Lecture _ 2

2
Channel management
Marketing focuses on the channel or
Value Network which operates on the
customer side
Intermediaries that constitute a
marketing channel are also called
trade channel or Distribution
channel
3
Value network chain
Consultant, advisor
Raw material supplier
inbound logistics provider
Manufacture, assemble
Sell, Distribute, resell, communicate
Outbound logistics provider
Monitor consumption, feedback, service
Satisfaction measurement
4
Distribution system
Is a key external resource
Ranks in importance with internal
resources such as manufacturing,
engineering, research, sales persons. Etc.
Represents an important corporate
commitment to the numerous independent
distributors.
Represents commitment to Policies and
Practices.
5
Channel structures
Mfgr. Customer

Mfgr. Dealer Consumer

Mfgr C&F Stockist Retailer Customer
Mfgr. Depot Stockist Retailer Customer

Mfgr. Distributor Stockist Retailer Cust.
6
Multiple channel systems
Self-service stores and supermarkets
Project (Haneef Rajpoot)
Pakistan Unilever Network-consultants
Out-of-home opportunity-vending H/M.
Health and beauty services therapy
7
Work Performed by Channels
Producers establish marketing channels for a
variety of reasons:
Producers lack financial resources necessary for
direct marketing
Direct marketing is not feasible for many offerings
Using channels frees money for investment in main
business
Intermediaries are more efficient

8
Work Performed by Channels
Producers establish marketing channels for a
variety of reasons:
Producers lack financial resources necessary for
direct marketing
Direct marketing is not feasible for many offerings
Using channels frees money for investment in main
business
Intermediaries are more efficient

9
Functions..
Take on risks connected with channel
work
Storage and movement of physical
goods
Provide payment of buyers bills.
Oversee actual transfer of ownership
10
Distribution channel activities
Distribution channel activities arise due
to discrepancies between typical
manufacturing activity and consumption
activity.
Discrepancies vary at different
situations.
The general discrepancies that exist
are:
11
Distribution activities
Spatial discrepancy: Exists because
of the physical distance between
point of manufacture and point of
consumption.
limited manufacturing locations and
widespread consumption locations.
12
Distribution activities
Temporal discrepancies: The point of
time in manufacturing is distinct from
the point of time in consumption.
(Pharmaceutical, Textile)
To bridge or reduce the temporal
discrepancy products have to be
stocked at appropriate places and in
adequate quantities
13
Distribution activities
Breaking bulk: appropriate selling
units.

Provide an assortment: The OSS
concept
14
Distribution activities
Bridging the information discrepancy.
Tourism and travel; Savings and
Investment; New technology
products
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