Distribution

Channels

PARAMJIT SHARMA
Distribution
Channels
Who Are They?

•Merchants– Who Buy and Distributes

•Agents– Who search for Customers

•Facilitators– Who facilitate Distribution

Distribution
Channels What Do They Do?

M C

M C

M C
Distribution
Channels

M c

M D c
M c
Distribution
Channels Functions

Gather information About Customers , Competitors

&Others
Develop Communication To Stimulate Purchasing
Reaching Agreement On Price & Other Terms
Place Orders With Manufacturers
Acquire Funds to finance Inventories
Assume Channel Risk
Facilitate Storage & Movement Of Products
Oversee Transfer Of Ownership
 Distribution Channel
Channels
flow
1 Physical Flow

Suppliers T&W,s M TW D T Customers

2Title Flow

Suppliers M D Customers

3 Payment Flow

Suppliers Banks M Banks D B Customers

4 Information Flow

Suppliers TW &B M TWB D TB Customers

5 Promotion Flow
Suppliers
Adv
Agency M Adv.
Agency D Customers
 Distribution Channel
Channels
flow

1 Physical Flow

Suppliers T&W,s
M TW D T Customers
 Distribution Channel
Channels
flow

2Title Flow

Suppliers
M D Customers
 Distribution Channel
Channels
flow

3 Payment Flow

Suppliers Banks M Banks D B Customers

5 Promotion Flow
Suppliers
Adv
Agency M Adv.
Agency D Customers
 Consum
Distribution er
Channels Marketi
ng
0-level 1-level
Channel 2-level 3-level

Manufacturer Manufacturer Manufacturer Manufacturer

Wholesaler Wholesaler

Jobber

Retailer Retailer Retailer

Customer Customer Customer Customer

Distribution
Channels
Intermediaries

Type
Company Sales Force Number Of Intermediaries

Manufactures’ Agency

Industrial Distributors Exclusive Distribution

Selective Distribution

Intensive Distribution
Distribution
Other Types
Channels

•Sole Selling Agents

•C& F Agents
•Redistribution Stockiest
•Stockiest/Distributor/Wholesaler
•Semi-wholesaler
•Retailer/dealer
•Broker
•Franchisees
•Authorized Representatives
•Commission Agents
•Jobbers
 Terms &
Responsibilities
Distribution
Of
Channels Channel Members

Conditions
Price
of
Policy Sales

Territorial Specific
Rights Services
 Distribution
Channels

High
Sales Force

Value Added Direct

Partners Sales
Channels
Value-add of

Distributors

Retail stores Indirect

sale

channel
telemarketing

internet Direct Marketing

low Channels
low High
Cost Per Transaction
Distribution Evaluating
Alternatives
Channels
Criteria's

Economic

Control Adaptive
Distribution Channel
Channels Management
Decisions

Modifying
Evaluating
Channel
Motivating Channel
Training Members
Channel Members
Selecting Channel Members
Channel Members
Members
Distribution Channel
Channels Management
Decisions

Characteristics

•No. Of Years In Bus.

•Other lines carried
•Growth &Profit
Selecting •Financial Strength
Channel •Cooperativeness
Members •Service
Reputation
Distribution Channel
Channels Management
Decisions

Motivating Powers

Motivating Coercive Power

Channel Reward Power
Members
Legitimate Power
Expert Power
Referent Power
Distribution Channel
Channels Management
Decisions
Value Added By Channel
High Low

1 Introductory 4 Declining

-PC’s :hobbyist -P C’ s
Low Mail Order
Stores
-Designer Apparel -DA’s
Market Growth

Modifying
Boutiques Off-Price Stores
Channel
Members 2 Growing 3 Mature

-PC’s: Specialty
Rate

-PC
Stores Mass Merchandise
High
-Designer Apparel -Designer Apparel
Better Dept Mass Merchandise
Stores
Distribution Channel
Channels Dynamics

Vertical
Marketing
System
Multi
Channel
Horizontal Marketing
Marketing Systems
System
Distribution Channel
Channels Dynamics

Vertical
Marketing Corporate Administered
System VMS VMS

Producer

Channel Contractual
Wholesalers Captain VMS

Retailers
 Contractual
Distribution
Channels
VMS

Value Added
Partnerships Wholesaler-sponsored
voluntary Chains

Retailer Cooperatives

Franchise Organisations

Manufacturer-sponsored
Wholesale franchise
 Horizontal
Distribution
Channels Marketing
System

Two Or more Unrelated Companies Put together

Or Programs to exploit an emerging marketing
Opportunities .Many supermarket Chains Have
arrangements with Local banks to offer in-store
banking
Distribution Channel
Channels Dynamics

Multi
Channel Single Firm uses two or more marketing
Multi Channels to reach one or more marketing
Marketing
Channel segment
Systems
Marketing
Systems
Distribution Channel
Channels Dynamics
Multi Channel

Demand Generation Tasks

l
e
a
internet d

Direct
sales

Consumers
Vendors

Tele
marketing

Retail

distributor

wholesaler
Distribution Channel
Channels Conflicts

Between National Account & Sales Force

Between Sales Force & Intermediaries

Between Sales force & Dealers

Distribution Managing
Channels Channel
Conflict

•Adopting Super ordinate Goals

•Exchanging Persons
•Co-optation In advisory bodies
•Joint Membership Of Trade Associations
•Diplomacy, Meditation & Arbitration
Distribution Legal &
Channels Ethical
Issues

 Exclusive territories

Exclusive Dealing

Tying Agreements
Distribution
Channels

thanks