SELECTION OF RIGHT DISTRIBUTION

CHANNEL
 overview
A channel of distribution is “a set of
interdependent organizations involved in the
process of making a product or service
available for use or consumption by the
consumer or business user.”(Philip Kotler)
 Who Engages in Channel
Design?
Retailers
Firms Wholesalers

• Producers,
manufacturers, service • Look up the
providers, franchisors • Look both up and channel
down to secure
• Look down the the channel suppliers
channel
toward the market
 Types of utility distribution offers

Time
Place
Possession
Form
 Selection of channel

Organization objectives
Type of product Possession
Nature and extent of market
Existing channel for comparable product
Buying habit of customers
 Selection of Channel for
Consumer and Business Markets
Determining the Channel Objectives
Identifying Functions
Matching Channel Design to Product Attributes
Evaluating Legal Aspects and the Distribution Environment
Assessing Competitors Channel Design
Assessing Company Resources and Matching Channel
Design to it
Parallel distribution channel
 Role and Functions of Channel
Channels of distribution play an important role in marketing,
because of many vital functions performed by them.
Effective and well-managed channels provide sound competitive
advantage to companies.

Provide market information

Promotion
Breaking bulk
Supply in assortments
Physical distribution
Risk taking
Financing
 Role and Functions of Channel
Channels of distribution play an important role in marketing,
because of many vital functions performed by them.
Effective and well-managed channels provide sound competitive
advantage to companies.

Provide market information

Promotion
Breaking bulk
Supply in assortments
Physical distribution
Risk taking
Financing
 Channel levels (Consumer goods)
1. Direct marketing
channel or zero : Manu- Con-sumer
level channel facture

2. Indirect Marketing channels : Manu- Retailer Con-

(a) one level facture sumer
Channel

Manu- Whole- Retailer Con-sumer

(b) Two level : facture saler
Channel

(c) Three level :Channel Manu- Manu- Jobber Retailer Con-sumer

facture facture
 Channel levels (Industrial goods)
1. Direct marketing
channel : Manu- Industrial
facture user

(a) one level Manu- Industrial Industrial

Channel : facture distributor user

(b) Two level :

Channel Manu- Manufacturer’s Industrial Industrial
facture representatives or distributor or user
sales office Agent
 Market Variables
Market Geography Location, geographical size,
& distance from producer

Market Size Number of customers in a

market

Market Density Number of buying units

(consumers or industrial firms)
per unit of land area

Market Behavior Who buys, & how, when, and

where customers buy
 Environmental Variables
Competitive
Economic
Sociocultural

The impact of environmental forces is

a common reason for making
channel design decisions.

Technological Legal
CONCLUSION