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Module 5 Marketing Management

Distribution channels are the paths through which products move from production to consumption. They perform several functions including sorting, stocking, allotting, and assorting products. Distribution channels ensure a continuous supply to markets, break bulk quantities into smaller units for retailers and customers, and set local market prices. There are different types of distribution channels including wholesalers, retailers, franchises, and different business-to-business and business-to-consumer models. Distributors and dealers differ in that distributors usually take ownership of goods and dealers do not.

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62 views

Module 5 Marketing Management

Distribution channels are the paths through which products move from production to consumption. They perform several functions including sorting, stocking, allotting, and assorting products. Distribution channels ensure a continuous supply to markets, break bulk quantities into smaller units for retailers and customers, and set local market prices. There are different types of distribution channels including wholesalers, retailers, franchises, and different business-to-business and business-to-consumer models. Distributors and dealers differ in that distributors usually take ownership of goods and dealers do not.

Uploaded by

sandra bonifus
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Module 5

Distribution Channels
What is distribution channel ?
• Out of the 4 P’s of marketing It comes under the P, Place. Place refers
to the geographical location where the companies sells it products
and services to customers
• Channel of distribution is the path through which products move
from the place production to the place of ultimate consumption .
• It is the link between the producer and the consumer
Functions of distribution channels
Sorting :- It sorts products and services into homogeneous groups.
Eg:- I) Super market arrange homogeneous products in separate racks
ii) Different stores buy similar products from the different suppliers
and sell it to customers, customers are given choices.
Stocking (Accumulation ) :- The channel buy products in bulk quantity
to have continuous supply to the market. Many of them avail price
advantages of advance payment , bulk purchase discount and stock
advantage
Eg:- The terms of being a distributor or seller is the capacity to stock for
many products
• Allotting (Allotment ):- The distribution channels collect bulk quantities
from the suppliers and wholesalers and break into small quantity and
cater to the retailers and customers in smaller quantities.
• Eg: Medical distributors collect medicines from companies and sell to
medical stores in smaller quantities.
• Assorting :- Channels buy products from different sources and make
them into groups which are to be offered to the customers as per their
requirements.
• Eg:- A retailer collect different products from different sources and sell
to households
Other functions
• The distribution channels ensure Market operating price.
• The distribution channels follow the distribution norms set by the
company in geographical area.
• The distribution channels are supposed to maintain the ethics in
business.
• The distribution channels also involve in local promotion of their
products to improve their business.
• They take the risk of demand changes, stock safety and warehousing .
Types of distribution channels
Distribution channel
-2
Why Channel Motivation ?
• For the producers and manufacturers , Distribution channels as the primary customers .
• Motivation of Channels make the organisation to drive for its goals
through the distribution channels
• Ensures active involvement of the distributors in driving business
• Channel motivation Process
• 1. Identify the wants and needs of the distribution channels
• 2. Identifying their issues and concerns
• 3. Offering support to solve their problems
• 4. Provide leadership
Different types of support provided for channel motivation

• Cooperative support for channel motivation


• Advertising Support – Tie up ads
• Display support – display materials/ Dummy display/ free display products
• Incentives/contests for buyers and sales persons
• Warehousing stocking support/allowances
• Free goods
• Gift/trip contest for Channels
• Training and engagement program
• Manpower salary supports
• Company sponsored demonstrators/ sales persons
• Financial advice
• Insurance protection
B2B and B2C distribution
• Distribution occurs between producers and industries for their usages
as raw materials for their products are called B2B distribution

• Distribution happening between the producer and the consumer is


called the B2C distribution
Wholesaler
• A channel which sells goods in large quantity at a lower price to
retailers
• wholesaler takes goods from producer in large quantity and split into
smaller quantity and supply to the retailers
• It provides storage facility
• Acts as contact point for retailers and customers with the producers
• Takes market responsibility and promotion
Franchise Business
• Franchising is a business relationship between two entities wherein
one party allows another to sell its products and intellectual property
• Roles and responsibility
• Ensure branding, credibility and goodwill
• Marketing activities
• Establish franchise branding
• Service /after sales service
• Training and skill development of franchise employees
• Compliance
Difference between Distributor and dealer
Retail marketing
• Any business that directs its marketing efforts towards satisfying the consumer by
selling goods and services as means of distribution.
• Retail industry includes
• Individual stores
• Super markets
• Chain shops
• Etc.,
• Features
• 1. It is the link between the distributor and the consumer
• 2. Provide choice for the consumers
• 3. Deal with the general public
• 4. Normally operates on Market price or MRP
• 5. Keeps personal contact with the customers
• Organized retailer
• Un organized retailer
• Online trading
• Vending machines
• Shopping malls

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