Maria javed

Mba IT

TOPIC

MARKETING CHANNEL DESIGN DECISION

MAIN HEADINGS

Introduction to the topic

Important sub-topics

Practical study of the organization

Swot analysis

Conclusion

recommendation

DEFINATION OF MARKETING CHANNEL

A marketing channel of distribution or a supply

chain are simply the ways in which an individual or

firm makes available a product or service for sale.

Understanding the way a marketing channel or

supply chain works is crucial to being able to create

and use an effective marketing strategy.

A set of interdependent organizations

(intermediaries) involved in the process of making a

product or service available for use or consumption

by the consumer or business user.

CHANNEL LEVEL

Intensive distribution

Exclusive distribution

Selactive distribution

LEVEL OF MARKET CHANNEL

• Intensive

– selling through all responsible and suitable wholesalers and retailers who will stock and/or sell the product

• Selective

– selling through only those middlemen who will give the product special attention

• Exclusive

– selling through only one middleman in a particular geographic region

DIRECT AND INDIRECT CHANNEL

The indirect channel is used by companies who do

not sell their goods directly to

consumers.Distributors, wholesalers and retailers

are the indirect channels.

A direct distribution channel is where a company

sells their products direct to consumers. Selling

agents and Internet sales are two types of direct

distribution channels.

CHANNEL MEMBER FUNCTIONS

Gather information

Develop and disseminate persuasive

communications

Reach agreements on price and terms

Acquire funds to finance inventories

Assume risks

Provide for storage

Provide for buyers’ payment of their bills

Oversee actual transfer of ownership

CHANNELS AND

MARKETING DECISIONS

A push strategy uses the manufacturer’s sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to end users.

A pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries.

DESIGNING A

MARKETING CHANNEL SYSTEM

Analyze customer needs

Establish channel objectives

Identify major channel alternatives

Evaluate major channel alternatives

CHARACTERISTICS OF CHANNEL OF

DISTRIBUTION

Characteristics of distribution channel cannot be over emphasized by

any stretch of our imagination because without distribution channel

marketing task would have remained incomplete. Following are few

main characteristics of distribution channel:

It requires a minimum of buyer and a seller. Besides this it may include

other middleman.

A basic transaction in distribution channel is the exchange of ownership

/ title of goods. Middlemen play an very important role in transfer of

ownership / title of goods.

Distribution channel creates transactional efficiency

A distribution channel may be simple or complex.

Distribution channel may be long or short depending on the company’s

marketing requirements as well as the product of the company.

PRACTICAL OF THE ORGANIZATION

Pepsi

HISTORY:

Pepsi Cola is, just like Coca-Cola, a creation of an

American pharmacist. In 1893, 5 years after the

introduction of Coca-Cola, Caleb Bradham began to

serve his customers ‘Brad’s Drink’ from his own

soda machine. Because of the positive reactions of

his samplers he decided to begin advertising in

1898 and he named the drink Pepsi-Cola. He

founded the Pepsi-Cola Company in 1902. Pepsi-

Cola is a big success in the United States and the

Pepsi-Cola Company decides to export the drink to

Mexico in 1907, other countries would follow soon.

MISSION

The mission statement of Pepsi focuses on selling

high quality products. The Pepsi mission statement

also elaborates on building shareholder value.

Standing on the side of the employees is also

important.

VISION

PepsiCo's responsibility is to continually improve all

aspects of the world in which we operate –

environmental, social, economic – creating a better

tomorrow than today

CHANNEL MANAGEMENT

PepsiCo has lot of control over the channel

In case of Pepsi to Authorised distributor to retailshops (defined territory of distributor)

Pepsi assigns a particular territory to the distributor under an agreement.

No intervention into other’s territory without company’s knowledge.

Retailers accountable to the authorized distributors

CONTD........

KEY PARAMETERS

Total lines sold per day

Penetration %

No. of SKU sales

Outlet booking order

Completed sales

CHANNEL MEMBER AND ROLE

PepsiCo

Assigns a territory to the distributor.

Assigns sales target acc to region and seasons.

Evaluates performance against

predefinedparameters.

Sales incentives

Promotional offers.

Distributors

Wholesalers

Retailers

WHAT DISTRIBUTION CHANNELS ARE USED

BY PEPSI?

PepsiCo in pakistan follows the system in which the

PSRs, pre sales representatives takes the orders,,

and then accordingly the products are loaded on

trucks n sent to outlets along with their bills. the

cash is either taken at the time of delivery or else

afterwards.. depending upon the norms set by a

particular distributor who is supplying there.

SWOT ANALYSIS

Strength

Pepsi is a well-established co., so it has a

good reputation in themarket.

An international channel distributor help a

small business reach markets all over the

world.

Most personal marketing channel available

on the market.

WEAKNESSES

1. There is the possibility that some merchants may

incur high commission costs and costly set up and

maintenance fees due to affiliate

facilitators/brokers.

2. The affiliates may engage in false and misleading

advertising in order to get sales commissions.

Unscrupulous affiliates may make claims and

promises regarding the product and services, which

are completely wrong or extremely exaggerated. In

cases like these, the merchant usually receives

complaints and lose any potential consumer.

OPPOTUNITIES

Merchants gain a wider place to sell their products

and services, resulting in more customers and more

sales.

Merchants can gain more customers without

spending valuable time in searching for them

THREATS

Threat of competitors new brand entry in the market

in near future.

Restrictions made by Govt. agencies that soft

drinks are harmful &non-nutritive.

Natural juice are now available whose price are

less or same as softdrinks.

CONCLUSION:I arrived at the following conciusion

The major problem faced by the distributor is the

shortage of supply particularly pets.

Distributor functions just as order takes; they should

contribute me and communicate to the retailers.

It should be checked that whether our products is

reaching to the outlets timely and regularly or not.

Most of the retailer’s especially small retailers have

complained that the salesman does not inform

about any sales promotional scheme.

RECOMANDATION: A complain Register should be provided by the

company to every distributor in every route so that, retailers/customers can write their problems. The complain register should be checked by consumer executive and depot in charge at time to -time.

A clear notification should be given to teach distributor and each route agent to give cash memo (with printed number) and maintain route card for every transaction.

Coke is the only competitor of Pepsi. So we should try to keep every informationabout Coke i.e. prices scheme, policy etc. always it will help in Decision making.

Install Vending machines for directdistribution.