2. The learning objectives
The nature of distribution channels
Channel behavior and organization
Channel design decisions
Channel management decision
Physical distribution and logistics management
3. 1.The nature of distribution
channels
What is distribution?
Why are marketing intermediaries used?
The function of distribution channel
Channel level
4. 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.
5. How a Distributor Reduces the
Number of Channel Transactions
= Customer
= Manufacturer
A. Number of contacts
without a distributor
M x C = 3 X 3 = 9
1
3
2
4
5
6
7
8
9
6. How a Distributor Reduces the
Number of Channel Transactions
= Distributor
= Customer
= Manufacturer
B. Number of contacts
with a distributor
M x C = 3 + 3 = 6
Store
1
2
3
4
5
6
14. Channel behavior and organization
Channel conflict
Vertical marketing system
Horizontal marketing system
Hybrid marketing systems
15. Corporate
Common Ownership at Different
Levels of the Channel
Contractual
Contractual Agreement Among
Channel Members
Administered
Leadership is Assumed by One or
a Few Dominant Members
TYPES OF VERTICAL CHANNELS
16. Conventional Distribution Channel vs. Vertical
Marketing Systems
Vertical
marketing
channel
Manufacturer
Retailer
Conventional
marketing
channel
Consumer
Manufacturer
Consumer
Retailer
Wholesaler
Wholesaler
19. Horizontal marketing system
Horizontal marketing is a channel
arrangement in which two or more companies
at one level join together to follow a new
marketing opportunity
McDonalds places Express Restaurants in
Wal-Mart stores.
Economies of scale are achieved
Reduction of cost by combined utilsation of
resources
20. Hybrid marketing channel
Increase in market coverage
Lower channel cost
More customised selling
Disadvantages
Increase in channel conflict
Problems in contrlling various channels
21. 2.channel design decision
Analyzing consumer service needs
Setting channel objectives and constraints
Identifying major alternatives
Evaluating the major alternatives
22. Identifying major alternative
Types of intermediaries
Number of marketing intermediaries
Responsibilities of channel members
23. Number of marketing intermediaries
Intensive distribution
Exclusive distribution
Selective distribution
29. Third-party logistics
An independent logistics provider that performs
any or all of the functions required to get their
clients’ product to market.