assignment - channel financing
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8/4/2019 Assignment - Channel Financing
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OVERVIEW
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Traditional system of trade
Trading under Channel Financing
Features of the product
7 Ps
Conclusion
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Dealers
Purchase of Goods byPresenting Cheques
Sends Cheques
Cheques Honoured/Bounced
Manufacturer
TRADITIONAL SYSTEM OF TRADE
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TRADING UNDER CHANNEL FINANCING
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Dealers
Purchase of Goods byPresenting Cheques
Sends Cheques andInvoice Details to Bank
Bank VerifiesDetails
Manufacturer
Supplies GoodsTo The Dealers
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HOW THE SYSTEM WORKS
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Smart Card to Partner Connect to Terminal
Value of Txn Entered& Data Sent to the Bank
Bank Host Confirms
Sales after CheckingThe Credit, DebitsThe Partners A/c
Sellers A/c Credited
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FEATURES & ADVANTAGES OF THE FACILITY
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Guarantee cash flow to the Company High quality of product & value added services
Facility flow of information between seller & bank electronically
Seller electronically verifies dealers position before parting with goods
Reduces cash & cheque handling risks
Buying power of dealer enhanced Bank Guarantee, Credit limit, Bill
Discounting facilities as per his eligibility
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THE PRODUCT
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Easy & Speedy settlement of the transaction
Flow of info between seller, banker and dealer
Cash carrying and credit risk taken away from company
BG facility to Dealer
Customization to the set of company & dealers
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PRICING
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Commission based on turnover from dealer and company
Interest for bill discounting/credit limit to the dealer
Negotiable with the set of company and dealers
Pricing for dealer taking into : Reputation Risk
Market Risk
Credit Risk and
Operational Risk
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PROMOTION STRATEGIES
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Personal Selling
Public Relationship
Advertising
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PLACE
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Specialised branches
can also be transacted through internet
Manpower not required much
User friendly for both bank and company
Frequent interaction for feedback
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PEOPLE
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Product details/mechanism to be clear
Need skills in interacting with the company people and dealers
Regular follow up with the customers
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PHYSICAL EVIDENCE
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Good ambience of the branch to attract big customers
Regular interaction with the customers
Calling on the customers regularly
Issues to be resolved fast
Corporate approach
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PROCESS
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Effective network system
Plan B in case of system failure
Good knowledge of product by the people
Regular review of the performance of the dealers
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