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Distribution channel (place)

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Distribution
Channel


What is distribution channel?
The role of Channel

Topic
Outline

Channel levels
Channel Strategies

Channel Design & Managment
Marketing Logistics


Supply chain


Upstream
partners


Downstream
partners


1. What is distribution
channel?



Distribution channel
or marketing channel

• A set of interdependent organizations that
help make a product or service available for
use by the consumer or business user.


What is the role of Intermediaries?


Merchants
Synonyms

Agents
Facilitators


2. The role of
channel


How channel members
Add Value
PRODUCER

CUSTOMER

PRODUCER


CUSTOMER

PRODUCER

CUSTOMER

9


How channel members
Add Value
PRODUCER

PRODUCER

PRODUCER

CUSTOMER

DISTRIBUTOR

6

CUSTOMER

CUSTOMER


Channel Functions

Gather and distribute information
Engage in promotion
Contact prospective buyers
Match offer to buyer’s needs
Negotiate transaction


Channel Functions
Physical distribution of goods
Finance transactions along channel
Assume risks of channel work


3. Channel Levels


Channel Levels
CONSUMER CHANNEL

PRODUCER

PRODUCER

PRODUCER

WHOLESALER

CONSUMER

RETAILER


RETAILER

CONSUMER

CONSUMER


Channel Levels
BUSINESS CHANNEL

PRODUCER

PRODUCER

PRODUCER

MFR. REP

BUSINESS
CUSTOMER

BUSINESS
DISTRIBUTOR

BUSINESS
DISTRIBUTOR

BUSINESS
CUSTOMER


BUSINESS
CUSTOMER


4. Channel
Strategies


Channel Strategies
Conventional

PRODUCER

Vertical Marketing System

PRODUCER

WHOLESALER
WHOLESALER
RETAILER

RETAILER

CONSUMER

CONSUMER


VMS



Vertical marketing system
CORPORATE VMS
CONTRACTUAL VMS
FRANCHISE ORGANIZATION

ADMINISTERED VMS


Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Corporate VMS


Contractual VMS


Franchised VMS


Administered VMS


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