Date post: | 08-Apr-2018 |
Category: |
Documents |
Upload: | sukhdev-singh-channe |
View: | 225 times |
Download: | 0 times |
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 1/31
1
channel sales
Definition:
Aggregate of all sales generated in a particular period by all means of distribution (own sales force, dealers,retailers, direct marketing, etc.) employed
by a firm to move its products to themarket.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 2/31
2
Distribution channels:
Distribution channels are the methods thatcompanies use to enter the consumer market with their product. While manymethods exist, they have changed over
the years because of the Internet andglobal sales.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 3/31
3
Def inition
1. A distribution channel is the method a company uses to get its products into themarketplace for consumer use. The traditional
channel goes f rom supplier, manuf acturer,distributor, wholesaler and retailer. Two typesof distribution channels exist: indirect anddirect.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 4/31
4
Indirect Channel
The indirect channel is used by companies whodo not sell their goods directly to consumers.
Suppliers and manuf acturers typically use indirectchannels because they exist early in the supplychain.
Depending on the industry and product, directdistribution channels have become moreprevalent because of the Internet.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 5/31
5
Direct Channel
A direct distribution channel is where a company sells its products direct to
consumers. While direct channels were notpopular many years ago, the Internet hasgreatly increased the use of directchannels. Additionally, companies needing
to cut costs may use direct channels toavoid middlemen markups on their products.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 6/31
6
Indirect Channel Methods
Distributors, wholesalers and retailers arethe primary indirect channels a companymay use when selling its products in the
marketplace. Companies choose theindirect channel best suited for their product to obtain the best market share;it also allows them to focus on producing
their goods.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 7/31
7
Direct Channel Methods
Selling agents and Internet sales aretwo types of direct distribution channels.
Selling agents work for the company andmarket their products directly toconsumers through mail order, storef rontsor other means. The Internet is an easydistribution channel because of the global availability to consumers.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 8/31
8
W hat are Channels of Distribution?
a supply chain as consisting of all parties andtheir supplied activities that help a marketer create and deliver products to the final customer. For marketers, the distribution
decision is primarily concerned with the supplychain¶s f ront-end or channels of distribution thatare designed to move the product (goods or services) f rom the hands of the company to thehands of the customer. All activities andorganizations helping with the exchange are part
of the marketer¶s channels of distribution.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 9/31
9
Middleman:
A distributor is the middle man themanuf acturer and retailer. After a productis manuf actured, it may be warehoused or
shipped to the next echelon in the supplychain, typically either a distributor, retailer or consumer
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 10/31
10
Activities involv ed:
Activities involved in the channel are wide andvaried though the basic activities revolve aroundthese general tasks:
Ordering
Handling and shipping Storage Display Promotion Selling Information feedback
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 11/31
11
Channel Lev els:
consumer mkt¶ g:
0-level
1-level
2-level
3-level
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 12/31
12
0-lev el:
Manufacturer
consumer
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 13/31
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 14/31
14
2-lev el:
Manufacturer
Wholesaler
Retailer
Consumer
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 15/31
15
3-lev el
manufacturer
wholesaler
Jobber
retailer
Consumer
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 16/31
16
The distribution channel
Frequently there may be a chain of intermediaries, each passing the product downthe chain to the next organization, before it
finally reaches the consumer or end-user. Thisprocess is known as the 'distribution chain' or the'channel.' Each of the elements in these chainswill have their own specific needs, which theproducer must take into account, along with
those of the all-important end-user.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 17/31
17
Type of Channel Members
Channel activities may be carried out bythe marketer or the marketer may seek
specialist organizations to assist withcertain functions.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 18/31
18
We can classify specialist organizationsinto two broad categories:
Resellers
Specialty service firms.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 19/31
19
R esellers
These organizations, also known within someindustries as intermediaries, distributors or dealers, generally purchase or take ownership of products f rom the marketing company with theintention of selling to others. If a marketer utilizes multiple resellers within its distributionchannel strategy the collection of resellers istermed a Reseller Network.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 20/31
20
Sub division of reseller
Retailers
Wholesalers
Industrial Distributors
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 21/31
21
These organizations can be classified into several sub-categories including:
Retailers ± Organizations that sell products
directly to final consumers. Wholesalers ± Organizations that purchase
products f rom suppliers, such as manuf acturersor other wholesalers, and in turn sell these toother resellers, such as retailers or other
wholesalers.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 22/31
22
Industrial Distributors ± Firms thatwork mainly in the business-to-businessmarket selling products obtained f rom
industrial suppliers.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 23/31
23
Specialty Service Firms:
These are organizations that provideadditional services to help with the
exchange of products but generally do nottake ownership of the product
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 24/31
24
Agents and Brokers ± Organizations thatmainly work to bring suppliers and buyerstogether in exchange for a fee.
Distribution Service Firms ± Offer servicesaiding in the movement of products suchas assistance with transportation, storage,and order processing.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 25/31
25
Others ± This category includes firms thatprovide additional services to aid in thedistribution process such as insurance
companies and firms offering transportation routing assistance.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 26/31
26
AMUL: Grow th Strategy
Every day Amul collects 447,000 liters of milk f rom 2.12 million f armers (manyilliterate), converts the milk into branded,
packaged products, and delivers goodsworth Rs 6 crore (Rs 60 million) to over 500,000 retail outlets across the country.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 27/31
27
Its supply chain is easily one of the mostcomplicated in the world.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 28/31
28
Organization structureIt all started in December 1946 with a group of f armers keen to f ree themselves
f rom intermediaries, gain access tomarkets and thereby ensure maximumreturns for their efforts.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 29/31
29
Managing this supply chain efficiently iscritical as GCMMF's competitive position isdriven by low consumer prices supported
by a low cost system.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 30/31
30
The distribution network Amul products are available in over 500,000 retail outlets across India through
its network of over 3,500 distributors.There are 47 depots with dry and coldwarehouses to buffer inventory of theentire range of products.
8/7/2019 channel sales.2
http://slidepdf.com/reader/full/channel-sales2 31/31
31
Wholesale dealers carry inventory that isjust adequate to take care of the transittime f rom the branch warehouse to their
premises. This just-in-time inventorystrategy improves dealers' return oninvestment (ROI). All GCMMF branchesengage in route scheduling and havededicated vehicle operations.