PLACEObjective: To make the products conveniently available to the

customers.

Channel of distribution of the products

Marketing Intermediaries

Marketing Channels

•The marketing or distribution channel is comprised

of a set of interdependent organisations involved

in the process of making a product or service

available for use or consumption by the

consumer or an industrial user.

Customer Marketing Channel

Selection Consideration

•Market factors

•Producer factors

•Product factors

How Channel Members Add Value

•The use of inte rmedia ries results from the ir The use of inte rmedia ries results from the ir grea te r e fficiency in making goods ava ilablegrea te r e fficiency in making goods ava ilable

to ta rge t marke ts .to ta rge t marke ts .•Offe rs the firm more than it can achieve on its Offe rs the firm more than it can achieve on its

own through the inte rmedia ries :own through the inte rmedia ries :ContactsContactsExperienceExperienceSpecia liza tionSpecia liza tionSca le of opera tionSca le of opera tion

Channel organisation

– Historically channels have followed the conventional distribution channel format:

• comprised of independent producers, wholesalers and retailers, with separate businesses and seeking to maximise their own profit individually, even at the expense of the entire channel.

– Modern channel management has evolved to develop vertical marketing systems (VMS) that provide channel leadership.

A conventional marketing channel versus a vertical marketing system

Number of Intermediaries

•Intens ive dis tributionIntens ive dis tribution

•Exclus ive dis tributionExclus ive dis tribution

•Se lective dis tributionSelective dis tribution

Channel Design Decisions

•Analyzing Consumer NeedsAnalyzing Consumer Needs

•Se tting Channe l ObjectivesSe tting Channe l Objectives

•Identifying Major Alte rna tivesIdentifying Major Alte rna tivesTypes of inte rmedia riesTypes of inte rmedia riesNumber of inte rmedia riesNumber of inte rmedia riesRespons ibilitie s of inte rmediariesRespons ibilitie s of inte rmediaries

Channel Management Decisions

•Se lecting channe l membersSe lecting channe l members

•Managing and motiva ting channe l membersManaging and motiva ting channe l members

•Evalua ting channe l membersEvalua ting channe l members