Channel of distribution:It is an organized network or a system of agencies &institutions which in combination ,perform all the activities required to link producers with users to accomplish the marketing task.

MARKETING CHANNELS: are the sets of interdependent organization involved in the process of making a product or service available for the use or consumption.

Basic intermediaries:

Managing intermediaries:PUSH STRATEGY:Focus is on carry, promote and sellLow brand loyaltyImpulse item

PULL STRATEGYConsumer persuasionHigh brand loyaltyHigh involvement product

Factors governing the choice of channels of distribution:productfactorsMarket factorsUnit factorsEnvironmentfactors

Cont.Product factors:Nature of productPerceived risk/product valueTechnical natureProduct volumeMarket factorsMarket structureA. concentratedB.DispersedPurchase deliberationsCust .wants high level service

Cont.

Unit factorsCo financial positionExtent of market controlco 'reputation

Types of channels:Conventional/Non integratednon.-conventional/integrateddirectindirecthorizontalvertical

Direct channels:Zero level/direct marketing:

manufacturerconsumer

One level/indirect channelmanufacturerretailerconsumer

Two level:manufacturerwholesalerretailerconsumer

manufacturerwholesalerconsumer

3-level:manufacturerwholesalerjobberretailerconsumer

INTEGRATED CHANNELS:

Those that work with full coordination rather than in loose manner

Integrated mkt channels can be vertical and horizontal in nature

VERTICAL MARKETING SYSTEM:

ALL the channel members act as part of a Unified system in one of them owing the other so have the power to make them all corporate

CORPORATE VMS:Successive stages from production to distribution are under single ownership.E.g.amartexBata have their own manufacturing as well as retail outlets.WoodlandsRaymond's owns their own retail stores while producing textiles and woolens.Giant food stores operates an ice making facility, soft drink boiling operations, ice-cream plant that supplies them everything.

Administrative VMS:

Seeks control over successive stages from production to distribution through size and power of one of the channel members.E.g. HLL,P&G,nestle,maruti are brand and market leaders

Contractual VMS:Independent firms at different levels of production & distribution integrating their programs on contract basis.For e.g.Manufacturer sponsored retailer franchiseManufacturer sponsored wholesaler franchise

Horizontal marketing system:symbiotic marketing

2 or more unrelated cos Put together their resources or programs to exploit an emerging market opportunityE.G.Supermarkets have arrangements with local banks to offer in store bankingTie-up b/w TVS whirlpool,onida to market washing machines

Channel design decisions:

1.Analyzing customer desired service outputs.2.Establishing channel alternatives3.Identifying major channel alternatives4.Evaluating major channel alternatives

Analyzing the customers desired service output: getting know what your customer wantLot sizeSpatial convenienceWaiting and delivery timeProduct varietyService back up

Establishing objectives and constraints:

Obj.are stated in the terms of services.Channel objective vary with Product characteristics.For e.g.perishable product timely and fast delivery

Bulky product Minimize the shipping distance and amount of handling.

High unit value service ,training, installation

Identifying major alternatives:

Channel alternatives for a cellular car phone maker:1.Co could sell car phones to automobile manufacturers to be installed as original equipment.2.Could sell it car phones to auto dealers.3.Could sell it to retail automotive equipment dealer.4.Trough mail order catalogs

Channel alternatives described by:

1.types of business intermediary2.No,of intermediaries3.Terms &responsibility

Channel management decision:1.Selecting the channel members2.Training channel members3.Motivating the channel members