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Variety-loving shoppers
High-involvement shoppers
Rural Distribution
Innovative Distribution Traditional Channels
Channels for Rural for Reaching Out to
Markets Rural Customers
Hub and Spoke model Haats
Mobile shops and offices Mandis
Linkage with community Melas
based organizations
(SHGs, NGOs, and
cooperatives)
The Value-Adds vs. Costs of
Different Channels
Channel levels
Channel levels
Channel ‘Level’ and Channel ‘Member’
A zero level channel (direct marketing channel) consists of a
manufacturer selling directly to a customer
Door to door sales, mail order, telemarketing, internet sales, own
stores
Examples – Otto Burlington (mail order), Tupper ware (home
parties), Eureka Forbes and aqua guard (door to door sales), Asian
sky shop (TV), Raymond having own stores
Raymond
presents
world-class
experience
through its
stores
e-Commerce Marketing Practices
Pure-click
Brick-and-click
Channel Levels
A one level channel has one intermediary.
Example – Automobile dealers, petrol
pumps.
A two level channel has two intermediaries,
example – FMCG’s and consumer durables.
HLL uses this strategy
A three level channel or more – usually in
food distribution
Identifying Channel Alternatives
Types of
intermediaries
Number of
intermediaries
Terms and
responsibilities
Types of intermediaries
Direct sales using sales force
Direct sales with own outlets
Direct mail
Telemarketing
Internet marketing
Agents, distributors, dealers, retailers
Franchisee
Self help groups, NGO’s in rural sector
Selective
Intensive
Terms and responsibilities of distributors
Price policy
Conditions of sale
Distributors territorial rights
Mutual services and responsibilities
What is Channel Conflict?
Channel conflict occurs when one
member’s actions prevent another channel
from achieving its goal.
Types of channel conflict
Vertical – Dell’s direct selling creates conflict
with the retailers
Horizontal – Conflict between two
franchisees of Pizza hut
Causes of Channel Conflict
Goal incompatibility
Differences in perception
Intermediaries’ dependence
on the manufacturer
Marketing Debate
Does it matter where you are sold?
Take a position:
1. Channel images do not really affect
the brand images of the products they
they sell that much.
or
2. Channel images must be consistent with
the brand image.
Marketing Discussion
Think of your favorite retailers.
How have they integrated their
channel system?
How would you like their channels to
be integrated?
Do you use multiple channels from
them? Why?