MEDICAPS UNIVERSITY , INDORE

BATCH – 2017-2019

SUBJECT- SALES AND CHANNEL MANAGEMENT

TOPIC-MARKETING CHANNEL IMPORTANCE, STRUCTURE AND FLOW

SUBMITTED TO SUBMITTED BY
PROF. SUNIL MISHRA DIVYA SHARMA
DHARA SHARMA
GAURAV KALA
DIKSHIKA SODHAGAR
DIVYANSHU PATIDAR
GAGAN SINGH
DEEPAK SHARMA
INTRODUCTION TO MARKETING CHANNELS-

Marketing channels is a medium of transporting the goods from factory to marketplace .

A marketing channel is the people, organizations, and activities necessary to transfer the
ownership of goods from the point of production to the point of consumption It is the way
products and services get to the end-user the consumer and is also known as a Distribution
channel. A marketing channel is a useful tool for management, and is crucial to creating an
effective and well-planned marketing strategy.
Another less known form of the marketing channel is the Dual Distribution channel. This channel
is a less traditional form that allows the manufacturer or wholesaler to reach the end-user by
using more than one distribution channel. The producer can simultaneously reach the consumer
through a direct market, such as a website, or sell to another company or retailer that will reach
the consumer through another channel, i.e., a store. An example of this type of channel would
be franchising
 DEFINITION OF CHANNELS-

A channel refers to a way of making a product available to distribute to the end consumers. A
marketing channel helps by getting the right products to the right consumer in time for purchase

Marketing channel or the distribution channel refers to a set of organizational bodies, isolated from
the producer, that are involved in supplying of the product to the consumer. It is seen as a channel
which starts from production and ends at consumption. As a concept it is very similar to distribution
channel.
Marketing channel can drive marketing objectives of a firm.

For Example

As per the marketing channel chosen, the pricing strategy of the product can be determined as we
see a lot these days. Selling through a website directly to consumer a manufacturer may be able to
offer better discounts whereas selling through a more traditional channel through a
wholesaler/distributor, they may have to sell it at MRP.
TYPES OF CHANNELS-
1.DIRECT CHANNEL- It is also called as Zero level Channel because here a
manufacturer sells directly to the customer without involving any market
intermediaries in the selling process.

2.INDIRECT CHANNEL- indirect channel involves taking help of market intermediaries

for selling companies products in the market.

The choice of using channels depends on company as it may use a single channel for
delivering its goods to ultimate customers that is called Omni channels.

For ex. A company may sell its products online only by using websites.

On the other hand it can also use a combination of different channels for selling its
products in the market that is called Multiple channels

For ex. A company may use a combination of online and outlets selling.
Importance of channels-

Role and Significance/Importance of Distribution Channels

Distribution Channels perform a crucial role in the successful distribution and marketing of
all products. They have various contacts, expertise and wider knowledge of the products. The
rapidly growing markets and increasing complexities of distribution have increased the
demand and requirement of the distribution channels.
The role of distribution channels can be summarized as follows:
Distribution channels offer salesmanship: The distribution channels offer pivotal role of a
sales agent. They help in creating new products in market. They specialize in word of mouth
selling and promotion of products. They assure pre-sale and post-sale service to the
consumers. Since these channels are in direct and regular contact with the consumers, they do
salesmanship very well and at the same time provide true and valuable feedback to the
producers.
Distribution channels increase distributional efficiency: The intermediary channels ease the
sales process as they are in direct contact with the customers. They narrow down the gap
between producers and consumers both economically and efficiently. These intermediaries
reduce the number of transactions involved in making products available from producers to
consumers. For instance, there are four producers who are targeting to sell their products to
four customers .
Structure of marketing channels
Channel Structure
the way in which a network of participating intermediaries is constructed in the delivery chain to perform
the required activities to achieve an organization's distribution goals and objectives. A channel
structure is a means of reaching your customer with your products and services.
1. Direct channel-
Selling directly to the customer using channels such as personal selling, retail or ecommerce. For
example, a fashion brand that has its own shops and ecommerce site.
producer → customer
2. Retail channel-
Selling to retailers who sell to the end-customer.
producer → retail → customer
3. Ecommerce-
Selling to ecommerce partners who manage the relationship with customers.
producer → ecommerce → customer
4. Wholesale-
Selling to wholesalers who distribute the product to retailers or ecommerce sellers.
producer → wholesaler → retail → customer
5. Agents –
Using agents or brokers to manage your sales to wholesalers, retail and/or ecommerce sellers.
producer → agent → wholesaler → retail → customer
Flow of marketing channels
Functions of marketing channels

1. The primary function of a distribution channel is to bridge the gap between production and
consumption.

2. A close study of the market is extremely essential. A sound marketing plan depends upon
thorough market study.

3. The distribution channel is also responsible for promoting the product. Awareness regarding
products and other offers should be created among the consumers.

4. Creating contacts or prospective buyers and maintaining liaison with existing ones.

5. Understanding the customer's needs and adjusting the offer accordingly.

6. Negotiate price and other offers related to the product as per the customer demand.