1. Group Member:-Group Member:-
Ritwik SharmaRitwik Sharma
Himanshu PandeyHimanshu Pandey
RajShekhar GantiRajShekhar Ganti
Jithish NambiarJithish Nambiar
1

2. “Marketing channels are sets of
interdependent organizations
involved in the process of making a
product or service available for use
or consumption”
Philip Kotler
2

3.  A plan created by the management of
a manufacturing business that specifies how the firm
intends
to transfer its products to intermediaries, retailers and
end consumers.
 Larger companies involved in making products will usually
also put together a detailed production distribution strategy
to guide its entry into its intended market.
3

4. 4
Manufacturers/products
Agents/brokers
Wholesalers/distributors
RetailersRetailers
Consumers and organizational end users

5. 5

6.  Exclusive Distribution
◦ Limiting the distribution to only one intermediary
in the territory
 Intensive distribution
◦ Distribute from as many outlets as possible to
provide location convenience
 Selective distribution
◦ Appoint several but not all retailers
6

7.  It is a situation where suppliers and distributors enter into
an exclusive agreement that only allows the named
distributor to sell a specific product
 Means that the producer selects only very few intermediaries.
 Exclusive distribution is often characterised by exclusive
dealing where the reseller carries only that producer's
products to the exclusion of all others
7

8.  Maximize control over service level/output
 Enhance product’s image & allow higher
markups
 Promotes dealers loyalty, better forecasting,
better inventory and merchandising control
 Restricts resellers from carrying competing
brands
8

9.  Betting on one dealer in each market
 Only suitable for high price, high margin,
and low volume products
9

10.  The producer's products are stocked in the
majority of outlets
 It is a strategy under which a company sells
its product through as many outlets as
possible so that the customers encounter
the product virtually everywhere they go
10

11.  Advantages:
◦ Increased sales, wider customer recognition,
and impulse buying
 Disadvantages:
◦ Characteristically low price and low-margin
products that require a fast turnover
◦ Difficult to control large number of retailers
11

12.  Newspapers, soft drinks
 Most of the fast moving consumer goods
12

13.  Selective Distribution is a type of
distribution that lies between intensive and
exclusive distribution.
 This basically involves using more than
one, but lesser than all the intermediaries
who carry the company’s products
13

14.  Advantages:
◦ Better market coverage than exclusive
distribution
◦ More control and less cost than intensive
distribution
◦ Concentrate effort on few productive outlets
◦ Selected firms capable of carrying full product
line and provide the required service
14

15.  Disadvantages:
◦ May not cover the market adequately
◦ Difficult to select dealers (retailers) that
can match your requirement and goals
15

16. Using two or more different channels to
distribute goods and services
 Why?
◦ Permits optimal access to each market segment
◦ Increase market coverage, lower channel cost and
provide more customized selling
 What to look out for?
◦ More channels usually means more conflict and control
problems
16

17. Each channel handles a product or segment
that is different or non-competing e.g.
 Toyota Lexus
 MPH online portals
 Magazine distributions

18. The same product is sold through two different
and competing channels e.g.
◦ Non-prescriptive drugs
◦ Electronic goods
 Why? To increase sales
 What to look out for?
◦ Over extending yourself
◦ Dealers’ resentment
◦ Control problems
18

19. Modify when the following changes occur:
 Consumer markets and buying habits
 Customer needs
 Competitor’s perspectives
 Relative importance of outlet types
 Manufacturer’s financial strength
 Sales volume level of existing products, and
 The marketing mix
19

20.  One of the importance of any website or business is
to bring the products or services to the right people
and to reach the target audience.
 There are a number of different distribution
channels available on the Internet which could be
utilised efficiently to the benefits of any company
20

21. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Selecting Channels of DistributionSelecting Channels of Distribution
 In either the presence or the absence of a
traditional channel, a primary constraint is that
of the availability of various types of middlemen
 Selecting a channel of distribution can hinge on
one of these factors
 Distribution coverage required
 Degree of control desired
 Total distribution cost
 Channel flexibility

22. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Selecting Channels of DistributionSelecting Channels of Distribution
 Distribution coverage – Channel selection may
depend upon the nature of market coverage
desired
 Intensive distribution – Using as many
wholesalers and retailers as possible
 Selective distribution – Using only the best
available per geographic area
 Exclusive distribution – Selected intermediaries
are given exclusive rights within a particular
territory

23. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
Selecting Channels of DistributionSelecting Channels of Distribution
 Degree of control desired – Achieved by the seller is
proportionate to the directness of channel
 Total distribution cost – Channel should be viewed as a total
system composed of interdependent subsystems
 Objective should be to optimize total system performance
 Generally assumed that the total system should be designed to
minimize costs, other things being equal
 Channel flexibility – Ability of the manufacturer to adapt to
changing conditions

24. McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved
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