand.

• This can either be through direct sales, or

through a reseller.
 Which Channel to Use?

• The first question to address is whether you

should go direct or indirect. Often the answer
is both--especially since the popularity of the
Internet. The key, however is to avoid most of
the channel conflict.  
For example, you might go direct with
massive deals that are too big for a reseller to
finance or very small deals that don’t require
any special training/installation/consulting.
Consumer Channels
PRODUCERS OF CONSUMER GOODS

Agents Agents

Merchant Merchant
wholesalers wholesalers

Retailers Retailers Retailers Retailers

ULTIMATE CONSUMERS
 Types of Marketing Channels

A. Conventional Channel or Non- Integrated

Channel

B.  Integrated Channel or Non conventional

channels
Conventional Channel or Non- Integrated Channel

• According to Kotler and Armstrong (2001), a

conventional distribution channel is a channel
consisting of one or
more independent producers, wholesalers,
and retailers, each a separate business seeking
to maximize its own profits
even at the expense of profits for the system
as a whole.
 1. Manufacturer to Consumer
• In this channel there is no intermediary.
Manufacturer makes the goods and directly
distributes to consumers.

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 2. Manufacturer to Retailer to Consumer 

• Retailer is the intermediary between

manufacturer and consumer. He purchases
goods from manufacturer and sells to
consumer.
3. Manufacturer to Wholesaler to Retailer to
Consumer 
• In this channel, there are two option, one is
wholesaler and other is retailer. Wholesaler
buys large scale and sells to retailer and the
retailer sells to consumer. 
4. Manufacturer to Wholesaler to Consumer

• Consumer can buy easily and directly from

wholesaler. So, in this channel there is only
one intermediary and he is wholesaler. 
B.  Integrated Channel or Non conventional
channels
• Integrated channel are modern channel for
distribution of goods. These channel can be
divided into two parts :

 Vertical Channel
 Horizontal Channel
 1. Vertical Channel
• Vertical channel is that corporate channel
which are useful for the flow of products
which are capital nature. In this, if one
company contracts with other manufacturers
who will convert the capital product into most
usable shape and sell it to the dealers. Then it
will be vertical channel.
 2. Horizontal Channel
• Two companies join together for marketing of
any product for reducing competition and
excess capacity.
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