Professional Documents
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Direct channels
Indirect channels Integrated multi - channels
Intensive
Selective
Standard products with less unit value Frequent purchases Fragmented market Criteria depends on product characteristics and customer needs Can control price cutting Can establish strong working relationships Good returns for channel members Seller will expect superior selling efforts Cannot deal with competing products Limited buyers in a geographical area Generally high priced products
Exclusive
Manufacturers representatives
promote sales and secure orders. Do not buy, store or finance. Paid commissions.
Distributors
Bringing together several related items from various sources to serve potential customers
Investing in inventory and extending credit Warehousing Transportation Technical service Market feedback
Brokers
may represent either buyer or seller. To find potential buyers, negotiate and complete the sale. relationship is short. Paid on commission basis. Vital when info on markets and products are not readily available.
Commission merchants
deal with bulk commodities. Represent the seller. Functions arranging inspection, physical handling, negotiating and completing the sale. paid on commission basis.
Elements
Product availability Order cycle time
Description
Items available in stock for despatch Time for the order placement to delivery
Order accuracy
Information
Damage handling
Sales revenue, Rs
Channel objectives
Channel constraints Channel tasks
Total costs
Channel costs
Distn costs
Buyers cost
Channel service
contd
Horizontal axis: combination of channel service outputs quantities, rapid delivery, wide assortment, installation , application assistance etc. each of these services is a cost. Channel costs increase with increased level of service. Total costs represents the sum of buyers cost and the channel cost. It moves the channel to the structure that yields minimum total costs. *
Extension of credit
Distributor does not want to be dictated by the Co. for extension of credit
Loss of opportunity
Applicable for exclusive distributors
Major cost centers are: Transportation Warehousing Inventory Order processing Material handling
1. 2. 3. 4. 5.
What is customer service? The key to customer service is understanding the customer and the customers perceptions. Customer service is a means by which companies attempt to differentiate their product, keep customers loyal, increase sales and / or increase profits. Customer service is not just an outcome of business activities; it can be a managed element of that business.
The major criterion for evaluating the appropriate customer service level is profitability. Higher the level of service, greater the costs. Figure ( next slide ) shows profit contribution varies with level of service. At the present level,( 73 % ) profits are sub optimal. Between 73% and 85% service levels, sales will increase faster than costs generating higher profits. Beyond 85%, marginal costs increase faster than sales. It is a point of diminishing returns at which additional expenditures will exceed the vale of sales.
Poor firms ignore their competitors Average firms copy their competitors Winning firms lead their competitors