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Lecture Sales and distribution management: Chapter 9 - Krishna K Havaldar, Vasant M Cavale

Chapter 9, marketing channels. After studying this chapter you will be able: Understand channel structure and how channels manage discrepancies, understand concept of channel flows, relationship of channel flows to service levels, understand channel formats and levels, understand what channel systems are expected to deliver, prominent marketing and channel systems. | Chapter 9 Marketing Channels SDM- Ch 9 Tata McGraw Hill Publishing Learning Objectives Understand channel structure and how channels manage discrepancies Understand concept of channel flows Relationship of channel flows to service levels Understand channel formats and levels Understand what channel systems are expected to deliver Prominent marketing and channel systems SDM- Ch 9 Tata McGraw Hill Publishing Channel Functions Information gathering Consumer motivation Bargaining with suppliers Placing orders Financing Inventory management Risk bearing After sales support SDM- Ch 9 Tata McGraw Hill Publishing Role of Intermediaries Company 1 Company 2 Company 3 Intermediary Large number of CONSUMERS Direct and Indirect . SDM- Ch 9 Tata McGraw Hill Publishing Direct Distribution Company to consumers or retailers without use of intermediaries. Also includes reaching Institutional buyers. Selling on the Internet If products are technically complex, this system is preferred . | Chapter 9 Marketing Channels SDM- Ch 9 Tata McGraw Hill Publishing Learning Objectives Understand channel structure and how channels manage discrepancies Understand concept of channel flows Relationship of channel flows to service levels Understand channel formats and levels Understand what channel systems are expected to deliver Prominent marketing and channel systems SDM- Ch 9 Tata McGraw Hill Publishing Channel Functions Information gathering Consumer motivation Bargaining with suppliers Placing orders Financing Inventory management Risk bearing After sales support SDM- Ch 9 Tata McGraw Hill Publishing Role of Intermediaries Company 1 Company 2 Company 3 Intermediary Large number of CONSUMERS Direct and Indirect . SDM- Ch 9 Tata McGraw Hill Publishing Direct Distribution Company to consumers or retailers without use of intermediaries. Also includes reaching Institutional buyers. Selling on the Internet If products are technically complex, this system is preferred Cost is a major consideration to adopt this mode SDM- Ch 9 Tata McGraw Hill Publishing Direct Distribution - Examples Banking services Credit cards Petrol / diesel – company own outlets Land line phone connections Health services Utilities – electricity, water Subsidized ration Education SDM- Ch 9 Tata McGraw Hill Publishing Indirect Distribution Goods may move through a set of intermediaries Most FMCG companies follow this route The intermediary has a far better reach than the company The cost of operations of an intermediary like a wholesaler / retailer is shared with many businesses. SDM- Ch 9 Tata McGraw Hill Publishing Indirect Distribution - Examples All FMCG, consumer durables and pharmaceutical Petrol / diesel / cooking gas - franchisees Insurance Mobile phones All kinds of passenger transport SDM- Ch 9 Tata McGraw Hill Publishing Marketing Channel Systems Vertical: Corporate Administered Contractual Horizontal Multi-channel Vertical . SDM- Ch 9 Tata McGraw .