Distribution

Kamal K. Gupta
Assistant Professor Ajay Kumar Garg Institute of Management Ghaziabad

Role of Marketing Channels
‡ Intermediaries bring in pooled financial resources ‡ Break bulk and create assortment for the customer ‡ Cost-effective due to specialisation Cost-

Functions of Marketing Channels
‡ Gather information about potential and current customers, competitors, and other actors and forces in the marketing environment ‡ Develop and disseminate persuasive communications to stimulate purchasing ‡ Reach agreements on price and other terms so that transfer of ownership or possession can be effected ‡ Place orders with manufacturers ‡ Acquire the funds to finance inventories at different levels in the marketing channel ‡ Assume risk connected with carrying out channel work ‡ Provide for the successive storage and movement of physical products ‡ Provide for buyers¶ payment of their bills through banks and other financial institutions ‡ Oversee actual transfer of ownership from one organisation or person to another

Channel Levels
‡ Zero-level channel / direct marketing Zerochannel
± Door-to-door, mail order, telemarketing, TV Door-toselling, Internet selling, manufacturer owned stores

‡ One-level channel One‡ Two-level channel Two‡ Three-level channel Three-

Designing a Marketing Channel System
‡ Analysing customers¶ desired service output levels
± Lot size; waiting time and delivery; purchase convenience; size; delivery; convenience; product variety; service backup variety;

‡ Establishing objectives ‡ Identifying major channel alternatives
± Types of intermediaries ± Number of intermediaries
‡ Exclusive distribution ‡ Selective distribution ‡ Intensive distribution

± Terms and responsibilities of channel members

‡ Evaluating the major alternatives
± Economic criteria ± Control and adaptive criteria

Channel Management Decisions
‡ ‡ ‡ ‡ ‡ Selecting channel members Training channel members Motivating channel members Evaluating channel members Modifying channel arrangements

Channel Integration and Systems
‡ Vertical Marketing Systems (VMS)
± Corporate VMS ± Administered VMS ± Contractual VMS

‡ Horizontal Marketing Systems ‡ Multichannel Marketing Systems

Market Logistics
³Market logistics involves planning the infrastructure to meet demand, then implementing and controlling the physical flows of materials and final goods from points of origin to points of use, to meet customer requirements at a profit.´ profit.

Market Logistics Decisions
‡ ‡ ‡ ‡ Order processing Warehousing Inventory Transportation

Retailing
‡ Retailing includes all the activities involved in selling goods or services directly to final consumers for personal, nonbusiness use. use.

Retailers¶ Marketing Decisions
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Target market Product assortment Procurement Services and store atmosphere Store activities and experiences Price decision Communication decision Location decision

Wholesaling
‡Wholesaling includes all the activities involved in selling goods or services to those who buy for resale or business use. use.
Wholesaling excludes manufactures and farmers because they are engaged primarily in production and it excludes retailers

Wholesalers Marketing Decisions
‡ ‡ ‡ ‡ ‡ Target market Product assortment and services Price decision Promotion decision Place decision

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