Marketing Chanel

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Placement Prepared ByLutf Ali Altaf
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The Nature and Importance of Marketing
ChannelsHow Channel Members Add Value

• Channel members add value by bridging the major
  time, place, and possession gaps that separate
  goods and services from those who would use them

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Producers use intermediaries because they create
greater efficiency in making goods available to
target markets. Intermediaries offer the firm
more than it can achieve on its own through their
contacts, experience, specialization, and scale
of operations
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Define logistics

• An independent logistics provider that performs
  any or all of the functions required to get their
  clients product to market.

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Logistics
Logistics

• Involves entire supply chain
• Increasing importance of logistics
• effective logistics is becoming a key to winning
  and keeping customers.
• logistics is a major cost element for most
  companies.
• the explosion in product variety has created a
  need for improved logistics management.
• information technology has created opportunities
  for major gains in distribution efficiency.

• Involves entire supply chain
• Increasing importance of logistics
• effective logistics is becoming a key to winning
  and keepi customers.
• logistics is a major cost element for most
  companies.
• the explosion in product variety has created a
  need for improved logistics management.
• information technology has created opportunities
  for majgains in distribution efficiency.

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Goals of Logistics system

• Provide a Targeted Level of Customer Service at
  the Least Cost.
• Maximize Profits, Not Sales.

Higher Distribution Costs/ Higher Customer
Service Levels
Lower Distribution Costs/ Lower Customer Service
Levels
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What is distribution channel?

• A set of interdependent organizations involved in
  the process of making a product or service
  available for use or consumption by the consumer
  or business user.

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Distribution Channel Functions
Information
Transfer
Communication
Payments
Negotiation
Physical Distribution
Ordering
Risk Taking
Financing
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Information refers to the gathering and
distributing research and intelligence
information about actors and forces in the
marketing environment needed for planning and
aiding exchangePromotion refers to the
development and spreading persuasive
communications about an offerContacts refers to
finding and communicating with prospective buyers
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Matching refers to shaping and fitting the offer
to the buyers needs, including activities such
as manufacturing, grading, assembling, and
packagingNegotiation refers to reaching an
agreement on price and other terms of the offer
so that ownership or possession can be
transferred
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Physical distribution refers to transporting and
storing goodsFinancing refers to acquiring and
using funds to cover the costs or carrying out
the channel workRisk taking refers to assuming
the risks of carrying out the channel work
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Number of Channel Members Channel level refers
to each layer of marketing intermediaries that
performs some work in bringing the product and
its ownership closer to the final buyerDirect
marketing channel has no intermediary levels the
company sells directly to consumersIndirect
marketing channels contain one or more
intermediaries
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Direct Channels Own Retail shopsPersonal
selling (door to door)Mail order
sellingAutomatic vendingFranchised
shopsTelephone selling (Telemarketing)Exclusiv
e Stores/Specialty StoresE-marketing
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Indirect ChannelsMerchandise Agents and Brokers
Works on Commission basis Merchandise
Wholesalers or trade channels Manufacturer/Produ
cer?Consumer/End UserManufacturer/Producer?Whole
saler?Consumer/End UserManufacturer/Producer?Ret
ailer?Consumer/End UserManufacturer/Producer?Who
lesaler/Distributor?Retailer?Consumer/End
User Manufacturer/Producer?Wholesaler/Distributo
r?Semi-wholesaler?Retailer ? Consumer/End User
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Connected by types of flowsPhysical flow of
productsFlow of ownershipPayment
flowInformation flowPromotion flow
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Channel Behavior and OrganizationChannel
Behavior Marketing channel consists of firms
that have partnered for their common good with
each member playing a specialized role
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Horizontal conflict is conflict among members at
the same channel levelVertical conflict is
conflict between different levels of the same
channel
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Conventional Distribution Systems Conventional
distribution systems consist of one or more
independent producers, wholesalers, and
retailers. Each seeks to maximize its own profits
and there is little control over the other
members and no formal means for assigning roles
and resolving conflict.
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Marketing logistics (physical distribution)
involves planning, implementing, and controlling
the physical flow of goods, services, and related
information from points of origin to points of
consumption to meet consumer requirements at a
profit
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Marketing logistics involvesOutbound
distribution Moving products from the factory to
resellers and consumersInbound distribution
Moving products and materials from suppliers to
the factoryReverse distribution Moving broken,
unwanted, or excess products returned by
consumers or resellers
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Importance of logisticsCompetitive advantage by
giving customers better service at lower
pricesCost savings to the company and its
customersProduct variety requires improved
logisticsInformation technology has created
opportunities for distribution efficiency
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Major Logistics FunctionsWarehousingInventory
managementTransportationLogistics information
management
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Warehousing is the storage function that
overcomes differences in need quantities and
timing, ensuring that the products are available
when customers are ready to buy themStorage
warehousesDistribution centers
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Storage warehouses are designed to store goods,
not move them Distribution centers are designed
to move goods, not store them
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Inventory management balances carrying too little
and too much inventoryJust-in-time logistics
systemsRFIDJust-in-time logistics systems allow
producers and retailers to carry small amounts
of inventories of parts or merchandiseRFID
(radio frequency identification devices) are
small transmitter chips embedded in or placed on
products or packages to provide greater
inventory control
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Transportation affects the pricing of products,
delivery performance, and condition of the goods
when they arrive1-Truck2-Rail3-Water4-Pipeline
5-Air6-Internet
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• Intermodal transportation combines two or more
  modes of transportation
• Piggyback uses rail and truck
• Fishyback uses water and truck
• Airtruck uses air and truck

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Logistics information management is the
management of the flow of information,
including customer orders, billing, inventory
levels, and customer data EDI (electronic data
interchange)VMI (vendor-managed inventory)
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Integrated logistics management is the
recognition that providing customer service and
trimming distribution costs require teamwork
internally and externallyCross-functional
teamwork inside the companyBuilding partner
relationships
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Cross-functional teamwork inside the company
refers to the inter-relationship of different
departments within the company to achieve the
goals of integrated supply chain management
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Building partner relationships refers to the
understanding that one companys distribution
is another companys supply system
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Factors affecting choice of Distribution
channelMarket Factors Nature of Market Number
of Potential Customers Geographic
Concentration Order SizeProduct Factors Unit
value Perishable Goods Technical Nature of
ProductsCompany Factors Financial
Resources Managerial Capability Desire for
Channel Control Service provided by the seller
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Middleman FactorsProduct launch Promotional
scheme Market Information Environmental
Factors Economic conditions Technological
inventions Socio-cultural developments Political
and Legal Ethical factors and
Rival/Competitors channelIdentifying the major
alternatives Types of intermediariesNumber of
intermediaries (Intensive / Exclusive /
Selective) Responsibilities of each channel
memberEvaluating the major alternativesEconomic
criteriaControl criteriaAdaptive criteria
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Function of Retailing and WholesalingDefinitions
Retailing refers to the business activity of
selling goods or services to the final consumer.
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Retailer is one whose business firms sells
mainly to the final consumers.Functions of
Retailers
Functions of Retailers

1. They provide convenience

2. They provide guarantee and service
3. They provide financing of transactions
4. They perform promotional activities
5. They perform storage function
6. They perform intelligence service for the
manufacturer and
7. They serves as buying agent of the consumers.
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Types of Retailers

• 1. By sales volume
• By product mix offered
• 3. By form of ownership
• 4. By method of operation

Can classified as

• Small

• Medium

• Large

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1. By sales volume 2. By product mix
offered 3. By form of ownership 4. By
method of operation
General Merchandise stores

• are those that carry a large variety of product
  line.

Department stores Variety Stores
- are those which carry only a specific line of
products.
Specialty Stores
Single line specialty store Limited-line
specialty store
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1. By sales volume 2. By product mix
offered 3. By form of ownership 4. By
method of operation
Corporate chain stores
Independent stores
Franchise stores
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1. By sales volume 2. By product mix
offered 3. By form of ownership 4. By
method of operation
Corporate chain stores
- composed of two or more outlets that are owned
commonly by a person or a group of persons
selling similar products
Independent stores
- are owned and operated by independent
retailers.
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1. By sales volume 2. By product mix
offered 3. By form of ownership 4. By
method of operation
Franchise stores
-is an independent retailer given the right to
sell his products in a definite market area.
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1. By sales volume 2. By product mix
offered 3. By form of ownership 4. By
method of operation
Full Service Retailers
- are stores where assistance in a variety of
ways is extended to the costumers.
Supermarkets
- large department stores which offers a variety
of goods.
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1. By sales volume 2. By product mix
offered 3. By form of ownership 4. By
method of operation
Discount Stores
- are self-service retailers that sells a wide
variety of goods at less than traditional retail
prices.
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Nonstore Retailers
1. By sales volume 2. By product mix
offered 3. By form of ownership 4. By
method of operation

• - refer to those who sell outside of the store.
  They may be classified as
• at home retailers
• telephone retailers
• vending machine retailers
• mail-order retailer
• mail-order retailers
• internet retailers
• cellphone service retailers

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What is Wholesaling?
Wholesaling
-refers to all activities involved in selling
goods and services to those who intend to resell
or use the same for producing goods or services.
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Functions of the Wholesaler

1. anticipating customer needs

2. selling and promotion

• 3. financing

• 4. storage

• 5. breaking bulk

• 6. transportation

• 7. risk-taking.

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Types of Wholesalers
A. Merchant Wholesalers Merchant wholesalers can
be classified into the ff the general line
merchant wholesaler who carry a general
assortment of goods and the specialty line
merchant wholesaler who carry only a limited
number of lines.

• Full Function Wholesalers
• Limited function wholesalers
• Industrial wholesalers

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A. Merchant Wholesalers Merchant wholesalers can
be classified into the ff the general line
merchant wholesaler who carry a general
assortment of goods and the specialty line
merchant wholesaler who carry only a limited
number of lines.

• Full Function Wholesalers
• Limited function wholesalers
• Industrial wholesalers

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B. Sales office and branches C. Agents
manufacturers agents- sell only a portion of
a manufacturers output. selling agents- are
required to sell the firms entire output.

• Full Function Wholesalers
• Limited function wholesalers
• Industrial wholesalers

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Limited function wholesalers provide only
some wholesaling functions, like order taking
and processing. They may be classified as
follows 1. drop shippers 2. truck
distributors 3. mail-order
wholesalers 4. cash-and-carry
wholesalers 5. cooperatives 6. rack jobbers

• Full Function Wholesalers
• Limited function wholesalers
• Industrial wholesalers

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The following types of wholesalers serve the
industrial market 1. those also serving the
retailers a. sales branches b. brokers c.
manufacturers agents d. combination houses .

• Full Function Wholesalers
• Limited function wholesalers
• Industrial wholesalers

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2. industrial distributors serving only the
industrial market a. general line
wholesalers- carry complete assortment of
goods in a single line. b. specialty line
wholesalers- carry only limited range of products
in a given line

• Full Function Wholesalers
• Limited function wholesalers
• Industrial wholesalers

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Thank you

• for cool attentd
• Guys