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    Distribution Channel: Submitted To: Ravi Malhotra

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    Ashish Verma
    This document discusses distribution channels and channel design decisions. It explains that businesses use intermediaries like third parties to bring products to market more efficiently. When designing channels, businesses must analyze customer needs like lot size, delivery time, convenience, product variety, and services. They must also establish channel objectives in terms of service levels and identify alternative channels considering intermediary types, numbers needed, and member responsibilities. Finally, businesses evaluate the best channel alternatives to meet objectives and customer needs.

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    Distribution Channel: Submitted To: Ravi Malhotra

    Uploaded by

    Ashish Verma
    30 views11 pages
    This document discusses distribution channels and channel design decisions. It explains that businesses use intermediaries like third parties to bring products to market more efficiently. When designing channels, businesses must analyze customer needs like lot size, delivery time, convenience, product variety, and services. They must also establish channel objectives in terms of service levels and identify alternative channels considering intermediary types, numbers needed, and member responsibilities. Finally, businesses evaluate the best channel alternatives to meet objectives and customer needs.

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    This document discusses distribution channels and channel design decisions. It explains that businesses use intermediaries like third parties to bring products to market more efficiently. When designing channels, businesses must analyze customer needs like lot size, delivery time, convenience, product variety, and services. They must also establish channel objectives in terms of service levels and identify alternative channels considering intermediary types, numbers needed, and member responsibilities. Finally, businesses evaluate the best channel alternatives to meet objectives and customer needs.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    30 views11 pages

    Distribution Channel: Submitted To: Ravi Malhotra

    Uploaded by

    Ashish Verma
    This document discusses distribution channels and channel design decisions. It explains that businesses use intermediaries like third parties to bring products to market more efficiently. When designing channels, businesses must analyze customer needs like lot size, delivery time, convenience, product variety, and services. They must also establish channel objectives in terms of service levels and identify alternative channels considering intermediary types, numbers needed, and member responsibilities. Finally, businesses evaluate the best channel alternatives to meet objectives and customer needs.

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    DISTRIBUTION CHANNEL

    PRESENTED BY:
    SUNIT KR SINGH (34)

    SUBMITTED TO:
    RAVI MALHOTRA

    8 January 2015

    DISTRIBUTION CHANNEL

    Nature and importance of channels


    Most businesses use third parties or intermediaries to bring their products to
    market.
    They try to forge a "distribution channel" which can be defined as All the
    organizations through which a product must pass between its point of
    production and consumption
    Why does a business give the job of selling its products to intermediaries?
    The answer lies in efficiency of distribution costs. Intermediaries are specialists
    in selling. They have the contacts, experience and scale of operation which
    means that greater sales can be achieved than if the producing business tried to
    run a sales operation itself.

    8 January 2015

    DISTRIBUTION CHANNEL

    Channel design decisions


    Analyzing customer needs
    (a) Lot size (b) Waiting and delivery time (c) Spatial convenience
    (d) Product variety (e) Service backup
    Establishing channel objectives
    Channel objectives should be stated in terms of targeted service output levels.
    Channel design must take into account the strengths and weaknesses of different
    types of intermediaries.
    Identifying major channel alternatives
    A channel alternative is described by three elements : (a)the types of available
    business intermediaries, (b) the number of intermediaries needed, (c) and the terms
    and responsibilities of each channel member.
    Evaluating major channel alternatives
    8 January 2015

    DISTRIBUTION CHANNEL

    Analyzing customer needs


    (a) Lot size :
    In buying cars for its fleet, Hertz prefers a channel from which it can buy a
    large lot size.
    A Household wants a channel that permits buying a lot size of one.

    8 January 2015

    DISTRIBUTION CHANNEL

    (b) Waiting and delivery time :


    The average time customers of that channel wait for receipt of the goods.
    Customers increasingly prefer faster and faster delivery channels.

    8 January 2015

    DISTRIBUTION CHANNEL

    (c) Spatial convenience :


    The degree to which the marketing channel makes it easy for customers to purchase
    the product.
    Example : Chevrolet offers greater spatial convenience than Cadillac, because there
    are more Chevrolet dealers.
    Chevrolets greater market decentralization helps customers save on transportation
    and search costs in buying and repairing an automobile.

    8 January 2015

    DISTRIBUTION CHANNEL

    (d) Product variety :


    The assortment breadth provided by the marketing channel.
    Normally, customers prefer a greater assortment because more choices
    increase the chance of finding what they need.
    United Spirits Limited (USL) is the largest spirits company in the

    world by volume, selling 114 million cases for the fiscal ending March
    21, 2011.

    8 January 2015

    DISTRIBUTION CHANNEL

    (e) Service backup :


    The add-on services are the credit, delivery, installation, repairs and

    others provided by the channel. The greater the service backup, the greater
    the work provided by the channel.

    8 January 2015

    DISTRIBUTION CHANNEL

    Establishing channel objectives


    Channel objectives are a part of and result from the companys marketing

    objectives that need to be stated in terms of targeted service output levels.


    Profit considerations and asset utilization must be reflected in channel objectives
    and the resultant design.
    It should be the Endeavour of the channel members to minimize the total
    channel costs and still provide with the desired level of service outputs.
    For example,
    Perishable products require more direct marketing because of the dangers
    associated with delays and repeated handling.
    Products requiring installation and/or maintenance services are usually sold and
    maintained by the company or exclusively branches dealers.
    Custom-built machinery and specialized business forms are sold directly by
    company sales representatives because middlemen lack the requisite
    knowledge.
    8 January 2015

    DISTRIBUTION CHANNEL

    DISTRIBUTION PROCESS:

    8 January 2015

    DISTRIBUTION CHANNEL

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    8 January 2015

    DISTRIBUTION CHANNEL

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