 Types of Distribution Channels

The major types of channels are conventional channels and vertical marketing systems
(VMS). the conventional channel of distribution is a group of vertically linked independent
organizations, each trying to look out for itself, with limited concern for the total performance
of the channel. The relationships between the conventional channel participants are rather
informal and the members are not closely coordinated. The focus of the channel organizations
is on buyer-seller transactions rather than close collaboration throughout the distribution
channel. Three types of vertical marketing systems may be used: ownership, contractual and
administered. During recent years, a fourth form of VMS has developed in which the channel
organizations form collaborative relationships rather than control by one organization.
 DISTRIBUTION INTENSITY
Choosing the right distribution intensity depends on management’s targeting and positioning
strategies and product and market characteristics. The major issues in deciding distribution
intensity are:
1. Identifying which distribution intensities are feasible, taking into account the size and
characteristics of the market target, the product and the requirements likely to be imposed by
prospective intermediaries.
2. Selecting the alternatives that are compatible with the proposed market target and
marketing program positioning strategy.
3. Choosing the alternative that offers the best strategic fit, meets management’s financial
performance expectations and is attractive enough to intermediaries so that they will be
motivated to perform their assigned functions.
 CHANNEL CONFIGURATION

1. End User Considerations.

It is important to know where the targeted end users might expect to purchase the products of
interest. The intermediaries that are selected should provide an avenue to the market
segments targeted by the producer.
2. Product Characteristics.
The complexity of the product, special application requirements and servicing needs are
useful in guiding the choice of intermediaries. Looking at how competing products are
distributed may suggest possible types of intermediaries, although adopting competitors’
strategies may not be the most promising channel configuration.
3. Manufacturer’s Capabilities and Resources.
Large producers with extensive capabilities and resources have a lot of flexibility in choosing
intermediaries. These producers also have a great deal of bargaining power with the
middlemen and producer may be able and willing to perform certain distribution functions.
4. Required Functions.
 The functions that need to be performed in moving products from producer to end user
include various channel activities such as storage, servicing and transportation.
5. Availability and Skills of Intermediaries.
Evaluation of the experience, capabilities and motivation of the intermediaries that are under
consideration for channel membership is also important.
 Selecting the Channel Strategy
Market Access
Market target decisions intertwine closely with channel strategies, only solidifying once
chosen channels connect with end-users; customer insights shape suitable channel choices,
multiple market targets may need diverse distribution channels, while leveraging
intermediaries with aligned customer bases rapidly grants market access.

Chapter 11

Determining specific prices and policies

The last step in pricing strategy is selecting specific prices and formulating policies to help manage
the pricing strategy. Pricing methods are first examined, followed by a discussion of pricing policy

a. Determining Specific Prices:

It is necessary to either assign a specific price to each product item or to provide a method for
computing price for a particular buyer seller transaction. Many methods and techniques are
available for calculating price.

1. Cost -based pricing:

Cost based pricing are two parts.

a) Cost plus Pricing

b) Break even pricing

a) Cost plus pricing:

Mark-up pricing is an item by adding a standard increase to the product's cost.

 b) Break even pricing: Break even pricing is setting price to break even on the costs of making
and marketing a product or setting price to make a target profit.

2. Demand oriented Pricing:

Demand oriented pricing is based on the level of demand for a product. The buyer is the frame of
reference for these methods. One popular method is estimating the value of the buyer. The
objective is to determine how much the buyer is willing to pay for the product based on its
contribution to the buyer's needs or wants. Recall our earlier discussion of estimating value provided
to the customer.

3. Competition based pricing:

Pricing decisions are always affected by competitor’s prices and their potential actions. In going rate
pricing, the firm bases its price largely on competitor's prices. Sealed bid pricing forces the company
to set prices based on what they think the competition will charge.

b. Establishing Pricing Policy and Structure:

1. Pricing Policy

A pricing policy may include consideration of discounts, allowances, returns and other operating
guidelines. The policy serves as the basis for implementing and managing the pricing strategy. The
policy may be in written form although many companies operate without formal pricing policies.

2. Pricing Structure

When more than one product item is involved, management must determine product mix and line
pricing interrelationships in order to establish price structure. Pricing structure concerns how
individual items in the line are priced in relation to one another.

b. Pricing Management:

Pricing strategy is an ongoing process rather than a once-a-year budgeting activity. Several principles
of pricing management are outlined in importantly; pricing strategy is an interrelated process
requiring central management direction and control.

1. Price Segmentation

Price may be used to appeal to different market segments. For example, airline prices vary
depending on the conditions of purchase. Different versions of the same basic product may be
offered at different prices to reflect differences in materials and product features.

2. Value Chain Pricing

The pricing strategies of sellers in the value chain should include consideration of the pricing needs
of producers and facilitating firms. These decisions require analysis of cost and pricing at all value
chain levels. If producer prices to intermediaries are too high, inadequate margins may discourage
intermediaries from actively promoting the producer's brand.

3. Price Flexibility

Will prices be firm, or will they be negotiated between buyer and seller? Perhaps most important,
firms should make price flexibility a policy decision rather than a tactical response. Some company’s
price lists are very rigid while others have list prices that give no indication of actual selling prices.
 4. Product life cycle

pricing Some companies have policies to guide pricing decisions over the life cycle of the product.
Depending on its stage in the product life cycle, the price of a particular product or an entire line
may be based on market share, profitability, cash flow or other objectives.

Chapter 9
Integrating Training with Performance Management Systems and Compensation

Integrating training with performance management and compensation systems ensures

alignment between employee development, recognition, and rewards. By linking learning
outcomes with performance evaluation and appropriate rewards, organizations motivate
employees to apply new skills effectively. When these elements operate separately, without
integration, the reinforcement of learning and its impact on performance and compensation
becomes less effective. A cohesive approach ensures that training is not only strategic but
also reinforces organizational objectives, driving success and employee satisfaction.

Connecting training with performance management and compensation creates a symbiotic

relationship where learned skills directly impact employee performance and subsequent
rewards, fostering an aligned and motivated workforce. This integration ensures that skill
development is recognized and rewarded, driving both individual and organizational
success.

Conclusion
Training and development of employees is a key strategic issue for organizations: It is the means by
which organizations determine the extent to which their human assets are viable investments.
Because much of the return on investment in training and development may be difficult to quantify,
particularly in the short run, organizations should take a holistic view of training and development,
particularly with regard to the kinds of employees and the skills and knowledge bases necessary to
achieve strategic objectives. Changes in how work is performed and the organizational contexts in
which work is conducted mandate that organizations conduct specific, targeted, strategic training
and development initiatives as a prerequisite for continued success.
PPT

Types of Distribution]‫ دس تروب يوشن‬Channels‫شلنس‬

Conventional Channel ‫كنف شنل شلن‬
Conventional distribution channels prioritize‫ ب ري وي ر ت ايز‬individual organization interests
over channel performance, illustrated‫ يلي ستريدد‬by Benetton's‫ بن توس‬challenges competing‫كم‬
‫ بيتنق‬with VMS-driven‫ درافن‬rivals like H&M and Zara in the fast-moving fashion industry.
Vertical Marketing Systems‫فردكل‬
Vertical Marketing Systems (VMS) coordinate‫ ك وور دنيت‬channel organizations for
advantages, dominating‫ دامنيتنق‬US retailing‫ ري تيلنق‬and impacting business industrial sectors.
Three types of vertical‫ فردكل‬marketing systems may be used: ownership, contractual‫كون‬
‫ تركت شول‬and administered‫ادمن ستريد‬. During recent‫ ريسنتلي‬years, a fourth form of VMS has
developed in which the channel organizations form collaborative‫ ك ا لب ردف‬relationships
rather‫ راثر‬than control by one organization.

 DISTRIBUTION INTENSITY
Choosing the right distribution intensity‫دي‬44‫ ان تن س‬depends on management’s targeting,
positioning strategies, product and market characteristics ‫كيركت ريس ستك‬. The major issues in
deciding distribution intensity are
1. identifying‫ اي دن تفاينق‬which distribution intensity are feasible into assessing market size,
characteristics ‫ كيركت ريس ستك‬product nature, and potential‫ بنتشل‬intermediary‫انتر ميد يري‬
requirements‫ريكوارمينتس‬.
2.Selecting the alternatives‫ ال تار نديف‬that are compatible‫ كومباد بل‬with the proposed market
target and marketing program positioning strategy.
3.Selecting a distribution alternative‫ ال تار نديف‬with strategic alignment‫ اليمينت‬, meeting
financial expectations‫اكس بك ستيشن‬, and incentivizing‫ ان سين تفايزنق‬intermediaries‫ انترميد يري‬to
fulfil‫ فول فيل‬their roles is crucial‫كروشل‬

 CHANNEL CONFIGURATION ‫تشنل كن فينق ريشن‬

1. End User Considerations.

It is important to know where the targeted end users might expect to purchase ‫ بروشيس‬the
products of interest. The intermediaries‫ انترميديريس‬that are selected should provide an avenue‫ا‬
‫ فن يو‬to the market segments targeted by the producer
 2. Product Characteristics‫ كيركت ريس ستك‬.
The complexity‫ كوم بلك سدي‬of the product, special application requirements‫ ري كوارمينتس‬and
servicing needs are useful in guiding the choice of intermediaries‫انترميديريس‬. Looking at how
competing‫ق‬44‫ كوم بيد ن‬products are distributed may suggest possible types of intermediaries,
although adopting‫ق‬44‫ اد بتن‬competitors‫د درس‬44‫وم ب‬44‫ ’ك‬strategies may not be the most promising
channel configuration ‫تشنل كن فينق ريشن‬.
3. Manufacturer’s‫ ميني فاكشورس‬Capabilities‫ كاب بيلتيس‬and Resources.
Large producers with extensive‫ اكس تنسف‬capabilities and resources have a lot of flexibility in
choosing intermediaries. These producers‫يرس‬4‫رد يوس‬44‫ ب‬also have a great deal of bargaining
power with the middlemen and producer‫ برد يوسير‬may be able and willing to perform certain
‫ سرتن‬distribution functions‫فن كشنس‬.
4. Required Functions.‫ري قويرد فن كشنس‬
The functions that need to be performed in moving products from producer‫ برديوسير‬to end
user include various‫ فيرس‬channel activities such as storage‫ستروج‬, servicing and transportation.
5. Availability and Skills of Intermediaries‫انتر ميديرس‬.
Evaluation‫ ا فال ويشن‬of the experience, capabilities and motivation of the intermediaries that
are under consideration for channel membership is also important.

 Selecting the Channel Strategy

Market Access‫اكسسيس‬
Market target decisions intertwine‫ انتر تواين‬closely with channel strategies, only solidifying‫سا‬
‫ق‬44‫دا فين‬44‫ ل‬once chose‫وزن‬44‫ ش‬channels connect‫ كن نكت‬with end-users; customer insights‫ايت‬44‫ان س‬
shape suitable‫ سودبل‬channel choices, multiple‫ موتبل‬market targets may need diverse‫دي فيرس‬
distribution channels, while leveraging‫ق‬4‫ف راجين‬4‫ لي‬intermediaries‫ديرس‬4‫ انترمي‬with aligned‫ا لينت‬
customer bases‫ بيسس‬rapidly‫ رابدلي‬grants‫ قرنتس‬market access

Determining‫ دي ترمنق‬specific prices and policies

The last step in pricing strategy is selecting specific prices and formulating‫ فور مليدينق‬policies to help
manage the pricing strategy. Pricing methods are first examined‫اكزميند‬, followed by a discussion of
pricing policy
 c. Determining Specific Prices:

It is necessary to either‫ ايثر‬assign‫ ا ساينت‬a specific price to each product item or to provide a method
for computing‫ فور مليدينق‬price for a special buyer seller transaction. Many methods and techniques
‫تكنيك‬are available for calculating‫ كا كليتنق‬price.

1. Cost -based pricing:

Cost based pricing are two parts.

a) Cost plus pricing:

Mark-up pricing is an item by adding a standard increase to the product's cost.

b) Break even pricing: Break even pricing is setting price to break even on the costs of making
and marketing a product or setting price to make a target profit.

2. Demand oriented Pricing:‫دي ماند اور ينت تد‬

Demand-based pricing: pricing products from the value buyers desire‫ دي زاير‬, focusing on
their needs and wants.
3. Competition based pricing: ‫كوبنتيسشن بيس‬

Pricing decisions‫ دي س ي ش نس‬are influenced by competitors' actions, with a closed-bid

strategy forcing companies to set prices based on competitors' estimates.‫كم بتتريس اس تيمس‬

2. Establishing‫ اس تابلشنق‬Pricing Policy and Structure:

1. Pricing Policy

Pricing policies, including discounts, allowances, and other guidelines, form the basis of pricing
strategy, although some companies do not have formal pricing policies.

2. Pricing Structure

If more than one product item is involved‫ان فولد‬, management must determine‫ دي تر يمنت‬the product
mix and pricing relationships to create a pricing structure that determines the relative value of items
in a product line..

c. Pricing Management:

Pricing strategy is an on going process that requires‫ ري كوايرس‬continuous management with

crucial price management principles‫ برنس سبلص‬and requires central direction.
1. Price Segmentation‫سق من تيشن‬

Pricing is used to appeal‫ ابيل‬to different market segments with price variations‫فاري اشنس‬
based on purchase‫ بروشس‬conditions and differences in product versions reflecting‫ريفلكتنق‬
different materials and features‫فيتشر‬
2. Value Chain Pricing
Pricing in the value chain must take into account the needs of producers‫ برود يوسيرس‬and
intermediaries‫ديرس‬44‫ انترمي‬to prevent excessively‫ اك ساس فلي‬high margins‫ م ارجنس‬that could
hamper brand promotion‫برمويشن‬.
3. Price Flexibility

Price flexibility as a primary‫ برا ميري‬policy is more important than rigid‫ رجد‬price lists or
direct negotiations‫ نقو زيشين‬between buyers and sellers

4. Product life cycle

pricing Some companies have policies to guide pricing decisions over the life cycle of the product.
Depending on its stage in the product life cycle, the price of a special product or an entire line ‫ان انتاير‬
‫ لين‬may be based on market share, profitability, cash flow or other objectives.

Chapter 9
Integrating‫ انترقري دنق‬Training with Performance Management Systems and Compensation‫ك ومبن‬
‫زيشن‬

Integrating training with performance management and compensation fosters employee

development and motivation by connecting‫ كن نكتن ق‬learning outcomes to performance
evaluation and rewards, driving effective skill application. Operating these elements
separately‫ سبرت لي‬hampers the reinforcement‫ رين فورسمنت‬of learning, but a unified‫يون فايد‬
approach not only aligns‫ الينس‬training strategically but also bolsters‫ بول سترس‬organizational
goals, promoting success and satisfaction.

Connecting training with performance management and compensation‫ كومبن زيشن‬creates a

symbiotic‫ سم بيادك‬relationship where learned skills directly impact employee performance
and subsequent‫ صب سكونت‬rewards, fostering an aligned‫ اليند‬and motivated workforce. This
integration ensures that skill development is recognized‫ ريكاق كنايز‬and rewarded, driving
both individual and organizational success.

Conclusion
Employee training is crucial for organizations, determining ‫ دي ترمن ق‬human assets as valuable
investments. Despite‫ ديس بايت‬the challenge in immediate‫ ا ميديت‬quantification‫ كوان تفكيشن‬, a holistic
‫ هوليس تك‬view aligning skills with strategic objectives is necessary. Evolving‫ اي فولفن ق‬work methods
require‫ ري كواير‬targeted training for sustained‫ سوس ستيند‬success, making it a prerequisite‫بير ريكوزيت‬
for organizational progress.