0% found this document useful (0 votes)
37 views22 pages

MM 18 Distribution Part 2 2019 C

Uploaded by

prabigyan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
37 views22 pages

MM 18 Distribution Part 2 2019 C

Uploaded by

prabigyan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 22

MARKETING MANAGEMENT

DISTRIBUTION
2
MAJOR TYPES OF CHANNEL DECISIONS
I. CHANNEL DESIGN DECISIONS
1.TYPES OF INTERMEDIARIES
2. NUMBER OF INTERMEDIARIES AT
EACH CHANNEL LEVEL (Exclusive
distribution, Selective Dist. or
Intensive Dist.)
3. TERMS & RESPONSIBILITIES OF
CHANNEL MEMBERS
(territorial rights, margins,payment
terms, mutual services etc.)
MAJOR TYPES OF CHANNEL DECISIONS
(Contd. )
• II. CHANNEL MANAGEMENT DECISIONS

1. SELECTING CHANNEL MEMBERS


2. MOTIVATING CHANNEL MEMBERS (incld.
managing channel conflict )
3. EVALUATING CHANNEL MEMEBRS
4. MODIFYING CHANNEL ARRANGEMENTS
I. SELECTING CHANNEL MEMBERS
Criteria commonly used for selecting
channel members:
- financial standing & ability to invest in business
- Number of years in business
- Other lines carried
- Growth & profit record
- Reputation
- Location & size of premises to be used for business
Terms and Responsibilities
of Channel Members

• Price policy
• Condition of sale
• Distributors’ territorial rights
• Mutual services and responsibilities
Cooperative Arrangements 9

Typical types of cooperative programs


provided by Manufacturers to channel members

• Cooperative advertising allowances


• Payments for interior displays
• Contests for buyers, salespeople, etc.
• Allowances for warehousing functions
• Payments for window display space
• Detail men who check inventory
• Demonstrators
• Coupon-handling allowance
• Free goods
= A Common Element of above programs?
II. Evaluating Channel Members

• Evaluated on parameters such as


1. Sales tgt. Achievements
2. Payments and outstanding
3. Inventory levels
4. Customer pre and after sales service
5. Market coverage
6. Sales efforts (inld. sales force trng.
7. Cooperation in promotional programmes
III. Motivating Channel Members

-Profit margins & Incentive Programmes


- Training
- Support & supervision
Motivation Management

Motivation Management:

The actions taken by the manufacturers to foster channel


member cooperation in implementing the manufacturer’s
distribution objectives
Motivating Channel Members
Basic Framework

1. Find out the needs and problems of


channel members.
2.Offer support to the channel members
that matches with their needs and
problems.
3.Provide leadership through the
effective use of power.
Channel Power
Channel power
– Ability to one channel member to get another channel
member to do what it otherwise would not have done
– Ability to control the decision variables in the marketing
strategy of another member in a given channel at a different
level of distribution

– Reward power
– Coercive power
– Legitimate power
– Expert power
– Referent power
Sources of Channel Power
Coercive

Reward

Legitimate

Expert

Referent
Channel Conflict
Channel conflict
• Arises when behaviour of channel member in opposition to its
channel counterpart; Occurs when one member views its upstream
or downstream as an adversary or opponent; attempt to block each
other.
Sources of conflict
– Goal divergence
– Unclear roles and rights
– Domain dissents
• Population issues
• Territory issues
• Gray markets
– Differing perception of reality
(Vertical Conflict, Horizontal Conflict, Multi-Channel conflict)
Managing Channel Conflict

• Adoption of
superordinate goals
• Cooptation
• Diplomacy
• Mediation
• Arbitration
CHANNEL CONFLICT

Large retailer threatens to stop buying a


product unless the suppler grants “
unreasonably low” prices and/or high
supports services

Coercive power?
Ethical Decision?
Survival Decision?
e-Commerce Marketing Practices

• Pure-click
• Brick-and-click
• Brick-and-mortar
Channel Trends
(Direct Marketing)

Infomediaries & Vertical Exchange


Direct Marketing Channels

Producer Buyer
Personal Selling
Telemarketing
Toll free phone #
Catalog order
Fax order
Mail order
E Commerce
9
Partnerships & Strategic Alliances

Three basic phases

1. Manufacturer should make explicit statement of


policies in areas such as product availability,
technical support, pricing, etc.

2. Manufacturer should assess all existing distributors


as to their capabilities for fulfilling their roles

3. Manufacturer should continually appraise the


appropriateness of the policies guiding his
or her relationship with the channel members
Channel Legal Issues

Legal Issues:
Exclusive Dealing
Exclusive Territories

 Tying Contracts

Court
Channel Legal Issues

Product Liability

Refusal to Deal

Resale Price maintenance


Channel Relationships

Channel Captain
• Leadership

• Cooperation
Power

• Conflict

You might also like