XAVIER INSTITUTE OF MANAGEMENT JABALPUR

AN ASSIGNMENT OF MARKETING MANAGEMENT TOPIC Managing market channels and Market logistics SUBMITTED TO : Faculty Advisor Prof. Cecil Anthony SUBMITTED BY: MANISH KUMAR SINGH (42)

MD IMRAAN (44) RAJ RANJAN(48)

Definition
Marketing channel: system of marketing institutions that promotes the physical flow of goods and services, along with ownership title, from producers to consumer or business user; also called a distribution

Channel
Value Delivery Network

What Is The Work Of The Marketing Channel?

The work of the channel includes the performance of several marketing flows.

What is a Channel of Distribution?

Process including the physical handling and distribution of goods, the passage of ownership (title) and the buying and selling negotiations between producers and middlemen and between middlemen and customers.

A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a product and its title from production to consumption *Bucklin - Theory of Distribution Channel Structure (1966)

What is Marketing Channel?

Middlemen in the process between Manufacturer & Final International Consumer who may or may not Physically handle & distribute the goods Assume title to goods Negotiate buying and selling

Middlemen used when the can perform functions more efficiently than manufacturers can Examples of Home-Country Middlemen (1) Global Retailers

Examples of Home-Country Middlemen

(2) Export Management Company

Export Management Companies

  

Independent firm which acts as the exclusive export sales department for non-competing firms; Typically represent smaller companies in specialized industries Ranges in size from 1 to 100 employees .

STRATEGIC IMPLICATIONS: THE ROLE OF MARKETING CHANNELS IN MARKETING STRATEGY

Channels provide the means by which the firm moves the goods and services it produces to ultimate users. Channels perform four important functions. They: Marketing intermediary

Wholesaler: Logistics Physical distribution:

Intermediaries Minimize Transactions

Direct Selling
Direct channel: marketing channel that moves goods directly from a producer to ultimate user Direct selling: strategy designed to establish direct sales contract between producer and final user

Dell Computer: A Direct Seller of Computers

Selection consideration
Market segment - must know the specific segment and target customer Changes during plc - different channels are exploited at various stages of plc Producer-distributor fit - their policies, strategies and image

Qualification assessment - experience and track record must be established Distributor training and support

Framework for Market Analysis

  

Market geography

Market size Market density Market behavior

 when customers buy  where customers buy  how customers buy  who buys

Who Buys?
Who makes physical purchase? Who uses the product? Who influences the buying decision?

Channel Strategy
The broad principles by which the firm expects to achieve its distribution objectives for its target market(s)

Six Fundamental Strategic Distribution Decisions

     

What role should distribution play in the firms overall objectives and strategies?

What role should distribution play in the marketing mix?

How should the firms marketing channels be designed to achieve its distribution objectives?

What kinds of channel members should be selected to meet the firms distribution objectives?

How can the marketing channel be managed to implement the firms channel design effectively and efficiently?

How can channel member performance be evaluated?

How Do you Select Channel?

Cost Transporting & storing goods Capital Requirements Control Coverage Character Does it fit the character of the company and the market? Continuity Can you foster loyalty among members?

Channel Design
Those decisions involving the development of new marketing channels where none had existed before, or the modification of existing channels

Paradigm of the Channel Design Decision

      

Recognize need for channel design decision

Set and coordinate distribution objectives

Specify distribution tasks

Develop possible alternative channel structures

Evaluate variables affecting channel structure

Choose the best channel structure

Select the channel members

Channel Conflict
Occurs when channel members disagree on roles, activities or rewards

Types of Conflicts

Horizontal Conflict Vertical Conflict

Franchise Examples

Marketing Logistics : Overview

Effective logistics management requires that the actual status of goods and services be communicated in real-time to the various groups of people involved in the logistics process. This helps logistics service providers to improve their service by keeping a closer watch on inventory and taking the steps necessary to avoid losing customers. Communication using satellite technology and sophisticated devices makes it possible for the various players involved in the logistics chain of processes to remain in constant communication with one another and with the end customer. Technology is playing a key role in communication as well as in other processes in the logistics function and helping logistics firms to attain a

competitive advantage. The various types of technology being implemented in logistics activities include Electronic Data Interchange, artificial intelligence, expert systems, communication technology in the form of satellite and wireless communication, and bar coding and scanning. Market Logistics Planning: y Deciding on the companys value proposition to its customers y Deciding on the best channel design and network strategy y Developing operational excellence y Implementing the solution It is necessary to streamline the logistics process to maintain the efficiency of the logistics network. In addition to integrating information technology and advanced logistical approaches into their business operations, businesses are beginning to realize the need to focus on their logistics strategy in order to efficiently maintain their supply chain capabilities. A logistics strategy examines logistical operations and activities and provides logistical firms with a sense of unity, direction, and purpose. It helps firms involved in the business to attain a competitive advantage over others by allowing them to promptly respond to the opportunities and threats in the business environment. In their efforts at logistical management, firms face several challenges, which may be local or global in their scope. While the need for integration of logistics activities and lack of qualified personnel are the primary challenges faced in logistics management at the local level, the global challenges include challenges arising due to greater distance, modes of transport, documentation, coordination of intermediaries, cultural and political differences, globalization, need for flexibility and speed, need to integrate supply chain activities, and challenges due to emphasis of companies on green logistics.

Market-Logistic Objectives: Getting the right goods to the right place to the right person at the right time for the least cost. \

Ultimate objectives of market-logistic are: Deliver the products safely. If the products are perishable, it has to reach to the consumer before spoilage. To retain the trustworthiness among customers. A step ahead of his competitor.

To satisfy the consumer/customers need timely.

Market-logistic Decision How should orders be handled? Where should stock be located? How much stock should be held? How should goods be shipped? Companies are reducing their inventory cost by treating inventory items differently, positioning them according risk and opportunity. They distinguish between bottleneck items (high risk, low opportunity), critical items (high risk, high opportunity), commodities(low risk, high opportunity), and nuisance items (low risk, low opportunity). They are also keeping slow moving items in central location and carrying fast moving items in warehouses closer to customers.