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8/17/2019 Channel Strategy for Building a Brand[1]
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Channel Strategy
for building aBrandGuided by: Submitted by:
Prof. Anant Gwal Trupti Joshi
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Channel Strategy
The manner by which a product is sold or distributed can
have a profoud impact on the resulting equity & ultimatesales success of a brand.
It includes the design & management of intermediaries.
%holesellers Distributors &ro'ers (etailers
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Channels Design
A producer has to find out the most economical & effective form ofdistribution. These are categorised on the basis of number of
intermediaries between producer & the manufacturer.
1. Dire)t sellin* by manufa)turer &
Company owned stores
Personal selling
Mail order selling
Telephone selling
". +ndire)t sellin* throu*h middlemen.
Push & Pull
Channel upport
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Direct Channel
In !irect Channel of distribution there can be computer sales or
mail order or face"to"face sales but there can#t be any sort of
distributor e$cept the original producer .
It is most common in the manufacturing & agriculture based
products li%e heavy equipment industrial components etc.
A small farmer selling his production of vegetables in the mar%et is
also an e$ample of !irect Channel.
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Advantages
!ue to the absence of any intermediaries to share the profits the direct
distribution channels generally have higher profit than the indirect
distribution channels.
A number of customers also appreciate the opportunity to provide profits to
producers and artists directly.
A web"based selling has very low overhead and provides your product
publicity at a global level. An '"Commerce portal is very convenient and is
available round the cloc% for its customers. !ue to these reasons we are
witnessing a huge surge in the '"Commerce space.
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Disadvantages
Inability to compete with the high geographical reach and huge business
volume of an indirect distribution channel which involves ma(orwholesellers and retailers.
Although players li%e Ama)on '"bay Alibaba and *lip%art are
increasingly e$panding and serving new mar%ets everyday +ast Mile
!elivery for remote areas still remain a big challenge for them to
encounter.The companies do provide *ree hipping for a lot of products and for
orders over minimum limit but still not all products are e$empted from
delivery charge which tends to fend away the customers.
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Direct Channels
elling through personal contacts to prospective customers by,
,#mailPhone )alls
,le)troni) means+n#person -isits
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Company Owned Stores
To gain control over the
selling process & buildstronger relationship with
customers
Manufacturers introduce
their own retail outlets or
through other means to
reach their customers.
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8/17/2019 Channel Strategy for Building a Brand[1]
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Indirect Channel
-ere comes selling through third party intermediaries as they have the required
contacts e$perience and scale of operations. -e might be a Consultant
riginal 'quipment Manufacturer/'Ms0 etc.
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Channel Design
Push Strate*y: Mar%eters can devote theirselling efforts to the channel members themselves
providing direct incentives for them to stoc% & sell
products to the end consumer.
Pull Strate*y: 1y devoting mar%eting efforts to
the end consumer a manufacturer is said to employ a
Pull trategy
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Push & Pull Strategy
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Channel Support
1. Physi)al
Distribution
. Mar'etin*
(esear)h
". Mat)hin*
demand with
supply
. Sharin* of
responsibility
/. Finan)in* $. (is' Sharin*
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Advantages
'stablished sales force2ood segmentation'stablished mar%ets & programs for productsProven service e$periencehared mar%eting e$pensesPotentially e$pense sharing
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Disadvantages
3o real loyaltyPotential conflicts amongst sales force 3o product loyaltyPotential e$pensive support for services
Margin issues between manufacturer & intermediaries
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Promotional Allowancesin Indirect Channel
Slottin* Fees
0ooperati-e ad-ertisin*
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Slotting ees
*ees charged by a 4etailer to stoc% a manufacturer#s
products on its shelves.
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Cooperative Advertising
A manufacturer pays for
a portion of the
advertising that a
retailer runs to promote
the manufacturer#s
product & itsavailability in the
retailer#s place of
business.
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!eferences
http,55www.%ellogg.northwestern.edu5
mar'etin*"made"simple.com5
http,55firealarmmar%eting.com5
http,55www.)eepedia.com5
www.in-estopedia.com5
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