PLACING

` -I

P C
R O
O N
D S
U U
C M
E E
R R
IIM
RAIPUR

Placing (I) - Channel

Management

MANOJ H
RAHUL KHEDKAR
RISHIRAJ SINGH ASHIYA
SHAHUL HAMEED
VAMSY KRISHNA

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

 AGENDA
CONCEPT

CHANNELS

TYPES

ROLES

FUNCTIONS

SELECTION

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 DISTRIBUTION
CONCEPT
What is Distribution?
CHANNELS

It is defined as the management of

TYPES all activities which facilitate
,
movement and co-ordination of
ROLES
supply and demand in creation of
time, place utility in goods
FUNCTIONS

SELECTION

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 DISTRIBUTION
CONCEPT
What is Distribution?
CHANNELS

It is the Art and Science of

TYPES
determining requirements,
,
acquiring them, distributing them
ROLES
and finally maintaining them in an
FUNCTIONS
operationally ready condition for
their entire life
SELECTION

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 TYPES OF DISTRIBUTION
CONCEPT

CHANNELS
Distribution

TYPES
,
ROLES
Channel Physical
FUNCTIONS management Distribution

SELECTION

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 CHANNELS
CONCEPT
What are Channels?
CHANNELS

The path through which

TYPES
,
goods and services
ROLES travel from the vendor
FUNCTIONS
to the consumer or
payments for those
SELECTION products travel from the
12/12/2012
consumer to the vendor
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 CHANNELS

CONCEPT
MANUFACTURER CUSTOMER

CHANNELS

MANUFACTURER
TYPES RETAILER CUSTOMER
,
ROLES
MANUFACTURER WHOLESALER RETAILER CUSTOMER

FUNCTIONS

MANUFACT WHOLE
AGENTS RETAILER CUSTOMER
URER
SELECTION SALER

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 MANUFACTURER CUSTOMER

MANUFACTURER RETAILER CUSTOMER

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 MANUFACTURER WHOLESALER RETAILER CUSTOMER

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 CHANNEL FLOW

CONCEPT

Goods/ Services
C
FORWARD
CHANNELS
C U
O S
TYPES Payment for Goods/
, M BACKWARD T
Returns
ROLES P O
A M
FUNCTIONS
N BOTH E
Information
MANUFACT
Y WAYS R
URER
SELECTION
S
 INTERMEDIARIES
CHANNELS

INTERMEDIARIES

AGENTS

WHOLESALERS

DISTRIBUTORS

RETAILERS

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 INTERMEDIARIES
CHANNELS
Links producers to other
INTERMEDIARIES
intermediaries or the ultimate
buyer.
AGENTS
Promote, sell, and make-
available a good or service through
WHOLESALERS
contractual arrangements or
purchase and resale of the item.
DISTRIBUTORS
Each intermediary receives the
item at one pricing point and
RETAILERS moves it to the next higher
pricing point until the item reaches
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12/12/2012
the final buyer 13
 AGENTS
CHANNELS

INTERMEDIARIES

AGENTS

An independent individual or company

WHOLESALERS
Primary selling arm of the producer and
represent the producer to users.
DISTRIBUTORS Agents take possession of products but
do not actually own them.
Make profits from commissions or fees
RETAILERS
paid for the services they provide to the
producer and users.
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 WHOLESALERS
CHANNELS

INTERMEDIARIES

AGENTS

WHOLESALERS
Independently owned firms that take title to
the merchandise they handle.
In other words, the wholesalers own the
products they sell.
DISTRIBUTORS
Wholesalers purchase product in bulk and
store it until they can resell it.
Wholesalers generally sell the products they
RETAILERS have purchased to other intermediaries,
usually retailers, for a profit.
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 DISTRIBUTORS
CHANNELS

INTERMEDIARIES

AGENTS

WHOLESALERS Distributors only carry complementary

product lines, either Pepsi or Coke
products.
DISTRIBUTORS
Distributors usually maintain close
relationships with their suppliers and
RETAILERS customers. Distributors will take title to
products and store them until they are
sold
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 RETAILERS
CHANNELS

INTERMEDIARIES

AGENTS

WHOLESALERS
A retailer takes title to, or purchases, products
from other market intermediaries.
DISTRIBUTORS
Retailers can be independently owned and
operated, like small mom and pop stores, or
they can be part of a large chain, like Walmart.
The retailer will sell the products it has purchased
RETAILERS directly to the end user for a profit

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 TYPES
CONCEPT

CHANNELS
INTENSIVE
TYPES

ROLES
SELECTIVE
FUNCTIONS

EXCLUSIVE
SELECTION

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 INTENSIVE
CONCEPT INTENSIVE SELECTIVE EXCLUSIVE

CHANNELS

TYPES

ROLES

FUNCTIONS

SELECTION

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 SELECTIVE
CONCEPT INTENSIVE SELECTIVE EXCLUSIVE

CHANNELS

TYPES

ROLES

FUNCTIONS

SELECTION

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 EXCLUSIVE
CONCEPT INTENSIVE SELECTIVE EXCLUSIVE

CHANNELS

TYPES

ROLES

FUNCTIONS

SELECTION

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 ROLES
CONCEPT
PROMOTION
NEGOTIATIO
CHANNELS N
INFORMATIO
N
TYPES
ORDERING
ROLES PHYSICAL
POSSESSION
TRANSFER
FUNCTIONS OF TITLE
FINANCING
SELECTION
RISK TAKING
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 PROMOTION
ROLES

PROMOTION Marketing intermediaries

NEGOTIATIO attract customers and
N
INFORMATIO persuade them to buy goods
N
and services.
ORDERING
PHYSICAL
These intermediaries
POSSESSION undertake sales promotion
TRANSFER
OF TITLE activities through media and
FINANCING personal contacts
RISK TAKING
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 PROMOTION
ROLES

PROMOTION
NEGOTIATIO
N
INFORMATIO
N
ORDERING
PHYSICAL
POSSESSION
TRANSFER
OF TITLE
FINANCING

RISK TAKING
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 NEGOTIATION
ROLES

PROMOTION Intermediaries or middlemen

NEGOTIATIO negotiate prices and other
N
INFORMATIO terms and condi-tions
N
between buyer and seller.
ORDERING
PHYSICAL
No sale can take place
POSSESSION without an agreement on
TRANSFER
OF TITLE prices and other terms and
FINANCING conditions
RISK TAKING
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 NEGOTIATION
ROLES

PROMOTION
NEGOTIATIO
N
INFORMATIO
N
ORDERING
PHYSICAL
POSSESSION
TRANSFER
OF TITLE
FINANCING

RISK TAKING
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 INFORMATION
ROLES

PROMOTION Middlemen collect

NEGOTIATIO information about demand,
N
INFORMATIO competition, etc., from
N
consumers and pass on to
ORDERING
manufacturers.
PHYSICAL
POSSESSION They also provide information
TRANSFER
OF TITLE to consumers about new
FINANCING products, changes in design,
RISK TAKING
style, prices, etc., of existing
products
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 INFORMATION
ROLES

PROMOTION
NEGOTIATIO
N
INFORMATIO
N
ORDERING
PHYSICAL
POSSESSION
TRANSFER
OF TITLE
FINANCING

RISK TAKING
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 ORDERING
ROLES

PROMOTION WHOLESALERS
NEGOTIATIO
N
INFORMATIO
N
ORDERING RETAIL OUTLETS
PHYSICAL
POSSESSION
TRANSFER
OF TITLE Intermediaries collect small
FINANCING orders from consumers
RISK TAKING and on that basis place large
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orders with manufacturers
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 PHYSICAL POSSESSION
ROLES

PROMOTION
NEGOTIATIO
N
INFORMATIO
N
ORDERING
PHYSICAL
POSSESSION
TRANSFER
OF TITLE
Middlemen take possession
of goods from producers and
FINANCING
pass on possession to
RISK TAKING consumers
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 TRANSFER OF TITLE
ROLES

PROMOTION
NEGOTIATIO
N
INFORMATIO
N
ORDERING
PHYSICAL
POSSESSION
TRANSFER
OF TITLE Middlemen transfer
FINANCING
ownership of goods from
producers to consumers
RISK TAKING
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 FINANCING
ROLES

PROMOTION
NEGOTIATIO
N
INFORMATIO
N
ORDERING
PHYSICAL
POSSESSION
TRANSFER Intermediaries provide financial,
OF TITLE assistances at different stages of
FINANCING the market-ing channel. They buy
goods in cash from producers and
RISK TAKING sell them to consumers on credit
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 RISK TAKING
ROLES

PROMOTION
NEGOTIATIO
N
INFORMATIO
N
ORDERING
PHYSICAL
POSSESSION Intermediaries assume most of
TRANSFER
OF TITLE the risks involved in the
FINANCING
distribution of goods. They
relieve producers from these
RISK TAKING risks and enable them to
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Indian on
Institute of Management pro-duction
Raipur 33
 FUNCTIONS
CONCEPT
INFORMATION
FLOW
CHANNELS

STIMULATE
TYPES PURCHASING

ROLES
STORAGE AND
MOVEMENT
FUNCTIONS

SELECTION PRICE FIXING

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 INFORMATION FLOW
FUNCTIONS

INFORMATION
FLOW

STIMULATE
PURCHASING

STORAGE AND
MOVEMENT
Information flows from
Retailers <- >distributors
Distributors <-> Wholesalers
PRICE FIXING
Wholesalers <-> company
 STIMULATE PURCHASING
FUNCTIONS

INFORMATION
FLOW

STIMULATE
PURCHASING

STORAGE AND
MOVEMENT
For its promotion VIP encourages retailers to
advertise in the city on its behalf, and shares
PRICE FIXING some cost of it
 STORAGE AND MOVEMENT
FUNCTIONS

INFORMATION
FLOW

STIMULATE
PURCHASING

STORAGE AND
MOVEMENT

GAS CYLINDERS ARE STORED IN THE WAREHOUSES AND

THEN MOVED THROUGH RETAILERS T
PRICE FIXING

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 PRICE FIXING
FUNCTIONS

INFORMATION
FLOW

STIMULATE
PURCHASING

STORAGE AND
MOVEMENT

PRICE FIXING

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 Factors Influencing the Selection of
Channel Members

CONCEPT

Cost
CHANNELS Control

TYPES
Image Selection of
Channel
ROLES
Members Performance

FUNCTIONS
Experience
Reputation
SELECTION

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 SELECTION
CONCEPT

CHANNELS MARKET
FACTORS

TYPES
PRODUCT
ROLES FACTORS

FUNCTIONS
PRODUCER
FACTORS
SELECTION

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 MARKET FACTORS
MARKET PRODUCT PRODUCER
FACTORS FACTORS FACTORS
CONCEPT

CHANNELS

TYPES

ROLE

Customer Profiles
FUNCTIONS Consumer or Industrial Consumer
Size of Market
SELECTION Geographic Location

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 PRODUCT FACTORS
MARKET PRODUCT PRODUCER
FACTORS FACTORS FACTORS
CONCEPT

CHANNELS

TYPES

ROLE

Product Complexity
FUNCTIONS Product Price
Product Life Cycle
SELECTION Product Delicacy

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 PRODUCER FACTORS
MARKET PRODUCT PRODUCER
FACTORS FACTORS FACTORS
CONCEPT

CHANNELS

TYPES

ROLE

Producer Resources
FUNCTIONS
Number of Product Lines
SELECTION Desire for Channel Control

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PROJECT SHAKTHI

E CHOUPAL
 THANK YOU

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