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Marketing Management

Marketing Channel System

Presented by:Rahul Tuli Rahman Danish

Marketing channel
A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process. A marketing channel is a useful tool for management.

Roles of marketing channel in marketing strategies:


Links producers to buyers. Performs sales, advertising and promotion. Influences the firm's pricing strategy. Affecting product strategy through branding, policies, willingness to stock. Customizes profits, install, maintain, offer credit, etc.

Marketing channel
A marketing channel is a set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process. A marketing channel is a useful tool for management.

Channels of distribution

Distributor, who sells to retailers via direct marketing, or brokers can also be used. Wholesalers Retailer who sells to end customers Direct Distribution(Direct Marketing), where an organization sells its products directly to the end customer. For example in case of online purchases(Internet Marketing and E-commerce) there will be the seller and customer. For this the seller and the customer may depend on various shipping providers.

Advertisement typically used for the consumption goods

Distribution channels may not be restricted to physical products from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc. process of transfer the products or services from Producer to Customer or end user.

Channel-Design Decisions
Designing a channel system calls for analyzing customer needs, establishing channel objectives, & identifying & evaluating the major channel alternatives.

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 Levels
Each intermediary that performs work in bringing the product & its title closer is a channel level.

Zero-channel level (direct-marketing channel) consists of a manufacturer selling directly to the final customer (i.e. door-to-door sales, mail order. Telemarketing, TV selling) One level channel contains one selling intermediary (i.e. retailer) Two level...(wholesalers, retailers) Three level...(wholesalers, jobbers, retailers)

Channel-management decisions
After a company has chosen a channel alternative, individual intermediaries must be selected, motivated & evaluated.

Selecting channel members


In order to select them, producers should determine what characteristics which distinguishes among the better intermediaries (years in business, other lines carried, solvency, reputation, etc.)

Motivating channel members


Constant training, supervision & encouragement. Producers can draw on the following types of power to elicit cooperation:

Coercive power. Manufacturer threatens to withdraw a resource or terminate a relationship if intermediaries fail to cooperate. Produces resentment. Reward power. Manufacturer offers intermediaries extra benefits for performing specific acts. Legitimate power. Manufacturer requests a behavior that is warranted by the contract. Expert power. Manufacturer has special knowledge that the intermediaries value. Referent power. Intermediaries are proud to be identified with the manufacturer.

Evaluating channel members

Underperformers need to be counseled, retrained or re-motivated. If they do no shape up, it might be best to terminate their services.

Thank you