2. PLACE/ CHANNEL OF DISTIBUTION
 Place represents the location where a product can be
purchased. It is often referred to as the distribution
channel. It can include any physical store as well as
virtual store on internet.
 The distribution channel is the movements of goods
and services between the point of production and the
point of consumption through organization that
perform variety of marketing activities. The major
participants in the distribution channels are producer,
intermediaries and consumers.

3. Definitions of Marketing Channels/Channel
of Distribution
According to American Marketing Association,
“ A channel of distribution, or marketing channel, is
the structure of intra-company organization units and
extra company agents and dealers, wholesale and
retail through which a commodity, product or service
is marketed.”
 According to Philip kotler,
“ Every producer seeks to links together the set of
Marketing intermediaries that best fulfill the firm’s
objectives. This set of marketing intermediaries is called
the Marketing Channels. (Also called Trades channel or
Channel of Distribution.)”

4. Definitions of Marketing Channels
 According To William J Stanton,
“ A Channel of distribution for product is the rout
taken by the title to the goods as they move from the
producer to the ultimate consumer or industrial
user.”

5. Importance of Marketing Channels
 Time and Place utility.
 Convenience to Consumers.
 Relive from Marketing Problems.
 Information to the producer.
 Stability in Prices.
 Promotional Activities.
 Storage of finished goods.
 Finance the producer.

6. Functions of Marketing Channels
 Information Provider.
 Price Stability.
 Promotion.
 Financing.
 Title.
 Help in Production Function.
 Matching Demand and Supply.
 Matching Buyer And Seller.

7. Channels Strategies/ Policies.
 Intensive Distribution.
 Selective Distribution.
 Exclusive Distribution.

8.  Intensive Distribution.
 Intensive distribution is a form of distribution in
which the manufacturer distributes its products
through as many outlets as possible. This type of
distribution is used for those products that are
characterized by low involvement of customer
and where customers look for location
convenience. Product like chocolates, biscuits,
shaving blades, soaps and detergents are
distributed in the manner, so that they are easily
available to the customer at the nearest location.

9. Selective Distribution
 This alternative is middle path approach to distribution.
Here, the firm selects some outlets to distributes its
product. This alternative helps focus the selling efforts of
manufacturing firms on a few outlets rather than
dissipating it over countless marginal ones. It also
enables the firm to establish a good working relationship
with the channel members. Selective distribution can help
the manufacturer gain optimum market coverage and
more control but at lesser cost than intensive distribution.
 Selective distribution is appropriate for consumer
shopping goods, such as various types of clothing and
appliances and for business accessory equipments.

10. Exclusive Distribution
 When the firm distributes its brand through just one
or two major outlets in the market, who exclusively
deals in it and not all competing brands, we say that
the firm is using an exclusive distribution strategy.
This is common form of distribution in products and
brands that seeks high prestige image. Typical
example are designer ware, major domestic
appliances and even automobiles.

11. Objectives of Distribution Management
 Provides convenience to the customers in getting the
product at the right time and the right place.
 Achieve the optimum distribution cost.
 Ensures the best possible coverage of the target
market.
 Give the choice of selection of goods to consumers.
 Reduce the chances of damage or breakage of goods
during the transport and sorting.
 Effective display and storage of goods.
 Motivate channel members for effective promotion and
selling of products.
 Resolve the channel conflicts successfully.

12. Channel Design
 Steps involved in Designing a Channel
System.
2.Formulating Channel Objectives.
3.Identifying Channel functions.
4.Linking design to Product Characteristics.
5.Evaluation of the distribution Environment.
6.Evaluation of competitors Channels Design.
7.Matching Channel Design to Company
Resources.
8.Evaluating the Alternatives and Selecting the
Best.

13. Consumer and Business Channels

14. Definition of Wholesaling
 According to Philip Kotler,
“ Wholesaling consist of the sale and all activities in
selling goods or services to those who buy for resale
or business use.”
 According to American Marketing Association
“Wholesalers sell to retailer or other merchants and
or industrial, institutional and commercial users, but
do not sell in significant to ultimate consumers.”

15. IMPORTANCE OF WHOLESALERS
1. Services to the Manufacturers.
ii. Stocking.
iii. Market Information.
iv. Expertise Knowledge.
v. Assist in Production.
vi. Financing
vii. Risk Reduction.

16. IMPORTANCE OF WHOLESALERS
2. Services to Retailers.
ii. Convenient Buying.
iii.Stocking.
iv.Expertise Knowledge.
v. Financing.
vi.Market information.
vii.Risk Reduction.
3. Services to the Society.

17. FUNCTIONS OF WHOLESALERS.
 Selling and Promoting.
 Buying and Assortment Building.
 Bulk Breaking.
 Warehousing.
 Transportation.
 Financing.
 Risk Bearing.
 Market Information.
 Management Services and Counseling.

18. MAJORS WHOLESALERS TYPES
1. Merchant Wholesalers.
ii. Full Services Wholesalers.
a. Wholesale Merchants.
b. Industrial Distributors.
4. Limited service Wholesalers.
v. Cash and carry Wholesalers.
vi. Truck Wholesalers.
vii. Drop Shippers.
viii. Rack Jobbers.
ix. Mail order Wholesalers.

19. MAJORS WHOLESALERS TYPES
3. Merchandising Brokers and Agents.
ii. Brokers.
iii.Agents.
a) Manufacturer Agents.
b) Selling Agents.
c) Purchasing Agents.
d) Commission Agents.
4. Manufacturer and Retailers Branches Offices.
5.Miscellineous Wholesalers.

20. Definitions of Retailing
 According to William J Stantons,
“ A Retailer or Retail store is a business enterprise
which sells primarily to the ultimate consumers for
non business use.”
 According to Cundiff and Still,
“Retailing consist of those activities involved in the
selling directly to ultimate consumers. ”
 According to Mc. Carthy.
“ Retailing is selling to final consumer products to
households.”

21. Importance of Retailing
 Services to Wholesalers and Producers.
b) Advertisement of new products.
c) Arrangement to sell the goods.
d) Information about consumer habits, tastes and needs.
e) Sharing of Risks.
 Services to consumers.
g) Selection.
h) Variety of goods.
i) Demand creation.
j) Distribution.
k) Credit Facility.

22. Functions of Retailing.
 Sorting.
 Breaking Bulk.
 Holding Stock.
 Additional Services.
 Channel of Communication.
 Transport and Advertising Functions

23. Types of store Retailers
 Retail Store-it is a merchant or business establishment that sells
mainly to the end consumers. The retailer specializes in a
particular line or category of a product. It offers a logical outlet
with similar or associated goods or services to serve a particular
needs of the target market.
 Independent Retail Store- it is a retail store controlled by its
individual ownership referred to as proprietors firm.
 Franchisee- it is an independent establishment that has a
contractual arrangement with a manufacturer to sell its entire
product line, usually with exclusive rights to sell within an
assigned territory.

24.  Departmental store-
it is an independent establishment that displays and offers
a great variety of products for sale, where appropriate
departments or categories of use or need offer separate
merchandise. It is a one stop shopping store, which caters
to all shopping needs of the consumers in its luxurious
settings. The departmental store offers readiness to serve
complete needs of the consumers. It presents a wide
variety and choice of products to attract customers and
uses well developed merchandising techniques.
 Discount store- It is a retail outlet engaged in selling
merchandise at prices below those that are changed. The
discounter provides emphasis on a high volume of sales and
rapid inventory turnover. Aggressive merchandising
techniques are employed.

25.  Super markets- they are large, low margin, high volume, low
cost, self service stores that carry a wide variety of ready to eat
snacks, grocery and households products.
 Hypermarkets- it is a place where consumers can buy groceries,
foods, garments, home appliance, durables, toys, cosmetics,
books and music at a price that is always lower than the market
price by 5 percent and onwards.
 Convenience store- it is a small located near a residential area
that is open long hours seven days a week and carries a limited
line of high turnover convenience goods.
 Superstore- it is a store almost twice the size of a regular
supermarket that carries a assortment of routinely purchased
products. The factory outlets store is an off price retailing
operation that is owned an operated by a manufacturer
surplus, discounted or irregular goods at marked down price.

26. Difference between Wholesaler and Retailer.
Criteria Wholesaler Retailer
Buyers Business customers, i.e. Retailers Final Customers, i.e. End users
Buying Motive of For reselling/trading. Wholesaler or producer in case large
Buyers retailers.
Business Volume High. Low.
Risk Involved High. Less.
Investment High. Moderate.
requirement
Promotional Less Important. Very important.
Activities
Store Atmosphere, Less attention. Very Important Hence maximum
Layout & Location attention.
Area covered Large area covered many areas Relatively small- mostly retailers operate
territories can be handle by in small area.
single wholesaler.
Upper link Producer Wholesaler or producer in case of large
retailers.

27. Direct Marketing
 Direct marketing is defined as an interactive system
of marketing, which uses non personal media of
communication to make a sale at any location or to
secure a measurable response.
 Direct marketing is a method wherein the
manufacturer or producer sells directly to retailer,
user or ultimate consumers without intervening
intermediaries. This offers flexibility with maximum
controls of sales efforts and marketing information
feedback.
 Various forms of Direct Marketing-telemarketing,
Direct mail marketing, television ,marketing,

28. Franchising
 Concept of Franchising.
 Franchise in French means privilege or freedom. Franchising
refers to the methods of practicing and using another
persons philosophy of business. The franchisor grants the
independent operators the right to distributes its products,
techniques and trademarks for a percentage of gross
monthly sales and royalty fee. Various tangibles and
intangibles such as national or international advertising ,
training and other support services are commonly made
available by the franchisor. Agreements typically last five to
twenty years, with premature cancelation or termination of
most contracts bearing serious consequences for
franchisees.

29. Advantages and Disadvantages of
franchising
 Advantages to the Franchiser
2. Low capital and low risks.
3. Speedier expansion.
4. Extended Market penetration.
5. Motivation of the Franchisee.
 Disadvantages to the Franchiser
7. Business control
8. Expenses involved.
9. Lower profit potential

30.  Advantages to the Franchisee
2. Reduce Business Risk.
3. Operational Advantage.
4. Easy Financing of the firm.
5. Quick Start.
 Disadvantages to the Franchisee
7. Limited freedom
8. Fee payment
9. Non performance of Franchiser.