Question

Unit-IV
Marketing Channels, their Structure ; Channel Intermediaries-Role and Types; Wholesaling and
Retailing; Logistics of Distribution; Channel Planning, Organizational Patterns in Marketing Channels:
Assessing Performance of Marketing Channels; International Marketing Channels.

NOTES FOR SALES AND DISTRIBUTION MANAGEMENT

Answer 1

Marketing channels- A marketing channel is a people, organization, activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is also known as a distribution channel.

Marketing channel structure-While channels can be very complex, there is a common set of channel structures that can be identified in most of the transactions.

1)Direct channel- Producer-Consumers

The direct channel is the simplest case where the producer directly sells the product to the consumers. For example, if you visit a farmer's market, you can purchase goods directly from the farmer. Same way in B2B, some corporates use direct channels very effectively.

2)Retail channel-Producer-Retailer-Consumer

The retail channel is different from the direct channel in that the retailer doesn't produce the product. The retailer sells the goods on behalf of the producer. The retailer may sell the product in-store, online, or kiosk or on your doorstep. The emphasis is not on the specific location but selling the product directly to the consumers. Examples are- a) Walmart discount store, b)Amazon online store.

3)Wholesale channel-Producer-wholesaler or distributor-retailer-consumer.

A wholesaler is primarily engaged in buying and usually storing and physically handling goods in large quantities, which are then resold to retailers, to industrial or to business users. The vast majority of goods produced in an economy in advance involve wholesalers or distributors. Examples of wholesalers includes-a)Restaurant food supplies, b)clothing wholesalers who sell to retailers.

4)Agent channel-Producer-agent or broker-wholesaler-retailer-consumer.

Broker does not own the merchandise, because they neither buy or sell. Instead, broker bring buyer and seller together and negotiate the terms of the transactions, the agent represents the buyer or seller, usually on a permanent basis., broker brings parties on a temporary basis. Examples are-a) Exporter agent, b)Insurance broker.

Logistics of distribution-Distribution logistics is the link between the production and the market. In concrete terms, distribution logistics include goods handling, packaging, storing and transporting. This subject a central component of extra logistics and closely links it with packaging technology. Sustainably structured information, decision making, and control processes are essential for the implementation of successful transport logistics.

Channel planning- Channel planning has grown both complex and more important, presenting a tricky challenge for the marketers, who need to reach the right people, at the right time. Effective channel planning depends on the mapping out the consumer journey and responding to the touchpoints that convert.

Assessing the performance of the marketing channel-Channel performance measurement is the key activity when a sales organization employs a different type of channel partner. In more complex multi-channel structures, it becomes even more important, due to the number of people, process and roles involved.

The channel performance depends on 3 steps-

1)Define sales objectives- Theses objectives are outlined and discussed in sales meetings to ensure a shared understanding between the members of the marketing and sales team.

2)Determine channel performance metrics-Choosing the right number and type of performance metrics can help to monitor and improve the performance of channel partners. These metrics provide an understanding of how well the channel partner going and reaching the performance target.

3)Set channel partner target-After overall sell objectives are defined, it is important to assign the specific targets to each of the channel partners to ensure that is in alignment with overall objectives.

International marketing channel-

International marketing involves coordinating the firm's activity in more than one nation. International marketing is effectively realized by choosing the right channel which helps in distributing the product.

Good intermediate helps in -

1)Intermediaries help in the efficiency of the process.

2)They help in the proper arrangements of routes of transactions.

3)They help in the searching process.

4)They help in the sorting process.