5/25/2015. Producer Driven. Service Driven. Seller Driven. Others DISTRIBUTION CHANNELS - 2 CHANNEL FORMATS DISTRIBUTION CHANNEL MEMBERS

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1 Planning, Forecasting & Budgeting Warehousing and Logistics Sales Force Management DISTRIBUTION CHANNELS - 2 MKT 405: Management M Wahidul Islam Summer 2015 Channel Information Systems Channels Elements of Management Visibility Pricing and Promotion DISTRIBUTION CHANNEL MEMBERS CHANNEL FORMATS Owned or Contracted Company Owned Center Carrying and Forwarding Agents Consignment Selling Agents or General Selling Agents Direct Marketing Sales force Franchises Exclusive / Shared s/ Dealers / Stockiest Value Added Resellers Retailers Who plays the major / dominant role in the distribution channel is also a big deciding factor Company Owned Retail Outlets Licensed Outlets Consignment Selling Agents Franchisers Seller Existing Retailers Modern Store Formats Specialty Stores Factory / Discount Stores Agents / Dealers Couriers Credit Card Companies Financial Institutions Others Multilevel marketing Kiosks TV home shopping networks Catalogue shopping s D2D Sales People 3P Logistic service providers Internet based sellers 1

2 HOW TO DECIDE WHICH DISTRIBUTION CHANNELS TO USE? type Industrial / Textile / Chemicals and Fertilizers Automotive FMCG Pharmaceutical Telecommunication IT hardware s Consultancy Requirement of after-sales service?? Who is driving the channel? Ability to influence consumer s buying decision CSAs / GSAs Direct Marketing Team Central Regional / Market Specific Retailers Authorized Reseller Own Branded Store INDUSTRIAL PRODUCTS PHARMACEUTICAL PRODUCTS General natures Technical Mostly B2B Need of more personal interaction with the customer Relationship management very important Examples: ion Raw Materials, Steel Mills Agent Industrial Highly technical Doctors one of the key stakeholders End Users / virtually have no communication with the manufacturer Examples: Medicine Companies Wholesaler Retailer / Chemist Doctors How do you manage the relationship with the Customer? Can the producer influence buying decision? 2

3 CONSUMER PRODUCTS CONSUMER DURABLES Target is to reach as many customers as possible Every possible route is selected Most evolved distribution flow / channels format Examples: Lux, Clear, Low Cost Ball Pen, Mineral Water etc. FMCG s Wholesaler Different forms of Retail / Consumers Similar to Consumer s But needs to be maintained / serviced Targeted Customer / End Users based Usually high-end Examples: Samsung, NOKIA, Sony, Mercedes Benz, QUBEE Market Specific Different forms of Retail / End Users Team Which distribution flow is right for my product? Is my Consumer buying my product? Which is more important? Flow or? After Sales?? SERVICES Customer Experience is the most important factor, leading to high coordination of Sales and After Sales Customer The customer interaction is directly with Company Representative, usually Usually customer goes through a process of service experience Purchase > Experience > Post Evaluation Franchises / Agents are carefully chosen, and are closely controlled Provider Different Forms of Outlets NEW FORM OF DISTRIBUTION FLOWS Mixture of and Physical Online Marketing Tele-shopping Catalogue Marketing (New or Old) Kiosks Others???? Examples: DHL, Hospitals, Airlines Telecommunication?? GP?? Does a distribution flow exist as there is no physical movement of services? 3

4 ONLINE MARKETING TELE-SHOPPING CATALOGUE MARKETING CATALOGUE MARKETING 4

5 KIOSK / VENDING MACHINE KIOSK / VENDING MACHINE The Google Vending Machine The Facebook Vending Machine REFERENCES Chapter 8 Management and the Marketing Mix Havaldar K. and Cavale V. M. (2011) Sales and Management Text and Cases (2 nd Edition) Delhi: Tata McGraw-Hill Education Private Limited Chapter 9 Marketing Channels Havaldar K. and Cavale V. M. (2011) Sales and Management Text and Cases (2 nd Edition) Delhi: Tata McGraw-Hill Education Private Limited END 5