Distribution Management
Dr. Anita Saxena
Marketing Channels
⚫Marketing channels are sets of interdependent
organizations involved in the process of making a
product or service available for use or consumption
Why Channel Members
• Time Utility
• Assortment Utility
• Breaking the Bulk
• Economic Reasons
• Economy of Effort
Functions of Channel
• Information
• Promotion
• Negotiation
• Ordering
• Warehousing
• Financing
• Risk taking
• Cash flow
• Title flow
Functions
⚫Gather Information about potential and current
customers, competitors , and other actors and
forces in the marketing environment
⚫Develop and disseminate persuasive
communications to stimulate purchasing
⚫Reach agreements on price and other terms so
that transfer of ownership or possession can be
effected
⚫Place orders with manufacturers
Cont
⚫Acquire the funds to finance inventories at different
levels in marketing channel
⚫Assume risks connected with carrying out channel work
⚫Provide the successive storage and movement of
physical products
⚫Provide for buyers’ payment of their bills through
banks and other financial institutions
⚫Oversee actual transfer of ownership from one
organization or person to other
Types of Marketing
Intermediaries
⚫Sole-selling agent
⚫Wholesaler
⚫C & F agents (CFAs)
⚫Stockist
⚫Distributor
⚫Semi-wholesaler
⚫Retailer / dealer
⚫Broker
⚫Franchisees
⚫Drop Shippers
⚫Commission agents
Types Of Indirect Channels
(i)Producer Agent Wholesaler Retailer
Consumer,
⚫(ii) Producer 🡪 Wholesaler🡪 Retailer🡪
Consumer
⚫(iii) Producer 🡪 Agent🡪 Consumer
⚫(iv) Producer🡪 Wholesaler 🡪 Consumer
⚫(v) Producer🡪 Retailer 🡪 Consumer
Channel Design Decisions
⚫Formulating channel objectives
⚫Identifying channel functions
⚫Linking Channel Design to Product
Characteristics
⚫Evaluation of Competitor's Channel Designs
⚫Matching the Channel Design to Company
Resources
⚫Channel Design Decisions
⚫Evaluation of the Distribution Environment
⚫Evaluating the Alternatives and Selecting
the Best
Levels of Distribution Intensity
Intensity Level Objective No of
Intermediaries
⚫Intensive Achieve mass market Many
selling. Convenience goods
⚫Selective Work with selected [Link]
Shopping and some specialty goods.
⚫Exclusive Work with single intermediary. One
Specialty goods and industrial
equipment.