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Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
LEARNING OBJECTIVES
Various functions performed by distribution channel intermediaries
Types of distribution channels: Consumer, Industrial and Service channels Three components of the channel strategy: How to select channels, decide distribution intensity and degree of integration
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
Channel management: Issues regarding intermediary selection, training, motivation, evaluation and conflict management Hybrid distribution channels to maximize effectiveness and efficiency Decisions regarding physical distribution
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
Improved accessibility
Providing specialist services
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
Industrial channels
Manufacturer to industrial customers Manufacturer to agent to industrial customer
Service channels
Service provider to consumer or industrial customer Service provider to agent to consumer or industrial customer Service provider via internet to consumer or industrial customer
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
CHANNEL STRATEGY
Channel selection
Marketing factors
Buyers expectations Willingness of channel intermediaries Profit margins demanded by wholesalers and retailers Location and geographic concentration of customers
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
Manufacturer factors
Financial and managerial resources Mix of products Independent channel intermediaries versus manufacturer control
Product factors
Competitive factors
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
Distribution intensity
Intensive distribution
Selective distribution Exclusive distribution
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
CHANNEL MANAGEMENT
Selection
Identifying Sources
Training
Evaluation
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
Managing conflict
Sources of channel conflict
Differences in goals
Differences in desired product lines Multiple distribution channels Inadequacies in performances of channel members and manufacturer
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
Each time a channel is added, the existing relationships, responsibilities, and compensation structures among various channel members are altered Customers reactions to these new relationships and responsibilities are very important Confusions and conflicts among various channels should be addressed
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
PHYSICAL DISTRIBUTION
Focuses on an efficient movement of goods from manufacturers to intermediaries and the consumer Provide intermediaries and customers with the right products, in the right quantities, in the right locations, at the right time
Effective physical distribution saves cost and improves customer service levels
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006
Concerns the balance between cost reduction and meeting customer service requirements Analyze the market in terms of customer service needs and price sensitivity There may be possible conflicts between elements of physical distribution itself
Marketing Management by Arun Kumar and N Meenakshi Vikas Publishing House Pvt. Ltd. 2006