Marketing Channels
Most producers do not sell their goods directly to the final users, between
them stands a set of intermediaries performing a variety of functions.
These intermediaries constitute a marketing channel, trade channel,
distribution channel.
Marketing channels are interdependent organizations.
Channel designing decisions
1) Analyzing
customer
needs
The marketer must
understand the service
output levels desired
by target customer.
a) Lot size
b) Waiting time
c) Spatial convenience
d) Product variety
e) Service backup
2) Establishing
objectives
a) Perishable products require more direct marketing.
b) Bulky products such as building materials, require channel that
Minimize the shipping distance & the amount of handling.
c) Non standardized products, such as custom build machinery &
specialized business forms, are sold directly by company sales
Representative.
3) Identify
major
channel
alternatives
Marketer can choose
wide variety of
channels for reaching
customers from sales
force to agents,
distributors, dealers,
direct mail,
telemarketing & internet.
Three elements of a channel alternative.
a) Type of available business intermediaries.
b) The number of intermediaries needed.
c) Terms & responsibilities of each channel
Member.
4) Evaluate
the major
alternatives
Each channel alternative needs to be evaluated under the light of
economic, control and adaptive criteria.
Recent trends in marketing channel
1) Our sourcing of
channel
arrangement /
Marketing logistics
In this kind, firms contract outside
logistics specialists to operate as
their marketing channel.
Volvo GM out
sources marketing
logistics, by tying up
with FedEx.
2) Exclusive retailing Across industries, it is becoming a
trend, partly displacing & partly coexisting
with the traditional
wholesaler retailer setup.
a) Exclusive dealers without franchising arrangement
b) Exclusive retailing through showrooms
c) Exclusive retailing through shop In shop
d) Franchising.
Reliance Vimal, Bata
MLM – Multilevel Marketing
MLM is a modified version of direct selling.
Only few firms operating with it.
Example: Avon, Amway, Oriflamme, Medicare, etc.
Operation of MLM Concept: MLM utilizes multi tired, non employee
sales persons – cum distributors to sell the products.
The value of the products a distributor has sold is worked out in the form
of point value.
MLM is a method of selling, which depends on networking between
people.
Most producers do not sell their goods directly to the final users, between
them stands a set of intermediaries performing a variety of functions.
These intermediaries constitute a marketing channel, trade channel,
distribution channel.
Marketing channels are interdependent organizations.
Channel designing decisions
1) Analyzing
customer
needs
The marketer must
understand the service
output levels desired
by target customer.
a) Lot size
b) Waiting time
c) Spatial convenience
d) Product variety
e) Service backup
2) Establishing
objectives
a) Perishable products require more direct marketing.
b) Bulky products such as building materials, require channel that
Minimize the shipping distance & the amount of handling.
c) Non standardized products, such as custom build machinery &
specialized business forms, are sold directly by company sales
Representative.
3) Identify
major
channel
alternatives
Marketer can choose
wide variety of
channels for reaching
customers from sales
force to agents,
distributors, dealers,
direct mail,
telemarketing & internet.
Three elements of a channel alternative.
a) Type of available business intermediaries.
b) The number of intermediaries needed.
c) Terms & responsibilities of each channel
Member.
4) Evaluate
the major
alternatives
Each channel alternative needs to be evaluated under the light of
economic, control and adaptive criteria.
Recent trends in marketing channel
1) Our sourcing of
channel
arrangement /
Marketing logistics
In this kind, firms contract outside
logistics specialists to operate as
their marketing channel.
Volvo GM out
sources marketing
logistics, by tying up
with FedEx.
2) Exclusive retailing Across industries, it is becoming a
trend, partly displacing & partly coexisting
with the traditional
wholesaler retailer setup.
a) Exclusive dealers without franchising arrangement
b) Exclusive retailing through showrooms
c) Exclusive retailing through shop In shop
d) Franchising.
Reliance Vimal, Bata
MLM – Multilevel Marketing
MLM is a modified version of direct selling.
Only few firms operating with it.
Example: Avon, Amway, Oriflamme, Medicare, etc.
Operation of MLM Concept: MLM utilizes multi tired, non employee
sales persons – cum distributors to sell the products.
The value of the products a distributor has sold is worked out in the form
of point value.
MLM is a method of selling, which depends on networking between
people.
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