Channel selection
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Selection of
Channels
A Sales & Distribution Presentation
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Arti
Presented By
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Channel Management is a process by which a producer or supplier directs marketing activity by involving and motivating the entities comprising its channel of distribution Various Channels are: Wholesalers, Retailers, Distributors & Agents
Channel Management
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Market Intermediaries
Mar
keti
ng
Inte
rme
dia
rie
s Middlemen
Agent or Broker
Wholesaler
Retailer
Distributor
Value-added Resellers
Merchants
Facilitating Agents
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Need for
Distribution Channels
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Direct Marketing Channel Indirect Marketing Channel
Types of Channels
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Direct Marketing Channel (or Zero Level) This type of channel has no intermediaries. In this distribution system, the goods go from the producer directly to the consumer, e.g., Amway, Eureka Forbes.
Direct Marketing Channel
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Indirect Marketing Channel
Producers
Consumers
Retailer
Wholesalers
Consumers
Retailer
Consumers
Retailer
Wholesalers
Distributor
Consumers
Retailer
Wholesalers
Distributor
Agent
Level- 1
Level- 2
Level- 3
Level- 4
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Channel Strategy Decisions
Market Factors Customer Preference Organizational Customers Geography
Competitors Nature & Availability of Intermediaries Product Factors
Life Cycle Selling Price/Unit Perishability Size & Weight Consumer Perceptions
Ch
ann
el S
ele
ctio
n C
rite
ria
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Key Issues in Determining Channel Requirement
While a manufacturer faces an agenda of issues related to finance, marketing and industrial
relations, attention is focused on selected topics that directly impact marketing channel
arrangements. The key issues related to this are:
Product proliferation and dynamics; and
Total-quality initiatives.
These two issues are significant drives for a typical firm in determining how channel
requirements will be delineated.
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Manufacturing Strategy
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Wholesalers
Wholesale trade is defined as “all establishments or places of business primarily engaged in selling merchandise to retailers; to industrial, commercial, institutional or professional users or to other wholesalers; or acting as agent in buying merchandise for or selling merchandise to such persons or companies”.
1. Merchant Wholesalers 2. Agent Wholesalers 3. Manufacturers’ Sales branches and offices
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Merchant Wholesalers
Merchant Wholesalers Full Function or Service Wholesalers Limited Function Wholesalers
Cash & Carry Wholesalers Drop Shippers Truck Wholesalers Mail Order Wholesalers Prod. & Retail Cooperative
Wh
ole
sale
rs
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Agent Wholesalers
Agent Wholesalers Manufacturers’ Agent Brokers Commission Merchant Selling Agents Commercial Auction Companies
Manufacturer’s Sales Branches and Sales Offices
Wh
ole
sale
rs
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A wholesaler is generally selected on the basis of his performance
evaluation. Before selecting wholesalers, manufacturers’ analyze a
wholesaler on the basis of the following questions:
How can a wholesaler serve a supplier?
How can a wholesaler serve a retailer?
How can a wholesaler serve business users?
Selecting Wholesalers
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Strategic Management of Wholesalers
Strategic Management of Wholesalers Effectiveness Profitability Niche Marketing Proprietary Brand New Technology
W
ho
lesa
lers
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Introduction to Retailing
Retailing It include all activities incidental to selling to ultimate consumer. According to ‘William.J.Stanton’, “A retailer or a retail store is a business enterprise which sells primarily to ultimate consumers for non business use.”
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Function of Retailing
Collect product assortment and offer them for sale
Product Information
Mark prices and pay for goods
Conclude Transaction with final consumer
Retailers
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Relation Between Retailers & Suppliers
Selling goods or services for use of retailer
Selling goods or services for reselling by retailer
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Wheel of Retailing
Innovation
Trading Up Vulnerability
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Thank You