Channel Management / Distribution. STUDENTS WILL…. Understand the concepts and processes needed to identify, select, monitor, and evaluate sales channels. STUDENTS WILL…. Acquire foundational knowledge of channel management to understand its role in marketing.
A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a product and its title from production to consumption
Bucklin - Theory of Distribution Channel Structure
Agents which perform all of the activities utilised to move a product and its title from production to consumption
Channels of Distribution
Organizing and moving products through the channels
aka: Logistics = ordering, transporting, storing, handling and inventory control
The 3rd largest expense for most businesses
(#1 Materials #2 Labor)
CHANNEL FUNCTIONS which perform all of the activities utilised to move a product and its title from production to consumption
Today’s system of exchange which perform all of the activities utilised to move a product and its title from production to consumption
Transporting and storing
Decisions about a product’s physical movement and transfer of ownership from producer to consumer.
Determine the types of members the belong in the channel, as well as the channel length (total number of channel members)
Involves determining the characteristics that distinguish the better ones by evaluating channel members
Selecting intermediaries that are sales agents involves evaluating
Produces must evaluate intermediaries performance against such standards as:
Should constantly evaluate the channel:
Risks & Dangers of Distribution Decisions
Achieve ideal market exposure (make their product available without over exposing and losing money)
To achieve market exposure, marketers must determine distribution intensity
= the use of all suitable outlets to sell a product.
The objective is complete market coverage and the ultimate goal is to sell to as many customers as possible, wherever they choose to shop.
Ex. Motor oil is sold in quick-lube shops, farm stores, auto parts retailers, supermarkets, drugstores, hardware stores, warehouse clubs, and other mass merchandisers.
= a limited number of outlets in a given geographical area are used to sell the product.
Very important to select channel members that maintain the image of the product & are good credit risks, aggressive marketers & good inventory planners.
Ex. Armani & Lucky Brand sell their clothing only through top department stores that appeal to the affluent customers who buy its merchandise. It does not sell in a chain megastore or a variety store.
Manufacturer acts as wholesaler and retailer for its own products.
Service Provider >>> Consumer
Service Provider >>> Industrial User
Customer facilitate order processing
Actions to Facilitate Order Processing
No, Customer Notified of Backorder
Yes, Item Packed for Shipment
Accounts Receivable Processes Payment
YOU'RE DONE!!! orders