d istribution c hannels - 2 mkt 405: distribution management m wahidul islam summer 2014
TRANSCRIPT
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DISTRIBUTION CHANNELS - 2MKT 405: Distribution Management
M Wahidul Islam
Summer 2014
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Elements of Distribution Managemen
t
Planning, Forecasting
& Budgeting
Sales Force Managemen
t
Product Pricing and Promotion
Product Visibility
Distribution Channels
Channel Information
Systems
Warehousing and
Logistics
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DISTRIBUTION CHANNEL MEMBERS
Owned or Contracted
Company Owned Distribution
Center
Carrying and Forwarding Agents
Consignment Selling Agents or General Selling
Agents
Direct Marketing Sales force
Franchises
Exclusive / Shared
Distributors/ Dealers / Stockiest
Value Added Resellers
Wholesalers
Retailers
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CHANNEL FORMATS
Who plays the major / dominant role in the distribution channel is also a big deciding factor
Producer Driven
Company Owned Retail Outlets
Licensed Outlets
Consignment Selling Agents
Franchisers
Distributors
Seller Driven
Existing Retailers
Wholesalers
Modern Store Formats
Specialty Stores
Factory / Discount Stores
Agents / Dealers
D2D Sales People
Service Driven
Couriers
Credit Card Companies
Financial Institutions
3P Logistic service providers
Others
Multilevel marketing
Kiosks
TV home shopping networks
Catalogue shopping
Internet based sellers
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HOW TO DECIDE WHICH DISTRIBUTION CHANNELS TO USE? Product type
Industrial / Textile / Chemicals and Fertilizers Automotive
FMCG Pharmaceutical Telecommunication IT hardware Services Consultancy
Requirement of after-sales service?? Who is driving the channel? Ability to influence consumer’s buying
decision
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Producer
Direct Marketing
Team
Central Distributor
Regional / Market Specific
Distributor
Wholesalers
Retailers
Customers
Authorized ResellerCSAs / GSAs
Own Branded
Store
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INDUSTRIAL PRODUCTS
General natures Technical Mostly B2B
Need of more personal interaction with the customer
Relationship management very important
Examples: Production Raw Materials, Steel Mills
Producer
Agent
Industrial Distributor
Customers
Critical Question:How do you manage the relationship with the Customer?
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PHARMACEUTICAL PRODUCTS
Highly technical Doctors one of the key
stakeholders End Users / Customers
virtually have no communication with the manufacturer
Examples: Medicine Companies
Producer
Distributor
Retailer / Chemist
Customers
DoctorsWholesaler
Critical Question:Can the producer influence Customers buying decision?
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CONSUMER PRODUCTS
Target is to reach as many customers as possible
Every possible route is selected
Most evolved distribution flow / channels format
Examples: Lux, Clear, Low Cost Ball Pen, Mineral Water etc.
FMCG Products
Producer
Distributor
Different forms of Retail
Customers / Consumers
Wholesaler
Critical Question:Which distribution flow is right for my product?
Is my Consumer buying my product?
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CONSUMER DURABLES
Similar to Consumer Products
But needs to be maintained / serviced
Targeted Customer / End Users based
Usually high-end
Examples: Samsung, NOKIA, Sony, Mercedes Benz, QUBEE
Producer
Market Specific
Distributor
Different forms of
Retail
Customers / End Users
Product Service Team
Critical Question:Which is more important? Distribution Flow or Service? After
Sales Service??
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SERVICES Customer Experience is the most
important factor, leading to high coordination of Sales and After Sales Customer Service
The customer interaction is directly with Company Representative, usually
Usually customer goes through a process of service experience Purchase > Experience > Post
Evaluation Franchises / Agents are carefully
chosen, and are closely controlled
Examples: DHL, Hospitals, Airlines’ Telecommunication?? GP??
Service Provider
Customers
Different Forms of Service Outlets
Critical Question:Does a distribution flow exist as there is no physical
movement of services?
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NEW FORM OF DISTRIBUTION FLOWS
Mixture of Service and Physical DistributionOnline MarketingTele-shoppingCatalogue Marketing (New or Old)KiosksOthers????
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ONLINE MARKETING
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TELE-SHOPPING
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CATALOGUE MARKETING
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CATALOGUE MARKETING
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KIOSK / VENDING MACHINE
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KIOSK / VENDING MACHINE
The Facebook Vending MachineThe Google Vending Machine
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REFERENCES
Chapter 8 – Distribution Management and the Marketing Mix Havaldar K. and Cavale V. M. (2011) Sales and
Distribution Management – Text and Cases (2nd Edition) Delhi: Tata McGraw-Hill Education Private Limited
Chapter 9 – Marketing Channels Havaldar K. and Cavale V. M. (2011) Sales and
Distribution Management – Text and Cases (2nd Edition) Delhi: Tata McGraw-Hill Education Private Limited
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